On this page of StockholderLetter.com we present the latest annual shareholder letter from BROADRIDGE FINANCIAL SOLUTIONS, INC. — ticker symbol BR. Reading current and past BR letters to shareholders can bring important insights into the investment thesis.
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10/2/2024 Letter Continued (Full PDF)
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9/27/2023 BR Stockholder Letter
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BR Benford's Law Stock Score = 67
10/2/2024 Letter Continued (Full PDF)
•
9/27/2023 BR Stockholder Letter•
More "Investment Brokerages" Category Stockholder Letters•
BR Benford's Law Stock Score = 67BR Shareholder/Stockholder Letter Transcript:
Be ready for the future of nancial services Trusted expertise. Transformative technology. 2024 ANNUAL REPORT Broadridge s strategy is anchored in long-term trends that are reshaping the nancial services industry Contents 01 CEO Letter 07 2024 Financial Highlights 08 Sustainability 10 Explanation and Reconciliation of the Company s Use of Non-GAAP Financial Measures 16 Directors and Executive Leadership Team 17 Annual Report on Form 10-K Today, more than ever, Broadridge is a trusted and transformative partner that clients depend on to help them drive innovation Tim Gokey Chief Executive O cer Dear Stockholders, Broadridge delivered another year of strong and sustainable growth in scal 2024. We are executing on our strategy to democratize and digitize governance, simplify and innovate trading, and modernize wealth management. Our focus on execution helped drive strong nancial results, including a double-digit increase in earnings and record Closed sales. Importantly, we are entering scal 2025 poised for another year of sustained growth backed by a record backlog, robust demand for our solutions, and resilient volume trends. Our strategy is anchored in long-term trends that are reshaping the nancial services industry. Over the past several years we have actively repositioned Broadridge to help our clients address the opportunities and challenges created by these trends, and that is translating directly into our nancial results. Today, more than ever, Broadridge is a trusted and transformative partner that clients depend on to help them drive innovation, adapt to regulatory changes, and reduce the cost and complexity of their operations. Another Year of Strong and Sustainable Growth Fiscal 2024 Recurring revenue increased 6% constant currency, and Adjusted earnings per share ( EPS ) rose 10%. Free cash ow conversion returned to 102%, consistent with more historic levels and in line with our 2024 guidance. We also reported record Closed sales of $342 million, an increase of 39% from scal 2023, highlighting the robust demand for our solutions and giving us increased visibility into our projected growth in scal 2025 and scal 2026. Fiscal Year 2024 Results Recurring revenue* +6% $4.2B Adjusted EPS* +10 % $7.73 Fiscal 2025 annual dividend amount $3.52 +10 % * Recurring revenue growth constant currency percentage, Free cash ow conversion, and Adjusted EPS are Non-GAAP nancial measures. Broadridge 2024 Annual Report | 1 Be ready for the democratization and digitization of investing Broadridge is digitizing corporate governance to ensure that investors get the critical information they need to understand their investment and vote their shares. Processing over 800 million shareholder positions to ensure that tens of millions of investors can vote their shares. Digitizing almost 90% of proxy communications to reduce the cost of communications for funds and public companies. Our growth was paced by the performance of each of our three franchise businesses. In Governance, Recurring revenue increased 5% constant currency, powered by growth in our data-driven fund solutions, issuer solutions, and digital communications. In Capital Markets, Recurring revenue grew 8% constant currency, surpassing the $1 billion mark. We bene ted from the continued demand for our Broadridge Trading and Connectivity Solutions ( BTCS ) and the onboarding of new global post-trade clients. Finally, in Wealth and Investment Management, Recurring revenue increased 7% constant currency, paced by revenues from sales, including the go-live of the foundational client on our wealth platform. Our 6% Recurring revenue growth, coupled with our consistent ability to generate operating leverage, enabled Broadridge to deliver Adjusted EPS growth of 10% for scal 2024. Our healthy Free cash ow conversion and investment-grade balance sheet supported our shareholder-friendly capital allocation policy, which balances investments for the future with capital returns to our shareholders. During the year, we announced or completed three value-accretive tuck-in M&A transactions while returning $781 million to shareholders, including an attractive dividend and $450 million in share repurchases. In August, we raised our annual dividend by another 10% for scal 2025 to $3.52 per share. Broadridge 2 | Broadridge 2024 Annual Report Empowering shareholders of more than 100 funds and ETFs to have a voice in how their fund manager votes in corporate elections. Optimizing digital and print communications with our Wealth InFocus platform to give investors more e ective communications while lowering costs for their advisors. has raised its dividend every year during its 18 years as a public company, and this latest increase marks the 12th double-digit rise over the last 13 years. Broadridge s scal 2024 results, underscored by record sales, keep us on-track to deliver again on our latest set of three-year nancial objectives, which we announced at our December 2023 Investor Day. Those objectives call for 7% 9% Recurring revenue growth constant currency and 8% 12% Adjusted EPS growth over the scal year 2024 through 2026 period. Our Growth Strategy is Driven by Long-term Trends Underpinning Broadridge s strong and sustainable growth are ve powerful long-term demand drivers. The democratization of investing is propelling the growth of our Governance franchise. Lower trading costs and an ever-expanding array of nancial products are putting more investment options into the hands of a growing number of individual investors. This trend has continued in recent years with ETFs, managed accounts, model-based investing, and more recently, app-based and zero commission trading. Growing investor participation also means our clients need to modernize their wealth o erings to keep pace. The second driver is the ongoing digitization of communications. Twenty- ve years after email became ubiquitous, the urgency around reducing the cost of physical communications is still very real. Innovation leaders have also realized that e ective digital communications can increase client engagement, providing top line bene ts as well. This trend is resonating in the wealth management industry, driven by the generational transfer of wealth from Boomers to Gens X and Y and by increased engagement with younger, digitally native investors who have grown up in the age of Apple and Amazon. Third is the acceleration of trading. Capital markets rms face pressure to drive ever increasing trade volumes at lower spreads and with faster settlement times. New asset classes continue to grow, often built with separate operations and technology infrastructures. Multiply each asset class by dozens of markets around the world with ever-higher volumes, and you can see why both large and smaller clients face constant pressure to simplify and innovate their operations. Fourth is the growing importance of data, and with it, Arti cial Intelligence ( AI ). Ever increasing computing speeds and the plummeting costs of storage have enabled companies to use growing lakes of data to guide decision-making and fuel an array of nancial products. The advent of generative AI gives every company a tool to increase productivity and improve the user experience. For those companies with unique data, the bene ts will be even greater. Finally, regulatory change is a constant as regulators around the world continuously update rules to regulate behavior and improve disclosure for all investors. Over the past few years, we have actively reshaped Broadridge to address these trends. In Governance, we have scaled our regulatory business, invested in our digital capabilities, and helped our clients address multiple regulatory changes. In Capital Markets, the acquisition of BTCS has extended our capabilities into the front- and middle-o ce. We have also invested in our global post-trade platform across multiple Be ready to simplify and innovate capital markets Broadridge is powering trading at scale with global, multi-asset class, modular solutions that drive revenue, increase e ciency, and reduce risk. Driving simpli cation and innovation with front-o ce platforms that support high-volume, low-touch trading strategies and high-touch customized execution across multiple asset classes. Simplifying operations by enabling banks to clear and settle trades on a uni ed, next-generation system across multiple asset classes and markets around the world. Innovating with distributed ledger technology to help global institutions increase liquidity, transfer collateral, and reduce counterparty risk. Broadridge 2024 Annual Report | 3