Q1 2026 Broadridge Financial Solutions Inc Earnings Call

Please euro.

After todays presentation, there will be an opportunity to ask questions to ask a question you May Press Star then one on a touchtone phone to withdraw your question. Please press Star then two please note. This event is being recorded I would like now to turn the conference over to Mr. Eddings Tivo head of Investor Relations. Please go ahead.

Thank you Ellen good morning, everybody and welcome to Broadridge is first physical.

26 earnings call.

Our earnings release and the slides that accompany this call may be found on the Investor Relations section of <unk> Dot Com Joy.

Eddings Thibault: Given the volatile nature of digital asset values, we expect to continue to record gains and/or losses as we mark these digital assets to market every quarter. Let's turn to sales now on slide 13. Broadridge reported closed sales of $33 million, driven by sales of our governance solutions. Looking ahead, our pipeline remains strong, and we are reaffirming our guidance for fully closed sales of $290 to 330 million. Turning to our cash flows on slide 14. Broadridge generated free cash flow of $13 million in the first quarter. Our strong cash performance was driven by higher earnings and working capital management. We remain on track to deliver free cash flow conversion of over 100% in fiscal 2026. Turning next to capital allocation on slide 15. We continue to take a balanced approach to capital allocation.

Joining me on the call. This morning are Tim Gokey, our CEO and our CFO Ashwin gate.

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 and we found on the second page of the slides and 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 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 presentation.

Let me now turn the call over to Kimco.

Thank you Adam and good morning.

I am pleased to be here to discuss our strong first quarter results.

With a positive economic backdrop equity markets remain strong and the fixed income market is steady.

Speaker #1: After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on a touch-tone phone.

Capital markets are healthy.

And our financial services clients are benefiting.

Eddings Thibault: In Q1, we invested $30 million in capital spending and software spend, with an additional $7 million to onboard clients onto our solutions. We deployed $56 million during the quarter on two tuck-in acquisitions to strengthen our governance franchise. In addition, we continue to expect our previously announced acquisition of Akulin to close at calendar year-end, pending approval by German regulatory authorities. During the quarter, we also repurchased $150 million in Broadridge shares and returned an additional $103 million to shareholders via our quarterly dividend. Yesterday, we entered into an agreement to use approximately $340 million of our Canton coin holdings as part of a PIPE offering in Paramount Incorporated, a Nasdaq-listed company with the ticker THAR that intends to execute a digital asset treasury strategy for Canton coins. When the deal closes later this week, we anticipate holding warrants for 8% of the publicly traded vehicle.

And last we're operating against the pro innovation regulatory backdrop.

Speaker #1: To withdraw your question, please press star, then two. Please note this event is being recorded. I would like now to turn the conference over to Mr. Eddings Thibault, Head of Investor Relations.

As a result, it should come as no surprise that Broadridge is off to a very good start to fiscal year 2026.

Speaker #1: Please go ahead.

We delivered strong first quarter results and are raising our recurring revenue outlook to the higher end of our 5% to 7% growth range.

Speaker #2: Thank you, Alan. Good morning, everybody, and welcome to Broadridge's First Fiscal First Quarter 2026 Earnings Call. Our earnings release and the slides that accompany this call may be found on the investor relations section of broadridge.com.

Our pipeline is growing as our clients look at how they can accelerate change across their businesses.

And we're also investing in new governance solutions.

Speaker #2: Joining me on the call this morning are Tim Gokey, our CEO; and our CFO, Ashima Ghei. Before I turn the call over to Tim, a few standard reminders.

And expanding our coke innovation capabilities.

And then making value added acquisitions.

With that backdrop, let's dig into the results starting with the headlines.

Speaker #2: 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.

First broadridge delivered strong first quarter results, including 8% recurring revenue growth constant currency and 51% growth in adjusted EPS.

Second we continue to execute on our strategy to democratize and digitize investing.

Speaker #2: 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 presentation.

Simplify and innovate trading and.

And modernize wealth management.

That execution is driving our results in the form of strong growth continued product innovation and a growing pipeline.

Third we are using our investment grade balance sheet and strong free cash flow to strengthen our business.

Speaker #2: Let me now turn the call over to Tim Gokey. Tim?

Speaker #3: Thank you, Eddings, and good morning. I'm pleased to be here to discuss our strong first quarter results. With a positive economic backdrop, equity markets remain strong, and the fixed income market is steady.

Eddings Thibault: Let's start to wrap by reviewing our fiscal 2026 guidance on slide 16. As I said in my callouts, Broadridge is on track to deliver strong fiscal 2026 results. Given our strong start to the year and the incremental revenue from our Signal and iJoin acquisitions, we now expect fiscal 2026 recurring revenue growth constant currency to be at the higher end of our 5% to 7% guidance. We continue to expect adjusted operating income margin of between 20% and 21%. Adjusted EPS growth of 8% to 12%, and $290 to 330 million in closed sales. Additionally, I will highlight that we are expecting a more normalized level of event-driven revenue in Q2 2026, compared to last year's record $125 million. As a result, we expect Q2 adjusted EPS to be approximately 13% to 15% of our full year outlook. I'll wrap by summarizing my key points.

Over the past year, we made a handful of small acquisitions to strengthen our Ics business and of course last year, we acquired S. I asked to accelerate our platform rollout in Canada.

And at the last two quarters, we repurchased $250 million of our shares.

Speaker #3: Capital markets are healthy, and our financial services clients are benefiting. And last, we're operating against a pro-innovation regulatory backdrop. As a result, it should come as no surprise that Broadridge is off to a very good start to fiscal year 2026.

Finally.

We expect to deliver strong fiscal year 2026 results.

With our positive start to the year, we now expect it to be at the higher end of our 5% to 7% recurring revenue range and we're reaffirming our guidance for 8% to 12% adjusted EPS growth and $290 million to $330 million of closed sales.

Speaker #3: We delivered strong first quarter results, and we're raising our recurring revenue outlook to the higher end of our five to seven percent growth range.

Speaker #3: Our pipeline is growing as our clients look at how they can accelerate change across their businesses. And we're also investing in new governance solutions, in expanding our tokenization capabilities, and in making value-added acquisitions.

That outlook also keeps us on track to deliver again on our top and bottom line three year growth objectives.

Let's move to the drivers of our strong start on slide four.

I'll start with our governance business, where we continue to drive democratization and digitization and to deliver innovation.

Speaker #3: With that backdrop, let's dig into the results, starting with the headlines. First, Broadridge delivered strong first quarter results, including 8% recurring revenue growth, constant currency, and 51% growth in adjusted EPS.

Governance revenues rose, 5% driven by revenue from sales and continued healthy position growth.

Investor participation trends remained healthy across both equities and bonds.

Eddings Thibault: Broadridge is off to a strong start to the year, and the combination of strong performance and recent acquisitions has us incrementally more confident in growth in recurring revenues. We are deploying capital to boost growth and shareholder returns. Last, we remain very much on track to deliver another strong year of recurring revenue and adjusted EPS growth in fiscal 2026 and deliver, again, on our top and bottom line three-year objectives. With that, let's move to Q&A. We will now begin the question and answer session. To ask a question, you may press star then one on your touch-tone phone. If you are 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 it, please press star then two. At this time, we will pause momentarily to assemble our roster.

Speaker #3: Second, we continue to execute on our strategy to democratize and digitize investing. Simplify and innovate trading. And modernize wealth management. That execution is driving our results in the form of strong growth, continued product innovation, and a growing pipeline.

At 2% fund position growth was impacted by the timing and mix of communications in the quarter.

Looking through that noise, we continue to see fund positions growing in the mid single digits consistent with fiscal 'twenty five.

Total equity position growth was 12% driven by continued growth in managed accounts.

Speaker #3: Third, we're using our investment-grade balance sheet and strong free cash flow to strengthen our business. Over the past year, we've made a handful of small acquisitions to strengthen our ICS business and, of course, last year, we acquired SIS to accelerate our platform rollout in Canada.

For the first half of the year, we expect mid teens position growth overall with high single digit growth in revenue equity positions.

Five years ago, we began to talk about direct indexing and we're now seeing it is driving growth and managed account positions.

Speaker #3: And in the last two quarters, we repurchased 250 million dollars of our shares. Finally, we expect to deliver strong fiscal year 2026 results. With our positive start to the year, we now expect to be at the higher end of our five to seven percent recurring revenue range and we're reaffirming our guidance for 8 to 12 percent adjusted EPS growth and 290 to 330 million dollars of closed sales.

Today, we're beginning to see interest in token as equities, which could create future sources of demand for new U S equity positions.

The speed of adoption is uncertain. The SEC has been clear that token I securities are still securities.

That means they will need to incorporate all the complex features of corporate governance and corporate actions that regular equity's too.

Speaker #3: That outlook also keeps us on track to deliver again on our top and bottom line three-year growth objectives. Let's move to the drivers of our strong start on slide four.

Eddings Thibault: Our first question comes from James Faucette of Morgan Stanley. Please go ahead. Hi everyone. Hi everyone. It's Michael Infante for James. Thanks for taking our question. I just wanted to ask on the recurring revenue outlook tracking towards the high end of the range versus the reiteration on the EPS run. I recognize that we're going to see a reversion of some of the event-driven revenue strength in the quarter, but can you just walk through some of the puts and takes as to why EPS wouldn't similarly track towards the high end of the range, just given the, you know, the incremental, high incremental margin nature of that event-driven revenue you saw in the quarter? Thanks. Absolutely. Thanks, Michael. I'll take that. You're right.

And Broadridge is committed to making all that work.

We will be there with disclosure and governance solutions for token as equities.

Sure that there are no roadblocks to widespread adoption.

It's too early to say how popular token is equities will become.

Speaker #3: I'll start with our governance business. Where we continue to drive democratization and digitization and to deliver innovation. Governance revenues rose 5%, driven by revenue from sales and continued healthy position growth.

Direct indexing, we see them as another leg of democratization that will continue to drive physician growth overtime.

Beyond position growth. We're also benefiting from a quite a significant shift in how asset managers and public companies are approaching shareholder engagement and proxy voting.

Speaker #3: Investor participation trends remain healthy across both equities and funds. At 2%, fund position growth was impacted by the timing and mix of communications in the quarter.

Last quarter, we talked about how the growth of passive investing is forcing the largest asset managers to rethink how they vote with a growing number of funds nearly 400 at the end of fiscal 'twenty five representing nearly two trillion dollars in assets using broadridge is voting choice solution to enable their shareholders to engage by expressing.

Speaker #3: Looking through that noise, we continue to see fund positions growing in the mid-single digits consistent with fiscal '25. Total equity position growth was 12%, driven by continued growth in managed accounts.

Eddings Thibault: We're off to a strong start of the year, and as a result, we raised our guidance for recurring revenue to the higher end of the 5% to 7% range. The biggest driver of the revenue upside is the acquisitions that we're seeing from iJoin and Signal that we announced earlier this year, which are more than offsetting the additional rate cuts that we're seeing in the year. I will say beyond that, we're seeing strength in our underlying business. Revenue from sales, from converting our $430 million backlog, is continuing to deliver consistent results and fuel our growth. Position growth is another important factor for us, and we're growing increasingly confident about the mid-teens growth that we're expecting for equities in Q2 and mid to high single-digit revenue growth for the full year. Fund position and revenue growth also continues at mid-single digit.

Speaker #3: For the first half of the year, we expect mid-teens position growth overall, with high single-digit growth in revenue equity positions. Five years ago, we began to talk about direct indexing.

They're voting preferences.

Now, we're working with large asset and wealth managers to create an objective data different approach devoting.

To be clear, we're technology company not a proxy adviser.

Speaker #3: And we're now seeing it is driving growth in managed account positions. Today, we're beginning to see interest in tokenized equities, which could create future sources of demand for new US equity positions.

Our solution, which rely with a select group of clients. This proxy season will meet an important market need by enabling clients to define and implement independent policies to complement ISS and glass Lewis.

Speaker #3: While the speed of adoption is uncertain, the SEC has been clear that tokenized securities are still securities. That means they will need to incorporate all the complex features of corporate governance and corporate actions that regular equities do.

In addition, we're also working with public companies to better engage retail shareholders by increasing the convenience of voting.

This past quarter, we launched a pilot program with Exxonmobil to enable retail shareholders to provide standing voting instructions for annual meetings.

Speaker #3: And Broadridge is committed to making all that work. We will be there with disclosure and governance solutions for tokenized equities, to ensure that there are no roadblocks to widespread adoption.

Eddings Thibault: We've seen a bit more upside from the digital asset revenues, driven by increase in market value relative to the starting point of the year. Specifically in Q1, as you noted, we also saw the impact of higher event-driven, which we were expecting given the large mutual fund proxy that was planned in Q1. All in all, all of this gets us to a super strong start to the year, which enables us to invest in our business while we continue to drive towards our 8% to 12% adjusted EPS growth. You know, I'm just going to add on to that a little bit because. You know, it is, it's pretty early in the year for us to think about the translation of any incremental margin, if I can talk, into earnings.

Shareholders, who opt in we'll continue to receive all the materials, we do today and they can change their vote at any time.

Speaker #3: It's too early to say how popular tokenized equities will become, but like direct indexing, we see them as another leg of democratization that will continue to drive position growth over time.

This approach makes it more convenient to vote and has the potential to increase retail voting.

It's a new and exciting front and shareholder engagement and we're seeing significant interest from other public companies.

Speaker #3: Beyond position growth, we're also benefiting from a quiet but significant shift in how asset managers and public companies are approaching shareholder engagement and proxy voting.

Taken together these innovations across passive funds.

Active institutional funds and public companies are enabling a quiet revolution and shareholder engagement by leveraging <unk> technology to give main street investors a greater voice in the company say huh.

Speaker #3: Last quarter, we talked about how the growth of passive investing is forcing the largest asset managers to rethink how they vote, with a growing number of funds—nearly 400 at the end of fiscal '25—representing nearly $2 trillion in assets, using Broadridge's voting choice solution to enable their shareholders to engage by expressing their voting preferences.

That's great for our markets.

We also completed two tuck in acquisitions in the first quarter to strengthen our governance business.

Eddings Thibault: I just note this is a time of great opportunity in the industry for us and for our clients. We're really pleased that we're in a position to be both investing and delivering on our commitments. I just want to focus you on four key areas that we're investing in now: tokenization, digital assets, shareholder engagement, digital communications, AI, and platform. Each of these are areas where we have a strong right to win and can bring real value to our clients by helping them really drive innovation. So it's just, you know, it's early in the year to think about the balance of investment and earnings delivery. Really staying with our guidance is the right call right now. That's helpful. Thank you both. Then maybe just a quick housekeeping one on Canton.

Signal is focused on digital client communications.

Speaker #3: Now, we're working with large asset and wealth managers to create an objective data-driven approach to voting. To be clear, we're technology company, not a proxy advisor.

It gives our customer communications business, a foothold in Europe, and strengthens our global relationships with key financial services firms.

Speaker #3: Our solution, which will be live with a select group of clients this proxy season, will meet an important market need by enabling clients to define and implement independent policies to complement ISS and Glass Lewis.

I joined as a retirement plan.

Planned technology provider that will strengthen our workplace and retirement solutions business.

Both are great examples of how small strategic M&A can accelerate our product development and deepen our product set.

Speaker #3: In addition, we're also working with public companies to better engage retail shareholders by increasing the convenience of voting. This past quarter, we launched a pilot program with ExxonMobil to enable retail shareholders to provide standing voting instructions for annual meetings.

Let's turn next to capital markets.

Where we are simplifying and innovating trading.

Capital markets revenues grew 6% driven by a combination of new sales and higher trading volumes with a boost from <unk> and which I'll comment in a moment.

Eddings Thibault: I recognize you're using some of those funds or those holdings to participate in the PIPE, but maybe after contemplating that transaction, do you intend to convert some of those holdings to cash, if at all, to sort of mitigate some of the GAAP volatility? And if so, like, how should we think about maybe like a theoretical, you know, 10% change in Canton coins and the impact on GAAP EPS? Thanks. Yeah, I'll take that. Just at a very high level, I do think there's, we're going to see some GAAP volatility. That's why we, why we're certainly going to adjust this. We do think this is going to be a pretty volatile asset, and it's probably something we'd prefer to just have off on the side. I think the core thing here is we're an operating company, not an investment company.

Speaker #3: Shareholders who opt in will continue to receive all the materials they do today, and they can change their vote at any time. This approach makes it more convenient to vote and has the potential to increase retail voting.

The growth in new sales is being driven by balanced mix across both front and back office solutions.

And the front office, we are seeing strong demand for our connectivity solutions.

Speaker #3: It's a new and exciting front in shareholder engagement, and we're seeing significant interest from other public companies. Taken together, these innovations across passive funds, active institutional funds, and public companies are enabling a quiet revolution in shareholder engagement by leveraging Broadridge's technology to give Main Street investors a greater voice in the company they own.

And the back office, we're seeing increased demand for solutions that help our clients simplify their global trading operations.

We're also engaging clients and some of the market structure changes coming in calendar 'twenty six.

The move to $22 five trading of equities in the second half of 'twenty six and.

In our centralized clearing for treasuries at the end of 'twenty six.

The good news is that the move to 23 by five training will be seamless her broadridge clients highlighting the benefit of a mutualized platform.

Speaker #3: That's great for our markets. We also completed two tuck-in acquisitions in the first quarter to strengthen our governance business. Signal is focused on digital client communications.

As we move toward Treasury clearing that is accelerating demand for our DLR distributed ledger repo solution.

Eddings Thibault: And so I think you should expect to see us liquidate these holdings over time. There are reasons because a lot of the momentum in the network and the potential for the network to become really the rails for institutional financial transactions that the coins could become a lot more valuable over time. So I think, I think this will be something that you'll see us see us evolve over you know over probably a few years. Yep. The only thing I'll add is, remember, in terms of the revenue, at least I called out that we expect this to be about one point of impact to the, to our capital markets business. So in the larger scale, I wouldn't expect the value to have a significant impact to Broadridge revenues. That makes sense. Thank you guys. Our next question comes from Kyle Peterson of Needham. Please go ahead. Great.

In September we processed over 300 billion in token is equity excuse me Cocainize trades per day.

Speaker #3: It gives our customer communications business a foothold in Europe and strengthens our global relationships with key financial services firms. IJOIN is a retirement plan technology provider that will strengthen our workplace and retirement solutions business.

On $100 per day six months ago.

Clearly the leading at scale platform.

Next we're going to real time repo.

Can make repos are trading and financing instrument and further scale volumes.

Speaker #3: Both are great examples of how small, strategic M&A can accelerate our product development and deepen our product set. Let's turn next to capital markets.

While we started with repo the platform is fully multi asset and will be going to other asset classes over the next 12 months.

Speaker #3: Where we are simplifying and innovating trading. Capital markets revenues grew 6%, driven by a combination of new sales and higher trading volumes, with a boost from tokenization, on which I'll comment in a moment.

We'll also be incorporating stable coin is the cash wheels for real time transactions.

More broadly we see <unk> it doesn't make a trend over the next 10 years.

It is ideal for less liquid harder just that'll asset classes and there could be real benefits in other areas of fixed income collateral private credit and alternative assets.

Speaker #3: The growth in new sales is being driven by a balanced mix across both front and back office solutions. In the front office, we're seeing strong demand for our connectivity solutions.

One of the avenues for token is activity to grow is on the Kantar network.

Speaker #3: And in the back office, we're seeing increased demand for solutions that help our clients simplify their global trading operations. We're also engaging clients in some of the market structure changes coming in calendar '26.

Eddings Thibault: Good morning, guys. Thanks for taking the questions. I wanted to talk a little bit on sales cycles and kind of what you guys are seeing, particularly if there's been any impact, you know, from you know the government shutdown, obviously, at least some things in capital markets and things have been hit snags a little bit. But I guess have you guys seen any impact to getting deals across the finish line or client conversations that might have kind of slowed down in the last month plus? Yeah, Kyle, thanks. It's Tim. And first of all, I think, you know, we are really pleased with the strong close we had to fiscal 2025. And we're, you know, we're still on our guidance for this year. Specifically to your question, I think the selling environment that we're seeing is pretty stable.

Our public permission digital asset network designed specifically for financial services.

As a result of our investment in digital asset holdings and I work on DLR, we have been a super validate or on the Canton network since the beginning of fiscal 'twenty five.

Speaker #3: Namely, the move to 23x5 trading of equities in the second half of '26, and a centralized clearing for treasuries at the end of '26.

Which we have earned canton coins.

Speaker #3: The good news is that the move to 23x5 trading will be seamless for Broadridge clients, highlighting the benefit of a mutualized platform. As we move toward treasury clearing, that is accelerating demand for our DLR, distributed ledger repo solution.

In Q1, we recorded $4 million in recurring revenue from our Super validated role.

In addition, the coin holdings, we earned previously and also again materially in value is asrama will share in a moment.

We see the potential for the Canton network to serve as the operating system for token is institutional markets, including DLR.

Speaker #3: In September, we processed over 300 billion in tokenized equity—excuse me—tokenized trades per day. Up from 100 billion per day six months ago. And we're clearly the leading at-scale platform.

To support this vision and Investor Group led by D. R. W announced yesterday the formation of our canton focused digital asset treasury or D. I T.

Eddings Thibault: It is, we haven't seen any slowdown in in conversations because of the government shutdown. Now, I think many of our conversations are they have a sales cycle that's really outside the window of whether whether a few weeks makes a difference unless we're coming right up on the end of the year like we talked about last spring. So I think it's really, you know, we're not seeing any change. It's pretty early in the year in terms of doing anything other than confirming our guidance. And, you know, all that said, I think the market remains strong. The conversations we're having with our clients are pretty exciting, you know, around strategic topics in digital communications and shareholder engagement, platform, among others.

Speaker #3: Next, we're going to real-time repo, which will make repos a trading and financing instrument and further scale volumes. While we started with repo, the platform is fully multi-asset, and we'll be going to other asset classes over the next 12 months.

Which would tense intends to invest in canton client and create applications for the network.

We're contributing a portion of our canton client holdings to take an 8% pro forma stake in that D. A T, which will trade on the NASDAQ.

This transaction is just one more indicator of the potential for our DLR and broader took innovation capability to create value is choking as activity grows.

Speaker #3: We'll also be incorporating stablecoin as the cash rails for real-time transactions. More broadly, we see tokenization as a mega trend over the next 10 years.

Moving to a world, where we're modernizing wealth and investment management revenues grew 22% in the quarter.

Speaker #3: It's ideal for less liquid, harder-to-settle asset classes, and it could provide real benefits in other areas of fixed income, collateral, private credit, and alternative assets.

By solid organic growth and the acquisition of S. I S.

Fiscal 'twenty five was a strong sales year for our wealth business with three significant platform sales.

Speaker #3: One of the avenues for tokenized activity to grow is on the Canton network. A public permissioned digital asset network designed specifically for financial services.

Eddings Thibault: And the conversations that I'm having with clients are really very, you know, much more on the transformational side, which I think is a testament to the investments that we've made. So, you know, we have a lot of confidence going forward is grounded in those conversations, is grounded in our pipeline, which remains healthy and has actually grown since the beginning of the year. Great. That's really helpful. And then, you know, maybe just a follow-up broadly, kind of your thoughts on how, you know, digital assets and tokenization fits within Broadridge. Obviously, several moving pieces. You know, you guys have started to get some revenue from that. You know, you made the investment.

So I'm pleased to note that we're making good progress on Onboarding. These new clients and are on track to begin recognizing revenue at the end of fiscal 'twenty six.

Speaker #3: As a result of our investment in digital asset holdings, and our work on DLR, we have been a super validator on the Canton network since the beginning of fiscal '25, for which we have earned Canton coins.

November one marked the one year anniversary of the S. I S acquisition and I'm pleased with how it's driving value for our business and our clients.

Over the past year, we've extended our relationship with key Canadian clients, and we're making strong progress in integrating S. I S onto our wealth platform.

Speaker #3: In Q1, we recorded $4 million in recurring revenue from our super validator role. In addition, the coin holdings we earned previously have also gained materially in value, as Ashima will share in a moment.

More broadly we continue to see a strong pipeline across our wealth business.

And finally closed sales.

After a strong finish to the fiscal 'twenty five year in June we closed $33 million in Q1 sales.

Eddings Thibault: But I guess how should we think about how, you know, digital assets kind of should continue to evolve and what role do you see that playing, you know, in your business, both in the near and long term here? Yeah, thank you for that. You know, I think we see digital assets and tokenization as a megatrend for the next 10 years and as a real opportunity for Broadridge and the industry. And our strategy is to drive tokenization across the asset classes where we have deep expertise and where we think the asset class will benefit the most. And that certainly includes fixed income, repos, collateral. Longer-term tokenized equities, we think, can be part of the next wave of democratization that drives demand for US equities and contributes to long-term position growth.

Speaker #3: We see the potential for the Canton network to serve as the operating system for tokenized institutional markets, including DLR. To support this vision, an investor group led by DRW announced yesterday the formation of a Canton-focused digital asset treasury or DAT, which intends to invest in Canton coin and create applications for the network.

More importantly, our pipeline continues to strengthen and we are on track to deliver on our full year guidance of $290 million to $330 million.

All of this means that broadridge is better positioned than ever.

<unk> is just one of the many innovations we are driving that are transforming their industry and setting the stage for long term growth.

Speaker #3: We're contributing a portion of our Canton coin holdings to take an 8% pro forma stake in that DAT, which will trade on the NASDAQ.

Let me close with some final thoughts.

Speaker #3: This transaction is just one more indicator of the potential for our DLR and broader tokenization capability to create value as tokenized activity grows. Moving to wealth, where we're modernizing wealth investment management, revenues grew 22% in the quarter, faced by solid organic growth and the acquisition of SIS.

First broadridge delivered strong first quarter results.

Second our first quarter performance as Broadridge on track to deliver another strong year, including recurring revenue at the higher end of our 5% to 7% range and 8% to 12% adjusted EPS growth.

Eddings Thibault: And then, you know, sort of as a double-click within that, we think the Canton Network, it has the potential. You know, early days, but potential to become an operating system that makes a lot of that more possible. So, you know, I think as you look across our businesses, you're seeing the continued progress on Distributed Ledger Repo in capital markets. And they are certainly going to be expanding traditional use cases, including real-time, new asset classes, Stablecoin. There's a Canton Network side of things, which is also sort of within capital markets. Tokenized equities we'd see as a longer-term opportunity that would be really affecting more our, somewhat on the capital market side, but more our ICS business in terms of extending position growth and really being the next wave of the evolution of democratization to drive that.

We're also deploying capital to drive value.

Speaker #3: Fiscal '25 was a strong sales year for our wealth business with three significant platform sales. So I'm pleased to note that we're making good progress in onboarding these new clients and are on track to begin recognizing revenue at the end of fiscal '26.

Third our results are being driven by the execution of our long term growth strategy.

We're driving to democratization and digitization of governance by delivering new voting solutions that put mainstream investors front and center.

Speaker #3: November 1st marked the one-year anniversary of the SIS acquisition. And I'm pleased with how it's driving value for our business and our clients. Over the past year, we've extended our relationship with key Canadian clients, and we're making strong progress in integrating SIS onto our wealth platform.

We're simplifying and innovating in capital markets across both the front and back office.

And we're modernizing wealth management idle living platform capabilities for clients in both the U S and Canada.

Fourth we are positioned to benefit from the growth of digital assets and the trend towards <unk>.

Speaker #3: More broadly, we continue to see a strong pipeline across our wealth business. And finally, closed sales. After strong finish to the fiscal '25 year in June, we closed $33 million in Q1 sales.

A combination of a pro innovation regulatory backdrop, and accelerating technology change, it's putting digital assets and <unk> front and center as a new Mega trend in financial services it creates significant opportunity for Broadridge.

Speaker #3: More importantly, our pipeline continues to strengthen, and we are on track to deliver on our full-year guidance of $290 to $330 million. All this means that Broadridge is better positioned than ever.

Across our businesses Broadridge is well positioned.

Took innovation is the next wave of democratization drive equity position growth.

Eddings Thibault: Mid-single, high-single digit position growth into the, you know, foreseeable future and beyond. So, and then last on the wealth management side, you know, this demand for digital assets is putting pressure on wealth managers to integrate those assets into their traditional client service operations. And, you know, they've sort of stayed away from them in the past, and I think that is changing quickly now. But when you think about a wealth manager now offering digital assets to clients, there's all the other things that you need to do: tax, margin, statements, all those things. And so, we think that's an area where we can really help. Our core engines will be enabled to represent digital assets by early next calendar year.

And our early start makes us a leader in supporting the technology behind <unk> assets trading.

Speaker #3: Tokenization is just one of the many innovations we are driving that are transforming our industry and setting the stage for long-term growth. Let me close with some final thoughts.

And finally, Broadridge is well positioned to deliver on its three year financial objectives and beyond.

This will be the fifth consecutive three year period in which we've met our goals.

And the opportunity going forward.

Speaker #3: First, Broadridge delivered strong first-quarter results. Second, our first-quarter performance has Broadridge on track to deliver another strong year including recurring revenue at the higher end of our 5 to 7% range, and 8 to 12% adjusted EPS growth.

Larger.

Before I turn it over to argument I want to thank our associates around the world.

Their focus on serving clients and driving change is how we add value to our clients and our industry every day and.

And it's making a real difference in the financial lives of millions.

Speaker #3: We're also deploying capital to drive value. Third, our results are being driven by the execution of our long-term growth democratization and digitization of governance by delivering new voting solutions that put mainstream investors front and center.

Eddings Thibault: And that is going to allow our clients to flow transactions through for everything from cost basis, tax, margin, SEG, statements, asset servicing, and all that complexity that comes with being a large-scale either capital markets or wealth manager. Great. Thanks for taking the questions. I'll just, maybe I'll just add on because you were also asking about the near-term and the mid-term implications from a revenue perspective, right? So I'll just tack on, as you know, we specifically for Canton coins, we earn these Canton coins for being a super validator on the Canton Network. In Q1, we recognize $4 million of revenue, like we said, associated with this service. The actual revenue that we earn over the course of the remainder of the year would vary based on the actual minting activity, the number of coins specifically, and the price of these coins, right?

Hi, Sean.

Thanks, Tim.

Thanks, Tim Good morning.

It's great to be here today to share our Q1 results.

Before I begin my review I want to make five key callouts.

First drawbridge is off to a strong start to fiscal 'twenty six with strong recurring revenue and adjusted EPS growth.

Speaker #3: We're simplifying and innovating in capital markets across both the front and back office. And we're modernizing wealth management by delivering platform capabilities for clients in both the US and Canada.

Second event driven revenue we.

We reported.

Pardon me.

$114 million of event driven revenues in Q1.

Well above the long term average driven in part by a proxy election at a major mutual fund complex.

Good.

We are deploying capital to drive shareholder returns during the first quarter, we completed two tuck in M&A deals for a total of $56 million.

<unk> repurchased 150 million of our shares.

Eddings Thibault: They have a, we've got a whole minting schedule, but bottom line, it translates into about a point of impact to capital markets, higher in Q2 and lower in Q3 and Q4. So that's from a revenue perspective. And on the balance sheet perspective, the only thing I'll call out is we do have, at the end of last quarter, we have 1.7 billion coins that were valued at $74 million, right? And like you said, we've contributed some of these to the DAT. But there could be volatility associated with this $74 million, which we'll continue to adjust out of our adjusted EPS. Great. Thanks for the clarification there. Our next question comes from Scott Wurtzel from Wolfe Research. Please go ahead. Hey, good morning. Thanks for taking my questions. Awesome.

Fourth we continue to expect to deliver strong fiscal 'twenty six results.

We are now raising our recurring revenue growth outlook to the higher end of a 5% to 7% guidance range.

We're also reaffirming our guidance for 8% to 12% adjusted EPS growth and closed sales of $2 $90 million to $330 million.

And one final callout digital asset revenues and mark to market gains.

As Tim referenced Broadridge recognized a full recognized $4 million of digital asset revenues related to our work as a super validated on the Canton network.

While we have been earning going for the service over the last year, they had de minimus value now.

Now as this going to have increased in value. They are not only contributing to revenue their value is also being recognized on our balance sheet.

Eddings Thibault: Just on the Q2 EPS guide, at about 13% to 15% of a full-year EPS, understand that, you know, we should see a normalization of event-driven revenue. But just wondering if there's anything else going on there that we should keep in mind for Q2 EPS. No, that's really the major driver, Scott. It's just a tough compare because of the event activity that we saw last year in Q2. Just wanted to make sure you guys saw the governance impact coming in from that. Nothing else significant to call out. Got it. Got it. That makes sense. And then forgive me, I was hopping from another call, so I may have missed the commentary here. But just wondering if you can talk a little bit more about the position growth trends that, you know, you saw in the quarter and how that sort of trended relative to expectations. Thanks.

As a result, we recorded a $46 million unrealized gain on the value of the $1 7 billion coins, we held at the end of the quarter.

That gain was excluded from our calculation of adjusted EPS.

With that let's go to the numbers on slide six.

Regarding revenues grew 8% on a constant currency basis, including 5% organic growth.

Adjusted operating income margin expanded by 280 basis points to 15, 8%.

Adjusted EPS grew 51% to $1 51, driven by strong event revenue and.

Closed sales were $33 million.

Eddings Thibault: Yeah. Thanks, Scott. You know, look, position growth is remaining strong. And we're seeing really nice strength in the underlying drivers. For equity positions, which grew 12%. Really driven by healthy growth in managed accounts, but also pretty good growth in self-directed. As we talk to our clients, they continue to tell us that direct indexing is, you know, a significant driver of the managed account growth. And then the equity revenue positions, you know, taking out the smaller accounts and the fractional shares of 7%, which is really in line with what we've seen over the long run. And then I noted that on the fund growth side, it was 2%, but that was really an anomaly driven by timing. And we're continuing to see underlying position growth in the mid-single digits.

Let's move to slide seven to discuss our segment recurring revenue starting with our Ics our governance segment.

Ics recurring revenues rose, 5% to $518 million.

Including a one point benefit from acquisitions and a one point headwind from lower interest rates.

As a reminder, the earnings impact of lower interest rates is functionally hedged by lower interest expense on a better.

Right that.

Regulatory revenues rose, 4% in Q1, driven by 7% growth in equity revenue positions and 2% growth in fund positions.

Regulatory revenues were partially impacted by a shift in fund communications from September to October.

Eddings Thibault: It is still early in the year, but our testing is now beginning to give a little bit of visibility into the second half. And that's showing, again, continued strength across funds and equities, low double-digit equity position growth, continued mid-single digit fund growth for the balance of the year. I know you asked about drivers right now, but I just, since I have the floor, you know, I think that the key takeaway here is that innovation remains the key driver for long-term position growth. You know, 15 years ago, we were talking about the rising popularity of ETFs. And 10 years ago, we started to talk about managed accounts. Five years ago, it was zero commission trading. And we started talking five years ago about direct indexing, but now we're seeing how that's beginning to become an important component of growth now.

Which lowered Q1 regulatory growth by two points.

Data driven fund solutions revenue grew 2% as a three point headwind from lower interest rates, partially offset strong growth in our retirement and workplace solutions revenue.

We also completed the acquisition of I joined in mid September, which had only a modest impact on growth in the quarter.

We expect to see data driven fund revenue growth accelerate in the second half of the year.

Issuer revenues grew 6% driven by strong growth in both our disclosure solutions and our shareholder engagement solutions.

Customer communications revenues rose, 8% driven by organic growth in digital and print revenues and the addition of signal.

Eddings Thibault: And as I said in my remarks, now we're beginning to hear, you know, beginnings of interest in tokenized equities. And I think that just highlights the ongoing innovation that has driven position growth for the past 40 years, that there's always the next thing. And, you know, that's exciting. And so I think it really, we feel good about the long-term health here. Great. Thanks, guys. Our next question comes from Puneet Jain of JPMorgan. Please go ahead. Yes. Hey, thanks for taking my question. So I want to make sure, like I understand, like the, so the super validator status that stems from the digital asset repo platform, it seems like. So is it common for you to be paid for that repo platform in the form of coins? And then the second question on that is like the investments that you made in Canton Network, like.

Yeah.

For the year, we expect Ics recurring revenue at the high end of a 5% to 7% total recurring revenue guidance.

Including a modest benefit from the I joined and signal acquisitions, and the continued drag from lower interest rates.

Turning to GTO.

Revenues grew 12% in Q1, including 6% organic.

Capital markets revenues grew 6% driven by the growth in our global post trade solutions, which benefited from high trading volume and by the recognition of digital asset revenues.

Which together more than offset a point of losses related to the business exits that we discussed last quarter.

Digital asset revenues contributed $4 million or one point to the growth of our capital markets business in the first quarter.

With the recent increases in corn value. We expect these digital asset revenues to contribute approximately 1.2 capital markets growth in fiscal 'twenty six.

Eddings Thibault: How do you expect to make returns on that investment? Yeah, it's Tim, Puneet. So first of all. Just to be clear, the role as super validator is separate from what we're doing on distributed ledger repo. So built a distributed ledger repo platform, which is at this point actually on a private version of the Canton Network. It'll go public later on. But that's an investment we've made. And I was just saying that because of our closeness to digital asset holdings, they invited us to be a super validator. That was a separate investment we made for that activity. And it's just a separate activity. So related, but separate. And in terms of getting paid and how people get paid for that role, yes, it is very common to be paid in coin.

Taken together with our growing revenues from distributor ledger to rebuild platform, it's exciting to see how to organize vision effort starting to drive a small but real revenue contribution to our capital markets business.

Wealth and investment management revenues grew 22% driven by 5% organic growth and the impact of the S. I S acquisition.

As a reminder, we closed the deal on November 1st 24, and that revenue will be reported as organic for the last two months of our second quarter and in the second half of the year.

For the year, we expect ICS recurring Revenue at the high end of our 5 to 7%. Total recurring Revenue guidance.

For the year, we continue to expect GTO recurring revenue growth within our 5% to 7% guidance range with higher growth in wealth.

Including a modest benefit from the I join and Signal Acquisitions. And the continued drag from lower interest rates.

Turning to GTO.

Revenues grew 12% in Q1, including 6% organic.

Now, let's move to slide eight to review our key volume indicators.

Eddings Thibault: There's a whole governing document for the Canton Network, much like there are for Ethereum or Bitcoin, that explains the different roles that people play and how the economics of that works. And so, you know, the payments we're getting, which again, until this quarter, we really didn't have any value. We were picking this up, but now they do. So it's sort of interesting. Does that help? And then the investment in Canton. It's really, you know, the investment that we made was just the investment to become a super validator and to operate that, which was frankly rather low. Got it. Got it. And then the guidance increase for recurring revenue growth, can you talk about percent takes, like the acquisition contribution? I think, Ashima, you mentioned like the lower interest rates that being a headwind there.

Capital markets revenues grew 6% driven by the growth in our global post trade solutions, which benefited from high trading volume and by the recognition of digital asset revenues were.

We continue to see healthy growth in investor participation across both equities and funds.

Equity position growth was 12%, including 7% growth in revenue positions.

Which together more than offset a point of losses related to the business exits that we discussed last quarter.

Looking ahead, our testing shows mid teens total position growth in Q2.

Digital asset revenues contributed $4 million.

Full year testing is showing low double digit growth, which would imply revenue position growth in the mid to high single digit range.

One point to the growth of our capital markets business in the first quarter.

With the recent increases in corn value. We expect these digital asset revenues to contribute approximately 1.2 capital markets growth in fiscal 'twenty six.

Q1 fund position growth of 2% was impacted by the timing of fund communications in the quarter.

Testing continues to indicate mid single digit position growth for both the first half and the full year.

Taken together with our growing revenue from distributed ledger to rebuild platform, it's exciting to see our to organize that.

In GTO trade volumes rose, 17% for the quarter driven by double digit growth in both equity and fixed income volume.

Efforts, starting to drive a small but real revenue contribution to our capital markets business.

I'll wrap up my discussion of regarding revenue growth on slide nine.

Wealth and investment management revenues grew 22% driven by a 5% organic growth and the impact of <unk> acquisition.

Eddings Thibault: So can you talk about various percent takes that drove one-point increase in the guidance? Yeah, sure. I'll just reiterate what I said before, Puneet. Yes, the biggest driver of our revenue upside, the guidance, was the contribution that we saw from iJoin and Signal, both of which were announced within the quarter. It's really less than 50 basis points of contribution coming in from those, so that's one part. The other side I'll call out is we are seeing additional rate cuts. What we're baking in right now is our expectation based on the latest Fed dot plot, right, which calls for two more interest rate cuts in the balance of our fiscal year. That's baked into our guidance as well. But beyond that, the guidance really reflects our growing confidence in our underlying growth, right? Tim spoke a little bit about position growth that continues to be strong.

In Q1 recurring revenue growth constant currency was 8%.

As a reminder, we closed the deal on November 1st 24, and that revenue will be reported as organic for the last two months of our second quarter and in the second half of the year.

Primarily driven by five points of organic growth.

Revenue from closed sales remains the biggest driver of organic growth at five points as we on boarded revenues from our 430 million fiscal 'twenty five in backlog.

For the year, we continue to expect GTO recurring revenue growth within a 5% to 7% guidance range.

Our retention rate was 98% for the quarter.

With higher growth in route.

Internal growth contributed two points, primarily driven by higher trade volumes and digital asset revenues.

Now, let's move to slide eight to review our key volume indicators.

We continue to see healthy growth in investor participation across both equities and funds.

Acquisitions, primarily S. I S contributed three points to growth and.

And finally changes in FX contributed one point.

Equity position growth was 12%, including 7% growth in revenue positions.

Let's close our discussion of revenues on slide 10.

Total revenue increased 12% to $1 $6 billion.

Looking ahead, our testing shows mid teens total position growth in Q2.

By five points of growth from recurring revenue.

Full year testing is showing low double digit growth, which would imply revenue position growth in the mid to high single digit range.

Higher event, driven revenue drove four points of growth.

Eddings Thibault: Our revenue from sales is tracking well. And the digital asset revenue, while it's super small, is helping our growth overall. So all of that gives us confidence in our guide towards the higher end of 5% to 7% recurring revenue growth. Got it. Thank you. The next question is by Patrick O'Shaughnessy of Raymond James. Please go ahead. Hey, good morning. In a world where tokenized equities trades are recorded on the blockchain, do you see that impacting the need for intermediated communications between corporate issuers and their shareholders? Patrick, thank you very much for the question. Look, we see this as an opportunity. You know, really, we see it as the next wave of democratization that's going to create new sources of demand and position growth. You know. As I said in my remarks, the SEC has been really clear that tokenized securities are still securities.

Q1, 'twenty six revenues of $114 million, where our second highest quarter ever.

Q1 fund position growth of 2% was impacted by the timing of fund communications in the quarter.

The biggest driver of event driven revenue in the quarter was board elections at a major mutual fund complex.

Testing continues to indicate mid single digit position growth for both the first half and the full year.

This fund company had its loss proxy event in the first quarter of fiscal 2019.

N GT you trade volumes rose, 17% for the quarter driven by double digit growth in both equity and fixed income volumes.

In the seven years since that event the number of positions grew approximately 30%.

Highlighting the long term growth drivers propelling event driven revenues.

I'll wrap up my discussion of regarding revenue growth on slide nine.

Looking ahead, we expect event driven revenues to return to historic average levels of $50 million to $60 million per quarter for the balance of fiscal 'twenty six.

In Q1 recurring revenue growth constant currency was 8%.

Primarily driven by five points of organic growth.

Low to no margin distribution revenues grew 8%, primarily driven by higher postage rates and contributed three points to total revenue growth.

Revenue from closed sales remains the biggest driver of organic growth at five points as we on boarded revenues from our $430 million fiscal 'twenty five in backlog.

Turning now to margins on slide 11.

Our retention rate was 98% for the quarter.

Adjusted operating income margin was 15, 8% an increase of 280 basis points from Q1 25.

Internal growth contributed two points, primarily driven by higher trade volumes and digital asset revenues.

Eddings Thibault: The week before last at a major industry event, Paul Atkins was asked specifically about tokenized equities on the main stage. He was clear that they're going to be subject to all the same regulation, including Reg NMS and all the governance provisions that traditional equities are. You know, we believe the vast majority of tokenized equities are going to be purchased through a broker-dealer or exchange. Those intermediaries are going to have the same financial. Same asset servicing obligations they have today, including proxy, but also corporate actions, class actions, protecting the personal information of their clients, all of which creates a real opportunity for Broadridge. As I said in my remarks, we're going to be there to manage the complexity of disclosure, governance, and all of that. We're already talking to clients and industry participants about how we enable them to make this possible.

This growth was driven by higher event, driven revenue and operating leverage from a scale business, partially offset by our ongoing reinvestments.

Acquisitions, primarily S. I S contributed three points to growth and.

And finally changes in FX contributed one point.

Let's close our discussion of revenues on slide 10.

The net impact of lower interest rates and higher distribution revenues.

Total revenue increased 12% to $1 $6 billion.

<unk>, Eli margins by 30 basis points.

Driven by five points of growth from recurring revenue.

Let's move on to earnings on Slide 12.

Higher event, driven revenue drove four points of growth.

Q1, adjusted EPS grew 51% to $1 51, driven by higher event driven revenue.

Q1, 'twenty six revenues of 114 million, what our second highest quarter ever.

<unk> expense was 24 million in the quarter, a decrease of $8 million from Q1, 'twenty five driven by a combination of lower balances and lower rates.

The biggest driver of event driven revenue in the quarter was board elections at a major mutual fund complex.

This one company had its loss proxy event in the first quarter of fiscal 2019.

As I noted in my call outs Broadridge recorded a 46 million unrealized gain driven by the increase in the value of our digital asset holdings in the quarter.

Eddings Thibault: You know, I think, and then, as I said earlier, you know, this work on tokenized equity is just part of our broader strategy to drive tokenization across multiple asset classes where there's real value and where we have deep expertise. All right. Got it. Thank you. Total trade volume growth continues to be a healthy tailwind for GTO segment revenue. Can you remind us the percentage of segment revenue that's tied to trading volumes? And how durable do you view this growth to be? Yep. Overall, Patrick, if you think about the GTO revenues, I'd say about 1/3 of GTO revenues are tied to trade volumes. Not all of it is exactly paper trade, right? One-on-one though. I would say about 1/2 of that is direct paper trade. 1/2 of that is step bank kind of structures that we have.

In the seven years since that event the number of positions grew approximately 30% highlighting the long term growth drivers propelling event driven revenues.

That noncash gain was reported in other nonoperating income and was excluded from our calculation of adjusted EPS.

Looking ahead, we expect event driven revenues to return to historic average levels of $50 million to $60 million per quarter for the balance of fiscal 'twenty six.

Given the volatile nature of digital asset values, we expect to continue to record record gains and losses as we Mark These digital assets to market every quarter.

Low to no margin distribution revenues grew 8%, primarily driven by higher postage rates and contributed three points to total revenue growth.

Let's turn to sales now on slide 13.

Yeah.

Broadridge reported closed sales of 33 million driven by sales of our governance solutions.

Turning now to margins on slide 11.

Adjusted operating income margin was 15, 8% an increase of 280 basis points from Q1 dollars 25.

Looking ahead, our pipeline remains strong and we are reaffirming our guidance for full year closed sales of $2 $90 million to $330 million.

This growth was driven by higher event driven revenue.

And operating leverage from our scale business, partially offset by our ongoing reinvestments.

Turning to our cash flows on slide 14.

Drug regenerated free cash flow of $13 million in the first quarter.

Eddings Thibault: We're definitely seeing the impact of higher volumes on that direct paper trade portion. You typically see higher trade and higher periods of higher volatility. It's proven to be double digits for the last many quarters. We're not counting on very elevated levels of trade volumes going forward, but we're expecting continued strong growth. Great. Thank you. This concludes the question and answer session. I would like to hand things over back to management for any closing remarks. Well, thank you, operator. I want to thank everyone for joining our call today. Again, just to reiterate, we're really pleased with the strong start to the year. We're excited about what we see coming forward. We're excited about the innovation in the industry.

The net impact of lower interest rates and higher distribution revenues reduced Eli margins by 30 basis points.

Our strong cash performance was driven by higher earnings and working capital management.

And we remain on track to deliver free cash flow conversion of over 100% in fiscal 'twenty six.

Let's move on to earnings on Slide 12.

Q1, adjusted EPS grew 51% to $1 51, driven by higher event driven revenue.

Turning next to capital allocation on slide 15.

We continue to take a balanced approach to capital allocation in.

Interest expense was 24 million in the quarter, a decrease of $8 million from Q1, 'twenty five driven by a combination of lower balances and lower rates.

In Q1, we invested $30 million in capital spending and software spend with an additional 7 million to onboard clients onto our solutions.

As I noted in my call outs Broadridge recorded a 46 million unrealized gain driven by the increase in the value of our digital asset holdings in the quarter.

We deployed $56 million during the quarter on two tuck in acquisitions to strengthen our governance franchise.

That noncash gain was reported in other nonoperating income and was excluded from our calculation of adjusted EPS.

In addition, we continue to expect our previously announced acquisition of Acland to close at calendar year end pending approval by German regulatory authorities.

Eddings Thibault: We hope that you're as excited as we are about everything that's happening in our industry and about the year ahead as we continue to really work with our clients to transform the financial services industry. Thank you for your interest in Broadridge. We look forward to speaking to you on the next call. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

Given the volatile nature of digital asset values, we expect to continue to record record gains and losses as we Mark These digital assets to market every quarter.

During the quarter, we also repurchased $150 million in Broadridge chairs.

And returned an additional $103 million to shareholders why our quarterly dividend.

Let's turn to sales now on slide 13.

And yesterday, we entered into an agreement to use approximately $340 million of our canton coin holdings as part of our pipe offering in pad immune incorporated a NASDAQ listed company with the Deca D. H E R that intends to execute a digit.

Yeah.

Broadridge reported closed sales of 33 million driven by sales of our governance solutions.

Looking ahead, our pipeline remains strong and we are reaffirming our guidance for full year closed sales of $2 $90 million to $330 million.

Turning to our cash flows on slide 14.

Laughs at Treasury strategy for Canton coins.

Broadridge generated free cash flow of 13 million in the first quarter.

When the deal closes later this week, we anticipate holding warrants for 8% of the publicly traded vehicle.

Our strong cash performance was driven by higher earnings and working capital management.

And we remain on track to deliver free cash flow conversion of over 100% in fiscal 'twenty six.

Let's talk to wrap up by reviewing our fiscal 2006 guidance on slide 16.

As I said in my call outs Broadridge is on track to deliver a strong fiscal 'twenty six results.

Turning next to capital allocation on slide 15.

We continue to take a balanced approach to capital allocation in.

Given our strong start to the year and the incremental revenue from our signal and I join acquisitions. We now expect fiscal 'twenty six recurring revenue growth constant currency to be at the higher end of our 5% to 7% guidance.

In Q1, we invested 30 million in capital spending and software spend within an additional $7 million to onboard clients onto our solutions.

We deployed $56 million during the quarter on two tuck in acquisitions to strengthen our governance franchise.

We continue to expect adjusted operating income margin of between 20% to 21%.

In addition, we continue to expect our previously announced acquisition of Acland too.

Adjusted EPS growth of 8% to 12% and $2 $90 million to $330 million in closed sales.

Clothes at calendar year end pending approval by German regulatory authorities.

Additionally, I will highlight that we are expecting a more normalized level of event driven revenue in the second quarter of 26.

During the quarter, we also repurchased $150 million in Broadridge chairs.

<unk> to last year's record of 125 million.

And returned an additional 103 million to shareholders, while our quarterly dividend.

As a result, we expect <unk> adjusted EPS to be approximately 13% to 15% of our full year outlook.

And yesterday, we entered into an agreement to use approximately $340 million of our canton coin holdings.

I'll wrap by summarizing my key points.

As part of our pipe offering in pad immune incorporated a NASDAQ listed company with the ticker D. H E. R that intends to execute a digital asset treasury strategy for canton coins.

Broadridge is off to a strong start to the year and the combination of strong performance and recent acquisitions has us incrementally more confident in growth in recurring revenues.

We are deploying capital to boost growth and shareholder returns.

When the deal closes later this week, we anticipate holding warrants for 8% of the publicly traded vehicle.

And last we remain very much on track to deliver another strong year of recurring revenue and adjusted EPS growth in fiscal 'twenty, six and deliver again on our top and bottom line three year objectives.

Let's stop to wrap up by reviewing our fiscal 2006 guidance on slide 16.

As I said in my call outs Broadridge is on track to deliver a strong fiscal 'twenty six results.

With that let's move to Q&A.

Yeah.

Given our strong start to the ear and the incremental revenue from our signal and I join acquisitions. We now expect fiscal 'twenty six recurring revenue growth constant currency to be at the higher end of our 5% to 7% guidance.

We will now begin the question and answer session to ask a question you May Press Star then one on your take if youre using a speakerphone. Please pick up your handset before pressing the keys if at any time. Your question has been addressed and we would like to withdraw it. Please press Star then two.

We continue to expect adjusted operating income margin of between 20% to 21%.

At this time, we will pause momentarily to assemble our roster.

Adjusted EPS growth of 8% to 12% and $2 $90 million to $330 million in closed sales.

Our first question comes from.

James.

Organ Stanley.

Additionally, I will highlight that we are expecting a more normalized level of event driven revenue in the second quarter of 26 compared to last year's record of 125 million.

Please go ahead, hi, everyone, Hi, Brian, It's Michael and Tom Tom for James Thanks for taking my question I just wanted to ask on the recurring revenue outlook are tracking towards the high end of the range versus the reiteration on the EPS Ron I recognize that we're going to see a reversion of some of the event driven revenue strength in the.

As a result, we expect <unk> adjusted EPS to be approximately 13% to 15% of our full year outlook.

Quarter, but can you just walk through some of the puts and takes as to why EPS wouldn't similarly track towards the high end of the range just given the.

I'll wrap up by summarizing my key points.

Broadridge is off to a strong start to the AR and the combination of strong performance and recent acquisitions has us incrementally more confident in growth in recurring revenues.

The increment high incremental margin nature of that event driven revenue you saw on the quarter. Thanks.

Absolutely Thanks, Michael I'll take that up.

We are deploying capital to boost growth and shareholder returns.

You're right we're off to a strong out of the year and as a result, we raised our guidance for recurring revenue to the higher end of the 5% to 7% range.

And last we remain very much on track to deliver another strong year of recurring revenue and adjusted EPS growth in fiscal 'twenty, six and deliver again on a top and bottom line three year objectives.

The biggest driver of the revenue upside is the acquisitions that we're seeing from IGN and signal that we announced earlier this year, which are more than offsetting the additional rate cuts that we're seeing in the.

With that let's move to Q&A.

Yes.

I will say beyond that we are seeing strength in our underlying business revenue from sales from converting a $430 million backlog is continuing to deliver consistent results and fuel our growth position.

We will now begin the question and answer session to ask a question you May Press Star then one on your telephone.

If youre 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 it. Please Chris store than two at this time, we will pause momentarily to assemble our roster.

Position growth is another important factor for us and we are growing increasingly confident about the mid teens growth that you're expecting for equities in Q2.

And mid to high single digit revenue growth for the full year.

Our first question comes.

Fund position and revenue growth also continues at mid single digit.

From James.

Morgan Stanley.

And we've seen a bit more upside from the digital asset revenues driven by increase in market value relative to the starting point of the year.

Please go ahead, hi, everyone Hi.

It's Michael <unk> on for James Thanks for taking my question I just wanted to ask on the recurring revenue outwork tracking toward the high end of the range versus the reiteration on the EPS Ron I recognize that we're going to see a reversion of some of our event driven revenue strength in the quarter, but can you just walk through some of that puts them.

And specifically in Q1 as you noted we also saw the impact of higher event, which we were expecting given the large mutual fund proxy that was planned in Q1.

All in all all of this gets us to a super strong start to the year, which enables us to invest in our business, while we continue to drive towards our 8% to 12% adjusted EPS growth.

So as to why EPS wouldn't similarly track towards the high end of the range just given the high incremental margin nature of that event driven revenue you saw in the quarter.

I'm, just going to add onto that a little bit because you.

Absolutely Thanks, Michael I'll take that.

It is it's pretty early in the year for us to think about the translation of the of any kind of incremental margin if I can talk.

You're right we're off to a strong out of the year and as a result, we raised our guidance for recurring revenue to the higher end of the 5% to 7% range.

And earnings and I. Just note. This is a time of great opportunity in the industry for us and for our clients and we're really pleased that.

The biggest driver of the revenue upside is the acquisitions that we are seeing from I joined and signal that we announced earlier this year, which are more than offsetting the additional rate cuts that we're seeing in the.

We're in a position to be both investing and delivering on our commitments and I.

I just want to focus you on four key areas that we're investing in now to organization digital assets shareholder engagement digital communications AI and platform in each of these are areas, where we have a strong right to win and can bring real value to our clients by helping them really drive innovation and so it's just.

I will say beyond that we are seeing strength in our underlying business revenue from sales from converting a $430 million backlog is continuing to deliver consistent results and fuel our growth.

Position growth is another important factor for us and we are growing increasingly confident about the mid teens growth that you're expecting for equities in Q2 and mid to high single digit revenue growth for the full year.

It's early in the year to think about the balance of investment in and earnings delivery and so really staying with our guidance is the right the right the right call right now.

Fund position and revenue growth also continues at mid single digit.

That's helpful. Thank you both and then maybe just a quick housekeeping one on Cat then.

And we've seen a bit more upside from the digital asset revenues driven by increase in market value relative to the starting point of the year.

I recognize you're using some of those funds are those holdings to participate in the pipe, but that maybe after contemplating that transaction do you intend.

In specifically in Q1 as you noted we also saw the impact of higher event, which we were expecting given the large mutual fund proxy that was planned in Q1.

Convert some of those holdings to cash if at all to sort of mitigate some of the gap volatility and if so like how should we think about.

All in all all of this gets us to a super strong start to the year, which enables us to invest in our business, while we continue to drive towards that 8% to 12% adjusted EPS growth.

Maybe like a theoretical 10% change in canton corn and the impact on GAAP EPS. Thanks.

Yeah.

I'll take that just at a very high level I do think there's we're going to see some GAAP volatility. That's why we are why we're certainly going to adjust this.

I'm, just going to add on to that a little bit because.

It is it's pretty early in the year for us to think about the translation of any income.

We do think this is gonna be a pretty volatile asset and is probably something we'd we'd prefer to have off on to have off on the side.

From an incremental margin if I can talk.

And earnings and I. Just note. This is a time of great opportunity in the industry for us and for our clients and we're really pleased that.

I think the core thing here is we're an operating company not an investment company and so I think you should expect to see US liquidate. These holdings overtime. There are reasons, because a lot of momentum in the network and the potential for the network to become really the rails for institutional financial transactions.

We're in a position to be both investing and delivering on our commitments and I.

I just want to focus you on four key areas that we're investing in now to organizations digital assets shareholder engagement digital communications AI and platform in each of these are areas, where we have a strong right to win and can bring real value to our clients by helping them really drive innovation and so it's just a you know it is early in the year to think about the balance of.

The coins could become a lot more valuable over time. So I think I think this will be something that you'll see us see us evolve over.

Over.

Probably a few years.

Yes.

Only thing I'd add is remember in terms of the revenue at least I called out that we expect this to be about one point of impact to the contract to our capital markets business. So on the larger scale I wouldn't expect the value to have a significant impact to broadridge.

Investment in and earnings delivery, and so really staying with our guidance is the right the right the right call right now.

That's helpful. Thank you both and then maybe just a quick housekeeping one on cat.

I recognize you're using some of those funds are those holdings to participate in the pipe, but that maybe after contemplating that transaction do you intend to convert some of those holdings to cash if at all to sort of mitigate some of the gap volatility and if so like how should we think about.

Revenues.

That makes sense. Thank you guys.

Our next question comes from Tycho Peterson of Needham.

Please go ahead.

Hey, good morning.

Hey, guys. Thanks for taking my questions I wanted to talk a little bit on sales cycles and kind of what you guys are seeing particularly if theres been any impact from it.

Maybe like a theoretical 10% change in cats in corn and the impact on GAAP EPS.

Yeah.

Yeah, I'll I'll I'll take that just at a very high level I do think there's we're going to see some GAAP volatility. That's why we are why we're certainly going to adjust this.

The government shutdown, obviously at least some things in capital markets and things have been hit snags, a little bit, but I guess have you guys seen any impact.

Getting deals across the finish line or client conversations that might have slowed down in the last month plus.

We do think this is going to be a pretty volatile asset and.

It's probably something we prefer to just have off on to have off on the side.

There is a it's Jim.

I think the core thing here is we're an operating company not an investment company and so I think you should expect to see US liquidate. These holdings overtime. There are reasons, because a lot of momentum in the network and the potential for the network to become really the rails for institutional financial transactions.

And first.

First of all I think we were really pleased with the strong close we had to fiscal 'twenty five.

And we're you know we're still on our guidance for this year.

Typically to your question I think the the selling environment that we're seeing is pretty stable. It is we haven't seen any slowdown in in conversations because of the government shutdown.

The coins could become a lot more valuable over time. So I think I think this will be something that you'll see us see us evolve over.

I think many of our conversations are.

They have a sales cycle that was really outside the window of weather, whether a few weeks. It makes a difference unless we're coming right up on the end of the year like we talked about last spring. So I think it's it's really you know we're not seeing any change it's pretty early in the year in terms of doing anything other than confirming our guidance.

Over.

A few years.

Yeah. The only thing I'll add is remember in terms of the revenue at least I called out that we expect this to be about one point of impact to the contract to our capital markets business. So in the larger scale I wouldn't expect you to have a significant impact to broadridge.

And you know all.

All that said I think the market remained strong.

Yes.

That makes sense. Thank you guys.

Conversations were having.

With our clients are pretty exciting you know around strategic topics and digital communications and shareholder engagement and platform among others and the conversations that I'm, having with clients are really very much.

Our next question comes from Kyle Peterson of Needham. Please.

Please go ahead.

Hey, good morning, guys. Thanks for taking my questions.

I wanted to talk a little bit on on sales cycles and kind of what you guys are seeing particularly if theres been any impact from.

Much more on the transformational side, which I think is a testament to the investments that we've made so.

We have a lot of confidence going forward is grounded in those conversations are grounded in our pipeline, which remains healthy and has actually grown since beginning of the year.

The government shutdown, obviously at least some things in capital markets and things have been hit snags, a little bit, but I guess have you guys seen any impact to <unk>.

Great.

That's really helpful. And then maybe just a follow up broadly kind of your thoughts on how digital assets and token relations fits within Broadridge, obviously, several moving pieces.

Any deals across the finish line or client conversations that might have slowed down in the last month plus.

Yes, Thanks, it's a it's Jim and first.

Starting to get some revenue from that.

First of all I think we were really pleased with the strong close we had to fiscal 'twenty five.

You made the investment, but I guess, how should we think about how digital assets.

And we're we're you know we're still on our guidance for this year.

It should continue to evolve and.

Typically to your question I think the the selling environment that we're seeing is pretty stable. It is we haven't seen any slowdown in in conversations because of the government shutdown.

What role do you see that playing in your business both in the near and long term here.

Yeah. Thank you for that you know I think we see digital assets and <unk> as a mega trend for the next 10 years and is a real opportunity for Broadridge and the industry and our strategy is to drive <unk> across the asset classes, where we have deep expertise and where.

I think many of our conversations are they.

They have a sales cycle that was really outside the window of weather.

A few weeks it makes a difference unless we're coming right up on the end of the year like we talked about last spring. So I think it's it's really Oh, no. We're not seeing any change it's pretty early in the year in terms of doing anything other than confirming our guidance.

We think the asset class will benefit the most and that certainly includes fixed income repos are collateral.

And you know all.

Longer term token is equities, we think can be a part of the next wave of democratization that drives demand for U S equities and contributes to long term position growth.

All that said I think the market remains strong.

Conversations were having.

With our clients are pretty exciting you know around strategic topics and digital communications and shareholder engagement and platform among others and the conversations that I'm, having with clients are really very much.

And then you know sort of as a as a doubleclick within that we think they can't on network is a has a potential you know early days, but the potential to become an operating system that makes a lot of that more possible. So you know I think as you look across our businesses are you seeing the continued progress on distributed ledger repo.

Much more on the transformational side, which I think is a testament to the investments that we've made so.

We have a lot of confidence going forward is grounded in those conversations are grounded in our pipeline, which remains healthy and has actually grown since the beginning of the year.

<unk> capital markets.

And there, we certainly going to be expanding traditional use cases, including real time, new asset classes stable coin Oh, there's a kantar network side of things, which is also.

Great.

That's really helpful. And then maybe just a follow up but a broadly kind of your thoughts on how digital assets and took innovation fits within Broadridge. Obviously, several moving pieces. You know you guys have started to get some revenue from that you made the investment, but I guess, how should we think about how.

Sort of within capital markets.

Token as equities, we'd see as a longer term opportunity that would be really affecting more or somebody on the capital market side, but more ics business in terms of extending position growth.

<unk> and digital assets should continue to evolve and what role do you see that playing in your business both in the near and long term here.

And really being the next wave of the evolution of democratization to drive that up.

Mid single high single digit position growth into the.

Foreseeable future and be up so and then and then last on the wealth management side. You know this demand for digital assets is putting pressure on wealth managers to integrate those assets into their traditional client service operations.

Yeah. Thank you for that.

I think we see digital assets and <unk> as a mega trend for the next 10 years and is a real opportunity for Broadridge and the industry and our strategy is to drive <unk> across the asset classes, where we have deep expertise and where we think the asset class will benefit the most and that's.

And you know they they sort of stayed away from them in the past and I think that is changing quickly now.

But when you think about our wealth managers are now offering digital assets our clients. There's all the other things that you need to do tax margin statements. All those things and so we think that's an area where we can really help our core engines will be enable to represent digital assets by early next calendar year and that is going to allow our clients to flow transaction.

Certainly includes fixed income repos are collateral.

Longer term token is equities, we think can be a part of the next wave of democratization that drives demand for U S equities and contributes to long term position growth.

And then.

You know sort of is that as that doubleclick within that we think they can't on network is had the potential you know early days, but potential to be common operating system that makes a lot of that more possible. So you know I think as you look across our businesses are you seeing the continued progress on distributed ledger repo and capital Mark.

Through for everything from cost basis tax margin segue statements asset servicing and all the all that complexity that comes with with being with doing a large scale either capital markets or wealth manager.

Great.

Thanks for taking the questions.

<unk> and there were certainly going to be expanding traditional use cases, including real time, new asset classes stable coin.

I'll, just maybe I'll just add on because you would also asking about the near term and the midterm implications from a revenue perspective, right. So I'll just tack on a as you know we specifically for canton coins, we on these canton Gainesville being a supervisor data on the Canton network.

There's a canton network side of things, which is also sort of within capital markets.

<unk> equities, we'd see as a longer term opportunity there.

That would be really affecting more are somewhat on the capital market side, but more ics business in terms of extending position growth.

In Q1, we recognized $4 million of revenue like we said associated with the service.

The actual revenue that we on over the course of the remainder of the year would vary based on the actual meeting activity the number of coins, specifically and the price of these claims right.

And I really and being the next wave of the evolution of democratization to drive that.

Mid single high single digit position growth into that you know.

Foreseeable future and N b out so and then and then last on the wealth management side. This demand for digital assets is putting pressure on wealth managers to integrate those assets into their traditional client service operations.

They have a we've got a whole minting scheduled but bottom line it translates into about a point of impact to our capital markets.

Higher in Q2, and lower in Q3 and Q4, so that's from a revenue perspective and on the balance sheet perspective, the only thing I'll call out is we do have at the end of last quarter. We have $1 7 billion coins that were valued at $74 million right and like you said we've control.

And you know they they sort of stayed away from them in the past and I think that is changing quickly now.

But when you think about our wealth managers are now offering digital assets our clients. There's all the other things that you need to do tax margin statements. All those things and so we think that's an area where we can really help our core engines will be enabled to represent digital assets by early next calendar year and that is going to allow our clients to flow transaction.

It's some of these to the D T.

But there could be volatility associated with the 74 million, which was continuing to adjust out of our adjusted EPS.

Through for everything from cost basis tax margin Sag statements asset servicing and all the all that complexity that comes with with being with being a large scale either capital markets or wealth manager.

Great. Thanks for the clarification there.

Yes.

Our next question comes from Scott workflow from Wolfe Research. Please go ahead.

Great. Thanks.

Hey, good morning, Thanks for taking my questions are answered, but just on the Q E. P. S guarded about 13% to 15% of our full year EPS I understand that you know we should see a normalization of event driven revenue, but just wondering if theres any anything else going on there that we should keep in mind for her to DBS.

Thanks for taking the questions.

I'll, just maybe I'll just add on because you were also asking about the near term and the midterm implications from a revenue perspective, right. So I'll just tack on a as you know we specifically for Qantas coins, we on these canton Gainesville being a supervisor data on the Canton network.

No that's really the major drivers caught it it's just a tough compare when because of the event activity that we saw last year in Q2.

In Q1, we recognized $4 million of revenue like we said associated with this service.

The actual revenue that we on over the course of the remainder of the year would vary based on the actual meeting activity the number of coins, specifically and the price of these claims right.

Just wanted to make sure you guys saw the grow over impact coming in from that nothing else significant to call out.

Got it that makes sense and then forgive me I was hopping from another call. So I may have missed the commentary here, but just wondering if you can talk a little bit more about the position growth trends that you saw in the quarter and how that how that sort of trended relative to expectations.

They have a we've got a whole minting scheduled but bottom line it translates into about a point of impact to our capital markets.

Higher in Q2, and lower in Q3 and Q4, so that's from a revenue perspective and on the balance sheet perspective, the only thing I'll call out is we do have at the end of last quarter. We have one 7 billion coins that were valued at $74 million right and like you said we've control.

Yeah.

Thanks Scott.

Position growth has remained strong and we're seeing really nice strength in the underlying drivers are for equity positions that which grew 12%.

Really driven by healthy growth in managed accounts, but also also pretty good pretty good growth in self directed.

Some of these to the D G.

As we talk to our clients. They continue to tell us that direct indexing is that you know a significant driver of of the managed account growth.

But there could be volatility associated with the $74 million, which will continue to adjust out of our adjusted EPS.

And then the equity revenue positions you know taking out the smaller accounts on the fractional shares and 7%, which was really in line with what we've seen over the long run.

Great. Thanks for the clarification there.

Our next question comes from Scott workflow from Wolfe Research. Please go ahead.

And then.

I noted that on the fund growth side, it was 2%, but that was really an anomaly driven by timing.

Hey, good morning, Thanks for taking my questions I'm, asking but just on the <unk> EPS guide at about 13% to 15% of our full year EPS understand that you know we should see a normalization of event driven revenue, but just wondering if there is any anything else going on there maybe we should keep in mind for for two gave yes.

And we're continuing to see underlying position growth in the mid single digits.

It is still early in the year, but our testing is now beginning to do.

Do you have a little bit of visibility into the second half and that's showing again continued strength across funds and equities low double digit equity position growth continued mid single digit fund growth for the balance of the year.

No that's really the major driver Scott, it's just a tough compare when because of the event activity that we saw last year in Q2.

I know you asked about drivers right now, but it just since I have the floor.

Just wanted to make sure you guys saw the grow over impact coming in from that nothing else significant to call out.

No I think that that the key takeaway here is that innovation.

Got it got it that makes sense and then forgive me I was hopping from another call. So I may have missed the commentary here, but just wondering if you can talk a little bit more about the position growth trends that you saw in the quarter and how that how that sort of trended relative to expectations. Thanks.

Remains the key driver for our long term position growth in.

15 years ago, we were talking about the rising popularity of Etfs and 10 years ago, We started to talk about managed accounts.

Five years ago. It was commissioner Zero Commission trading and and we started talking five years ago about direct indexing, but now we're seeing how that's beginning to become an important component of growth now and as I said in my remarks, and now we're beginning to hear you know.

Yeah.

Thanks Scott.

Position growth is remaining strong and and what we're seeing really nice strength in the underlying drivers are.

For equity positions, which grew 12% really driven by healthy growth in managed accounts, but also also pretty good pretty good growth in self directed.

Earnings of interest in token us equities.

And I think that just highlights the ongoing innovation that has driven position growth for the past 40 years. So there's always the next thing.

As we talk to our clients. They continue to tell us that direct indexing is that you know a significant driver of of the managed account growth.

And and that's exciting and so I think it really we feel good about the long term healthier.

And then the equity revenue positions you know taking out the smaller accounts on the fractional shares and 7%, which was really in line with what we've seen over the long run.

Great. Thanks, guys.

Our next question comes from Puneet Jain of J P. Morgan.

And then.

I noted that on the fund growth side, it was 2%, but that was really an anomaly driven by timing.

Please go ahead.

Yes.

Thanks for taking my question.

And we're continuing to see underlying position growth in the mid single digits.

So I want to make sure I understand.

Super.

Yes.

It is still early in the year, but our testing is now beginning to.

Tom I would just tell us.

<unk>.

But it seems like.

Do you have a little bit of visibility into the second half and that's showing again continued strength across funds and equities low double digit equity position growth continued mid single digit fund growth for the balance of the year.

At Goldman for you to repeat it for the full platform and foremost points and then the second question on that is like the investments that you made.

I know you asked about drivers right now, but it just since I have the floor.

In the network.

How do you expect to.

No I think that that the key takeaway here is that innovation.

Make returns on that investment.

Yeah, It's is Germany, so first of all.

Remains the key driver for our long term position growth.

Just to be just to be clear.

15 years ago, we were talking about the rising popularity of Etfs and 10 years ago, We started to talk about managed accounts.

The the rule as Supervalu Deere is separate from what we're doing on distributed ledger repo. So built a distributed ledger repo platform.

Five years ago. It was commissioner Zero Commission trading and and we started talking five years ago about direct indexing, but now we're seeing how that's beginning to become an important component of growth now and as I said in my remarks, and now we're beginning to hear.

Which is which is at this point actually on the that's on a private version of Canton network. It'll go public later on but.

That's an investment we've made and I was just saying that because of our closeness to digital asset holdings.

Earnings are interested in talking to us equities.

And I think that just highlights the ongoing innovation that has driven position growth of the past 40 years. So theres always the next thing.

Just to be a supervalu or that was a separate investment we made for that activity and it's it's it's just a separate activity so related but separate and.

And and that's exciting and so I think it really we feel good about the long term healthier.

In terms of of getting paid and how people get paid for that role.

Great. Thanks, guys.

Yes. It is very common to be paid in kind as a whole are governing document for the Canada network. Much like there are for a theory them or bitcoin Ah that explains the different roles that people play and how the economics of that works and so.

Our next question comes from Puneet Jain of Jpmorgan.

Please go ahead.

Yes.

Thanks for taking my question.

So I want to make sure.

You know the payments, we're getting which again until until this quarter. It really didn't have any value here, where Ah Ah picking this up but but now they do so it's a it's sort of interesting.

So the.

The Super funds.

This stems from the last.

Triple.

Tom It seems like so is it common for you to be for the full platform and foremost point and then the second question on doctors like the investments that you made.

And then the investment in canton.

Hum.

It's really.

Uh huh.

The investment that we've made with just the investments become a super validated and operate that which was.

And the network.

How do you expect to make returns on that investment.

Frankly, rather low.

Got it got it.

Yeah, It's a it's Jim.

Then that guidance increase recurring revenue growth can you talk about the puts and takes Nick.

So first of all.

Just to be just to be clear.

The wall as Supervalu data is separate from what we're doing on distributed ledger repo. So built it distributor ledger repo platform.

The acquisition contribution I think you mentioned have been lower interest rates.

That being a headwind.

So can you talk about various puts and takes that drove one point increase in the guidance.

Which is which is at this point actually on the that's on a private version of Kent on network. It'll go public later on but.

Yeah sure I'll, just reiterate what I said before Bonnie yes, the biggest driver of our revenue upside.

That's an investment we've made and I was just saying that because of our closeness to digital asset holdings.

The guidance was the contribution that we saw from I join and signal both of which were.

Just to be Super validate or that was a separate investment I made for that activity and it's just a separate activity.

Announced within the quarter, it's really less than 50 basis points of contribution coming in from those we are so that's one but the other side I'd call out is we are seeing additional rate cuts what we're baking in right now is our expectation based on the latest fed dot plot right, which calls for two more into.

So related but separate and in terms of getting paid and how people get paid for that role. Yes. It is very common to be paid in coin as a whole are governing document for the canton network. Much like there are for a theory M or bitcoin and that explains the different roles that people play and how the economics of that.

Rate cuts in the balance of our fiscal year, that's baked into our guidance as well.

Works and so you.

You know the payments, we're getting which again until until this quarter. It really didn't have any value here we are.

Beyond that the guidance really reflects our growing confidence in our underlying growth right Tim spoke a little bit about position growth that continues to be strong our.

Picking this up but but now they do so it's a it's sort of interesting.

Our revenue from sales is tracking well and the digital asset revenue, while it's super small is helping our growth overall.

And then the investment in canton.

It's it's really.

The investment that we made was just the investments become a super validated and operate that which was.

So that all of that gives us confidence in our guide towards the higher end of 5% to 7% recurring revenue growth.

Frankly, rather low.

Okay. Thank you.

Got it got it.

And then Doug.

Guidance increase for recurring revenue growth can you talk about the puts and takes like like the acquisition contribution I think you mentioned check them.

The next question is Patrick O'shaughnessy of Raymond James.

Please go ahead.

Hey, good morning in a world where token equities trades are recorded on the blockchain.

Right.

That being a headwind.

So can you talk about puts and takes that drove the increase in the guidance.

You see that impacting the need for intermediate communications between corporate issuers and their shareholders.

Yeah sure I'll, just reiterate what I said before Bonnie yes, the biggest driver of our revenue upside.

Patrick Thank you very much for the question and look we see this as an opportunity.

The guidance was the contribution that we saw from IGN and signal both of which was.

And you know really we see it as the next wave of democratization, that's going to create new sources of demand and position growth.

Announced within the quarter, it's really less than 50 basis points of contribution coming in from those we are so that's one but the other side I'd call out is we are seeing additional rate cuts what we're baking in right now is our expectation based on the latest fed dot plot right, which calls for two more into.

And you know.

As I said in my remarks, VLCC has been has been really clear that token I securities are still securities.

At a a week for a laugh at a major industry event, Paul Atkins was asked specifically about token as equities on the main stage and he was clear that they're going to be subject to all the same regulation, including Reg NMS and all the governance provisions that traditional equities are.

Rate cuts in the balance of our fiscal year, that's baked into our guidance as well.

We believe the vast majority of trucking hours equities are going to be purchased through a broker dealer or exchange and those intermediaries are going to have the same financial.

Beyond that the guidance really reflects our growing confidence in our underlying growth right Tim spoke a little bit about position growth that continues to be strong our.

Same asset servicing obligations they have today, including proxy, but also corporate actions class actions are protecting the personal information of their clients all of which creates a real opportunity for broadridge. So as I said in my remarks, we're gonna be there to manage the complexity of disclosure of governance and all of that.

Our revenue from sales is tracking well and the digital asset revenue, while it's super small is helping our growth overall.

So that all of that gives us confidence in our guide towards the higher end of 5% to 7% recurring revenue growth.

Okay. Thank you.

And I remember talking to clients and industry participants about how we enable them to make this possible. So.

The next question is Patrick O'shaughnessy of Raymond James.

You know I think and then and then as I said earlier you know this work on token is equity. It's just part of our broader strategy to drive organization across multiple asset classes, where there's real value and where we have deep expertise.

Please go ahead.

Hey, good morning in a world where token is equities trades are recorded on the blockchain do you see that impacting the need for intermediate it communications between corporate issuers and their shareholders.

Alright got it thank you.

And then total or trade volume growth continues to be a healthy tailwind for GTO segment revenue can you remind us the percentage of segment revenue that's tied to trading volumes and how durable do you view this growth to be.

Patrick Thank you very much for the question and look we see this as an opportunity.

And you.

You know really we see it as the next wave of democratization, that's going to create new sources of demand and position growth.

Yeah. So overall, Patrick if you think about the GTO revenues I'd say about a third of GTO revenues I try a guide to.

And you know as.

As I said in my remarks, the SEC has been has been really clear that token I securities are still securities.

<unk> trade volumes not all of it is.

And a week for a laugh at a major industry event, Paul Atkins was asked specifically about token actually equities on the main stage and he was clear that they're going to be subject to all the same regulation, including Reg NMS and all the governance provisions that traditional equities are.

Exactly paper trade like one on one though.

I would say about half of that is direct paper trade half of that is demand kind of structures that we have.

And we are definitely seeing the impact of higher volumes on the indirect paper trade portion.

We believe the vast majority of trucking hours equities are going to be purchased through a broker dealer or exchange and those intermediaries are going to have the same financial.

It is you typically see higher trade and higher periods of higher volatility, it's proven to be double digits for the last many quarters.

Same asset servicing obligations they have today, including proxy, but also corporate actions class actions are protecting the personal information of their clients all of which creates a real opportunity for broadridge. So as I said in my remarks, we're gonna be there to manage the complexity of disclosure of governance and all of that.

We're not counting on very elevated levels of trade volumes going forward, but we are expecting continued strong growth.

Great. Thank you.

This concludes the question and answer session I'd like to two I would like to him. Thank you Rebecca management for any closing remarks.

And I remember I was talking to clients and industry participants about how we enable them to make this possible. So.

You know I think and then and then as I said earlier. This work I'm talking about the equity. It's just part of our broader strategy to drive to a organization across multiple asset classes, where there's real value and where we have deep expertise.

Well, thank you operator, and I want to thank everyone for joining our call today.

Again, just to reiterate we're really pleased with the strong start to the year. We're excited about what we see coming forward. We're excited about the innovation in the industry and we hope that you're as excited as we are about everything that's happening or industry and about the year ahead.

Alright got it thank you.

And then total or trade volume growth continues to be a healthy tailwind for GTO segment revenue can you remind us the percentage of segment revenue that's tied to trading volumes and how durable do you view this growth to be.

As we continue to really work with our clients to transform the financial services industry.

Thank you for your interest in Broadridge, we look forward to speaking to you on the next call.

Yeah. So overall, Patrick if you think about the GTO revenues I'd say about a third of GTO revenues I I'd try a guide to.

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

<unk> trade volumes not all of it is.

Exactly paper trade like one on one though.

I would say about half of that is direct vapor trade half of that as that band kind of structures that we have.

And we're definitely seeing the impact of higher volumes on that direct paper trade portion.

It is up you typically see higher trade and higher periods of higher volatility, it's proven to be double digits for the last many quarters.

We're not counting on very elevated levels of trade volumes going forward, but we are expecting continued strong growth.

Great. Thank you.

This concludes our question and answer session, if you'd like to two I would like to hand things over back to management for any closing remarks.

Well, thank you operator, and I want to thank everyone for joining our call today.

Again, just to reiterate we're really pleased with the strong start to the year. We're excited about what we see coming forward. We're excited about the innovation in the industry and we hope that you are as excited as we are about everything that's happening in our industry and about the year ahead.

As we continue to really work with our clients to transform the financial services industry.

Thank you for your interest in Broadridge, we look forward to speaking to you on the next call.

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

[music].

Yes.