How did Broadridge perform in the second quarter of fiscal 2024?

Total revenues rose 9% to $1,405 million and recurring revenues rose 7% to $899 million. Net earnings increased 22% to $70 million, diluted EPS rose 23% to $0.59, and Adjusted EPS rose 1% to $0.92.

Did Broadridge change its full-year outlook?

No. The company reaffirmed its fiscal 2024 guidance: 6-9% recurring revenue growth in constant currency, 8-12% Adjusted EPS growth, an Adjusted operating income margin of about 20%, and Closed sales of $280-320 million.

Why did Adjusted operating income margin decline?

The company said operating leverage from higher revenues and a 40 basis point net benefit from float income and distribution revenue was offset by increased investment spending and higher selling, general and administrative expenses. Adjusted operating income margin was 12.4% compared with 13.4% in the prior year period.

What drove the increase in event-driven revenues?

Event-driven revenues rose 47% to $55 million, driven by higher mutual fund proxy activity. For the six months, event-driven revenues rose 42% to $142 million on higher mutual fund proxy and corporate action activity.

How much did Broadridge return to shareholders and how did its debt change?

For the six months ended December 31, 2023, the company paid $179.7 million in dividends and purchased $161.5 million of treasury stock. Long-term debt increased to $3,652.9 million from $2,234.7 million at June 30, 2023, and the current portion of long-term debt was zero compared with $1,178.5 million.

BR 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K filed February 1, 2024. Cited figures are marked; the original filing is the authoritative source.

Broadridge Financial Solutions, Inc. furnished its earnings press release and earnings presentation for the second quarter of fiscal 2024, which ended December 31, 2023.

Total revenues rose 9% to $1,405 million^a, and recurring revenues rose 7% to $899 million, or 6% in constant currency. Diluted EPS increased 23% to $0.59, while Adjusted EPS (non-GAAP) rose 1% to $0.92. Operating income increased 15% to $124 million, but Adjusted operating income was essentially flat at $174 million, and its margin declined to 12.4% from 13.4%.

The company cited higher compensation and selling, general and administrative expenses and increased investment spending as offsets. Closed sales for the quarter declined 11% to $58 million^b, but year-to-date Closed sales rose 12% to $106 million. Mutual fund proxy activity drove event-driven revenues up 47% to $55 million for the quarter.

Distribution revenues rose 9% to $451 million^c, helped by a postage rate increase of approximately $28 million. For the six months, net cash flows from operating activities were $127.8 million, compared with negative $81.4 million a year earlier. Long-term debt increased to $3,652.9 million from $2,234.7 million, and the company repurchased $161.5 million of treasury stock and paid $179.7 million in dividends during the six-month period.

Broadridge reaffirmed its full-year fiscal 2024 guidance, including 6-9% recurring revenue growth in constant currency, Adjusted EPS growth of 8-12%, an Adjusted operating income margin of about 20%, and Closed sales of $280^d-320 million. The company also reiterated its fiscal 2024 to 2026 long-term objectives, including 7-9% constant currency recurring revenue growth and 8-12% Adjusted EPS growth.

02—Key points

Key Highlights

Total revenues rose 9% to $1,405 million in Q2 fiscal 2024, and recurring revenues rose 7% to $899 million (6% constant currency, all organic).
Diluted EPS increased 23% to $0.59; Adjusted EPS increased 1% to $0.92 versus $0.91 a year earlier.
Operating income rose 15% to $124 million, while Adjusted operating income was $174 million, a 1% increase, with margin down to 12.4% from 13.4%.
Closed sales fell 11% to $58 million in the quarter but rose 12% year-to-date to $106 million.
Event-driven revenues rose 47% to $55 million on higher mutual fund proxy activity; distribution revenues rose 9% to $451 million.
FY24 guidance was reaffirmed across all metrics: 6-9% constant currency recurring revenue growth, 8-12% Adjusted EPS growth, about 20% Adjusted operating income margin, and $280-320 million of Closed sales.
Long-term debt increased to $3,652.9 million from $2,234.7 million, and the company paid $179.7 million in dividends and repurchased $161.5 million of stock in the six months ended December 31, 2023.

03—Questions

Frequently Asked Questions

How did Broadridge perform in the second quarter of fiscal 2024?
Total revenues rose 9% to $1,405 million and recurring revenues rose 7% to $899 million. Net earnings increased 22% to $70 million, diluted EPS rose 23% to $0.59, and Adjusted EPS rose 1% to $0.92.
Did Broadridge change its full-year outlook?
No. The company reaffirmed its fiscal 2024 guidance: 6-9% recurring revenue growth in constant currency, 8-12% Adjusted EPS growth, an Adjusted operating income margin of about 20%, and Closed sales of $280-320 million.
Why did Adjusted operating income margin decline?
The company said operating leverage from higher revenues and a 40 basis point net benefit from float income and distribution revenue was offset by increased investment spending and higher selling, general and administrative expenses. Adjusted operating income margin was 12.4% compared with 13.4% in the prior year period.
What drove the increase in event-driven revenues?
Event-driven revenues rose 47% to $55 million, driven by higher mutual fund proxy activity. For the six months, event-driven revenues rose 42% to $142 million on higher mutual fund proxy and corporate action activity.
How much did Broadridge return to shareholders and how did its debt change?
For the six months ended December 31, 2023, the company paid $179.7 million in dividends and purchased $161.5 million of treasury stock. Long-term debt increased to $3,652.9 million from $2,234.7 million at June 30, 2023, and the current portion of long-term debt was zero compared with $1,178.5 million.

04—Continue

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