Recurring revenues grew 7%; up 6% constant
currency
Diluted EPS rose to $0.59 and Adjusted EPS increased to $0.92
Year-to-date Closed sales rose 12%
Reaffirming FY'24 guidance, including 6-9%
Recurring revenue growth constant currency and 8-12% Adjusted EPS
growth, and Closed sales of $280-320
million
NEW
YORK, Feb. 1, 2024 /PRNewswire/ -- Broadridge
Financial Solutions, Inc. (NYSE:BR) today reported financial
results for the second quarter ended December 31, 2023 of its fiscal year 2024.
Results compared with the same period last year were as follows:
Summary Financial
Results
|
|
Second
Quarter
|
|
Six
Months
|
|
Dollars in millions,
except per share data
|
|
2024
|
2023
|
Change
|
2024
|
2023
|
Change
|
|
|
|
|
|
|
|
|
Recurring
revenues
|
|
$899
|
$840
|
7 %
|
$1,770
|
$1,646
|
8 %
|
Constant currency growth
(Non-GAAP)
|
|
|
|
6 %
|
|
|
7 %
|
Total
revenues
|
|
$1,405
|
$1,293
|
9 %
|
$2,836
|
$2,576
|
10 %
|
|
|
|
|
|
|
|
|
Operating
income
|
|
$124
|
$108
|
15 %
|
$273
|
$195
|
40 %
|
Margin
|
|
8.9 %
|
8.3 %
|
|
9.6 %
|
7.6 %
|
|
|
|
|
|
|
|
|
|
Adjusted Operating
income (Non-GAAP)
|
|
$174
|
$173
|
1 %
|
$374
|
$323
|
16 %
|
Margin
(Non-GAAP)
|
|
12.4 %
|
13.4 %
|
|
13.2 %
|
12.5 %
|
|
|
|
|
|
|
|
|
|
Diluted EPS
|
|
$0.59
|
$0.48
|
23 %
|
$1.35
|
$0.91
|
48 %
|
Adjusted EPS
(Non-GAAP)
|
|
$0.92
|
$0.91
|
1 %
|
$2.01
|
$1.75
|
15 %
|
|
|
|
|
|
|
|
|
Closed sales
|
|
$58
|
$65
|
(11 %)
|
$106
|
$94
|
12 %
|
"Broadridge's second quarter marks continued progress toward the
growth objectives we outlined at our Investor Day in December,"
said Tim Gokey, Broadridge CEO. "Our
results, including 6% organic Recurring revenue growth constant
currency, demonstrate continued execution on our goals to
democratize and digitize governance, simplify and innovate trading
in capital markets, and modernize wealth management. Our focus on
driving growth and returns is translating into higher Free cash
flow and positions us to return additional capital to
shareholders.
"We are reaffirming our 2024 guidance including 6-9% Recurring
revenue growth constant currency, 8-12% Adjusted EPS growth, and
record Closed sales of $280-320
million. As a result, we are off to a strong start in delivering on
our three-year growth objectives including annualized growth of
7-9% for Recurring revenues and 8-12% for Adjusted EPS," Mr. Gokey
concluded.
Fiscal Year 2024 Financial Guidance
|
|
FY'24
Guidance
|
Updates /
Changes
|
Recurring revenue
growth constant currency (Non-GAAP)
|
|
6 - 9%
|
No Change
|
Adjusted Operating
income margin (Non-GAAP)
|
|
~20%
|
No Change
|
Adjusted Earnings per
share growth (Non-GAAP)
|
|
8 - 12%
|
No Change
|
Closed sales
|
|
$280 - $320M
|
No Change
|
Financial Results for Second Quarter Fiscal Year 2024
compared to Second Quarter Fiscal Year 2023
- Total revenues increased 9% to $1,405 million from $1,293 million.
- Recurring revenues increased $58
million, or 7%, to $899
million. Recurring revenue growth constant currency
(Non-GAAP) was 6%, all organic, driven by Net New Business and
Internal Growth.
- Event-driven revenues increased $18
million, or 47%, to $55
million, driven by higher mutual fund proxy activity.
- Distribution revenues increased $36
million, or 9%, to $451
million, driven by the postage rate increase of
approximately $28 million and higher
event-driven mailings.
- Operating income was $124
million, an increase of $16 million, or 15%. Operating
income margin increased to 8.9%, compared to 8.3% for the prior
year period, primarily due to higher Recurring revenues and higher
event-driven revenues.
- Adjusted Operating income was $174 million, an increase of $1 million, or 1%. Adjusted Operating income
margin was 12.4% compared to 13.4% for the prior year period. The
operating leverage from higher revenues and a 40 basis point net
benefit from higher float income and distribution revenue was
offset by increased investment spending and higher selling, general
and administrative expenses.
- Interest expense, net was $36 million, an increase of $2 million, due to an increase in interest
expense from higher borrowing costs, partially offset by a decrease
in average borrowings.
- The effective tax rate was 19.9% compared to 20.0%
in the prior year period. The effective tax rate for the three
months ended December 31, 2023 was
primarily driven by a higher excess tax benefit related to equity
compensation, relative to pre-tax income, as compared to the prior
year period.
- Net earnings increased 22% to $70 million and Adjusted Net earnings increased
1% to $110 million.
- Diluted earnings per share increased 23% to $0.59, compared to $0.48 in the prior year period, and
- Adjusted earnings per share increased 1% to $0.92, compared to $0.91 in the prior year period.
Segment and Other Results for Second Quarter Fiscal Year 2024
compared to Second Quarter Fiscal Year 2023
Investor Communication Solutions ("ICS")
- Total revenues were $1,000
million, an increase of $80
million, or 9%.
- Recurring revenues increased $26
million or 6%, to $493
million. Recurring revenue growth constant currency
(Non-GAAP) was 6%, all organic, driven by Net New Business and
Internal Growth.
- By product line, Recurring revenue growth and Recurring revenue
growth constant currency (Non-GAAP) were as follows:
- Regulatory rose 8% and 8%, respectively, which included the
impact of mutual fund/ETF position growth of 5% and equity position
growth of 6%.
- Data-driven fund solutions rose 9% and 9%, respectively, driven
primarily by growth in our retirement and workplace products.
- Issuer rose 15% and 15%, respectively, driven by growth in our
registered shareholder solutions and disclosure solutions.
- Customer communications was essentially flat, as the increase
in digital communications was slightly more than offset by lower
print revenues.
- Event-driven revenues increased $18
million, or 47%, to $55
million, driven by mutual fund proxy activity.
- Distribution revenues increased $36
million, or 9%, to $451
million, driven by the postage rate increase of
approximately $28 million and higher
event-driven mailings.
- Earnings before income taxes increased by $31 million, or 48%, to $96 million, primarily from higher Recurring
revenue and higher event-driven revenue. Operating expenses rose
6%, or $49 million, to $904 million primarily driven by higher
distribution expenses. Pre-tax margins increased to 9.6% from 7.1%
in the prior period.
Global Technology and Operations ("GTO")
- Recurring revenues were $405
million, an increase of $32
million, or 9%. Recurring revenue growth constant currency
(Non-GAAP) was 8%, all organic, driven by Net New Business and
Internal Growth.
- By product line, Recurring revenue growth and the corresponding
Recurring revenue growth constant currency (Non-GAAP) were as
follows:
- Capital markets rose 12% and 10%, respectively, driven by Net
New Business and Internal Growth. Internal Growth was driven
primarily by higher trading volumes and software term license
revenue.
- Wealth and Investment management rose 3% and 4%, respectively,
driven primarily by Net New Business as strong sales were partially
offset by client losses.
- Earnings before income taxes were $39
million, a decrease of $5
million, or 11%. Pre-tax margins decreased to 9.7% from
11.8% as higher revenues were more than offset by higher expenses,
including an increase in amortization expenses of $15 million.
Other
- Loss before income tax increased to $47
million from $37 million in
the prior year period, primarily due to higher compensation and
other selling, general and administrative expenses and the
$1 million net increase in interest
expense and Other non-operating expenses which more than offset the
absence of Russia-Related Exit Costs.
Financial Results for the Six Months Fiscal Year 2024
compared to the Six Months Fiscal Year 2023
- Total revenues increased 10% to $2,836 million from $2,576
million.
- Recurring revenues increased $124
million, or 8%, to $1,770
million. Recurring revenue growth constant currency
(Non-GAAP) was 7%, all organic, driven by Net New Business and
Internal Growth in GTO and ICS.
- Event-driven revenues increased $42
million, or 42%, to $142
million, driven by higher mutual fund proxy and corporate
action activity.
- Distribution revenues increased $94
million, or 11%, to $924
million, driven by the postage rate increase of
approximately $55 million as well as
higher event-driven mailings.
- Operating income was $273
million, an increase of $77
million, or 40%. Operating income margin increased to 9.6%,
compared to 7.6% for the prior year period, primarily due to higher
Recurring revenues and higher event-driven revenues.
- Adjusted Operating income was $374 million, an increase of $51 million, or 16%. Adjusted Operating income
margin was 13.2% compared to 12.5% for the prior year period. The
operating leverage from higher revenues and a 70 basis point net
benefit from higher float income and distribution revenue was
offset by increased investment spending.
- Interest expense, net was $70 million, an increase of $9 million, primarily due to an increase in
interest expense from higher borrowing costs, partially offset by a
decrease in average borrowings.
- The effective tax rate was 19.7% compared to 15.2%
in the prior year period. The effective tax rate for the six months
ended December 31, 2023 was driven by
lower discrete tax benefits, including a lower excess tax benefit
related to equity compensation, relative to pre-tax income, as
compared to the prior year period.
- Net earnings increased 49% to $161 million and Adjusted Net earnings increased
15% to $239 million.
- Diluted earnings per share increased 48% to $1.35, compared to $0.91 in the prior year period, and
- Adjusted earnings per share increased 15% to
$2.01, compared to $1.75 in the prior year period.
Segment and Other Results for the Six Months Fiscal Year 2024
compared to the Six Months Fiscal Year 2023
Investor Communication Solutions
- Total revenues were $2,028
million, an increase of $188
million, or 10%.
- Recurring revenues increased $52
million or 6%, to $962
million. Recurring revenue growth constant currency
(Non-GAAP) was 6%, all organic, driven by Net New Business and
Internal Growth.
- By product line, Recurring revenue growth and Recurring revenue
growth constant currency (Non-GAAP) were as follows:
- Regulatory rose 6% and 6%, respectively, which included the
impact of mutual fund/ETF position growth of 3% and equity position
growth of 7%.
- Data-driven fund solutions rose 10% and 9%, respectively,
driven by growth in our retirement and workplace products.
- Issuer rose 17% and 17%, respectively, driven by growth in our
registered shareholder solutions.
- Customer communications rose 1% and 1%, respectively, driven by
higher digital communications offset by lower print
revenue.
- Event-driven revenues increased $42
million, or 42%, to $142
million, driven by higher mutual fund proxy and corporate
action activity.
- Distribution revenues increased $94
million, or 11%, to $924
million, driven by the postage rate increase of
approximately $55 million as well as
higher event-driven mailings.
- Earnings before income taxes increased by $86 million, or 69%, to $211 million, primarily from higher Recurring
revenue and higher event-driven revenue. Operating expenses rose
6%, or $102 million, to $1,817 million primarily driven by higher
distribution expenses. Pre-tax margins increased to 10.4% from 6.8%
in the prior period.
Global Technology and Operations
- Recurring revenues were $808
million, an increase of $72
million, or 10%. Recurring revenue growth constant currency
(Non-GAAP) was 9%, all organic, driven by Net New Business and
Internal Growth.
- By product line, Recurring revenue growth and the corresponding
Recurring revenue growth constant currency (Non-GAAP) were as
follows:
- Capital markets rose 11% and 9%, respectively, driven by Net
New Business and Internal Growth, which benefited from higher
trading volumes.
- Wealth and Investment management rose 8% and 9%, respectively,
driven primarily by Net New Business.
- Earnings before income taxes were $73
million, a decrease of $11
million, or 13%. Pre-tax margins decreased to 9.0% from
11.5% as higher revenues were more than offset by higher expenses,
including an increase in amortization expenses of $30 million.
Other
- Loss before income taxes increased to $83 million from $82
million in the prior year period, primarily due to higher
compensation and other selling, general and administrative expenses
and the $4 million net increase in
interest expense and Other non-operating expenses, which offset the
absence of Russia-Related Exit Costs.
Earnings Conference Call
An analyst conference call will be held today, February 1, 2024 at 8:30
a.m. ET. A live webcast of the call will be available to the
public on a listen-only basis. To listen to the live event and
access the slide presentation, visit Broadridge's Investor
Relations website at www.broadridge-ir.com prior to the start
of the webcast. To listen to the call, investors may also dial
1-877-328-2502 within the United
States and international callers may dial 1-412-317-5419. A
replay of the webcast will be available and can be accessed in the
same manner as the live webcast at the Broadridge Investor
Relations site. Through February 8,
2024, the recording will also be available by dialing
1-877-344-7529 within the United
States or 1-412-317-0088 for international callers, using
passcode 5239951 for either dial-in number.
Explanation and Reconciliation of the Company's Use of
Non-GAAP Financial Measures
The Company's results in this press release are presented in
accordance with U.S. GAAP except where otherwise noted. In certain
circumstances, results have been presented that are not generally
accepted accounting principles measures ("Non-GAAP"). These
Non-GAAP measures are Adjusted Operating income, Adjusted Operating
income margin, Adjusted Net earnings, Adjusted earnings per share,
Free cash flow, and Recurring revenue growth constant currency.
These Non-GAAP financial measures should be viewed in addition to,
and not as a substitute for, the Company's reported results.
The Company believes our Non-GAAP financial measures help
investors understand how management plans, measures and evaluates
the Company's business performance. Management believes that
Non-GAAP measures provide consistency in its financial reporting
and facilitates investors' understanding of the Company's operating
results and trends by providing an additional basis for comparison.
Management uses these Non-GAAP financial measures to, among other
things, evaluate our ongoing operations, and for internal planning
and forecasting purposes. In addition, and as a consequence of the
importance of these Non-GAAP financial measures in managing our
business, the Company's Compensation Committee of the Board of
Directors incorporates Non-GAAP financial measures in the
evaluation process for determining management compensation.
Adjusted Operating Income, Adjusted Operating Income Margin,
Adjusted Net Earnings and Adjusted Earnings Per Share
These Non-GAAP measures are adjusted to exclude the impact of
certain costs, expenses, gains and losses and other specified items
the exclusion of which management believes provides insight
regarding our ongoing operating performance. Depending on the
period presented, these adjusted measures exclude the impact of
certain of the following items: (i) Amortization of Acquired
Intangibles and Purchased Intellectual Property, (ii) Acquisition
and Integration Costs, and (iii) Russia-Related Exit Costs.
Amortization of Acquired Intangibles and Purchased Intellectual
Property represents non-cash amortization expenses associated with
the Company's acquisition activities. Acquisition and Integration
Costs represent certain transaction and integration costs
associated with the Company's acquisition activities.
Russia-Related Exit Costs are direct and incremental costs
associated with the Company's wind down of business activities in
Russia in response to Russia's invasion of Ukraine, including relocation-related expenses
of impacted associates.
We exclude Acquisition and Integration Costs and Russia-Related
Exit Costs from our Adjusted Operating income (as applicable) and
other adjusted earnings measures because excluding such information
provides us with an understanding of the results from the primary
operations of our business and enhances comparability across fiscal
reporting periods, as these items are not reflective of our
underlying operations or performance. We also exclude the impact of
Amortization of Acquired Intangibles and Purchased Intellectual
Property, as these non-cash amounts are significantly impacted by
the timing and size of individual acquisitions and do not factor
into the Company's capital allocation decisions, management
compensation metrics or multi-year objectives. Furthermore,
management believes that this adjustment enables better comparison
of our results as Amortization of Acquired Intangibles and
Purchased Intellectual Property will not recur in future periods
once such intangible assets have been fully amortized. Although we
exclude Amortization of Acquired Intangibles and Purchased
Intellectual Property from our adjusted earnings measures, our
management believes that it is important for investors to
understand that these intangible assets contribute to revenue
generation. Amortization of intangible assets that relate to past
acquisitions will recur in future periods until such intangible
assets have been fully amortized. Any future acquisitions may
result in the amortization of additional intangible assets.
Free cash flow
In addition to the Non-GAAP financial measures discussed above,
we provide Free cash flow information because we consider Free cash
flow to be a liquidity measure that provides useful information to
management and investors about the amount of cash generated that
could be used for dividends, share repurchases, strategic
acquisitions, other investments, as well as debt servicing. Free
cash flow is a Non-GAAP financial measure and is defined by the
Company as Net cash flows provided by operating activities less
Capital expenditures as well as Software purchases and capitalized
internal use software.
Recurring revenue growth constant currency
As a multi-national company, we are subject to variability of
our reported U.S. dollar results due to changes in foreign currency
exchange rates. The exclusion of the impact of foreign currency
exchange fluctuations from our Recurring revenue growth, or what we
refer to as amounts expressed "on a constant currency basis," is a
Non-GAAP measure. We believe that excluding the impact of foreign
currency exchange fluctuations from our Recurring revenue growth
provides additional information that enables enhanced comparison to
prior periods.
Changes in Recurring revenue growth expressed on a constant
currency basis are presented excluding the impact of foreign
currency exchange fluctuations. To present this information,
current period results for entities reporting in currencies other
than the U.S. dollar are translated into U.S. dollars at the
average exchange rates in effect during the corresponding period of
the comparative year, rather than at the actual average exchange
rates in effect during the current fiscal year.
Forward-Looking Statements
This press release and other written or oral statements made
from time to time by representatives of Broadridge may contain
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Statements that are not
historical in nature, and which may be identified by the use of
words such as "expects," "assumes," "projects," "anticipates,"
"estimates," "we believe," "could be," "on track," and other words
of similar meaning, are forward-looking statements. In particular,
information appearing in the "Fiscal Year 2024 Financial Guidance"
section and statements about our three-year objectives are
forward-looking statements.
These statements are based on management's expectations and
assumptions and are subject to risks and uncertainties that may
cause actual results to differ materially from those expressed.
These risks and uncertainties include those risk factors described
and discussed in Part I, "Item 1A. Risk Factors" of our Annual
Report on Form 10-K for the year ended June
30, 2023 (the "2023 Annual Report"), as they may be updated
in any future reports filed with the Securities and Exchange
Commission. All forward-looking statements speak only as of the
date of this press release and are expressly qualified in their
entirety by reference to the factors discussed in the 2023 Annual
Report.
These risks include:
- changes in laws and regulations affecting Broadridge's
clients or the services provided by Broadridge;
- Broadridge's reliance on a relatively small number of clients,
the continued financial health of those clients, and the continued
use by such clients of Broadridge's services with favorable pricing
terms;
- a material security breach or cybersecurity attack affecting
the information of Broadridge's clients;
- declines in participation and activity in the securities
markets;
- the failure of Broadridge's key service providers to
provide the anticipated levels of service;
- a disaster or other significant slowdown or failure
of Broadridge's systems or error in the performance of
Broadridge's services;
- overall market, economic and geopolitical conditions and their
impact on the securities markets;
- the success of Broadridge in retaining and selling
additional services to its existing clients and in obtaining new
clients;
- Broadridge's failure to keep pace with changes in technology
and demands of its clients;
- competitive conditions;
- Broadridge's ability to attract and retain key personnel;
and
- the impact of new acquisitions and divestitures.
There may be other factors that may cause our actual results to
differ materially from the forward-looking statements. Our actual
results, performance or achievements could differ materially from
those expressed in, or implied by, the forward-looking statements.
We can give no assurances that any of the events anticipated by the
forward-looking statements will occur or, if any of them do, what
impact they will have on our results of operations and financial
condition.
Broadridge disclaims any obligation to update or revise
forward-looking statements that may be made to reflect events or
circumstances that arise after the date made or to reflect the
occurrence of unanticipated events, other than as required by
law.
About Broadridge
Broadridge Financial Solutions (NYSE: BR), a global Fintech
leader with over $6 billion in
revenues, provides the critical infrastructure that powers
investing, corporate governance and communications to enable better
financial lives. We deliver technology-driven solutions to banks,
broker-dealers, asset and wealth managers and public companies.
Broadridge's infrastructure serves as a global communications hub
enabling corporate governance by linking thousands of public
companies and mutual funds to tens of millions of individual and
institutional investors around the world. In addition, Broadridge's
technology and operations platforms underpin the daily trading of
on average more than U.S. $10
trillion of equities, fixed income and other securities
globally. A certified Great Place to Work®, Broadridge is a part of
the S&P 500® Index, employing over 14,000 associates
in 21 countries. For more information about Broadridge, please
visit www.broadridge.com.
Contact Information
Investors
broadridgeir@broadridge.com
Media
Gregg.rosenberg@broadridge.com
Condensed
Consolidated Statements of
Earnings (Unaudited)
|
|
|
In millions, except
per share amounts
|
|
Three Months
Ended
December 31,
|
|
Six Months Ended
December 31,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Revenues
|
|
$ 1,405.0
|
|
$ 1,292.9
|
|
$ 2,836.0
|
|
$ 2,576.2
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Cost of
revenues
|
|
1,057.2
|
|
988.2
|
|
2,132.5
|
|
1,978.7
|
Selling, general and
administrative expenses
|
|
223.4
|
|
196.8
|
|
430.8
|
|
402.1
|
Total operating
expenses
|
|
1,280.6
|
|
1,185.0
|
|
2,563.2
|
|
2,380.8
|
Operating
income
|
|
124.4
|
|
107.9
|
|
272.8
|
|
195.4
|
Interest expense,
net
|
|
(36.3)
|
|
(34.1)
|
|
(69.7)
|
|
(61.0)
|
Other non-operating
expenses, net
|
|
(0.4)
|
|
(1.9)
|
|
(2.6)
|
|
(7.1)
|
Earnings before income
taxes
|
|
87.6
|
|
71.9
|
|
200.5
|
|
127.3
|
Provision for income
taxes
|
|
17.4
|
|
14.4
|
|
39.4
|
|
19.3
|
Net earnings
|
|
$
70.3
|
|
$
57.5
|
|
$
161.2
|
|
$
108.0
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share
|
|
$
0.60
|
|
$
0.49
|
|
$
1.37
|
|
$
0.92
|
Diluted earnings per
share
|
|
$
0.59
|
|
$
0.48
|
|
$
1.35
|
|
$
0.91
|
|
|
|
|
|
|
|
|
|
Weighted-average shares
outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
|
117.7
|
|
117.7
|
|
117.8
|
|
117.6
|
Diluted
|
|
119.1
|
|
118.9
|
|
119.1
|
|
118.9
|
Amounts may not sum
due to rounding.
|
Condensed
Consolidated Balance Sheets
(Unaudited)
|
|
In millions, except
per share amounts
|
|
|
December 31,
2023
|
|
June 30,
2023
|
Assets
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
$
277.0
|
|
$
252.3
|
Accounts receivable,
net of allowance for doubtful accounts of
$6.6 and $7.2, respectively
|
|
|
892.2
|
|
974.0
|
Other current
assets
|
|
|
194.4
|
|
166.2
|
Total current
assets
|
|
|
1,363.6
|
|
1,392.5
|
Property, plant and
equipment, net
|
|
|
143.2
|
|
145.7
|
Goodwill
|
|
|
3,429.3
|
|
3,461.6
|
Intangible assets,
net
|
|
|
1,347.6
|
|
1,467.2
|
Deferred client
conversion and start-up costs
|
|
|
930.6
|
|
937.0
|
Other non-current
assets
|
|
|
785.5
|
|
829.2
|
Total
assets
|
|
|
$
7,999.8
|
|
$
8,233.2
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Current portion of
long-term debt
|
|
|
$
—
|
|
$
1,178.5
|
Payables and accrued
expenses
|
|
|
778.3
|
|
1,019.5
|
Contract
liabilities
|
|
|
192.8
|
|
199.8
|
Total current
liabilities
|
|
|
971.2
|
|
2,397.8
|
Long-term
debt
|
|
|
3,652.9
|
|
2,234.7
|
Deferred
taxes
|
|
|
346.4
|
|
391.3
|
Contract
liabilities
|
|
|
482.3
|
|
492.8
|
Other non-current
liabilities
|
|
|
479.4
|
|
476.0
|
Total
liabilities
|
|
|
5,932.2
|
|
5,992.6
|
Stockholders'
equity:
|
|
|
|
|
|
Preferred stock:
Authorized, 25.0 shares; issued and outstanding,
none
|
|
|
—
|
|
—
|
Common stock, $0.01
par value: Authorized, 650.0 shares; issued,
154.5 and 154.5 shares, respectively; outstanding, 117.7 and
118.1
shares, respectively
|
|
|
1.6
|
|
1.6
|
Additional paid-in
capital
|
|
|
1,506.8
|
|
1,436.8
|
Retained
earnings
|
|
|
3,085.9
|
|
3,113.0
|
Treasury stock, at
cost: 36.7 and 36.4 shares, respectively
|
|
|
(2,176.6)
|
|
(2,026.1)
|
Accumulated other
comprehensive income (loss)
|
|
|
(350.0)
|
|
(284.7)
|
Total stockholders'
equity
|
|
|
2,067.6
|
|
2,240.6
|
Total liabilities and
stockholders' equity
|
|
|
$
7,999.8
|
|
$
8,233.2
|
Amounts may not sum
due to rounding.
|
Condensed
Consolidated Statements of Cash Flows
(Unaudited)
|
|
In
millions
|
Six Months
Ended
December
31,
|
|
2023
|
|
2022
|
Cash Flows From
Operating Activities
|
|
|
|
Net earnings
|
$
161.2
|
|
$
108.0
|
Adjustments to
reconcile net earnings to net cash flows from operating
activities:
|
|
|
|
Depreciation and
amortization
|
59.1
|
|
42.5
|
Amortization of
acquired intangibles and purchased intellectual property
|
100.7
|
|
109.5
|
Amortization of other
assets
|
77.7
|
|
64.1
|
Write-down of
long-lived assets and related charges
|
7.6
|
|
0.5
|
Stock-based
compensation expense
|
36.9
|
|
36.5
|
Deferred income
taxes
|
(39.2)
|
|
(35.3)
|
Other
|
(23.9)
|
|
(3.7)
|
Changes in operating
assets and liabilities, net of assets and liabilities
acquired:
|
|
|
|
Current assets and
liabilities:
|
|
|
|
Accounts receivable, net
|
106.6
|
|
110.9
|
Other current assets
|
(23.6)
|
|
13.2
|
Payables and accrued expenses
|
(261.2)
|
|
(307.4)
|
Contract liabilities
|
(5.0)
|
|
2.0
|
Non-current assets and
liabilities:
|
|
|
|
Other non-current assets
|
(96.7)
|
|
(291.8)
|
Other non-current liabilities
|
27.5
|
|
69.4
|
Net cash flows from
operating activities
|
127.8
|
|
(81.4)
|
Cash Flows From
Investing Activities
|
|
|
|
Capital
expenditures
|
(16.8)
|
|
(15.9)
|
Software purchases and
capitalized internal use software
|
(19.6)
|
|
(17.2)
|
Other investing
activities
|
—
|
|
(2.0)
|
Net cash flows from
investing activities
|
(36.4)
|
|
(35.1)
|
Cash Flows From
Financing Activities
|
|
|
|
Debt
proceeds
|
622.7
|
|
580.0
|
Debt
repayments
|
(382.7)
|
|
(270.0)
|
Dividends
paid
|
(179.7)
|
|
(160.3)
|
Purchases of Treasury
stock
|
(161.5)
|
|
(2.5)
|
Proceeds from exercise
of stock options
|
44.8
|
|
32.2
|
Other financing
activities
|
(9.8)
|
|
(2.5)
|
Net cash flows from
financing activities
|
(66.2)
|
|
176.9
|
Effect of exchange rate
changes on Cash and cash equivalents
|
(0.4)
|
|
(5.0)
|
Net change in Cash and
cash equivalents
|
24.7
|
|
55.3
|
Cash and cash
equivalents, beginning of period
|
252.3
|
|
224.7
|
Cash and cash
equivalents, end of period
|
$
277.0
|
|
$
280.0
|
Amounts may not sum due to
rounding.
|
Segment
Results
(Unaudited)
|
|
In
millions
|
Three Months
Ended
December
31,
|
|
Six Months
Ended
December
31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Revenues
|
|
|
|
Investor Communication
Solutions
|
$
999.5
|
|
$
919.4
|
|
$ 2,028.2
|
|
$ 1,840.0
|
Global Technology and
Operations
|
405.4
|
|
373.5
|
|
807.9
|
|
736.2
|
Total
|
$ 1,405.0
|
|
$ 1,292.9
|
|
$ 2,836.0
|
|
$ 2,576.2
|
Earnings before
Income Taxes
|
|
|
|
Investor Communication
Solutions
|
$
95.8
|
|
$
64.9
|
|
$
211.0
|
|
$
124.9
|
Global Technology and
Operations
|
39.3
|
|
44.0
|
|
73.0
|
|
84.3
|
Other
|
(47.5)
|
|
(37.0)
|
|
(83.5)
|
|
(81.9)
|
Total
|
$
87.6
|
|
$
71.9
|
|
$
200.5
|
|
$
127.3
|
|
|
|
|
|
|
|
|
Pre-tax
margins:
|
|
|
|
|
|
|
|
Investor Communication
Solutions
|
9.6 %
|
|
7.1 %
|
|
10.4 %
|
|
6.8 %
|
Global Technology and
Operations
|
9.7 %
|
|
11.8 %
|
|
9.0 %
|
|
11.5 %
|
|
|
|
|
|
|
|
|
Amortization of
acquired intangibles and purchased intellectual
property
|
|
|
|
|
Investor Communication
Solutions
|
$
11.4
|
|
$
14.9
|
|
$
22.8
|
|
$
30.4
|
Global Technology and
Operations
|
38.5
|
|
38.8
|
|
77.9
|
|
79.1
|
Total
|
$
49.9
|
|
$
53.7
|
|
$
100.7
|
|
$
109.5
|
|
|
|
|
|
|
|
|
Amounts may not sum due to
rounding.
|
Supplemental
Reporting Detail - Additional Product Line Reporting
(Unaudited)
|
|
In
millions
|
Three Months
Ended
December
31,
|
|
Six Months
Ended
December
31,
|
|
2023
|
|
2022
|
|
%
Change
|
|
2023
|
|
2022
|
|
Change
|
Investor
Communication Solutions
|
|
|
|
|
|
|
|
|
|
|
|
Regulatory
|
$
194.7
|
|
$
180.7
|
|
8 %
|
|
$
374.1
|
|
$
351.5
|
|
6 %
|
Data-driven fund
solutions
|
105.3
|
|
96.4
|
|
9 %
|
|
207.1
|
|
188.9
|
|
10 %
|
Issuer
|
30.6
|
|
26.5
|
|
15 %
|
|
59.2
|
|
50.4
|
|
17 %
|
Customer
communications
|
162.7
|
|
163.4
|
|
— %
|
|
321.8
|
|
319.3
|
|
1 %
|
Total ICS Recurring revenues
|
493.4
|
|
466.9
|
|
6 %
|
|
962.2
|
|
910.1
|
|
6 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity and
other
|
22.1
|
|
25.2
|
|
(12 %)
|
|
62.9
|
|
54.7
|
|
15 %
|
Mutual
funds
|
33.1
|
|
12.4
|
|
167 %
|
|
79.2
|
|
45.6
|
|
74 %
|
Total ICS Event-driven revenues
|
55.2
|
|
37.6
|
|
47 %
|
|
142.1
|
|
100.2
|
|
42 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Distribution
revenues
|
450.9
|
|
414.9
|
|
9 %
|
|
923.9
|
|
829.7
|
|
11 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Total ICS
Revenues
|
$
999.5
|
|
$
919.4
|
|
9 %
|
|
$
2,028.2
|
|
$
1,840.0
|
|
10 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Global Technology
and Operations
|
|
|
|
|
|
|
|
|
|
|
|
Capital
markets
|
$
262.4
|
|
$
235.3
|
|
12 %
|
|
$
510.9
|
|
$
462.0
|
|
11 %
|
Wealth and investment
management
|
143.0
|
|
138.2
|
|
3 %
|
|
296.9
|
|
274.2
|
|
8 %
|
Total GTO Recurring revenues
|
405.4
|
|
373.5
|
|
9 %
|
|
807.9
|
|
736.2
|
|
10 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Revenues
|
$
1,405.0
|
|
$
1,292.9
|
|
9 %
|
|
$
2,836.0
|
|
$
2,576.2
|
|
10 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues by
Type
|
|
|
|
|
|
|
|
|
|
|
|
Recurring
revenues
|
$
898.8
|
|
$
840.4
|
|
7 %
|
|
$
1,770.0
|
|
$
1,646.2
|
|
8 %
|
Event-driven
revenues
|
55.2
|
|
37.6
|
|
47 %
|
|
142.1
|
|
100.2
|
|
42 %
|
Distribution
revenues
|
450.9
|
|
414.9
|
|
9 %
|
|
923.9
|
|
829.7
|
|
11 %
|
Total Revenues
|
$
1,405.0
|
|
$
1,292.9
|
|
9 %
|
|
$
2,836.0
|
|
$
2,576.2
|
|
10 %
|
Amounts may not sum due to
rounding.
|
Select Operating
Metrics
(Unaudited)
|
|
In
millions
|
Three Months
Ended
December
31,
|
|
Six Months
Ended
December
31,
|
|
2023
|
|
2022
|
|
Change
|
|
2023
|
|
2022
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
Closed sales
(a)
|
$58.0
|
|
$65.4
|
|
(11 %)
|
|
$105.6
|
|
$94.4
|
|
12 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Record Growth
(b)
|
|
|
|
|
|
|
|
|
|
|
|
Equity positions (Stock
records)
|
6 %
|
|
9 %
|
|
|
|
7 %
|
|
9 %
|
|
|
Mutual fund/ETF
positions (Interim records)
|
5 %
|
|
6 %
|
|
|
|
3 %
|
|
10 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Internal Trade
Growth (c)
|
12 %
|
|
5 %
|
|
|
|
13 %
|
|
5 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts may not sum
due to rounding.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Refer to the
"Results of Operations" section of Broadridge's Form 10-Q for a
description of Closed sales and its calculation.
|
|
|
|
|
|
|
|
|
|
|
|
|
(b) Record Growth is
comprised of stock record growth and interim record growth. Stock
record growth (also referred to as "SRG" or "equity position
growth") measures the estimated annual change in positions eligible
for equity proxy materials. Interim record growth (also referred to
as "IRG" or
"mutual fund/ETF position growth") measures the estimated change in
mutual fund and exchange traded fund positions eligible for
interim
communications. These metrics are calculated from equity proxy and
mutual fund/ETF position data reported to Broadridge for the same
issuers or funds in both the current and prior year
periods.
|
|
|
|
|
|
|
|
|
|
|
|
|
(c) Represents the
estimated change in daily average trade volumes for clients whose
contracts are linked to trade volumes and who were on
Broadridge's trading platforms in both the current and prior year
periods.
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Non-GAAP to GAAP Measures
(Unaudited)
|
|
In millions, except
per share amounts
|
Three Months
Ended
December
31,
|
|
Six Months Ended
December 31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Reconciliation of
Adjusted Operating Income
|
|
|
|
Operating income
(GAAP)
|
$
124.4
|
|
$
107.9
|
|
$
272.8
|
|
$
195.4
|
Adjustments:
|
|
|
|
|
|
|
|
Amortization of
Acquired Intangibles and Purchased
Intellectual Property
|
49.9
|
|
53.7
|
|
100.7
|
|
109.5
|
Acquisition and
Integration Costs
|
0.2
|
|
3.7
|
|
0.2
|
|
7.7
|
Russia-Related
Exit Costs (a)
|
—
|
|
7.9
|
|
—
|
|
10.5
|
Adjusted Operating
income (Non-GAAP)
|
$
174.5
|
|
$
173.1
|
|
$
373.7
|
|
$
323.2
|
Operating income margin
(GAAP)
|
8.9 %
|
|
8.3 %
|
|
9.6 %
|
|
7.6 %
|
Adjusted Operating
income margin (Non-GAAP)
|
12.4 %
|
|
13.4 %
|
|
13.2 %
|
|
12.5 %
|
|
|
|
|
|
|
|
|
Reconciliation of
Adjusted Net earnings
|
|
|
|
Net earnings
(GAAP)
|
$ 70.3
|
|
$ 57.5
|
|
$
161.2
|
|
$
108.0
|
Adjustments:
|
|
|
|
|
|
|
|
Amortization of
Acquired Intangibles and Purchased
Intellectual Property
|
49.9
|
|
53.7
|
|
100.7
|
|
109.5
|
Acquisition and
Integration Costs
|
0.2
|
|
3.7
|
|
0.2
|
|
7.7
|
Russia-Related Exit
Costs (a)
|
—
|
|
6.8
|
|
—
|
|
9.3
|
Subtotal of
adjustments
|
50.1
|
|
64.1
|
|
100.9
|
|
126.6
|
Tax impact of
adjustments (b)
|
(10.8)
|
|
(13.2)
|
|
(22.9)
|
|
(26.4)
|
Adjusted Net earnings
(Non-GAAP)
|
$
109.6
|
|
$
108.4
|
|
$
239.2
|
|
$
208.2
|
|
|
|
|
|
|
|
|
Reconciliation of
Adjusted EPS
|
|
|
|
|
|
|
|
Diluted earnings per
share (GAAP)
|
$ 0.59
|
|
$ 0.48
|
|
$ 1.35
|
|
$ 0.91
|
Adjustments:
|
|
|
|
|
|
|
|
Amortization of
Acquired Intangibles and Purchased
Intellectual Property
|
0.42
|
|
0.45
|
|
0.85
|
|
0.92
|
Acquisition and
Integration Costs
|
—
|
|
0.03
|
|
—
|
|
0.06
|
Russia-Related Exit
Costs
|
—
|
|
0.06
|
|
—
|
|
0.08
|
Subtotal of
adjustments
|
0.42
|
|
0.54
|
|
0.85
|
|
1.06
|
Tax impact of
adjustments (b)
|
(0.09)
|
|
(0.11)
|
|
(0.19)
|
|
(0.22)
|
Adjusted earnings per
share (Non-GAAP)
|
$ 0.92
|
|
$ 0.91
|
|
$ 2.01
|
|
$ 1.75
|
(a) Total
Russia-Related Exit Costs were $6.8 million, comprised of $7.9
million of operating expenses, offset by a gain of $1.2 million in
non-operating income for the three months ended December 31, 2022.
For the six months ended December 31, 2022, total costs were $9.3
million, comprised of $10.5 million of operating expenses, offset
by the gain of $1.2 million in non-operating income.
|
|
(b) Calculated using
the GAAP effective tax rate, adjusted to exclude $1.2 million and
$6.2 million of excess tax benefits associated with stock-based
compensation for the three and six months ended December 31, 2023,
respectively, and $0.5 million and $7.2 million of excess tax
benefits associated with stock-based compensation for the three and
six months ended December 31, 2022, respectively. For purposes of
calculating the Adjusted earnings per share, the same adjustments
were made on a per share basis.
|
|
Six Months Ended
December 31,
|
|
2023
|
|
2022
|
Reconciliation of
Free cash flow
|
|
Net cash flows from
operating activities (GAAP)
|
$
127.8
|
|
$
(81.4)
|
Capital expenditures
and Software purchases and capitalized internal use
software
|
(36.4)
|
|
(33.1)
|
Free cash flow
(Non-GAAP)
|
$
91.4
|
|
$ (114.5)
|
|
|
|
|
Reconciliation of
Recurring Revenue Growth Constant Currency
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31, 2023
|
Investor
Communication Solutions
|
Regulatory
|
|
Data-
Driven
Fund
Solutions
|
|
Issuer
|
|
Customer
Comms.
|
|
Total
|
Recurring revenue
growth (GAAP)
|
8 %
|
|
9 %
|
|
15 %
|
|
— %
|
|
6 %
|
Impact of foreign
currency exchange
|
— %
|
|
(1 %)
|
|
— %
|
|
— %
|
|
— %
|
Recurring revenue
growth constant
currency (Non-GAAP)
|
8 %
|
|
9 %
|
|
15 %
|
|
— %
|
|
6 %
|
|
Three Months Ended
December 31, 2023
|
Global Technology
and Operations
|
Capital
Markets
|
|
Wealth and
Investment
Management
|
|
Total
|
Recurring revenue
growth (GAAP)
|
12 %
|
|
3 %
|
|
9 %
|
Impact of foreign
currency exchange
|
(2 %)
|
|
— %
|
|
(1 %)
|
Recurring revenue
growth constant
currency (Non-GAAP)
|
10 %
|
|
4 %
|
|
8 %
|
|
Three Months
Ended
December 31, 2023
|
Consolidated
|
Total
|
Recurring revenue
growth (GAAP)
|
7 %
|
Impact of foreign
currency exchange
|
— %
|
Recurring revenue
growth constant currency (Non-GAAP)
|
6 %
|
|
Six Months Ended
December 31, 2023
|
Investor
Communication Solutions
|
Regulatory
|
|
Data-
Driven
Fund
Solutions
|
|
Issuer
|
|
Customer
Comms.
|
|
Total
|
Recurring revenue
growth (GAAP)
|
6 %
|
|
10 %
|
|
17 %
|
|
1 %
|
|
6 %
|
Impact of foreign
currency exchange
|
— %
|
|
(1 %)
|
|
— %
|
|
— %
|
|
— %
|
Recurring revenue
growth constant
currency (Non-GAAP)
|
6 %
|
|
9 %
|
|
17 %
|
|
1 %
|
|
6 %
|
|
Six Months Ended
December 31, 2023
|
Global Technology
and Operations
|
Capital
Markets
|
|
Wealth and
Investment
Management
|
|
Total
|
Recurring revenue
growth (GAAP)
|
11 %
|
|
8 %
|
|
10 %
|
Impact of foreign
currency exchange
|
(1 %)
|
|
1 %
|
|
(1 %)
|
Recurring revenue
growth constant
currency (Non-GAAP)
|
9 %
|
|
9 %
|
|
9 %
|
|
Six Months Ended
December 31, 2023
|
Consolidated
|
Total
|
Recurring revenue
growth (GAAP)
|
8 %
|
Impact of foreign
currency exchange
|
— %
|
Recurring revenue
growth constant currency (Non-GAAP)
|
7 %
|
Amounts may not sum
due to rounding.
|
Fiscal Year 2024
Guidance
Reconciliation of
Non-GAAP to GAAP Measures
Adjusted Earnings
Per Share Growth and Adjusted Operating Income
Margin
(Unaudited)
|
|
FY24 Recurring revenue
growth
|
|
|
Impact of foreign
currency exchange (a)
|
|
0 - 0.5%
|
Recurring revenue
growth constant currency (Non-GAAP)
|
|
6 - 9%
|
|
|
|
FY24 Adjusted Operating
income margin (b)
|
|
|
Operating income
margin % (GAAP)
|
|
~16%
|
Adjusted Operating
income margin % (Non-GAAP)
|
|
~20%
|
|
|
|
FY24 Adjusted earnings
per share growth rate (c)
|
|
|
Diluted earnings per
share (GAAP)
|
|
15 - 20%
growth
|
Adjusted earnings per
share (Non-GAAP)
|
|
8 - 12%
growth
|
(a) Based on forward
rates as of December 2023.
|
(b) Adjusted
Operating income margin guidance (Non-GAAP) is adjusted to exclude
the approximately $230 million impact of Amortization of Acquired
Intangibles and Purchased Intellectual Property, Restructuring
Charges, and Acquisition and Integration Costs.
|
(c) Adjusted
earnings per share growth guidance (Non-GAAP) is adjusted to
exclude the approximately $1.50 per share impact of Amortization of
Acquired Intangibles and Purchased Intellectual Property,
Restructuring Charges, and Acquisition and Integration Costs, and
is calculated using diluted shares outstanding.
|
View original
content:https://www.prnewswire.com/news-releases/broadridge-reports-second-quarter-fiscal-2024-results-302050032.html
SOURCE Broadridge Financial Solutions, Inc.