Broadridge Financial Solutions, Inc. (NYSE:BR) Q1 2024 Earnings Conference Call November 2, 2023 8:30 AM ET Company Participants Edings Thibault – Head-Investor Relations Tim Gokey – Chief Executive Officer Edmund Reese – Chief Financial Officer Conference Call Participants David Togut – Evercore ISI Peter Heckmann – D.A. Davidson Darrin Peller – Wolfe Research Matthew Roswell – RBC Capital Markets James Faucette – Morgan Stanley Operator Good morning, and welcome to the Broadridge Financial Solutions First ...

Revenue and Segment Performance - Total revenue for the three months ended September 30, 2023, was $1,431.1 million, compared to $1,283.3 million in the same period in 2022, representing an 11.5% increase[104] - Investor Communication Solutions segment revenue grew to $1,028.6 million in Q3 2023, up from $920.6 million in Q3 2022, a 11.7% increase[104] - Global Technology and Operations segment revenue increased to $402.4 million in Q3 2023, compared to $362.7 million in Q3 2022, a 10.9% growth[104] - Recurring revenue growth (GAAP) for Investor Communication Solutions was 5% in Q3 2023, with constant currency growth (Non-GAAP) also at 5%[135] - Recurring revenues increased by $65.4 million, or 8%, to $871.2 million for the three months ended September 30, 2023, driven by Net New Business and Internal Growth[95] - Distribution revenues increased by $58.2 million, or 14%, driven by higher event-driven mailings and a postage rate increase of approximately $27.4 million[96] - Investor Communication Solutions segment revenues increased to $1,028.6 million, up from $920.6 million in the prior year period[104] - Global Technology and Operations segment revenues increased to $402.4 million, up from $362.7 million in the prior year period[104] - The company's total revenues for the three months ended September 30, 2023, were $1,431.1 million, compared to $1,283.3 million in the prior year period[104] - Recurring revenue growth (GAAP) for Investor Communication Solutions was 5%, Data-Driven Fund Solutions 10%, Issuer Customer Communications 19%, and total recurring revenue growth was 6%[135] - Recurring revenue growth constant currency (Non-GAAP) for Investor Communication Solutions was 5%, Data-Driven Fund Solutions 9%, Issuer Customer Communications 19%, and total recurring revenue growth was 6%[135] Earnings and Profitability - Net earnings (GAAP) for Q3 2023 were $90.9 million, up from $50.4 million in Q3 2022, an 80.4% increase[133] - The company's total earnings before taxes for the three months ended September 30, 2023, were $112.9 million, compared to $55.4 million in the prior year period[104] - Net earnings (GAAP) for 2023 increased to $90.9 million, up from $50.4 million in 2022[133] Cash Flow and Financial Position - Free cash flow (Non-GAAP) for Q3 2023 was $(76.4) million, an improvement from $(218.1) million in Q3 2022[190] - Cash and cash equivalents decreased to $234.0 million as of September 30, 2023, from $252.3 million as of June 30, 2023[3] - Net cash flows from operating activities were negative at $(62.0) million for Q3 2023, compared to $(204.5) million for the same period in 2022[4] - Debt proceeds amounted to $462.7 million in Q3 2023, while debt repayments were $192.7 million[4] - Dividends paid in Q3 2023 totaled $85.6 million, compared to $75.0 million in the same period in 2022[4] Debt and Liabilities - Total long-term debt as of September 30, 2023, was $3,700.0 million, compared to $3,347.0 million as of September 30, 2022[139] - Long-term debt increased to $3,682.0 million as of September 30, 2023, from $2,234.7 million as of June 30, 2023[3] - Total current liabilities decreased to $924.0 million as of September 30, 2023, from $2,397.8 million as of June 30, 2023, primarily due to a reduction in payables and accrued expenses[3] - Total long-term debt as of September 30, 2023, was $3,700.0 million, with a carrying value of $3,682.0 million[139] - The Fiscal 2021 Senior Notes have a carrying value of $1,000.0 million and a fair value of $793.1 million as of September 30, 2023[139] - The Fiscal 2020 Senior Notes have a carrying value of $750.0 million and a fair value of $634.0 million as of September 30, 2023[139] - The Fiscal 2016 Senior Notes have a carrying value of $500.0 million and a fair value of $469.9 million as of September 30, 2023[139] - The Fiscal 2024 Amended Term Loan has a carrying value of $1,300.0 million and a fair value of $1,300.0 million as of September 30, 2023[139] - The Fiscal 2021 Revolving Credit Facility has a total unused available capacity of $1,350.0 million as of September 30, 2023[139] Operating Expenses and Costs - Total operating expenses increased by $86.9 million, or 7%, to $1,282.6 million, primarily due to higher cost of revenues, including $50.1 million in postage and distribution expenses in the ICS segment[96] - Interest expense, net increased by $6.6 million to $33.4 million, primarily due to higher borrowing costs[96] - Other non-operating expenses, net decreased by $3.1 million to $2.1 million, driven by lower losses on investments associated with retirement plans[96] - Fixed operating lease costs for the three months ended September 30, 2023, were $10.2 million, compared to $10.3 million in the same period in 2022[70] Contracts and Commitments - The company has fixed minimum commitments of $132.1 million under the Amended and Restated IT Services Agreement with Kyndryl, Inc., expiring on June 30, 2027[40] - Fixed minimum commitments under the Private Cloud Agreement with Kyndryl, Inc. are $143.1 million, expiring on March 31, 2030[40] - The company has fixed minimum commitments of $178.6 million under the AWS Cloud Agreement, expiring on December 31, 2026[41] Assets and Investments - The company's total assets decreased to $8,071.2 million as of September 30, 2023, from $8,233.2 million as of June 30, 2023[3] - Accounts receivable decreased to $916.2 million as of September 30, 2023, from $974.0 million as of June 30, 2023[3] - Long-term investments increased to $243.4 million as of September 30, 2023, up from $241.9 million in June 2023[53] - The company's total assets as of June 30, 2023, include $141.3 million in non-current securities and $66.7 million in derivative assets[50] - The company's non-marketable securities remained stable at $55.6 million as of September 30, 2023, unchanged from June 2023[24] - The company's total other non-current assets decreased to $817.5 million as of September 30, 2023, down from $829.2 million in June 2023[53] - The company's deferred data center costs decreased to $14.5 million as of September 30, 2023, down from $15.4 million in June 2023[53] Employee Compensation and Benefits - As of September 30, 2023, the company has a restructuring liability of $7.9 million related to employee compensation and benefits[29] - Employee compensation and benefits decreased to $165.3 million as of September 30, 2023, down from $335.6 million in June 2023[55] - The Rabbi Trust assets had a value of $56.2 million at September 30, 2023, with a total benefit obligation of $59.3 million for the SORP and SERP plans[63] Legal and Regulatory Matters - The company estimates an aggregate range of reasonably possible losses for litigation matters of up to $30 million in excess of established reserves[99] - The SEC's new rule on mutual fund and exchange-traded fund investor communications is estimated to reduce the company's annual recurring revenues by approximately $30 million, phasing in over fiscal years 2025 and 2026[92] Derivatives and Financial Instruments - The fair value of Level 3 financial instruments, which require significant management judgment, was determined using pricing models and discounted cash flow methodologies[22] - The company's derivative assets related to cross-currency swap contracts were $72.8 million as of September 30, 2023, up from $66.7 million as of June 30, 2023[27] - The company executed cross-currency swap derivative contracts with an aggregate notional amount of EUR 880 million, resulting in an asset position of $72.8 million as of September 30, 2023[101] Stock and Compensation - The company's President, Christopher J. Perry, adopted a Rule 10b5-1 trading arrangement for the sale of up to 35,438 shares of the company's common stock, effective from September 1, 2023, to August 31, 2024[180] - The company's stock-based compensation includes 2,286,011 stock options with a weighted-average exercise price of $120.92 as of September 30, 2023[37] Tax and Interest Rates - The company's effective tax rate for the three months ended September 30, 2023, was 19.5%, compared to 9.0% in the same period in 2022[66] - The company's Fiscal 2021 Revolving Credit Facility has a weighted-average interest rate of 6.41% for the three months ended September 30, 2023, compared to 3.26% for the same period in 2022[31] Other Financial Metrics - Contract assets increased due to a rise in software term license revenues, while contract liabilities decreased due to the timing of client invoices in relation to revenue recognition. The company recognized $127.8 million of revenue during Q3 2023 that was included in the contract liability balance as of June 30, 2023[16] - Total payables and accrued expenses decreased to $743.7 million as of September 30, 2023, down from $1,019.5 million in June 2023[55] - Deferred client conversion and start-up costs slightly decreased to $934.6 million as of September 30, 2023, from $937.0 million in June 2023[52] - Accrued broker fees decreased to $80.2 million as of September 30, 2023, down from $148.0 million in June 2023[55] - The company's potential maximum loss exposure related to its unconsolidated investments in a variable interest entity totaled $36.1 million as of September 30, 2023[69] - Total operating lease liabilities and post-employment retirement obligations amounted to $469.9 million as of September 30, 2023[61] Key Performance Indicators - The company focuses on key performance indicators including Revenue, Recurring revenue, Adjusted Operating income, Adjusted Net earnings, Adjusted earnings per share, Free Cash flow, and Closed sales[84] Reportable Segments - The company has two reportable segments: Investor Communication Solutions and Global Technology and Operations[145] - The company has two reportable segments: Investor Communication Solutions and Global Technology and Operations[145]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended June 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 COMMISSION FILE NUMBER 001-33220 | --- | --- | |--------------------------------------------------------------------------------------------------|--------------------------------------------------- ...

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Securities registered pursuant to Section 12(b) of the Act: Title of Each Class: Trading Symbol Name of Each Exchange on Which Registered: Common Stock, par value $0.01 per share BR New York Stock Exchange NOTE ABOUT FORWARD-LOOKING STATEMENTS Broadridge Financial Solutions, Inc. | ...

Commission File Number 001-33220 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submi ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-33220 BROADRIDGE FINANCIAL SOLUTIONS, INC. (Exact Name of Registrant as Specified in Its Charter) Delaware 33-1151291 (State or Other J ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended June 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 COMMISSION FILE NUMBER 001-33220 | --- | --- | |-------------------------------------------------------------------------------------------------------|---------------------------------------------- ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-33220 BROADRIDGE FINANCIAL SOLUTIONS, INC. (Exact Name of Registrant as Specified in Its Charter) Delaware 33-1151291 (State or Other Juris ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-33220 BROADRIDGE FINANCIAL SOLUTIONS, INC. (Exact Name of Registrant as Specified in Its Charter) Delaware 33-1151291 (State or Other Ju ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-33220 BROADRIDGE FINANCIAL SOLUTIONS, INC. (Exact Name of Registrant as Specified in Its Charter) Delaware 33-1151291 (State or Other J ...