Q1 2025 Broadridge Financial Solutions Inc Earnings Call Transcript
Key Points
- Broadridge Financial Solutions Inc (BR) reported solid first-quarter results with a 4% growth in recurring revenue in constant currency, despite the impact of the E-Trade deconversion.
- The company is executing its strategy effectively, driving product innovation, growing its sales pipeline, and achieving strong sales.
- Broadridge is strengthening its business through targeted investments, including the acquisition of SIS, which is expected to enhance its Canadian business and wealth innovation capabilities.
- The company raised its fiscal 2025 recurring revenue guidance to 6% to 8%, reflecting strong organic growth and the SIS acquisition.
- Broadridge recorded a first-quarter record of $57 million in closed sales, indicating strong demand for its solutions and a robust sales pipeline.
- Recurring revenue growth was partially offset by a 4% decline in wealth and investment management revenues due to the E-Trade deconversion.
- Adjusted operating income decreased by 7%, impacted by lower event-driven revenues and the E-Trade deconversion.
- The company's adjusted EPS remained at $1, with no increase in EPS guidance despite the top-line revenue raise, suggesting lower incremental margins.
- Free cash flow was negative $158 million in Q1, a decline from the previous year, driven by increased cash taxes and severance payments.
- The acquisition of SIS is expected to be slightly dilutive to Broadridge's margins and neutral to EPS in the first year.
Good day, and welcome to the Broadridge fiscal first-quarter 2025 earnings conference call. (Operator Instructions) Please note this event is being recorded.
I would now like to turn the conference over to Mr. Edings Thibault, Head of Investor Relations. Please go ahead, sir.
Thank you, Chuck. Good morning, everybody, and welcome to Broadridge's first-quarter fiscal year 2025 earnings call. Our earnings release and the slides that accompany this call may be found on the Investor Relations section of broadridge.com. Joining me on the call this morning are Tim Gokey, our CEO; and our Interim CFO, Ashima Ghei.
Before I turn the call over to Tim, a few standard reminders. One, we will be making forward-looking statements on today's call regarding Broadridge that involve risks. A summary of these risks can be found on the second page of the slides and a more complete description on our annual report on Form 10-K.
Two, we'll also be referring to several non-GAAP measures
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