SS&C Earnings: Strong Period and Steady Outlook

SS&C Technologies reported a respectable quarter. Organic revenue grew 6.4% in the second quarter of 2024, compare with 4.7% in the first quarter and the firm's outlook of 4.8% at the midpoint. In addition, revenue retention remains steady in the 96%-97% range. However, while SS&C beat its second-quarter outlook by about $20 million at the midpoint, it only raised its full-year outlook revenue by $12 million at the midpoint in part due to some accelerated license revenue in the quarter. SS&C raised its adjusted earnings per share outlook by $0.05 at the midpoint to $5.10. Overall, there was little in the firm's financial results that would alter our long-term view of the firm, and we will maintain our narrow moat rating and $82 fair value estimate. We regard shares as undervalued.