BROADRIDGE FINANCIAL SOLUTIONS, INC. Q1 FY2025 earnings call

• Global financial markets remain robust with demand for Broadridge's services healthy driven by long-term trends like democratization of investing, digitization of communications, etc. • Broadridge reported solid first quarter results with recurring revenue growth and adjusted EPS of $1. • Executing on strategy to enable clients in democratizing and digitizing investing, simplifying and innovating trading, and modernizing wealth management, driving product innovation, pipeline, and sales. • Strengthening business with targeted investments such as the acquisition of SIS. • On-track to deliver strong full year results with raised recurring revenue guidance, reaffirmed adjusted EPS growth and closed sales guidance, and on-track to achieve three-year financial objectives.

Broadridge's recurring revenue grew 4% in constant currency. ICS recurring revenues rose 5% to $493 million. Regulatory revenues grew 6% due to fund position growth of 6%. Data Driven Fund Solutions revenue increased 6%. Issuer revenue grew 8%. Customer communications revenue growth was 3%. Capital Markets recurring revenues grew 5%. Wealth and Investment Management recurring revenues declined 4% but grew 6% excluding the E-Trade deconversion. The acquisition of SIS closed and is expected to grow the Canadian business. Closed sales were $57 million, up 21% from Q1 2024.

• Raising fiscal '25 recurring revenue guidance to 6% to 8% reflecting the acquisition of SIS and strong organic growth. • Reaffirming guidance for adjusted EPS growth and strong closed sales. • Expecting 6% to 7% organic recurring revenue growth over the next three quarters driven by a $450 million sales backlog, mid to high single-digit position growth, and lapping of the E-Trade deconversion. • Expecting 50 basis points plus of underlying core margin expansion, 8% to 12% adjusted EPS growth, and $290 million to $330 million of closed sales in fiscal '25.

• Uncertainty remains high given the U.S. Election and other geopolitical events.

Q: Dan Perlin asked about M&A appetite and where to place incremental dollars.

A: Tim Gokey said M&A is an attractive way to meet client needs, tracking a strong pipeline of opportunities, and looking for deals that meet financial criteria and are best owned by Broadridge.

Q: James Faucette asked about digital revenue and customer communications growth.

A: Tim Gokey said BRCC revenues are on-track to pick up with new sales and digital growth, driven by recent sales wins.

Q: Puneet Jain asked about backlog conversion and clients' behavior.

A: Tim Gokey said no slowdown in project execution, lengthening sales pipeline, strong sales closes, and good pipeline.

Q: Patrick O'Shaughnessy asked about SIS revenue contribution and sales pull forward.

A: Tim Gokey said SIS is expected to add a little shy of $60 million this year, and there is no pull forward but a good start to the year.