SS&C Technologies Holdings, Inc. (NASDAQ: SSNC) stock rose over 1.1% on 1st November, 2018 (as of 12:12 PM GMT-4 ; Source: Google finance) after the company posted better than expected results for the in the third quarter of FY 18. The earnings beat is primarily driven by a lower cost base and strong performance on the DST synergies. DST’s integration and margin improvement is going well. Additional unplanned cost savings were achieved in Q3, primarily through the result of natural attrition.
SSNC in the third quarter of FY 18 has reported the adjusted earnings per share of 79 cents, beating the analysts’ estimates for the adjusted earnings per share of 78 cents. The company had reported the adjusted revenue growth of 139.1 percent to $1 billion in the third quarter of FY 18, missing the analysts’ estimates for revenue by 0.02%. Adjusted operating income for the third quarter of 2018 was $344.7 million, or 34.4 percent of adjusted revenue, compared to $170.1 million, or 40.5 percent of adjusted revenue, in 2017’s third quarter, representing a 102.6 percent increase. Adjusted consolidated EBITDA increased 104.6 percent to $365.9 million in Q3 2018. Adjusted consolidated EBITDA margin was 36.5 percent for the quarter. Paid down $641.2 million in debt since acquiring DST Systems, bringing our leverage ratio to 4.02 times consolidated EBITDA as of September 30, 2018.
On September 6, 2018, SS&C had announced a definitive agreement to acquire Intralinks Holdings, Inc. for a total consideration of $1.5 billion. The purchase price will consist of $1 billion in cash and $500 million in SS&C stock, with the per share price of the stock based on the volume weighted average trading price for 30 trading days prior to closing.
Additionally, SNC generated net cash from operating activities of $322.4 million for the nine months ended September 30, 2018, compared to $308.5 million for the same period in 2017, representing a 4.5 percent increase. Operating cash flow was impacted by approximately $210.0 million of transaction costs related to the acquisition of DST Systems. SS&C ended the third quarter with $732.2 million in cash and cash equivalents and $6,759.4 million in gross debt, for a net debt balance of $6,027.2 million.
SSNC has raised the synergy guidance for DST to $220 million to $240 million, over the three years beginning April 16 of 2018. The additional $45 million to $65 million in cost savings will come from transitioning contractors to employees, lower facilities costs and improved provisioning of data and other operating expenses.