SS&C Technologies Holdings, Inc. Net Income jumped on 42.6% and Revenue increased slightly on 0.76%
02/10/2021 • About SS&C Technologies Holdings, Inc. (
$SSNC) • By InTwits
SS&C Technologies Holdings, Inc. reported 2020 financial results today. Here are the key drivers of the company's long term financial model:
- SS&C Technologies Holdings, Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.6%. At the same time it's in pair with industry average of 3.5%
- CAPEX is quite volatile: $106m in 2020, $130m in 2019, $89m in 2018, $46m in 2017, $38m in 2016
- In the last 5 years the company invested considerably less than D&A: $409m vs. $984m
- The company has business model with low profitability: ROIC is 8.0%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue increased slightly on 0.76%. Revenue growth showed slowdown in 20Q4 - it was -0.0% YoY. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 3.6 pp from 16.2% to 19.8% in 2020.
Gross Margin increased slightly on 1.2 pp from 43.6% to 44.9% in 2020. SG&A as a % of Revenue showed almost no change in 2020.
Net Income margin increased on 3.9 pp from 9.5% to 13.4% in 2020.
Investments (CAPEX, working capital and M&A)
In 2020 SS&C Technologies Holdings, Inc. had CAPEX/Revenue of 2.3%. CAPEX/Revenue showed almost no change from 2017 to 2020. For the last three years the average CAPEX/Revenue was 2.6%.
Return on investment
The company operates at low ROIC (8.0%) and ROE (11.5%). ROIC increased slightly on 0.96 pp from 7.0% to 8.0% in 2020. ROE increased on 2.5 pp from 9.0% to 11.5% in 2020.
Leverage (Debt)
Company's Net Debt / EBITDA is 3.7x and Debt / EBITDA is 3.8x. Net Debt / EBITDA dropped on 0.5x from 4.2x to 3.7x in 2020. Debt decreased on 9.7% while cash surged on 37.0%.
SS&C Technologies Holdings, Inc. has no short term refinancing risk: cash is higher than short term debt (178.4%).
Valuation and dividends
SS&C Technologies Holdings, Inc.'s trades at EV/EBITDA 13.1x and P/E 26.9x.
Management team
William C Stone "Bill" is a SS&C Technologies Holdings, Inc.'s CEO. William C Stone "Bill" has spent 16 years with the company. Patrick J Pedonti is a SS&C Technologies Holdings, Inc.'s CFO. Patrick J Pedonti has spent 18 years at the company.
Financial and operational results
FY ended 12/31/2020
SS&C Technologies Holdings, Inc. ($SSNC) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 1,481 | 1,675 | 3,421 | 4,633 | 4,668 | 0.8% |
| Gross Profit | 681 | 789 | 1,370 | 2,021 | 2,094 | 3.6% |
| SG&A | 240 | 239 | 525 | 723 | 709 | -2.0% |
| EBITDA | 517 | 634 | 948 | 1,769 | 1,789 | 1.1% |
| EBIT | 289 | 397 | 429 | | | |
| Tax | 33 | -46 | 22 | | | |
| Net Income | 131 | 329 | 103 | 439 | 625 | 42.6% |
| Stock Based Compensation | 4 | 41 | 97 | | | |
Balance Sheet
|
|---|
| Cash | 118 | 64 | 167 | 153 | 209 | 37.0% |
| Accounts Receivable | 241 | 244 | 682 | | | |
| Accounts Payable | 16 | 27 | 41 | | | |
| Short Term Debt | 126 | 38 | 88 | 136 | 117 | -13.8% |
| Long Term Debt | 2,375 | 2,007 | 8,169 | 7,426 | 6,712 | -9.6% |
Cash flow
|
|---|
| Capex | 38 | 46 | 89 | 130 | 106 | -18.4% |
| Dividends | 50 | 54 | 71 | | | |
| Acquisitions | 458 | 17 | 7,067 | | | |
Ratios
|
|---|
| Revenue growth | 48.1% | 13.1% | 104.2% | 35.4% | 0.8% | |
| EBITDA growth | 63.9% | 22.6% | 49.4% | 86.6% | 1.1% | |
|
|---|
| Gross Margin | 46.0% | 47.1% | 40.0% | 43.6% | 44.9% | 1.2% |
| EBITDA Margin | 34.9% | 37.9% | 27.7% | 38.2% | 38.3% | 0.1% |
| EBIT Margin | 19.5% | 23.7% | 12.5% | | |
| SG&A, % of revenue | 16.2% | 14.2% | 15.3% | 15.6% | 15.2% | -0.4% |
| SBC, % of revenue | 0.3% | 2.5% | 2.8% | | |
| Net Income Margin | 8.8% | 19.6% | 3.0% | 9.5% | 13.4% | 3.9% |
| CAPEX, % of revenue | 2.5% | 2.7% | 2.6% | 2.8% | 2.3% | -0.5% |
|
|---|
| ROIC | 5.5% | 7.7% | 4.5% | 7.0% | 8.0% | 1.0% |
| ROE | 6.0% | 13.3% | 2.8% | 9.0% | 11.5% | 2.5% |
| Net Debt/EBITDA | 4.6x | 3.1x | 8.5x | 4.2x | 3.7x | -0.5x |
People
|
|---|
| Insider ownership | 13.6% | 13.6% | 13.6% | | | |
| Employees | 8,001 | 8,287 | 22,600 | | | |
| Revenue/Employee, th. $ | 185 | 202 | 151 | | | |
SS&C Technologies Holdings, Inc. ($SSNC) key quoterly financial indicators
| mln. $ | 20Q1 | 20Q2 | 20Q3 | 20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 1,174 | 1,138 | 1,153 | 1,203 | | 3.2% | -0.9% | 0.8% | -0.0% |
| EBITDA | 404 | 421 | 437 | 450 | | -5.0% | -2.9% | -0.1% | -4.9% |
| Net Income | 99 | 170 | 159 | 197 | | 22.8% | 40.0% | 67.8% | 39.2% |
Balance Sheet
|
|---|
| Cash | 374 | 262 | 185 | 209 | | 141.7% | 99.5% | 17.1% | 37.0% |
| Short Term Debt | 320 | 72 | 78 | 117 | | 125.0% | -39.9% | -33.3% | -13.8% |
| Long Term Debt | 7,318 | 7,163 | 7,094 | 6,712 | | -12.7% | -11.8% | -10.4% | -9.6% |
Ratios
|
|---|
| Gross Margin | 43.3% | 44.9% | 45.4% | 45.8% | | 1.5% | 1.5% | 1.6% | 0.4% |
| EBITDA Margin | 34.4% | 37.0% | 37.9% | 37.4% | | -3.0% | -0.8% | -0.3% | -1.9% |
| Net Income Margin | 8.5% | 14.9% | 13.8% | 16.4% | | 1.3% | 4.3% | 5.5% | 4.6% |
Peers in Application Software
Below we provide SS&C Technologies Holdings, Inc. benchmarking against other companies in Application Software industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| VirnetX Holding Corp ($VHC) | - | -0.2% | -95.9% | 34.9% | 355,942.4% |
| AudioEye, Inc. ($AEYE) | - | 175.5% | 106.6% | 90.2% | 90.2% |
| Cloudera, Inc. ($CLDR) | - | 57.2% | 42.6% | 28.9% | 65.5% |
| Integrated Ventures Inc ($INTV) | - | - | - | -8.9% | 62.7% |
| Smartsheet Inc. ($SMAR) | - | 64.3% | 66.1% | 59.7% | 52.4% |
| |
|---|
| Median (92 companies) | 12.0% | 15.7% | 15.1% | 19.4% | 14.7% |
|---|
| SS&C Technologies Holdings, Inc. ($SSNC) | - | 13.1% | 104.2% | 35.4% | 0.8% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Aware, Inc. ($AWRE) | 90.3% | 94.6% | 92.3% | 89.7% | 92.8% |
| Alteryx, Inc. ($AYX) | 81.3% | 83.4% | 91.0% | 90.6% | 91.1% |
| Autodesk, Inc. ($ADSK) | 85.2% | 83.2% | 85.2% | 88.9% | 90.1% |
| Smith Micro Software, Inc. ($SMSI) | 73.2% | 77.9% | 83.5% | 90.9% | 89.9% |
| Cadence Design Systems, Inc. ($CDNS) | 85.9% | 87.8% | 87.9% | 88.6% | 88.6% |
| |
|---|
| Median (89 companies) | 64.2% | 64.6% | 66.0% | 68.4% | 70.6% |
|---|
| SS&C Technologies Holdings, Inc. ($SSNC) | 46.0% | 47.1% | 40.0% | 43.6% | 44.9% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| VirnetX Holding Corp ($VHC) | -1,837.2% | -1,118.0% | -40,379.4% | -23,127.1% | 52.2% |
| j2 Global, Inc. ($JCOM) | 41.7% | 36.5% | 35.7% | 38.6% | 40.5% |
| Intelligent Systems Corporation ($INS) | -5.4% | -12.8% | 33.6% | 43.6% | 40.4% |
| Adobe Inc. ($ADBE) | 31.2% | 34.2% | 35.3% | 35.8% | 39.7% |
| ANSYS, Inc. ($ANSS) | 45.1% | 41.9% | 41.4% | 39.5% | 36.1% |
| |
|---|
| Median (89 companies) | -5.3% | -4.2% | -3.3% | 2.7% | 6.8% |
|---|
| SS&C Technologies Holdings, Inc. ($SSNC) | 34.9% | 37.9% | 27.7% | 38.2% | 38.3% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| MicroStrategy Incorporated ($MSTR) | 0.5% | 0.8% | 1.4% | 2.1% | 234.8% |
| Integrated Ventures Inc ($INTV) | - | - | 199.9% | 15.2% | 27.2% |
| Intelligent Systems Corporation ($INS) | 3.8% | 9.7% | 4.3% | 4.9% | 19.2% |
| LivePerson, Inc. ($LPSN) | 5.5% | 7.9% | 8.8% | 16.3% | 11.4% |
| PROS Holdings, Inc. ($PRO) | 4.7% | 0.8% | 0.7% | 2.1% | 11.3% |
| |
|---|
| Median (87 companies) | 3.0% | 2.3% | 2.4% | 3.0% | 2.6% |
|---|
| SS&C Technologies Holdings, Inc. ($SSNC) | 2.5% | 2.7% | 2.6% | 2.8% | 2.3% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| VirnetX Holding Corp ($VHC) | -210.9% | -256.8% | -416.3% | -247.2% | 137.3% |
| Manhattan Associates, Inc. ($MANH) | 99.3% | 102.5% | 80.9% | 71.7% | 53.4% |
| Citrix Systems, Inc. ($CTXS) | 16.1% | 16.7% | 25.2% | 29.8% | 33.5% |
| Sonic Foundry, Inc. ($SOFO) | -18.1% | -50.6% | -786.4% | - | 31.3% |
| Paycom Software, Inc. ($PAYC) | 75.4% | 51.1% | 47.5% | 47.5% | 28.7% |
| |
|---|
| Median (92 companies) | -9.8% | -11.8% | -10.6% | -4.5% | -2.2% |
|---|
| SS&C Technologies Holdings, Inc. ($SSNC) | 5.5% | 7.7% | 4.5% | 7.0% | 8.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Dropbox, Inc. ($DBX) | - | -3.8x | - | 2.4x | 1,341.0x |
| Avaya Holdings Corp. ($AVYA) | - | - | 7.4x | - | 77.9x |
| Alteryx, Inc. ($AYX) | - | - | 2.5x | 6.1x | 32.2x |
| Five9, Inc. ($FIVN) | -6.7x | -8.6x | 7.3x | 5.3x | 17.6x |
| Synchronoss Technologies, Inc. ($SNCR) | - | - | - | - | 11.6x |
| |
|---|
| Median (53 companies) | -0.9x | -0.9x | -0.7x | 0.4x | 0.0x |
|---|
| SS&C Technologies Holdings, Inc. ($SSNC) | 4.6x | 3.1x | 8.5x | 4.2x | 3.7x |
