Broadridge Financial Solutions (NYSE:BR) Q1 2026 Earnings Call November 04, 2025 08:30 AM ET Speaker0Good day and welcome to Broadridge's Fiscal First Quarter twenty twenty six Earnings Conference Call. All participants will be in listen only mode. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would like now to turn the conference over to Mr.Edding Thibault, Head of Investor Relations. Please go ahead.Speaker1Thank you, Alan. Good morn ...

Financial Data and Key Metrics Changes - Broadridge reported a 7% increase in recurring revenue on a constant currency basis and an 11% growth in adjusted EPS for fiscal year 2025, aligning with long-term objectives [5][31] - The company generated $1.1 billion in free cash flow, representing 104% of adjusted net income, positioning it well for investments and shareholder returns [29][43] - Adjusted operating income margin expanded by 50 basis points to 20.5% for the full year [31][42] Business Line Data and Key Metrics Changes - Governance recurring revenues rose 6% to $2.7 billion, driven by a 16% increase in equity shareholder positions [7][31] - Capital Markets revenues grew 6% to $1.1 billion, supported by new sales and higher trade volumes [11][36] - Wealth and Investment Management revenues increased by 12%, with a notable 26% growth in Q4, driven by the acquisition of SIS [14][36] Market Data and Key Metrics Changes - Daily average trading volumes rose above $200 billion in June, significantly up from $100 billion earlier in the year [14] - Equity position growth was 18% in Q4, with a 12% growth in revenue-generating positions for the full year [38] - Fund position growth remained strong at 7%, reflecting ongoing demand for both equity and fixed income funds [8][38] Company Strategy and Development Direction - Broadridge is focused on democratizing and digitizing governance, simplifying capital markets, and modernizing wealth management [5][23] - The company aims to leverage its investments in technology to enhance its platform capabilities and drive innovation [24][25] - The acquisition of Aklan is expected to deepen Broadridge's role as an intermediary and enhance fund data quality [10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the macro environment, noting a bounce back in capital markets activity and increased investor confidence [4][5] - The company anticipates 5% to 7% recurring revenue growth and 8% to 12% adjusted EPS growth for fiscal year 2026 [6][48] - Regulatory changes are seen as opportunities for growth, particularly in digital assets and shareholder engagement [19][27] Other Important Information - Broadridge's Board approved an 11% increase in the annual dividend to $3.9 per share, marking the 13th double-digit increase in the last 14 years [6][47] - The company has a recurring revenue backlog of $430 million, providing visibility into future growth [30][78] Q&A Session Summary Question: On the contemplated closed sales acceleration - Management acknowledged longer sales cycles but noted strong underlying demand in areas where investments have been made [56][58] Question: Qualitative color on Distributed Ledger Repo (DLR) - Management highlighted the growth in DLR and its significance in the tokenized securities market, noting strong client interest [60][63] Question: Opportunities on the ICS side of the business with tokenization - Management discussed the potential for digital assets and tokenization to enhance traditional capabilities and democratize investing [68][70] Question: Drivers for Capital Markets revenue outlook - Management indicated that the exit of a business would have a modest impact on growth, contributing to a lower revenue outlook [73] Question: Change in backlog duration due to digital solutions - Management clarified that backlog duration varies by product type, with some sales taking longer to convert [79] Question: Debt profile management going forward - Management expressed confidence in the current debt level and plans to roll forward upcoming debt maturities [98]