Broadridge Financial Solutions, Inc. · NYSE:BR
Broadridge Financial Solutions — Q2 2024 Earnings Presentation
31 slides from Broadridge Financial Solutions's earnings presentation, Feb 1, 2024
Slide 1: Powering and transforming financial markets
Powering and transforming financial markets Earnings Conference Call Fiscal Second Quarter 2024 February 1, 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’s second quarter results, powered by 6% Recurring revenue growth constant currency, 1 mark another step forward towards our long-term growth objectives Our growth continues to be driven by long-term trends, including equity position growth of 6% and 2 mutual fund/ETF position
Slide 5: Broadridge is executing across Governance, Capital Markets, and Wealth & Investment Management
Broadridge is executing across Governance, Capital Markets, and Wealth & Investment Management Governance Q2’24 Highlights • Strong ICS Recurring revenue growth driven primarily by new sales across all four product lines, as well as $493M mid-single digit position growth +6% YoY • Capital Markets st
Slide 6: Broadridge continues to deliver strong results
Broadridge continues to deliver strong results Broadridge continues to execute on its long-term growth plans 1 Our results are being powered by the democratization of investing, digitization of communications, 2 accelerating trading, regulation, and the growing importance of data and AI We continue
Slide 7: Summary financial results
Summary financial results SECOND QUARTER $ in millions, except per share data 2024 2023 Inc./(Dec.) Recurring revenues $899 $840 7% Constant currency growth (Non-GAAP) 6% Total revenues 1,405 1,293 9% Operating income 124 108 15% Adjusted Operating income (Non-GAAP) 174 173 1% Adjusted Operating inc
Slide 8: Second quarter 2024 Recurring revenues
Second quarter 2024 Recurring revenues $ in millions; growth in constant currency FISCAL YEAR RECURRING REVENUE GROWTH Q2 RECURRING REVENUES +6% 16% $899 10% 9% 6-9% FY'21 FY'22 FY'23 FY'24 Guidance Q2'23 Q2'24 Information about our use of Non-GAAP measures and reconciliations to GAAP measures may b
Slide 9: Second quarter 2024 segment Recurring revenues
Second quarter 2024 segment Recurring revenues $ in millions; growth in constant currency ICS RECURRING REVENUES GTO RECURRING REVENUES +6% +8% $493 $405 $195 8% Regulatory Capital $262 10% Markets Data-Driven $105 9% Fund Solutions Issuer $31 15% Wealth & Customer Investment Comms. $163 0% Manageme
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. 1,2 18% 9% 11% 2 8% 14% 8% ITG 3 1% 4% 6% 10% 9% 8% 8% 6% 6% 6% 6% 5% 3% Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 INTERNAL TRADE 5% 1% 3% 15% 12% GROWTH 1. Q2’23 equity position growth represented 9% of
Slide 11: Second quarter 2024 Recurring revenue growth drivers
Second quarter 2024 Recurring revenue growth drivers $ in millions. Pts contribution to growth RECURRING REVENUE GROWTH CONSTANT CURRENCY WAS 6% Organic Growth: 6 pts 7% 8 pts 2 pts 0 pts 6% 0 pts (3) pts $899 $840 Q2'23 Recurring Closed Sales Client Losses Internal Growth Acquisitions Q2'24 Rec. Re
Slide 12: Second quarter 2024 Total revenue growth drivers
Second quarter 2024 Total revenue growth drivers $ in millions. Pts contribution to growth SECOND QUARTER 2024 TOTAL REVENUE GROWTH DRIVERS 3 pts 0 pts 9% 4 pts 1 pt $1,405 $1,293 Q2'23 Total Revenues Recurring Event-Driven Distribution FX Q2'24 Total Revenues QUARTERLY EVENT-DRIVEN REVENUES $87 $59
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% 8.3% 8.9% INCOME MARGIN ~20% 19.8% 13.4% ADJUSTED 12.4% OPERATING 18.7% INCOME MARGIN (NON- 18.1% GAAP) +60 +60 +110 bps bps bps FY'21 FY'22 FY'23 FY'24 Guidance Q2'23 Q2'24 Information a
Slide 14: Closed sales
Closed sales $ in millions CLOSED SALES $280 – $320 $280 $106 $246 $94 $231 FY'21 FY'22 FY'23 FY'24 Guidance H1'23 H1'24 13
Slide 15: Free cash flow conversion
Free cash flow conversion FREE CASH FLOW CONVERSION (LTM) 1,2 110% 103% 90% 63% 51% Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 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 a
Slide 16: Capital allocation
Capital allocation $ in millions, except per share data SELECT USES OF CASH YTD’24 TOTAL CAPITAL RETURNS 4 YTD Net Share Repurchases YTD Dividends Paid CapEx and Software 1 $36 $312 $269 $253 $248 Client Platform $117 Investments 2 $29 $236 $180 M&A 3 $0 FY'20 FY'21 FY'22 FY'23 FY'24 (E) 6 DIVIDENDS
Slide 17: Fiscal year 2024 guidance
Fiscal year 2024 guidance FY’24 GUIDANCE UPDATES/CHANGES Recurring revenue growth constant currency 6 - 9% No Change (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 16
Slide 18: Appendix
Appendix Broadridge:
Slide 19: Supplemental reporting detail - product line reporting
Supplemental reporting detail ‒ product line reporting (Unaudited) 2022 2023 2024 Q2% Dollars in millions FY Q1 Q2 Q3 Q4 FY Q1 Q2 Growth Investor Communication Solutions ("ICS") Regulatory Solutions $1,075 $171 $181 $ 346 $ 444 $1,141 $179 $195 8% Data-Driven Fund Solutions 364 93 96 102 113 404 102
Slide 20: 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 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
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, 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 such information provides u
Slide 24: Reconciliation of GAAP to Non-GAAP measures
Reconciliation of GAAP to Non-GAAP measures (Unaudited) Three Months Ended December 31, 2023 Data-Driven Fund Investor Communication Solutions Regulatory Issuer Customer Comms. Total Solutions Recurring revenue growth (GAAP) 8% 9% 15% —% 6% Impact of foreign currency exchange —% (1)% —% —% —% Recurr
Slide 25: Reconciliation of GAAP to Non-GAAP measures
Reconciliation of GAAP to Non-GAAP measures (Unaudited) Six Months Ended December 31, 2023 Data-Driven Fund Investor Communication Solutions Regulatory Issuer Customer Comms. Total Solutions Recurring revenue growth (GAAP) 6% 10% 17% 1% 6% Impact of foreign currency exchange —% (1)% —% —% —% Recurri
Slide 26: Reconciliation of GAAP to Non-GAAP measures
Reconciliation of GAAP to Non-GAAP measures (Unaudited) Three Months Ended Dec. 31, Six Months Ended Dec.31, Dollars in millions 2023 2022 2023 2022 Operating income (GAAP) $124.4 $107.9 $272.8 $195.4 Adjustments: Amortization of Acquired Intangibles and Purchased Intellectual Property 49.9 53.7 100
Slide 27: Reconciliation of GAAP to Non-GAAP measures
Reconciliation of GAAP to Non-GAAP measures (Unaudited) Three Months Ended Dec. 31, Six Months Ended Dec.31, Dollars in millions, except per share amounts 2023 2022 2023 2022 Diluted earnings per share (GAAP) $0.59 $0.48 $1.35 $0.91 Adjustments: Amortization of Acquired Intangibles and Purchased Int
Slide 28: Reconciliation of GAAP to Non-GAAP measures
Reconciliation of GAAP to Non-GAAP measures (Unaudited) FY 2022 FY 2023 FY 2024 QQ Dollars in millions Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Net cash flows from operating activities (GAAP) $ 80.7 $ 457.4 $ (204.5) $ 123.1 $ 175.6 $ 729.2 $ (62.0) $ 189.8 Capital expenditures and Software purchases and capitalized
Slide 29: Reconciliation of GAAP to Non-GAAP measures
Reconciliation of GAAP to Non-GAAP measures (Unaudited) Year ended June 30, Dollars in millions 2023 2022 2021 Operating income (GAAP) $936.4 $759.9 $678.7 Adjustments: Amortization of Acquired Intangibles and Purchased Intellectual Property 214.4 250.2 153.7 Acquisition and Integration Costs 15.8 2
Slide 30: 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 - 0.5% Recurring revenue growth constant currency (Non-GAAP) 6-9% FY24 Adjusted Operating income margin (b) Operating income mar
Slide 31: Broadridge Fiscal Second Quarter 2024 Earnings Conference Call
Broadridge Fiscal Second Quarter 2024 Earnings Conference Call Contacts Replay Options W. Edings Thibault Online replay available at broadridge-ir.com Greg Faje Telephone replay available through February 8, 2024 Sean Silva broadridgeir@broadridge.com Domestic Dial-In: 1-877-344-7529 Live Call Infor
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