01—Abstract
Summary
Summary of the 10-Q filed November 5, 2024. Cited figures are marked; the original filing is the authoritative source.
Broadridge Financial Solutions, Inc. reported results for the first fiscal quarter ended September 30, 2024.
Revenues were $1,422.9 milliona, down from $1,431.1 million, while operating income fell to $134.4 million from $148.4 million and net earnings declined to $79.8 million from $90.9 million. Diluted earnings per share were $0.68 versus $0.76 a year earlier. Recurring revenues rose to $900.3 million from $871.2 million, offset by a $23.8 million decline in event-driven revenues and a $13.5 million decline in distribution revenues.
Investor Communication Solutions revenue fell $13.0 millionb, while Global Technology and Operations revenue grew $4.8 million and its pre-tax earnings rose to $47.4 million from $33.7 million. Cash flow was weaker: net cash used in operating activities was $125.5 million compared with $62.0 million a year earlier, and free cash flow (a non-GAAP measure) was negative $157.6 million. Total debt increased to $3,600.0 million principal, with $230.0 million drawn on the revolving credit facility and $470.0 million of debt proceeds during the quarter.
Adjusted diluted earnings per share, a non-GAAP measure, was $1.00c versus $1.09. After the quarter end, on November 1, 2024, the company completed the acquisition of Kyndryl's Securities Industry Services business in Canada for approximately $185 million, with Canadian Competition Bureau discussions ongoing. The company also reported that Closed sales rose to $57.5 million from $47.6 million.
02—Key points
Key Highlights
- Revenues declined $8.2 million to $1,422.9 million, while recurring revenues increased $29.1 million to $900.3 million.
- Net earnings fell to $79.8 million from $90.9 million, and diluted EPS was $0.68 versus $0.76.
- Event-driven revenues decreased $23.8 million, driven by lower corporate action activity and lower mutual fund proxy volume.
- Net cash flows from operating activities were negative $125.5 million, compared with negative $62.0 million, and free cash flow was negative $157.6 million (non-GAAP).
- Total debt rose to $3,600.0 million principal, and cash and cash equivalents were $292.8 million at September 30, 2024.
- Global Technology and Operations pre-tax earnings increased $13.7 million to $47.4 million, while Investor Communication Solutions pre-tax earnings declined $18.7 million to $96.5 million.
- On November 1, 2024, the company acquired Kyndryl's Securities Industry Services business in Canada for approximately $185 million.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2025, Broadridge Financial Solutions kept $0.06.
- Revenue$1.42B100.0%
- Cost of revenue−$1.07B75.5%
- Gross profit$347.9M24.5%
- Operating costs−$213.5M15.0%
- Operating income$134.4M9.4%
- Interest, other & tax−$54.6M3.8%
- Net income$79.8M5.6%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2025filed November 5, 2024Financial Statements
Q1 FY2025 against Q1 FY2024
| Line item | Q1 FY2025Q1 FY2024 | Change |
|---|---|---|
| Revenue | $1.42B$1.43B | −0.6% |
| Cost of Revenue | $1.07B$1.08B | 0.0% |
| Gross Profit | $347.90M$355.80M | −2.2% |
| SG&A Expenses | $213.40M$207.30M | +2.9% |
| Operating Expenses | $1.29B$1.28B | +0.5% |
| Operating Income | $134.40M$148.40M | −9.4% |
| Interest Expense | $35.90M$36.40M | −1.4% |
| Net Income | $79.80M$90.90M | −12.2% |
| EPS (Basic) | $0.68$0.77 | −11.7% |
| EPS (Diluted) | $0.68$0.76 | −10.5% |
| Shares Outstanding (Basic) | 116.90M117.90M | −0.8% |
| Shares Outstanding (Diluted) | 118.10M119.20M | −0.9% |
05—Questions
Frequently Asked Questions
How did Broadridge perform in the quarter ended September 30, 2024?
Revenues were $1,422.9 million, down from $1,431.1 million. Operating income was $134.4 million versus $148.4 million, and net earnings were $79.8 million versus $90.9 million. Diluted EPS was $0.68 compared with $0.76.
What drove the change in revenue?
Recurring revenues increased $29.1 million to $900.3 million. This was offset by a $23.8 million decline in event-driven revenues, attributed to lower corporate action activity and lower mutual fund proxy communications volume, and a $13.5 million decline in distribution revenues, driven by lower event-driven mailing volume partially offset by a postage rate increase of approximately $23 million.
Why was operating cash flow negative this quarter?
Net cash flows from operating activities were negative $125.5 million versus negative $62.0 million a year earlier. The company cited a decrease in net earnings of $11.1 million, an increase in cash payments related to accrued expenses and accounts payable of $118.1 million, and higher income tax payments of $45.1 million, partially offset by higher accounts receivable collections of $111.4 million.
What acquisition did Broadridge complete after the quarter ended?
On November 1, 2024, Broadridge completed the acquisition of Kyndryl's Securities Industry Services business in Canada for approximately $185 million, expanding its Global Technology and Operations offerings. The company stated that discussions with the Canadian Competition Bureau are ongoing.
How much debt does Broadridge carry and how is it structured?
Total debt principal was $3,600.0 million at September 30, 2024, including $230.0 million drawn on the revolving credit facility, a $1,120.0 million term loan due August 2026, and $2,250.0 million of senior notes. The company stated it was in compliance with its debt covenants.
06—Continue