On August 6, 2024, Broadridge Financial Solutions Inc (BR, Financial) released its 8-K filing detailing the financial results for the fourth quarter and fiscal year 2024. Broadridge, a leading provider of investor communications and technology-driven solutions, reported significant growth in recurring revenues and closed sales, alongside a notable increase in adjusted earnings per share (EPS).
Company Overview
Broadridge Financial Solutions, which was spun off from ADP in 2007, is a leading provider of investor communications and technology-driven solutions to banks, broker/dealers, asset managers, wealth managers, and corporate issuers. The company operates through two segments: Investor Communication Solutions (ICS) and Global Technology and Operations (GTO).
Fiscal Year 2024 Performance
Broadridge reported a 6% increase in recurring revenues, reaching $4.223 billion, and a 10% growth in adjusted EPS to $7.73. Total revenues for the fiscal year rose by 7% to $6.507 billion. The company also achieved a record $342 million in closed sales, marking a 39% increase from the previous year.
Key Financial Metrics
| Metric | Q4 2024 | Q4 2023 | Change | FY 2024 | FY 2023 | Change |
|---|---|---|---|---|---|---|
| Recurring Revenues | $1,326M | $1,259M | 5% | $4,223M | $3,987M | 6% |
| Total Revenues | $1,944M | $1,839M | 6% | $6,507M | $6,061M | 7% |
| Operating Income | $441M | $454M | -3% | $1,017M | $936M | 9% |
| Diluted EPS | $2.72 | $2.72 | 0% | $5.86 | $5.30 | 11% |
| Adjusted EPS | $3.50 | $3.21 | 9% | $7.73 | $7.01 | 10% |
| Closed Sales | $157M | $90M | 74% | $342M | $246M | 39% |
Segment Performance
The ICS segment saw a 6% increase in total revenues to $1.528 billion for Q4 2024, driven by a 6% rise in recurring revenues. The GTO segment reported a 4% increase in recurring revenues to $416 million, primarily due to net new business and internal growth.
Challenges and Achievements
Despite a 3% decline in operating income for Q4 2024, Broadridge's overall fiscal year performance was robust. The company faced increased operating expenses, including higher restructuring and litigation settlement costs. However, the growth in recurring revenues and event-driven revenues helped offset these challenges.
“As we close fiscal year 2024, Broadridge is executing on its strategy to democratize and digitize Governance, simplify and innovate trading in Capital Markets, and modernize Wealth Management,” said Tim Gokey, Broadridge CEO.
Financial Position
Broadridge's balance sheet remains strong with total assets of $8.242 billion and total liabilities of $6.074 billion. The company also reported a free cash flow conversion of 102%, highlighting its strong liquidity position.
Outlook
For fiscal year 2025, Broadridge has provided guidance for 5-7% recurring revenue growth and 8-12% adjusted EPS growth. The company remains committed to a balanced approach to capital allocation, including share repurchases and dividend increases.
Broadridge's continued focus on innovation and client adaptation to regulatory changes positions it well for sustained growth in the coming years.
Explore the complete 8-K earnings release (here) from Broadridge Financial Solutions Inc for further details.
