Broadridge(BR)2024-05-08 12:00Financial Performance - Adjusted Operating income increased by 743 million, with a margin of 16.3%, up from 15.8% in the prior year period[1] - Adjusted earnings per share rose 11% to 3.81 in the prior year period[2] - Total revenues increased by 3,330 million[3] - Operating income increased by 576 million, with a margin of 12.6%, up from 11.4%[7] - Net earnings increased 22% to 506 million[9] - Net earnings for the nine months ended March 31, 2024, were 306.5 million for the same period in 2023[55] - Adjusted operating income (Non-GAAP) for the three months ended March 31, 2024, was 344.8 million for the same period in 2023[60] - Total revenues increased 5% to 1,646 million for the third quarter of fiscal year 2024[75] - Diluted earnings per share increased 7% to 2.23 for the third quarter of fiscal year 2024[99] - Earnings before income taxes increased by 481 million, primarily from higher Recurring and event-driven revenues[111] - Loss before income taxes increased to 8 million and higher Interest expense, partially offset by the absence of Russia-Related Exit Costs[113] Revenue Growth - Event-driven revenues grew by 209 million, driven by higher mutual fund proxy and equity proxy contests[4] - Wealth and Investment Management revenues rose 9% and 10%, respectively, driven by Net New Business and Internal Growth[5] - Recurring revenues increased by 425 million, with constant currency growth of 9%[6] - Recurring revenues in Investor Communication Solutions increased by 1,663 million, with constant currency growth of 4%[10] - Data-driven fund solutions revenue rose 8% and 7% in GAAP and constant currency terms, respectively, driven by growth in retirement and workplace products[10] - Total ICS Revenues increased by 4% to 1,257.2 million in the same period in 2023[36] - Data-driven fund solutions revenue grew by 4% to 102.0 million in 2023[36] - Equity and other revenues surged by 58% to 29.2 million in 2023[36] - Total GTO Recurring revenues increased by 9% to 388.5 million in 2023[36] - Recurring revenue growth (GAAP) was 4% for the three months ended March 31, 2024, with no impact from foreign currency exchange[46] - Recurring revenue growth (GAAP) for Global Technology and Operations was 8%, and for Capital Markets, it was 12% for the three months ended March 31, 2024[54] - Investor Communication Solutions revenue for the three months ended March 31, 2024, was 1,257.2 million in the same period in 2023[57] - Global Technology and Operations revenue for the three months ended March 31, 2024, was 388.5 million in the same period in 2023[57] - Recurring revenue growth (GAAP) for the nine months ended March 31, 2024 was 6%, with constant currency growth (Non-GAAP) also at 6%[69] - Event-driven revenues increased 67 million, driven by equity proxy contests in the quarter[76] - Distribution revenues increased 533 million, driven by a postage rate increase of approximately 15 million (29%) to 116 million (9%) to 85 million and higher event-driven mailings[111] - Recurring revenues increased by 1,233 million, with constant currency growth of 9% driven by Net New Business and Internal Growth[112] Segment Performance - Regulatory segment grew by 3% driven by equity position growth of 6%, partially offset by delayed proxy communications shifting into Q4[105] - Capital Markets segment increased by 10% and 9% respectively, driven by Net New Business and Internal Growth, benefiting from higher trading volumes[106] - Data-driven fund solutions grew by 4% primarily due to growth in retirement and workplace products[109] Operational Metrics - Closed sales grew by 29% to 61.6 million in 2023[38] - Closed sales rose 29% for the third quarter of fiscal year 2024, with year-to-date closed sales up 19%[79] - Pre-tax margin for Investor Communication Solutions improved to 20.8% for the three months ended March 31, 2024, from 20.3% in the same period in 2023[57] - Operating income margin increased to 17.5% from 17.4% for the prior year period, primarily due to higher Recurring and event-driven revenues[77] Financial Position - Total assets decreased slightly from 8,215.4 million in March 2024[50] - Cash and cash equivalents decreased from 235.6 million in March 2024[50] - Accounts receivable increased from 1,165.1 million in March 2024[50] - Long-term debt increased from 3,513.9 million in March 2024[50] Guidance and Risks - Broadridge's reliance on a relatively small number of clients and the continued financial health of those clients are key risks[47] - Adjusted Operating income margin guidance (Non-GAAP) excludes approximately 1.5 million for the three months ended March 31, 2023, and $10.8 million for the nine months ended March 31, 2023[64] - Adjusted Operating Income excludes Acquisition and Integration Costs, Russia-Related Exit Costs, Litigation Settlement Charge, and Restructuring Costs to enhance comparability across fiscal periods[108] Liquidity and Cash Flow - Free cash flow is used as a liquidity measure to inform decisions on dividends, share repurchases, strategic acquisitions, and debt servicing[104]