Broadridge Financial Solutions, Inc. · NYSE:BR
Broadridge Financial Solutions — Q1 2024 Earnings Presentation
30 slides from Broadridge Financial Solutions's earnings presentation, Nov 2, 2023
Slide 1: Scaling a Global Fintech Leader
Scaling a Global Fintech Leader EARNINGS CONFERENCE CALL Fiscal First Quarter 2024 | © 2023 0
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation and other written or oral statements made from time to time by representatives of Broadridge Financial Solutions, Inc. ("Broadridge" or the "Company") contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act
Slide 3: Use of Non-GAAP financial measures, KPIs and Foreign exchange rates
Use of Non-GAAP financial measures, KPIs and Foreign exchange rates Use of Non-GAAP Financial Measures This presentation includes certain Non-GAAP financial measures including Adjusted Operating income, Adjusted Operating income margin, Adjusted Net earnings, Adjusted earnings per share (“EPS”), Fre
Slide 4: Key messages
Key messages Broadridge reported strong first quarter results with 8% Recurring revenue 1 growth constant currency (all organic), 30% Adjusted EPS growth, and higher Closed sales Investor participation remains on track for mid to high single digit growth, with 2 first quarter equity position growth
Slide 5: Broadridge is executing across Governance, Capital Markets, and Wealth & Investment Management
Broadridge is executing across Governance, Capital Markets, and Wealth & Investment Management $ in millions; growth rates in constant currency Q1’24 Highlights Extend Governance • Solid Regulatory growth complemented by strong results across Data-Driven Fund $469M Solutions, Issuer, and Digital +6%
Slide 6: Broadridge continues to deliver strong results
Broadridge continues to deliver strong results Broadridge is off to a strong start to Fiscal Year 2024 as we execute across our 1 Governance, Capital Markets, and Wealth & Investment Management franchises Our growth is being driven by increased investor participation, demand for 2 new regulatory sol
Slide 7: Summary financial results
Summary financial results $ in millions, except per share data FIRST QUARTER 2024 2023 Inc./(Dec.) Recurring revenues $871 $806 8% Constant currency growth (Non-GAAP) 8% Total revenues 1,431 1,283 12% Operating income 148 88 70% Adjusted Operating income (Non-GAAP) 199 150 33% Adjusted Operating inc
Slide 8: First quarter 2024 Recurring revenues
First quarter 2024 Recurring revenues $ in millions; growth in constant currency FISCAL YEAR RECURRING REVENUE GROWTH Q1 RECURRING REVENUES 16% +8% $871 10% 9% 6-9% FY'21 FY'22 FY'23 FY'24 Guidance Q1'23 Q1'24 Note: Information about our use of Non-GAAP measures and reconciliations to GAAP measures
Slide 9: First quarter 2024 segment Recurring revenues
First quarter 2024 segment Recurring revenues $ in millions; growth in constant currency ICS RECURRING REVENUES GTO RECURRING REVENUES +6% +11% $469 $402 $179 5% Regulatory Capital Markets $249 9% Data-Driven $102 9% Fund Solutions Issuer $29 19% Wealth & Customer Investment $159 2% Management $154
Slide 10: Key volume drivers: position and trade growth
Key volume drivers: position and trade growth EQUITY & MUTUAL FUND/ETF POSITION GROWTH FY’22 FY’23 10Y Avg. 18% 9% 11% 14% 8% 8% ITG 3 1% 4% 6% 11% 9% 10% 8% 8% 9% 6% 6% 6% 3% Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 INTERNAL TRADE 6% 5% 1% 3% 15% GROWTH 1. Q1’23 equity position growth represented 6% of total
Slide 11: First quarter 2024 Recurring revenue growth drivers
First quarter 2024 Recurring revenue growth drivers $ in millions. Pts contribution to growth RECURRING REVENUE GROWTH CONSTANT CURRENCY WAS 8% Organic Growth: 8 pts 8 pts 3 pts 0 pts 8% 0 pts 8% (3) pts $806 $871 Q1'23 Recurring Closed Sales Client Losses Internal Growth Acquisitions Q1'24 Recurrin
Slide 12: First quarter 2024 Total revenue growth drivers
First quarter 2024 Total revenue growth drivers $ in millions. Pts contribution to growth FIRST QUARTER 2024 TOTAL REVENUE GROWTH DRIVERS 2 pts 5 pts 0 pts 12% 5 pts $1,431 $1,283 Q1'23 Total Revenues Recurring Event-Driven Distribution FX Q1'24 Total Revenues QUARTERLY EVENT-DRIVEN REVENUES $87 $63
Slide 13: Operating income margin and Adjusted Operating income margin
Operating income margin and Adjusted Operating income margin OPERATING INCOME MARGIN OPERATING 13.6% 13.3% 15.4% 6.8% 10.4% INCOME MARGIN ~20% 19.8% ADJUSTED OPERATING 18.7% INCOME 13.9% MARGIN (NON- 18.1% GAAP) +60 +60 +110 11.7% bps bps bps FY'21 FY'22 FY'23 FY'24 Guidance Q1'23 Q1'24 Note: Inform
Slide 14: Closed sales
Closed sales $ in millions CLOSED SALES $280 – $280 $320 $246 $231 $48 $29 FY'21 FY'22 FY'23 FY'24 Guidance Q1'23 Q1'24 | © 2023 13
Slide 15: Free cash flow conversion
Free cash flow conversion FREE CASH FLOW CONVERSION (LTM) 1,2 103% 90% 63% 51% 41% Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 1. Last twelve months (LTM) Free cash flow conversion equals Free cash flow for the most recent four quarters divided by Adjusted Net earnings for the same four quarters 2. Information ab
Slide 16: Capital allocation
Capital allocation $ in millions, except per share data SELECT USES OF CASH Q1’24 TOTAL CAPITAL RETURNS 4 YTD Net Share Repurchases YTD Dividends Paid CapEx $14 and Software 1 $578 $312 $269 $253 Client Platform $248 $20 Investments 2 $236 $123 $86 M&A 3 $0 FY'20 FY'21 FY'22 FY'23 FY'24 (E) 6 DIVIDE
Slide 17: Fiscal Year 2024 Guidance
Fiscal Year 2024 Guidance FY’24 Guidance Updates/ Changes Recurring revenue growth 6 - 9% No Change constant currency (Non-GAAP) Adjusted Operating income margin ~20% No Change (Non-GAAP) Adjusted earnings per share growth 8 - 12% No Change (Non-GAAP) Closed sales $280M - $320M No Change Note: Infor
Slide 18: Investor Day 2023
Investor Day 2023 Broadridge will host its Investor Day on December 7, 2023 in New York City | © 2023 17
Slide 19: Appendix
Appendix aoc & Ve Broadridge’
Slide 20: Supplemental Reporting Detail ‒ Product Line Reporting
Supplemental Reporting Detail ‒ Product Line Reporting (Unaudited) 2022 2023 2024 Q1% Dollars in millions FY Q1 Q2 Q3 Q4 FY Q1 Growth Investor Communication Solutions ("ICS") Regulatory Solutions $1,075 $171 $181 $ 346 $ 444 $1,141 $179 5% Data-Driven Fund Solutions 364 93 96 102 113 404 102 10% Cor
Slide 21: Explanation of Non-GAAP measures and Reconciliation of GAAP to Non-GAAP measures
Explanation of Non-GAAP measures and Reconciliation of GAAP to Non-GAAP measures | © 2023 20
Slide 22: Non-GAAP Measures
Non-GAAP Measures Explanation and Reconciliation of the Company’s Use of Non-GAAP Financial Measures The Company’s results in this presentation are presented in accordance with U.S. generally accepted accounting principles ("GAAP") except where otherwise noted. In certain circumstances, results have
Slide 23: Non-GAAP Measures
Non-GAAP Measures We exclude Acquisition and Integration Costs, Restructuring Charges, Real Estate Realignment and Covid-19 Related Expenses, Investment Gains, and Russia- Related Exit Costs from our Adjusted Operating income (as applicable) and other adjusted earnings measures because excluding suc
Slide 24: Reconciliation of GAAP to Non-GAAP Measures
Reconciliation of GAAP to Non-GAAP Measures (Unaudited) Three Months Ended September 30, 2023 Data-Driven Customer Investor Communication Solutions Regulatory Issuer Total Fund Solutions Comms. Recurring revenue growth (GAAP) 5% 10% 19% 2% 6% Impact of foreign currency exchange —% (1)% —% —% —% Recu
Slide 25: Reconciliation of GAAP to Non-GAAP Measures
Reconciliation of GAAP to Non-GAAP Measures (Unaudited) Three Months Ended September 30, 2022 Data-Driven Customer Investor Communication Solutions Regulatory Issuer Total Fund Solutions Comms. Recurring revenue growth (GAAP) 3% 11% 16% 11% 8% Impact of foreign currency exchange —% 2% —% —% 1% Recur
Slide 26: Reconciliation of GAAP to Non-GAAP Measures
Reconciliation of GAAP to Non-GAAP Measures (Unaudited) Three Months Ended Sept. 30, Dollars in millions 2023 2022 Operating income (GAAP) $148.4 $87.5 Adjustments: Amortization of Acquired Intangibles and Purchased Intellectual Property 50.8 55.9 Acquisition and Integration Costs — 4.1 Russia-Relat
Slide 27: Reconciliation of GAAP to Non-GAAP Measures
Reconciliation of GAAP to Non-GAAP Measures (Unaudited) Three Months Ended Sept. 30, Dollars in millions, except per share amounts 2023 2022 Diluted earnings per share (GAAP) $0.76 $0.42 Adjustments: Amortization of Acquired Intangibles and Purchased Intellectual Property 0.43 0.47 Acquisition and I
Slide 28: Reconciliation of GAAP to Non-GAAP Measures
Reconciliation of GAAP to Non-GAAP Measures (Unaudited) FY 2022 FY 2023 FY 2024 Dollars in millions Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Net cash flows from operating activities (GAAP) $ 40.8 $ 80.7 $ 457.4 $ (204.5) $ 123.1 $ 175.6 $ 729.2 $ (62.0) Capital expenditures and Software purchases and capitalized int
Slide 29: Reconciliation of GAAP to Non-GAAP Measures: Fiscal Year 2024 Guidance
Reconciliation of GAAP to Non-GAAP Measures: Fiscal Year 2024 Guidance (Unaudited) Fiscal Year 2024 FY24 Recurring revenue growth Impact of foreign currency exchange (a) 0.5% Recurring revenue growth constant currency (Non-GAAP) 6-9% FY24 Adjusted Operating income margin (b) Operating income margin
Slide 30: Broadridge First Quarter Fiscal Year 2024 Earnings Conference Call
Broadridge First Quarter Fiscal Year 2024 Earnings Conference Call Contacts Replay Options W. Edings Thibault Online replay available at Greg Faje broadridge-ir.com Sean Silva broadridgeir@broadridge.com Telephone replay available through November 9, 2023 Live Call Information Domestic Date: Novembe
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