Executive Summary / Key Takeaways

• Strategic Transformation Driving Growth: Broadridge is executing a clear strategy to democratize and digitize investing, simplify and innovate trading, and modernize wealth management, leveraging its position as a critical financial infrastructure provider. This strategy is underpinned by significant investments in cutting-edge technologies like Distributed Ledger Repo (DLR) and AI.
• Robust Financial Performance and Outlook: The company delivered strong Q1 FY26 results, including 8% recurring revenue growth (constant currency) and 51% adjusted EPS growth, driven by organic expansion and strategic acquisitions. Broadridge has raised its FY26 recurring revenue growth outlook to the higher end of its 5-7% guidance range and reaffirmed 8-12% adjusted EPS growth, maintaining its trajectory to meet 3-year objectives.
• Technological Leadership in Tokenization: Broadridge is a leader in tokenized real-asset settlement, with its DLR platform processing over $300 billion in daily tokenized trades by September 2025, significantly outpacing competitors. This leadership, coupled with its role as a Super Validator on the Canton Network, positions it to capitalize on tokenization as a major industry megatrend.
• Resilient Business Model and Capital Allocation: With a high percentage of recurring fee revenues, a 98% revenue retention rate, and a substantial backlog, Broadridge demonstrates strong business resilience. Its balanced capital allocation strategy prioritizes internal investments, a growing dividend (19 consecutive years of increases), and strategic M&A or share repurchases, supported by robust free cash flow generation.
• Competitive Moat and Future Opportunities: Broadridge's deep domain expertise, proprietary technology, and extensive network effects create significant barriers to entry. The company is actively addressing emerging opportunities in digital assets, enhanced shareholder engagement, and AI-driven solutions, which are expected to fuel long-term growth and reinforce its market leadership.

The Unseen Backbone: Broadridge's Enduring Influence on Financial Services

Broadridge Financial Solutions, Inc. (NYSE:BR) stands as a global financial technology leader, an often-unseen but indispensable force powering the intricate machinery of investing, corporate governance, and communications across the financial services industry. Founded in 1962 and operating as an independent public company for approximately 15 years, Broadridge has cultivated a business model characterized by stability and consistent growth. Its overarching strategy centers on three pillars: democratizing and digitizing investing, simplifying and innovating trading, and modernizing wealth management. This strategic focus, combined with a high proportion of recurring fee revenues and a robust client retention rate, has allowed Broadridge to consistently deliver shareholder value, marked by 19 consecutive years of dividend increases, with double-digit growth in 13 of the past 14 years.

The company's journey has been one of continuous evolution, adapting to and often driving change within the financial landscape. Its historical investments in core infrastructure and client relationships have established a formidable competitive moat. Broad industry trends, such as the increasing democratization of investing, which enables more individuals to participate in capital markets and access diverse financial products, directly fuel Broadridge's growth. This is evidenced by sustained high single-digit to low double-digit growth in investor positions across both equities and mutual funds. Similarly, the accelerating pace of trading, the imperative for digital transformation in communications, and an ever-evolving regulatory environment create a constant demand for Broadridge's specialized solutions.

Technological Edge: Fueling Innovation and Competitive Advantage

Broadridge's competitive differentiation is deeply rooted in its proprietary technology and its ability to apply advanced solutions to complex financial processes. A prime example is its Distributed Ledger Repo (DLR) platform, a cornerstone of its capital markets innovation. This platform leverages blockchain technology to streamline repurchase agreements, offering tangible benefits over traditional methods by speeding settlement times and reducing liquidity requirements. The DLR platform has demonstrated remarkable scalability and adoption, processing an average of $385 billion in daily repo transactions in October 2025, a 492% increase year-over-year from $65 billion in 2024. This volume makes it the leading at-scale platform for tokenized assets globally, processing nearly five times the volume of any other platform.

The strategic "so what" for investors is clear: DLR not only enhances efficiency for clients but also positions Broadridge at the forefront of the tokenization megatrend. This technology is ideal for less liquid, harder-to-settle asset classes, with potential benefits extending to fixed income, collateral management, private credit, and alternative assets. Broadridge plans to expand DLR to real-time repo and other asset classes, incorporating stablecoin as cash rails for real-time transactions, further cementing its leadership.

Beyond DLR, Broadridge is actively investing in AI and digital communication platforms. Its AI-enabled Global Demand Data and Analytics model, which helps fund companies predict future demand, secured its 13th client win by Q3 FY25, highlighting the unmatched quality and depth of its data. The Broadridge Communications Cloud SM platform, a core component of its Investor Communication Solutions, modernizes technology infrastructures and simplifies communication processes, accelerating digital adoption. Digitization rates for equity proxy communications surpassed 90% in fiscal year 2025, and for funds, they exceeded 77%, representing a more than 25-point increase over the last decade and translating into hundreds of millions in annual savings for public companies and funds. These technological advancements contribute directly to Broadridge's competitive moat by increasing client stickiness, driving operational efficiencies, and enabling new revenue streams.

Segment Performance: A Story of Consistent Execution

Broadridge operates through two primary segments: Investor Communication Solutions (ICS) and Global Technology and Operations (GTO, both demonstrating robust performance in Q1 FY26.

Investor Communication Solutions (ICS)

The ICS segment, which focuses on governance and communications, reported revenues of $1,130 million in Q1 FY26, an 11% increase year-over-year. Earnings before income taxes for ICS grew 31% to $126.4 million, reflecting strong operational leverage. Recurring revenues within ICS rose 5% (constant currency), driven by 4 points from net new business and 1 point from recent acquisitions. Regulatory revenues increased 4% (constant currency), propelled by 7% growth in equity revenue positions and 2% growth in fund positions. This growth in positions underscores the ongoing democratization of investing, with direct indexing now a significant driver of managed account growth.

A notable highlight was the surge in event-driven revenues, which increased 81% to $113.8 million in Q1 FY26, marking the second-highest quarterly event-driven revenue ever. This was primarily due to a high volume of mutual fund proxy communications, including a significant board election at a major mutual fund complex. Broadridge's strategic acquisitions, such as Signal Agency Limited (digital client communications in Europe) and iJoin (retirement plan technology), are expected to provide a modest benefit to ICS recurring revenue growth for the full fiscal year 2026. The company is also innovating in shareholder engagement, developing a data-driven voting solution for asset and wealth managers and piloting a program with ExxonMobil (XOM) to enable standing voting instructions for retail shareholders.

Global Technology and Operations (GTO)

The GTO segment, providing mission-critical infrastructure to global financial markets, saw revenues increase 13% to $459.5 million in Q1 FY26. Earnings before income taxes for GTO grew 42% to $67.3 million. Recurring revenue growth for GTO was 12% (constant currency), with 6 points from the acquisition of Kyndryl's (KD) Securities Industry Services (SIS) business and 6 points of organic growth. Capital Markets revenues grew 6% (constant currency), benefiting from high trading volumes in its Global Post Trade solutions and a 1-point contribution ($4 million) from digital asset revenues. Internal Trade Growth for GTO was a robust 17% in Q1 FY26, reflecting double-digit growth in both equity and fixed income volumes.

The SIS acquisition, closed in November 2024, has significantly bolstered Broadridge's Wealth and Investment Management business, which saw revenues grow 22% (constant currency) in Q1 FY26. This acquisition is successfully integrating onto Broadridge's wealth platform, extending client relationships and accelerating new capabilities in the Canadian market. Broadridge's role as a Super Validator on the Canton Network, a public-permissioned digital asset network, further highlights its commitment to digital assets. The company recently contributed approximately $340 million of its Canton Coin holdings to acquire an 8% pro forma stake in Tharimmune, Inc. (THAR), a NASDAQ-listed company focused on a digital asset treasury strategy for Canton Coins. This move underscores Broadridge's intent to strategically manage its digital asset holdings while participating in the broader tokenization ecosystem.

Financial Strength and Prudent Capital Allocation

Broadridge's financial health remains robust, characterized by consistent revenue growth and expanding profitability. For Q1 FY26, total revenues increased 12% to $1,589.40 million, while recurring revenues grew 9% to $977.50 million. Operating income surged 40% to $188.80 million, and the adjusted operating income margin expanded by 280 basis points to 15.8%. This margin expansion was primarily driven by higher event-driven revenue and operating leverage, even after accounting for ongoing reinvestments and a 30 basis point reduction from lower interest rates and higher distribution revenues. Net earnings for the quarter were $165.40 million, resulting in diluted EPS of $1.40 and adjusted EPS of $1.51, a 51% increase year-over-year.

The company's liquidity position is solid, with cash and cash equivalents of $290.70 million as of September 30, 2025. Broadridge maintains an investment-grade balance sheet and a leverage ratio of 2x, at the low end of its target 2x to 2.5x range, providing ample capacity for strategic initiatives. Free cash flow for Q1 FY26 was $13 million, and the company expects to achieve free cash flow conversion of over 100% for the full fiscal year 2026. Capital allocation is balanced, prioritizing internal investments in growth initiatives, a strong and growing dividend, and strategic M&A or share repurchases. In Q1 FY26, Broadridge invested $30 million in capital expenditures and software, deployed $56 million for tuck-in acquisitions, repurchased $150 million in shares, and paid $103 million in dividends.

Competitive Landscape: A Leader in Critical Infrastructure

Broadridge operates in a competitive yet highly specialized segment of the financial technology industry, where its deep domain expertise and entrenched relationships provide significant advantages. Key direct competitors include SS&C Technologies Holdings, Inc. (SSNC), Fiserv, Inc. (FISV), and Envestnet, Inc. (ENV), each with overlapping but distinct focuses.

Broadridge's core strength lies in its specialized investor communications and back-office processing, particularly in proxy voting and regulatory reporting. Its Broadridge Communications Cloud platform offers greater efficiency in handling complex, high-volume transactions compared to SSNC's broader software offerings. Broadridge's emphasis on end-to-end platforms for content management and customer engagement positions it as highly adaptable in mutual fund processing and compliance services, where it often leads in vote processing efficiency. While SSNC excels in the breadth of its enterprise software solutions and FISV in payment processing scale, Broadridge's focused expertise in equity and mutual fund services provides a unique value proposition.

In the rapidly evolving digital asset space, Broadridge's DLR platform is a clear leader, processing volumes significantly larger than any other platform. This technological advantage, coupled with its role in the Canton Network, positions it favorably against emerging fintechs and even larger, more diversified players who may lack Broadridge's specialized infrastructure and regulatory understanding. The company's new data-driven voting solution for asset and wealth managers is designed to complement existing proxy advisory firms like ISS and Glass Lewis, offering clients independent policy implementation. While some competitors may offer deeper AI-driven analytics (like Envestnet) or broader payment networks (like Fiserv), Broadridge's strength lies in its operational execution for high-volume processing and its ability to integrate new technologies like AI into its core, mission-critical services. High regulatory requirements and substantial technology investments act as significant barriers to entry, further solidifying Broadridge's market position.

Outlook: Sustained Growth on a Transformative Path

Broadridge is well-positioned for another year of strong financial performance in fiscal year 2026. The company has raised its recurring revenue growth outlook to the higher end of its 5% to 7% constant currency guidance range, driven by organic growth and the incremental revenue contributions from the iJoin and Signal acquisitions. This positive outlook is supported by a strengthening pipeline and continued healthy investor participation, with expectations for low double-digit equity position growth and mid-single-digit fund position growth for the full year.

Management has reaffirmed its guidance for 8% to 12% adjusted EPS growth and $290 million to $330 million in Closed sales for FY26. This outlook incorporates a normalization of event-driven revenues to historical quarterly averages of $50 million to $60 million for the remainder of the fiscal year, following a record Q1. It also accounts for the impact of anticipated interest rate cuts, which are functionally hedged at the company level. Broadridge's strategic investments in tokenization, digital assets, AI, and platform development are expected to continue driving future growth, with digital asset revenues projected to contribute approximately 1 point to capital markets growth in FY26. The company remains on track to deliver on its 3-year top and bottom-line growth objectives, underscoring its confidence in its strategic direction and execution capabilities.

Conclusion

Broadridge Financial Solutions continues to demonstrate its resilience and strategic foresight, translating its foundational role in financial markets into consistent growth and shareholder value. The company's commitment to democratizing investing, simplifying trading, and modernizing wealth management, powered by its differentiated technology in areas like Distributed Ledger Repo and advanced AI, forms a compelling investment thesis. Its robust financial performance, strong liquidity, and disciplined capital allocation strategy provide a solid foundation for future expansion.

While the evolving landscape of digital assets and market structure changes present both opportunities and risks, Broadridge's proactive investments and leadership in critical infrastructure position it to thrive. The company's ability to integrate innovation at scale, coupled with its deep client relationships and regulatory expertise, reinforces its competitive moat. As financial services continue their digital transformation, Broadridge's technological leadership and strategic adaptability are poised to drive sustained growth, making it a compelling consideration for discerning investors.