Q3 2024 Broadridge Financial Solutions Inc Earnings Call

Operator: Good day, and welcome to the Broadridge Financial Solutions third quarter and fiscal year 2024 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then 1 on your telephone keypad. To withdraw your question, please press star then 2. Please note this event is being recorded. I would now like to hand the call over to Eddings Thiebaud, Head of Investor Relations. Please go ahead. Thank you, Andrew.

Good day, and welcome to the Broadridge financial solutions third quarter and fiscal year 'twenty 'twenty four earnings conference call.

All participants will be in listen only mode.

Did you need assistance. Please signal a conference specialist by pressing the star key followed by zero.

After todays presentation, there will be an opportunity to ask questions.

To ask a question you May press Star then one on your telephone keypad.

To withdraw your question. Please press Star then two.

Please note this event is being recorded.

I would now like to hand, the call over to Adam <unk> head of Investor Relations. Please go ahead.

Eddings Thiebaud: Thank you, Andrea. Good morning, everybody, and welcome to Broadridge's third quarter fiscal year 2024 earnings conference call. Our earnings release and the slides to accompany this call may be found in the Investor Relations section of Broadridge.com. Joining me on the call this morning are Tim Gokey, our Chief Executive Officer, and our Chief Financial Officer, Edmund Reese. Before I turn the call over to Tim, a few standard call-outs. One, we'll be making forward-looking statements on today's call regarding Broadridge that involve risks.

Adam: Thank you Andrea good morning, everybody and welcome to <unk> third quarter fiscal year 2024 earnings conference call our earnings release and the slides that accompany this call may be found on the Investor Relations section Broadridge Dot com.

Adam: Joining me on the call. This morning are Tim Gokey, our Chief Executive Officer, and our Chief Financial Officer Edmund Reese.

Eddings Thiebaud: A summary of these risks can be found on the second page of the slides and a more complete description in our annual report on Form 10-K. 2. We'll also be referring to several non-GAAP measures, which we believe provide investors with a more complete understanding of Broadridge's underlying operating results. An explanation of these non-GAAP measures and reconciliations to their comparable GAAP measures can be found in the earnings release and presentation.

Speaker Change: Before I turn the call over to Tim a few standard callouts.

Speaker Change: One we will be making forward looking statements on today's call regarding broadridge that involve risks a summary of these risks can be found on the second page of the slides and a more complete description on our annual report on Form 10-K.

Timothy C. Gokey: Two we'll also be referring to several non-GAAP measures, which we believe provide investors with a more complete understanding of broadridge as underlying operating results and explanation of these non-GAAP measures and reconciliations to their comparable GAAP measures can be found in the earnings release and presentation.

Eddings Thiebaud: Let me now turn the call over to Tim Gokey. Tim. Thank you, Eddie.

Timothy C. Gokey: Let me now turn the call over to Tim Tim. Thank.

Timothy C. Gokey: Thank you Annie.

Timothy C. Gokey: Good morning.

Timothy C. Gokey: It's great to be here to review our third quarter results and update you on our full year outlook. Overall, I'm pleased with the performance of our business in a complex environment. We see a market in which the underlying fundamentals are solid, where capital markets and retail investor activity are beginning to strengthen, and where our clients are highlighting the need for continued technology investment. But while all that is going on, those same clients are being careful with their spending as they weigh the new hire for longer scenario as well as other tailgaters.

Timothy C. Gokey: It's great to be here to review, our third quarter results and update you on our full year outlook.

Timothy C. Gokey: Overall I'm pleased with the performance of our business in a complex environment.

Timothy C. Gokey: We see a market in which the underlying fundamentals are solid.

Timothy C. Gokey: Our capital markets and retail investor activity are beginning to strengthen.

Timothy C. Gokey: And where our clients are highlighting the need for continued technology investment.

Timothy C. Gokey: Well all of that is going on the same clients are being careful with their spending as they weigh the new higher for longer scenario as well as other tail risks.

Timothy C. Gokey: These trends play to Broadridge's strength. Our testing is indicating that healthy markets are driving a pickup in investor participation and position growth, and we're delivering innovative solutions across governance, capital markets, and wealth. Sales continue to be strong, highlighting our clients' willingness to move ahead with solutions that address revenue, cost, or regulatory needs. My conversations with clients make it clear that they see Broadridge as a partner in helping them grow their business and adapt to change. It's a strong position and will be further enhanced as we put our cash flow to work with a balance of capital returns and targeted M&A. So let's dig into the quarter.

Timothy C. Gokey: These trends play to broaden your strengths are.

Timothy C. Gokey: Testing is indicating that healthy markets are driving a pickup in investor participation and position growth.

Timothy C. Gokey: And we're delivering innovative solutions across governance capital markets and wealth.

Timothy C. Gokey: Sales continued to be strong.

Timothy C. Gokey: Highlighting our clients' willingness to move ahead with solutions that address revenue cost or regulatory needs.

Timothy C. Gokey: My conversations with clients make it clear that they see broadridge as a partner in helping them grow their business and adapt to change.

Timothy C. Gokey: It's a strong position.

Timothy C. Gokey: And it will be further enhanced as we put our cash flow to work with a balance of capital returns and targeted M&A.

Speaker Change: So let's dig into the quarter.

Timothy C. Gokey: First, Broadridge reported 4% recurring revenue growth and 9% adjusted EPS growth. Those results were modestly impacted by the timing of annual, which pushed some governance revenues into the fourth quarter. Second, we continue to execute against our strategy to drive the democratization and digitization of investing. Simplify and innovate trading, and Modernize Wealth Management. Our strategy is supported by long-term trends, including Physician Growth, which we continue to see in the mid to high single-digit range.

Speaker Change: First broadridge reported 4% recurring revenue growth and 9% adjusted EPS growth.

Timothy C. Gokey: Those results were modestly impacted by the timing of annual meetings, which pushed some governance revenues into the fourth quarter.

Timothy C. Gokey: Doug.

Doug: We need to execute against our strategy to drive the democratization and digitization of investing.

Timothy C. Gokey: For Fi and innovate trading.

Timothy C. Gokey: And modernized wealth management.

Timothy C. Gokey: Our strategy is supported by long term trends.

Timothy C. Gokey: Adding physician growth, which we continue to see in the mid to high single digit range.

Timothy C. Gokey: Third, that execution is coming through in our closed sales, which rose 29% in the quarter and are now up 19% year-to-date. We expect that positive momentum to continue in the fourth quarter. We remain on track to achieve our objective for 100% free cash flow conversion for the full year. That positions us to use our capital to increase share repurchases and to fund strategic tech and M&A. Finally, as we move through our seasonally large fourth quarter, Broadridge is on track to deliver another year of steady and consistent growth in line with its long-term financial objectives.

Timothy C. Gokey: Third that execution is coming through in our closed sales, which rose 29% in the quarter and are now up 19% year to date.

Timothy C. Gokey: We expect that positive momentum to continue in the fourth quarter.

Timothy C. Gokey: Fourth we remain on track to achieve our objective for 100% free cash flow conversion for the full year.

Timothy C. Gokey: That positions us to use our capital increase share repurchases.

Timothy C. Gokey: And to fund strategic tuck in M&A.

Timothy C. Gokey: Finally, as we move through our seasonally large fourth quarter Broadridge is on track to deliver another year of steady and consistent growth in line with our long term financial objectives.

Timothy C. Gokey: We are reaffirming our outlook for fiscal 24, adjusted EPS at the middle of our 8-12% range, with recurring revenue growth, constant currency, at the low end of our 69% range. With strong year-to-date sales, we also expect record close sales of $280 to $320 million. Now let's turn from the headlines to slide 4 to review highlights of our execution, starting with a governance franchise. ICS recurring revenue rose 1% in the third quarter as the timing of regulatory communications impacted our quarterly growth, and Regulatory Communications revenues were flat despite 5% equity position growth.

Timothy C. Gokey: We are reaffirming our outlook for fiscal 'twenty for adjusted EPS in the middle of our 8% to 12% range, which.

Timothy C. Gokey: With recurring revenue growth constant currency at the low end of our six 9% range.

Timothy C. Gokey: With strong year to date sales.

Timothy C. Gokey: We also expect to record closed sales of $280 million to $320 million.

Timothy C. Gokey: Now, let's turn from the headlines to slide four to review highlights of our execution.

Timothy C. Gokey: Starting with our governance franchise.

Timothy C. Gokey: Ics recurring revenue rose, 1% in the third quarter as the timing of regulatory communications impacted our quarterly growth.

Timothy C. Gokey: And regulatory communications revenues were flat, despite 5% equity position growth.

Timothy C. Gokey: As many of you know, the peak period for project communications falls right at the end of March, so any shift in the annual meeting schedule can have an impact on quarterly revenue. This year, with Easter falling in the last week of March instead of the first week of April last year, we saw a substantial number of companies push back the date for their annual meeting. That change led to a shift of regulatory revenue from March to April, or from the third to fourth quarter. This timing shift will have no impact on our full-year results.

Timothy C. Gokey: As many of you know the peak period for proxy Communications falls right at the end of March.

Timothy C. Gokey: So any shift in the annual meeting schedule can have an impact on quarterly revenues.

Timothy C. Gokey: This year with Easter in the last week of March instead of April last year, we saw a substantial number of companies push back the date for the annual meeting.

Timothy C. Gokey: That sounds left which led to a shift of regulatory revenue from March to April.

Timothy C. Gokey: Or from the third to fourth quarter.

Timothy C. Gokey: This timing shift will have no impact on our full year results.

Timothy C. Gokey: Outsider Timing, Position Gross Transfer Mix, As I noted, equity position growth is 5% in line with our testing, driven by double-digit growth in managed accounts, while funded ETF record growth declined to negative 1%. Quarterly fund position growth can vary more widely than the full year because it is impacted by the timing and types of communications that are distributed during any particular quarter. More broadly, the cumulative impact of lower fund flows and the shift in money market funds that began over a year ago has weighed on growth, especially for active funds.

Timothy C. Gokey: Outside of timing for additional growth trends were mixed.

Timothy C. Gokey: As I noted equity position growth of 5% in line with our testing driven by double digit growth in managed accounts.

Timothy C. Gokey: Fund and ETF record growth declined to negative 1% for the quarter.

Timothy C. Gokey: Quarterly fund position growth can vary more widely than the full year never because it is impacted by the timing and types of communications.

Timothy C. Gokey: Pivoted during any particular quarter.

Timothy C. Gokey: More broadly the queue.

Timothy C. Gokey: The impact of lower fund flows into shifting money market funds that began over a year ago has weighed on growth, especially for active funds.

Timothy C. Gokey: Your fund record growth to date is two. Looking ahead, fund flows are improving, and our testing indicates a modest pickup in the. As Edmund outlined, for the year, we expect stock record growth at 6% and Fund Record Growth. Driving and enabling the democratization of investing is a key part of our long-term growth strategy. There's no better opportunity to demonstrate that, and on a large and very visible proxy site.

Timothy C. Gokey: Year to date fund record growth is 2%.

Timothy C. Gokey: Looking ahead fund flows are improving and our testing indicates a modest pickup in the fourth quarter.

Timothy C. Gokey: And then I'll outline for the year, we expect stock record growth of 6%.

Timothy C. Gokey: Fund record growth of 3%.

Timothy C. Gokey: Driving and enabling the democratization of investing is a key part of our long term growth strategy.

Timothy C. Gokey: There is no better opportunity to demonstrate that what that means in a large and very visible proxy fight.

Timothy C. Gokey: As part of the Disney contest, Broadridge processed and distributed multiple rounds of communications to millions of registered and beneficial shareholders holding almost 2 billion shares on behalf of hundreds of our broker-dealer clients. Each vote was subject to multiple reviews and a process verified by an independent accounting firm so that all sides can be highly confident in the accuracy of the Broadridge vote. Vote Tallys are available daily to all participants.

Timothy C. Gokey: As far as the Disney contest Broadridge processed and distributed multiple rounds of communications to millions of registered and beneficial shareholders holding almost 2 billion shares on behalf of hundreds of our broker dealer clients.

Timothy C. Gokey: Each vote was subject to multiple reviews in a process verified by an independent accounting firm. So that all sides can be highly confident in the accuracy of the broadridge boats.

Timothy C. Gokey: Though tallies were available daily to all participants.

Timothy C. Gokey: The process culminated with an annual meeting hosted on Broadridge's virtual shareholder meeting platform, and the outcome was known immediately when the meeting closed. Contests like Disney are a great showcase for issuers, investors, our broker-dealer clients, and regulators of how Broadridge's significant investments in technology and digital communications, combined with a commitment to accuracy, enhance investor confidence in our market, outside of highly visible. We continue to enhance investor engagement by supporting the growth of voting choice across funds.

Timothy C. Gokey: Ross has culminated with an annual meeting hosted in Broadridge is virtual shareholder meeting platform.

Timothy C. Gokey: <unk> was known immediately when the meeting closed.

Timothy C. Gokey: Contests like Disney are great showcase for issuers investors, our broker dealer clients and regulators and how.

Timothy C. Gokey: Broadview is significant investments in technology, and digital communications combined with our commitment to accuracy enhance investor confidence in our markets.

Timothy C. Gokey: Outside of highly digital contests, we continue to enhance investor engagement by supporting the growth in voting chose choice across funds.

Timothy C. Gokey: In recent months, we've gone live with five of the largest asset managers across a mix of both retail and institutional-focused funds and ETFs. This, in turn, is leading to strong interest in extending this service to more assets and for a wider set of fund categories. We're also continuing the rollout of our tailored shareholder report as we help the funds industry navigate regulatory change. We're in production testing now, and we will go fully live beginning in July.

Timothy C. Gokey: In recent months, we've gone live with five of the largest asset managers across a mix of both retail and institutional focused funds and Etfs.

Timothy C. Gokey: This in turn is leading to strong interest to extend this service from more asset managers and for a wider set of fund categories.

Timothy C. Gokey: We're also continuing the rollout of our tailored shareholder reports solution as we help the funds industry navigate regulatory change.

Timothy C. Gokey: We're in production testing now.

Timothy C. Gokey: And we go fully live beginning in July.

Timothy C. Gokey: Turning to capital markets, revenues rose 8% to $266 million, driven by strong growth in BTCF, which continues to deliver on the pillars of our original acquisition case. During the quarter, we signed a leading U.S. and global bank as the first client for a global futures and options SaaS platform. This new capability will build on our existing products and significantly expand our derivatives trading. It also represents another step forward in our goal of expanding BTCS's capabilities across asset classes and to our U.S. client base, which was a key part of our long-term growth plan at the time of the acquisition.

Timothy C. Gokey: Turning to capital markets revenues rose, 8% to $166 million driven by strong growth in <unk>, which continues to deliver on the pillars of our original acquisition case.

Timothy C. Gokey: During the quarter, we signed a leading U S and global Bank is the first client for global futures and options SaaS platform.

Timothy C. Gokey: This new capability, we will build on our existing products and significantly expand our derivatives trading solutions.

Timothy C. Gokey: It also represents another step forward in our goal of expanding <unk> capabilities across asset classes intra U S client base.

Timothy C. Gokey: He was a key part of our long term growth plan at the time of the acquisition.

Timothy C. Gokey: On the post-trade side, we completed the implementation of our global post-trade platform for a leading Nordic bank. Our platform consolidates the bank's legacy in-house, streamlining its operations across 25 European markets and 10 custodians across both equities and fixed income. This particular bank was a long-term BTCS client.

Timothy C. Gokey: On the postpaid side, we completed the implementation of our global post trade platform for a leading Nordic bank.

Timothy C. Gokey: Our platform consolidates, the bank's legacy in house systems streamlining its operations across 25 year P in markets and 10 custodians across both equities and fixed income.

Timothy C. Gokey: This particular bank was a long term BTC S client. So it's also another example of leveraging our front office relationship to extend our solutions across the trade lifecycle.

Timothy C. Gokey: So it's also another example of leveraging our front office relationship to extend our solutions across the trade lifecycle. We also continue to see nice traction with our digital ledger repo and AI with our bond GPT and operations GPT solutions. Turning now to wealth and investment management, revenues rose 11% to $159 million. However, strong growth from UBS in the license revenue was partially offset by the E-Trade transition.

Timothy C. Gokey: We also continue to see nice traction with our digital ledger repo and in AI with their bond GPT and ops GPT solutions.

Timothy C. Gokey: Turning now to wealth and investment management revenues rose, 11% to $159 million as strong growth from UBS and the license revenue.

Timothy C. Gokey: Partially offset by the E trade transition.

Timothy C. Gokey: In the first full year since the rollout of our wealth platform, we are seeing significant interest in our broad suite of wealth capabilities, and that's driving strong sales momentum, with year-to-date wealth and investment management sales up 75%. I'm especially pleased to see strong interest in Canada for the wealth component capability. Canada counts for approximately a third of our wealth and investment management revenues, and we see a long-term opportunity to adapt our wealth tools for Canadian firms. Moving to sales, closed sales rose 29% in the third quarter and are up 19% year-to-date.

Timothy C. Gokey: In the first full year since the rollout of our wealth platform, we're seeing significant interest in our broad suite of wealth capabilities and.

Timothy C. Gokey: And that's driving strong sales momentum with year to date wealth and investment management sales up 75%.

Timothy C. Gokey: I'm, especially pleased to see strong interest in Canada for wealth component capabilities.

Timothy C. Gokey: Canada accounts for approximately a third of our wealth and investment management revenues and we see a long term opportunity to adapt our wealth tools for Canadian firms.

Timothy C. Gokey: Moving to sales closed sales rose, 29% in the third quarter and are up 19% year to date.

Timothy C. Gokey: We benefited from strong sales of our digital and print solutions for the new Tailor-to-Your-Helder reports, and we continue to see significant print and digital opportunities in customer communication. Our pipeline remains at record levels as clients focus on solutions that drive revenue growth, like our front office trading tools, and meet their regulatory requirements, like tailored shareholder reports. That combination of strong sales and a record pipeline is giving us increased confidence in our ability to achieve record close sales in line with our $280 to $320 million full year guidance.

Timothy C. Gokey: We benefited from strong sales of our digital and print solutions for the new tailored shareholder reports and we continue to see significant print and digital opportunities and customer communications.

Timothy C. Gokey: Our pipeline remains at record levels as clients focus on solutions that drive revenue growth like your front office trading tools.

Timothy C. Gokey: And meet the regulatory requirements like tailored shareholder reports.

Timothy C. Gokey: That combination of strong sales and a record pipeline is it giving us increased confidence in our ability to achieve record closed sales in line with like $280 to $320 million full year guidance.

Timothy C. Gokey: Let's move to slide 5 for some additional thoughts on our quarter and outlook. First, we are poised to deliver another year of mid-single-digit organic recurring revenue growth and double-digit earnings growth, right in line with the long-term growth goals we laid out at our investor day in December. In a quarter impacted by the timing of annual meetings, we really avoided 9% adjusted EPS growth. Now, one month into the fourth quarter, we have high visibility into our remaining volume.

Timothy C. Gokey: Let's move to slide five for some additional thoughts on our quarter and outlook.

Timothy C. Gokey: First we are poised to deliver another year of mid single digit organic recurring revenue growth and double digit earnings growth.

Timothy C. Gokey: Right in line with our long term growth goals, we laid out at our Investor day in December.

Timothy C. Gokey: Yeah quarter impacted by the timing of annual meetings, we reported 9% adjusted EPS growth.

Timothy C. Gokey: Now one month into the fourth quarter, we have high visibility into our remaining volumes.

Timothy C. Gokey: For the full year, we're tracking to a recurring revenue growth of 6%, adjusted EPS growth of approximately 10%, and record closing sales. Second, our growth continues to be driven by long-term trends, increasing investor engagement, and the Man for Digitization.

Timothy C. Gokey: For the full year, we're tracking to recurring revenue growth of 6% adjusted.

Timothy C. Gokey: Adjusted EPS growth of approximately 10%.

Timothy C. Gokey: Our record closed sales.

Timothy C. Gokey: Second our growth continues to be driven by long term trends.

Timothy C. Gokey: Increasing investor engagement.

Timothy C. Gokey: Man for Digitization.

Timothy C. Gokey: Accelerating Trading, Regulatory Chain, Leveraging Data and AI, and the need to modernize wealth management have all combined to drive strong sales over the first three quarters. As a result, we're going into our largest sales quarter with a strong pipeline and increasing potential, position growth has moved from pandemic highs, and overall trends remain in line with the mid to high single-digit growth rate of the past decade and beyond. The outlook for financial services firms appears to be improving.

Timothy C. Gokey: Celebrating trading regularly.

Timothy C. Gokey: The regulatory change leveraging data and AI and the need to modernize wealth management have all combined to drive strong sales over the first three quarters.

Timothy C. Gokey: As a result, we're going into our largest sales quarter with a strong pipeline and increasing visibility.

Timothy C. Gokey: Position growth has moved from pandemic highs and overall trends remain in line with the mid to high single digit growth rate of the past decade.

Timothy C. Gokey: Looking beyond the fourth quarter the outlook for financial services firms appears to be improving.

Timothy C. Gokey: Capital Markets Activity is picking up, and innovation is driving sales growth as our clients increase their level of investment. At the same time, strong equity markets are driving investor engagement, and fund investors are beginning to rotate out-of-money market funds, both of which bode well for future position growth. Third, we're executing on our growth strategy. We're driving shareholder engagement and governance. Enhancing our digital capabilities and customer communications. Delivering Innovative New Capabilities in Capital Markets, and expanding our ability to drive growth and wealth across North America. We're also investing to strengthen our product teams, sales capabilities, and technology capabilities, including, of course, AI.

Timothy C. Gokey: Capital markets activity is picking up and innovation is driving sales growth as our clients increase the level of investment.

Timothy C. Gokey: At the same time strong equity markets are driving investor engagement and find investors are beginning to rotate out of money market funds, both of which bode well for future position growth.

Timothy C. Gokey: Third.

Timothy C. Gokey: Executing on our growth strategy.

Timothy C. Gokey: We are driving shareholder engagement and governance.

Timothy C. Gokey: <unk>, our digital capabilities and customer communications.

Timothy C. Gokey: Delivering innovative new capabilities in capital markets and are expanding our ability to drive growth and wealth across North America.

Timothy C. Gokey: We're also investing to strengthen our product teams sales capabilities and technology capabilities, including of course AI.

Timothy C. Gokey: We are on track to achieve our 100% free cash flow conversion objective, and the combination of strong free cash flow and our investment grade balance sheet positions us to return additional capital to shareholders. We're also seeing a growing number of attractive M&A opportunities to further complement our organic growth. Finally, Broadridge remains well-positioned to drive long-term growth. We remain on track to deliver on our three-year growth objectives of 79% recurring revenue growth, constant currency, 5% to 8% organic, and 8% to 12% adjusted EPS growth, with fiscal 24 right in line with those goals, and continued execution supported by long-term demand.

Timothy C. Gokey: Fourth we're on track to achieve our 100% free cash flow conversion objective and the combination of strong free cash flow and our investment grade balance sheet positions us to return additional capital to shareholders.

Timothy C. Gokey: We're also seeing a growing number of attractive M&A opportunities to further complement our organic growth.

Timothy C. Gokey: Finally.

Timothy C. Gokey: <unk> remains well positioned to drive long term growth.

Timothy C. Gokey: We remain on track to deliver on our three year growth objectives of 79% recurring revenue growth constant currency, 5% to 8% organic.

Timothy C. Gokey: And 8% to 12% adjusted EPS growth with fiscal 'twenty four right in line with those goals.

Timothy C. Gokey: And with continued execution supported by long term demand trends.

Timothy C. Gokey: We are well positioned to continue to grow beyond FY26 as we attack our $60 billion and growing market opportunity. I want to close by thanking our associates around the world. The market for what we do continues to evolve, and Broadridge is evolving as well. We're seizing the opportunities in front of us, and your Focus on Serving Our Clients. As shown by our strong accomplishments, this, Transcribed by https://otter.ai, continues to set us apart. Thank you. And with that, I will turn it over to Edmund.

Timothy C. Gokey: We are well positioned to continue to grow beyond FY 'twenty as we attack, our $60 billion and growing market opportunity.

Speaker Change: I want to close by thanking our associates around the world.

Speaker Change: The market for what we do continues to evolve.

Speaker Change: And broadridge the evolving as well.

Speaker Change: We're seizing the opportunities in front of us.

Speaker Change: And your focus on serving our clients.

Speaker Change: As shown by our strong accomplishments this quarter.

Speaker Change: And over a long period.

Speaker Change: Continues to set us apart.

Speaker Change: Thank you.

Speaker Change: And with that let me turn it over to Edmund.

Edmund J. Reese: Thank you, Tim and good morning, everyone.

Edmund J. Reese: And good morning, everyone. Let me start by saying that I'm pleased with the third quarter results relative to our full-year guidance. While third-quarter recurring revenue growth was impacted by the timing of annual meetings, we are entering the seasonally larger fourth quarter in a strong position. Through three quarters, we've reported 6% recurring revenue growth, 11% adjusted EPS growth, and have received 98% of proxy records through April. That gives us a high confidence interval in our ability to deliver 6% recurring revenue growth, approximately 20% adjusted operating income margin, and adjusted EPS growth of approximately 10%. Of equal importance is our cash flow performance for the year.

Edmund J. Reese: Let me start by saying that I'm pleased with the third quarter results relative to our full year guidance.

Edmund J. Reese: Third quarter recurring revenue growth was impacted by the timing of annual meetings, we are entering the seasonally larger fourth quarter in a strong position.

Edmund J. Reese: Through three quarters, we've reported 6% recurring revenue growth, 11% adjusted EPS growth and have received 98% of proxy records through April.

Edmund J. Reese: That gives us a high confidence interval and our ability to deliver 6% recurring revenue growth.

Edmund J. Reese: 20% adjusted operating income margin and adjusted EPS growth of approximately 10%.

Edmund J. Reese: Of equal importance is our cash flow performance for the year.

Edmund J. Reese: We are on track for 100% free cash flow conversion, which will allow us to return a total of $700 to $800 million to shareholders through the dividend and with share repurchases of $350 to $450 million. So, with clarity on fiscal 2020-2024.

Edmund J. Reese: We are on track for 100% free cash flow conversion, which will allow us to return a total of 700 to 800 billion to shareholders through the dividend.

Edmund J. Reese: With share repurchases of $350 million to $450 million.

Edmund J. Reese: So with clarity on fiscal 2020, 'twenty 'twenty four.

Edmund J. Reese: In my view, what matters most to achieving our three-year financial objectives are the wins that we have at our backs, which are driving positive momentum. First, closed sales through the first three quarters are up 19% over last year, and our healthy pipeline reinforces our conviction that we will achieve 15 to 30 percent sales growth in our full year 24 guidance. Second, while our testing shows 6% equity and 3% fund and ETF position growth for full year 24, the early testing for Q125 is consistent with more recent increased retail market activity and our long-term outlook of mid to high single-digit growth.

Edmund J. Reese: In my view, what matters, most to achieving our three year financial objectives or the wins that we have at our back.

Edmund J. Reese: What you are driving positive momentum in the business.

Edmund J. Reese: First closed sales through the first three quarters are up 19% over last year.

Edmund J. Reese: And our healthy pipeline reinforces our conviction that we will achieve 15% to 30% sales growth and our full year 2000 and for guidance.

Edmund J. Reese: Second.

Edmund J. Reese: While our testing shows, 6% equity and 3% fund and ETF position growth for full year 'twenty for the early testing for Q1 dollars 25 is consistent with more recent increased retail market activity and our long term outlook of mid to high single digit growth.

Edmund J. Reese: Third, we continue to focus on actively managing our expenses and finalizing our restructuring effort in the fourth quarter to create investment capacity for organic growth in fiscal 25 and 26 while delivering continued earnings growth. Finally, our free cash flow conversion, definitively back at historical levels.

Edmund J. Reese: Third we continue to focus on actively managing our expenses and finalizing a restructuring effort in the fourth quarter to create investment capacity for organic growth in fiscal 'twenty, five and 26, while delivering continued earnings growth.

Edmund J. Reese: Finally, our free cash flow conversion is definitively back at historical levels.

Edmund J. Reese: This positions us to supplement our organic growth with accretive tuck-in M&A or return capital to shareholders. As a result, when I look ahead, I see strong momentum in the Broadridge business. Strong closed sales driving five to eight points of growth from new sales, with Position Growth supporting 2-3 points from internal growth. M&A Investment Contributing Additional Growth, an active expense discipline that will enable Broadridge to continue to invest in organic growth and deliver continued earnings growth. We continue to execute the Broadridge Financial Model, and that gives me confidence that we remain on track to deliver on our three-year financial objectives and on Mid to High Teens ROYC.

Edmund J. Reese: Positioning us to supplement our organic growth with accretive tuck in M&A or return capital to shareholders.

Edmund J. Reese: As a result.

Edmund J. Reese: I look ahead I.

Edmund J. Reese: Strong momentum in the Broadridge business.

Edmund J. Reese: Strong closed sales driving five to eight points of growth from new sales.

Edmund J. Reese: Position growth supporting two to three points from internal growth.

Edmund J. Reese: M&A investment contributing additional growth.

Edmund J. Reese: Active expense discipline that will enable broadridge to continue to invest in organic growth and deliver continued earnings growth.

Edmund J. Reese: We continue to execute the Broadridge financial model and that gives me confidence that we remain on track to deliver again, one of our three year financial objectives and on mid to high teens ROIC.

Edmund J. Reese: So now turning to the financial summary on slide six, you see the performance for the third quarter. Recurring revenue rose to $1.1 billion, up 4% on a constant currency basis, all organic. Adjusted Operating Income increased 7%, and AOI margins of 21.4% expanded 40%, and Adjusted EPS rose 9% to $2.23. Finally, and as Tim noted, we delivered third quarter closed sales of $80 million, up 29% over Q3'22.

Edmund J. Reese: So now turning to the financial summary on slide six you see the performance for the third quarter.

Edmund J. Reese: Recurring revenue rose to $1 1 billion up 4% on a constant currency basis all organic.

Edmund J. Reese: Adjusted operating income increased 7% and a oi margins of 21, 4% expanded 40 basis points and.

Edmund J. Reese: And adjusted EPS rose, 9% to $2 23.

Edmund J. Reese: Finally, and as Tim noted, we delivered third quarter closed sales of $80 million up 29% over Q3 23.

Edmund J. Reese: On slide 7, you see that recurring revenue grew 4% to $1.1 billion in Q3 2014. However, recurring revenue growth, driven by converting our backlog to revenue and growth in GTO, was impacted by proxy communications that were delayed into our fiscal Q4. So for more context on this... March is typically a heavy month for proxy communications, accounting for almost a quarter of our full-year positions. As Tim mentioned, in 2024, we saw a modest delay in the timing of annual meetings, which pushed volumes from March into April.

Edmund J. Reese: On slide seven you see that recurring revenue grew 4% to $1 1 billion in Q3 dollars 24.

Recurring revenue growth driven by converting our backlog to revenue and growth in GTO was impacted by proxy communications that were delayed into our fiscal Q4, so for more context on this point.

Edmund J. Reese: March is typically a heavy month for proxy communications accounting for almost a quarter of our full year positions.

Edmund J. Reese: You mentioned in 2024, we saw a modest delay in the timing of annual meetings, which push volumes from March into April.

Edmund J. Reese: While that lowered our Q3 revenue, we have since processed virtually all of those delayed positions, and that will benefit regulatory revenue in the fourth quarter. On slide 8, we can see recurring revenue growth across our ICS and GTO segments. In Q3, ICS recurring revenue grew 1%, largely impacted by the quarterly noise that I just mentioned. Regulatory revenue was flat, as mid-single-digit equity position growth and revenue from sales were partially offset by the timing of the annual meeting. As I explained earlier, while these timing variances have no real impact on full-year revenues, they can result in quarters that vary from our reported position growth. We continue to expect

Edmund J. Reese: While that lowered our Q3 revenue we have since process virtually all of those delayed positions.

And that will benefit regulatory revenue in the fourth quarter.

On slide eight we can see recurring revenue growth across our Ics and GTO segments.

Edmund J. Reese: In Q3, Ics recurring revenue grew 1% largely impacted by the quarterly noise that I just mentioned.

Edmund J. Reese: Regulatory revenue was flat as mid single digit equity position growth in revenue from sales were partially offset by the timing of the annual meetings.

Edmund J. Reese: As I explained earlier, while these timing variances had no real impact on full year revenues. They can result in quarters that vary from our reported position growth.

Edmund J. Reese: We continue to expect full year regulatory revenues to be in line with mid single digit position growth.

Edmund J. Reese: Full-year regulatory revenues are expected to be in line with mid-single-digit position growth. Data-driven fund solutions revenue increased by 4% due to higher float revenue in our retirement and workplace products, as well as growth in our data and analytics products. Issuer revenue was up 3% driven by strong sales of our disclosure solutions and higher float income in our registered shareholder solutions. However, our Q3 registered shareholder solutions were also impacted by the timing of the annual meeting cycle.

Edmund J. Reese: Data driven fund solutions revenue increased by 4% due to higher float revenue in our retirement and workplace products as well as growth in our data and analytics products.

Edmund J. Reese: Issuer revenue was up 3% driven by strong sales of our disclosure solutions and higher float income in a registered shareholder solutions.

Edmund J. Reese: Our Q3 registered shareholder solutions were also impacted by the timing of the annual meeting cycle. So I will note that the issuer business has grown 10% year to date and we still expect high single digit full year revenue growth.

Edmund J. Reese: So I will note that the issuer business has grown 10% year-to-date, and we still expect high single-digit full-year revenue growth. Customer communications revenue rose 1% as growth and higher-margin digital revenue was offset by the lower growth of lower-margin print.

Edmund J. Reese: Customer communications revenue rose, 1% as growth in higher margin digital revenue was offset by the lower growth of lower margin print.

Edmund J. Reese: We expect print volumes to increase in the fourth quarter as we onboard new clients. For the full year, we expect low single-digit top-line growth driven by double-digit growth of higher-margin digital revenue and low single-digit print. This is in line with our print to digital strategy, which should yield expanding margins and continued low double-digit earnings growth. Looking ahead to Q4, we expect ICS at the high end of our organic growth, with recurring revenue growth of 7-9%, driven in part by the benefit of timing differences. Turning the GTO, recurring revenue grew 9% to $425 million.

Edmund J. Reese: We expect volumes to increase in the fourth quarter as we onboard new clients.

Edmund J. Reese: For the full year, we expect low single digit top line growth driven by double digit growth of higher margin digital revenue and low single digit growth.

Edmund J. Reese: This is in line with our print to digital strategy, which you are expanding margins and continued low double digit earnings growth.

Edmund J. Reese: Looking ahead to Q4, we expect Ics at the high end of our organic growth objectives with recurring revenue growth of 7% to 9% driven in part by the benefit of timing differences.

Edmund J. Reese: Turning to GTO recurring revenue grew 9% to $425 million.

Edmund J. Reese: Capital Markets Revenue increased 8%, led by new sales and higher equity in fixed income trading voice. I will also note that we continue to see strong performance in our front office BTCS solutions, which again had double-digit recurring revenue growth in the third quarter. Wealth and Investment Management Revenue grew 11%, powered by the UBS contract and higher license revenue, although partially offset by the E-Trade transition, which began late in the fiscal first quarter.

Edmund J. Reese: Capital markets revenue increased 8% led by new sales and higher equity and fixed income trading volumes.

Edmund J. Reese: I will also note that we continued to see strong performance in our front office, BTC Fs solutions, which again.

Edmund J. Reese: <unk> had double digit recurring revenue growth in the third quarter.

Edmund J. Reese: Wealth and investment management revenue grew 11% powered by the UBS contract and higher license revenue, partially offset by the E trade transition, which began late in the fiscal first quarter.

Edmund J. Reese: Looking ahead, we continue to expect capital markets growth in the fourth quarter to be impacted by growing over high Q4'23 license revenue. And we will also have another full quarter impact from the E-Trade transition in our wealth management business. That said, GTO recurring revenue growth is 9% year-to-date, giving us high confidence that full year growth will be well within our 5-8% organic growth objectives for both businesses. Turning to slide 9 for a discussion of volume,

Edmund J. Reese: Looking ahead, we continue to expect capital markets growth in the fourth quarter to be impacted by growing over high Q4, 'twenty three license revenue.

Edmund J. Reese: And we will also have another full quarter impact from the E trade transition in our wealth business that said GTO recurring revenue growth is 9% year to date.

Edmund J. Reese: Giving us high confidence that full year growth will be well within our 5% to 8% organic growth objectives for both businesses.

Edmund J. Reese: Turning to slide nine for a discussion of volume trends.

Edmund J. Reese: Equity position growth was 5% in the quarter, in line with our test. Growth was driven by continued double-digit growth in managed accounts. We are now in the peak period for annual meetings and proxies, and through the end of April, we've received record data for 98% of proxies that are expected for the year.

Edmund J. Reese: Equity position growth was 5% in the quarter in line with our testing.

Edmund J. Reese: Growth was driven by continued double digit growth in managed accounts.

Edmund J. Reese: We are now in the peak periods for annual meetings and proxies and through the end of April we've received record data for 98% of proxies that are expected for the year.

Edmund J. Reese: This data gives us high confidence in our outlook for position growth. For the full year, we expect equity position growth of approximately 6%, and while still early, testing data is extending into the q 125 and showing mid single-digit growth, continuing to support our outlook for mid to high single-digit equity position growth. We continue to be encouraged by expanding investor participation in financial markets, serving as a long-term tailwind that drives growth in our business. Fund and ETF positions declined by 1%.

Edmund J. Reese: This data gives us high confidence in our outlook for position growth.

Edmund J. Reese: For the full year, we expect equity position growth of approximately 6%.

Edmund J. Reese: And while still early are.

Edmund J. Reese: Testing data is extending into Q1 dollars 25 in the showing mid single digit growth.

Edmund J. Reese: <unk> the support our outlook for mid to high single digit equity position growth.

Edmund J. Reese: Continue to be encouraged by expanding investor participation in financial markets, serving as a long term tailwind that drives growth in our business.

Edmund J. Reese: Fund and ETF positions declined by 1%.

Edmund J. Reese: For the full year, we expect position growth of 3% with slower growth in passive funds and declines in active funds. Turning now to trade volumes on the bottom of the slide. Trade volumes grew 11% on a blended basis in Q3. However, once again, we saw a difference in asset classes, with increased volatility driving double-digit fixed income volume growth for 11 consecutive quarters and more modest equity volume growth. Let's now move to slide 10 for the drivers of recurring revenue growth.

Edmund J. Reese: For the full year, we expect position growth of 3% with low slower growth in passive funds and declines in active funds.

Edmund J. Reese: Turning now to trade volumes on the bottom of the slide.

Edmund J. Reese: Trade volumes grew 11% on a blended basis in Q3.

Edmund J. Reese: Once again, we saw a difference in asset classes with increased volatility driving double digit fixed income volume growth now.

Edmund J. Reese: Now 11 consecutive quarters and more modest equity volume growth.

Edmund J. Reese: Let's now move to slide 10 for the drivers of recurring revenue growth.

Edmund J. Reese: Recurring revenue grew 4% constant current, and revenue from Net New Business contributed three points of growth. Internal growth, primarily trading volumes, expanding client relationships, and float income, offset by the timing of proxy communications, contributed one point. Foreign exchange had a non-material 20 basis point positive impact on recurring revenue growth. And based on current rates, we expect a similar benefit in full-year recurring revenue growth relative to fiscal year 23. I'll wrap up the revenue discussion with a

Edmund J. Reese: Recurring revenue grew 4% constant currency revenue.

Edmund J. Reese: Revenue from net new business contributed three points of growth.

Edmund J. Reese: Internal growth, primarily trading volumes, expanding client relationships and float income offset by the timing of proxy communications contributed one point.

Edmund J. Reese: Foreign exchange had a non material 20 basis point positive impact on our recurring revenue growth and based on current rates. We expect a similar benefit in full year recurring revenue growth relative to fiscal year 'twenty three.

Edmund J. Reese: I'll wrap up the revenue discussion with a view of total revenue on slide 11.

Edmund J. Reese: Total revenue grew 5% in Q3 to $1.7 billion, with recurring revenue being the largest contributor, delivering three points of growth. Low to no-margin distribution revenues contributed one point to total revenue growth. Distribution revenue grew 4% due to postal rate increases, which are a headwind to our adjusted operating income margin. We continue to expect distribution revenue to grow in the high single-digit range, driven by the continued impact of postal rate increases.

Edmund J. Reese: Total revenue grew 5% in Q3 to $1 7 billion with recurring revenue being the largest contributor delivering three points of growth.

Edmund J. Reese: Low to no margin distribution revenues contributed one point to total revenue growth.

Edmund J. Reese: Distribution revenue grew 4% due the postal rate increases, which are a headwind to our adjusted operating income margin.

Edmund J. Reese: We continue to expect distribution revenue to grow in the high single digit range driven by the continued impact of postal rate increases.

Edmund J. Reese: Event-driven revenue was $67 million, up 29% over last year and adding one point to revenue growth. As anticipated, we saw more normalized levels of mutual fund proxy activity and elevated contest activity, including our work with Disney and Q3. With the combination of increased mutual fund proxy activity and higher contest activity, we now expect $260 to $280 million in full-year event-driven revenue. In our Q2 call, we mentioned that we expected event-driven revenue to trend above our historical levels for the full year.

Edmund J. Reese: Event, driven revenue was 67 million up 29% over last year, and adding one point to revenue growth as.

Edmund J. Reese: As anticipated we saw more normalized levels of mutual fund proxy activity in elevated contest activity, including our work with Disney in Q3.

Edmund J. Reese: With the combination of increased mutual fund proxy activity and higher contest activity, we now expect $260 million to $280 million and full year event driven revenue.

Edmund J. Reese: And our Q2 call. We mentioned that we expected event driven revenue to trend above our historical levels for the full year.

Edmund J. Reese: We modestly increased growth investments in Q2 based on the above trend event-driven revenue. We continue to make investments in Q3 as we are committed to investing in long-term growth while still delivering on our short-term fiscal 24 adjusted EPS guidance. Turning now to margins on slide 12.

Edmund J. Reese: We've modestly increased growth investments in Q2 based on the above trend event driven revenue.

Edmund J. Reese: Continue to make investments in Q3, as we are committed to investing in long term growth, while still delivering on our short term fiscal 'twenty four adjusted EPS guidance.

Edmund J. Reese: Adjusted operating income margin was up 40 basis points from the prior year to 21.4%. The net impact of higher distribution revenue and higher float income, which have an immaterial impact on earnings growth, as I detailed it on investor day, increased margins by 20 basis points in the quarter. Adjusted Operating Income Margin continued to benefit from operating leverage on our higher recurring and event revenue and the benefit from our restructuring initiative that we began in Q4'23 to realign some of our businesses and streamline our management structure.

Edmund J. Reese: Turning now to margins on slide 12.

Edmund J. Reese: Adjusted operating income margin was up 40 basis points from prior year to 21, 4%.

Edmund J. Reese: The net impact of higher distribution revenue and higher float income, which have an immaterial impact on earnings growth as I detailed at Investor day increased margins by 20 basis points in the quarter.

Edmund J. Reese: Adjusted operating income margin continued to benefit from the operating leverage on our higher recurring and event revenue.

Edmund J. Reese: And the benefit from our restructuring initiative that we began in Q4 'twenty three to realign some of our businesses and streamline our management structure.

Edmund J. Reese: As part of the initiative, we exited a small, non-core GTO business in Q3-24, and we remain on track to complete the restructuring initiative and have the remaining restructuring charge by the end of the fiscal year. The restructuring charges are excluded from our calculation of Adjusted Operating Income and Adjusted EPS.

Edmund J. Reese: As part of the initiative, we exited a small non core GTO business in Q3 24 and.

Edmund J. Reese: And we remain on track to complete the restructuring initiative and have the remaining restructuring charge by the end of the fiscal year.

Edmund J. Reese: The restructuring charges are excluded from our calculation of adjusted operating income and adjusted EPS.

Edmund J. Reese: We have a long track record of disciplined expense management. This discipline, along with the operating leverage inherent in our business model, allows us to invest in long-term growth investments and meet our earnings growth objectives. Looking ahead, we continue to expect adjusted operating income margin to increase year-over-year to approximately 20%. Let's move ahead to closed sales on slide 13.

Edmund J. Reese: We have a long track record of disciplined expense management.

Edmund J. Reese: This discipline along with the operating leverage inherent in our business model allows us to invest in long term growth investments and meet our earnings growth objectives.

Edmund J. Reese: Looking ahead, we continue to expect adjusted operating income margin to increase year over year to approximately 20%.

Edmund J. Reese: Let's move ahead to closed sales on slide 13.

Edmund J. Reese: Third quarter closed sales were $80 million, up 29% from $62 million in Q3 2023 and bringing our year-to-date total to $185 million. 19% above Q3 year-to-date 23. Our strong performance on closed sales has been in product areas where we've been investing and innovating, such as tailored shareholder reports, BTCS, and wealth. We continue to see clients willing to invest in areas that either drive revenue, Lower Costs, or Address Regulatory Requirements. With performance through three quarters and our five-year history of closing on average 40% of full-year sales in the fourth quarter, we continue to have high confidence in meeting our full year guidance of $280 to $320 million.

Edmund J. Reese: Third quarter closed sales were $80 million up 29% from $62 million in Q3 2023 and.

Edmund J. Reese: And bringing our year to date total to $185 million, 19% above Q3 year to date 23.

Edmund J. Reese: Our strong performance on closed sales has been in product areas, where we've been investing and innovating such as tailored shareholder reports be tcs and wealth.

Edmund J. Reese: We continue to see clients willing to invest in areas that either drive revenue lower cost or address regulatory requirements.

Edmund J. Reese: With the performance through three quarters, and our five year history of closing on average 40% of full year sales in the fourth quarter.

Edmund J. Reese: We continue to have high confidence in meeting our full year guidance of $280 million to $320 million.

Edmund J. Reese: Again, strengthening our revenue backlog and providing strong momentum entering fiscal year 25. I'll turn now to free cash flow on slide 14. Q3'24 free cash flow was $167,000,000, $5,000,000 better than last year; three quarters free cash flow is a positive 259 million relative to 47 million in the first nine months of 2023. These results are being driven by our continued strong earnings growth and lower client platform spend. Free cash flow conversion was 108% in Q3'24, up from 63% last year.

Edmund J. Reese: Again, strengthen our revenue backlog and providing strong momentum entering fiscal year 'twenty five.

Edmund J. Reese: I'll turn now on the free cash flow on slide 14.

Edmund J. Reese: Q3, 24 free cash flow was $167 million 5 million better than last year.

Edmund J. Reese: Two three quarters free cash flow is a positive 259 million relative to $47 million in the first nine months of 2023.

Edmund J. Reese: These results are being driven by our continued strong earnings growth and lower client platform spend.

Edmund J. Reese: Free cash flow conversion was 108% in Q3 dollars 24 up from 63% last year.

Edmund J. Reese: This is consistent with our expectations and has us on track for free cash flow conversion of 100% for fiscal year 2014. On slide 15, you can see that over the first nine months of the year, we invested $109 million in our technology platforms and converted clients to our platforms.

Edmund J. Reese: This is consistent with our expectations.

Edmund J. Reese: Has us on track for free cash flow conversion of 100% for fiscal year 'twenty four.

Edmund J. Reese: On slide 15, you can see that over the first nine months of the year, we invested $109 million on our technology platforms and converting clients to our platforms.

Edmund J. Reese: Additionally, before option proceeds, we returned $424 million in capital to shareholders due to dividends and share repurchases year-to-date. And given our expectations for 100% free cash flow conversion, we are positioned to return additional capital to shareholders in fiscal year 24. We continue to ask for $350 million to $450 million in total share repurchases for the full year, which includes an additional $200 million to $300 million in the fourth quarter. Let me put this in context. While we are still early in this current fiscal 24 to fiscal 26 three-year cycle.

Edmund J. Reese: Additionally, before option proceeds we returned $424 million in capital to shareholders through dividend and share repurchases year to date.

Edmund J. Reese: And given our expectations for 100% free cash flow conversion, we are positioned to return additional capital to shareholders in fiscal year 'twenty four.

Edmund J. Reese: We continue to estimate 350 to 450 million in total share repurchases for the full year, which includes an additional $200 million to $300 million in the fourth quarter.

Edmund J. Reese: And let me put this into context for you.

Edmund J. Reese: While we are still early.

Edmund J. Reese: In this current fiscal 'twenty for the fiscal 'twenty, six three year cycle or capital allocation, that's unfolding right in line with our expectations.

Edmund J. Reese: Our capital allocation is unfolding right in line with our expectations. As I said on investor day, we are in a strong capital position, on track to generate approximately $3 billion of free cash flow with another $1 billion available at our 2.5x leverage objective. After the dividend, we are off to a strong start. Balancing Investment for Growth with Capital Return to Shareholders, which we expect to reach $700 to $800 million this year, and we remain well positioned to execute accretive tuck-in M&A.

Edmund J. Reese: As I said at Investor Day, we are in a strong capital position on track to generate approximately 3 billion of free cash flow with another billion available at our two five times leverage objective.

Edmund J. Reese: After the dividend we are off to a strong start.

Edmund J. Reese: Balancing investment for growth with capital return to shareholders.

Edmund J. Reese: Which we expect to reach $700 million to $800 million this year.

Edmund J. Reese: And we remain well positioned to execute accretive tuck in M&A.

Edmund J. Reese: We expect that this balanced capital allocation will increase ROYC to a mid to high teens level over the next three years, turning the guidance on slide 16. We will continue to execute the Broadridge Financial Model in Fiscal 2021.

Edmund J. Reese: We expect that this balanced capital allocation will increase rois seats up mid to high teens level over the next three years.

Edmund J. Reese: Turning to guidance on slide 16.

Edmund J. Reese: We continue to execute the Broadridge financial model in fiscal 'twenty four.

Edmund J. Reese: We've got two months left in high visibility in fiscal 24 position growth. We expect recurring revenue growth, constant currency, to be approximately 6% for the full year at the low end of our guidance range. We continue to expect AOI margin expansion to approximately 20%, adjusted EPS growth at the middle of our 8-12% range, and closed sales of $280-$320 million. And I'll also note that we remain on track to drop 100% free cash flow conversion and have a capital return of $700 to $800 million through dividends and share repurchases in fiscal 2024. To bring all of this together, and highlight what it means to our financial objectives, I will conclude by emphasizing what I said earlier. First...

Edmund J. Reese: With two months left and high visibility in the fiscal 'twenty four position growth, we expect recurring revenue growth constant currency to be approximately 6% for the full year at the low end of our guidance range.

Edmund J. Reese: We continue to expect a O Y margin expansion to approximately 20% adjusted EPS growth at the middle of our 8% to 12% range and closed sales of $280 million to $320 million.

Edmund J. Reese: And I'll also note that we remain on track to drop 100% free cash flow conversion and half capital return of $700 million to $800 million through dividends and share repurchases in fiscal 2024.

Edmund J. Reese: To bring all of this together.

Edmund J. Reese: The highlight what it means to our financial objectives.

Edmund J. Reese: Ill conclude by emphasizing what I said earlier.

Edmund J. Reese: First the.

Edmund J. Reese: Results through the third quarter and the visibility into the fourth quarter give us confidence in delivering a fiscal 2024 in line with our guidance, marking a strong start to the fiscal 24 to 26 three-year cycle. We have positive momentum, including strong sales demand and growing investor participation, actions we are taking to create investment capacity and sustain our steady and consistent growth. Additionally, we have the capital capacity for accretive tuck-in M&A to supplement our organic growth. These two items. Fiscal Year 24 performance and Positive Forward Momentum. Transcript by Transcription Outsourcing, LLC. And with that, let's take your questions. Andrea.

Edmund J. Reese: The results through the third quarter and the visibility into the fourth quarter give us confidence in delivering our fiscal 2024 in line with our guidance, marking a strong start to the fiscal 24 to 26 three year cycle.

Edmund J. Reese: Second.

Andrea: We have positive momentum in our business.

Edmund J. Reese: Including strong sales demand growing investor participation.

Andrea: The actions, we are taking to create investment capacity and sustain our steady and consistent growth.

Edmund J. Reese: Additionally, we have the capital capacity for accretive tuck in M&A to supplement our organic growth.

Andrea: Finally, those two items.

Edmund J. Reese: Fiscal year 'twenty for performance and positive forward momentum.

Speaker Change: <unk> to deliver on our three year financial objective.

Edmund J. Reese: With that let's take your questions Andrea.

Operator: We will now begin the question and answer session. To ask a question, you may press star, then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star, then 2. At this time, we will pause momentarily to assemble the roster. And our first question comes from David Togut of Evercore ISI. Please go ahead.

Speaker Change: We will now begin the question and answer session.

David Mark Togut: Ask a question you May press Star then one on your telephone keypad.

David Mark Togut: If you are using a speakerphone please pick up your handset before pressing the keys.

Operator: To withdraw your question. Please press Star then two.

David Mark Togut: At this time, we will pause momentarily to assemble the roster.

Operator: Okay.

David Mark Togut: And our first question comes from David <unk> of Evercore ISI. Please go ahead.

David Mark Togut: Good morning. I'll ask my question in the follow-up, both up front. So first, given the solid early demand for ops GPT and bond GBT, where do you see the biggest opportunity to increase?

David Mark Togut: Thank you good morning, I'll ask my question and a follow up both upfront. So first given the solid early demand for op CPT and bond GBT, where do you see the biggest opportunity to increase Gen AI related product development.

David Mark Togut: And then the follow up since you would deleverage the balance sheet now we're a few years post the <unk> acquisition, where do you see the greatest white space.

David Mark Togut: Fear acquisition opportunities.

Timothy C. Gokey: David, thank you very much. It's Tim. And, and thank you for the question on AI. It's an area that we are pretty excited about, as you know, and, you know, we have talked about being a leader in AI.

David Mark Togut: David Thank you very much as Tim and and thank you for the question on AR and AI is scenario that we are we're pretty excited about as you know and you know we have talked about being leader in AI in our space at we've talked about how we're bringing that.

Tim: To really into all of our products, we think in the future every product will be part I will have AI as part of it and then to introduce introduce commercial commercial products as well and use it for internal efficiency.

Timothy C. Gokey: We think of the future.

Timothy C. Gokey: And do all that in a safe way.

Timothy C. Gokey: We are really pleased by the progress of OpsGPT and BondGPT. With OpsGPT, we're in production with our first client, and we're actively engaged with another five. With BondGPT, we have three proofs of concept underway, eight additional discussions. So there's lots of good activity around those. We're also doing things on the asset management side with our global demand model, where we have six of the largest 50 asset managers already

Timothy C. Gokey: We are really pleased by the progress of op CPT and bond GPT.

Timothy C. Gokey: Without CPT you know we're in production.

Timothy C. Gokey: With with our first client and we're actively engaged with out with another five.

Timothy C. Gokey: Bond GPT, our three proof of concept underway.

Timothy C. Gokey: Additional discussion so there are lots of good activity around those we're also doing things in the asset management side with a global demand model, where we have six of the largest 50 asset managers already signed up and an additional 10 to the largest 100 in contracting. So I think people are really attracted to these to these use case.

Timothy C. Gokey: When we see sort of the biggest areas going forward I think it's it's really deepening in these.

Timothy C. Gokey: sort of unique areas where it really makes sense for us to be the one to invest. It doesn't make sense for others to invest in the sort of, you know, depths of capital markets or in some of these more arcane areas in asset management. And we think there's a real opportunity for us there. And we're excited about how it's going to affect things in the fixed income world. You know, when you think about this in the future, it's really,

Timothy C. Gokey: It's sort of unique areas that where it really makes sense for us to be the one to invest it doesn't make sense for others to invest in the sort of depth.

Timothy C. Gokey: Depths of capital markets or in some of these marketing areas.

Timothy C. Gokey: In asset management, and we think there's real opportunity for us there.

Timothy C. Gokey: We're excited about how it's going to drive things in the fixed income world.

Timothy C. Gokey: When you think about this in the future its really there.

Timothy C. Gokey: There will be a commodity part of it, where it's part of just having a good product, and then there will be a more exclusive part of it, where if you have proprietary data, you can really leverage something and create something unique, and we think there are definitely areas where we have proprietary data. So we continue to be excited about AI. It'll be a while for it to sort of begin to show in the economics, but we are beginning to be excited about it. I think on the M&A side, let me just turn to that. I think that's a, you know, really important, important question.

Timothy C. Gokey: There'll be a commodity part of it where it's part of just having a good product and then there'll be a more exclusive part of it where if you have proprietary data you can really leverage something and create something unique and we think there are definitely areas, where where we have proprietary data. So we continue to be continue to be excited about AI it'll be a while for it to sort of begin to show in the economics.

Timothy C. Gokey: But that will begin to be excited about it.

Timothy C. Gokey: I think on the M&A side, let me just turn to that I think that's a.

Speaker Change: Really important important question David as you know our growth is primary primarily organic and we have a long runway for that with the 60 billion market opportunity and as you know our three year objective for M&A is sort of one to two points.

Timothy C. Gokey: And David, as you know, our growth is primarily organic, and we have a long runway for that with the $60 billion market opportunity. And you know, as you know, our three-year objective for M&A is sort of one to two points. And, you know, we've been on this sort of pause post-BTCF acquisition, but now, as you pointed out, having reached our leverage and our free cash flow conversion goals, we do have flexibility to invest. And, you know, in past calls, I have been cautious about buyers and sellers coming together on price.

Timothy C. Gokey: That's the and and we've been on this sort of pause.

Timothy C. Gokey: B Tcs acquisition.

Timothy C. Gokey: But now as you point out having reached our leverage and our free cash flow conversion goals, we do have flexibility to to invest.

Timothy C. Gokey: And.

Timothy C. Gokey: In past calls I have been cautious about how buyers and sellers coming together on price.

Timothy C. Gokey: And, and I do think now looking at the market that that logjam is beginning to break up; we are beginning to see more tuck-in opportunities that have the potential to meet both our strategic and financial criteria. And, you know, as you know, we always look for opportunities that are tightly aligned with our strategy, where we're the right owner. And, you know, that's an IRR sort of in the really attractive mid to high teens, well in excess of our cost of capital.

Timothy C. Gokey: And I do think now looking at the market that that logjam is beginning to break up.

Timothy C. Gokey: We are beginning to see more tuck in opportunities that have the potential to meet both our strategic and financial criteria.

Timothy C. Gokey: And as you know, we always look for opportunities are tightly aligned with our strategy, where we're the right owner.

Timothy C. Gokey: And.

Timothy C. Gokey: That's that's IRR sort of in that and that really attractive that mid to high teens well in excess of our cost of capital. So we do think that there will be opportunities this year.

Timothy C. Gokey: So we do think that there will be opportunities this year. We think there will be opportunities when you look across, you know, the areas that we do cover. Wealth management has some very interesting things going on. Data and analytics also have some very interesting things going on. You know, we're beginning to see all the PE firms, really, really polishing up their properties to make them look attractive to strategists like ourselves. And so we think there will be a stream of opportunities.

Timothy C. Gokey: We think there'll be opportunities when you look across the areas that we do well.

Timothy C. Gokey: Wealth management has some some very interesting things going on data and analytics has some very interesting things going on and we're beginning to see all of the P firms you know really.

Timothy C. Gokey: Polishing up their properties too to make to look attractive to strategics like ourselves and so we think there'll be a stream of opportunities will be very very selective.

Timothy C. Gokey: We'll be very, very selective. If you see us do something, you'll know that we're doing it because it's very attractive and we'll, and there are enough opportunities out there that we can be very disciplined in doing things that, you know, we think will have very good returns for shareholders.

Timothy C. Gokey: He has to do something.

Timothy C. Gokey: You'll know that we're doing it because it's very attractive and will.

Timothy C. Gokey: And enough opportunities out there that we can be very disciplined in doing things that we think will have very good returns for shareholders.

Edmund J. Reese: Yeah, and I'll just add, Tim, the opportunities are out there. David, you know, we have two months left in this fiscal year, which is why I highlight the fact that the majority of our capital will be allocated towards share repurchases this fiscal year. But, as I said a number of times in my prepared remarks, we're in a really, really strong position. Because of the point that you made on being at the right leverage ratio and the capital we're generating through our free cash flow, and as Tim said, there are very attractive opportunities out there as we go into our next fiscal year, and I think we'll be in a great capital position to be able to supplement our organic growth through M

Timothy C. Gokey: And I'll just add to them the opportunities are out there David we have two months left in this fiscal year, which is why I highlight the fact that the majority of our capital will be allocated towards share repurchases in this fiscal year, but as I said a number of times in my prepared remarks, we're in a really really strong position.

Edmund J. Reese: Because of the point that you made.

Edmund J. Reese: On being at the right leverage ratio and the capital we're generating through our free cash flow. So as Tim said, there are very attractive opportunities out there as we go into our next fiscal year and I think we'll be in a great capital position to be able to.

Edmund J. Reese: To be able to supplement our organic growth with M&A.

David Mark Togut: I understand. Thanks so much, Tim and Edmund.

Unknown Speaker: Unknown Speaker Thank you.

Speaker Change: Understood. Thanks, so much Tim and Edmond.

Operator: The next question comes from Will Vue of Wolf Research. Please go ahead.

Speaker Change: The next question comes from will view of Wolfe Research. Please go ahead.

Will Vue: Hey guys, thanks for taking my questions. This is Will on behalf of Darrin here.

William Vu: Hey, guys. Thanks for taking my questions. This is will on for Darrin here I had two related to some of the bookings trends first and foremost.

William Vu: You guys in the past I've talked about.

William Vu: Some of the underlying bookings being more being less transformative and I was curious as to if you guys can comment on some of the more recent characteristics within your pipeline you're seeing any.

William Vu: Deal sizes, expanding or any of that.

William Vu: And then my second question being you know as we look on the wealth management side kind of curious how what opportunities are really resonating with some of your prospective customers that youre seeing on the sand.

Will Vue: I had two related to some of the booking trends. First and foremost, you guys in the past have talked about some of the underlying bookings being more or less transformative. And I was curious as to, you know, if you guys can comment on some of the more recent characteristics within your pipeline. Are you seeing any, you know, deal sizes expanding or any of that? And then my second question is, you know, as we look on the wealth management side, kind of curious how

Speaker Change: Well. Thanks, it's it's Tim I'll I'll I'll take those I think on a on the booking trends we are.

Will Vue: I do think that the.

Will Vue: Main thrust continues to be hot.

Will Vue: Lots of.

Will Vue: And if they say exactly bite size opportunities, but you know very manageable size opportunities and.

Will Vue: So we do have some that are you know.

Will Vue: Call it more than $5 million, but we don't have any of these sort of mega things that will take take many years to implement so we really feel good about sort of that flow that we're seeing.

Will Vue: We are seeing areas and in the areas of demand and you know I've mentioned this a little bit in the script, but we're seeing it around things that will drive revenue.

Will Vue: Certainly on the <unk> side.

Will Vue: Certainly around advisor tools.

Will Vue: Securities Class action and other things that really drive revenue nicely.

Will Vue: We're saying things that drive cost lots of activity around print to digital and of course regulatory with Atwood tailored shareholder report so all areas that really align with the investments that we've been making and so that really makes us feel feel good about the return on investments that we're going to see.

Will Vue: And I think that that really you know you sort of second part of the question was about wealth management.

Will Vue: And.

Will Vue: I think that is just emblematic of.

Will Vue: Getting return on areas, where we've made significant investments as you know very attractive market, we've talked about the $16 billion market, how it's growing.

Will Vue: And you know.

Will Vue: We're getting really good traction with a whole series of of component sales. Our sales were up 75% for the year. Our current pipeline is over is over $200 million and when you say sort of what opportunities. There are people looking are looking for I think that you know.

Will Vue: It's a combination of you know.

Will Vue: Each has sort of a different specific pain point and and wanted to address it.

Will Vue: But at the same time, they're looking to so to say to say how do I begin to put in place a digital roadmap and sort of a north star that they can build to over time. So I think the the open API framework. The enterprise integration service layer all of those things in terms of how we can bring things together.

Will Vue: Together, they really like that as a vision. Meanwhile, they tend to say, let me start with an existing pinpoint like tax like client onboarding like corporate actions and things that are very tangible.

Will Vue: And so we have great conversations going on both at.

Will Vue: Both here in the U S. But also lots of good conversations in Canada. So we feel really good about the outlook there.

Speaker Change: That's great. Thanks.

Timothy C. Gokey: Well, thanks. It's, it's Tim. I'll take those.

Will Vue: The next question comes from Patrick O'shaughnessy of Raymond James. Please go ahead.

Timothy C. Gokey: I think on the booking trends, we are I do think that the main thrust continues to be lots of... I don't want to say exactly bite-sized opportunities, but very manageable-sized opportunities. So we do have some that are, call them, more than 5 million, but we don't have any of these sort of mega things that will take many years to implement.

Tim: Hey, good morning, guys.

Timothy C. Gokey: When you kind of think about the factors that are driving 6% recurring revenue growth this fiscal year as compared to the high end of your range is 9%.

Timothy C. Gokey: What are the factors that are kind of resulting in revenue to come in towards the lower end of the range and then how does that inform your outlook for next year, yes.

Timothy C. Gokey: So we really feel good about sort of that flow that we're seeing. We are seeing areas of demand, and I mentioned this a little bit in the script, but we're seeing it around things that will drive revenue, certainly on the BTCS side, certainly around advisor tools, securities class actions, other things that really drive revenue nicely. We're seeing things that drive cost, lots of activity around print to digital, and, of course, regulatory with tailored shareholder reports.

Timothy C. Gokey: Yes.

Timothy C. Gokey: Good morning, Patrick Thanks for that question I did want an opportunity to dive deeper into that so thanks for the question. We are tracking to your 0.6% at the low end of what I would highlight is our strong organic recurring revenue range and there are two items that are really impacting that first I would say is position growth you know.

Timothy C. Gokey: So all areas that really align with the investments that we've been making, and so that really makes us feel good about the return on the investments that we're going to see. And I think that, you know, your sort of second part of the question was about wealth management.

Timothy C. Gokey: Our outlook was mid to high single digit position growth and you just heard both Tim and I talk about 6% equity position growth and fund growth at about 3% for the full year. So that's one thing relative to the outlook that we had the second as you know a strong component of our recurring revenue growth is converting sales to.

Timothy C. Gokey: And there I would highlight lower revenue in our customer communications business, but again you heard me talk about starting to see that tick up in the fourth quarter as we onboard new clients. So I think the key point for me is that we do have positive momentum going into fiscal 'twenty, five and 26 with sales which <unk>.

Timothy C. Gokey: And I think that is just emblematic of getting return on areas where we've made significant investments. As you know, this is a very attractive market. We've talked about the $16 billion market, how it's growing. And we're getting really good traction with a whole series of component sales. Our sales are up 75% for the year. Our current pipeline is over $200 million.

Timothy C. Gokey: You know, they each have sort of a different specific pain point and want to address it. But at the same time, they're looking to sort of say, "How do I begin to put in place a digital roadmap and sort of a north star that we can build on over time?" So I think the open API framework, the enterprise integration service layer, all of those things in terms of how we can bring things together, they really like that as a vision.

Timothy C. Gokey: Meanwhile, they tend to say, "Let me start with an existing pain point, like tax, like client onboarding, like corporate actions, some things that are very tangible." And so we have great conversations going on both here in the US, but also lots of good conversations in Canada. So we feel really good about the outlook there.

Operator: The next question comes from Patrick O'Shagasy of Raymond James. Please go ahead.

Timothy C. Gokey: <unk> next year revenue.

Patrick O'Shagasy: Estimated to be up 15% to 30% and position growth starting to tick up I I was very deliberate about mentioning Q1, 'twenty five testing data showing mid single digit at this point I think that's a good trend because as we know it normally ticks up so look delivering 6% in fiscal 'twenty, four and momentum going into <unk>.

Patrick O'Shagasy: Hey, good morning, guys. When you kind of think about the factors that are driving 6% recurring revenue growth this fiscal year as compared to the high end of your range, it's 9%. What are the factors that are kind of resulting in revenue coming in towards?

Patrick O'Shagasy: 25, I think has us in a pretty good place relative to the three year objectives. The second part of your question is like would it be about it's all focused on the go forward and what it means for the outlook for me as you know I like to put that in terms of our three year objectives and as I. Just mentioned, we have great line of sight.

Patrick O'Shagasy: Into fiscal year, 'twenty, four and I would say that's a strong start on the three year cycle and I'll just remind you we're coming off a year of 7% recurring revenue growth and 9% adjusted EPS growth and now sort of on track to deliver approximately 6% and 10% respectively and so those numbers are right in line.

Edmund J. Reese: Good morning, Patrick. Thanks for that question. I did want an opportunity to dive deeper into that, so thanks for the question. We are tracking, to your point, 6% at the low end of what I would highlight is a strong organic recurring revenue range, and there are two things that are really impacting that. First, I would say position growth. You know that our outlook was for mid- to high-single-digit position growth, and you just heard both Tim and I talk about 6% equity position growth and fund growth at about 3% for the full year.

Edmund J. Reese: So that's one thing relative to the outlook that we had. The second, as you know, a strong component of our recurring revenue growth is converting sales to revenue, and there I'd highlight lower revenue in our customer communications business, but again, you heard me talk about starting to see that tick up in the fourth quarter as we onboard new clients. So I think the key point for me is that we do have positive momentum going in fiscal 25 and 26 with sales, which impacts next year's revenue estimated to be up 15% to 30%, and position growth starting to tick up. I was very deliberate about mentioning Q125 testing data showing mid-single-digit growth at this point.

Edmund J. Reese: I think that's a good trend because, as we know, it normally ticks up. So, look, delivering 6% in fiscal 24 and momentum going in fiscal 25, I think, has us in a pretty good place relative to the three-year objectives. The second part of your question is, like, what that means.

Edmund J. Reese: With our guidance right in line with the growth algorithm as we think about the long term objective and I just talked about the drivers of growth being stable and the momentum that we have moving forward. So we feel good about where we are relative to the three year objectives and is our usual practice, we'll come back and talk more specifically about 25 in a more robust way.

Edmund J. Reese: It's all focused on the future and what it means for the outlook. And for me, as you know, I like to put that in terms of our three-year objectives. And as I just mentioned, we have a great line of sight into fiscal year 24, and I would say that's a strong start on the three-year cycle. And I'll just remind you, we're coming off a year of 7% recurring revenue growth and 9% adjusted EPS growth, and now sort of on track to deliver approximately 6% and 10%, respectively.

Edmund J. Reese: And so those numbers are right in line with our guidance, right in line with the growth algorithm as we think about the long-term objective. And I just talked about the drivers of growth being stable and the momentum that we have moving forward. So we feel good about where we are relative to the three-year objectives. And, as usual, we'll come back and talk more specifically about 25 in a more robust way on our Q4 call.

Edmund J. Reese: On our Q4 call.

Patrick O'Shagasy: I appreciate that. A quick follow-up. Just to make sure I understand your commentary on timing and shareholder meetings getting pushed into April from March. So that would show up in the regulatory revenues line and the issuer revenues line, but no impact on data driven fund solutions or customer communications. Am I understanding that correctly? That's primarily right. You're very astute at picking it up.

Speaker Change: Yes, I appreciate that.

Speaker Change: A quick follow up.

Patrick O'Shagasy: Just to make sure I understand your commentary on timing and shareholder meetings is getting pushed into April from March So that would show up in the regulatory revenues lines and the issuer revenues line, but no impact to data driven fund solutions or customer communications am I understanding that correctly.

Edmund J. Reese: That's primarily right. You're very astute in picking it up. Those are the two areas that we called out, so you'll see them in both of those businesses, in the registered shareholder solutions and issuer businesses, and then, obviously, in the regulatory business. All right, perfect. Thank you.

Patrick O'Shagasy: That's primarily right you're very astute in picking it up those are the two areas that we called out so youll see it in both of those businesses and the registered shareholder solutions, an issuer and then obviously the regulatory business.

Edmund J. Reese: Alright, perfect. Thank you.

Edmund J. Reese: Yeah.

Operator: Once again, if you would like to ask a question, please press star, then 1. There are no further questions at this time. I'd like to turn the call over.

Edmund J. Reese: Once again, if you would like to ask a question. Please press Star then one.

Operator: Yeah.

Operator: Okay.

Operator: Yeah.

Operator: Yeah.

Operator: Yeah.

Speaker Change: There are no further questions at this time I'd like to turn the call over to management for any closing remarks.

Timothy C. Gokey: Thank you very much, Andrea. Thank you to everyone on the call. Thank you for your interest in Broadridge. As I said earlier, we are now well into our seasonally largest quarter. We're looking to delivering full year results, as Edmund just said, of 6% recurring revenue growth and double-digit EPS growth. That's going to mark a strong start to our three-year objectives, and we will look forward to seeing you in August.

Speaker Change: Thank you very much Andrea Thank you to everyone on the call. Thank you for your interest in and Broadridge.

Timothy C. Gokey: As I said earlier, we are now well into our seasonally largest quarter.

Timothy C. Gokey: We're looking to delivering full year results as Ed just said of 6% recurring revenue growth.

Timothy C. Gokey: Double digit EPS growth that's.

Timothy C. Gokey: Mark a strong start to our three year objectives, and we will look forward to seeing you in August.

Operator: The conference is now concluded. Thank you for attending today's presentation, and you may now disconnect.

Speaker Change: The conference has now concluded. Thank you for attending today's presentation and you may now disconnect.

Operator: [music].

Operator: Okay.

Operator: [music].

Operator: Yeah.

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