Release Date: October 24, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- SS&C Technologies Holdings Inc (SSNC, Financial) reported record adjusted revenue of $1,466.8 million, up 7.3% year-over-year.
- The company achieved an adjusted diluted earnings per share of $1.29, marking a 10.3% increase from the previous year.
- SS&C Technologies Holdings Inc (SSNC) reported a significant increase in cash from operating activities, reaching $336.6 million, up 39% from Q3 2023.
- The acquisition of Battea-Class Action services is expected to be immediately accretive to earnings, with $95 million in annual revenue and a 45%-plus EBITDA margin.
- The company has successfully integrated automation efforts, reducing headcount while increasing revenue by approximately $600 million since acquiring Blue Prism in 2022.
Negative Points
- The company anticipates a slowdown in organic revenue growth for Q4 2024, with a projected 2.4% growth at the midpoint.
- There is a challenging comparison for Q4 2024 due to a strong Q4 2023, which may impact growth perceptions.
- SS&C Technologies Holdings Inc (SSNC) faces potential market challenges in the healthcare sector, with ongoing merger talks and weak results from major players like Cigna and Humana.
- The company is carrying a higher-than-expected cash balance, which may indicate underutilization of capital resources.
- There is some uncertainty regarding the impact of large license deals and their timing, which could affect quarterly revenue projections.
Q & A Highlights
Q: Could you discuss the market opportunity for DomaniRx, considering the top-three players handle a significant portion of prescription claims?
A: William Stone, CEO, explained that while the top-three players handle about 70-80% of prescription claims, there is still a substantial market opportunity. With 5-6 billion scripts annually in the U.S., even a 20-30% share represents a significant volume. SS&C sees potential in licensing their technology and serving smaller players in the market.
Q: Can you provide any color on the outlook for Q4, particularly regarding the implied slowdown in organic growth?
A: William Stone, CEO, noted that Q4 2023 was exceptionally strong, creating a challenging comparison. Despite this, SS&C has a robust pipeline and expects Q4 to be significant, although they remain cautious due to the strong performance in previous quarters.
Q: How is SS&C planning to leverage Blue Prism for cost efficiencies, and what are the future expectations?
A: William Stone, CEO, expressed enthusiasm about Blue Prism's potential, highlighting plans to reduce systems and increase digital workers. Brian Schell, CFO, added that they are leveraging consolidated systems and increasing sophistication in using digital workers, which will continue to contribute to cost efficiencies.
Q: What are the expectations for 2025 in terms of organic growth, and how is the pipeline shaping up?
A: William Stone, CEO, stated that SS&C is bullish on 2025, with a strong field force and numerous opportunities globally. They are optimistic about cross-sell opportunities and expect to surprise positively, leveraging their resources and market access.
Q: Could you elaborate on the strong growth in alternatives AUM and the drivers behind it?
A: William Stone, CEO, attributed the growth to strong market conditions and SS&C's client base, which includes large-scale platforms that have captured significant new capital. SS&C is focused on adding value and supporting clients with new technologies and processes.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
