Broadridge Financial Solutions: Delivering Growth and Innovation

Broadridge Financial Solutions, a leading provider of investor communication solutions and technology-enabled services, has reported strong financial results for the first half of fiscal year 2024. The company’s two reportable segments, Investor Communication Solutions and Global Technology and Operations, have both contributed to the overall growth and performance.

Investor Communication Solutions: Driving Recurring Revenue Growth

Broadridge’s Investor Communication Solutions segment has seen a 9% increase in recurring revenues for the three-month period ended December 31, 2024, compared to the same period in the prior year. This growth was driven by a combination of Net New Business, Internal Growth, and acquisitions.

The Regulatory, Data-Driven Fund Solutions, Issuer, and Customer Communications product lines all contributed to the segment’s performance. Regulatory revenues grew 8%, driven by an 11% increase in equity position growth and an 8% increase in mutual fund/ETF position growth. Data-Driven Fund Solutions revenues rose 9%, supported by growth in global distribution insights and retirement and workplace products. Issuer revenues increased 18%, fueled by growth in disclosure solutions and shareholder engagement solutions. Customer Communications revenues grew 10%, driven by growth in print revenues and digital communications.

Event-driven revenues, which can be volatile, saw a significant increase of 126% in the quarter, primarily due to higher volumes of mutual fund communications. Distribution revenues, which include revenues related to physical mailing and administrative services, increased 7%, largely due to the impact of a postage rate increase.

Global Technology and Operations: Expanding Capabilities

Broadridge’s Global Technology and Operations segment also delivered strong results, with a 9% increase in recurring revenues for the three-month period ended December 31, 2024. This growth was driven by a combination of organic growth and the impact of the acquisition of SIS, a provider of data products for asset management and wealth management firms.

The Capital Markets business saw a 6% increase in recurring revenues, driven by new sales and internal growth, which benefited from higher trading volumes. The Wealth and Investment Management business grew 12%, with 2 percentage points of organic growth and 11 percentage points from the SIS acquisition, partially offset by a 4 percentage point decline due to the loss of a large client.

Financial Performance Highlights

For the three-month period ended December 31, 2024, Broadridge reported:

• Revenues of $1,589.2 million, an increase of 13% compared to the prior year period
• Recurring revenues of $980.2 million, an increase of 9% compared to the prior year period
• Event-driven revenues of $124.6 million, an increase of 126% compared to the prior year period
• Distribution revenues of $484.5 million, an increase of 7% compared to the prior year period
• Adjusted Operating income of $263.3 million, an increase of 51% compared to the prior year period
• Adjusted Net earnings of $184.4 million, an increase of 68% compared to the prior year period
• Adjusted earnings per share of $1.56, an increase of 70% compared to the prior year period

For the six-month period ended December 31, 2024, Broadridge reported:

• Revenues of $3,012.1 million, an increase of 6% compared to the prior year period
• Recurring revenues of $1,880.5 million, an increase of 6% compared to the prior year period
• Event-driven revenues of $187.6 million, an increase of 32% compared to the prior year period
• Distribution revenues of $944.0 million, an increase of 2% compared to the prior year period
• Adjusted Operating income of $448.1 million, an increase of 20% compared to the prior year period
• Adjusted Net earnings of $302.7 million, an increase of 27% compared to the prior year period
• Adjusted earnings per share of $2.56, an increase of 27% compared to the prior year period

The company’s strong financial performance was driven by growth in both its Investor Communication Solutions and Global Technology and Operations segments, as well as effective cost management and operational efficiency.

Strengths and Opportunities

Broadridge’s key strengths include its market-leading position in investor communication solutions, its diversified and recurring revenue streams, and its ability to leverage technology to drive innovation and efficiency for its clients. The company’s acquisition strategy has also been a source of growth, with the recent acquisition of SIS expanding its capabilities in the wealth management and asset management sectors.

Looking ahead, Broadridge sees several opportunities for continued growth, including:

• Expanding its presence in the wealth management and asset management markets, leveraging the capabilities gained through the SIS acquisition
• Continuing to drive digital transformation and adoption of its technology-enabled solutions across its client base
• Capitalizing on regulatory changes and market events that drive increased demand for its event-driven services
• Exploring additional strategic acquisitions to further enhance its product and service offerings

Outlook and Conclusion

Broadridge’s strong financial performance in the first half of fiscal year 2024, coupled with its strategic initiatives and market opportunities, position the company well for continued growth and success. The company’s focus on innovation, operational excellence, and client-centric solutions has enabled it to navigate the evolving financial services landscape and deliver value to its shareholders.

As Broadridge looks to the future, the company remains committed to driving sustainable growth, investing in its technology and talent, and leveraging its market-leading position to capitalize on emerging trends and opportunities in the financial services industry.