01—Abstract
Summary
Summary of the 10-Q filed May 8, 2024. Cited figures are marked; the original filing is the authoritative source.
Broadridge Financial Solutions, Inc. reported a quarter ended March 31, 2024 with revenues of $1,726.5 milliona, up $80.8 million, or 5%, from $1,645.7 million, and net earnings of $213.7 million versus $198.5 million a year earlier.
Diluted earnings per share were $1.79b compared with $1.67. Operating income rose 6% to $302.9 million, and the operating margin was 17.5% versus 17.4%. For the nine months, revenues were $4,562.5 million, up 8%, and net earnings were $374.9 million, up 22%, with diluted EPS of $3.14 versus $2.58.
Recurring revenues grew 4% in the quarter to $1,126.2 millionc, with growth described as all organic. Event-driven revenues rose 29%, driven by equity proxy contests, and distribution revenues rose 4%, helped by a postage rate increase of approximately $29.5 million. Non-GAAP Adjusted Earnings Per Share was $2.23 for the quarter versus $2.05 a year earlier, and free cash flow for the nine months was $258.6 million versus $47.3 million.
At March 31, 2024, the company had cash and cash equivalents of $235.6 milliond and total debt of $3,513.9 million carrying value, with total stockholders' equity of $2,267.2 million. Long-term debt rose to $3,513.9 million from $2,234.7 million as the Fiscal 2021 Term Loans, due May 2024, were refinanced into a $1.25 billion Fiscal 2024 Amended Term Loan maturing August 2026. The filing also notes a $8.2 million litigation settlement charge and a $7.0 million restructuring-related asset impairment in the third quarter.
02—Key points
Key Highlights
- Quarterly revenues of $1,726.5 million, up 5% from $1,645.7 million, with Investor Communication Solutions revenues of $1,301.4 million and Global Technology and Operations revenues of $425.1 million.
- Quarterly net earnings of $213.7 million, up from $198.5 million, and diluted EPS of $1.79 versus $1.67.
- Nine-month net earnings of $374.9 million, up 22%, with diluted EPS of $3.14 versus $2.58.
- Recurring revenues of $1,126.2 million in the quarter, up 4% and all organic; Global Technology and Operations recurring revenues rose 9%.
- Non-GAAP Adjusted EPS of $2.23 for the quarter versus $2.05, and nine-month free cash flow of $258.6 million versus $47.3 million.
- Total debt rose to $3,530.0 million principal, with the $1.25 billion Fiscal 2024 Amended Term Loan replacing the Fiscal 2021 Term Loans, and an aggregate estimated reasonably possible litigation loss of up to $25 million in excess of reserves.
- Management expects a reduction of approximately $30 million in annual recurring revenues from the SEC tailored shareholder reports rule, phasing in over fiscal years 2025 and 2026.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2024, Broadridge Financial Solutions kept $0.12.
- Revenue$1.73B100.0%
- Cost of revenue−$1.19B68.8%
- Gross profit$539.2M31.2%
- Operating costs−$236.3M13.7%
- Operating income$302.9M17.5%
- Interest, other & tax−$89.2M5.2%
- Net income$213.7M12.4%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2024filed May 8, 2024Financial Statements
Q3 FY2024 against Q3 FY2023
| Line item | Q3 FY2024Q3 FY2023 | Change |
|---|---|---|
| Revenue | $1.73B$1.65B | +4.9% |
| Cost of Revenue | $1.19B$1.14B | +4.4% |
| Gross Profit | $539.20M$508.00M | +6.1% |
| SG&A Expenses | $236.20M$221.20M | +6.8% |
| Operating Expenses | $1.42B$1.36B | +4.8% |
| Operating Income | $302.90M$286.80M | +5.6% |
| Interest Expense | $38.20M$40.30M | −5.2% |
| Net Income | $213.70M$198.50M | +7.7% |
| EPS (Basic) | $1.81$1.69 | +7.1% |
| EPS (Diluted) | $1.79$1.67 | +7.2% |
| Shares Outstanding (Basic) | 117.80M117.70M | +0.1% |
| Shares Outstanding (Diluted) | 119.40M119.10M | +0.3% |
05—Questions
Frequently Asked Questions
How did Broadridge perform in the March 2024 quarter?
Revenues increased 5% to $1,726.5 million, operating income rose 6% to $302.9 million, and net earnings increased to $213.7 million from $198.5 million. Diluted EPS was $1.79 versus $1.67 in the prior-year quarter.
What drove revenue growth?
Recurring revenues increased 4% to $1,126.2 million, all organic, driven by Net New Business and Internal Growth. Event-driven revenues rose 29% on equity proxy contests, and distribution revenues rose 4% mainly due to a postage rate increase of approximately $29.5 million.
How is the company's debt position changing?
Total long-term debt carrying value was $3,513.9 million at March 31, 2024, up from $2,234.7 million at June 30, 2023, as the Fiscal 2021 Term Loans due May 2024 were replaced by a $1.25 billion Fiscal 2024 Amended Term Loan maturing August 2026. Cash and cash equivalents were $235.6 million.
What is the outlook for the SEC tailored shareholder reports rule?
The company estimates a reduction in annual Recurring revenues of approximately $30 million, phasing in over fiscal years 2025 and 2026, assuming no offset from new services. It is still reviewing the full impact.
Are there any notable one-time charges?
In the third quarter, the company recorded an $8.2 million Litigation Settlement Charge and a $7.0 million asset impairment charge tied to its Corporate Restructuring Initiative. Adjusted earnings per share excludes these items along with amortization of acquired intangibles.
06—Continue