Press Release

Advent Software Reports Second Quarter 2014 Results

Record Second Quarter Revenue of $100.4 Million and GAAP Diluted EPS of $0.24

SAN FRANCISCO – July 28, 2014 – Advent Software, Inc. (NASDAQ: ADVS), a leading provider of software and services to the global investment management industry, announced today its financial results for the second quarter ended June 30, 2014.

“We are pleased to report that Advent had an excellent second quarter with record revenues, robust profitability, and growing operating cash flow,” said Pete Hess, Chief Executive Officer of Advent. “Increasing demand for Advent’s solutions, including Advent Direct® Investor Management, and continued client loyalty are evidence of our strong competitive position.”

SECOND QUARTER 2014 RESULTS

GAAP Results for Continuing Operations
The Company reported quarterly revenue of $100.4 million for the second quarter of 2014, compared to $96.1 million in the second quarter of 2013, a 4% increase.

Operating income for the second quarter of 2014 was $21.8 million, or 21.7% of revenue, compared to a loss of $5.8 million for the second quarter of 2013. Advent’s results for the second quarter of 2013 included costs associated with its recapitalization transaction. These costs, on a pre-tax basis, were composed of $6.7 million of third party costs which were not included in capitalized debt issue costs and $21.9 million of stock-based compensation expense associated with the modification of equity awards.

Net income for the second quarter of 2014 was $12.7 million, compared to a loss of $4.2 million in the second quarter of 2013. On a fully diluted basis, earnings per share in the second quarter of 2014 were $0.24 compared to a loss of $0.08 in the second quarter of 2013.

Operating cash flow in the second quarter of 2014 was $22.4 million, compared with $21.9 million in the second quarter of 2013.

Cash and cash equivalents totaled $41 million as of June 30, 2014, compared to $45 million as of March 31, 2014. Total outstanding debt as of June 30, 2014 was $280 million compared to $295 million as of March 31, 2014.

Deferred revenue as of June 30, 2014 was $183.1 million, compared to $187.8 million as of March 31, 2014.

The Company repurchased approximately 426,000 shares of its common stock in the second quarter of 2014 for a total cash outlay of $12.4 million and at an average price of $29.11 per share.

Non-GAAP Results for Continuing Operations
Non-GAAP operating income for the second quarter of 2014 was $33.2 million, or 33.1% of revenue, a 7% increase compared to $31.0 million, or 32.3% of revenue, in the second quarter of 2013.

On a fully diluted basis, non-GAAP earnings per share were $0.38 in the second quarter of 2014 and represent a 4% increase from non-GAAP diluted net income per share of $0.37 in the second quarter of 2013.

The reconciliation between GAAP and non-GAAP financial measures is provided at the end of this press release.

HIGHLIGHTS
  • Advent’s Black Diamond Platform Surpasses 500-Client Milestone. Advent’s Black Diamond platform has surpassed 540 clients and has exceeded $245 billion in assets on its portfolio management, reporting, and rebalancing platform. The client base has increased by more than 125 percent and assets by more than 240 percent since its acquisition by Advent in June 2011.
  • Award-Winning Solutions & Company: Advent's solutions continued to receive industry awards and win honors around the world during the second quarter. Advent was awarded “Best Fund Accounting and Reporting Systems Firm” by Hedgeweek, as well as “Best Client Reporting Solution” by FTF News. In Europe, Advent was named “Best Portfolio Management Solution” at Wealth Briefing European Awards 2014 and “Best Technology – Fund Accounting” at the HFM Week European Hedge Fund Service Awards.
  • Continued Client Success: Advent had a strong second quarter, with a number of existing clients expanding their relationship with Advent, and many new noteworthy clients around the world, including Beta Capital Management, Carroll Financial Associates, Fiera Capital Corporation, Finix Services, Merced Capital L.P., Busey Wealth Management, Mesirow Financial Administrative Corp., William E. Hamm and Associates, Neon Capital Management, and the Georgia Division of Investment Services.
  • Quarterly Dividend: Advent's Board of Directors declared its first quarterly cash dividend to its shareholders during the second quarter of 2014. The quarterly cash dividend payment of $0.13 per common share was paid on July 15, 2014 to shareholders of record on June 30, 2014.

FINANCIAL GUIDANCE

Advent updates the following financial guidance for the third quarter and fiscal year 2014:

Guidance

Q3 2014

FY 2014

Total Revenue ($M)

$99-$102

$395-$403

GAAP Operating Margin

n/a

20.0%-20.5%

Stock Compensation Expense (% of revenue)

n/a

8.5%

Amortization of Intangibles (% of revenue)

n/a

2.0%

Restructing (% of revenue)

n/a

0.5%

Non-GAAP Operating Margin (% of revenue)

n/a

31.0%-31.5%

Operating Cash Flow ($M)

n/a

$105-$115

Capital Expenditures ($M)

n/a

$8-$11

Effective Tax Rate (GAAP)

n/a

35%-40%

Effective Tax Rate (non-GAAP)

n/a

35%

View the financial report for Q2.14.

INVESTOR CALL 
Advent Software, Inc. will host its Q2 2014 quarterly earnings conference call at 5:00 p.m. Eastern time today. The Q2 2014 earnings presentation and trended disclosures file, which include highlights and detailed financial information, are currently available at http://investor.advent.com. To participate via phone, please dial 877-474-9504 and request conference ID # 25698158. Telephone replay will be available through midnight August 4, 2014. The replay number for domestic callers is 888-286-8010, and for international callers is 617-801-6888, with the conference ID of # 31161812. The conference call will also be webcast live and then archived on http://investor.advent.com

ABOUT ADVENT 
Over the last 30 years of industry change, our core mission to help our clients focus on their unique strategies and deliver exceptional investor service has never wavered. With unparalleled precision and ahead of the curve solutions, we've helped over 4,300 firms in more than 50 countries - from established global institutions to small start-up practices – to grow their business and thrive. Advent technology helps firms minimize risk, work together seamlessly, and discover new opportunities in a constantly evolving world. Together with our clients, we are shaping the future of investment management. For more information on Advent products visit http://www.advent.com.


ABOUT NON-GAAP FINANCIAL INFORMATION
This press release includes non-GAAP financial measures. For a description of these non-GAAP financial measures, including the reasons management uses each measure, and reconciliations of these non-GAAP financial measures to the most directly comparable financial measures prepared in accordance with Generally Accepted Accounting Principles in the United States of America (GAAP), please see the accompanying tables entitled “Reconciliation of Selected Continuing Operations’ GAAP Measures to Non-GAAP Measures.”

FORWARD-LOOKING STATEMENTS 
The financial projections under Financial Guidance and any other forward-looking statements included in this presentation reflect management's best judgment based on factors currently known and involve risks and uncertainties; our actual results may differ materially from those discussed here. These risks and uncertainties include: potential fluctuations in new contract bookings, renewal rates, operating results and future growth rates; continued market acceptance of our products; the successful development, release and market acceptance of new products and product enhancements; uncertainties and fluctuations in the financial markets; the Company’s ability to declare future dividends; the Company’s ability to satisfy contractual performance requirements and other risks detailed from time to time in our SEC reports including, but not limited to, our quarterly reports on Form 10-Q and our 2013 Annual Report on Form 10-K. The Company disclaims any intention or obligation to publicly update or revise any forward-looking statements including any guidance, whether as a result of events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

Advent, the Advent logo, Advent Software, and Advent Direct are registered trademarks of Advent Software, Inc. Any other company names or marks mentioned herein are those of their respective owners.

CONTACTS
Media Contact:
Amanda Diamondstein-Cieplinska
Advent Software, Inc.
(415) 645-1668
adiamond@advent.com

Investor Relations Contact:
Justin Ritchie
Advent Software, Inc.
(415) 645-1683
jritchie@advent.com