BR 8-K
Broadridge Financial Solutions, Inc. (BR)
8-K
2023-08-08
For: 2023-08-08
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Added on
April 04, 2026
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 8, 2023
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(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation) | (Commission file number) | (I.R.S. Employer Identification No.) | ||||||
| (Street Address) | (City) | (State) | Zip Code | ||||||||
Registrant’s telephone number, including area code: (516 ) 472-5400
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class: | Trading Symbol | Name of Each Exchange on Which Registered: | ||||||
Item 2.02. Results of Operations and Financial Condition.
On August 8, 2023, Broadridge Financial Solutions, Inc. (“Broadridge” or the “Company”) issued a press release (“Press Release”) announcing its financial results for the fourth quarter and fiscal year ended June 30, 2023. On August 8, 2023, the Company also posted an Earnings Webcast & Conference Call Presentation (the “Earnings Presentation”), dated August 8, 2023, on the Company’s Investor Relations website at www.broadridge-ir.com. Copies of the Press Release and Earnings Presentation are being furnished as Exhibits 99.1 and 99.2, attached hereto, respectively, and are incorporated herein by reference.
Item 8.01. Other Events.
On August 7, 2023, Broadridge's Board of Directors (the “Board”) declared a quarterly dividend of $0.80 per share payable on October 5, 2023 to stockholders of record on September 15, 2023. This declaration reflects the Board's approval of an increase in the annual dividend amount by 10% from $2.90 to $3.20 per share, subject to the discretion of the Board to declare quarterly dividends The declaration and payment of future dividends to holders of the Company’s common stock will be at the discretion of the Board, and will depend upon many factors, including the Company’s financial condition, earnings, capital requirements of its businesses, legal requirements, regulatory constraints, industry practice, and other factors that the Board deems relevant. A copy of the press release announcing this dividend declaration is attached hereto as Exhibit 99.1
The information furnished pursuant to Items 2.02 and 9.01, including Exhibits 99.1 and 99.2, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act.
Forward-Looking Statements
This current report on Form 8-K may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Statements that are not historical in nature and which may be identified by the use of words such as “expects,” “assumes,” “projects,” “anticipates,” “estimates,” “we believe,” “could be,” “on track,” and other words of similar meaning, are forward-looking statements. These statements are based on management’s expectations and assumptions and are subject to risks and uncertainties that may cause actual results to differ materially from those expressed. Factors that could cause actual results to differ materially from those contemplated by the forward-looking statements include:
•changes in laws and regulations affecting Broadridge’s clients or the services provided by Broadridge;
•Broadridge’s reliance on a relatively small number of clients, the continued financial health of those clients, and the continued use by such clients of Broadridge’s services with favorable pricing terms;
•a material security breach or cybersecurity attack affecting the information of Broadridge’s clients;
•declines in participation and activity in the securities markets;
•the failure of Broadridge’s key service providers to provide the anticipated levels of service;
•a disaster or other significant slowdown or failure of Broadridge’s systems or error in the performance of Broadridge’s services;
•overall market, economic and geopolitical conditions and their impact on the securities markets;
•the success of Broadridge in retaining and selling additional services to its existing clients and in obtaining new clients;
•Broadridge’s failure to keep pace with changes in technology and demands of its clients;
•competitive conditions;
•Broadridge’s ability to attract and retain key personnel; and
•the impact of new acquisitions and divestitures.
There may be other factors that may cause our actual results to differ materially from the forward-looking statements. Our actual results, performance or achievements could differ materially from those expressed in, or implied by, the forward-looking statements. We can give no assurances that any of the events anticipated by the forward-looking statements will occur or, if any of them do, what impact they will have on our results of operations and financial condition. You should carefully read the factors described in the “Risk Factors” section of our Annual Report on Form 10-K for the fiscal year ended June 30, 2023 filed with the Securities and Exchange Commission on August 8, 2023 (the “Annual Report”) for a description of certain risks that could, among other things, cause our actual results to differ from these forward-looking statements.
All forward-looking statements speak only as of the date of this Form 8-K and are expressly qualified in their entirety by the cautionary statements included in our Annual Report. We disclaim any obligation to update or revise forward-looking statements that may be made to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events, other than as required by law.
| Item 9.01. | Financial Statements and Exhibits. | ||||
(d) Exhibits.
| Exhibit No. | Description | |||||||
| 104 | Cover Page Interactive Data File – the cover page XBRL tags are embedded within the Inline XBRL document. | |||||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: August 8, 2023
| BROADRIDGE FINANCIAL SOLUTIONS, INC. | |||||||||||||||||
| By: | /s/ Edmund L. Reese | ||||||||||||||||
| Edmund L. Reese | |||||||||||||||||
| Corporate Vice President, Chief Financial Officer | |||||||||||||||||
Broadridge Reports Fourth Quarter and Fiscal 2023 Results
Q4 Recurring revenues grew 7%, up 8% constant currency,
with Diluted EPS growth of 30% and Adjusted EPS growth of 21%
with Diluted EPS growth of 30% and Adjusted EPS growth of 21%
2023 Recurring revenues grew 7%, up 9% constant currency,
with Diluted EPS growth of 16% and Adjusted EPS growth of 9%
with Diluted EPS growth of 16% and Adjusted EPS growth of 9%
Raising annual dividend 10% to $3.20 per share
Fiscal year 2024 guidance of 6-9% Recurring revenue growth constant currency
and 8-12% Adjusted EPS growth
and 8-12% Adjusted EPS growth
NEW YORK, N.Y., August 8, 2023 - Broadridge Financial Solutions, Inc. (NYSE:BR) today reported financial results for the fourth quarter and fiscal year 2023. Results compared with the same period last year were as follows:
| Summary Financial Results | Fourth Quarter | Fiscal Year | ||||||||||||||||||||||||
Dollars in millions, except per share data | 2023 | 2022 | Change | 2023 | 2022 | Change | ||||||||||||||||||||
| Recurring revenues | $1,259 | $1,177 | 7 | % | $3,987 | $3,723 | 7 | % | ||||||||||||||||||
| Constant currency growth - Non-GAAP | 8 | % | 9 | % | ||||||||||||||||||||||
| Total revenues | $1,839 | $1,723 | 7 | % | $6,061 | $5,709 | 6 | % | ||||||||||||||||||
| Operating income | $454 | $342 | 33 | % | $936 | $760 | 23 | % | ||||||||||||||||||
| Margin | 24.7 | % | 19.8 | % | 15.4 | % | 13.3 | % | ||||||||||||||||||
| Adjusted Operating income - Non-GAAP | $531 | $436 | 22 | % | $1,199 | $1,066 | 12 | % | ||||||||||||||||||
| Margin | 28.9 | % | 25.3 | % | 19.8 | % | 18.7 | % | ||||||||||||||||||
| Diluted EPS | $2.72 | $2.09 | 30 | % | $5.30 | $4.55 | 16 | % | ||||||||||||||||||
| Adjusted EPS - Non-GAAP | $3.21 | $2.65 | 21 | % | $7.01 | $6.46 | 9 | % | ||||||||||||||||||
| Closed sales | $90 | $111 | (19 | %) | $246 | $280 | (12 | %) | ||||||||||||||||||
“Broadridge reported strong fourth quarter results, including 8% Recurring revenue constant currency growth and 21% Adjusted EPS growth. For the full year, Recurring revenues were at the higher end of our guidance and rose 9% constant currency, driving continued margin expansion, 9% Adjusted EPS growth and strong Free cash flow. Our performance enabled Broadridge to deliver at or above the high end of the range of our three year financial objectives,” said Tim Gokey, Broadridge CEO.
“Looking ahead, our fiscal year 2024 guidance calls for 6-9% Recurring revenue growth constant currency and 8-12% Adjusted EPS growth. Our strong results and outlook reflect continued execution of our long-term growth strategy, powerful underlying trends, and returns on the investments we have made in our business.
“I’m also pleased to announce that our Board has approved a 10% increase in our annual dividend to $3.20 per share. Broadridge has now increased its dividend every year since becoming a public company, including double digit increases in 11 of the past 12 years,” Mr. Gokey concluded.
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Fiscal Year 2024 Financial Guidance
| Recurring revenue growth constant currency - Non-GAAP | 6 - 9% | |||||||
| Adjusted Operating income margin - Non-GAAP | ~20% | |||||||
| Adjusted Earnings per share growth - Non-GAAP | 8 - 12% | |||||||
| Closed sales | $280 - $320 million | |||||||
Financial Results for Fourth Quarter Fiscal Year 2023 compared to Fourth Quarter Fiscal Year 2022
•Total revenues increased 7% to $1,839 million from $1,723 million in the prior year period.
◦Recurring revenues increased 7% to $1,259 million from $1,177 million. Recurring revenue growth constant currency (Non-GAAP) was 8%, all organic, driven by Net New Business and Internal Growth.
◦Event-driven revenues decreased by $11 million, or 15%, to $59 million, primarily due to the decrease in volume of mutual fund proxy communications.
◦Distribution revenues increased $45 million, or 9%, to $522 million, driven by the impact of postage rate increases of approximately $35 million.
•Operating income was $454 million, an increase of $112 million, or 33%. Operating income margin increased to 24.7%, compared to 19.8% for the prior year period, due to the growth in Recurring revenues and lower amortization expense from acquired intangible assets, more than offsetting lower event-driven revenues.
Adjusted Operating income was $531 million, an increase of $96 million, or 22%. The increase was driven by higher Recurring revenues partially offset by lower event-driven revenues. Adjusted Operating income margin increased to 28.9%, compared to 25.3% for the prior year period. The increase in pass through distribution revenues negatively impacted margins by approximately 10 basis points.
•Interest expense, net was $36 million, an increase of $15 million, primarily due to an increase in interest expense from higher borrowing costs.
•The effective tax rate was 22.4% compared to 22.1% in the prior year period. The increase was driven by the decreased impact of discrete tax items.
•Net earnings increased 31% to $324 million and Adjusted Net earnings increased 22% to $382 million.
◦Diluted earnings per share increased 30% to $2.72, compared to $2.09 in the prior year period, and
◦Adjusted earnings per share increased 21% to $3.21, compared to $2.65 in the prior year period.
Segment and Other Results for Fourth Quarter Fiscal Year 2023 compared to Fourth Quarter Fiscal Year 2022
Investor Communication Solutions (“ICS”)
•ICS total Revenues were $1,438 million, an increase of $87 million, or 6%.
◦Recurring revenues increased $53 million, or 7%, to $858 million. Recurring revenue growth constant currency (Non-GAAP) was 7%, all organic, driven by Net New Business and Internal Growth.
◦By product line, Recurring revenue growth and Recurring revenue growth constant currency (Non-GAAP) were as follows:
▪Regulatory rose 5% and 5%, respectively, driven by equity position growth of 6% and mutual fund/ETF position growth of 8%, partially offset by lower growth in international revenues;
▪Data-driven fund solutions rose 11% and 12%, respectively, driven by growth in our mutual fund trade processing business and continued growth in our data and analytics solutions;
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▪Issuer rose 7% and 7%, respectively, driven by growth in our registered shareholder solutions and disclosure solutions; and
▪Customer communications rose 7% and 7%, respectively, driven by higher print and digital communications.
◦Event-driven revenues decreased $11 million, or 15%, to $59 million, primarily due to the decrease in volume of mutual fund proxy communications.
◦Distribution revenues increased $45 million, or 9%, to $522 million, driven by the impact of postage rate increases of approximately $35 million.
•ICS Earnings before income taxes were $431 million, an increase of $68 million, or 19%. The earnings benefit from higher Recurring revenue was partially offset by lower event-driven revenues. Operating expenses rose 2%, or $20 million, to $1,007 million, driven by higher distribution expenses, partially offset by a decline in other operating expenses. Amortization expense from acquired intangibles decreased by $4 million to $12 million. Pre-tax margins increased to 30.0% from 26.9%.
Global Technology and Operations (“GTO”)
•GTO Recurring revenues were $401 million, an increase of $29 million, or 8%. Recurring revenue growth constant currency (Non-GAAP) was 9%, all organic, driven by Net New Business and Internal Growth.
•By product line, Recurring revenue growth and Recurring revenue growth constant currency (Non-GAAP) were as follows:
◦Capital markets rose 11% and 12%, respectively, driven by a combination of Internal Growth and Net New Business; and
◦Wealth and investment management rose 2% and 4%, respectively, driven primarily by Net New Business.
•GTO Earnings before income taxes were $52 million, an increase of $14 million, or 35%. GTO earnings increase was driven primarily by the $29 million growth in Recurring revenues. Operating expenses rose 5%, or $15 million, to $349 million, primarily driven by increased labor costs. Amortization expense from acquired intangibles decreased by $3 million to $40 million in fiscal year 2023 due to the impact of changes in foreign currency exchange rates and certain intangible assets now being fully amortized. Pre-tax margins increased to 13.0% from 10.3%.
Other
•Other Loss before income tax was $66 million compared to a loss of $83 million in the prior year period. The impact of a $15 million increase in net interest expense and higher severance costs related to the corporate restructuring initiative were more than offset by the absence of the prior year $24 million in Real Estate Realignment and Covid-19 related expenses and lower compensation related expenses.
Financial Results for Fiscal Year 2023 compared to Fiscal Year 2022
•Total revenues increased 6% to $6,061 million from $5,709 million in the prior year period.
◦Recurring revenues increased 7% to $3,987 million from $3,723 million. Recurring revenue growth constant currency (Non-GAAP) was 9%, all organic, driven by Net New Business and Internal Growth.
◦Event-driven revenues decreased $58 million, or 22%, to $211 million, primarily due to a decrease in volume of mutual fund proxy communications.
◦Distribution revenues increased $146 million, or 9%, to $1,863 million, primarily driven by the impact of postage rate increases of approximately $121 million.
•Operating income was $936 million, an increase of $177 million, or 23%. Operating income margin increased to 15.4% from 13.3% in the prior year period due to the growth in Recurring revenues, which
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more than offset the impact of lower event-driven revenues, an increase in low-margin distribution revenues, growth investments and other expenses.
Adjusted Operating income was $1,199 million, an increase of $133 million, or 12%. The increase was primarily driven by higher Recurring revenues, partially offset by lower event-driven revenues, growth investments and other spending. Adjusted Operating income margin increased to 19.8%, compared to 18.7% for the prior year period. The increase in pass through distribution revenues negatively impacted margins by approximately 30 basis points.
•Interest expense, net was $136 million, an increase of $51 million, primarily due to an increase in interest expense from higher borrowing costs.
•The effective tax rate was 20.7% compared to 19.8% in the prior year period. The increase in the effective tax rate was driven by lower discrete tax items, primarily attributable to the excess tax benefit related to equity compensation, as compared to the prior year.
•Net earnings increased 17% to $631 million and Adjusted Net earnings increased 9% to $835 million.
◦Diluted Earnings per share increased 16% to $5.30 compared to $4.55 in the prior year period, and
◦Adjusted Earnings per share increased 9% to $7.01 compared to $6.46 in the prior year period.
Segment and Other Results for Fiscal Year 2023 compared to Fiscal Year 2022
ICS
•ICS total Revenues were $4,536 million, an increase of $279 million, or 7%.
◦Recurring revenues increased $191 million, or 8%, to $2,461 million. Recurring revenue growth constant currency (Non-GAAP) was 9%, all organic, driven by Internal Growth and Net New Business.
◦By product line, Recurring revenue growth and Recurring revenue growth constant currency (Non-GAAP) were as follows:
▪Regulatory rose 6% and 7%, respectively, driven by equity position growth of 9% and mutual fund/ETF position growth of 8%;
▪Data-driven fund solutions rose 11% and 12%, respectively, driven by growth in our mutual fund trade processing business and continued growth in our data and analytics solutions;
▪Issuer rose 12% and 13%, respectively, driven by growth in our registered shareholder solutions and disclosure solutions; and
▪Customer communications rose 9% and 10%, respectively, driven by higher print and digital communications.
◦Event-driven revenues decreased $58 million, or 22%, to $211 million, primarily due to the decrease in volume of mutual fund proxy communications.
◦Distribution revenues increased $146 million, or 9%, to $1,863 million, driven by the impact of postage rate increases of $121 million and the impact of modestly higher mail volumes, primarily in Customer communications.
•ICS earnings before income taxes were $811 million, an increase of $87 million, or 12%. The earnings benefit from higher Recurring revenue was partially offset by lower event-driven revenues. Operating expenses rose 5%, or $192 million, to $3,724 million, primarily driven by distribution and other revenue related expenses. Amortization expense from acquired intangibles decreased by $13 million to $56 million. Pre-tax margins increased to 17.9% from 17.0%.
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GTO
•GTO Recurring revenues were $1,525 million, an increase of $73 million, or 5%. Recurring revenue growth constant currency (Non-GAAP) was 8%, all organic, driven by Net New Business and Internal Growth.
•By product line, Recurring revenue growth and Recurring revenue growth constant currency (Non-GAAP) were as follows:
◦Capital markets rose 7% and 11%, respectively, driven by a combination of Internal Growth and Net New Business; and
◦Wealth and investment management rose 2% and 4%, respectively, primarily driven by Net New Business.
•GTO earnings before income taxes were $184 million, an increase of $44 million, or 32%, driven primarily by the $73 million growth in Recurring revenues, partially offset by increased labor costs. Operating expenses rose 2%, or $28 million, to $1,341 million, primarily driven by increased labor costs. Amortization expense from acquired intangibles decreased by $23 million to $159 million in fiscal year 2023 due to the impact of changes in foreign currency exchange rates and certain intangible assets now being fully amortized. Pre-tax margins increased to 12.1% from 9.6%.
Other
•Other Loss before income tax was $201 million compared to a loss of $192 million in the prior year period. The impact of a $51 million increase in net interest expense and higher severance costs related to the corporate restructuring initiative were partially offset by the absence of the prior year $30 million in Real Estate Realignment and Covid-19 related expenses and lower compensation related expenses.
Dividend Declaration and Increase
On August 7, 2023, Broadridge's Board of Directors (the “Board”) declared a quarterly dividend of $0.80 per share payable on October 5, 2023 to stockholders of record on September 15, 2023. This declaration reflects the Board's approval of an increase in the annual dividend amount by 10% from $2.90 to $3.20 per share, subject to the discretion of the Board to declare quarterly dividends. With this increase, the Company's annual dividend has increased for the 17th consecutive year since becoming a public company in 2007.
On August 7, 2023, Broadridge's Board of Directors (the “Board”) declared a quarterly dividend of $0.80 per share payable on October 5, 2023 to stockholders of record on September 15, 2023. This declaration reflects the Board's approval of an increase in the annual dividend amount by 10% from $2.90 to $3.20 per share, subject to the discretion of the Board to declare quarterly dividends. With this increase, the Company's annual dividend has increased for the 17th consecutive year since becoming a public company in 2007.
Earnings Conference Call
An analyst conference call will be held today, August 8, 2023 at 8:30 a.m. ET. A live webcast of the call will be available to the public on a listen-only basis. To listen to the live event and access the slide presentation, visit Broadridge’s Investor Relations website at www.broadridge-ir.com prior to the start of the webcast. To listen to the call, investors may also dial 1-877-328-2502 within the United States and international callers may dial 1-412-317-5419.
A replay of the webcast will be available and can be accessed in the same manner as the live webcast at the Broadridge Investor Relations site. Through August 15, 2023, the recording will also be available by dialing 1-877-344-7529 within the United States or 1-412-317-0088 for international callers, using passcode 8237106 for either dial-in number.
Change in Foreign Exchange Rates
Beginning with the first quarter of fiscal year 2023, the Company changed reporting for segment revenues, segment earnings (loss) before income taxes, segment amortization of acquired intangibles and purchased intellectual property, and Closed sales to reflect the impact of actual foreign exchange rates applicable to the individual periods presented. The presentation of these metrics for the prior periods has been changed to conform to the current period presentation. Total consolidated revenues and earnings before income taxes were not impacted. For additional information, please see the Company’s Form 8-K filed on September 26, 2022.
Explanation and Reconciliation of the Company’s Use of Non-GAAP Financial Measures
The Company’s results in this press release are presented in accordance with U.S. GAAP except where otherwise noted. In certain circumstances, results have been presented that are not generally accepted accounting principles
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measures (“Non-GAAP”). These Non-GAAP measures are Adjusted Operating income, Adjusted Operating income margin, Adjusted Net earnings, Adjusted earnings per share, Free cash flow, and Recurring revenue growth constant currency. These Non-GAAP financial measures should be viewed in addition to, and not as a substitute for, the Company’s reported results.
The Company believes our Non-GAAP financial measures help investors understand how management plans, measures and evaluates the Company’s business performance. Management believes that Non-GAAP measures provide consistency in its financial reporting and facilitates investors’ understanding of the Company’s operating results and trends by providing an additional basis for comparison. Management uses these Non-GAAP financial measures to, among other things, evaluate our ongoing operations, and for internal planning and forecasting purposes. In addition, and as a consequence of the importance of these Non-GAAP financial measures in managing our business, the Company’s Compensation Committee of the Board of Directors incorporates Non-GAAP financial measures in the evaluation process for determining management compensation.
Adjusted Operating Income, Adjusted Operating Income Margin, Adjusted Net Earnings and Adjusted Earnings Per Share
These Non-GAAP measures reflect Operating income, Operating income margin, Net earnings, and Diluted earnings per share, as adjusted to exclude the impact of certain costs, expenses, gains and losses and other specified items the exclusion of which management believes provides insight regarding our ongoing operating performance. Depending on the period presented, these adjusted measures exclude the impact of certain of the following items: (i) Amortization of Acquired Intangibles and Purchased Intellectual Property, (ii) Acquisition and Integration Costs, (iii) Restructuring Charges, (iv) Real Estate Realignment and Covid-19 Related Expenses, (v) Russia-Related Exit Costs, and (vi) Investment Gain. Amortization of Acquired Intangibles and Purchased Intellectual Property represents non-cash amortization expenses associated with the Company’s acquisition activities. Acquisition and Integration Costs represent certain transaction and integration costs associated with the Company’s acquisition activities. Restructuring Charges represent severance costs associated with the Company’s initiative to streamline our management structure, reallocate work to lower cost locations, and reduce headcount in deprioritized areas. Real Estate Realignment and Covid-19 Related Expenses are comprised of two major components: Real Estate Realignment Expenses, and Covid-19 Related Expenses. Real Estate Realignment Expenses are expenses associated with the exit of certain of the Company’s leased facilities in response to the Covid-19 pandemic, which consist of the impairment of certain right of use assets, leasehold improvements and equipment, as well as other related facility exit expenses directly resulting from, and attributable to, the exit of these leased facilities. Covid-19 Related Expense are direct and incremental expenses incurred by the Company to protect the health and safety of Broadridge associates during the Covid-19 outbreak, including expenses associated with monitoring the temperatures for associates entering our facilities, enhancing the safety of our office environment in preparation for workers to return to Company facilities on a more regular basis, ensuring proper social distancing in our production facilities, personal protective equipment, enhanced cleaning measures in our facilities, and other safety related expenses. Russia-Related Exit Costs are direct and incremental costs associated with the Company’s wind down of business activities in Russia in response to Russia’s invasion of Ukraine, including relocation-related expenses of impacted associates. Investment Gain represents a non-operating, non-cash gain on a privately held investment.
We exclude Acquisition and Integration Costs, Restructuring Charges, Real Estate Realignment and Covid-19 Related Expenses, Russia-Related Exit Costs, and Investment Gain from our Adjusted Operating income (as applicable) and other adjusted earnings measures because excluding such information provides us with an understanding of the results from the primary operations of our business and enhances comparability across fiscal reporting periods, as these items are not reflective of our underlying operations or performance. We also exclude the impact of Amortization of Acquired Intangibles and Purchased Intellectual Property, as these non-cash amounts are significantly impacted by the timing and size of individual acquisitions and do not factor into the Company's capital allocation decisions, management compensation metrics or multi-year objectives. Furthermore, management believes that this adjustment enables better comparison of our results as Amortization of Acquired Intangibles and Purchased Intellectual Property will not recur in future periods once such intangible assets have been fully amortized. Although we exclude Amortization of Acquired Intangibles and Purchased Intellectual Property from our adjusted earnings measures, our management believes that it is important for investors to understand that these intangible assets contribute to revenue generation. Amortization of intangible assets that
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relate to past acquisitions will recur in future periods until such intangible assets have been fully amortized. Any future acquisitions may result in the amortization of additional intangible assets.
Free Cash Flow
In addition to the Non-GAAP financial measures discussed above, we provide Free cash flow information because we consider Free cash flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated that could be used for dividends, share repurchases, strategic acquisitions, other investments, as well as debt servicing. Free cash flow is a Non-GAAP financial measure and is defined by the Company as Net cash flows provided by operating activities less Capital expenditures as well as Software purchases and capitalized internal use software.
Recurring revenue growth constant currency
As a multi-national company, we are subject to variability of our reported U.S. dollar results due to changes in foreign currency exchange rates. The exclusion of the impact of foreign currency exchange fluctuations from our Recurring revenue growth, or what we refer to as amounts expressed “on a constant currency basis,” is a Non-GAAP measure. We believe that excluding the impact of foreign currency exchange fluctuations from our Recurring revenue growth provides additional information that enables enhanced comparison to prior periods.
Changes in Recurring revenue growth expressed on a constant currency basis are presented excluding the impact of foreign currency exchange fluctuations. To present this information, current period results for entities reporting in currencies other than the U.S. dollar are translated into U.S. dollars at the average exchange rates in effect during the corresponding period of the comparative year, rather than at the actual average exchange rates in effect during the current fiscal year.
Reconciliations of such Non-GAAP measures to the most directly comparable financial measures presented in accordance with GAAP can be found in the tables that are part of this press release.
Forward-Looking Statements
This press release and other written or oral statements made from time to time by representatives of Broadridge may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Statements that are not historical in nature, and which may be identified by the use of words such as “expects,” “assumes,” “projects,” “anticipates,” “estimates,” “we believe,” “could be,” “on track” and other words of similar meaning, are forward-looking statements. In particular, information appearing in the “Fiscal Year 2024 Financial Guidance” section and statements about our three-year objectives are forward-looking statements.
These statements are based on management’s expectations and assumptions and are subject to risks and uncertainties that may cause actual results to differ materially from those expressed. These risks and uncertainties include those risk factors described and discussed in Part I, “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the year ended June 30, 2023 (the “2023 Annual Report”), as they may be updated in any future reports filed with the Securities and Exchange Commission. All forward-looking statements speak only as of the date of this press release and are expressly qualified in their entirety by reference to the factors discussed in the 2023 Annual Report.
These risks include:
•changes in laws and regulations affecting Broadridge’s clients or the services provided by Broadridge;
•Broadridge’s reliance on a relatively small number of clients, the continued financial health of those clients, and the continued use by such clients of Broadridge’s services with favorable pricing terms;
•a material security breach or cybersecurity attack affecting the information of Broadridge’s clients;
•declines in participation and activity in the securities markets;
•the failure of Broadridge’s key service providers to provide the anticipated levels of service;
•a disaster or other significant slowdown or failure of Broadridge’s systems or error in the performance of Broadridge’s services;
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•overall market, economic and geopolitical conditions and their impact on the securities markets;
•the success of Broadridge in retaining and selling additional services to its existing clients and in obtaining new clients;
•Broadridge’s failure to keep pace with changes in technology and the demands of its clients;
•competitive conditions;
•Broadridge’s ability to attract and retain key personnel; and
•the impact of new acquisitions and divestitures.
Broadridge disclaims any obligation to update or revise forward-looking statements that may be made to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events, other than as required by law.
About Broadridge
Broadridge Financial Solutions (NYSE: BR), a global Fintech leader with over $6 billion in revenues, provides the critical infrastructure that powers investing, corporate governance and communications to enable better financial lives. We deliver technology-driven solutions to banks, broker-dealers, asset and wealth managers and public companies. Broadridge's infrastructure serves as a global communications hub enabling corporate governance by linking thousands of public companies and mutual funds to tens of millions of individual and institutional investors around the world. In addition, Broadridge's technology and operations platforms underpin the daily trading of on average more than U.S. $10 trillion of equities, fixed income and other securities globally. A certified Great Place to Work®, Broadridge is a part of the S&P 500® Index, employing over 14,000 associates in 21 countries. For more information about Broadridge, please visit www.broadridge.com.
Contact Information
8
Condensed Consolidated Statements of Earnings
(Unaudited)
| In millions, except per share amounts | Three Months Ended June 30, | Fiscal Year Ended June 30, | |||||||||||||||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||||||
| Revenues | $ | 1,839.0 | $ | 1,722.9 | $ | 6,060.9 | $ | 5,709.1 | |||||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||||||||
| Cost of revenues | 1,159.1 | 1,146.8 | 4,275.5 | 4,116.9 | |||||||||||||||||||||||||
| Selling, general and administrative expenses | 225.7 | 234.3 | 849.0 | 832.3 | |||||||||||||||||||||||||
| Total operating expenses | 1,384.8 | 1,381.2 | 5,124.5 | 4,949.2 | |||||||||||||||||||||||||
| Operating income | 454.2 | 341.7 | 936.4 | 759.9 | |||||||||||||||||||||||||
| Interest expense, net | (36.0) | (20.7) | (135.5) | (84.7) | |||||||||||||||||||||||||
| Other non-operating income (expenses), net | (0.7) | (2.2) | (6.0) | (3.0) | |||||||||||||||||||||||||
| Earnings before income taxes | 417.5 | 318.8 | 794.9 | 672.2 | |||||||||||||||||||||||||
| Provision for income taxes | 93.4 | 70.6 | 164.3 | 133.1 | |||||||||||||||||||||||||
| Net earnings | $ | 324.1 | $ | 248.1 | $ | 630.6 | $ | 539.1 | |||||||||||||||||||||
| Basic earnings per share | $ | 2.75 | $ | 2.12 | $ | 5.36 | $ | 4.62 | |||||||||||||||||||||
| Diluted earnings per share | $ | 2.72 | $ | 2.09 | $ | 5.30 | $ | 4.55 | |||||||||||||||||||||
| Weighted-average shares outstanding: | |||||||||||||||||||||||||||||
| Basic | 118.0 | 117.2 | 117.7 | 116.7 | |||||||||||||||||||||||||
| Diluted | 119.1 | 118.5 | 119.0 | 118.5 | |||||||||||||||||||||||||
Amounts may not sum due to rounding.
9
Condensed Consolidated Balance Sheets
(Unaudited)
| In millions, except per share amounts | June 30, 2023 | June 30, 2022 | |||||||||||||||
| Assets | |||||||||||||||||
| Current assets: | |||||||||||||||||
| Cash and cash equivalents | $ | 252.3 | $ | 224.7 | |||||||||||||
Accounts receivable, net of allowance for doubtful accounts of $7.2 and $6.8, respectively | 974.0 | 946.9 | |||||||||||||||
| Other current assets | 166.2 | 156.8 | |||||||||||||||
| Total current assets | 1,392.5 | 1,328.4 | |||||||||||||||
| Property, plant and equipment, net | 145.7 | 150.9 | |||||||||||||||
| Goodwill | 3,461.6 | 3,484.9 | |||||||||||||||
| Intangible assets, net | 1,467.2 | 1,077.1 | |||||||||||||||
| Deferred client conversion and start-up costs | 937.0 | 1,232.3 | |||||||||||||||
| Other non-current assets | 829.2 | 895.3 | |||||||||||||||
| Total assets | $ | 8,233.2 | $ | 8,168.8 | |||||||||||||
| Liabilities and Stockholders’ Equity | |||||||||||||||||
| Current liabilities: | |||||||||||||||||
| Current portion of long-term debt | $ | 1,178.5 | $ | — | |||||||||||||
| Payables and accrued expenses | 1,019.5 | 1,114.9 | |||||||||||||||
| Contract liabilities | 199.8 | 198.5 | |||||||||||||||
| Total current liabilities | 2,397.8 | 1,313.4 | |||||||||||||||
| Long-term debt | 2,234.7 | 3,793.0 | |||||||||||||||
| Deferred taxes | 391.3 | 446.1 | |||||||||||||||
| Contract liabilities | 492.8 | 215.8 | |||||||||||||||
| Other non-current liabilities | 476.0 | 481.5 | |||||||||||||||
| Total liabilities | 5,992.6 | 6,249.8 | |||||||||||||||
| Commitments and contingencies | |||||||||||||||||
| Stockholders’ equity: | |||||||||||||||||
| Preferred stock: Authorized, 25.0 shares; issued and outstanding, none | — | — | |||||||||||||||
Common stock, $0.01 par value: Authorized, 650.0 shares; issued, 154.5 and 154.5 shares, respectively; outstanding, 118.1 and 117.3 shares, respectively | 1.6 | 1.6 | |||||||||||||||
| Additional paid-in capital | 1,436.8 | 1,344.7 | |||||||||||||||
| Retained earnings | 3,113.0 | 2,824.0 | |||||||||||||||
Treasury stock, at cost: 36.4 and 37.2 shares, respectively | (2,026.1) | (2,024.8) | |||||||||||||||
| Accumulated other comprehensive income (loss) | (284.7) | (226.3) | |||||||||||||||
| Total stockholders’ equity | 2,240.6 | 1,919.1 | |||||||||||||||
| Total liabilities and stockholders’ equity | $ | 8,233.2 | $ | 8,168.8 | |||||||||||||
Amounts may not sum due to rounding.
10
Condensed Consolidated Statements of Cash Flows
(Unaudited)
| In millions | Fiscal Year | ||||||||||
| 2023 | 2022 | ||||||||||
| Cash Flows From Operating Activities | |||||||||||
| Net earnings | $ | 630.6 | $ | 539.1 | |||||||
| Adjustments to reconcile net earnings to net cash flows provided by operating activities: | |||||||||||
| Depreciation and amortization | 84.4 | 82.4 | |||||||||
| Amortization of acquired intangibles and purchased intellectual property | 214.4 | 250.2 | |||||||||
| Amortization of other assets | 126.2 | 131.4 | |||||||||
| Write-down of long-lived assets | 2.5 | 39.5 | |||||||||
| Stock-based compensation expense | 73.1 | 68.4 | |||||||||
| Deferred income taxes | (50.8) | 50.7 | |||||||||
| Other | (27.4) | (17.9) | |||||||||
| Changes in operating assets and liabilities, net of assets and liabilities acquired: | |||||||||||
| Current assets and liabilities: | |||||||||||
| Accounts receivable, net | 19.6 | (85.4) | |||||||||
| Other current assets | (10.0) | 12.2 | |||||||||
| Payables and accrued expenses | (104.5) | (26.7) | |||||||||
| Contract liabilities | (3.2) | 30.2 | |||||||||
| Non-current assets and liabilities: | |||||||||||
| Other non-current assets | (472.4) | (696.9) | |||||||||
| Other non-current liabilities | 340.9 | 66.2 | |||||||||
| Net cash flows provided by operating activities | 823.3 | 443.5 | |||||||||
| Cash Flows From Investing Activities | |||||||||||
| Capital expenditures | (38.4) | (29.0) | |||||||||
| Software purchases and capitalized internal use software | (36.8) | (44.1) | |||||||||
| Acquisitions, net of cash acquired | — | (13.3) | |||||||||
| Other investing activities | (5.3) | (24.0) | |||||||||
| Net cash flows used in investing activities | (80.4) | (110.4) | |||||||||
| Cash Flows From Financing Activities | |||||||||||
| Debt proceeds | 990.0 | 670.0 | |||||||||
| Debt repayments | (1,375.0) | (765.5) | |||||||||
| Dividends paid | (331.0) | (290.7) | |||||||||
| Purchases of Treasury stock | (24.3) | (22.8) | |||||||||
| Proceeds from exercise of stock options | 43.1 | 60.2 | |||||||||
| Other financing activities | (17.5) | (22.0) | |||||||||
| Net cash flows used in financing activities | (714.7) | (370.8) | |||||||||
| Effect of exchange rate changes on Cash and cash equivalents | (0.6) | (12.2) | |||||||||
| Net change in Cash and cash equivalents | 27.6 | (49.9) | |||||||||
| Cash and cash equivalents, beginning of fiscal year | 224.7 | 274.5 | |||||||||
| Cash and cash equivalents, end of fiscal year | $ | 252.3 | $ | 224.7 | |||||||
Amounts may not sum due to rounding
11
Segment Results
(Unaudited)
| In millions | Three Months Ended June 30, | Fiscal Year Ended June 30, | |||||||||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
| Revenues | |||||||||||||||||||||||
| Investor Communication Solutions | $ | 1,438.4 | $ | 1,351.1 | $ | 4,535.6 | $ | 4,256.6 | |||||||||||||||
| Global Technology and Operations | 400.6 | 371.7 | 1,525.2 | 1,452.4 | |||||||||||||||||||
| Total | $ | 1,839.0 | $ | 1,722.9 | $ | 6,060.9 | $ | 5,709.1 | |||||||||||||||
| Earnings Before Income Taxes | |||||||||||||||||||||||
| Investor Communication Solutions | $ | 431.1 | $ | 363.5 | $ | 811.4 | $ | 724.7 | |||||||||||||||
| Global Technology and Operations | 52.0 | 38.4 | 183.9 | 139.4 | |||||||||||||||||||
| Other | (65.6) | (83.1) | (200.5) | (191.9) | |||||||||||||||||||
| Total | $ | 417.5 | $ | 318.8 | $ | 794.9 | $ | 672.2 | |||||||||||||||
| Pre-tax margins: | |||||||||||||||||||||||
| Investor Communication Solutions | 30.0 | % | 26.9 | % | 17.9 | % | 17.0 | % | |||||||||||||||
| Global Technology and Operations | 13.0 | % | 10.3 | % | 12.1 | % | 9.6 | % | |||||||||||||||
| Amortization of acquired intangibles and purchased intellectual property | |||||||||||||||||||||||
| Investor Communication Solutions | $ | 11.8 | $ | 15.7 | $ | 55.5 | $ | 68.7 | |||||||||||||||
| Global Technology and Operations | 39.8 | 42.5 | 158.9 | 181.5 | |||||||||||||||||||
| Total | $ | 51.6 | $ | 58.2 | $ | 214.4 | $ | 250.2 | |||||||||||||||
Amounts may not sum due to rounding.
12
Supplemental Reporting Detail - Additional Product Line Reporting
(Unaudited)
| In millions | Three Months Ended June 30, | Fiscal Year Ended June 30, | |||||||||||||||||||||||||||||||||
| 2023 | 2022 | Change | 2023 | 2022 | Change | ||||||||||||||||||||||||||||||
| Investor Communication Solutions | |||||||||||||||||||||||||||||||||||
Regulatory | $ | 444.3 | $ | 422.8 | 5 | % | $ | 1,141.4 | $ | 1,075.4 | 6 | % | |||||||||||||||||||||||
Data-driven fund solutions | 113.4 | 101.7 | 11% | 404.3 | 363.7 | 11 | % | ||||||||||||||||||||||||||||
Issuer | 134.4 | 125.3 | 7 | % | 242.6 | 215.9 | 12 | % | |||||||||||||||||||||||||||
Customer communications | 165.8 | 155.0 | 7 | % | 673.1 | 615.4 | 9 | % | |||||||||||||||||||||||||||
| Total ICS Recurring revenues | 857.9 | 804.9 | 7 | % | 2,461.4 | 2,270.3 | 8 | % | |||||||||||||||||||||||||||
| Equity and other | 32.7 | 37.8 | (14 | %) | 116.5 | 115.0 | 1 | % | |||||||||||||||||||||||||||
| Mutual funds | 26.3 | 31.9 | (18 | %) | 94.5 | 154.4 | (39 | %) | |||||||||||||||||||||||||||
| Total ICS Event-driven revenues | 58.9 | 69.7 | (15 | %) | 211.0 | 269.4 | (22 | %) | |||||||||||||||||||||||||||
| Distribution revenues | 521.5 | 476.5 | 9 | % | 1,863.1 | 1,717.0 | 9 | % | |||||||||||||||||||||||||||
| Total ICS Revenues | $ | 1,438.4 | $ | 1,351.1 | 6 | % | $ | 4,535.6 | $ | 4,256.6 | 7 | % | |||||||||||||||||||||||
| Global Technology and Operations | |||||||||||||||||||||||||||||||||||
Capital markets | $ | 257.4 | $ | 231.7 | 11 | % | $ | 965.2 | $ | 902.7 | 7 | % | |||||||||||||||||||||||
Wealth and investment management | 143.2 | 140.0 | 2 | % | 560.1 | 549.7 | 2 | % | |||||||||||||||||||||||||||
| Total GTO Recurring revenues | 400.6 | 371.7 | 8 | % | 1,525.2 | 1,452.4 | 5 | % | |||||||||||||||||||||||||||
| Total Revenues | $ | 1,839.0 | $ | 1,722.9 | 7 | % | $ | 6,060.9 | $ | 5,709.1 | 6 | % | |||||||||||||||||||||||
| Revenues by Type | |||||||||||||||||||||||||||||||||||
| Recurring revenues | $ | 1,258.5 | $ | 1,176.6 | 7 | % | $ | 3,986.7 | $ | 3,722.7 | 7 | % | |||||||||||||||||||||||
| Event-driven revenues | 58.9 | 69.7 | (15 | %) | 211.0 | 269.4 | (22 | %) | |||||||||||||||||||||||||||
| Distribution revenues | 521.5 | 476.5 | 9 | % | 1,863.1 | 1,717.0 | 9 | % | |||||||||||||||||||||||||||
| Total Revenues | $ | 1,839.0 | $ | 1,722.9 | 7 | % | $ | 6,060.9 | $ | 5,709.1 | 6 | % | |||||||||||||||||||||||
Amounts may not sum due to rounding.
13
Select Operating Metrics
(Unaudited)
| In millions | Three Months Ended June 30, | Fiscal Year Ended June 30, | |||||||||||||||||||||||||||||||||
| 2023 | 2022 | Change | 2023 | 2022 | Change | ||||||||||||||||||||||||||||||
Closed sales1 | $89.8 | $110.5 | (19)% | $245.8 | $279.5 | (12) | % | ||||||||||||||||||||||||||||
Record Growth2 | |||||||||||||||||||||||||||||||||||
| Equity positions (Stock records) | 6% | 17% | 9% | 18% | |||||||||||||||||||||||||||||||
| Mutual fund/ETF positions (Interim records) | 8% | 10% | 8% | 14% | |||||||||||||||||||||||||||||||
Internal Trade Growth3 | 3% | 8% | 4% | 1% | |||||||||||||||||||||||||||||||
| Amounts may not sum due to rounding | |||||||||||||||||||||||||||||||||||
1. Refer to the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of Broadridge’s 2023 Annual Report for a description of Closed sales and its calculation. | |||||||||||||||||||||||||||||||||||
2. Stock record growth (also referred to as “SRG” or “equity position growth”) measures the estimated annual change in positions eligible for equity proxy materials. Interim record growth (also referred to as “IRG” or “mutual fund/ETF position growth”) measures the estimated change in mutual fund and exchange traded fund positions eligible for interim communications. These metrics are calculated from equity proxy and mutual fund/ETF position data reported to Broadridge for the same issuers or funds in both the current and prior year periods. | |||||||||||||||||||||||||||||||||||
3. Represents the estimated change in daily average trade volumes for clients whose contracts are linked to trade volumes and who were on Broadridge’s trading platforms in both the current and prior year periods. | |||||||||||||||||||||||||||||||||||
14
Reconciliation of Non-GAAP to GAAP Measures
(Unaudited)
| In millions, except per share amounts | Three Months Ended June 30, | Fiscal Year Ended June 30, | |||||||||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
| Reconciliation of Adjusted Operating Income | |||||||||||||||||||||||
| Operating income (GAAP) | $ | 454.2 | $ | 341.7 | $ | 936.4 | $ | 759.9 | |||||||||||||||
| Adjustments: | |||||||||||||||||||||||
| Amortization of Acquired Intangibles and Purchased Intellectual Property | 51.6 | 58.2 | 214.4 | 250.2 | |||||||||||||||||||
| Acquisition and Integration Costs | 4.8 | 10.6 | 15.8 | 24.5 | |||||||||||||||||||
| Restructuring Charges | 20.4 | — | 20.4 | — | |||||||||||||||||||
Real Estate Realignment and Covid-19 Related Expenses (a) | — | 23.7 | — | 30.5 | |||||||||||||||||||
| Russia-Related Exit Costs (c) | 0.1 | 1.4 | 12.1 | 1.4 | |||||||||||||||||||
| Adjusted Operating income (Non-GAAP) | $ | 531.2 | $ | 435.6 | $ | 1,199.1 | $ | 1,066.4 | |||||||||||||||
| Operating income margin (GAAP) | 24.7% | 19.8% | 15.4% | 13.3% | |||||||||||||||||||
| Adjusted Operating income margin (Non-GAAP) | 28.9% | 25.3% | 19.8% | 18.7% | |||||||||||||||||||
| Reconciliation of Adjusted Net earnings | |||||||||||||||||||||||
| Net earnings (GAAP) | $ | 324.1 | $ | 248.1 | $ | 630.6 | $ | 539.1 | |||||||||||||||
| Adjustments: | |||||||||||||||||||||||
| Amortization of Acquired Intangibles and Purchased Intellectual Property | 51.6 | 58.2 | 214.4 | 250.2 | |||||||||||||||||||
| Acquisition and Integration Costs | 4.8 | 10.6 | 15.8 | 24.5 | |||||||||||||||||||
| Restructuring Charges | 20.4 | — | 20.4 | — | |||||||||||||||||||
Real Estate Realignment and Covid-19 Related Expenses (a) | — | 23.7 | — | 30.5 | |||||||||||||||||||
| Russia-Related Exit Costs (c) | 0.1 | 1.4 | 10.9 | 1.4 | |||||||||||||||||||
| Investment Gains | — | (6.7) | — | (14.2) | |||||||||||||||||||
| Subtotal of adjustments | 77.0 | 87.2 | 261.6 | 292.3 | |||||||||||||||||||
| Tax impact of adjustments (d) | (19.1) | (21.6) | (57.5) | (65.7) | |||||||||||||||||||
| Adjusted Net earnings (Non-GAAP) | $ | 381.9 | $ | 313.7 | $ | 834.6 | $ | 765.7 | |||||||||||||||
Amounts may not sum due to rounding. Refer to notes (a) - (d) on the next page.
15
| In millions, except per share amounts | Three Months Ended June 30, | Fiscal Year Ended June 30, | |||||||||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
| Reconciliation of Adjusted EPS | |||||||||||||||||||||||
| Diluted earnings per share (GAAP) | $ | 2.72 | $ | 2.09 | $ | 5.30 | $ | 4.55 | |||||||||||||||
| Adjustments: | |||||||||||||||||||||||
| Amortization of Acquired Intangibles and Purchased Intellectual Property | 0.43 | 0.49 | 1.80 | 2.11 | |||||||||||||||||||
| Acquisition and Integration Costs | 0.04 | 0.09 | 0.13 | 0.21 | |||||||||||||||||||
| Restructuring Charges | 0.17 | — | 0.17 | — | |||||||||||||||||||
Real Estate Realignment and Covid-19 Related Expenses (b) | — | 0.20 | — | 0.26 | |||||||||||||||||||
| Russia-Related Exit Costs | — | 0.01 | 0.09 | 0.01 | |||||||||||||||||||
| Investment Gains | — | (0.06) | — | (0.12) | |||||||||||||||||||
| Subtotal of adjustments | 0.65 | 0.74 | 2.20 | 2.47 | |||||||||||||||||||
| Tax impact of adjustments (d) | (0.16) | (0.18) | (0.48) | (0.55) | |||||||||||||||||||
| Adjusted earnings per share (Non-GAAP) | $ | 3.21 | $ | 2.65 | $ | 7.01 | $ | 6.46 | |||||||||||||||
(a) Real Estate Realignment Expenses were $22.6 million and $23.0 million for the three months and fiscal year ended June 30, 2022, respectively. Covid-19 Related Expenses were $1.1 million and $7.5 million for the three months and fiscal year ended June 30, 2022, respectively.
(b) Real Estate Realignment Expenses impacted Adjusted earnings per share by $0.19 and $0.19 for the three months and fiscal year ended June 30, 2022, respectively. Covid-19 Related Expenses impacted Adjusted earnings per share by $0.01 and $0.06 for the three months and fiscal year ended June 30, 2022, respectively.
(c) Total Russia-Related Exit costs were $0.1 million for the three months ended June 30, 2023. Total Russia-Related Exit costs were $10.9 million for the fiscal year ended June 30, 2023, comprised of $12.1 million of operating expenses, offset by a gain of $1.2 million in non-operating income. For the fiscal year ended June 30, 2022, total Russia-Related Exit costs were $1.4 million.
(d) Calculated using the GAAP effective tax rate, adjusted to exclude excess tax benefits associated with stock-based compensation of $2.9 million and $10.4 million for the three months and fiscal year ended June 30, 2023, and $4.5 million and $18.1 million for the three months and fiscal year ended June 30, 2022, respectively. For purposes of calculating the Adjusted earnings per share, the same adjustments were made on a per share basis.
| Fiscal Year Ended June 30, | |||||||||||
| 2023 | 2022 | ||||||||||
| Reconciliation of Free cash flow | |||||||||||
| Net cash flows provided by operating activities (GAAP) | $ | 823.3 | $ | 443.5 | |||||||
| Capital expenditures and Software purchases and capitalized internal use software | (75.2) | (73.1) | |||||||||
| Free cash flow (Non-GAAP) | $ | 748.2 | $ | 370.4 | |||||||
| Reconciliation of Recurring Revenue Growth Constant Currency | |||||||||||||||||||||||||||||
| Three Months Ended June 30, 2023 | |||||||||||||||||||||||||||||
| Investor Communication Solutions | Regulatory | Data-Driven Fund Solutions | Issuer | Customer Comm. | Total | ||||||||||||||||||||||||
| Recurring revenue growth (GAAP) | 5 | % | 11 | % | 7 | % | 7 | % | 7 | % | |||||||||||||||||||
| Impact of foreign currency exchange | — | % | — | % | — | % | — | % | — | % | |||||||||||||||||||
| Recurring revenue growth constant currency (Non-GAAP) | 5 | % | 12 | % | 7 | % | 7 | % | 7 | % | |||||||||||||||||||
16
| Fiscal Year Ended June 30, 2023 | |||||||||||||||||||||||||||||
| Investor Communication Solutions | Regulatory | Data-Driven Fund Solutions | Issuer | Customer Comm. | Total | ||||||||||||||||||||||||
| Recurring revenue growth (GAAP) | 6 | % | 11 | % | 12 | % | 9 | % | 8 | % | |||||||||||||||||||
| Impact of foreign currency exchange | — | % | 1 | % | — | % | — | % | — | % | |||||||||||||||||||
| Recurring revenue growth constant currency (Non-GAAP) | 7 | % | 12 | % | 13 | % | 10 | % | 9 | % | |||||||||||||||||||
| Three Months Ended June 30, 2023 | |||||||||||||||||
| Global Technology and Operations | Capital Markets | Wealth and Investment Management | Total | ||||||||||||||
| Recurring revenue growth (GAAP) | 11 | % | 2 | % | 8 | % | |||||||||||
| Impact of foreign currency exchange | 1 | % | 2 | % | 1 | % | |||||||||||
| Recurring revenue growth constant currency (Non-GAAP) | 12 | % | 4 | % | 9 | % | |||||||||||
| Fiscal Year Ended June 30, 2023 | |||||||||||||||||
| Global Technology and Operations | Capital Markets | Wealth and Investment Management | Total | ||||||||||||||
| Recurring revenue growth (GAAP) | 7 | % | 2 | % | 5 | % | |||||||||||
| Impact of foreign currency exchange | 4 | % | 2 | % | 3 | % | |||||||||||
| Recurring revenue growth constant currency (Non-GAAP) | 11 | % | 4 | % | 8 | % | |||||||||||
| Three Months Ended June 30, 2023 | Fiscal Year Ended June 30, 2023 | ||||||||||
| Consolidated | Total | Total | |||||||||
| Recurring revenue growth (GAAP) | 7 | % | 7 | % | |||||||
| Impact of foreign currency exchange | 1 | % | 1 | % | |||||||
| Recurring revenue growth constant currency (Non-GAAP) | 8 | % | 9 | % | |||||||
Amounts may not sum due to rounding.
17
Fiscal Year 2024 Guidance
Reconciliation of Non-GAAP to GAAP Measures
Adjusted Earnings Per Share Growth and Adjusted Operating Income Margin
(Unaudited)
| FY24 Recurring revenue growth | ||||||||
| Impact of foreign currency exchange (a) | 0.5% | |||||||
| Recurring revenue growth constant currency - Non-GAAP | 6 - 9% | |||||||
| FY24 Adjusted Operating income margin (b) | ||||||||
| Operating income margin % - GAAP | ~16% | |||||||
| Adjusted Operating income margin % - Non-GAAP | ~20% | |||||||
| FY24 Adjusted earnings per share growth rate (c) | ||||||||
| Diluted earnings per share - GAAP | 15 - 20% growth | |||||||
| Adjusted earnings per share - Non-GAAP | 8 - 12% growth | |||||||
(a) Based on forward rates as of July 2023
(b) Adjusted Operating income margin guidance (Non-GAAP) is adjusted to exclude the projected $225 million impact of Amortization of Acquired Intangibles and Purchased Intellectual Property, Acquisition and Integration Costs, and Restructuring Charges.
(c) Adjusted earnings per share growth guidance (Non-GAAP) is adjusted to exclude the projected $1.50 per share impact of Amortization of Acquired Intangibles and Purchased Intellectual Property, Acquisition and Integration Costs, and Restructuring Charges, and is calculated using diluted shares outstanding.
18
0© 2023 | Scaling a Global Fintech Leader E A R N I N G S C O N F E R E N C E C A L L Fiscal Fourth Quarter and Full-Year 2023 EXHIBIT 99.2
1© 2023 | Forward-Looking Statements This presentation and other written or oral statements made from time to time by representatives of Broadridge Financial Solutions, Inc. ("Broadridge" or the "Company") contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Statements that are not historical in nature, and which may be identified by the use of words such as “expects,” “assumes,” “projects,” “anticipates,” “estimates,” “we believe,” “could be,” “on track,” and other words of similar meaning are forward-looking statements. In particular, information appearing in the “Fiscal Year 2023 Guidance” section and statements about our three-year objectives are forward-looking statements. These statements are based on management’s expectations and assumptions and are subject to risks and uncertainties that may cause actual results to differ materially from those expressed. These risks and uncertainties include those risk factors described and discussed in Part I, “Item 1A. Risk Factors” of the Annual Report on Form 10-K for the year ended June 30, 2023 (the “2023 Annual Report”), as they may be updated in any future reports filed with the Securities and Exchange Commission. All forward-looking statements speak only as of the date of this presentation and are expressly qualified in their entirety by reference to the factors discussed in the 2023 Annual Report. These risks include: • Changes in laws and regulations affecting Broadridge’s clients or the services provided by Broadridge; • Broadridge’s reliance on a relatively small number of clients, the continued financial health of those clients, and the continued use by such clients of Broadridge’s services with favorable pricing terms; • A material security breach or cybersecurity attack affecting the information of Broadridge's clients; • Declines in participation and activity in the securities markets; • The failure of Broadridge's key service providers to provide the anticipated levels of service; • A disaster or other significant slowdown or failure of Broadridge’s systems or error in the performance of Broadridge’s services; • Overall market, economic and geopolitical conditions and their impact on the securities markets; • The success of Broadridge in retaining and selling additional services to its existing clients and in obtaining new clients; • Broadridge’s failure to keep pace with changes in technology and demands of its clients; • Competitive conditions; • Broadridge’s ability to attract and retain key personnel; and • The impact of new acquisitions and divestitures. There may be other factors that may cause our actual results to differ materially from the forward-looking statements. Our actual results, performance or achievements could differ materially from those expressed in, or implied by, the forward-looking statements. We can give no assurances that any of the events anticipated by the forward-looking statements will occur or, if any of them do, what impact they will have on our results of operations and financial condition. Broadridge disclaims any obligation to update or revise forward-looking statements that may be made to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events, other than as required by law.
2© 2023 | Use of Non-GAAP financial measures, KPIs and Foreign exchange rates Use of Non-GAAP Financial Measures This presentation includes certain Non-GAAP financial measures including Adjusted Operating income, Adjusted Operating income margin, Adjusted Net earnings, Adjusted earnings per share (“EPS”), Free cash flow, Free cash flow conversion, and Recurring revenue growth constant currency. All Recurring revenue dollar amounts shown in this presentation are GAAP, and Recurring revenue growth percentages are shown as constant currency (Non-GAAP). Please see the “Explanation of Non-GAAP Measures and Reconciliation of GAAP to Non-GAAP Measures” section of this presentation for more information on Broadridge’s use of Non-GAAP measures and reconciliations to GAAP measures. Key Performance Indicators Management focuses on a variety of key indicators to plan, measure and evaluate the Company’s business and financial performance. These performance indicators include Revenues and Recurring revenue, as well as Non-GAAP measures of Adjusted Operating income, Adjusted Net earnings, Adjusted EPS, Free cash flow, Recurring revenue growth constant currency, and Closed sales. In addition, management focuses on select operating metrics specific to Broadridge of Record Growth, which is comprised of Stock Record Growth (also referred to as “SRG” or “equity position growth”) and Interim Record Growth (also referred to as “IRG” or “mutual fund/ETF position growth”), and Internal Trade Growth (“ITG”). Please refer to Item 7. Management’s Discussion and Analysis of Financial Condition of the Company’s 2023 Annual Report for a discussion of Revenues, Recurring revenue, Record Growth and Internal Trade Growth in the “Key Performance Indicators” section and the “Results of Operations” section for a description of Closed sales. Foreign Exchange Rates Beginning with the first quarter of fiscal year 2023, the Company changed its reporting for segment revenues, segment earnings (loss) before income taxes, segment amortization of acquired intangibles and purchased intellectual property to reflect the impact of actual foreign exchange rates applicable to the individual periods presented. The presentation of these metrics for the prior periods has been changed to conform to the current period presentation. Total consolidated revenues and earnings before income taxes were not impacted. Note on Rounding Amounts presented in this presentation may not sum due to rounding. Use of Material Contained Herein The information contained in this presentation is being provided for your convenience and information only. This information is accurate as of the date of its initial presentation. If you plan to use this information for any purpose, verification of its continued accuracy is your responsibility. Broadridge assumes no duty to update or revise the information contained in this presentation.
3© 2023 | Key messages Broadridge reported strong fourth quarter results, including 8% Recurring revenue growth constant currency and 21% Adjusted EPS growth These results powered a strong Fiscal Year 2023, with 9% Recurring revenue growth constant currency, 9% Adjusted EPS growth, and 90% free cash flow conversion. As a result, Broadridge delivered at or above the high end of its three-year growth objectives Performance was driven by continued execution, key trends including the ongoing digitization of financial services and increased investor participation, and our growth investments Fiscal 2024 guidance calls for 8-12% Adjusted EPS growth powered by 6-9% organic Recurring revenue growth with strengthening free cash flow Raising annual dividend by 10% to $3.20 per share, in line with balanced capital allocation per share with flexibility to resume share repurchases 1 2 3 4 5
4© 2023 | INVESTOR DAY FY20-FY23 GROWTH OBJECTIVES FY20-FY23 PERFORMANCE Organic Recurring revenue growth 5 – 7% 8% Recurring revenue growth 7 – 9% 11% Adjusted Operating income margin – Non-GAAP 50+ bps/yr 77 bps Adjusted earnings per share growth – Non-GAAP 8 – 12% 12% Broadridge delivered at or above the higher end of its 3-year objectives 1. FY’20 investor day recurring revenue growth objectives in constant currency reflecting BR’s approach to FX reporting as of December 10, 2020 1
5© 2023 | We are extending our Governance franchise… FY'19 FY'20 FY'21 FY'22 FY'23 $2.5B 9% 9% HIGHLIGHTS 1 2 3 Y-O-Y GROWTH FY’23 RECURRING REVENUE Avg. Annual Growth $2.5B Revenue growth paced by strong demand for digital solutions and new clients Equity and fund/ETF position growth normalized at 9% and 8%, respectively after two strong years Focus on innovation continues with new digital products, voting choice implementations, and tailored shareholder reports
6© 2023 | …growing our Capital Markets franchise… FY'19 FY'20 FY'21 FY'22 FY'23 $965M HIGHLIGHTS 1 2 3 11% 14% FY’23 RECURRING REVENUE Y-O-Y GROWTH Avg. Annual Growth $965M Continued strong growth from BTCS highlights demands for trading innovation and simplification Extending global post-trade implementations across multiple large clients Driving innovation to enhance trading capabilities, streamline data management, and deliver cutting edge technologies
7© 2023 | $560M FY'19 FY'20 FY'21 FY'22 FY'23 …and building our Wealth & Investment Management franchise $560M HIGHLIGHTS 1 2 FY’23 RECURRING REVENUE 4% 10% Y-O-Y Growth Avg Annual Growth Growth driven by strong demand for advisor tools, including digital marketing capabilities, and other component solutions Finalized rollout of wealth management platform suite with UBS with revenue recognition beginning in Q1’24 Developed targeting plan to deliver on growing pipeline and extend platform capabilities to additional clients 3
8© 2023 | Broadridge continues to build on its track-record of long- term, sustainable growth Broadridge recorded another strong year in Fiscal 2023, delivering strong financial results and achieving key financial and operational milestones Our growth continues to be propelled by long-term trends, including digitization, technology innovation, and regulation Fiscal 2024 guidance calls another strong year in fiscal 2024, with recurring revenue and Adjusted EPS growth coupled with greater capital flexibility driving increased returns. Broadridge is better-positioned to drive long-term growth across Governance, Capital Markets and Wealth & Investment Management 1 2 3 4
9© 2023 | Summary financial performance Q4’23 Inc./(Dec.) FY’23 Inc./(Dec.) Recurring revenues $1,259 7% $3,987 7% Total revenues 1,839 7% 6,061 6% Operating income 454 33% 936 23% Adjusted Operating income (Non-GAAP) 531 22% 1,199 12% Adjusted Operating income margin (Non-GAAP) 28.9% 360bps 19.8% 110bps Diluted earnings per share $2.72 30% $5.30 16% Adjusted Earnings per share (Non-GAAP) $3.21 21% $7.01 9% Closed sales $90 (19%) $246 (12%) $ in millions, except per share data Note: Information about our use of Non-GAAP measures may be found on slides 28-36 Constant currency growth (Non-GAAP) 8% 9%
10© 2023 | FY'20 FY'21 FY'22 FY'23 Q4'22 Q4'23 $1,259 16% 10% $ in millions; growth in constant currency 10% +8% Information about our use of Non-GAAP measures and reconciliations to GAAP measures may be found on slides 28-36 9% FISCAL YEAR RECURRING REVENUE GROWTH Q4 RECURRING REVENUE Recurring revenue increased 8% in fourth quarter 2023
11© 2023 | $166 $134 $113 $444 Q4'22 Q4'23 Regulatory Customer Comms. Data-Driven Fund Solutions Issuer 7% 7% 12% 5% ICS Q4 RECURRING REVENUES ICS FISCAL YEAR RECURRING REVENUES $858 +7% Information about our use of Non-GAAP measures and reconciliations to GAAP measures may be found on slides 28-36 +9% $ in millions; growth in constant currency $673 $243 $404 $1,141 FY'22 FY'23 13% 10% 12% 7% $2,461 ICS fourth quarter and fiscal year 2023 Recurring revenues
12© 2023 | $560 $965 FY'22 FY'23 GTO Q4 RECURRING REVENUES GTO FISCAL YEAR RECURRING REVENUES $1,525 11% 4% +9% Information about our use of Non-GAAP measures and reconciliations to GAAP measures may be found on slides 28-36 +8% $ in millions; growth in constant currency $143 $257 Q4'22 Q4'23 Capital Markets Wealth & Investment Management $401 12% 4% GTO fourth quarter and fiscal year 2023 Recurring revenues
13© 2023 | 8% 6% 5% 1% 3% 17% 9% 9% 10% 6% 10% 11% 6% 6% 8% Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 INTERNAL TRADE GROWTH ITG EQUITY & MUTUAL FUND/ETF POSITION GROWTH Key volume drivers: position and trade growth 1. Q4’22 equity position growth represented 55% of total fiscal year 2022 positions. Q1’22: 7% | Q2’22: 9% | Q3’22: 29% 2. Reflects position growth processed in the same time period of both years. Therefore, quarterly and annual data may not align. 3. Represents the estimated change in daily trade volumes for clients whose contracts are linked to trade volumes and who were on Broadridge’s trading platforms in both the current and prior year periods. 3 FY’22 FY’23 9% 8% 18% 14% 4%1% 11% 10Y Avg. 8% 6%
14© 2023 | $1,177 Q4'22 Recurring revenue Closed Sales Client Losses Internal Growth Acquisitions Q4'23 Recurring revenue constant currency FX Q4'23 Recurring revenue Fourth quarter 2023 Recurring revenue growth drivers RECURRING REVENUE GROWTH CONSTANT CURRENCY WAS 8% ICS $805M 5 pts (1) pt 3 pts 0 pts 7% 0 pts $858M GTO $372M 7 pts (3) pts 5 pts 0 pts 9% (1) pt $401M 5 pts (1) pt 4 pts 0 pts 7% (1) pt 8% Organic Growth: 7 pts $1,259 $ in millions. Pts contribution to growth Organic Growth: 9 pts Organic Growth: 8 pts
15© 2023 | $70 $63 $38 $59 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 $1,723 Q4'22 Total Revenue Recurring Event-Driven Distribution FX Q4'23 Total Revenue Fourth quarter 2023 Total revenue growth drivers QUARTERLY EVENT-DRIVEN REVENUE 5 pts (1) pt 3 pts 7% FOURTH QUARTER 2023 TOTAL REVENUE GROWTH DRIVERS $59M FY’17-FY’23 QUARTERLY AVERAGE $ in millions. Pts contribution to growth 0 pts $1,839 $52
16© 2023 | 17.5% 18.1% 18.7% 19.8% FY'20 FY'21 FY'22 FY'23 13.8% 13.6% 13.3% 24.7%19.8% 25.3% Q4'22 Q4'23 +40 bps +60 bps +60 bps OPERATING INCOME MARGIN ADJUSTED OPERATING INCOME MARGIN (NON- GAAP) Operating income margin and Adjusted Operating income margin OPERATING INCOME MARGIN 15.4% 28.9% +110 bps
17© 2023 | Closed sales $ in millions CLOSED SALES RECURRING REVENUE BACKLOG 12% 10% % OF RECURRING REVENUE $224 $231 $280 $246 FY'20 FY'21 FY'22 FY'23 $430 $400 FY'22 FY'23
18© 2023 | Client platform spend and Free cash flow conversion 1. Net investments on new client conversions, including development of platform capabilities 2. Last twelve months (LTM) Free cash flow conversion equals Free cash flow for the most recent four quarters divided by Adjusted Net earnings for the same four quarters 3. Information about our use of Non-GAAP measures and reconciliations to GAAP measures may be found on slides 28-36 FREE CASH FLOW CONVERSION (LTM)NET CLIENT PLATFORM SPEND1 $ in millions $97 $163 $78 $74 $54 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 48% 41% 51% 63% Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 2,3 90%
19© 2023 | TOTAL CAPITAL RETURNS $2.16 $2.30 $2.56 $2.90 $3.20 11% 6% 11% 13% 10% DIVIDENDS PER SHARE Debt Paydown M&A Client Platform Investments CapEx and Software Capital allocation 2 1. Net investments on new client conversions, including development of platform capabilities 2. Includes Software purchases and capitalized internal use software 3. Includes acquisitions and minority investments SELECT USES OF CASH FY’23 1 $369 FY'20 FY'21 FY'22 FY'23 FY'24 (E) $75 $0 $ in millions, except per share data 3 6 $253$248 $269 $578 4. Capital returns to shareholders through dividends and total share repurchases net of option proceeds. FY’23 annual dividend amount subject to Board declaration YOY GROWTH 4 $312 $385
20© 2023 | Fiscal Year 2024 Guidance FY’24 Guidance Recurring revenue growth constant currency - Non-GAAP 6 - 9% Adjusted Operating income margin - Non-GAAP ~20% Adjusted Earnings per share growth - Non-GAAP 8 - 12% Closed sales $280M - $320M
21© 2023 | Save the date – Broadridge’s Investor Day Broadridge will host its Investor Day on December 7, 2023 in New York City Additional details to come
22© 2023 | Appendix
23© 2023 | Confidential and Proprietary | Supplemental Reporting Detail ‒ Product Line Reporting (Unaudited) 2021 2022 2023 YoY % Dollars in millions FY Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Growth Investor Communication Solutions ("ICS") Regulatory Solutions $938 $165 $166 $ 321 $ 423 $1,075 $171 $181 $346 $ 444 $1,141 6% Data-Driven Fund Solutions 342 83 89 90 102 364 93 96 102 113 404 11% Corporate Issuer Solutions 189 21 24 46 125 216 24 27 58 134 243 12% Customer Communications Solutions 568 141 148 171 155 615 156 163 188 166 673 9% Total ICS recurring revenues 2,037 410 427 629 805 2,270 443 467 693 858 2,461 8% Equity and other 123 28 25 25 38 115 30 25 29 33 117 1% Mutual Funds 112 49 40 34 32 154 33 12 23 26 94 (39)% Total Event-driven revenues 235 76 65 59 70 269 63 38 52 59 211 (22)% Distribution 1,548 367 401 472 476 1,717 415 415 512 522 1,863 9% Total ICS Revenues $3,820 $853 $893 $1,159 $1,351 $4,257 $921 $919 $1,257 $ 1,438 $4,536 7% Global Technology and Operations (“GTO”) Capital Markets Solutions $656 $209 $221 $ 241 $ 232 $903 $227 $235 $246 $ 257 $965 7% Wealth and investment Management Solutions 517 131 146 133 140 550 136 138 143 143 560 2% Total GTO recurring revenues 1,173 339 367 374 372 1,452 363 373 388 401 1,525 5% Total Revenues $4,994 $1,193 $1,260 $1,534 $1,723 $5,709 $1,283 $1,293 $1,646 $ 1,839 $6,061 6% Revenues by type Recurring revenues $3,210 $750 $793 $1,003 $1,177 $3,723 $806 $840 $1,082 $ 1,259 $3,987 7% Event-driven revenues 235 76 65 59 70 269 63 38 52 59 211 (22)% Distribution revenues 1,548 367 401 472 476 1,717 415 415 512 522 1,863 9% Total Revenues $4,994 $1,193 $1,260 $1,534 $1,723 $5,709 $1,283 $1,293 $1,646 $ 1,839 $6,061 6%
24© 2023 | $3,723 FY'22 Recurring revenue Closed Sales Client Losses Internal Growth Acquisitions FY'23 Recurring revenue constant currency FX FY'23 Recurring revenue Fiscal year 2023 Recurring revenue growth drivers RECURRING REVENUE GROWTH CONSTANT CURRENCY WAS 9% ICS $2,270M 6 pts (1) pt 5 pts 0 pts 9% (0) pts $2,461M GTO $1,452M 6 pts (2) pts 4 pts 0 pts 8% (3) pts $1,525M 6 pts (2) pts 4 pts 0 pts 7% Organic Growth: 9 pts (1) pt 9% Organic Growth: 9 pts Organic Growth: 8 pts $3,987 $ in millions. Pts contribution to growth
25© 2023 | Fiscal year 2023 Total revenue drivers FY'22 Total Revenue Recurring Event-Driven Distribution FX FY'23 Total Revenue FISCAL YEAR 2023 REVENUE DRIVERS 6 pts (1) pt 3 pts (1) pt 6% $ in millions Pts contribution to growth $6,061$5,709
26© 2023 | $219 $284 $244 $176 $235 $269 $211 FY'17 FY'18 FY'19 FY'20 FY'21 FY'22 FY'23 $234M FY’17-FY’23 AVERAGE FISCAL YEAR 2023 EVENT-DRIVEN REVENUE Fiscal year 2023 Event-driven revenue $ in millions
27© 2023 | Explanation of Non-GAAP measures and Reconciliation of GAAP to Non-GAAP measures
28© 2023 | Confidential and Proprietary | Non-GAAP Measures Explanation and Reconciliation of the Company’s Use of Non-GAAP Financial Measures The Company’s results in this presentation are presented in accordance with U.S. generally accepted accounting principles ("GAAP") except where otherwise noted. In certain circumstances, results have been presented that are not generally accepted accounting principles measures (“Non-GAAP”). These Non-GAAP measures are Adjusted Operating income, Adjusted Operating income margin, Adjusted Net earnings, Adjusted earnings per share, Free cash flow, Free cash flow conversion, and Recurring revenue growth constant currency. These Non-GAAP financial measures should be viewed in addition to, and not as a substitute for, the Company’s reported results. The Company believes our Non-GAAP financial measures help investors understand how management plans, measures and evaluates the Company’s business performance. Management believes that Non-GAAP measures provide consistency in its financial reporting and facilitates investors’ understanding of the Company’s operating results and trends by providing an additional basis for comparison. Management uses these Non-GAAP financial measures to, among other things, evaluate our ongoing operations, and for internal planning and forecasting purposes. In addition, and as a consequence of the importance of these Non- GAAP financial measures in managing our business, the Company’s Compensation Committee of the Board of Directors incorporates Non-GAAP financial measures in the evaluation process for determining management compensation. Reconciliations of Non-GAAP measures to the most directly comparable financial measures presented in accordance with GAAP can be found in the tables that are part of this presentation. Adjusted Operating Income, Adjusted Operating Income Margin, Adjusted Net Earnings, and Adjusted Earnings Per Share These Non-GAAP measures are adjusted to exclude the impact of certain costs, expenses, gains and losses and other specified items the exclusion of which management believes provides insight regarding our ongoing operating performance. Depending on the period presented, these adjusted measures exclude the impact of certain of the following items: (i) Amortization of Acquired Intangibles and Purchased Intellectual Property, (ii) Acquisition and Integration Costs, (iii) IBM Private Cloud Charges, (iv) Real Estate Realignment and Covid-19 Related Expenses, (v) Investment Gains, (vi) Russia-Related Exit Costs, (vii) Software Charge, (viii) Loss (Gain) on Acquisition-Related Financial Instrument, and (ix) Restructuring Charges. Amortization of Acquired Intangibles and Purchased Intellectual Property represents non-cash amortization expenses associated with the Company's acquisition activities. Acquisition and Integration Costs represent certain transaction and integration costs associated with the Company’s acquisition activities. IBM Private Cloud Charges represent a charge on the hardware assets transferred to IBM and other charges related to the IBM Private Cloud Agreement. Real Estate Realignment and Covid-19 Related Expenses are comprised of two major components: Real Estate Realignment Expenses, and Covid-19 Related Expenses. Real Estate Realignment Expenses are expenses associated with the exit of certain of the Company’s leased facilities in response to the Covid-19 pandemic, which consist of the impairment of certain right of use assets, leasehold improvements and equipment, as well as other related facility exit expenses directly resulting from, and attributable to, the exit of these leased facilities. Covid-19 Related Expense are direct and incremental expenses incurred by the Company to protect the health and safety of Broadridge associates during the Covid-19 outbreak, including expenses associated with monitoring the temperatures for associates entering our facilities, enhancing the safety of our office environment in preparation for workers to return to Company facilities on a more regular basis, ensuring proper social distancing in our production facilities, personal protective equipment, enhanced cleaning measures in our facilities, and other safety related expenses. Investment Gains represent non-operating, non-cash gains on privately held investments. Russia-Related Exit Costs are direct and incremental costs associated with the Company’s wind down of business activities in Russia in response to Russia’s invasion of Ukraine, including relocation-related expenses of impacted associates. Software Charge represents a charge related to an internal use software product that is no longer expected to be used. Loss (Gain) on Acquisition-Related Financial Instrument represents a non-operating loss (gain) on a financial instrument designed to minimize the Company's foreign exchange risk associated with the Itiviti acquisition, as well as certain other non-operating financing costs associated with the Itiviti acquisition. Restructuring Charges represent severance costs associated with the Company’s initiative to streamline our management structure, reallocate work to lower cost locations, and reduce headcount in deprioritized areas.
29© 2023 | Confidential and Proprietary | We exclude Acquisition and Integration Costs, IBM Private Cloud Charges, Real Estate Realignment and Covid-19 Related Expenses, Investment Gains, Russia- Related Exit Costs, the Software Charge, Loss (Gain) on Acquisition-Related Financial Instrument, and Restructuring Charges from our Adjusted Operating income (as applicable) and other adjusted earnings measures because excluding such information provides us with an understanding of the results from the primary operations of our business and enhances comparability across fiscal reporting periods, as these items are not reflective of our underlying operations or performance. We also exclude the impact of Amortization of Acquired Intangibles and Purchased Intellectual Property, as these non cash amounts are significantly impacted by the timing and size of individual acquisitions and do not factor into the Company's capital allocation decisions, management compensation metrics or multi-year objectives. Furthermore, management believes that this adjustment enables better comparison of our results as Amortization of Acquired Intangibles and Purchased Intellectual Property will not recur in future periods once such intangible assets have been fully amortized. Although we exclude Amortization of Acquired Intangibles and Purchased Intellectual Property from our adjusted earnings measures, our management believes that it is important for investors to understand that these intangible assets contribute to revenue generation. Amortization of intangible assets that relate to past acquisitions will recur in future periods until such intangible assets have been fully amortized. Any future acquisitions may result in the amortization of additional intangible assets. Free Cash Flow In addition to the Non-GAAP financial measures discussed above, we provide Free cash flow information because we consider Free cash flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated that could be used for dividends, share repurchases, strategic acquisitions, other investments, as well as debt servicing. Free cash flow is a Non-GAAP financial measure and is defined by the Company as Net cash flows provided by operating activities less Capital expenditures as well as Software purchases and capitalized internal use software. Free cash flow conversion is calculated as Free cash flow divided by Adjusted Net earnings for the given period. Recurring Revenue Growth Constant Currency As a multi-national company, we are subject to variability of our reported U.S. dollar results due to changes in foreign currency exchange rates. The exclusion of the impact of foreign currency exchange fluctuations from our Recurring revenue growth, or what we refer to as amounts expressed “on a constant currency basis”, is a Non-GAAP measure. We believe that excluding the impact of foreign currency exchange fluctuations from our Recurring revenue growth provides additional information that enables enhanced comparison to prior periods. Changes in Recurring revenue growth expressed on a constant currency basis are presented excluding the impact of foreign currency exchange fluctuations. To present this information, current period results for entities reporting in currencies other than the U.S. dollar are translated into U.S. dollars at the average exchange rates in effect during the corresponding period of the comparative year, rather than at the actual average exchange rates in effect during the current fiscal year. Reconciliations of such Non-GAAP measures to the most directly comparable financial measures presented in accordance with GAAP can be found in the tables that are part of this presentation. Non-GAAP Measures
30© 2023 | Confidential and Proprietary | Reconciliation of GAAP to Non-GAAP Measures (Unaudited) Three Months Ended June 30, 2023 Investor Communication Solutions Regulatory Data-Driven Fund Solutions Issuer Customer Comms. Total Recurring revenue growth (GAAP) 5% 11% 7% 7% 7% Impact of foreign currency exchange —% —% —% —% —% Recurring revenue growth constant currency (Non-GAAP) 5% 12% 7% 7% 7% Global Technology and Operations Capital Markets Wealth and Investment Management Total Recurring revenue growth (GAAP) 11% 2% 8% Impact of foreign currency exchange 1% 2% 1% Recurring revenue growth constant currency (Non-GAAP) 12% 4% 9% Consolidated Total Recurring revenue growth (GAAP) 7% Impact of foreign currency exchange 1% Recurring revenue growth constant currency (Non-GAAP) 8%
31© 2023 | Confidential and Proprietary | Reconciliation of GAAP to Non-GAAP Measures (Unaudited) Fiscal Year Ended June 30, 2023 Investor Communication Solutions Regulatory Data-Driven Fund Solutions Issuer Customer Comms. Total Recurring revenue growth (GAAP) 6% 11% 12% 9% 8% Impact of foreign currency exchange —% 1% —% —% —% Recurring revenue growth constant currency (Non-GAAP) 7% 12% 13% 10% 9% Global Technology and Operations Capital Markets Wealth and Investment Management Total Recurring revenue growth (GAAP) 7% 2% 5% Impact of foreign currency exchange 4% 2% 3% Recurring revenue growth constant currency (Non-GAAP) 11% 4% 8% Consolidated Total Recurring revenue growth (GAAP) 7% Impact of foreign currency exchange 1% Recurring revenue growth constant currency (Non-GAAP) 9%
32© 2023 | Confidential and Proprietary | Reconciliation of GAAP to Non-GAAP Measures (Unaudited) 3 Months Ended June 30 Fiscal Year Ended June 30 Dollars in millions 2023 2022 2023 2022 2021 Operating income (GAAP) $454.2 $341.7 $936.4 $759.9 $678.7 Adjustments: Amortization of Acq. Intangibles and Purchased Intellectual Property 51.6 58.2 214.4 250.2 153.7 Acquisition and Integration Costs 4.8 10.6 15.8 24.5 18.1 Restructuring Charges 20.4 — 20.4 — — Real Estate Realignment and Covid-19 Related Expenses (a) — 23.7 — 30.5 45.3 Russia-Related Exit Costs (c) 0.1 1.4 12.1 1.4 — Software Charge — — — — 6.0 Adjusted Operating income (Non-GAAP) $531.2 $435.6 $1,199.1 $1,066.4 $901.8 Operating income margin (GAAP) 24.7% 19.8% 15.4% 13.3% 13.6% Adjusted Operating income margin (Non-GAAP) 28.9% 25.3% 19.8% 18.7% 18.1% 3 Months Ended June 30 Fiscal Year Ended June 30 Dollars in millions 2023 2022 2023 2022 2021 Net earnings (GAAP) $324.1 $248.1 $630.6 $539.1 $547.5 Adjustments: Amortization of Acq. Intangibles and Purchased Intellectual Property 51.6 58.2 214.4 250.2 153.7 Acquisition and Integration Costs 4.8 10.6 15.8 24.5 18.1 Restructuring Charges 20.4 — 20.4 — — Real Estate Realignment and Covid-19 Related Expenses (a) — 23.7 — 30.5 45.3 Russia-Related Exit Costs (c) 0.1 1.4 10.9 1.4 — Software Charge — — — — 6.0 Investment Gains — (6.7) — (14.2) (8.7) Gain on Acquisition-Related Financial Instrument — — — — (62.1) Subtotal of adjustments 77.0 87.2 261.6 292.3 152.2 Tax impact of adjustments (d) (19.1) (21.6) (57.5) (65.7) (33.2) Adjusted Net earnings (Non-GAAP) $381.9 $313.7 $834.6 $765.7 $666.5 Refer to Notes (a) - (d) on the next slide.
33© 2023 | Confidential and Proprietary | Reconciliation of GAAP to Non-GAAP Measures (Unaudited) (a) Real Estate Realignment Expenses were $22.6 million for the three months ended June 30, 2022, and $0.0 million, $23.0 million, and $29.6 million, for the fiscal years ended June 30, 2023, 2022, and 2021, respectively. Covid-19 Related Expenses were $1.1 million for the three months ended June 30, 2022, and $0.0 million, $7.5 million, and $15.7 million for the fiscal years ended June 30, 2023, 2022, and 2021 respectively. (b) Real Estate Realignment Expenses impacted Adjusted Earnings per share by $0.19 for the three months ended June 30, 2022, and $0.00, $0.19, and $0.25 for the fiscal years ended June 30, 2023, 2022, and 2021, respectively. Covid-19 Related Expenses impacted Adjusted earnings per share by $0.01 for the three months ended June 30, 2022, and $0.00, $0.06, and $0.13 for the fiscal years ended June 30, 2023, 2022, and 2021, respectively. (c) Russia-Related Exit Costs were $10.9 million and $1.4 million for the fiscal years ended June 30, 2023 and June 30, 2022, comprised of $12.1 million of operating expenses, offset by a gain of $1.2 million in non-operating income for the fiscal year ended June 30, 2023, and $1.4 million of operating expenses for the fiscal year ended June 30, 2022. (d) Calculated using the GAAP effective tax rate, adjusted to exclude $2.9 million and $4.5 million of excess tax benefits associated with stock-based compensation for the three months ended June 30, 2023 and 2022, respectively, and $10.4 million, $18.1 million, and $16.9 million of excess tax benefits associated with stock-based compensation for the fiscal year ended June 30, 2023, 2022, and 2021, respectively. For purposes of calculating the Adjusted earnings per share, the same adjustments were made on a per share basis. 3 Months Ended June 30 Fiscal Year Ended June 30 Dollars in millions, except per share amounts 2023 2022 2023 2022 2021 Diluted Earnings per share (GAAP) $2.72 $2.09 $5.30 $4.55 $4.65 Adjustments: Amortization of Acq. Intangibles and Purchased Intellectual Property 0.43 0.49 1.80 2.11 1.30 Acquisition and Integration Costs 0.04 0.09 0.13 0.21 0.15 Restructuring Charges 0.17 — 0.17 — — Real Estate Realignment and Covid-19 Related Expenses (b) — 0.20 — 0.26 0.38 Russia-Related Exit Costs — 0.01 0.09 0.01 — Software Charge — — — — 0.05 Investment Gains — (0.06) — (0.12) (0.07) Gain on Acquisition-Related Financial Instrument — — — — (0.53) Subtotal of adjustments 0.65 0.74 2.20 2.47 1.29 Tax impact of adjustments (d) (0.16) (0.18) (0.48) (0.55) (0.28) Adjusted Earnings per share (Non-GAAP) $3.21 $2.65 $7.01 $6.46 $5.66 Fiscal Year Ended June 30 Dollars in millions 2023 2022 Net cash flows provided by operating activities (GAAP) $823.3 $443.5 Capital expenditures and Software purchases and capitalized internal use software (75.2) (73.1) Free cash flow (Non-GAAP) $748.2 $370.4
34© 2023 | Confidential and Proprietary | Reconciliation of GAAP to Non-GAAP Measures (Unaudited) FY 2022 FY 2023 Dollars in millions Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Net cash flows (used in) provided by operating activities (GAAP) $ (135.4) $ 40.8 $ 80.7 $ 457.4 $ (204.5) $ 123.1 $ 175.6 $ 729.2 Capital expenditures and Software purchases and capitalized internal use software (15.9) (13.3) (25.2) (18.7) (13.6) (19.5) (13.7) (28.4) Free cash flow (Non-GAAP) $ (151.4) $ 27.6 $ 55.5 $ 438.7 $ (218.1) $ 103.5 $ 161.9 $ 700.9 FY 2022 FY 2023 Dollars in millions Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Net earnings (GAAP) $67.2 $47.2 $176.6 $248.1 $50.4 $57.5 $198.5 $324.1 Adjustments: Amortization of Acquired Intangibles and Purchased Intellectual Property 68.7 62.5 60.8 58.2 55.9 53.7 53.3 51.6 Acquisition and Integration Costs 2.9 7.8 3.1 10.6 4.1 3.7 3.3 4.8 Restructuring Charges — — — — — — — 20.4 Real Estate Realignment and Covid-19 Related Expenses 1.8 1.7 3.3 23.7 — — — — Russia-Related Exit Costs — — — 1.4 2.6 6.8 1.5 0.1 Investment Gains — (7.5) — (6.7) — — — — Loss (Gain) on Acquisition-Related Financial Instrument — — — — — — — — Subtotal of adjustments 73.4 64.4 67.2 87.2 62.5 64.1 58.0 77.0 Tax impact of adjustments (14.4) (14.3) (15.4) (21.6) (13.2) (13.2) (12.0) (19.1) Adjusted Net earnings (Non-GAAP) $126.3 $97.3 $228.4 $313.7 $99.7 $108.4 $244.5 $381.9 FY 2022 FY 2023 Dollars in millions Q4 Q1 Q2 Q3 Q4 LTM Free cash flow (a) $370.4 $303.7 $379.7 $486.1 $748.2 LTM Adjusted Net earnings (Non-GAAP) (b) $765.7 $739.1 $750.3 $766.4 $834.6 LTM Free cash flow conversion (Non-GAAP) (c) 48 % 41 % 51 % 63 % 90 % (a) Last twelve months (LTM) sums the last four quarters of free cash flow for the given period (b) Last twelve months (LTM) sums the last four quarters of adjusted net earnings for the given period (c) Free cash flow conversion is calculated as free cash flow divided by adjusted net earnings for the given period
35© 2023 | Confidential and Proprietary | Reconciliation of GAAP to Non-GAAP Measures: Fiscal Year 2024 Guidance Fiscal Year, 2024 FY24 Recurring revenue growth Impact of foreign currency exchange (a) 0.5% Recurring revenue growth constant currency – Non-GAAP 6-9% FY24 Adjusted Operating income margin (b) Operating income margin % – GAAP ~16% Adjusted Operating income margin % – Non-GAAP ~20% FY24 Adjusted earnings per share growth rate (c) Diluted Earnings per share – GAAP 15-20% growth Adjusted Earnings per share – Non-GAAP 8-12% growth (Unaudited) (a) Based on forward rates as of July 2023 (b) Adjusted Operating income margin guidance (Non-GAAP) is adjusted to exclude the projected $225 million impact of Amortization of Acquired Intangibles and Purchased Intellectual Property, Acquisition and Integration Costs, and Russia-Related Exit Costs. (c) Adjusted earnings per share growth guidance (Non-GAAP) is adjusted to exclude the projected $1.50 per share impact of Amortization of Acquired Intangibles and Purchased Intellectual Property, Acquisition and Integration Costs, and Russia-Related Exit Costs, and is calculated using diluted shares outstanding.
36© 2023 | Confidential and Proprietary | Reconciliation of GAAP to Non-GAAP Measures (Unaudited) Fiscal Year Ended June 30, Dollars in millions 2023 Net Earnings $630.6 Provision for income taxes 164.3 Interest expense, net 135.5 Other non-operating expenses 6.0 Operating income 936.4 Adjustments Depreciation and Amortization 84.4 Amortization of acquired intangibles and purchases intellectual property 214.4 Amortization of other assets 126.2 Acquisition and integration costs 15.8 Restructuring charges 20.4 Russia-related exit costs 12.1 EBITDA (Non-GAAP) 1,409.7 Operating lease costs 41.0 EBITDAR (Non-GAAP) 1,450.8 Current and Long-term debt 3,413.3 Adjustments Present Value of Operating Lease Liabilities 239.4 SERP / SORP Liability 58.6 Adjusted Debt 3,711.3 Current and Long-term Debt to EBITDA 2.4x Adjusted Debt to EBITDAR 2.6x
37© 2023 | Contacts W. Edings Thibault Greg Faje Sean Silva [email protected] Replay Options Online replay available at broadridge-ir.com Telephone replay available through August 15, 2023 Domestic Dial-In: 1-877-344-7529 Access Code: 8237106 International Toll Dial-In: 1-412-317-0088 Passcode: 8237106 Click here for dial-ins by country Broadridge Fourth Quarter and Fiscal Year 2023 Earnings Conference Call Live Call Information Date: August 8, 2023 Start Time: 8:30 A.M. ET Toll-Free: 1-877-328-2502 International: 1-412-317-5419 Webcast: broadridge-ir.com