Broadridge Reports Fiscal Q1 2027 Results, Reaffirms Full-Year Guidance

Broadridge Financial Soln (NYSE: BR ) reported first-quarter financial results on Tuesday. The transcript from the company's first-quarter earnings call has been provided below. This transcript is brought to you APIs. For real-time access to our entire catalog, please visit for a consultation.

Access the full call at Summary Broadridge Financial Soln delivered a strong fiscal first-quarter 2027, with recurring revenues rising 11% on a constant currency basis, driven by double-digit growth in governance and GTO segments. Strategic initiatives include democratizing and digitizing governance, simplifying and innovating trading, modernizing wealth management, and focusing on digital engagement, tokenization, and agentic AI. The company repurchased $200 million in shares during Q1 and expects to continue strong fiscal 2027 performance, reaffirming full-year guidance for all metrics.

Notable operational highlights include 17% growth in capital markets recurring revenue and a significant partnership with the New York Stock Exchange for tokenized equity marketplace governance. Management expressed optimism about Broadridge's position to capitalize on market opportunities, highlighting AI-driven efficiencies and investment in core strategic areas. Full Transcript Jamie (Moderator) Good morning and welcome to the Broadridge Financial Soln fiscal first quarter 2027 earnings conference call. All participants will be in a listen-only mode.

Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star and then one on your touchtone phones. To withdraw your questions, you may press star and 2.

Please also note today's event is being recorded. At this time, I'd like to turn the floor over to Eddings Thibault, Head of Investor Relations. Please go ahead. Eddings Thibault (Head of Investor Relations) Thank you, Jamie.

Good morning, everyone, and welcome to Broadridge Financial Soln's fiscal first quarter 2027 earnings conference call. This 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 CFO, Ashma Gay. Before I turn the call over to Tim, a few standard reminders.

1. We will be making forward-looking statements on today's call regarding Broadridge Financial Soln that involve risks. A summary of these risks can be found on the second page of the slides and a complete description on our Annual Report on Form 10-K. 2.

We will also be referring to several non-GAAP measures which we believe provide investors with a more complete understanding of Broadridge Financial Soln's underlying operating results. An explanation of these non-GAAP measures and reconciliations to the comparable GAAP measures can be found in the earnings release and presentation. Let me now turn the call over to Tim Gokey. Tim Gokey (Chief Executive Officer) Thank you, Adams, and good morning.

It's late in the U.S., which is a fitting time to talk about shareholder engagement and the importance of giving investors a voice. So thank you to everyone who's already voted, and I encourage everyone eligible who hasn't yet voted to do so later. Turning to Broadridge, our business is performing very well. We're benefiting from a positive market backdrop that's translating into momentum for financial services clients, continued double-digit growth in positions, and rising demand for our — and that in turn is enabling Broadridge to deliver strong financial results while funding investments in attractive new growth markets.

Those investments build on our strong existing positions and are translating into tangible momentum, driving new products and client relationships, supporting investor engagement, and unlocking productivity. So let's get to those results, starting with the headlines on slide 3. First, Broadridge Financial Soln delivered a strong financial quarter. Recurring revenues rose 11% on a constant currency basis, with double-digit growth across both our governance and GTO segments.

Those sales increased by 10%. Second, those results are being driven by the fusion of our strategy to democratize and digitize, simplify and innovate trading, and modernize wealth management. Third, we're also putting in place the building blocks for attractive future growth by driving digital engagement, accelerating tokenization, and scaling agentic AI. Fourth, we continued to deliver strong free-cash-flow conversion and increased capital returns to our shareholders, including repurchasing $200 million of our shares in Q1.

And last, we expect to deliver strong fiscal 2027 financial results and are reaffirming our full-year guidance for all metrics. Let's move to the drivers and results, starting on slide 4 with our governance business, where we continue to drive democratization and digitization. Governance revenues rose 10% constant currency, driven in part by continued investor participation, very healthy position growth. Total equity position growth remained strong at 16%, led by growth in managed accounts and continued growth in self-directed accounts.

Revenue position growth was 11%. Fund position growth accelerated to 16% in the quarter compared to 6% for the full year in fiscal 26. While timing contributed to this quarter's numbers, our testing is signaling a sustained pickup to high single-digit growth, as Ashma will share in a few minutes. We're also seeing strong interest globally for our proxy solutions.

During the quarter, we closed a sale with a leading Scandinavian wealth manager for U.S. equities, building on the strong momentum we saw at the end of last fiscal year and making inroads in Asia Pacific. Last month, Broadridge Financial Soln signed a memorandum of understanding with the Korean Securities Depository to begin collaborating on modernizing the proxy voting process there. As newer financial markets step up their competition for global asset flows, they are recognizing the importance of corporate governance and, with it, efficient, digitized, and transparent voting.

And no surprise, they see Broadridge as a key partner in that work. Turning next to capital markets, where we are simplifying and innovating trading, we had a very strong quarter with 17% recurring revenue growth, including organic growth of 12% in the U.S. market. Our clients are gearing up for the start of 23×5 trading, which will begin December 6th.

At Broadridge, we're fully prepared to enable that transition across our front- and back-office applications, further demonstrating the power of an industry solution. In front office, the acquisition of CQG is already strengthening our futures and options offering. During the quarter, we won a mandate for a front-office solution for a leading global brokerage platform, providing an equities, futures, and options suite across both the U.S. and Europe.

In the back office, we're expanding our relationship with a major Japanese bank seeking to take advantage of our unified global post-trade platform. We're also benefiting from strong demand for our corporate actions platform. Moving now to wealth management, revenues rose 6%. In wealth, we're benefiting from continued growth in Canada, driven in part by the extension of our platform capabilities across our Canadian clients.

In the U.S. market, we continue to see significant interest in our wealth platform capabilities, aided in part by the progress we're making in onboarding several major wealth managers. Finally, I want to call out closed sales. After a record finish to fiscal 26 in June, we are pleased to close $36 million in Q1 sales, up 10% on fiscal 26.

More importantly, our pipeline continues to strengthen, and we are nicely on track to deliver our full-year guidance of 290 to 330 million. In sum, across governance, capital markets, and wealth, we are executing well on our current businesses, each of which has a long runway and substantial opportunity. At the same time, we're seeing powerful new trends that have the potential to change markets over the next three, five, and ten years. The good news is the change is positive for Broadridge because it increases the need for investment by our clients, and Broadridge is exceedingly well positioned to take advantage of the new market opportunities that are being created.

Our successful execution today positions Broadridge as the trusted partner as clients adapt to the next phase tomorrow, and we're ready. We've been investing in the core themes of engagement, tokenization, and agentic AI, in some cases for years, and those efforts are now bearing fruit. So let's turn to slide 5 to review our progress on these fronts. First, digital engagement.

Our standing voting instructions, or SVI, capability is gaining real momentum in the marketplace. Over the last few weeks, both Goldman Sachs and Tesla have launched SVI engagement programs to make it easier than ever for retail shareholders to vote their shares. The success of early campaigns from Exxon and others are opening eyes, and we anticipate further announcements on blue-chip names in the months to come. Furthermore, in late September, the SEC provided guidance as to how mutual funds can implement their version of an SVI program.

The upcoming move to e-Default is also increasing digital engagement. We submitted our comments to the SEC in September, reiterating our support for the proposal's core objectives. The proposal creates new requirements and complexities for intermediaries, and we're actively engaging clients on what they need to stay compliant. At the same time, forward-thinking firms are using this shift as a catalyst to drive deeper and more valuable engagement with their clients.

As a result, our Wealth InFocus platform continues to gain momentum as clients look forward to what they will need to successfully implement the new rules and deliver tailored digital communications at scale. Turning next to tokenization, Broadridge is building the infrastructure that helps markets support tokenized assets while preserving the governance and servicing that investors, brokers, clients, and issuers need. First, in tokenized equities, the SEC continues to advance its pro-innovation agenda with its recently released innovation exemption. That rule is designed to encourage new marketplaces for tokenized equities.

Importantly, the Commission explicitly reiterated the importance of shareholder rights, including voting, as a core feature of tokenized equities. The competition across the multiple models of equity tokenization and across the different level one networks points to a more diverse and fragmented environment for issuers and intermediaries to navigate. It's now clear that the introduction of tokenized equities will result in increased complexity for issuers, wealth managers, and investors. Broadridge is stepping in to reduce that complexity by extending our scaled and institutional-grade governance layer to cover all models of tokenized equities.

Leaders in each of the models know they want strong governance as a feature of their offerings, and they're turning to Broadridge to help them deliver. We recently announced an agreement with Kraken Payward to provide governance services, building on existing relationships with Ondo and Alpaca. Importantly, these new relationships cover both global tokenized equities, which are largely synthetic, as well as the custodial tokenized model that these players are planning to bring to the U.S. market.

We're also working with big market infrastructure providers. As we announced yesterday, Broadridge will provide the core governance layer for the New York Stock Exchange's planned tokenized equity marketplace and will support issuers with digital transfer agency services. We're also supporting the DTCC's tokenization efforts across governance and trading infrastructure, and we anticipate further announcements with other market infrastructure providers over time. In sum, tokenized equities can bring real benefits and also come with new complexities.

There's significant growth opportunities for Broadridge as we solve those new needs — a horizontal governance layer that simplifies complexity for issuers, intermediaries, and investors. Outside of equities, we're building the trading infrastructure to support tokenized securities across multiple asset classes. Our Distributed Ledger Repo, or DLR, platform now supports cross-border atomic settlement for GC repo securities alongside tokenized U.S. Treasuries, enabling us to bring our market-leading collateral management capability to our global clients.

Based on clients signed and currently in implementation, we expect further significant increases in our DLR volumes over the next six months. Building further on DLR, we launched DLX, an end-to-end platform that goes beyond repos to connect tokenized and traditional markets across multiple asset classes through an integrated operating layer. The first use case is supporting the DTCC's tokenization initiative, and we're leading a user group of nearly two dozen institutions to help them as they begin to access and use the DTCC's new service. Turning last to AI, where we continue to scale our agentic capabilities.

We have now expanded our AI-powered institutional voting solution to include global equities and enhanced workflow to make institutional voting more seamless and independent than ever. Demand remains strong, and we signed another tier-one wealth manager to our growing client roster in Q1. Our global demand model is also gaining momentum, covering more than 130 trillion. Its predictive AI capability is giving our clients unrivaled visibility into future asset flows.

We recently signed an agreement with a leading consulting firm, replacing their longstanding in-house model. We're also delivering real AI efficiencies, as Oshmo will share, and using that capacity to fund investment and drive EPS growth. Putting it all together, it's an exciting time. Our industry is evolving rapidly, creating significant new opportunity for which no one is better positioned than Broadridge.

We've been investing to meet that demand, and we're now seeing the beginning of real traction across multiple areas. Let me close with a quick recap of our key headlines. First, we delivered strong first-quarter results, including double-digit growth in both ICS and GTO. Second, we're putting our cash flow to work to expand our market, grow our dividend, and repurchase shares.

Third, we're on track to deliver another year of steady and consistent top- and bottom-line growth, and we're reaffirming our guidance on all metrics. And last, we're translating our growth investments into tangible results. We're widening access with better digital engagement. We're building the governance layer for tokenized securities and the operating infrastructure to connect traditional and digital assets.

And we're delivering new agentic products and workflows while using AI to create internal efficiencies that will fund investment and support NC growth. Before I turn it over to Ashima, I want to thank the 16,000 Broadridge associates worldwide who turn our strategy into execution. They're delivering exceptional value to our clients and, in turn, for the tens of millions who rely on our industry to invest in the future. I've never been more confident and excited about Broadridge's ability to serve our clients, engage our associates, and create compelling long-term value for shareholders.

Ashima. Eddings Thibault (Head of Investor Relations) Thanks, Tim. Good morning. It's great to be here today to share our Q1 results.

Before I begin my review, I want to make five key callouts. First, Broadridge Financial Soln is off to a strong start in fiscal '27. In our seasonally smallest quarter, recurring revenue grew 11% constant currency, including 9% organic growth. Closed sales also rose 10% to $36 million.

Second, underlying growth drivers remain positive with double-digit equity and fund position growth and continued trade-volume growth. Third, we continue to be a buyer of Broadridge Financial Soln shares. We repurchased $200 million in Q1, bringing our total since January to $650 million. Fourth, we are delivering on AI productivity gains.

AI savings were $6 million in the first quarter and we are on track for $25 million for the full year, enabling us to deliver strong bottom-line results and fund strategic growth initiatives. And finally, we are reaffirming our full-year outlook, delivering 8% to 12% adjusted EPS growth while investing in our future growth. With that, let's go to the numbers on slide 6. Recurring revenues grew 11% on a constant-currency basis, including 9% organic growth.

Adjusted operating income margin was 13.8%, lower year on year as we lapped record event-driven revenues in Q1 last year. Adjusted EPS grew 3% to $1.56, above our expectations, driven by timing benefits in our regulatory revenues and a lower effective tax rate. And closed sales were $36 million, up 10% from Q1 last year. Let's move to slide 7 to discuss our segment recurring revenue, starting with ICS, our Investor Communication Solutions segment.

ICS recurring revenues rose 10% to $568 million, including a one-point benefit from acquisitions. Regulatory revenues rose 17% in Q1, driven by 11% growth in equity revenue positions and 16% growth in fund positions. The timing of certain fund communications resulted in a three-point benefit to regulatory revenues. Data-Driven Fund Solutions revenues grew 10%.

Organic growth was 4%, which included a two-point headwind from lower interest rates. Issuer revenues grew 4%, driven by strong growth in Disclosure Solutions, which more than offset a two-point headwind from lower interest rates.