Full Year 2026 Broadridge Financial Solutions Inc Earnings and Business Update Call
Speaker #1: Joining you from our office in Midtown Manhattan. Thanks for joining us today. As we get started, please download the accompanying slides within your portal, which will serve as a guide to my remarks.
Speaker #1: I'll start with a few selective disclosures. First, I'll be making forward-looking statements on today's call about Broadridge that involve risks. A summary of the risks that may impact our business can be found on our Form 10-K annual report on our website.
Speaker #1: Second, I'll be referring to several financial metrics, which are different from those found in our reported financial statements. We believe that these non-GAAP measures provide our investors with a more complete understanding of Broadridge's underlying operating results.
Speaker #1: And you can find an explanation of these measures in reconciliations to their comparable GAAP measures in the appendix. Last, all statements related to our fiscal year 27 financial guidance are as of August 4, 2026, and are not updated.
Speaker #1: Now, we have a full agenda today, so let's turn to slide 3 to get started. I'm going to begin a review tonight, as always do, with a quick overview of our business.
Speaker #1: After that, I'll provide a summary of our full-year results for fiscal year 26 and our outlook for fiscal year 27. Then we'll move to Q&A.
Speaker #1: Let's begin. On slide 4. Today, Broadridge generates almost $7.5 billion in total revenue, approximately two-thirds of which is recurring. That recurring revenue has grown at a 10% annualized growth rate, or CAGR, over the last 10 years.
Speaker #1: Driving a 13% adjusted EPS CAGR over the same period. And that, in turn, has resulted in an annualized total shareholder return—the combination of share price appreciation and dividend—of 11% over the past decade.
Speaker #1: Turning to slide 5. At the core of Broadridge is our unique network and business model. Broadridge operates at the intersection of financial services. We serve nearly every broker-dealer in North America, and have a service relationship with almost every public company, asset manager, fund, and investor.
Speaker #1: And our governance platform helps ensure that investors receive the communications they need to vote at annual meetings and understand the funds they own. And within that network, we built 3 franchise businesses, in governance, capital markets, and wealth and investment management, and each provides mission-critical services for our clients at scale.
Speaker #1: Our franchises processes more than $7 billion regulatory and client communications every year, and we enable the clearing and settlement of more than 18 trillion of trades each day.
Speaker #1: And now, we're building the infrastructure for the financial markets of tomorrow, markets that will be digitized, agentic, and increasingly tokenized. With that overview, let's move to our latest results.
Speaker #1: And I'll start with the key headlines. First, Broadridge delivered strong financial results. Fiscal year 2026 revenue rose 8% constant currency. Adjusted EPS rose 12%.
Speaker #1: And thanks to a record fourth-quarter close sales rose to $305 million. Second, Broadridge is executing its strategy across governance, capital markets, and wealth while building the infrastructure for the markets of tomorrow.
Speaker #1: By driving digital communications, scaling agentic AI, and accelerating tokenized assets. And third, we returned over $1 billion to our shareholders last year in the form of our dividend and a record $600 million in buybacks.
Speaker #1: And last week, our board approved a 12% increase in our annual dividend. That marks our 20th annual increase in our 20 years as a public company.
Speaker #1: Looking ahead to fiscal 27, we expect another year of steady growth. We're guiding to 6% to 8% recurring revenue growth, into 8% to 12% adjusted earnings per share growth.
Speaker #1: The bottom line is that Broadridge is delivering strong results today while investing to build the markets of tomorrow. So let's review those results across our franchises starting with governance on slide 7.
Speaker #1: Governance recurring revenue rose 8% in fiscal 26, supported by new sales, and strong investor participation. One of our key areas of focus is on making it easier for investors to have a voice in the governance of the securities they own.
Speaker #1: And more than 900 funds with $8 trillion in assets are using our voting choice capability as in 2026, and that's up from 600 funds and $4 trillion last year.
Speaker #1: Our standing voting instruction solutions, which allows retail investors to provide ongoing voting direction, now has 6 clients in its first year. For institutional investors, our AI-powered custom policy engine completed its first proxy season.
Speaker #1: And now supports voting across more than 800 billion of U.S. equity assets. And we're using agentic AI to accelerate product development and create more intuitive workflows.
Speaker #1: Let's turn to capital markets. On slide 8. We continue to simplify and innovate across the trade lifecycle on capital markets. In fiscal 26, revenue grew 5% to $1.2 billion.
Speaker #1: Broadridge is seeing demand for trade processing solutions that can operate across markets, asset classes, and geographies. Our business is also benefiting from the move to our extended-hours trading, which is increasing the need for real-time post-trade processing and managed services.
Speaker #1: In May, we completed the acquisition of CQG, further strengthening our futures and options capability. And that combination has already contributed to a competitive win with a significant trading institution.
Speaker #1: I'll turn next to wealth investment management on slide 9. Wealth and investment management recurring revenue grew 10% in fiscal 26. In the U.S., we're making strong progress onboarding the wealth platform sales we closed last year.
Speaker #1: And we're seeing strong demand for our corporate actions and managed services offering. In Canada, our acquisition of SIS and fiscal 25 is creating new momentum.
Speaker #1: We announced a visa as our latest platform client and recorded another significant win with a large Canadian bank. And we're also accelerating the adoption of digital assets through a next-generation capability that brings together traditional and digital assets in one together in one operating model.
Speaker #1: And we expect to launch that for our Canadian wealth clients by the end of the calendar year. And we're extending that capability to U.S.
Speaker #1: clients. Now, that wraps up my review of our business results. I said earlier that Broadridge was delivering strong financial results today while building for tomorrow.
Speaker #1: So let me turn next to explain how we're building the infrastructure for markets that will be increasingly digitized, agentic, and tokenized. On slide 10.
Speaker #1: I'll start with digitization. For our print-to-digital strategy continues to gain momentum. Digital revenue and customer communications grew 14%, marking the 4th consecutive year of double-digit growth.
Speaker #1: And our wealth and focus platform now has 6 leading U.S. wealth managers either live or in the process of onboarding. Last month, the securities and exchange commission proposed allowing institutions to make digital delivery the default for client communications.
Speaker #1: Broadridge, we're pleased with that proposal. Which we see as an exciting step forward for investors and public companies' funds and brokers. And most importantly, we expect this initiative to be an important catalyst in driving demand for more engaging digital-first investor communications like those enabled by our wealth and focus platform.
Speaker #1: I'll turn next to artificial intelligence. Across all three franchises, our AI initiatives are delivering results. Our new AI products, including our custom policy voting engine and global demand model, and our governance business, and our operations solutions spawn GPT and trading algorithms in wealth and capital markets, are gaining traction.
Speaker #1: We're also deploying AI to accelerate product and software development and reduce the time and cost to onboard new clients. Finally, we're beginning to see real AI-driven productivity gains.
Speaker #1: Including 25 million dollars targeted for fiscal 27. And we're just getting started. Finally, tokenization. At Broadridge, we see tokenization as a generational opportunity across our franchises and we're seizing it.
Speaker #1: Tokenization has the potential to reshape how assets are issued, traded, financed, and serviced. And we expect it to be a significant tailwind for our business.
Speaker #1: The financial services industry is now grappling with questions about where tokenization will create the most value. How quickly it will scale. And what kind of market infrastructure will we require to support it?
Speaker #1: At Broadridge, we're actively shaping the answers to those questions by building trusted, scalable, tokenized market infrastructure across our franchises. In governance, we're actively extending our market-leading proxy voting and disclosure capabilities to support synthetic, custodial, and native tokenized equity models.
Speaker #1: And Broadridge is the first and only provider to support all three models of tokenized equities. Turning now to capital markets. Our distributed ledger repo platform, DLR for short, processes 360 billion in tokenized repo transactions every day with nearly 20 institutions on the platform or in the process of onboarding.
Speaker #1: DLR gives institutions a practical way to improve funding flexibility and make more efficient use of capital across global markets. All while operating within familiar institutional workflows.
Speaker #1: As demand for tokenized securities grows, many clients are concerned about the cost of a separate infrastructure for digital and tokenized assets, which is why almost 70% of those firms expect a hybrid infrastructure going forward.
Speaker #1: And Broadridge is stepping in to build that hybrid infrastructure at scale. We're extending Broadridge's market-leading multi-asset capabilities to support the trading and servicing of digital and tokenized assets across our front-to-back infrastructure from order management and execution to books and records.
Speaker #1: And we will leverage many of those same components for wealth managers to deliver a full front-to-back and office front and back office solution integrating tokenized and traditional assets.
Speaker #1: That's tokenization across governance, capital markets, and wealth management. I'm going to close my prepared remarks this evening pardon me, this afternoon, with a quote from our CEO.
Speaker #1: Broadridge has never been a stronger company. We have deep client relationships with the leading financial institutions and we're extending those relationships to new entrants.
Speaker #1: Broadridge has unmatched subject matter expertise and we have the integrated technology platform to bring it all together. There is no one better positioned to build the next-generation infrastructure that will power the markets of tomorrow.
Speaker #1: Now, that concludes my prepared remarks. So let me briefly explain how our Q&A session will work. All shareholders who are given a shareholder registration number on their invitation may submit questions through our portal.
Speaker #1: Your submission will come to me with your name, and shareholder registration number. And I will answer as many questions as time allows over the next 15 to 20 minutes.
Speaker #1: If you're not a shareholder, or became a shareholder after July 23, 2026, first of all, let me say welcome. But then you're on this call and listen-only mode.
Speaker #1: And you can always contact our investor relations team with questions after the event. Now, please allow a moment for me to load up the question queue.
Speaker #1: All right. Seeing some really terrific questions here. So let's get right to it and start asking some of the questions. Thank you to everyone who has submitted a question.
Speaker #1: We're going to try and get to, as I said before, as many of them as we can. So first question, not shockingly, it's about artificial intelligence.
Speaker #1: It's the question is, can you explain how you how Broadridge is using artificial intelligence to enhance its offerings to our current and potential future client base?
Speaker #1: Great questions. We touched on a little bit in the call, but I'm happy to go on my prepared remarks. But happy to go into a little bit more detail here.
Speaker #1: Which is that we see AI as a significant opportunity for Broadridge. We see really three primary benefits. One, bringing products and clients onto our platforms faster and operating and then the third is operating more efficiently.
Speaker #1: So on the product side, we're already using AI in areas such as our custom policy engine, fixed income trading platform, and fund flow prediction models.
Speaker #1: And while revenue from these products is still relatively small, it is growing more as clients begin to use them. Now, AI is also helping our teams develop software more quickly and reduce the time and cost required to bring clients onto our platforms.
Speaker #1: And then finally, on efficiency, we're beginning to see real productivity gains across our organization. And those gains really were the catalyst for giving us the confidence to announce a target of approximately 25 million dollars of AI-related savings in our fiscal year 27 outlook.
Speaker #1: Now, the flip side, of course, to opportunity is risk. And on the risk side, we're simply not seeing clients use AI to replace Broadridge.
Speaker #1: Our renewals in an average year run close to almost a billion dollars of business that we renew. We're not hearing from clients that they're looking to substitute Broadridge.
Speaker #1: On the substitute Broadridge's project in in-house AI-enabled product. And actually, on the contrary, they're telling us the opposite, which is we're more going to be more deeply embedded into their products and they see us as a core partner for them.
Speaker #1: And the reason for that is our solutions connect large financial networks and support mission-critical applications in highly regulated markets. Our systems are already optimized for scale reliability, data management, and then they come with our regulatory expertise and strong operating controls.
Speaker #1: So it's very difficult to replicate that with AI. So as we step back and think about artificial intelligence across Broadridge, we really do see it as an opportunity.
Speaker #1: We expect it to help us introduce new products, strengthen our client relationships, improve efficiency, and support long-term growth and margin expansion. Next question. What are the company's views regarding changes in mail proxy versus digital?
Speaker #1: Okay. I would say, look, we're very comfortable with the value we provide to our clients. If you think about our regulatory communications business, I talked in the prepared remarks in the overview of Broadridge, about the network in which Broadridge sits at the middle of a network connecting hundreds of millions of retail investors, thousands of broker-dealers, tens of thousands of funds, and really as that central hub in the industry for investor communications.
Speaker #1: And the reality is we operate a 24 by 7 platform. Some of the key benefits we provide data security. We maintain and protect the information of all the investors and broker-dealers to whom we distribute those critical communications.
Speaker #1: Preferences. We manage the voting preferences of shareholders. And obviously, we're a huge compliance engine on behalf of our clients. We help all of those constituencies, issuers, broker-dealers, et cetera, main compliant with regulations in those critical communications.
Speaker #1: That means making sure they get the right communications and the right format and the time required to give them to do that. And then not underestimated is where central billing process.
Speaker #1: So we streamline the billing process across the constituents. And so when we think about the shift to digital, that's been a big driver of savings.
Speaker #1: We've led the digitization of investor communications close to 95% of proxy communications are now digitized. Almost more than 80% of fund communications are digitized, as well.
Speaker #1: Broadridge has led that in a way. And so when we think about the rise of digitization and including the SEC's actions on this, we see it as a real tailwind for some of the digital products we are helping to drive, not just in our regulatory communications, but across everything we're doing in our customer communications business to make statements more compelling, to make regulatory communications more compelling, to increase that value prop for investors, and therefore include our clients.
Speaker #1: That means working with enhanced proxy boat app, drive click-through voting, across some of these solutions, our virtual shareholder meetings, all of these are designed to create a more positive digital experience for the clients of our broker-dealer clients and that helps drive them online.
Speaker #1: And that unlocks further mail savings as well. So terrific opportunity for us. We've been working on it in a leader in driving digitization for a long time and we're excited about where we can go from here.
Speaker #1: And we just don't see it as in any way impeding our value proposition. Oof. This one I was waiting for. Share price. So regarding I think this is in reference to our last call in February.
Speaker #1: Can you provide an update on the 20% decline in the share price? And as well as strategies and innovations towards new products. So I hope we've covered the second part of that question, which is the strategies and innovation with our comments on how we are helping drive the transformation of financial products to be more digitized, more agentic, more tokenized, and spending time on each one of those.
Speaker #1: But I also think it's just as important to think about we have Broadridge has seen its share price decline. We're certainly not alone in that.
Speaker #1: You've seen a broader set of stocks in the industry that have been impacted by investors' desire to invest in the AI trade. And you've seen broadly speaking a whole basket of software stocks underperform as a result of that, including Broadridge shares.
Speaker #1: So when we think about that, how does that change our behavior? Well, it influences how we think about capital allocation. So Broadridge generated 1.2 billion dollars of free cash flow.
Speaker #1: We asked last year we deployed over 400 million in our dividend. We repurchased 600 million of our own shares. And so and we still completed some tuck-in attractive tuck-in M&A.
Speaker #1: And I think that is part and parcel of our commitment to our balanced capital allocation priority. The first priority for us in spending our capital is investing in the business.
Speaker #1: And that means including that means investing in the growth areas, digitization, AI, shareholder engagement, tokenization, and cyber, most of which we've touched upon in this call.
Speaker #1: We also remain committed to a strong dividend. And I think that was reiterated with our board's announcement of a 12% increase in our annual dividend for fiscal year '27.
Speaker #1: And I am going to take this opportunity to say it again because I think it's powerful fact that's the 20th increase in our 20 years as a public company.
Speaker #1: And not only that, it's the 14th double-digit increase in the last 15 years. So Broadridge is committed to driving long-term shareholder value. We really see a strong and growing dividend as a core pillar of that commitment.
Speaker #1: Now, outside the dividend, we as I said, we returned almost $9 a share to shareholders in the form of the dividend and a $600 million buyback of our shares.
Speaker #1: And I think you should see us continue with the stock price at current levels to be more tilted towards returning capital to shareholders through share buybacks.
Speaker #1: We still have the lower leverage capacity. We're our gross debt to EBITDA is just under two times. Our target is about two and a half times.
Speaker #1: And so between our low leverage position, our strong free cash flow, as we look forward to fiscal '27, we think that will allow us to both continually actively repurchase our shares and position us to pursue attractive tuck-in M&A if those opportunities come up.
Speaker #1: So no question that repurchasing our shares can be an attractive use of our capital. And when the stock price is compelling and so we see that as compelling today and we will continue to allocate capital to the opportunities we believe will create the most long-term value for our shareholders.
Speaker #1: Great question. Thank you for asking that. Next question is about tokenization. Management recently highlighted impressive growth in distributed ledger repo platform. Thank you. Which is now processing 360 billion dollars in tokenized transactions per day.
Speaker #1: Seven to eight trillion dollars a month, I'll remind you. Can you so the question is, can you speak to the long-term margin profile of these digital assets and tokenized equity solutions relative to our legacy post-trade processing infrastructure?
Speaker #1: And then a follow-up question, how fast do you expect tokenized governance to become a meaningful contributor to our recurring revenue mix? Lots of unpack there.
Speaker #1: No question we're excited about our distributed ledger repo platform and our own right and what it means for the broader opportunity in tokenized securities and funds.
Speaker #1: And we are investing in this. We talked about the 360 billion in tokenized transactions per day. The next step for our DLR platform is really extending those capabilities into real-time repo which can help institutions improve funding liquid flexibility.
Speaker #1: Their liquidity management, collateral optimization, and capital efficiency. We're scaling our distributed ledger repo globally, which means today that that product is largely focused on US treasuries, which are the backbone of the US repo market.
Speaker #1: We're going to be extending the reach in there into global government bonds. So think Japanese government bonds, UK gilts, European government bonds, as well Euro denominated bonds as well.
Speaker #1: So really bringing this capability to a much broader set of global constituents as well. And extending the platform. Now, when you think about tokenization overall, there are continued to be opportunities outside of the repo market.
Speaker #1: So what we're really doing is bringing out our distributed ledger X, our DLX platform, which is about extending our tokenization capabilities across equities, funds, alternatives, and money market instruments.
Speaker #1: Now, it's still a little bit early here. So I'm not going to predict which use cases scale first. But it looks like we're having a little issue with the lights.
Speaker #1: So joy of doing this live. I do want to come back to your question on the margin profile. Clearly, I hope you're hearing our excitement and the capacity for this to continue to grow.
Speaker #1: And I think what you also should be hearing is, look, this is an area of focus for us. So we are investing in these platforms.
Speaker #1: We would anticipate to continue to invest in these platforms. That's going to really there's the lights. That's going to bring down some of the margin contribution of this as this product scales.
Speaker #1: And we think that's the best use of our capital. We want to be driving growth. This is not about matching the margin profile of some of our long-established scaled platforms.
Speaker #1: It's really about growing and helping transform the industry. So look for us to continue to invest in this area, not just in our distributed ledger repo, just DLX platform, but also broadly in tokenization as we build in a governance platform that supports tokenized assets governance and investor communications across a full gamut of tokenized assets.
Speaker #1: Thanks. All right. Tokenized last question here. And is tokenized equities? Also on tokenization. Can you explain the three main models of tokenization and Broadridge's strategy in each?
Speaker #1: First of all, terrific question. Glad you're paying attention to what we're seeing we're doing here. Tokenized equities really means using distributed ledger or blockchain technology to represent an investment in a company's stock.
Speaker #1: So it's an alternative means of delivering company shares. Across that. And it as an industry, this is all very much on the come. It's all very nascent.
Speaker #1: But there are three main models of tokenization. Emerging, which is where I think the question is going. Those models are an issuer model, a custodial model, and a synthetic model.
Speaker #1: Now, in the issuer model, that's where a public company issues tokenized shares directly alongside its traditional shares. So you can buy those shares directly from a company.
Speaker #1: Galaxy Digital is a great example of this. It became the first US public company to issue native tokenized equities on a major public blockchain.
Speaker #1: And Broadridge would stepped in to provide the proxy voting services across its traditional and tokenized shares. So getting to that notion of, we'll do it all for them, including the tokenized shares.
Speaker #1: We were excited to be that first provider of on-chain voting to Galaxy. In the custodial model, a bank, broker, or other third-party intermediary holds the traditional shares.
Speaker #1: And issues digital tokens representing an interest in those shares to their clients. Many of those intermediaries are already Broadridge clients. In fact, Broadridge represents the vast majority of those financial intermediaries.
Speaker #1: Think broker dealers, wealth managers, et cetera. And so we view this as really an extension of our core proxy voting business. So we're able to build with building relationships with Alpaca, who's a leading custodial provider for this, for Ondo as they look to bring and offer US tokenized shares in the US market.
Speaker #1: These are great examples of new partnerships that we're building to provide governance infrastructure around that. And then the last model, which is actually the biggest model today, is the so-called synthetic model.
Speaker #1: In which a token is designed to track the value of the stock, but is not an actual but it doesn't represent the company's actual share.
Speaker #1: And doesn't automatically carry all of the same shareholder rights. So it may or may not have the dividend associated with it. It may or may not have governance associated with that.
Speaker #1: That's largely offered to investors outside the US. And it's for those who have had challenges accessing the US market. And so we're working with Ondo again, which is the leading provider of synthetic tokenized equities US equities worldwide, to give its holders a voice in the governance.
Speaker #1: So accessing that model to almost a pass-through voting model. But stepping back from the individual models, our strategy is really not to predict which one of these models is going to become the biggest.
Speaker #1: At Broadridge, we want to be the provider position to solve the governance layer and the complexity surviving the governance layer and communications layer. For all of those models of tokenization.
Speaker #1: And we're the only ones doing that today. And we'll continue to be a leader in that space. So regardless of how a tokenized equity is created, investors will still need the communications proxy voting, corporate actions, disclosures, and accurate record keeping around that.
Speaker #1: And that's exactly what Broadridge does. Our platform brings voting across registered shares, held through brokers, and self-tokenized shares in one single view for the issuer.
Speaker #1: And it gives them a clear view of how their shareholders are voting. So it's a great opportunity. Tokenization is going to bring more investors into the market by enabling new innovative products, not all of this we think is going to emerge over the coming years.
Speaker #1: And it really take advantage of that. Those products are going to be more complex, but they'll still require governance. They'll still require investor communications and asset servicing.
Speaker #1: And Broadridge is going to be the provider that helps solve that and helps drive the adoption of these tokenized assets. So great question. And I think looking at our clock, that brings us to time.
Speaker #1: So I want to wrap up there. And thank you guys very much for participating. In this event, we take a bit of effort to bring this to you.
Speaker #1: We appreciate that you come attend this call. We've changed up the time a little bit, moving to the afternoon versus the evening. We're going to test out and see if that see if that is the ends up attracting more investors.
Speaker #1: But for all of you who are taking the time, one, thank you for your interest in Broadridge. Thank you for your ownership on Broadridge.
Speaker #1: And I'll close here by just saying, look, please continue to vote your shares, whether it's Broadridge or elsewhere. Be an owner of the shares you own, not a renter.
More BR earnings call transcripts
- BR - Q1 2026 Broadridge Financial Solutions Inc Earnings Call (November 4, 2025)
- BR - Q2 2026 Broadridge Financial Solutions Inc Earnings Call (February 3, 2026)
- BR - Q3 2026 Broadridge Financial Solutions Inc Earnings Call (April 30, 2026)
- BR - Q4 2026 Broadridge Financial Solutions Inc Earnings Call (August 4, 2026)
