Broadridge(US:BR)2025-11-04 18:19Financial Performance - Revenues for the three months ended September 30, 2025, increased to $1,589.4 million, up 11.7% from $1,422.9 million in the same period of 2024[12] - Operating income rose to $188.8 million, representing a 40.4% increase compared to $134.4 million in the prior year[12] - Net earnings for the quarter were $165.4 million, a significant increase of 107.1% from $79.8 million in the same quarter of 2024[12] - Basic earnings per share increased to $1.41, up from $0.68, reflecting a growth of 107.4% year-over-year[12] - Total revenues for the three months ended September 30, 2025, were $1,589.4 million, an increase of 11.7% from $1,422.9 million in the same period of 2024[58] - Recurring revenues accounted for $977.5 million, up from $900.3 million, reflecting a growth of 8.6% year-over-year[58] - Event-driven revenues increased significantly to $113.8 million, compared to $63.0 million, marking an increase of 80.6%[58] - Distribution revenues rose to $498.1 million, up from $459.5 million, representing an increase of 8.5%[58] - The company reported a comprehensive income of $195.8 million for the quarter, compared to $109.0 million in the prior year[15] - The accumulated other comprehensive income improved from $(272.9) million at June 30, 2025, to $(242.5) million at September 30, 2025[127] Cash Flow and Liquidity - Cash and cash equivalents at the end of the period were $290.7 million, down from $561.5 million at the beginning of the period[20] - Net cash flows from operating activities were $42.3 million, a recovery from a negative $125.5 million in the same quarter of 2024[20] - Free cash flow for the three months ended September 30, 2025, was $12.7 million, a significant improvement from a negative $157.6 million in 2024[204] - The company expects existing cash and cash flows to be sufficient to cover cash needs for working capital, capital expenditures, strategic acquisitions, dividends, and stock repurchases for at least the next 12 months[206] - The company experienced a net change in cash and cash equivalents of $(270.8) million for the three months ended September 30, 2025[210] Assets and Liabilities - Total assets decreased to $8,302.9 million from $8,545.0 million as of June 30, 2025[18] - Total stockholders' equity decreased to $2,635.1 million from $2,655.1 million as of June 30, 2025[18] - Contract assets decreased to $126.8 million from $137.5 million, while contract liabilities decreased to $654.9 million from $678.3 million[59] - As of September 30, 2025, total debt amounted to $3,294.1 million, with a carrying value of $3,281.3 million[101] - The company has a total long-term debt of $2,794.1 million, with a carrying value of $2,781.8 million[101] - The total payables and accrued expenses decreased to $840.7 million as of September 30, 2025, from $1,112.8 million as of June 30, 2025[88] - Deferred client conversion and start-up costs were $836.4 million as of September 30, 2025, down from $842.9 million as of June 30, 2025[82][83] Acquisitions and Investments - The company incurred $55.8 million in acquisitions during the quarter, compared to $8.0 million in the same period of 2024[20] - The acquisition of LDI-MAP, LLC ("iJoin") for a total purchase price of $43.9 million, including $31.9 million in cash, was completed in September 2025[65] - The acquisition of Signal Agency Limited for $26.6 million was finalized in August 2025, enhancing the company's capabilities in omni-channel communications[66] - The aggregate purchase price for the SIS acquisition was $185.5 million, which includes cash payments of $185.5 million, net tangible liabilities assumed of $(1.9) million, goodwill of $38.3 million, and intangible assets of $149.1 million[68][69] - Broadridge announced the proposed acquisition of Acolin Group Holdco Limited for approximately $70 million, expected to close in the first half of fiscal year 2026[138] Segment Performance - Broadridge operates in two reportable segments: Investor Communication Solutions (ICS) and Global Technology and Operations (GTO) [30] - The ICS segment includes services such as proxy materials processing and regulatory communications, significantly impacting investor engagement [30] - Earnings before income taxes for the Investor Communication Solutions segment were $126.4 million, while the Global Technology and Operations segment reported $67.3 million, leading to a total of $193.8 million[131] - The Investor Communication Solutions segment reported revenues of $1,130.0 million, an increase of $114.3 million, or 11%[186] - Wealth and Investment Management recurring revenue rose by 22% and 22% in constant currency, driven by 17 points from the SIS acquisition and 5 points of organic growth[192] Financial Ratios and Metrics - Operating income grew by $54.3 million, or 40%, to $188.8 million, resulting in an operating margin of 11.9%[177] - The effective tax rate for the three months ended September 30, 2025, was 22.4%, up from 20.4% in 2024[181] - Earnings before income taxes increased by $112.8 million, or 112%, to $213.1 million[185] - Adjusted Operating Income for the three months ended September 30, 2025, was $251.2 million, compared to $184.8 million in 2024, reflecting a margin increase from 13.0% to 15.8%[202] Regulatory and Compliance - The company was in compliance with all covenants of the Fiscal 2025 Revolving Credit Facility as of September 30, 2025[93] - As of September 30, 2025, Matrix Trust Company was in compliance with its regulatory capital requirements[125] Accounting and Reporting - Broadridge adopted ASU No. 2023-08, requiring crypto assets to be measured at fair value, impacting the accounting for Canton Coins starting in fiscal year 2026 [40] - The company is assessing the impact of new accounting pronouncements, including ASU No. 2023-09 on income tax disclosures, effective in Q4 fiscal year 2026 [43] - The Company’s financial statements are prepared in accordance with GAAP, and interim results may not indicate full-year performance[149]