01—Abstract
Summary
Summary of the 10-K filed August 12, 2022. Cited figures are marked; the original filing is the authoritative source.
Broadridge Financial Solutions, Inc. (BR) reported fiscal 2022 (year ended June 30, 2022) revenues of $5,709.1 milliona, up 14% from $4,993.7 million, with net earnings of $539.1 million, down 2% from $547.5 million, and diluted earnings per share of $4.55 versus $4.65.
Growth was driven by recurring fee revenues of $3,749.3 millionb (up 16%), including 7 points from acquisitions, primarily the Itiviti acquisition completed in May 2021. Operating income rose 12% to $759.9 million, but interest expense increased to $84.7 million from $55.2 million, and the Global Technology and Operations segment's earnings before income taxes fell 30% to $139.5 million as acquisition-related operating costs and amortization of acquired intangibles rose. Adjusted operating income, a non-GAAP measure, was $1,066.4 million, and free cash flow was $370.4 million, down from $557.3 million, as operating cash flow decreased to $443.5 million.
The Investor Communication Solutions segment, which generated about 75% of fiscal 2022 revenues, grew revenues 11% to $4,262.1 millionc and pre-tax earnings 22% to $726.3 million, supported by equity proxy Record Growth of 18% and mutual fund interim Record Growth of 14%. Total debt was $3,793.0 million at June 30, 2022, of which $1,560.8 million, or 41%, carried floating rates, and the company had $1,475.0 million of unused revolving credit capacity. The Board raised the quarterly cash dividend by $0.085 to $0.725 per share on August 11, 2022, lifting the expected annual dividend to $2.90 per share from $2.56.
02—Key points
Key Highlights
- Revenues rose 14% to $5,709.1 million, driven by recurring fee revenues up 16% to $3,749.3 million, with 7 points of growth from acquisitions.
- Net earnings declined 2% to $539.1 million, and diluted EPS fell to $4.55 from $4.65, reflecting higher interest expense and acquisition-related costs.
- Investor Communication Solutions revenues grew 11% to $4,262.1 million and pre-tax earnings grew 22% to $726.3 million, with pre-tax margin of 17.0%.
- Global Technology and Operations revenues rose 24% to $1,474.4 million, but pre-tax earnings fell 30% to $139.5 million due to Itiviti-related operating costs and amortization of $189.3 million.
- Free cash flow (non-GAAP) declined to $370.4 million from $557.3 million, as operating cash flow fell to $443.5 million from $640.1 million.
- Total debt was $3,793.0 million at June 30, 2022, with $1,475.0 million of unused revolving credit capacity; the Board raised the quarterly dividend to $0.725 per share on August 11, 2022.
- Goodwill of $3,484.9 million and other intangibles and deferred costs made up about 71% of total assets, creating impairment risk if performance weakens.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2022, Broadridge Financial Solutions kept $0.09.
- Revenue$5.71B100.0%
- Cost of revenue−$4.12B72.1%
- Gross profit$1.59B27.9%
- Operating costs−$832.3M14.6%
- Operating income$759.9M13.3%
- Interest, other & tax−$220.8M3.9%
- Net income$539.1M9.4%
Where FY2022 revenue went
$5.71B- Cost of revenue: $4.12B, 72% of revenue
- SG&A: $832.3M, 15% of revenue
- Net income: $539.1M, 9.4% of revenue
- Interest, other & tax: $220.8M, 3.9% of revenue
Kept 9.4% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2022filed August 12, 2022Financial Statements
FY2022 against FY2021
| Line item | FY2022FY2021 | Change |
|---|---|---|
| Revenue | $5.71B$4.99B | +14.3% |
| Cost of Revenue | $4.12B$3.57B | +15.3% |
| Gross Profit | $1.59B$1.42B | +11.9% |
| SG&A Expenses | $832.30M$744.30M | +11.8% |
| Operating Expenses | $4.95B$4.32B | +14.7% |
| Operating Income | $759.90M$678.70M | +12.0% |
| Interest Expense | $87.70M$57.50M | +52.5% |
| Net Income | $539.10M$547.50M | −1.5% |
| EPS (Basic) | $4.62$4.73 | −2.3% |
| EPS (Diluted) | $4.55$4.65 | −2.2% |
| Shares Outstanding (Basic) | 116.70M115.70M | +0.9% |
| Shares Outstanding (Diluted) | 118.50M117.80M | +0.6% |
05—Questions
Frequently Asked Questions
How did Broadridge perform financially in fiscal 2022?
Revenues increased 14% to $5,709.1 million and operating income rose 12% to $759.9 million. Net earnings declined 2% to $539.1 million, and diluted EPS was $4.55 compared with $4.65 in fiscal 2021, mainly because interest expense rose to $84.7 million and other non-operating income fell to an expense of $3.0 million.
What drove the growth in revenues?
Recurring fee revenues increased $521.1 million, including 4 points from Net New Business, 5 points from Internal Growth and 7 points from acquisitions, primarily Itiviti. Event-driven fee revenues rose 14% on higher mutual fund proxy activity, and distribution revenues rose $168.1 million on higher mail volumes and postage rates.
Why did the Global Technology and Operations segment's earnings decline?
Segment pre-tax earnings fell $60.8 million to $139.5 million, a 30% decline, mainly due to $290.7 million in operating costs from acquisitions, primarily Itiviti, compared with $228.2 million of revenue from acquisitions. Amortization of acquired intangibles also rose $121.7 million to $189.3 million.
How is Broadridge's debt position and liquidity?
Total debt was $3,793.0 million at June 30, 2022, of which $1,560.8 million, or 41%, was floating-rate. Cash and cash equivalents were $224.7 million, and $1,475.0 million was unused under the revolving credit facility. The company stated it expects cash from operations, existing cash and borrowing capacity to cover its needs for at least the next 12 months.
What dividend and shareholder return actions did Broadridge announce?
On August 11, 2022, the Board increased the quarterly cash dividend by $0.085 per share to $0.725, raising the expected annual dividend to $2.90 from $2.56. The company did not repurchase shares under its program in fiscal 2022 and had 9,586,545 shares remaining available for repurchase at June 30, 2022.
06—Continue