Broadridge Financial Solutions — First Quarter Fiscal 2027 Earnings Summary

Financial Performance:

• Total revenues increased 5% year-over-year to $1,669 million from $1,589 million.
• Recurring revenues grew 11% year-over-year to $1,083 million, with constant currency growth of 11% driven by 9 percentage points of organic growth.
• Event-driven revenues decreased 41% to $67 million, primarily due to lower mutual fund proxy revenues.
• Distribution revenues increased 4% to $518 million, driven by a $18 million postage rate increase.
• Operating income decreased 8% to $174 million, with an operating margin of 10.4% compared to 11.9% in the prior year.
• Adjusted Operating income decreased 9% to $230 million, with an adjusted margin of 13.8% compared to 15.8% in the prior year.
• Diluted EPS decreased 41% to $0.83 from $1.40.
• Adjusted EPS increased 3% to $1.56 from $1.51.
• Net earnings decreased 43% to $95 million; Adjusted Net earnings were flat at $178 million.
• Interest expense, net increased 13% to $27 million from $24 million.
• The effective tax rate was 13.6% compared to 22.4% in the prior year period.
• Free cash flow was $76.3 million compared to $12.7 million in the prior year period.
• Cash and cash equivalents decreased to $284.1 million from $402.9 million at the beginning of the period.
• Long-term debt increased to $3,347.1 million from $3,254.6 million.
• Contract liabilities (current and non-current combined) decreased to $544.4 million from $589.4 million.

Guidance and Future Outlook:

• Reaffirmed Fiscal Year 2027 guidance for Recurring revenue growth constant currency of 6-8%.
• Reaffirmed Fiscal Year 2027 guidance for Adjusted EPS growth of 8-12%.
• Reaffirmed Fiscal Year 2027 guidance for Closed sales of $290-$330 million.
• Reaffirmed Fiscal Year 2027 guidance for Adjusted Operating income margin of approximately 21%.
• Reaffirmed Fiscal Year 2027 guidance for Free cash flow conversion of 100%+.
• Management highlighted a strong start to the year and confidence in driving digital engagement, scaling agentic AI, and accelerating tokenization.

Business Segments and Product Lines:

• Investor Communication Solutions (ICS):
  • Total revenues increased 2% to $1,153 million.
  • Recurring revenues increased 10% to $568 million, with constant currency growth of 10% driven by 8 percentage points of organic growth.
  • Regulatory recurring revenue grew 17% (constant currency).
  • Data-driven fund solutions recurring revenue grew 10%, driven by acquisitions of Acolin and iJoin and data/analytics revenues.
  • Issuer recurring revenue grew 4%, driven by disclosure solutions.
  • Customer communications recurring revenue grew 3%, driven by digital/print growth and the acquisition of Signal Agency Limited.
  • Event-driven revenues decreased 41% to $67 million.
  • Distribution revenues increased 4% to $518 million.
  • Earnings before income taxes decreased 18% to $104 million; operating expenses rose 5% to $1,049 million.
• Global Technology and Operations (GTO):
  • Recurring revenues increased 12% to $516 million, with constant currency growth of 13% driven by 10 percentage points of organic growth and 3 percentage points from the acquisition of CQG, Inc.
  • Capital Markets recurring revenue grew 17% (constant currency), including 12 percentage points of organic growth (4 points from software term licenses, 5 points from CQG).
  • Wealth and Investment Management recurring revenue grew 5% (organic), including 3 percentage points from higher software term license revenues.
  • Earnings before income taxes increased 47% to $99 million; operating expenses rose 6% to $417 million.
• Corporate and Other:
  • Loss before income taxes was $93 million, a decrease of $112 million from the prior year, primarily due to non-cash losses on digital assets of $40 million compared to a $46 million gain in the prior year, and $15 million in restructuring costs.

Market and Competitive Landscape:

• Broadridge processes over 8 billion communications annually and underpins the daily average trading of over $18 trillion in tokenized and traditional securities globally.
• The company employs approximately 16,000 associates in 28 countries and is part of the S&P 500 Index.
• Position growth metrics for the quarter showed:
  • Equity positions grew 16% (vs. 12% prior year).
  • Equity revenue positions grew 11% (vs. 7% prior year).
  • Mutual fund/ETF positions grew 16% (vs. 2% prior year).
  • Internal trade growth was 7% (vs. 17% prior year).

Risks and Challenges:

• Risks include changes in laws and regulations affecting clients or services.
• Reliance on a relatively small number of clients and their financial health.
• Potential material security breaches or cybersecurity attacks.
• Declines in participation and activity in securities markets.
• Failure of key service providers to deliver anticipated service levels.
• System disasters or significant slowdowns.
• Overall market, economic, and geopolitical conditions.
• Ability to retain and sell additional services to existing clients and obtain new clients.
• Failure to keep pace with technology changes and client demands.
• Competitive conditions.
• Ability to attract and retain key personnel.
• Impact of new acquisitions and divestitures.

Management Commentary and Tone:

• CEO Tim Gokey stated the company is "driving digital engagement, scaling agentic AI, and accelerating tokenization while delivering strong financial results."
• Management expressed confidence in the strong start to the year, leading to the reaffirmation of full-year guidance.
• The tone regarding recurring revenue growth was positive, highlighting 9% organic growth in the quarter.
• Management noted that Adjusted EPS increased 3% despite a significant decline in GAAP EPS due to non-cash digital asset losses.

Other Key Points:

• Closed sales increased 10% to $36 million.
• The company repurchased $200 million in shares during the quarter.
• The company returned an additional $111 million to shareholders via dividends.
• Acquisitions mentioned include CQG, Inc. (GTO), Acolin, iJoin, and Signal Agency Limited (ICS).
• Restructuring and other related costs of $15 million were incurred, primarily related to AI and productivity initiatives workforce actions.
• Non-cash losses on digital assets totaled $40 million in the current period, compared to a $46 million gain in the prior year period.
• An Investor Day is scheduled for December 8, 2026, in New York City to provide an update on strategy and new three-year financial objectives.
• An analyst conference call was held on November 3, 2026.