Q1 2025 Broadridge Financial Solutions Inc Earnings Call

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Unknown Attendee: Good day, and welcome to the Broadridge Fiscal First Quarter 2025 Earnings Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal conference specialists by pressing the star key, followed by zero.

Good day and welcome to the Broadridge fiscal first quarter 2025 earnings conference call. All participants will be in a listen only mode. So do you need assistance. Please signal a conference specialist by pressing the Starkey followed by zero.

Unknown Attendee: After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your touch tone phone, and to withdraw your question, please press star, then two. Please note this event is being recorded.

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

To ask a question you May Press Star then one on your Touchtone phone and talk to all your question. Please press Star then two please note. This event is being recorded I would now like to turn the conference over to Mr. Eddings Tivo head of Investor Relations. Please go ahead Sir.

Eddings Thibault: I would now like to turn the conference over to Mr. Eddings Thibault, Head of Investor Relations. Please go ahead, sir.

Unknown Attendee: Thank you, Chuck.

Eddings Tivo: Thank you Chuck.

Eddings Thibault: Good morning, everybody. And welcome to Broadridge's first quarter fiscal year 2025 earnings call. Our earnings release and the slides that accompany this call may be found on the investor relations section of broadridge.com. Joining me on the call this morning are Tim Gokey, our CEO, and our interim CFO, Ashima Ghei.

Eddings Tivo: Morning, everybody and welcome to Broadridge as first quarter fiscal year 2025 earnings call.

Mr. Eddings: Our earnings release and slides to accompany this call may be found on the Investor Relations section Broadridge Dot com.

Mr. Eddings: Joining me on the call. This morning are Tim Gokey, our CEO and our interim CFO I should make a bid.

Eddings Thibault: Before I turn the call over to Tim, a few standard reminders. 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 in a more complete description on our annual report on Form 10-K. Two, 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 the comparable GAAP measures can be found in the earnings release and the presentation.

Before I turn the call over to Tim a few standard reminders, 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, two will also be referring to several non-GAAP measures, which we.

Mr. Eddings: Please provide investors a more complete understanding of Broadridge is underlying operating results and explanation of these non-GAAP measures and reconciliations to the comparable GAAP measures can be found in the earnings release and the presentation.

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

Let me now turn the call over to Tim Gokey, Tim Thank.

Timothy Gokey: Thank you, Eddie, and good morning. I'm pleased to be here with you today to discuss our first quarter results.

Tim Gokey: Thank you Eddie and good morning.

Tim Gokey: I am pleased to be here with you today to discuss our first quarter results.

Timothy Gokey: I want to thank you all for joining, especially on Election Day. which reminds us all of the incredible privilege and power of voting. Stepping back, global financial markets remain robust, and the demand for what we do remains healthy. driven by long-term trends, including the democratization of investment. Digitization of Communications, Acceleration of Trading. growing importance of AI and the data that powers it, and ever-present regulatory change. At the same time, uncertainty remains high given the U.S. election and other geopolitical events.

Tim Gokey: Thank you all for joining especially on election day.

Which reminds us all of the incredible privilege empower our votes.

Tim Gokey: Okay.

Tim Gokey: Stepping back global financial markets remain robust and the demand for what we do remains healthy.

Tim Gokey: Driven by long term trends, including the democratization of investing.

Digitization of communications celebration of fading.

Tim Gokey: Growing importance of AI and the data that powers it ever present regulatory challenge.

Tim Gokey: At the same time uncertainty remains high given the U S election, and other geopolitical events.

Timothy Gokey: It's an environment in which the Broadridge business model stands out and I'm pleased to report that we are very much on track to deliver another strong Consistent top and bottom line growth powered by a strong backlog of revenue from sales, continued healthy position growth, and resilient trading volume. So let's dive into the headlines. First, Broadridge reported solid first quarter results. After absorbing the impact of the E-Trade deconversion, recurring revenue grew 4% in constant currency, driven by our governance and capital markets franchise. Adjusted EPS was $1 as we cycled through the E-Trade Impact and lower event-driven revenues for the quarter.

Tim Gokey: It's an environment in which the Broadridge business model stands out.

Tim Gokey: And I'm pleased to report that we are very much on track to deliver another strong year with consistent top and bottom line growth powered by a strong backlog of revenue from sales.

Tim Gokey: <unk> healthy position growth.

And resilient trading volumes.

Tim Gokey: So let's dive into the headlines.

Tim Gokey: First Broadridge reported solid first quarter results.

Tim Gokey: After absorbing the impact of the E trade deconversion recurring revenue grew 4% in constant currency, driven by our governance and capital markets franchises.

Tim Gokey: Adjusted EPS was one dollar as we cycled through the E trade impact and lower event driven revenues for the quarter.

Timothy Gokey: Second, we continue to execute on our strategy to enable our clients to democratize and digitize investing, simplify and innovate trading and modernize wealth. That execution is driving our results in the form of continued product innovation, a growing pipeline, and strong sales. Third, we're strengthening our business with targeted investment. including the acquisition of SAS, which closed last week. SIS will grow our Canadian business and accelerate our ability to bring wealth innovation to that market.

Tim Gokey: Second we continue to execute on our strategy to enable our clients are democratizing digitize investing.

Tim Gokey: So finding a great trading and modernize wealth management.

Tim Gokey: That execution is driving our results in the forum.

Tim Gokey: New product innovation.

Tim Gokey: Growing pipeline.

Tim Gokey: And strong sales.

Tim Gokey: Third we're strengthening our business with targeted investments, including the acquisition of SaaS, which closed last week.

Tim Gokey: As we grow our Canadian business and accelerate our ability to bring wealth innovation to that market.

Timothy Gokey: Fourth, as I said a moment ago, Broadridge is on track to deliver strong full year results. We're raising our Fiscal 25 recurring revenue guidance to 6-8%, reflecting our recently completed acquisition of SIS and strong organic growth over the balance We're also reaffirming our guidance for just EPS growth and strong closed sales.

Tim Gokey: Fourth as I said, a moment ago.

Tim Gokey: Broadridge is on track to deliver strong full year results.

Tim Gokey: We're raising our fiscal 'twenty five recurring revenue guidance to 6% to 8%, reflecting our recently completed acquisition of S. I S and strong organic growth over the balance of the year.

Tim Gokey: We're also reaffirming our guidance for adjusted EPS growth and strong closed sales.

Timothy Gokey: and we are on track to achieve our three-year financial To sum up, our business is performing well. So let's dive into that performance on slide.

Tim Gokey: And we are on track to achieve our three year financial objectives.

Tim Gokey: To sum up our business is performing well.

Tim Gokey: So let's dive into that performance on slide four.

Timothy Gokey: I'll start with our government. where we continue to drive democratization and digitization. Deliver innovation and help our clients adapt to regulatory change. ICS recurring revenues rose 5% in constant currency, driven by strong revenue from sales and continued growth in investor participation. Looking across our product lines, we reported strong growth in data-driven fund solutions and issuers. Investor participation continues to drive healthy position growth. Equity record growth for companies whose meeting was processed during the quarter was 3%. Our fiscal first quarter is our seasonally smallest quarter, and it's more impacted by the mix of companies hosting their annual meetings, which this quarter included fewer large-cap growth companies.

Tim Gokey: I'll start with our governance business, where we continue to drive democratization of Digitization.

Tim Gokey: Innovation.

Tim Gokey: And help our clients adapt to regulatory change.

Tim Gokey: Ics recurring revenues rose, 5% constant currency driven by strong revenue from sales and continued growth in investor participation.

Tim Gokey: Looking across our product lines, we reported strong growth in data driven fund solutions and issuer solutions.

Tim Gokey: Investor participation continues to drive healthy position growth.

Tim Gokey: Equity with equity record growth for companies, whose meeting was processed during the quarter was 3%.

Tim Gokey: Our fiscal first quarter is our seasonally smallest quarter and it's more impacted by the mix of companies hosting an annual meetings, which this quarter included fewer large cap growth companies.

Timothy Gokey: Underlying Trends, including Double-Digit Growth and Managed Accounts, remain for the past and we continue to see mid to high single digit growth overall for the first half. and as Ashima will share with you, for the seasonally larger second half. Fund and ETF position growth, which is less seasonal, was 6% in the first quarter. Underlying fund position growth trends remain stable, with continued strong growth in passive fund positions and double-digit growth in money market fund positions. With the Fed having cut rates late in the quarter, it's too soon to assess whether lower rates will drive positive funding.

Tim Gokey: Underlying trends, including double digit growth in managed accounts remained robust.

Tim Gokey: And we continue to see mid to high single digit growth overall for the first half.

Speaker Change: And as <unk> shared with you.

Tim Gokey: Seasonally larger second half.

Tim Gokey: [noise] fund ETF position growth, which is less seasonal with 6% in the first quarter.

Tim Gokey: Underlying fund position growth trends remained stable with continued strong growth in passive fund physicians double digit growth in money market fund positions.

Tim Gokey: With the fed having cut rates late in the quarter, it's too soon to assess whether lower base will drive positive fund position growth.

Timothy Gokey: New sales were the biggest driver of our governance revenue growth, which reflects our focus on driving innovation and enabling clients to adapt to regulatory change. During the quarter, we onboarded hundreds of fund clients onto our new tailored shareholder reporting. helping them communicate more effectively with their clients. That success is not only contributing to our revenue growth. It's driving growing interest in our digital composition capability. We also introduced our new governance client experience during the quarter, giving our broker clients a single dashboard to monitor their critical communications across proxies, fund documents, and other communications. This new cloud-based experience leveraged the investments we made in our wealth platform, highlighting the broader benefits we are seeing from that investment across Broadridge.

Tim Gokey: New sales were the biggest driver of our governance revenue growth.

Tim Gokey: Our focus on driving innovation and enabling clients to adapt to regulatory change.

Tim Gokey: During the quarter, we on boarded hundreds of fund clients onto our new tailored shareholder reporting solution.

Tim Gokey: Helping them communicate more effectively with their clients.

Tim Gokey: That success is not only contributing to our revenue growth is.

Tim Gokey: It is driving growing interest in our digital composition capabilities.

Tim Gokey: We also introduced a new governance client experienced during the quarter.

Tim Gokey: Our broker clients a single dashboard to monitor their critical communications across proxies on documents and other communications.

Tim Gokey: This new cloud based experience leveraging the investments we've made in our wealth platform highlighting the broader benefits, we're seeing from that investment across broadridge.

Timothy Gokey: A key factor in the success of our governance and communications business has been our ability to drive the digitization of investor and customer communications. At last year's Investor Day, we highlighted our Wealth in Focus platform, which transforms the full spectrum of wealth client communications by creating personal, interactive digital communications combined with streamlined physical statements for those that so choose. We're now lapping the first full year of client And as we scale up the volume of communications, the impact on client engagement rates has been even better than in our initial trial. We're seeing open rates 20% higher and click-through rates more than five times that of standard That's up from the initial numbers we shared with you last year, which means an even better experience for investors.

Tim Gokey: A key factor in the success of our governance and communications business has been our ability to drive the digitization of investor and customer communications.

Tim Gokey: At last year's Investor Day, we highlighted our wealth and focused platform, which transforms the full spectrum of wealth client communications by creating personal interactive digital communications combined with streamline physical statements for doses so choose.

Tim Gokey: We're now lapping the first full year client implementations and.

Tim Gokey: And as we scale up the volume of communications impact on client engagement rates have been even better than in our initial trials.

Tim Gokey: We're seeing open rates, 20% higher and click through rates within five times that of standard communications.

Tim Gokey: That's up from the initial numbers, we shared with you last year, which means an even better experience for investors.

Timothy Gokey: Turning to Capital Markets, where we are simplifying and innovating trading. Recurring Revenues, Group 5. Driven by new sales and higher trading volumes. Since the end of the summer, markets have been driven by the interplay of growth and inflation, as I'm sure you can all attest. That uncertainty has driven higher fixed income trading volumes. Periods of intense volatility highlight the scalability, flexibility, and reliability of our post-trade technology as markets react to sudden change. We're also continuing to deliver innovative solutions, again by leveraging the data management investments we made as part of our wealth platform. Our new Tradeverse solution enables trading firms to bring together and harmonize multi-asset class trade data throughout the trade lifecycle.

Tim Gokey: Turning to capital markets, where we are simplifying and innovating trading recurring revenues grew 5% driven by new sales and higher trading volumes.

Tim Gokey: Since the end of the summer markets have been driven by the interplay of growth and inflation as I'm sure you can all attest.

Tim Gokey: That uncertainty has driven higher fixed income trading volumes.

Tim Gokey: Periods of intense volatility highlights the scalability flexibility and reliability of our post trade technology as markets react to sudden change.

Tim Gokey: We're also continuing to deliver innovative solutions again by leveraging the database management investments, we made as part of our wealth platform.

Tim Gokey: Our new trade versus solution enables trading firms to bring together and harmonize multi asset class trade data throughout the trade lifecycle.

Timothy Gokey: Improving data quality and accessibility will enable clients to reduce errors and unlock insights across the front, middle, and back office. to further simplify their operation. We're also helping clients adapt to regulatory changes in both the EU and the U.S. with a new resilience solution for a global post-trade platform and by adapting our distributed ledger capabilities to make it easier for firms to meet centralized clearing requirements for U.S. Treasury.

Tim Gokey: Improving data quality and accessibility will enable clients to reduce errors and unlock insights across the front middle and back office and further simplify their operations.

Tim Gokey: We're also helping clients adapt to regulatory changes in both the EU and the U S with a new resilient solution for a global post trade platform and by adapting our distributed ledger capabilities to make it easier for firms to meet centralized clearing requirements for U S. Treasury.

Timothy Gokey: Turning now to Wealth and Investment Management, recurring revenue declined 4% as the deconversion of E-Trade offset healthier 6% underlying growth. The onboarding of new sales remained the key driver of that growth, which is why I'm pleased to see a strong pipeline of new opportunities across both the U.S. and Canada. This pipeline includes component solutions as well as broader opportunities with larger well-being. We continue to see strong interest in solutions that drive operational efficiency. and or client and advisor.

Tim Gokey: Turning now to wealth and investment management.

Tim Gokey: <unk> revenue declined 4% as the deconversion of E trade offset healthier 6% underlying growth.

Tim Gokey: The Onboarding of new sales remained the key driver of background, which is why I am pleased to see a strong pipeline of new opportunities across both the U S and Canada.

Tim Gokey: This pipeline includes components solutions as well as broader opportunities with larger wealth managers.

Tim Gokey: We continued to see strong interest in solutions that drive operational efficiency, and our client and advisor engagement.

Timothy Gokey: Last week, we closed an approximately $185 million acquisition of Kindle's SISP. further expand our wealth business in Canada. Over the years, we've built a strong Canadian technology business providing core back office functions, including clearing and settlement, serving many of the largest banks, broker dealers, and wealth managers in Canada. More recently, we've expanded for retail bank distribution as well, and in addition, a suite of component solutions that enrich the advisor and investor experience. The acquisition of SAS gives us additional attractive clients. It also gives more opportunity for the broader set of wealth components that we're bringing to all our Canadian clients through a common integration layer, APIs, and component-based approach to drive productivity for advisors.

Tim Gokey: Last week, we closed on approximately $185 million acquisition of <unk> S. I S business to further expand our wealth business in Canada.

Tim Gokey: Over the years, we've built a strong Canadian technology business, providing core back office functions, including clearing and settlement serving many of the largest banks broker dealers and wealth managers in Canada.

Tim Gokey: More recently, we've expanded retail bank distribution as well.

Tim Gokey: And in addition, I see a component solutions that enrich the adviser and investor experience.

Tim Gokey: The acquisition of SaaS gives us additional attractive clients.

Tim Gokey: It also gives more opportunity for the broader set of wealth components that we're bringing to all our Canadian clients through a common integration layer api's and component based approach to drive productivity for advisors enhance investors' experience and streamline operations.

Timothy Gokey: Unknown Attendee, Puneet Jain, William Vu, Ashima Ghei, Broadridge Financial Solutions Inc. Unknown Attendee, Puneet Jain, William Vu, Ashima Ghei, Broadridge Financial Solutions A great example is a multi-year transformation we're doing for a large Canadian bank. We're working with them to create a unified, one bank experience by linking their wealth and investment accounts to their retail banking clients. We recently completed the transition of more than a million accounts as part of this implementation, creating a simplified and enhanced end-user experience and a more efficient and streamlined set of internal processes for the bank.

Tim Gokey: A great example is a multiyear transformation, we're doing for large Canadian bank.

Tim Gokey: We're working with them to create a unified one bank experienced by linking their wealth and investment accounts to the retail banking clients.

Tim Gokey: We recently completed the transition of more than 1 million accounts as part of this implementation, creating a simplified and enhanced and user experience and a more efficient and streamlined set of internal processes for the bank.

Timothy Gokey: We're excited about the potential to bring more of that innovation to an even larger set of Canadian financial services firms. I'll wrap up my review of our business with closed sales. Broadridge recorded a first quarter record $57 million in closed sales. That performance is even more impressive given our 4th quarter Fiscal 24 results and it underscores the breadth of our products and how our solutions are helping our clients grow and drive a During the quarter, we saw strong demand for custom communications and class action services and governance, and for selecting components in capital markets and wealth.

Tim Gokey: We're excited about the potential to bring more of that innovation to an even larger set of Canadian financial services firms.

Tim Gokey: I'll wrap up my review of our business with closed sales.

Tim Gokey: <unk> recorded a first quarter record $57 million and close sales.

Tim Gokey: That performance is even more impressive given our fourth quarter and fiscal 'twenty for results and it underscores the breadth of our products and how our solutions are helping our clients grow and drive efficiency.

Tim Gokey: During the quarter, we saw strong demand for communications and class action services and governance.

Tim Gokey: For selecting components and capital markets and wealth.

Timothy Gokey: I was excited to see another sale of our distributed ledger repo solution to a major bank, which is a great example of how our innovation is driving sales. Most importantly, our pipeline of new sales opportunities remains strong.

Tim Gokey: I was excited to see another sale of our distributed ledger repo solution to a major bank, which is a great example of how our innovation is driving sales.

Tim Gokey: Most importantly, our pipeline of new sales opportunities remains strong.

Timothy Gokey: I'll close with some summary callouts on slide 5. First, we deliver a solid first quarter result. Second, Broadridge is executing on our long term growth plan. We're helping our clients address the growing number of new investors. to drive digitization and to adapt to regulatory change.

Tim Gokey: I'll close with some salary callouts on slide five.

Tim Gokey: First we delivered solid first quarter results.

Tim Gokey: Second Broadridge is executing on our long term growth plan.

Tim Gokey: We're helping our clients address the growing number of new investors.

Tim Gokey: To drive Digitization and to adapt to regulatory change.

Timothy Gokey: Delivering Innovation for Capital Markets Clients and Expanding Our Wealth Management. Third, our plans are anchored in long-term trends that are driving the financial services industry, including the democratization and digitization of investing, the acceleration of trading, the growing importance of AI and the data that powers it, and the need to adapt to an ever-evolving regulatory environment. That long-term focus has enabled Broadridge to become a trusted and increasingly transformative partner for our clients. creating significant value for our shareholders. We have driven steady and sustainable top and bottom line financial results through the ups and downs of financial markets.

Tim Gokey: Delivering innovation for capital markets clients, and expanding our wealth management business.

Tim Gokey: Third our plans are anchored in long term trends that are driving the financial services industry, including the democratization and digitization of investing the acceleration of trading there.

Tim Gokey: The growing importance of AI and the data that powers, it and the need to adapt to an ever evolving regulatory environment.

Tim Gokey: That long term focus has enabled broadridge to become a trusted and increasingly transformative partner for our clients.

Tim Gokey: Creating significant value for our shareholders.

Tim Gokey: We have driven steady and sustainable top and bottom line financial results.

Tim Gokey: Due to the ups and downs of financial markets.

Timothy Gokey: and to administrations of both parties.

Tim Gokey: And two administrations of both parties.

Timothy Gokey: Fourth, our execution has us on track to deliver another year of strong and sustainable results in fiscal 25, including 6-8% recurring revenue growth, constant currency, and 8-12% adjusted EPS growth. and longer term, we remain on track to achieve the three-year financial objectives we laid out at our last investor... which will mark the fifth three-year cycle in which we've delivered on our goal.

Tim Gokey: Fourth our execution has us on track to deliver another year of strong and sustainable results and fiscal 'twenty, five, including 6% to 8% recurring revenue growth constant currency.

Tim Gokey: 8% to 12% adjusted EPS growth.

Tim Gokey: And longer term, we remain on track to achieve the three year financial objectives, we laid out at our last Investor day, which will mark the fifth three year cycle in which you have delivered on our goal.

Timothy Gokey: Before I turn it over to Ashima, I want to thank the 15,000 Broadridge Associates around the world. do hard work. focus on serving our clients. and success in bringing innovation to our industry is what powers our growth. Thank you.

Tim Gokey: Before I turn it over to Ashley I want to thank the 15000 Broadridge associates around the world.

Tim Gokey: Their hard work.

Tim Gokey: Focus on serving our clients.

Tim Gokey: Success in bringing innovation to our industry is what powers our growth.

Tim Gokey: Thank you.

Ashima Ghei: Now I'll turn it over to Ashima. Ashima?

Tim Gokey: And now I'll turn it over to Ashok Ashok.

Ashima Ghei: Thank you, Tim.

Ashima Ghei: Good morning, everyone. I'll begin my discussion this morning with four key call-outs. First... Broadridge delivered solid first quarter results. Recurring revenue growth, constant currency of 4% included a 170 basis point headwind from the E-Trade deconversion. That impact will subside in the second quarter, and we expect organic recurring revenue growth to strengthen over the balance of the year. Second. Our key revenue growth drivers remain strong. Close sales rose 21% over a very healthy Q125. and our forward position growth testing, which now includes the second half of the year, continues to support our mid to high single-digit outlook.

Ashok: Thank you Tim good morning, everyone.

Ashok: I'll begin my discussion this morning with four key callouts.

Ashok: First broadridge delivered solid first quarter results.

Ashok: Recurring revenue growth constant currency of 4%, including a 170 basis point headwind from the E train deconversion.

Ashok: That impact will subside in the second quarter.

Ashok: We expect organic recurring revenue growth to strengthen over the balance of D. A.

Ashok: Second.

Ashok: Key revenue growth drivers remain strong.

Ashok: Sales rose, 21% over a very healthy Q1 24.

Tim Gokey: In a forward position grow testing, which now includes the second half of the year.

Tim Gokey: Stimulus to support a mid to high single digit outlook.

Ashima Ghei: Third, we are raising our recurring revenue growth outlook for the year to 6-8% from 5-7%. Our increased guidance reflects both the acquisition of SIS, which closed on November 1st, and is expected to add one point to our growth. And strengthening organic growth for the balance of the year, as I noted earlier, we expect organic recurring revenue growth of 6 to 7 percent over the next three quarters, driven by our $450 million sales backlog, mid-to-high single-digit position growth, and the lapping of the E-Trade deconversion. Fourth, as a result, we continue to expect to deliver strong fiscal year 25 results.

Tim Gokey: Could we are raising our recurring revenue growth outlook for the year.

Tim Gokey: 262, 8% from 5% to 7%.

Tim Gokey: Our increased guidance reflects both the acquisition of S. I S, which closed on November five.

Tim Gokey: And is expected to add one point to outgrow it.

Tim Gokey: Strengthening organic growth for the balance of the AR as I noted earlier we.

Tim Gokey: We expect organic recurring revenue growth of 6%, 7% over the next three quarters, driven by a $450 million sales backlog mid to high single digit position growth.

Tim Gokey: And the lapping of the E trade deconversion.

Tim Gokey: As a result, we continue to expect to deliver strong fiscal year 2005 results.

Ashima Ghei: including 50 basis points plus of underlying core margin expansion, 8 to 12% adjusted EPS growth. and $290 to $330 million of closed sales.

Tim Gokey: Including 50 basis points plus of underlying core margin expansion.

Tim Gokey: 12% adjusted EPS growth.

Tim Gokey: So 90 330 million of closed sales.

Ashima Ghei: With that, let's get to the numbers on slide six. Recurring revenues rose 4% on a constant currency basis, virtually all organic. Adjusted operating income decreased 7% driven by lower event driven and the impact of the E-Trade deconversion. AY margins were 13% and adjusted EPS was $1 per share, both modestly above our expectations, driven by timing of investment spend. Finally, as Tim noted, we delivered close sales of $57 million, up 21% from last year.

Tim Gokey: With that let's get to the numbers on slide six.

Tim Gokey: Recurring revenues rose, 4% on a constant currency basis virtually all organic.

Tim Gokey: Adjusted operating income decreased 7% driven by lower event, driven and the impact of the EJ deconversion.

Tim Gokey: Eli margins were 13% and adjusted EPS was the daughter Bushehr book modestly above our expectations driven by timing of investment spend.

Speaker Change: Finally, as Jim noted, we delivered closed sales of 57 million up 21% from last year.

Ashima Ghei: Let's move to slide 7. Recurring revenue grew 4% to $900 million. Our growth was driven by a strong contribution from new sales, partially offset by lower growth in wealth and investment management.

Tim Gokey: Let's move to slide seven.

Tim Gokey: Recurring revenue grew 4% to 900 million.

Tim Gokey: Our growth was driven by a strong contribution from new sales, partially offset by lower growth in wealth and investment management.

Ashima Ghei: Let's turn to slide 8 to look at the growth across our ICS and GTO segments. ICS recurring revenues rose 5% to $493 million. Regulatory revenues rose 6%, driven by fund position growth of 6%. As a reminder, equity proxy revenues are not a meaningful driver of revenue growth in the first quarter, given the seasonally low volume level. Data-driven fund solutions revenue increased 6%, driven by growth in our retirement and workplace solutions and our data and analytics products. M&A contributed one point to fund solution growth. Issuer revenue also grew 8%, led by strong growth in our shareholder engagement solutions.

Tim Gokey: Let's turn to slide eight to look at the growth across Ics and GTO segments.

Tim Gokey: I see it's regarding revenues rose, 5% to $493 million.

Tim Gokey: Regulatory revenues rose, 6% driven by fund position growth of 6%.

Tim Gokey: As a reminder, equity proxy revenues are not a meaningful driver of revenue growth in the first quarter, given the seasonally low volume levels.

Tim Gokey: Data driven fund solutions revenue increased 6% driven by growth in our retirement and workplace solutions.

Tim Gokey: And our data and analytics products.

Tim Gokey: M&A contributed one point to find solution growth.

Tim Gokey: Issuer revenue also grew 8% led by strong growth in our shareholder engagement solutions.

Ashima Ghei: And customer communications revenue growth was 3% as we continue to benefit from onboarding new clients. Looking ahead, we continue to expect ICS recurring revenues to grow in line with our 6-8% recurring revenue growth outlook. Driven by revenue from new sales and mid to high single-digit position growth.

Tim Gokey: And customer communications revenue growth was 3% as we continued to benefit from Onboarding new clients.

Tim Gokey: Looking ahead, we continue to expect Ics recurring revenues to grow in line with our 6% to 8% recurring revenue growth outlook.

Tim Gokey: By revenue from new sales and mid to high single digit position growth.

Ashima Ghei: Turning to GTO, revenues rose 2% to $407 million. Capital Markets revenues grew 5%. Driven by the growth of our global post-trade capability. which benefited from higher fixed income trading volumes as well as our BTCS front office solutions. Lower license revenues were a modest headwind. Wealth and investment management revenues declined 4% as we continue to cycle through the impact of the E-Trade deconversion. Excluding that impact, revenues rose 6%, powered by growth of our back-office capabilities, as well as our component solutions. The E-Trade deconversion impact is expected to decline from the 10 point impact in Q1 to a 4 to 6 point headwind in the second quarter, which will be the last quarter with any impact.

Tim Gokey: Turning to GTO.

Tim Gokey: News rose, 2% to $407 million.

Tim Gokey: Capital markets revenues grew 5% driven.

Tim Gokey: Driven by the growth of our global post trade capabilities.

Tim Gokey: Which benefited from higher fixed income trading volume as well as our Bdcs front office solution.

Tim Gokey: Lower license revenues were a modest headwind.

Tim Gokey: Wealth and investment management revenues declined 4% as we continue to cycle through the impact of the EJ deconversion.

Tim Gokey: Excluding that impact revenues rose 6%.

Tim Gokey: Powered by growth of our back office capabilities as well as our component solutions.

Tim Gokey: The E trade deconversion impact is expected to decline from the 10 point impact in Q1 due a four to six point headwind in the second quarter.

Tim Gokey: Which will be the last quarter with any impact.

Ashima Ghei: As Tim noted... Close the acquisition of SIS on November 1 and expect to record SIS revenues in our Wealth and Investment Management product line. Including the benefit from SIS, we now expect overall GTO revenue growth at the high end of our 6-8% recurring revenue growth output. including low double-digit growth in wealth and investment management.

Speaker Change: As Jim noted.

Speaker Change: We closed the acquisition of S. I S on November five.

Speaker Change: And expect to record SaaS revenues in our wealth and investment management product line.

Speaker Change: Including the benefit from S. I S. We now expect overall GTO revenue growth at the high end of our 6% to 8% recurring revenue growth outlook.

Speaker Change: Including low double digit growth in wealth and investment management.

Ashima Ghei: Next, let's turn to slide nine to look at to take a look at our key volume indicators. Broadridge continues to benefit from the secular growth in investor participation across both equities and funds. Equity position growth was 3% driven by managed accounts and in line with our testing at the end of fiscal 2020. First quarter equity position growth was impacted by the mix of companies hosting their annual meetings. This is not unusual, given the much smaller number of proxies processed in the quarter. For context, first quarter volumes accounted for only 6% of the annual total in Fiscal 24.

Speaker Change: Next let's turn to slide nine to look it did take a look at our key volume indicators.

Tim Gokey: Broadridge continues to benefit from the secular growth and investor participation across both equities and funds.

Tim Gokey: Equity position growth was 3% driven by managed accounts and in line with our testing at the end of fiscal 'twenty four.

Tim Gokey: First quarter equity position growth was impacted by the mix of companies hosting that annual meetings.

Tim Gokey: This is not unusual given the much smaller number of proxies processed in the quarter.

Tim Gokey: For context first quarter volumes accounted for only 6% of the annual total in fiscal 'twenty four.

Ashima Ghei: It's important to call out that we expect first half position growth will be firmly in the mid to high single-digit range, in line with our prior test. And looking further ahead, our forward testing is showing continued mid to high single-digit position growth during the more meaningful second half of the year as well. Mutual fund and ETF position growth was 6% and our current testing is indicating continued mid-single digit growth. Turning to trade volumes on the bottom of the slide, trade volumes rose 10% on a blended basis, led by double-digit growth in fixed income volume.

Tim Gokey: It's important to call out that we expect first half position growth.

Tim Gokey: Would it be firmly in the mid to high single digit range in line with our prior testing.

Tim Gokey: And looking further ahead on.

Tim Gokey: Forward testing is showing continued mid to high single digit position growth during the more meaningful second half of the year as well.

Tim Gokey: Mutual fund and ETF position growth was 6% and our current testing is indicating continued mid single digit growth.

Tim Gokey: Turning to trade volumes on the bottom of the slide trade volumes rose, 10% on a blended basis led by double digit growth in fixed income volume.

Ashima Ghei: I'll wrap up my discussion of recurring revenue growth on slide 10. Revenue from closed sales remains the biggest driver of our recurring revenue growth at six points. as we onboard revenues from our 450 million backlog. that growth was partially offset by four points of loss. including the deconversion of E-Trade, which accounted for almost half of our overall loss. Internal growth contributed one point, primarily driven by fund position growth and higher trading volume. which more than offset lower 30E3 regulatory fee revenue. As a result, organic revenue growth was 3%. Rounding out the recurring revenue growth drivers, the two tuck-in acquisitions we made in May and July contributed 20 basis points.

Tim Gokey: I'll wrap up my discussion of regarding revenue growth on slide 10.

Tim Gokey: Revenue from closed sales remains the biggest driver of our recurring revenue growth at six points.

Tim Gokey: As we onboard revenues from our 450 million backlog.

Tim Gokey: That growth was partially offset by four points of losses.

Tim Gokey: <unk>, the deconversion of E trade, which accounted for almost half of our overall losses.

Tim Gokey: Internal growth contributed one point, primarily driven by fund position growth and higher trading volume.

Tim Gokey: Which more than offset lower <unk> III regulatory fee revenues.

Tim Gokey: As a result organic revenue growth was 3%.

Tim Gokey: Rounding out the recurring revenue growth drivers the two tuck in acquisitions, we made in May and July contributed 20 basis points.

Ashima Ghei: I'll also remind you that the acquisition of SIS did not close until November, so it did not contribute to our first quarter goal. And changes in effects reduced our reported growth by 20 basis points. With the recent weakening of the dollar, we now forecast FX to be a modest positive for growth over the balance of the year.

Tim Gokey: I'd also remind you that the acquisition of Fas did not close until November so it did not contribute to our first quarter growth.

Tim Gokey: And changes in effect reduced our reported growth by 20 basis points.

Tim Gokey: With the recent weakening of the dollar we now forecast FX to be a modest positive for growth over the balance of the year.

Tim Gokey: Okay.

Ashima Ghei: Let's close our discussions of revenues on slide 11. Total revenue was flat at $1.4 billion, as two points of growth from recurring revenue were offset by a decline in event-driven revenue and modestly lower distribution revenue. Event Driven Revenues were $63 million. in line with our 7-year quarterly average and $27 million lower than an unusually high Q1 2021. Looking ahead, we continue to expect full-year event-driven revenue to be at the high end of our historical level. Driven in part by a major mutual fund proxy campaign, which is expected to occur in the second quarter. Low to no margin distribution revenues declined 3%.

Tim Gokey: Let's close our discussions with revenues on slide 11.

Tim Gokey: Total revenue was flat at $1 4 billion are still points of growth from recurring revenue were offset by a decline in event driven revenue.

Tim Gokey: Modestly lower distribution revenue.

Tim Gokey: Event, driven revenues were 63 million.

Tim Gokey: In line with a seven year quarterly average and 27 million lower than the unusually high Q1 24.

Tim Gokey: Looking ahead, we continue to expect full year event driven revenue to be at the high end of our historical levels.

Tim Gokey: Given in part by a major mutual fund proxy campaign, which is expected to occur in the second quarter.

Tim Gokey: Low to no margin distribution revenues declined 3%.

Ashima Ghei: Representing a one-point headwind to total revenue growth. The impact of higher postal rates was more than offset by a decline in mail volumes linked to our event-driven activities. We now expect distribution revenue growth to be in the mid- to high-single-digit range for Fiscal 25, driven by higher postal rates and customer communication print volumes.

Tim Gokey: Presenting a one point headwind to total revenue growth.

Tim Gokey: The impact of higher postal rates was more than offset by a decline in mail volumes linked to our event driven activities.

Tim Gokey: We now expect distribution revenue growth to be in the mid to high single digit range for fiscal 'twenty, five driven by higher postal rates and customer communication print volumes.

Ashima Ghei: Turning now to margins on slide 12. Adjusted Operating Income Margin was 13%, a decline of 90 basis points from Q1-24. This was driven by the decline in event-driven revenues, the E-Trade deconversion, and ongoing green bust. Together, these factors more than offset the operating leverage we generated from higher recurring revenues and the benefits of our fourth quarter restructuring initiative. The Net Impact of Changes in Float Income and Distribution Revenue. reduced AOI margins by approximately 30 basis points in the quarter. For the year, we remain on track to generate 50 basis points plus of underlying core margin expansion.

Tim Gokey: Turning now to margins on slide 12.

Tim Gokey: Adjusted operating income margin was 13% a.

Tim Gokey: A decline of 90 basis points from Q1 24.

Tim Gokey: This was driven by the decline in event driven revenues the E trade deconversion and ongoing reinvestment.

Tim Gokey: Together these factors more than offset the operating leverage we generated from higher recurring revenues and the benefits of a fourth quarter restructuring initiative.

Tim Gokey: The net impact of changes in float income and distribution revenues reduced NOI margins by approximately 30 basis points in the quarter.

Tim Gokey: For the year, we remain on track to generate 50 basis points plus of underlying core margin expansion.

Ashima Ghei: Let's move on to sales. Closed sales were $57 million. Up 10 million or 21% from Q1 20. Driven by strong demand for our governance solutions. Closed sales are the biggest driver of our long term. So I'm encouraged by a strong start to Fiscal 25, especially coming off our record Fiscal 24 sale.

Tim Gokey: Let's move on to sales.

Tim Gokey: Closed sales were $57 million.

Tim Gokey: Up $10 million or 21% from Q1 'twenty for.

Tim Gokey: Driven by strong demand for our governance solutions.

Tim Gokey: Closed sales are the biggest driver of our long term growth. So I'm encouraged by our strong start to fiscal 'twenty, five, especially coming off a record fiscal 'twenty for sales.

Ashima Ghei: Turning to our cash flows, I'll start with a reminder that Broadridge's cash flow generation is typically negative in the fiscal first quarter and strengthens throughout the year. Q125 free cash flow was negative $158 million, a decrease from negative $76 million in Q124. The decline was driven by an increase in cash taxes and severance payments related to our fourth quarter 24 restructuring initiative, as well as lower net income. We continue to expect free cash flow conversion of 95 to 105% in Fiscal 25.

Tim Gokey: Turning to our cash flows.

Tim Gokey: Start with a reminder, that Broadridge is cash flow generation is typically negative in the fiscal first quarter and strengthened throughout the year.

Tim Gokey: Q1, 'twenty five free cash flow was negative 158 million a decrease from negative 76 million in Q1 'twenty four the decline was driven by an increase in cash taxes and severance payments related to our fourth quarter 'twenty four restructuring initiative as well as lower net income.

Tim Gokey: We continue to expect free cash flow conversion of 95% to 105% in fiscal 'twenty five.

Ashima Ghei: Turning next to capital allocation on slide 15. During the quarter, we invested $32 million in capital spending and software, and returned $93 million to shareholders in our quarterly dividends. We also have made two tuck-in M&A investments. The first was Compsci to strengthen our issuer business, which closed on July 1st. And then we also closed the acquisition of SIS on November 1st for approximately 185 million U.S. We remain committed to balanced capital allocation. The combination of our quarterly dividend payments and the acquisition of SIS is expected to absorb approximately $600 million of our cash, giving us ample capacity to fund additional tuck-in M&A and or repurchase additional shares over the balance of the year.

Tim Gokey: Turning next to capital allocation on slide 15.

Tim Gokey: During the quarter, we invested 32 million in capital spending and software.

Tim Gokey: And returned $93 million to shareholders in our quarterly dividend.

Tim Gokey: We also have made two tuck in M&A investments the first Wisconsin site to standardize issuer business, which closed on July 1st and then we also closed the acquisition of Fas on November.

Tim Gokey: For approximately 185 million USD.

Tim Gokey: We remain committed to balanced capital allocation.

Tim Gokey: The combination of our quarterly dividend payments and the acquisition of SaaS is expected to absorb approximately 600 million of our cash.

Tim Gokey: Giving us ample capacity to fund additional tuck in M&A and repurchase additional shares over the balance of the year.

Ashima Ghei: Let's start to wrap by reviewing our Outlook for Fiscal 25 on page 16. As I said in the beginning of my remarks, Broadridge is on track to deliver strong Fiscal 25 results. We are raising our recurring revenue guidance to 6-8% from 5-7% and our guidance now incorporates the impact of the SIS acquisition. We continue to expect adjusted operating income margin of approximately 20%, adjusted EPS growth of 8-12%, and closed sales of between $290-330 million. Additionally, we expect 27% to 28% of our earnings to be generated in the first half of the year, in line with our performance over the last 10 years.

Tim Gokey: Let's talk to wrap up by reviewing our outlook for fiscal 'twenty five on page 16.

Tim Gokey: As I said in the beginning of my remarks, Broadridge is on track to deliver a strong fiscal 'twenty five results.

Tim Gokey: We are raising our recurring revenue guidance to 6% to 8% from 5% to 7% and our guidance now incorporates the impact of DSI its acquisition.

Tim Gokey: We continue to expect adjusted operating income margin of approximately 20%.

Tim Gokey: Adjusted EPS growth of 8% to 12% and closed sales of between $2 $90 million to $330 million.

Tim Gokey: Additionally, we expect 27% to 28% of our earnings to be generated in the first half of the year in line with our performance over the last 10 years.

Ashima Ghei: Finally, let me summarize my key messages. Broadridge delivered solid Q1 financial results. The demand and secular trends driving our growth remain strong, and our testing is showing continued mid-to-high single-digit equity. and Mid-Single-Digit Fund Position Growth for the year. We are on track to deliver strong fiscal 25 results. We are raising a recurring revenue growth guidance. to reflect the benefit from the acquisition of SIS. and reaffirming our adjusted EPS and sales guidance. Highlighting the strength of our business and financial model.

Tim Gokey: Finally, let me summarize my key messages.

Tim Gokey: Broadridge delivered solid Q1 financial results.

Tim Gokey: The demand and secular trends driving our growth remained strong and our testing is showing continued mid to high single digit equity.

Tim Gokey: And mid single digit fund position growth for the year.

Tim Gokey: Last we are on track to deliver strong fiscal 'twenty five results.

Tim Gokey: We are raising our recurring revenue growth guidance to reflect the benefit from the acquisition of S. I S.

Tim Gokey: And reaffirming on adjusted EPS and sales guidance.

Tim Gokey: Highlighting the strength of our business and financial model.

Unknown Attendee: With that, Let's take your questions.

Tim Gokey: With that.

Speaker Change: Let's take your questions Chuck.

Unknown Attendee: Ciao.

Unknown Attendee: We will now begin the question and answer session. To ask a question, you may press star, then 1 on your touchtone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed, and you would like to withdraw your question, please press star, then 2.

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

Tim Gokey: To ask a question you May Press Star then one on your Touchtone phone.

Tim Gokey: If you're using a speakerphone please pick up your handset before pressing the keys.

Tim Gokey: Anytime your question has been addressed and you would like to withdraw your question. Please press Star then two and at this time, we'll pause momentarily to assemble our roster.

Unknown Attendee: And at this time, we'll pause momentarily to assemble our roster.

Daniel Perlin: And the first question will come from Dan Perlin with RBC Capital. Please go ahead.

Speaker Change: And the first question will come from Dan Perlin with RBC capital. Please go ahead.

Unknown Attendee: Thanks, good morning. I just wanted to revisit the guidance there for a second. I think it's pretty clear on the raising of the recurring numbers around the acquisition and then eTrades, you know, I guess Headwind kind of abating, but not raising the EPS again kind of suggests that the incremental margins associated with what's being brought on are lower or there's something else that's offsetting it.

Speaker Change: Thanks, Good morning.

Dan Perlin: I wanted to revisit the guidance there for a second.

Dan Perlin: I think it's pretty clear on the raising of the recurring numbers around the acquisition.

Dan Perlin: And then he trades.

Tim Gokey: I guess headwind kind of abating, but not raising the EPS again kind of suggest that the incremental margins associated with whats being brought on their lower or there's something else. That's offsetting it and I think you mentioned a couple but maybe if you could talk about some of those puts and takes to kind of reconcile why.

Unknown Attendee: I think you mentioned a couple, but maybe if you could talk about some of those puts and takes to kind of reconcile why we'd get a top-line raise but not something else in earnings. Thank you. Sure.

Tim Gokey: We'd get the topline raised but not not somebody else's earnings. Thank you.

Unknown Attendee: I'll take that, Dan. Thanks for your question. Happy to provide some color on the guidance. You're absolutely right. We're raising our recurring revenue growth guidance to 6 to 8%, right, like you pointed out. It reflects the acquisition of SIS, and it also reflects our additional comfort and confidence sitting where we are at the end of Q1, given the sales activity, given the position growth. that we're specifically now targeting 6-7% organic growth over the balance of the year. We are also feeling good about our event activity. Having said that, we think about high level, high margin event activity as a means to create investment capacity.

Tim Gokey: Sure.

Speaker Change: I'll take that Dan Thanks for your question.

Speaker Change: Happy to provide some color on the guidance you are absolutely right. We are raising our recurring revenue growth guidance to 6% to 8% right like you pointed out it reflects the acquisition of S. I S.

Tim Gokey: And it also reflects an additional comfort and confidence sitting where we are at the end of Q1 and given the sales activity given the position growth.

Speaker Change: Where specifically now targeting 6% to 7% organic growth over the balance of the.

Speaker Change: We are also feeling good about that event activity, having said that we think about.

Tim Gokey: High level of high margin event activity.

Tim Gokey: As a means to create investment capacity so.

Unknown Attendee: So what we're really targeting is in line with our guidance, eight to 12% EPS growth. and seeking the opportunity to reinvest for further growth opportunities. And I would just add to that, you know, I think the obviously a key part of the rise is the SIS acquisition. And in the first year, we expect that to be neutral to EPS. So it's really the other factors that Ashima was talking about in terms of the reinvestment on event, and feeling good about organic really leaves us right in that same range.

Tim Gokey: What we're really targeting is inline with our guidance, 8% to 12% EPS growth.

Tim Gokey: And seeking the opportunity to reinvest for further growth opportunities.

Tim Gokey: Panned out I would just add to that no I think the obviously a key part of the rise is the sys acquisition.

Tim Gokey: And in the first year, we expect that to be neutral to EPS. So it's.

Tim Gokey: It's really that the other factors that actually I was talking about in terms of the reinvestment on event and feeling good about organic really leaves us right in that same range.

Speaker Change: Got it that's great. Thank you just a quick follow up on M&A and your appetite here I mean, you have done a couple of deals relatively small tuck ins you clearly have a lot more capacity.

Tim Gokey: In the past couple of quarters.

Tim Gokey: Can you kind of alluded to maybe the environment getting a little bit better.

Tim Gokey: In terms of maybe the.

Tim Gokey: Prices and opportunities that you see out in the market that pipeline getting bigger so just as we sit here today I'm just curious where you are thinking you might Wanna play some incremental dollars. If you. Thank you.

Timothy Gokey: Yeah, thanks, Dan. You know, just starting with the principles that you you well know, which is we're an organic growth company, you know, our growth is primarily there. And we have a long runway given given the addressable market we have. But M&A has been an attractive way to meet the needs of our meet needs of clients. And, and over three years, we're expecting sort of one to two points contribution to recurring revenue from from M&A. If you look at where the market is right now, first of all, we're excited that we've been able to make some compelling purchases, including SIS, and certainly we're seeing many PEs bringing things to market.

Speaker Change: Yeah. Thanks, Dan.

Speaker Change: Starting with the principles that you you will know, which is where Atlantic growth company or <unk>.

Tim Gokey: This is primarily there and we have a long runway given given the addressable market we have.

Tim Gokey: But M&A has been an attractive way to meet the needs of our our meet needs of clients.

Tim Gokey: And in over three years, we're expecting sort of one to two points contribution to recurring revenue from some M&A.

Tim Gokey: If you look at where the market is right now first of all we're excited that we've been able to make some compelling purchases, including SaaS and certainly we're seeing many P. He's bringing things to market, we're tracking a pretty strong pipeline of opportunities and I think as always.

Timothy Gokey: We're tracking a pretty strong pipeline of opportunities, and I think, as always, the art is in finding those deals that meet a combination of our financial criteria and where we think we are really the right or the best owner, and that's obviously all in the context of a balanced capital allocation, mid- to high-teams, ROIC. So we're definitely looking at things. We're definitely... keeping that financial framework in mind. And so if you do see us execute, it will be because we see something that we think is compelling. And if we don't see the right opportunities, we remain very comfortable with repurchasing Broadridge shares.

Tim Gokey: Art is in finding those deals that meet <unk>.

Tim Gokey: Combination of our financial criteria.

Tim Gokey: And where we think we are really the right or the best owner and that's obviously all in the context of a balanced capital allocation mid to high teens ROIC.

Tim Gokey: So we're definitely looking at things.

Tim Gokey: We're definitely.

Tim Gokey: Keeping that financial framework in mind, and so if you do see us execute it will be because we see something that we think is compelling.

Tim Gokey: And if we don't see the right opportunities, we remain very comfortable with repurchasing broadridge shares.

Unknown Attendee: That's great.

Speaker Change: That's great. Thank you.

James Faucette: The next question will come from James Faucette with Morgan Stanley. Please go ahead.

Speaker Change: The next question will come from James <unk> with Morgan Stanley. Please go ahead.

Unknown Attendee: Great. Thank you for those clarifications on the outlook, etc.

Speaker Change: Great. Thank you for the clarification on the outlook et cetera wanted to touch really quickly on on digital and then some developments in the market generally.

James Faucette: I wanted to touch really quickly on digital and then some developments in the market generally. You know, you've got digital revenue growing double digits in fiscal year 24, and digital revenue on average is converting faster and the better onboarding efficacy you referred to last call. But I was surprised to see customer communications growth in the quarter consistent with fiscal fourth quarter. What's the driver there? And is there still a line of sight to that business accelerating to mid single digit or even high single digit growth in this coming fiscal year?

James: No you've got digital revenue growing double digits in fiscal year, 'twenty, four and digital reveal one however, it is converting faster and a better onboarding advocacy you referred to US coal was surprised to see customer communications broken leg quarter consistent with.

Speaker Change: Fiscal fourth quarter, what's the driver there and and is there still a line of sight to that business accelerating to mid single digit or even high single digit growth in this coming fiscal year.

Unknown Attendee: Unknown Attendee Yeah, James, thanks very much for that question. It's a good one. And I do want to reiterate that we really do see our BRCC revenues on track to pick up from the FY 24 levels in the remainder of the year. And really, that is driven by new sales, and it's driven by growth in digital. We had a quite significant sale in the fourth quarter, that was called Center of Excellence, but it's a full lift out of all of the print and digital capabilities of a significant financial services provider. That revenue was onboarded late in the first quarter, so it didn't really impact the first quarter, but it will impact the rest of the year.

Speaker Change: Yes, James Thanks, very much for that question. It's a good one and I do want to reiterate that we really do see our <unk> revenues on track to pick up from the FY 'twenty four levels are in the remainder of the year and really that is driven by new sales and it's driven by growth and digital.

Speaker Change: We had a.

Speaker Change: Quite significant sale in the fourth quarter that was call center of excellence that is a it's a full lift out of all of the print and digital capabilities of significant financial services provider that revenue was on boarded late in the first quarter. So it didn't really impact the first quarter, but it will impact the rest of the year and it really shows the value.

Unknown Attendee: And it really shows the value proposition of that print to digital conversion. Also, you know, we talked, I mentioned the script around wealth and focus, which we featured on Investor Day last year, generating very positive feedback and pipeline. So we're pretty confident in the outlook for higher growth over the balance of 25, driven by that onboarding of recent sales wins, which, as I say, are already onboard. So we feel pretty confident in mid to high single digit growth in BRCC for the full year. Got it. Appreciate that.

Speaker Change: Proposition of that print to digital conversion.

Speaker Change: Also we talked I've mentioned in the script around wealth and focus which we featured at our Investor day last year generating very positive feedback and pipeline. So we're pretty confident in the outlook for higher growth over the balance of 25% driven by that Onboarding of recent sales wins, which as you know as I say are already onboard.

Speaker Change: So we feel pretty confident in.

Speaker Change: Mid to high single digit growth in B R. C C for the full year.

Speaker Change: Got it appreciate that and then just more on a high level one.

James Faucette: And then just more on a high level and longer term question. We saw an article during the quarter with one of the heads of international post trade, which Effectively from it, at least I took that there, while it's not really an acute issue right now, he was starting to see T plus one lead to increased costs for brokers, particularly as it relates to securities, lending and FX.

Speaker Change: Longer term question.

Speaker Change: We saw an article during the quarter with one of the heads of international posts rated which.

Speaker Change: Effectively format at least I took that there while it's not really an acute issue right now he was starting to see T. Plus one lead to increased costs for brokers, particularly as it relates to securities lending and FX.

Unknown Attendee: What is Broadridge or how is Broadridge helping to mitigate this dynamic and what are some of the takeaways the industry is focused on before that rollout in Europe and the rest of the world? Yeah, James, very, very interesting question. And, you know, it's, it's, it's, it's interesting, because I think there's a bit of a dichotomy here between the US and Europe. The T plus one implementation went very smoothly here in the US. The fail rates and straight-through processing rates and same-day confirmation rates all went up quite a bit, and I think people were expecting there to be some issues, and there weren't.

Speaker Change: What is broad routes or how it broadridge is helping to mitigate this dynamic and what are some of the takeaways.

Speaker Change: <unk> is focused on before that rollout in Europe, and the rest of the world.

Speaker Change: Yeah, James at very.

Speaker Change: Very interesting question and.

Speaker Change: You know, it's it's it's it's interesting because I think there's a bit of a dichotomy here between the U S and Europe the T plus one implementation.

Speaker Change: It went very smoothly here in the U S D.

Speaker Change: Uh huh.

Speaker Change: Fill rates and straight through processing rates and same day confirmation rates all went up quite a bit and I think people were expecting there to be some issues and there weren't.

Unknown Attendee: Now, Europe has yet to do T plus one, and they're looking at, you know, when to do that, and but what they're seeing is, you know, just some of the tension between it's T plus one in the U.S., it's not in Europe, and, you know, how is that causing sort of disconnect in some of those ancillary services? And it's being papered over at this point with people, and and so I think, you know, we are hearing the same thing, that that's causing some challenges for people.

Speaker Change: Now Europe is yet to do T plus one and Theyre looking at you know when to do that.

Speaker Change: But what they're seeing is.

Speaker Change: Just some of the tension between C plus one in the U S is not in Europe, and how is that causing sort of disconnect in some of those ancillary services.

Speaker Change: And it's being papered over at this point with people.

Speaker Change: And so I think you know we are hearing the same thing that that's causing some challenges for people I think in terms of how we can help it's a little bit of a question of how quickly they'll move to T plus one and sort of eliminate that that disparity in the dates between here and there and you know in the meantime, we obviously if we have a managed service for so.

Unknown Attendee: I think in terms of how we can help, it's a little bit of a question of how quickly they'll move to T plus one and sort of eliminate that disparity in the dates between here and there, and you know, in the meantime, we obviously, if we have a managed service for, so for our clients who are where we're doing that for them on both sides, you know, we can help them with our BPO, and if there's going to be a significant timing gap, then it would be creating some technology to help. Great.

Speaker Change: Our clients, who are where we're doing that for them on both sides. If we can help them with our BPL and if there's going to be a significant timing gap than it would be creating some technology to help.

Unknown Attendee: Thank you very much.

Speaker Change: Great. Thank you very much.

Puneet Jain: The next question will come from Puneet Jain with JP Morgan.

Puneet Jain: The next question will come from Puneet Jain with Jpmorgan. Please go ahead.

Unknown Attendee: Please go ahead. Hi, thank you for taking my question. So some of the consulting companies have definitely gotten more positive on outlook for financial services in the US, like the large banks, capital market clients. Are you also seeing any changes in backlog conversion into revenue or the flow of deals from pipeline into backlog? Are you seeing any change in clients' behavior as it relates to how they take decisions?

Speaker Change: Hi.

Puneet Jain: Taking my question. So some of them like the consulting companies has definitely gotten more positive on outlook, both financial services and the U S.

Speaker Change: The large banks capital Master plans.

Speaker Change: How do you also see any changes.

Speaker Change:

Speaker Change: Backlog conversion to revenue or.

Speaker Change: So.

Speaker Change: From pipeline into backlog are you seeing any change in client behavior.

Speaker Change: It relates to how they take decisions.

Puneet Jain: Yeah, Puneet, thank you very much. It is You know, if you think about project execution We didn't see the slowdown that some other people have reported in project execution. We definitely saw, you know, this is going back a ways now, a lengthening of sales pipeline and it taking longer to get to closure. This may be because more of the mix of the things that we do are around regulatory and cost and things that are. that our clients feel like they really need to get done. And so, you know, once they sign, they sort of maybe more at the top of the list for implementation.

Speaker Change: Yeah Puneet thank.

Puneet Jain: Thank you very much it is.

Speaker Change: You know if you think about project execution.

Speaker Change: We didn't see the slowdown that some other people have reported and project execution, we definitely saw.

Speaker Change: This is going back a ways now.

Speaker Change: <unk>, a lengthening of sales pipeline and are taking longer to get to closure.

Speaker Change: This may be because more of the mix of the things that we do are around regulatory and thick and cost and things that are.

Speaker Change: Uh huh.

Speaker Change: Clients feel like they really need to get done and so you know once they sign they sort of maybe more at the top of the list for implementation. So we didn't see the same implementation delays that have that others are seeing.

Timothy Gokey: So we didn't see the same implementation delays that others are seeing. I think more broadly, though, if we just talk about the business environment out there, you know, we were really, really pleased by what we're seeing in terms of sales closes. And, you know, that strong start to the year on the sales side increases our confidence for the full year. We're seeing that in governance and communication solutions. We're seeing in select areas in capital markets and wealth. And just, you know, while I'm on sales, you know, a couple of things that I think are worth noting is just that, you know, we're seeing those sales in the areas where we're investing, digital communications, class actions, in the front office and wealth.

Speaker Change: I think more broadly, though if we just talk about the business environment out there.

Speaker Change: We were really really pleased by the by what we're seeing in terms of sales closes and you know that strong start to the year on the sales side increases our confidence for the full year are we're seeing that in governance and communications solutions or were seeing in select areas in capital markets and wealth and just while I'm on sales.

Speaker Change: Yeah, a couple of things that are that I think I've worth worth noting is just that we're seeing we're seeing the sales in the areas, where we're investing in digital communications class actions in the front office and wealth.

Timothy Gokey: And the pipeline is really good. And if we compare our pipeline multiplier now to where we were last year at the same time, it's just as strong. And then with the backlog, $450 million as of August, you know, that really gives us confidence in our outlook and provides good visibility into our recurring revenue over the medium term, giving us confidence in our three-year outlook. And I just, you know, one final comment just on that revenue to sales, sales to revenue conversion. It is an area that we're really focused on. And I think we're actually seeing improvements this year over last year.

Speaker Change: And in.

Speaker Change: And the pipeline is really good and if we compare our pipeline multiplier now to where he worked last year at the same time. It is just as strong and then with a the backlog $450 million as of August you know that really gives us confidence in our outlook and provides good visibility into our recurring revenue over the medium term.

Speaker Change: Giving us confidence in our three year three year outlook and I just have one final comment just on that revenue to sale sales to revenue conversion. It is an area that we're really focused on.

Speaker Change: And and I think we're actually seeing improvements this year over last year part of that is on the client side part of that is on our side.

Unknown Attendee: Part of that's on the client side. Part of that is on our side. Got it.

Speaker Change: Got it.

Unknown Attendee: And then on the other side, ICS side within regulatory business, like the stock record growth came at 3%. You expect that to improve. How much visibility you have or what confidence you have that like that stock record growth improves from here to mid-single digits? Yeah. So Puneet, I'll start by just reminding you, I know you know this, but I'll just start off by reminding that the stock record growth that you saw for Q1 reflects the growth for those specific issuers that sent out their proxies in the July to September time period, right? They typically end up being very small companies, and one or two large issuers really make a swing in the growth rate.

Speaker Change: And then on the other side Ics side within regulatory business.

Speaker Change: I'll kick of growth came at 2%.

Speaker Change: You expect that to improve.

Speaker Change: How much visibility you have or what confidence you have that like that's toxic growth improves from here is two months ago digits.

Speaker Change: Yeah.

Speaker Change: So puneet Oh I'll start by just reminding you I know you know this but I'll just start off by reminding that the stock record growth that you saw for Q1 reflects the growth for those specific issuers that send out their proxies in the July to September time period, right that typically end up being very small companies.

Speaker Change: And one or two largest was really make a swing in the growth trends.

Unknown Attendee: The 3% was actually in line with what we'd expected at the end of last year, given the mix of companies that we were aware of, just like we're expecting Q2 now to be at the high single digit growth rate, which together across the first half of the year, we're expecting to be solidly in the mid to high single digit growth rate. Our testing for equity has proven pretty reliable, right, especially when we're looking at two, three quarters out, we have a fairly good idea of, because we do it at an issuer level, we have a fairly good idea of how it's going to trend out.

Speaker Change: The 3% was actually in line with what we had expected at the end of last year, given the mix of companies that would be went away. It off just like we're expecting Q2 now to be at the high single digit growth rate, which together across the first half of the year, we're expecting to be solidly solidly in the mid <unk>.

Speaker Change: High single digit growth rate.

Speaker Change: Adjusting for equity has proven pretty reliable right, especially when we're looking at two or three quarters out we have a fairly good idea because.

Speaker Change: Because we do it at an issuer level, we have a fairly good idea of how it's going to trend out.

Timothy Gokey: As we sit here right now, we've started testing a much more material second half of the year as well. And it's showing mid to high single digit growth, so I feel pretty good about it. And, Puneet, I just add that, you know, I think the bigger picture here is about the broad drivers that remain very positive, especially the momentum in managed accounts, the overall market environment. As Ashima said, the testing has been pretty accurate, showing a strong full year. We're also seeing this on the fund side where it's more mid-single than high-single digit. And then beyond that, we have all the innovation that we've talked about with voting choice and direct indexing.

Speaker Change: As we sit here right now we've started testing a much more material second half of the year as well.

Speaker Change: And it's showing mid to high single digit growth, so I feel pretty good about it.

Speaker Change: And Puneet I, just add that you know.

Speaker Change: The the bigger picture here is about.

Speaker Change: The broad drivers remain very positive, especially the momentum in managed accounts.

Speaker Change: The overall market environment.

Speaker Change: As Arthur said, the testing has been pretty accurate showing a strong full year.

Speaker Change: We're also seeing this on the Sun side, where it's more mid single mid single to high single digit.

Speaker Change: And then beyond that we have all the innovation that we've talked about with voting choice and direct indexing and so I think you know overall I think the thing we would want people to take away is that the positive trends, we're giving us confidence in the year, but also in the longer term duration.

Unknown Attendee: And so I think, you know, overall, I think the thing we'd want people to take away is that the positive trends are giving us confidence in the year, but also in the longer-term duration. Got it.

Speaker Change: Got it thank you.

Unknown Attendee: Thank you.

Patrick O'Shaughnessy: The next question will come from Patrick O'Shaughnessy with Raymond James. Please go ahead.

Speaker Change: The next question will come from Patrick O'shaughnessy with Raymond James. Please go ahead.

Patrick O'Shaughnessy: Hey, good morning. Follow up question on SIS. Can you provide the specific revenue contribution that you expect from that business this year? And SIS, would you have still raised your constant currency recurring revenue guide for the year?

Patrick O'Shaughnessy: Hey, good morning, a follow up question on SaaS can you provide the specific revenue contribution that you expect from that business. This year.

Speaker Change: So yes would you have still raised your.

Speaker Change: Constant currency recurring revenue guide for the year.

Speaker Change: Yeah.

Unknown Attendee: Yeah, Patrick, I'll start on this and let Ashima add in anything. I think, first of all, just since you know, the number for SIS is just a little shy of $60 million for this year, in this full year. But when we look at, more broadly, when we look at our overall wealth and investment management business, you know, we really like the position we have in Canada. It's an attractive market. We serve many of the leading institutions, lots of small ones, too. We're excited to add these important new clients, but we're also excited about the opportunity to leverage our wealth platform investment into the Canadian market.

Speaker Change: Yeah.

Speaker Change: Patrick I'll I'll start on this and and let a little.

Speaker Change: But ashram add in anything.

Speaker Change: I think first of all just since you have the.

Speaker Change: The number for <unk> is just a just a little shy of 60 million for this year.

Speaker Change: And this and is this a full year.

Speaker Change: But when we look at more broadly when you look at our overall wealth and investment management business. You know, we really like the position we have in Canada is an attractive market we serve.

Speaker Change: Many of the leading institutions lots of small ones too.

Speaker Change: We're excited to add these important new clients, but we're also excited about the opportunity to leverage our wealth platform investment into the Canadian market and we're bringing that that technology. That's already built out we have a bigger base of clients to provide it to and and this really underscores our commitment to our wealth business to being a leading.

Timothy Gokey: And we're bringing that, that technology that's already built, we have a bigger base of clients to provide it to, and this really underscores our commitment to our wealth business, to being a leading, leading technology provider to, to Canada. On the, would we have increased guidance without this, I think what we're signaling is increased confidence on the organic side. I'm not sure that it would have been so much that we would have changed our guidance. So that the increase that you're seeing here is largely related specifically to SIS. And, but we feel, you know, what we want to make sure is that no one came away feeling, looking, doing, doing all the math and saying that we think like we're weakening on the organic side.

Speaker Change: Leading technology provider.

Speaker Change: Two.

Speaker Change: To Canada.

Speaker Change: The wood, we have increased our guidance without this I think what we're signaling is increased confidence on the organic side I'm not sure that it would have been so much that we would have changed our guidance.

Speaker Change: The increase that you're seeing here is largely related specifically to S. I S and.

Speaker Change: But we feel you know what we wanted to make sure is that <unk>.

Speaker Change: Came away feeling looking doing doing all the math and saying that we think like a weakening on the organic side. That's that's sort of the opposite of the message we're trying to convey because where we're really seeing nice trends for the rest of the year.

Ashima Ghei: That's, that's sort of the opposite of the message we're trying to convey because we're, we're really seeing nice trends for the rest of the year.

Ashima Ghei: And Patrick, I'll also add a bit more specifics about SIS. Like you heard, we expect it's about $185 million purchase price. We expect it to add a little over a percentage point to Broadridge growth overall. To the question earlier, we do expect it to be slightly dilutive to broad-reach margin, but are not expecting any material impact to earnings as a result of this. Of course, it will be accretive to wealth growth, leading to low double-digit growth for the wealth business and GTO growth coming in at the high end of the 5 to 8 percent. But just SIS itself, the guide is a little over one percentage point to broad-reach growth.

Speaker Change: And Patrick and I will also add a bit more specifics about S. I S. Like you.

Speaker Change: I would expect it's about 185 million purchase price, we expect it to add a little over a percentage point to broadridge growth overall.

Speaker Change: To the question earlier, we do expect it to be slightly diluted to Broadridge margin.

Speaker Change: But I'm not expecting any material impact to earnings as a result of this of course, it'll be accretive to wealth growth leading to low double digit growth for the wealth business and GTO growth coming in at the high end of the 5% to 8%, but just as I said itself.

Speaker Change: <unk> is a little over one percentage point to Broadridge grow it.

Speaker Change: Slight dilution to margin and no impact to earnings.

Patrick O'Shaughnessy: Terrific, that's very helpful. Thank you.

Speaker Change: Terrific Thats very helpful. Thank you.

Patrick O'Shaughnessy: And then, you know, looking at your closed sales number, typically your fiscal first quarter represents less than 15% of your full year closed sales activity. But this past quarter, closed sales was closer to 20% of the midpoint of your full year fiscal 25 outlook. Was there any unusual pull forward this quarter? Or are things perhaps just trending maybe a little bit better than what you would have expected? Yeah, Patrick, it's, you know, it's always good to get a strong start on the on the year. I don't think I want to signal any increase in our expectation.

Speaker Change: And then looking at your closed sales number typically your fiscal first quarter represents less than 15% of your full year sales activity.

Speaker Change: But this past quarter close sales was closer to 20% of the midpoint of your full year fiscal 'twenty five outlook was there any unusual pull forward this quarter or are things, perhaps just trending maybe a little bit better than what you would've expected.

Speaker Change: Yeah, Patrick It's you know it's.

Speaker Change: Always good to get a strong start on the on the year.

Speaker Change: I don't think I want to signal any increase in our expectation I think the $2 90 to $3 30 is a really good good range for us I Wouldnt call. It pull forward, but there's always the timing of sort of the medium sized deals that can fall in one quarter versus another and.

Unknown Attendee: I think that $290,000 to $330,000 is a really good range for us. I wouldn't call it pull forward, but there's always the timing of sort of the medium-sized deals that can fall in one quarter versus another. And so I just, you know, want you to take away that we feel like we have a good start to the quarter.

Speaker Change: So I just I just.

Speaker Change: I want you to take away that we feel like we have a good start to the quarter, we feel like we have a good first half.

Unknown Attendee: We feel like we have a good first half, and we're feeling good about the full year. Terrific. Thank you.

Speaker Change: And and we're feeling good about the full year.

Speaker Change: Terrific. Thank you.

Unknown Attendee: This concludes our question and answer session.

Speaker Change: This concludes our question and answer session I would like to turn the conference back over to management for any closing remarks. Please go ahead.

Unknown Attendee: I would like to turn the conference back over to management for any closing remarks.

Timothy Gokey: Please go ahead.

Unknown Attendee: Thank you, Chuck. I just want to thank everyone on the call for your interest in Broadridge, especially so on Election Day.

Speaker Change: Thank you Chuck.

Speaker Change: I just want to thank everyone on the call for your interest in Broadridge, especially so on election day have a great morning.

Unknown Attendee: Have a great morning.

Unknown Attendee: The conference is now concluded. Thank you for attending today's presentation.

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

Unknown Attendee: You may now disconnect.

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