Broadridge Reports Fourth Quarter and Fiscal 2023 Results
- Strong Q4 results with 7% growth in recurring revenues and 21% adjusted EPS growth
- Raising annual dividend by 10% to $3.20 per share
- Fiscal year 2024 guidance of 6-9% recurring revenue growth constant currency and 8-12% adjusted EPS growth
- None.
Q4 Recurring revenues grew
2023 Recurring revenues grew
Raising annual dividend
Fiscal year 2024 guidance of 6
Summary Financial Results | Fourth Quarter | Fiscal Year | ||||||
Dollars in millions, except per share data
| 2023 | 2022 | Change | 2023 | 2022 | Change | ||
Recurring revenues | 7 % | 7 % | ||||||
Constant currency growth - Non-GAAP | 8 % | 9 % | ||||||
Total revenues | 7 % | 6 % | ||||||
Operating income | 33 % | 23 % | ||||||
Margin | 24.7 % | 19.8 % | 15.4 % | 13.3 % | ||||
Adjusted Operating income - Non-GAAP | 22 % | 12 % | ||||||
Margin | 28.9 % | 25.3 % | 19.8 % | 18.7 % | ||||
Diluted EPS | 30 % | 16 % | ||||||
Adjusted EPS - Non-GAAP | 21 % | 9 % | ||||||
Closed sales | (19 %) | (12 %) |
"Broadridge reported strong fourth quarter results, including
"Looking ahead, our fiscal year 2024 guidance calls for 6
"I'm also pleased to announce that our Board has approved a
Fiscal Year 2024 Financial Guidance | ||
Recurring revenue growth constant currency - Non-GAAP | 6 - | |
Adjusted Operating income margin - Non-GAAP | ~ | |
Adjusted Earnings per share growth - Non-GAAP | 8 - | |
Closed sales |
Financial Results for Fourth Quarter Fiscal Year 2023 compared to Fourth Quarter Fiscal Year 2022
- Total revenues increased
7% to from$1,839 million in the prior year period.$1,723 million - Recurring revenues increased
7% to from$1,259 million . Recurring revenue growth constant currency (Non-GAAP) was$1,177 million 8% , all organic, driven by Net New Business and Internal Growth. - Event-driven revenues decreased by
, or$11 million 15% , to , primarily due to the decrease in volume of mutual fund proxy communications.$59 million - Distribution revenues increased
, or$45 million 9% , to , driven by the impact of postage rate increases of approximately$522 million .$35 million - Operating income was
, an increase of$454 million , or$112 million 33% . Operating income margin increased to24.7% , compared to19.8% 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 , an increase of$531 million , or$96 million 22% . The increase was driven by higher Recurring revenues partially offset by lower event-driven revenues. Adjusted Operating income margin increased to28.9% , compared to25.3% for the prior year period. The increase in pass through distribution revenues negatively impacted margins by approximately 10 basis points.
- Interest expense, net was
, an increase of$36 million , primarily due to an increase in interest expense from higher borrowing costs.$15 million - The effective tax rate was
22.4% compared to22.1% in the prior year period. The increase was driven by the decreased impact of discrete tax items. - Net earnings increased
31% to and Adjusted Net earnings increased$324 million 22% to .$382 million - Diluted earnings per share increased
30% to , compared to$2.72 in the prior year period, and$2.09 - Adjusted earnings per share increased
21% to , compared to$3.21 in the prior year period.$2.65
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
, an increase of$1,438 million , or$87 million 6% . - Recurring revenues increased
, or$53 million 7% , to . Recurring revenue growth constant currency (Non-GAAP) was$858 million 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% and5% , respectively, driven by equity position growth of6% and mutual fund/ETF position growth of8% , partially offset by lower growth in international revenues; - Data-driven fund solutions rose
11% and12% , respectively, driven by growth in our mutual fund trade processing business and continued growth in our data and analytics solutions; - Issuer rose
7% and7% , respectively, driven by growth in our registered shareholder solutions and disclosure solutions; and - Customer communications rose
7% and7% , respectively, driven by higher print and digital communications. - Event-driven revenues decreased
, or$11 million 15% , to , primarily due to the decrease in volume of mutual fund proxy communications.$59 million - Distribution revenues increased
, or$45 million 9% , to , driven by the impact of postage rate increases of approximately$522 million .$35 million - ICS Earnings before income taxes were
, an increase of$431 million , or$68 million 19% . The earnings benefit from higher Recurring revenue was partially offset by lower event-driven revenues. Operating expenses rose2% , or , to$20 million , driven by higher distribution expenses, partially offset by a decline in other operating expenses. Amortization expense from acquired intangibles decreased by$1,007 million to$4 million . Pre-tax margins increased to$12 million 30.0% from26.9% .
Global Technology and Operations ("GTO")
- GTO Recurring revenues were
, an increase of$401 million , or$29 million 8% . Recurring revenue growth constant currency (Non-GAAP) was9% , 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% and12% , respectively, driven by a combination of Internal Growth and Net New Business; and - Wealth and investment management rose
2% and4% , respectively, driven primarily by Net New Business. - GTO Earnings before income taxes were
, an increase of$52 million , or$14 million 35% . GTO earnings increase was driven primarily by the growth in Recurring revenues. Operating expenses rose$29 million 5% , or , to$15 million , primarily driven by increased labor costs. Amortization expense from acquired intangibles decreased by$349 million to$3 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$40 million 13.0% from10.3% .
Other
- Other Loss before income tax was
compared to a loss of$66 million in the prior year period. The impact of a$83 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$15 million in Real Estate Realignment and Covid-19 related expenses and lower compensation related expenses.$24 million
Financial Results for Fiscal Year 2023 compared to Fiscal Year 2022
- Total revenues increased
6% to from$6,061 million in the prior year period.$5,709 million - Recurring revenues increased
7% to from$3,987 million . Recurring revenue growth constant currency (Non-GAAP) was$3,723 million 9% , all organic, driven by Net New Business and Internal Growth. - Event-driven revenues decreased
, or$58 million 22% , to , primarily due to a decrease in volume of mutual fund proxy communications.$211 million - Distribution revenues increased
, or$146 million 9% , to , primarily driven by the impact of postage rate increases of approximately$1,863 million .$121 million - Operating income was
, an increase of$936 million , or$177 million 23% . Operating income margin increased to15.4% from13.3% in the prior year period due to the growth in Recurring revenues, which 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 , an increase of$1,199 million , or$133 million 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 to19.8% , compared to18.7% for the prior year period. The increase in pass through distribution revenues negatively impacted margins by approximately 30 basis points.
- Interest expense, net was
, an increase of$136 million , primarily due to an increase in interest expense from higher borrowing costs.$51 million - The effective tax rate was
20.7% compared to19.8% 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 and Adjusted Net earnings increased$631 million 9% to .$835 million - Diluted Earnings per share increased
16% to compared to$5.30 in the prior year period, and$4.55 - Adjusted Earnings per share increased
9% to compared to$7.01 in the prior year period.$6.46
Segment and Other Results for Fiscal Year 2023 compared to Fiscal Year 2022
ICS
- ICS total Revenues were
, an increase of$4,536 million , or$279 million 7% . - Recurring revenues increased
, or$191 million 8% , to . Recurring revenue growth constant currency (Non-GAAP) was$2,461 million 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% and7% , respectively, driven by equity position growth of9% and mutual fund/ETF position growth of8% ; - Data-driven fund solutions rose
11% and12% , respectively, driven by growth in our mutual fund trade processing business and continued growth in our data and analytics solutions; - Issuer rose
12% and13% , respectively, driven by growth in our registered shareholder solutions and disclosure solutions; and - Customer communications rose
9% and10% , respectively, driven by higher print and digital communications. - Event-driven revenues decreased
, or$58 million 22% , to , primarily due to the decrease in volume of mutual fund proxy communications.$211 million - Distribution revenues increased
, or$146 million 9% , to , driven by the impact of postage rate increases of$1,863 million and the impact of modestly higher mail volumes, primarily in Customer communications.$121 million - ICS earnings before income taxes were
, an increase of$811 million , or$87 million 12% . The earnings benefit from higher Recurring revenue was partially offset by lower event-driven revenues. Operating expenses rose5% , or , to$192 million , primarily driven by distribution and other revenue related expenses. Amortization expense from acquired intangibles decreased by$3,724 million to$13 million . Pre-tax margins increased to$56 million 17.9% from17.0% .
GTO
- GTO Recurring revenues were
, an increase of$1,525 million , or$73 million 5% . Recurring revenue growth constant currency (Non-GAAP) was8% , 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% and11% , respectively, driven by a combination of Internal Growth and Net New Business; and - Wealth and investment management rose
2% and4% , respectively, primarily driven by Net New Business. - GTO earnings before income taxes were
, an increase of$184 million , or$44 million 32% , driven primarily by the growth in Recurring revenues, partially offset by increased labor costs. Operating expenses rose$73 million 2% , or , to$28 million , primarily driven by increased labor costs. Amortization expense from acquired intangibles decreased by$1,341 million to$23 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$159 million 12.1% from9.6% .
Other
- Other Loss before income tax was
compared to a loss of$201 million in the prior year period. The impact of a$192 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$51 million in Real Estate Realignment and Covid-19 related expenses and lower compensation related expenses.$30 million
Dividend Declaration and Increase
On August 7, 2023, Broadridge's Board of Directors (the "Board") declared a quarterly dividend of
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
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
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
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
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 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
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
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;
- 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
Contact Information
Investors: broadridgeir@broadridge.com
Media: Gregg.rosenberg@broadridge.com
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. |
Condensed Consolidated Balance Sheets (Unaudited) | |||||
In millions, except per share amounts | June 30, | June 30, | |||
Assets | |||||
Current assets: | |||||
Cash and cash equivalents | $ 252.3 | $ 224.7 | |||
Accounts receivable, net of allowance for doubtful accounts | 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 | — | — | |||
Common stock, | 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. |
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 |
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. |
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. |
Select Operating Metrics (Unaudited) | |||||||||||
In millions | Three Months Ended June 30, | Fiscal Year Ended | |||||||||
2023 | 2022 | Change | 2023 | 2022 | Change | ||||||
Closed sales1 | (19) % | (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 | |||||||||||
2. Stock record growth (also referred to as "SRG" or "equity position growth") measures the estimated annual change in positions eligible for equity proxy | |||||||||||
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 |
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 | $ 1,066.4 | ||||
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. | |||||||
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 |
(b) Real Estate Realignment Expenses impacted Adjusted earnings per share by |
(c) Total Russia-Related Exit costs were |
(d) Calculated using the GAAP effective tax rate, adjusted to exclude excess tax benefits associated with stock-based compensation of |
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- | Issuer | Customer | 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 % | ||||
Fiscal Year Ended June 30, 2023 | |||||||||
Investor Communication Solutions | Regulatory | Data- | Issuer | Customer | 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 | 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 | 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 | Fiscal Year Ended | ||
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. |
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 - | |
FY24 Adjusted Operating income margin (b) | ||
Operating income margin % - GAAP | ~ | |
Adjusted Operating income margin % - Non-GAAP | ~ | |
FY24 Adjusted earnings per share growth rate (c) | ||
Diluted earnings per share - GAAP | 15 - | |
Adjusted earnings per share - Non-GAAP | 8 - |
(a) Based on forward rates as of July 2023 |
(b) Adjusted Operating income margin guidance (Non-GAAP) is adjusted to exclude the projected |
(c) Adjusted earnings per share growth guidance (Non-GAAP) is adjusted to exclude the projected |
View original content:https://www.prnewswire.com/news-releases/broadridge-reports-fourth-quarter-and-fiscal-2023-results-301895128.html
SOURCE Broadridge Financial Solutions, Inc.
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