Broadridge Financial Solutions, Inc. (NYSE: BR): Delivering Consistent Growth and Shareholder Value

Published on September 24, 2024 | Ticker: BR

Broadridge Financial Solutions, Inc. (NYSE: BR) is a global financial technology leader providing investor communications and technology-driven solutions to banks, broker-dealers, asset and wealth managers, public companies, investors, and mutual funds. The company operates in two reportable segments: Investor Communication Solutions (ICS) and Global Technology and Operations (GTO).

Financials

Broadridge has demonstrated consistent financial performance, reporting annual net income of $630.6 million, annual revenue of $6,060.9 million, annual operating cash flow of $823.3 million, and annual free cash flow of $748.1 million in its most recent fiscal year. The company's strong financial position is further evidenced by its quarterly results, which showcase its ability to navigate market conditions and deliver value to shareholders.

In the third quarter of fiscal year 2024, Broadridge reported recurring revenue of $1,126.2 million, up 4% from the prior-year period. This growth was driven by a 3-percentage point contribution from Net New Business and a 1-percentage point contribution from Internal Growth, partially offset by the timing of annual meetings, which shifted some regulatory revenue from the third to the fourth quarter. Event-driven revenue increased 29% to $67.0 million, while distribution revenue rose 4% to $533.3 million.

Global Technology and Operations Segment

The company's Global Technology and Operations segment continued to deliver strong performance, with recurring revenue increasing 9% to $425.1 million. This growth was driven by an 8% increase in Capital Markets revenue and an 11% rise in Wealth and Investment Management revenue. The Capital Markets business benefited from new sales and higher trading volumes, while the Wealth and Investment Management business saw strong growth from the UBS contract and higher license revenue.

Investor Communication Solutions Segment

Broadridge's Investor Communication Solutions segment reported a 1% increase in recurring revenue to $701.1 million. Within this segment, Regulatory revenue was flat, Data-Driven Fund Solutions revenue increased 4%, Issuer revenue rose 3%, and Customer Communications revenue grew 1%. The flat Regulatory revenue was due to the timing of annual meetings, which shifted some revenue from the third to the fourth quarter, partially offset by mid-single-digit equity position growth.

Sales Performance

The company's strong sales performance continued in the third quarter, with closed sales increasing 29% to $79.6 million. This brings the year-to-date closed sales to $185.2 million, up 19% from the prior-year period. Broadridge's pipeline remains at record levels, driven by strong demand for its digital and print solutions, as well as its front-office trading tools and regulatory compliance offerings.

Operating Margin and Cash Flow

Broadridge's adjusted operating income margin expanded by 40 basis points to 21.4% in the third quarter, benefiting from operating leverage on higher recurring and event-driven revenue, as well as the company's ongoing restructuring initiative. The company remains on track to achieve its full-year adjusted operating income margin target of approximately 20%.

Free cash flow generation continues to be a strength for Broadridge, with the company reporting $167 million in the third quarter and $258.6 million year-to-date. This strong cash flow performance positions Broadridge to return capital to shareholders, with the company expecting to repurchase $350 million to $450 million in shares during the fiscal year.

Outlook

Looking ahead, Broadridge is reaffirming its fiscal year 2024 guidance, expecting recurring revenue growth at the low end of its 6% to 9% constant currency range and adjusted earnings per share growth in the middle of its 8% to 12% range. The company also expects to achieve record closed sales of $280 million to $320 million for the full year.

Long-term Growth Strategy

Broadridge's long-term growth strategy is supported by several key trends, including the increasing demand for digital solutions, the need for modernized wealth management platforms, the acceleration of trading activity, and the ongoing regulatory changes in the financial services industry. The company's investments in areas such as artificial intelligence, data analytics, and front-office trading solutions position it well to capitalize on these opportunities and drive continued growth.

Conclusion

The company's strong financial performance, consistent execution, and strategic positioning make Broadridge an attractive investment opportunity. With a diversified business model, a robust pipeline of growth initiatives, and a commitment to returning capital to shareholders, Broadridge is well-poised to deliver steady and consistent growth in the years ahead.

Brighthouse Financial, Inc. (BHF): Navigating Complexity, Unlocking Capital

Brighthouse Financial, Inc. (BHF) is a leading provider of annuity and life insurance products in the United States, serving a diverse customer base through independent distribution channels. The company's strategic focus on driving growth, managing expenses, and enhancing capital efficiency has been the cornerstone of its success in navigating the dynamic financial landscape.

B. Riley Financial (NASDAQ:RILY): Navigating Challenges and Opportunities Amid Evolving Market Dynamics

B. Riley Financial, a diversified financial services platform, has established itself as a prominent player in the investment banking, brokerage, wealth management, and asset disposition sectors. With a history spanning over two decades, the company has built a reputation for delivering tailored solutions to its broad client base, which includes public and private companies, financial sponsors, investors, financial institutions, and individuals.

Netcapital Inc. (NCPL): Revolutionizing Private Capital Markets Access

Netcapital Inc. (NCPL) is a digital private capital markets ecosystem that provides private companies with the ability to raise capital online from accredited and non-accredited investors. The company's innovative platform and services have positioned it as a disruptive force in the traditional private equity investing landscape.

Broadridge Financial Solutions (BR): A Trusted Partner Powering the Financial Services Industry's Digital Transformation

Business Overview and History Broadridge Financial Solutions, Inc. (BR) is a global financial technology leader, providing investor communications and technology-driven solutions to the financial services industry. With over 60 years of experience, Broadridge has established itself as a trusted partner, enabling its clients to navigate the evolving landscape of the financial markets and empower their digital transformation.

Lindsay Corporation (LNN): A Resilient Leader in Irrigation and Infrastructure Solutions

Lindsay Corporation, a global manufacturer and distributor of irrigation and infrastructure equipment and technology, has demonstrated its ability to navigate challenging market conditions and deliver consistent financial performance. With a rich history spanning over six decades, the company has established itself as a trailblazer in the industry, continuously innovating to meet the evolving needs of its customers worldwide.