Recurring revenues grew 4%; up 4% constant
currency
Diluted EPS rose to $1.79 and Adjusted EPS increased 9% to
$2.23
Q3 Closed sales rose 29%; up 19%
year-to-date
Expecting FY'24 Recurring revenue growth
constant currency at the low end of 6-9% guidance range, Adjusted
EPS growth at the middle of 8-12% range, and record Closed
sales
NEW
YORK, May 8, 2024 /PRNewswire/ -- Broadridge
Financial Solutions, Inc. (NYSE: BR) today reported financial
results for the third quarter ended March
31, 2024 of its fiscal year 2024. Results compared with the
same period last year were as follows:
Summary Financial
Results
|
|
Third
Quarter
|
|
Nine
Months
|
|
Dollars in millions,
except per share data
|
|
2024
|
2023
|
Change
|
2024
|
2023
|
Change
|
|
|
|
|
|
|
|
|
Recurring
revenues
|
|
$1,126
|
$1,082
|
4 %
|
$2,896
|
$2,728
|
6 %
|
Constant currency growth
(Non-GAAP)
|
|
|
|
4 %
|
|
|
6 %
|
Total
revenues
|
|
$1,726
|
$1,646
|
5 %
|
$4,563
|
$4,222
|
8 %
|
|
|
|
|
|
|
|
|
Operating
income
|
|
$303
|
$287
|
6 %
|
$576
|
$482
|
19 %
|
Margin
|
|
17.5 %
|
17.4 %
|
|
12.6 %
|
11.4 %
|
|
|
|
|
|
|
|
|
|
Adjusted Operating
income (Non-GAAP)
|
|
$370
|
$345
|
7 %
|
$743
|
$668
|
11 %
|
Margin
(Non-GAAP)
|
|
21.4 %
|
21.0 %
|
|
16.3 %
|
15.8 %
|
|
|
|
|
|
|
|
|
|
Diluted EPS
|
|
$1.79
|
$1.67
|
7 %
|
$3.14
|
$2.58
|
22 %
|
Adjusted EPS
(Non-GAAP)
|
|
$2.23
|
$2.05
|
9 %
|
$4.24
|
$3.81
|
11 %
|
|
|
|
|
|
|
|
|
Closed sales
|
|
$80
|
$62
|
29 %
|
$185
|
$156
|
19 %
|
"Broadridge reported 4% Recurring revenue growth and 9% Adjusted
EPS growth in a quarter that was modestly impacted by the timing of
annual meetings," said Tim Gokey,
Broadridge CEO. "Closed sales rose 29% as we continue to execute on
our strategy to democratize and digitize governance, simplify and
innovate trading in capital markets, and modernize wealth
management.
"Entering our fourth quarter, Broadridge is poised to deliver
another year of steady and consistent growth. For fiscal 2024, we
expect Recurring revenue growth constant currency at the low end of
our 6-9% guidance range and are reaffirming our outlook for
Adjusted EPS growth at the middle of our 8-12% range, as well as
record Closed sales of $280-320
million. We also expect to deliver on our full year objective of
100% free flow conversion, positioning Broadridge to return
additional capital to shareholders while funding tuck-in M&A,"
Mr. Gokey added.
"Broadridge remains well-positioned for long-term growth and is
on track to deliver on our three-year growth objectives including
5-8% organic Recurring revenue growth, 7-9% total Recurring revenue
growth constant currency, and 8-12% Adjusted EPS growth."
Fiscal Year 2024 Financial Guidance
|
|
FY'24
Guidance
|
Updates
|
Recurring revenue
growth constant currency (Non-GAAP)
|
|
6 - 9%
|
Low end of
range
|
Adjusted Operating
income margin (Non-GAAP)
|
|
~20%
|
No Change
|
Adjusted Earnings per
share growth (Non-GAAP)
|
|
8 - 12%
|
Middle of
range
|
Closed sales
|
|
$280 - $320M
|
No Change
|
Financial Results for Third Quarter Fiscal Year 2024 compared
to Third Quarter Fiscal Year 2023
- Total revenues increased 5% to $1,726 million from $1,646
million.
- Recurring revenues increased $44
million, or 4%, to $1,126
million. Recurring revenue growth constant currency
(Non-GAAP) was 4%, all organic, driven by Net New Business and
Internal Growth.
- Event-driven revenues increased $15
million, or 29%, to $67
million, driven by equity proxy contests in the
quarter.
- Distribution revenues increased $21
million, or 4%, to $533
million, driven by the postage rate increase of
approximately $30 million offset by
lower communications volumes.
- Operating income was $303
million, an increase of $16
million, or 6%. Operating income margin increased to 17.5%,
compared to 17.4% for the prior year period, primarily due to
higher Recurring revenues and higher event-driven revenues.
- Adjusted Operating income was $370 million, an increase of $25 million, or 7%. Adjusted Operating income
margin was 21.4% compared to 21.0% for the prior year period. The
combination of higher distribution revenue and higher float income
had a net benefit of 20 basis points.
- Interest expense, net was $35
million, a decrease of $3
million, primarily due to a decrease in average borrowings,
partially offset by an increase in interest expense from higher
borrowing costs.
- The effective tax rate was 19.8% compared to 20.6% in
the prior year period. The effective tax rate for the three months
ended March 31, 2024 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 8% to $214
million and Adjusted Net earnings increased 9% to
$267 million.
- Diluted earnings per share increased 7% to $1.79, compared to $1.67 in the prior year period, and
- Adjusted earnings per share increased 9% to $2.23, compared to $2.05 in the prior year period.
Segment and Other Results for Third Quarter Fiscal Year 2024
compared to Third Quarter Fiscal Year 2023
Investor Communication Solutions ("ICS")
- Total revenues were $1,301
million, an increase of $44
million, or 4%.
- Recurring revenues increased $8
million or 1%, to $701
million. Recurring revenue growth constant currency
(Non-GAAP) was 1%, all organic, driven by Net New Business
partially offset by Internal Growth. Internal Growth was negatively
impacted by the timing of equity proxy and mutual fund
communications.
- By product line, Recurring revenue growth and Recurring revenue
growth constant currency (Non-GAAP) were as follows:
- Regulatory was essentially flat. The positive impact of equity
position growth of 5% was offset by a delay in proxy
communications, which shifted a portion of those communications
into the fiscal fourth quarter. Mutual fund/ETF position growth was
(1)%.
- Data-driven fund solutions rose 4% and 4%, respectively, driven
primarily by growth in our retirement and workplace products.
- Issuer rose 3% and 3%, respectively, driven by growth in
disclosure solutions.
- Customer communications rose 1% and 1%, respectively, as growth
in digital communications was partially offset by slower growth in
print revenues.
- Event-driven revenues increased $15
million, or 29%, to $67
million, driven by equity proxy contests in the
quarter.
- Distribution revenues increased $21
million, or 4%, to $533
million, driven by the postage rate increase of
approximately $30 million offset by
lower communication volumes.
- Earnings before income taxes increased by $15 million, or 6%, to $270 million, primarily from higher Event-driven
and Recurring revenue. Operating expenses rose 3%, or $29 million, to $1,031
million primarily driven by higher distribution and other
segment expenses. Pre-tax margins increased to 20.8% from 20.3% in
the prior period.
Global Technology and Operations ("GTO")
- Recurring revenues were $425
million, an increase of $37
million, or 9%. Recurring revenue growth constant currency
(Non-GAAP) was 9%, all organic, driven by Internal Growth and Net
New Business.
- By product line, Recurring revenue growth and the corresponding
Recurring revenue growth constant currency (Non-GAAP) were as
follows:
- Capital Markets rose 8% and 8%, respectively, driven by Net New
Business and Internal Growth. Internal Growth was driven primarily
by software term license revenue and higher trading volumes.
- Wealth and Investment Management rose 12% and 11%,
respectively, driven primarily by Internal Growth from software
term license revenue. Net New Business was flat as strong sales
were offset by client losses.
- Earnings before income taxes were $53
million, an increase of $6
million, or 12%. Pre-tax margins increased to 12.5% from
12.3% as higher revenues more than offset higher expenses,
including an increase in amortization and depreciation expenses of
$16 million.
Other
- Loss before income tax increased to $57
million from $53 million in
the prior year period, primarily due to a Litigation Settlement
Charge of $8 million partially offset
by lower compensation and other selling, general and administrative
expenses and the absence of Russia-Related Exit Costs of
$1 million.
Financial Results for the Nine Months Fiscal Year 2024
compared to the Nine Months Fiscal Year 2023
- Total revenues increased 8% to $4,563 million from $4,222
million.
- Recurring revenues increased $168
million, or 6%, to $2,896
million. Recurring revenue growth constant currency
(Non-GAAP) was 6%, all organic, driven by Net New Business and
Internal Growth.
- Event-driven revenues increased $57
million, or 38%, to $209
million, driven by higher mutual fund proxy, equity proxy
contests, and corporate action activity.
- Distribution revenues increased $116
million, or 9%, to $1,457
million, driven by the postage rate increase of
approximately $85 million as well as
higher event-driven mailings.
- Operating income was $576
million, an increase of $93
million, or 19%. Operating income margin increased to 12.6%,
compared to 11.4% for the prior year period, primarily due to
higher Recurring revenues and higher event-driven revenues.
- Adjusted Operating income was $743 million, an increase of $75 million, or 11%. Adjusted Operating income
margin was 16.3% compared to 15.8% for the prior year period. The
combination of higher distribution revenue and higher float income
had a net benefit of 50 basis points.
- Interest expense, net was $105
million, an increase of $6
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 19.8% compared to 18.8% in
the prior year period. The effective tax rate for the nine months
ended March 31, 2024 was driven by an
increase in pre-tax income relative to total discrete tax benefits.
The higher excess tax benefit related to equity compensation was
offset by a decrease in other discrete tax benefits.
- Net earnings increased 22% to $375 million and Adjusted Net earnings increased
12% to $506 million.
- Diluted earnings per share increased 22% to $3.14, compared to $2.58 in the prior year period, and
- Adjusted earnings per share increased 11% to
$4.24, compared to $3.81 in the prior year period.
Segment and Other Results for the Nine Months Fiscal Year
2024 compared to the Nine Months Fiscal Year 2023
Investor Communication Solutions
- Total revenues were $3,330
million, an increase of $232
million, or 8%.
- Recurring revenues increased $60
million or 4%, to $1,663
million. Recurring revenue growth constant currency
(Non-GAAP) was 4%, all organic, driven primarily by Net New
Business and Internal Growth. Internal Growth was negatively
impacted by the timing of equity proxy communications.
- By product line, Recurring revenue growth and Recurring revenue
growth constant currency (Non-GAAP) were as follows:
- Regulatory rose 3% and 3%, respectively. The positive impact of
equity position growth of 6% was offset by a delay in proxy
communications, which shifted a portion of those communications
into the fiscal fourth quarter. Mutual fund/ETF position growth was
2%.
- Data-driven fund solutions rose 8% and 7%, respectively, driven
by growth in our retirement and workplace products.
- Issuer rose 10% and 10%, respectively, driven by growth in our
registered shareholder solutions and disclosure solutions.
- Customer communications rose 1% and 1%, respectively, driven by
growth in digital communications, partially offset by a modest
decline in print revenue.
- Event-driven revenues increased $57
million, or 38%, to $209
million, driven by higher mutual fund proxy, equity proxy
contests, and corporate action activity.
- Distribution revenues increased $116
million, or 9%, to $1,457
million, driven by the postage rate increase of
approximately $85 million as well as
higher event-driven mailings.
- Earnings before income taxes increased by $101 million, or 27%, to $481 million, primarily from higher Recurring
revenue and higher event-driven revenue. Operating expenses rose
5%, or $131 million, to $2,848 million primarily driven by higher
distribution expenses. Pre-tax margins increased to 14.5% from
12.3% in the prior period.
Global Technology and Operations
- Recurring revenues were $1,233
million, an increase of $108
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 10% and 9%, respectively, driven by Net
New Business and Internal Growth, which benefited from higher
trading volumes.
- Wealth and Investment Management rose 9% and 10%, respectively,
driven primarily by Net New Business and Internal Growth.
- Earnings before income taxes were $126
million, a decrease of $6
million, or 4%. Pre-tax margins decreased to 10.2% from
11.7% as higher revenues were more than offset by higher expenses,
including an increase in amortization and depreciation expenses of
$46 million.
Other
- Loss before income taxes increased to $140 million from $135
million in the prior year period, primarily due to a
Litigation Settlement Charge of $8
million, an increase in Interest expense, net of
$6 million, partially offset by the
absence of Russia-Related Exit Costs of $11
million.
Earnings Conference Call
An analyst conference call will be held today, May 8, 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 May 15, 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 9347187
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, (iii) Russia-Related Exit Costs, (iv)
Litigation Settlement Charge, and (v) Restructuring and Other
Related 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. Litigation Settlement Charge represents the
reserve established during the third quarter of 2024 related to the
settlement of a claim. Restructuring and Other Related Costs
represent costs associated with the Company's Corporate
Restructuring Initiative to exit and/or realign some of our
businesses, streamline the Company's management structure,
reallocate work to lower cost locations, and reduce headcount in
deprioritized areas.
We exclude Acquisition and Integration Costs, Russia-Related
Exit Costs, Litigation Settlement Charge, and Restructuring and
Other Related 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
March 31,
|
|
Nine Months
Ended
March 31,
|
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
Revenues
|
|
$ 1,726.5
|
|
$ 1,645.7
|
|
$ 4,562.5
|
|
$ 4,221.9
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Cost of
revenues
|
|
1,187.3
|
|
1,137.7
|
|
3,319.8
|
|
3,116.4
|
Selling, general and
administrative expenses
|
|
236.2
|
|
221.2
|
|
667.0
|
|
623.3
|
Total operating
expenses
|
|
1,423.6
|
|
1,358.9
|
|
3,986.8
|
|
3,739.7
|
Operating
income
|
|
302.9
|
|
286.8
|
|
575.7
|
|
482.2
|
Interest expense,
net
|
|
(35.3)
|
|
(38.5)
|
|
(105.1)
|
|
(99.5)
|
Other non-operating
income (expenses), net
|
|
(0.9)
|
|
1.8
|
|
(3.5)
|
|
(5.3)
|
Earnings before income
taxes
|
|
266.7
|
|
250.1
|
|
467.2
|
|
377.4
|
Provision for income
taxes
|
|
52.9
|
|
51.6
|
|
92.3
|
|
70.9
|
Net earnings
|
|
$
213.7
|
|
$
198.5
|
|
$
374.9
|
|
$
306.5
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share
|
|
$
1.81
|
|
$
1.69
|
|
$
3.18
|
|
$
2.61
|
Diluted earnings per
share
|
|
$
1.79
|
|
$
1.67
|
|
$
3.14
|
|
$
2.58
|
|
|
|
|
|
|
|
|
|
Weighted-average shares
outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
|
117.8
|
|
117.7
|
|
117.8
|
|
117.6
|
Diluted
|
|
119.4
|
|
119.1
|
|
119.2
|
|
118.9
|
|
Amounts may not sum due to
rounding.
|
Condensed
Consolidated Balance Sheets
|
(Unaudited)
|
|
In millions, except
per share amounts
|
|
|
March 31,
2024
|
|
June 30,
2023
|
Assets
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
$
235.6
|
|
$
252.3
|
Accounts receivable,
net of allowance for doubtful accounts of
$7.9 and $7.2, respectively
|
|
|
1,165.1
|
|
974.0
|
Other current
assets
|
|
|
164.3
|
|
166.2
|
Total current
assets
|
|
|
1,565.1
|
|
1,392.5
|
Property, plant and
equipment, net
|
|
|
155.0
|
|
145.7
|
Goodwill
|
|
|
3,451.9
|
|
3,461.6
|
Intangible assets,
net
|
|
|
1,317.2
|
|
1,467.2
|
Deferred client
conversion and start-up costs
|
|
|
905.2
|
|
937.0
|
Other non-current
assets
|
|
|
821.0
|
|
829.2
|
Total
assets
|
|
|
$
8,215.4
|
|
$
8,233.2
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Current portion of
long-term debt
|
|
|
$
—
|
|
$
1,178.5
|
Payables and accrued
expenses
|
|
|
893.5
|
|
1,019.5
|
Contract
liabilities
|
|
|
229.0
|
|
199.8
|
Total current
liabilities
|
|
|
1,122.4
|
|
2,397.8
|
Long-term
debt
|
|
|
3,513.9
|
|
2,234.7
|
Deferred
taxes
|
|
|
329.5
|
|
391.3
|
Contract
liabilities
|
|
|
483.9
|
|
492.8
|
Other non-current
liabilities
|
|
|
498.4
|
|
476.0
|
Total
liabilities
|
|
|
5,948.2
|
|
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, 118.0 and
118.1
shares, respectively
|
|
|
1.6
|
|
1.6
|
Additional paid-in
capital
|
|
|
1,545.2
|
|
1,436.8
|
Retained
earnings
|
|
|
3,205.3
|
|
3,113.0
|
Treasury stock, at
cost: 36.5 and 36.4 shares, respectively
|
|
|
(2,171.1)
|
|
(2,026.1)
|
Accumulated other
comprehensive income (loss)
|
|
|
(313.6)
|
|
(284.7)
|
Total stockholders'
equity
|
|
|
2,267.2
|
|
2,240.6
|
Total liabilities and
stockholders' equity
|
|
|
$
8,215.4
|
|
$
8,233.2
|
|
Amounts may not sum due to
rounding.
|
Condensed
Consolidated Statements of Cash Flows
|
(Unaudited)
|
|
In
millions
|
Nine Months
Ended
March
31,
|
|
2024
|
|
2023
|
Cash Flows From
Operating Activities
|
|
|
|
Net earnings
|
$
374.9
|
|
$
306.5
|
Adjustments to
reconcile net earnings to net cash flows from operating
activities:
|
|
|
|
Depreciation and
amortization
|
89.6
|
|
63.7
|
Amortization of
acquired intangibles and purchased intellectual property
|
151.4
|
|
162.8
|
Amortization of other
assets
|
116.8
|
|
95.3
|
Write-down of
long-lived assets and related charges
|
14.9
|
|
2.7
|
Stock-based
compensation expense
|
57.1
|
|
57.4
|
Deferred income
taxes
|
(62.9)
|
|
(49.5)
|
Other
|
(29.5)
|
|
(16.5)
|
Changes in operating
assets and liabilities, net of assets and liabilities
acquired:
|
|
|
|
Current assets and
liabilities:
|
|
|
|
Accounts receivable, net
|
(145.9)
|
|
(112.2)
|
Other current assets
|
6.1
|
|
15.6
|
Payables and accrued expenses
|
(153.2)
|
|
(180.2)
|
Contract liabilities
|
30.6
|
|
15.2
|
Non-current assets and
liabilities:
|
|
|
|
Other non-current assets
|
(175.7)
|
|
(405.7)
|
Other non-current liabilities
|
60.8
|
|
139.1
|
Net cash flows from
operating activities
|
335.2
|
|
94.1
|
Cash Flows From
Investing Activities
|
|
|
|
Capital
expenditures
|
(39.6)
|
|
(21.4)
|
Software purchases and
capitalized internal use software
|
(37.0)
|
|
(25.4)
|
Other investing
activities
|
—
|
|
(2.3)
|
Net cash flows from
investing activities
|
(76.6)
|
|
(49.1)
|
Cash Flows From
Financing Activities
|
|
|
|
Debt
proceeds
|
722.7
|
|
750.0
|
Debt
repayments
|
(622.7)
|
|
(470.0)
|
Dividends
paid
|
(273.9)
|
|
(245.7)
|
Purchases of Treasury
stock
|
(161.8)
|
|
(3.7)
|
Proceeds from exercise
of stock options
|
70.5
|
|
35.1
|
Other financing
activities
|
(10.0)
|
|
(2.5)
|
Net cash flows from
financing activities
|
(275.1)
|
|
63.3
|
Effect of exchange rate
changes on Cash and cash equivalents
|
(0.2)
|
|
(1.4)
|
Net change in Cash and
cash equivalents
|
(16.7)
|
|
106.9
|
Cash and cash
equivalents, beginning of period
|
252.3
|
|
224.7
|
Cash and cash
equivalents, end of period
|
$
235.6
|
|
$
331.6
|
|
Amounts may not sum due to
rounding.
|
Segment
Results
|
(Unaudited)
|
|
In
millions
|
Three Months
Ended
March
31,
|
|
Nine Months
Ended
March
31,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
Revenues
|
|
|
|
Investor Communication
Solutions
|
$ 1,301.4
|
|
$ 1,257.2
|
|
$ 3,329.6
|
|
$ 3,097.2
|
Global Technology and
Operations
|
425.1
|
|
388.5
|
|
1,233.0
|
|
1,124.6
|
Total
|
$ 1,726.5
|
|
$ 1,645.7
|
|
$ 4,562.5
|
|
$ 4,221.9
|
Earnings before
Income Taxes
|
|
|
|
Investor Communication
Solutions
|
$
270.3
|
|
$
255.5
|
|
$
481.4
|
|
$
380.4
|
Global Technology and
Operations
|
53.2
|
|
47.6
|
|
126.2
|
|
131.9
|
Other
|
(56.9)
|
|
(53.1)
|
|
(140.4)
|
|
(134.9)
|
Total
|
$
266.7
|
|
$
250.1
|
|
$
467.2
|
|
$
377.4
|
|
|
|
|
|
|
|
|
Pre-tax
margins:
|
|
|
|
|
|
|
|
Investor Communication
Solutions
|
20.8 %
|
|
20.3 %
|
|
14.5 %
|
|
12.3 %
|
Global Technology and
Operations
|
12.5 %
|
|
12.3 %
|
|
10.2 %
|
|
11.7 %
|
|
|
|
|
|
|
|
|
|
Amortization of
acquired intangibles and purchased intellectual
property
|
|
|
|
|
Investor Communication
Solutions
|
$
11.4
|
|
$
13.3
|
|
$
34.2
|
|
$
43.7
|
Global Technology and
Operations
|
39.2
|
|
39.9
|
|
117.1
|
|
119.1
|
Total
|
$
50.6
|
|
$
53.3
|
|
$
151.4
|
|
$
162.8
|
|
|
|
|
|
|
|
|
|
Amounts may not sum due to
rounding.
|
Supplemental
Reporting Detail - Additional Product Line
Reporting
|
(Unaudited)
|
|
In
millions
|
Three Months
Ended
March
31,
|
|
Nine Months
Ended
March
31,
|
|
2024
|
|
2023
|
|
%
Change
|
|
2024
|
|
2023
|
|
Change
|
Investor
Communication Solutions
|
|
|
|
|
|
|
|
|
|
|
|
Regulatory
|
$
344.6
|
|
$
345.7
|
|
— %
|
|
$
718.7
|
|
$
697.1
|
|
3 %
|
Data-driven fund
solutions
|
106.2
|
|
102.0
|
|
4 %
|
|
313.3
|
|
290.9
|
|
8 %
|
Issuer
|
59.6
|
|
57.7
|
|
3 %
|
|
118.7
|
|
108.2
|
|
10 %
|
Customer
communications
|
190.8
|
|
188.0
|
|
1 %
|
|
512.5
|
|
507.3
|
|
1 %
|
Total ICS Recurring revenues
|
701.1
|
|
693.5
|
|
1 %
|
|
1,663.2
|
|
1,603.5
|
|
4 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity and
other
|
46.0
|
|
29.2
|
|
58 %
|
|
108.9
|
|
83.9
|
|
30 %
|
Mutual
funds
|
21.1
|
|
22.6
|
|
(7 %)
|
|
100.3
|
|
68.2
|
|
47 %
|
Total ICS Event-driven revenues
|
67.0
|
|
51.8
|
|
29 %
|
|
209.2
|
|
152.1
|
|
38 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Distribution
revenues
|
533.3
|
|
511.9
|
|
4 %
|
|
1,457.2
|
|
1,341.6
|
|
9 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Total ICS
Revenues
|
$
1,301.4
|
|
$
1,257.2
|
|
4 %
|
|
$
3,329.6
|
|
$
3,097.2
|
|
8 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Global Technology
and Operations
|
|
|
|
|
|
|
|
|
|
|
|
Capital
markets
|
$
265.8
|
|
$
245.8
|
|
8 %
|
|
$
776.7
|
|
$
707.8
|
|
10 %
|
Wealth and investment
management
|
159.3
|
|
142.7
|
|
12 %
|
|
456.3
|
|
416.9
|
|
9 %
|
Total GTO Recurring revenues
|
425.1
|
|
388.5
|
|
9 %
|
|
1,233.0
|
|
1,124.6
|
|
10 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Revenues
|
$
1,726.5
|
|
$
1,645.7
|
|
5 %
|
|
$
4,562.5
|
|
$
4,221.9
|
|
8 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues by
Type
|
|
|
|
|
|
|
|
|
|
|
|
Recurring
revenues
|
$
1,126.2
|
|
$
1,082.0
|
|
4 %
|
|
$
2,896.2
|
|
$
2,728.2
|
|
6 %
|
Event-driven
revenues
|
67.0
|
|
51.8
|
|
29 %
|
|
209.2
|
|
152.1
|
|
38 %
|
Distribution
revenues
|
533.3
|
|
511.9
|
|
4 %
|
|
1,457.2
|
|
1,341.6
|
|
9 %
|
Total Revenues
|
$
1,726.5
|
|
$
1,645.7
|
|
5 %
|
|
$
4,562.5
|
|
$
4,221.9
|
|
8 %
|
|
Amounts may not sum due to
rounding.
|
Select Operating
Metrics
|
(Unaudited)
|
|
In
millions
|
Three Months
Ended
March
31,
|
|
Nine Months
Ended
March
31,
|
|
2024
|
|
2023
|
|
Change
|
|
2024
|
|
2023
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
Closed sales
(a)
|
$ 79.6
|
|
$ 61.6
|
|
29 %
|
|
$
185.2
|
|
$
156.0
|
|
19 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Record Growth
(b)
|
|
|
|
|
|
|
|
|
|
|
|
Equity positions (Stock
records)
|
5 %
|
|
10 %
|
|
|
|
6 %
|
|
10 %
|
|
|
Mutual fund/ETF
positions (Interim records)
|
(1) %
|
|
6 %
|
|
|
|
2 %
|
|
8 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Internal Trade Growth
(c)
|
11 %
|
|
1 %
|
|
|
|
13 %
|
|
4 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
March
31,
|
|
Nine Months
Ended
March 31,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
Reconciliation of
Adjusted Operating Income
|
|
|
|
Operating income
(GAAP)
|
$
302.9
|
|
$
286.8
|
|
$
575.7
|
|
$
482.2
|
Adjustments:
|
|
|
|
|
|
|
|
Amortization of
Acquired Intangibles and Purchased
Intellectual Property
|
50.6
|
|
53.3
|
|
151.4
|
|
162.8
|
Acquisition and
Integration Costs
|
0.8
|
|
3.3
|
|
1.0
|
|
11.0
|
Russia-Related
Exit Costs (a)
|
—
|
|
1.5
|
|
—
|
|
12.0
|
Litigation
Settlement Charge
|
8.2
|
|
—
|
|
8.2
|
|
—
|
Restructuring
and Other Related Costs (b)
|
7.0
|
|
—
|
|
7.0
|
|
—
|
Adjusted Operating
income (Non-GAAP)
|
$
369.5
|
|
$
344.8
|
|
$
743.3
|
|
$
668.0
|
Operating income margin
(GAAP)
|
17.5 %
|
|
17.4 %
|
|
12.6 %
|
|
11.4 %
|
Adjusted Operating
income margin (Non-GAAP)
|
21.4 %
|
|
21.0 %
|
|
16.3 %
|
|
15.8 %
|
|
|
|
|
|
|
|
|
Reconciliation of
Adjusted Net earnings
|
|
|
|
Net earnings
(GAAP)
|
$
213.7
|
|
$
198.5
|
|
$
374.9
|
|
$
306.5
|
Adjustments:
|
|
|
|
|
|
|
|
Amortization of
Acquired Intangibles and Purchased
Intellectual Property
|
50.6
|
|
53.3
|
|
151.4
|
|
162.8
|
Acquisition and
Integration Costs
|
0.8
|
|
3.3
|
|
1.0
|
|
11.0
|
Russia-Related Exit
Costs (a)
|
—
|
|
1.5
|
|
—
|
|
10.8
|
Litigation Settlement
Charge
|
8.2
|
|
—
|
|
8.2
|
|
—
|
Restructuring and
Other Related Costs (b)
|
7.0
|
|
—
|
|
7.0
|
|
—
|
Subtotal of
adjustments
|
66.6
|
|
58.0
|
|
167.6
|
|
184.6
|
Tax impact of
adjustments (c)
|
(13.5)
|
|
(12.0)
|
|
(36.5)
|
|
(38.4)
|
Adjusted Net earnings
(Non-GAAP)
|
$
266.8
|
|
$
244.5
|
|
$
506.0
|
|
$
452.7
|
|
|
|
|
|
|
|
|
Reconciliation of
Adjusted EPS
|
|
|
|
|
|
|
|
Diluted earnings per
share (GAAP)
|
$ 1.79
|
|
$ 1.67
|
|
$ 3.14
|
|
$ 2.58
|
Adjustments:
|
|
|
|
|
|
|
|
Amortization of
Acquired Intangibles and Purchased
Intellectual Property
|
0.42
|
|
0.45
|
|
1.27
|
|
1.37
|
Acquisition and
Integration Costs
|
0.01
|
|
0.03
|
|
0.01
|
|
0.09
|
Russia-Related Exit
Costs
|
—
|
|
0.01
|
|
—
|
|
0.09
|
Litigation Settlement
Charge
|
0.07
|
|
—
|
|
0.07
|
|
—
|
Restructuring and
Other Related Costs (b)
|
0.06
|
|
—
|
|
0.06
|
|
—
|
Subtotal of
adjustments
|
0.56
|
|
0.49
|
|
1.41
|
|
1.55
|
Tax impact of
adjustments (c)
|
(0.11)
|
|
(0.10)
|
|
(0.31)
|
|
(0.32)
|
Adjusted earnings per
share (Non-GAAP)
|
$ 2.23
|
|
$ 2.05
|
|
$ 4.24
|
|
$ 3.81
|
|
|
(a)
|
Russia-Related Exit
Costs were $1.5 million for the three months ended March 31, 2023.
For the nine months ended March 31, 2023, Russia-Related Exit Costs
were $10.8 million, comprised of $12.0 million of operating
expenses, offset by a gain of $1.2 million in non-operating
income.
|
(b)
|
During the third
quarter of fiscal year 2024, the Company exited a business
resulting in a $7.0 million asset impairment charge in connection
with the Corporate Restructuring Initiative.
|
(c)
|
Calculated using the
GAAP effective tax rate, adjusted to exclude $3.2 million and $9.5
million of excess tax benefits associated with stock-based
compensation for the three and nine months ended March 31, 2024,
respectively, and $0.3 million and $7.5 million of excess tax
benefits associated with stock-based compensation for the three and
nine months ended March 31, 2023, respectively. For purposes of
calculating the Adjusted earnings per share, the same adjustments
were made on a per share basis.
|
|
Nine Months
Ended
March 31,
|
|
2024
|
|
2023
|
Reconciliation of
Free cash flow
|
|
Net cash flows from
operating activities (GAAP)
|
$
335.2
|
|
$
94.1
|
Capital expenditures
and Software purchases and capitalized internal use
software
|
(76.6)
|
|
(46.8)
|
Free cash flow
(Non-GAAP)
|
$
258.6
|
|
$
47.3
|
|
|
|
|
Reconciliation of
Recurring Revenue Growth Constant Currency
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31, 2024
|
Investor
Communication Solutions
|
Regulatory
|
|
Data-
Driven
Fund
Solutions
|
|
Issuer
|
|
Customer
Comms.
|
|
Total
|
Recurring revenue
growth (GAAP)
|
— %
|
|
4 %
|
|
3 %
|
|
1 %
|
|
1 %
|
Impact of foreign
currency exchange
|
— %
|
|
— %
|
|
— %
|
|
— %
|
|
— %
|
Recurring revenue
growth constant
currency (Non-GAAP)
|
— %
|
|
4 %
|
|
3 %
|
|
1 %
|
|
1 %
|
|
Three Months Ended
March 31, 2024
|
Global Technology
and Operations
|
Capital
Markets
|
|
Wealth and
Investment
Management
|
|
Total
|
Recurring revenue
growth (GAAP)
|
8 %
|
|
12 %
|
|
9 %
|
Impact of foreign
currency exchange
|
1 %
|
|
— %
|
|
— %
|
Recurring revenue
growth constant
currency (Non-GAAP)
|
8 %
|
|
11 %
|
|
9 %
|
|
Three Months
Ended
March 31, 2024
|
Consolidated
|
Total
|
Recurring revenue
growth (GAAP)
|
4 %
|
Impact of foreign
currency exchange
|
— %
|
Recurring revenue
growth constant
currency (Non-GAAP)
|
4 %
|
|
Nine Months Ended
March 31, 2024
|
Investor
Communication Solutions
|
Regulatory
|
|
Data-
Driven
Fund
Solutions
|
|
Issuer
|
|
Customer
Comms.
|
|
Total
|
Recurring revenue
growth (GAAP)
|
3 %
|
|
8 %
|
|
10 %
|
|
1 %
|
|
4 %
|
Impact of foreign
currency exchange
|
— %
|
|
(1 %)
|
|
— %
|
|
— %
|
|
— %
|
Recurring revenue
growth constant
currency (Non-GAAP)
|
3 %
|
|
7 %
|
|
10 %
|
|
1 %
|
|
4 %
|
|
Nine Months Ended
March 31, 2024
|
Global Technology
and Operations
|
Capital
Markets
|
|
Wealth and
Investment
Management
|
|
Total
|
Recurring revenue
growth (GAAP)
|
10 %
|
|
9 %
|
|
10 %
|
Impact of foreign
currency exchange
|
(1 %)
|
|
— %
|
|
(1 %)
|
Recurring revenue
growth constant
currency (Non-GAAP)
|
9 %
|
|
10 %
|
|
9 %
|
|
Nine Months
Ended
March 31, 2024
|
Consolidated
|
Total
|
Recurring revenue
growth (GAAP)
|
6 %
|
Impact of foreign
currency exchange
|
— %
|
Recurring revenue
growth constant
currency (Non-GAAP)
|
6 %
|
|
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)
|
|
9 - 15%
growth
|
Adjusted earnings per
share (Non-GAAP)
|
|
8 - 12%
growth
|
|
|
(a)
|
Based on forward rates
as of March 2024.
|
(b)
|
Adjusted Operating
income margin guidance (Non-GAAP) is adjusted to exclude the
approximately $270 million impact of Amortization of Acquired
Intangibles and Purchased Intellectual Property, Litigation
Settlement Charge, Restructuring and Other Related
Costs.
|
(c)
|
Adjusted earnings per
share growth guidance (Non-GAAP) is adjusted to exclude the
approximately $1.80 per share impact of Amortization of Acquired
Intangibles and Purchased Intellectual Property, Litigation
Settlement Charge, Restructuring and Other Related Costs, and
Acquisition and Integration Costs, and is calculated using diluted
shares outstanding.
|
View original
content:https://www.prnewswire.com/news-releases/broadridge-reports-third-quarter-fiscal-2024-results-302139012.html
SOURCE Broadridge Financial Solutions, Inc.