Broadridge Financial Solutions, Inc. · NYSE:BR
Broadridge Financial Solutions — Q4 2024 Earnings Presentation
37 slides from Broadridge Financial Solutions's earnings presentation, Aug 6, 2024
Slide 1: Powering and transforming financial markets
Powering and transforming financial markets Earnings Conference Call Fiscal Fourth Quarter and Full-Year 2024 August 6, 2024
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 is executing on our strategy to democratize and digitize Governance, simplify and 1 innovate in Capital Markets, and modernize Wealth Management Broadridge reported record Closed sales of $342 million, up 39% year-over-year with strong 2 growth across all three franchises Ano
Slide 5: Driving democratization and digitization in Governance
We are driving democratization and digitization in Governance… 5% 8% $2.6B HIGHLIGHTS Position growth continues to be driven by Y-O-Y Avg. Annual FY’24 RECURRING 1 GROWTH Growth REVENUE managed accounts and demand for passive funds. FY’24 equity position growth of 6% was in-line with mid-to-high sin
Slide 6: Simplifying and innovating in Capital Markets
…simplifying and innovating in Capital Markets… 8% 15% $1.0B 1 HIGHLIGHTS Surpassed $1B in annual revenue Y-O-Y Avg. Annual FY’24 RECURRING GROWTH Growth REVENUE 2 Continued strong demand for front office solutions including extension into new asset $1.0B classes 3 Global post-trade platform driving
Slide 7: Modernizing Wealth Management
…and modernizing Wealth Management 7% 10% $600M 1 HIGHLIGHTS Began recognizing UBS revenue in Q1’24 Y-O-Y Avg. Annual FY’24 RECURRING GROWTH Growth REVENUE 2 Successfully completed transition of Morgan Stanley E*Trade onto the Morgan Stanley $600M platform 3 Strong sales and pipeline growth highligh
Slide 8: Broadridge remains well-positioned for long-term growth
Broadridge remains well-positioned for long-term growth Broadridge is executing on its growth strategy across Governance, Capital Markets, and Wealth & 1 Investment Management We delivered strong FY’24 results including 6% Recurring revenue growth constant currency, 2 10% Adjusted EPS growth, and re
Slide 9: Summary financial results
Summary financial results $ in millions, except per share data Q4’24 Inc./(Dec.) FY’24 Inc./(Dec.) Recurring revenues $1,326 5% $4,223 6% Constant currency growth (Non-GAAP) 5% 6% Total revenues 1,944 6% 6,507 7% Operating income 441 (3)% 1,017 9% Adjusted Operating income (Non-GAAP) 559 5% 1,303 9%
Slide 10: Fourth quarter and fiscal year 2024 Recurring revenues
Fourth quarter and fiscal year 2024 Recurring revenues $ in millions; growth in constant currency Q4 RECURRING REVENUES FISCAL YEAR RECURRING REVENUE GROWTH Acquisitions Organic growth +5% 16% $1,326 10% 10% 9% 6% 9% 9% 8% 6% 4% Q4'23 Q4'24 FY'20 FY'21 FY'22 FY'23 FY'24 Information about our use of
Slide 11: ICS fourth quarter and fiscal year 2024 segment Recurring revenues
ICS fourth quarter and fiscal year 2024 segment Recurring revenues $ in millions; growth in constant currency ICS Q4 RECURRING REVENUES ICS FISCAL YEAR RECURRING REVENUES +6% +5% $910 $2,574 $1,196 5% $477 7% Regulatory Regulatory Data-Driven $435 7% Data-Driven $122 7% Fund Solutions Fund Solutions
Slide 12: GTO fourth quarter and fiscal year 2024 segment Recurring revenues
GTO fourth quarter and fiscal year 2024 segment Recurring revenues $ in millions; growth in constant currency GTO Q4 RECURRING REVENUES GTO FISCAL YEAR RECURRING REVENUES +4% +8% $1,649 $416 $1,049 8% Capital $272 6% Capital Markets Markets Wealth & Wealth & Investment Investment Management $143 0%
Slide 13: Key volume drivers: position and trade growth
Key volume drivers: position and trade growth EQUITY & MUTUAL FUND/ETF POSITION GROWTH FY’23 FY’24 10Y Avg. 1,2 9% 6% 10% 2 8% 3% 7% ITG 3 4% 13% 7% 8% 7% 8% 6% 5% 6% 6% 3% 5% (1%) Q4'23 Q1'24 Q2'24 Q3'24 Q4'24 INTERNAL TRADE 3% 15% 12% 11% 15% GROWTH 1. Q4’24 equity position growth represented 55%
Slide 14: Fourth quarter 2024 Recurring revenue growth drivers
Fourth quarter 2024 Recurring revenue growth drivers $ in millions. Pts contribution to growth RECURRING REVENUE GROWTH CONSTANT CURRENCY WAS 5% Organic Growth: 5 pts 5 pts 3 pts 0pts 5% 5% (0) pts (3) pts $1,259 $1,326 Q4'23 Recurring Closed Sales Client Losses Internal Growth Acquisitions Q4'24 Re
Slide 15: Fourth quarter 2024 Total revenue growth drivers
Fourth quarter 2024 Total revenue growth drivers $ in millions. Pts contribution to growth FOURTH QUARTER 2024 TOTAL REVENUE GROWTH DRIVERS 1 pt 1 pt 6% 4 pts (0) pts $1,944 $1,839 Q4'23 Total Revenues Recurring Event-Driven Distribution FX Q4'24 Total Revenues QUARTERLY EVENT-DRIVEN REVENUES $87 $7
Slide 16: Operating income margin and Adjusted Operating income margin
Operating income margin and Adjusted Operating income margin Q4 OPERATING INCOME FISCAL YEAR OPERATING INCOME OPERATING 24.7% 22.7% 13.8% 13.6% 13.3% 15.4% 15.6% INCOME MARGIN 20.0% ADJUSTED 28.9% 28.8% 19.8% OPERATING +20 +110 INCOME bps MARGIN bps (NON- GAAP) 18.7% +60 18.1% bps +60 17.5% bps +40
Slide 17: Closed sales
Closed sales $ in millions CLOSED SALES RECURRING REVENUE BACKLOG 1 $342 $450 $400 $280 $246 $231 $224 FY'20 FY'21 FY'22 FY'23 FY'24 FY'23 FY'24 % OF 10% 11% RECURRING REVENUE 1. Recurring Revenue Backlog represents an estimate of first year revenues from Closed sales that have not yet been recogniz
Slide 18: Free cash flow conversion
Free cash flow conversion FREE CASH FLOW CONVERSION 1,2 102% 90% 85% 84% 48% FY'20 FY'21 FY'22 FY'23 FY'24 1. Free cash flow conversion equals annual Free cash flow divided by Adjusted Net earnings 2. Information about our use of Non-GAAP measures and reconciliations to GAAP measures may be found on
Slide 19: Capital allocation
Capital allocation $ in millions, except per share data SELECT USES OF CASH FISCAL YEAR 2024 TOTAL CAPITAL RETURNS4 YTD Net Share Repurchases $781 YTD Dividends Paid CapEx and Software 1 $113 $413 Client Platform $312 Investments 2 $41 $248 $253 $368 M&A 3 $35 FY'21 FY'22 FY'23 FY'24 FY'25 (E) 6 DIV
Slide 20: Fiscal year 2025 guidance
Fiscal year 2025 guidance FY’25 GUIDANCE Recurring revenue growth constant currency (Non-GAAP) 5-7% Adjusted Operating income margin (Non-GAAP) ~20% Adjusted earnings per share growth (Non-GAAP) 8-12% Closed sales $290 - $330M 19
Slide 21: Appendix
Appendix Broadridge:
Slide 22: Supplemental reporting detail - product line reporting
Supplemental reporting detail ‒ product line reporting (Unaudited) 2022 2023 2024 YoY % Dollars in millions FY Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Growth Investor Communication Solutions ("ICS") Regulatory Solutions $1,075 $171 $181 $ 346 $ 444 $1,141 $179 $195 $345 $ 477 $1,196 5% Data-Driven Fund Soluti
Slide 23: Fiscal year 2024 Recurring revenue growth drivers
Fiscal year 2024 Recurring revenue growth drivers $ in millions. Pts contribution to growth RECURRING REVENUE GROWTH CONSTANT CURRENCY WAS 6% Organic Growth: 6 pts 7 pts 2 pts 0 pts 6% 0 pts 6% (3) pts $4,223 $3,987 FY'23 Recurring Closed Sales Client Losses Internal Growth Acquisitions FY'24 Rec. R
Slide 24: Fiscal year 2024 Total revenue growth drivers
Fiscal year 2024 Total revenue growth drivers $ in millions. Pts contribution to growth FISCAL YEAR 2024 TOTAL REVENUE GROWTH DRIVERS 2 pts 0 pts 7% 4 pts 1 pt $6,507 $6,061 FY'23 Total Revenues Recurring Event-Driven Distribution FX FY'24 Total Revenues 23
Slide 25: Fiscal year 2024 Event-driven revenue growth drivers
Fiscal year 2024 Event-driven revenue growth drivers $ in millions FISCAL YEAR 2024 EVENT-DRIVEN REVENUES $284 $285 $269 $244 $235 $243M $211 FY’18-FY’24 AVERAGE $175 FY'18 FY'19 FY'20 FY'21 FY'22 FY'23 FY'24 24
Slide 26: FY'24 - FY'26 long-term growth objectives
FY’24 – FY’26 long-term growth objectives FY’24 – FY’26 (CAGR) Organic Recurring revenue growth 5-8% Recurring revenue growth constant currency 7-9% (Non-GAAP) Adjusted Operating Income Margin expansion (bps/year) 50+ (Non-GAAP) Adjusted Earnings per Share Growth 8-12% (Non-GAAP) Note: AOI margin ex
Slide 27: 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
Slide 28: 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 29: Non-GAAP Measures
Non-GAAP Measures We exclude Acquisition and Integration Costs, Restructuring and Other Related Costs, Litigation Settlement Charges, Russia-Related Exit Costs, Real Estate Realignment and Covid-19 Related Expenses, Investment Gains, the Software Charge, Gain on Acquisition-Related Financial Instrum
Slide 30: Reconciliation of GAAP to Non-GAAP measures
Reconciliation of GAAP to Non-GAAP measures (Unaudited) Three Months Ended June 30, 2024 Data-Driven Fund Investor Communication Solutions Regulatory Issuer Customer Comms. Total Solutions Recurring revenue growth (GAAP) 7% 7% 5% 3% 6% Impact of foreign currency exchange 0% 0% 0% 0% 0% Recurring rev
Slide 31: Reconciliation of GAAP to Non-GAAP measures
Reconciliation of GAAP to Non-GAAP measures (Unaudited) Fiscal Year Ended June 30, 2024 Data-Driven Fund Investor Communication Solutions Regulatory Issuer Customer Comms. Total Solutions Recurring revenue growth (GAAP) 5% 8% 7% 1% 5% Impact of foreign currency exchange 0% 0% 0% 0% 0% Recurring reve
Slide 32: Reconciliation of GAAP to Non-GAAP measures
Reconciliation of GAAP to Non-GAAP measures (Unaudited) 3 Months Ended June 30, Fiscal Year Ended June 30, Dollars in millions 2024 2023 2024 2023 2022 2021 2020 Operating income (GAAP) $441.4 $454.2 $1,017.1 $936.4 $759.9 $678.7 $624.9 Adjustments: Amortization of Acquired Intangibles and Purchased
Slide 33: Reconciliation of GAAP to Non-GAAP measures
Reconciliation of GAAP to Non-GAAP measures (Unaudited) 3 Months Ended June 30, Fiscal Year Ended June 30, Dollars in millions, except per share amounts 2024 2023 2024 2023 2022 2021 2020 Diluted earnings per share (GAAP) $2.72 $2.72 $5.86 $5.30 $4.55 $4.65 $3.95 Adjustments: Amortization of Acquire
Slide 34: Reconciliation of GAAP to Non-GAAP measures
Reconciliation of GAAP to Non-GAAP measures (Unaudited) Fiscal Year Ended June 30, Dollars in millions 2024 2023 2022 2021 2020 Net cash flows from operating activities (GAAP) $1,056.2 $823.3 $443.5 $640.1 $598.2 Capital expenditures and Software purchases and capitalized internal use software (113.
Slide 35: Reconciliation of GAAP to Non-GAAP measures: Fiscal year 2025 guidance
Reconciliation of GAAP to Non-GAAP measures: Fiscal year 2025 guidance (Unaudited) Fiscal Year 2025 FY25 Recurring revenue growth Impact of foreign currency exchange (a) 0% - 0.5% Recurring revenue growth constant currency (Non-GAAP) 5-7% FY25 Adjusted Operating income margin (b) Operating income ma
Slide 36: Reconciliation of GAAP to Non-GAAP measures
Reconciliation of GAAP to Non-GAAP measures (Unaudited) Fiscal Year Ended June 30, Dollars in millions 2024 Net Earnings $698.1 Provision for income taxes 179.3 Interest expense, net 138.1 Other non-operating expenses 1.7 Operating income $1,017.1 Adjustments Depreciation and amortization 119.8 Amor
Slide 37: Broadridge Fiscal 2024 Earnings Conference Call
Broadridge Fiscal 2024 Earnings Conference Call Contacts Replay Options W. Edings Thibault Online replay available at broadridge-ir.com Sean Silva Telephone replay available through August 13, 2024 broadridgeir@broadridge.com Domestic Dial-In: 1-877-344-7529 Live Call Information Date: August 6, 202
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