Broadridge Financial Solutions (BR) Q1 2025 earnings summary

Executive summary

• Recurring revenues grew 3% to $900 million (4% constant currency) in Q1 FY25, while total revenues declined 1% to $1.423 billion.

• Adjusted EPS was $1.00, slightly above expectations but down 8% year-over-year; diluted EPS was $0.68, down 11%.

• Closed sales reached a Q1 record of $57 million, up 21% year-over-year, reflecting strong demand and a robust sales pipeline.

• Acquired Kyndryl's SIS business in Canada for $185 million, expected to add over 1 percentage point to growth and expand GTO offerings.

• Executed growth strategy across Governance, Capital Markets, and Wealth & Investment Management, with strong segment performance.

Financial highlights

• Recurring revenues rose 3% to $900 million (4% constant currency); total revenues were $1.423 billion, down 1% year-over-year.

• Adjusted operating income was $185 million (down 7% YoY); adjusted operating income margin was 13.0% (down from 13.9%).

• Net earnings fell 12% to $79.8 million; adjusted net earnings were $118 million.

• Free cash flow was negative $158 million, impacted by higher cash taxes, severance, and lower net income.

• Closed sales were $57 million, up 21% year-over-year.

Outlook and guidance

• Fiscal 2025 recurring revenue growth guidance raised to 6-8% constant currency (previously 5-7%), reflecting SIS acquisition and organic growth.

• Adjusted EPS growth guidance maintained at 8-12%; closed sales guidance unchanged at $290-$330 million.

• Adjusted operating income margin expected at ~20% for the year; expect 50+ bps of underlying core margin expansion.

• SIS acquisition expected to be neutral to EPS in year one and slightly dilutive to margins.

• Long-term objectives: 7-9% recurring revenue growth and 8-12% adjusted EPS growth through FY26.