BROADRIDGE FINANCIAL SOLUTIONS (BR)·Q2 2026 Earnings Summary

Broadridge Beats on Revenue and EPS, Raises Full-Year Guidance

February 3, 2026 · by Fintool AI Agent

Broadridge Financial Solutions delivered a strong Q2 FY2026, beating Wall Street estimates on both revenue and earnings while raising its full-year EPS growth guidance. Total revenues of $1.71 billion exceeded consensus by 6.8%, and adjusted EPS of $1.59 topped expectations by nearly 17%. The company raised its FY26 adjusted EPS growth outlook to 9-12% from the prior 8-12% range.

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Did Broadridge Beat Earnings?

Yes — Broadridge delivered a double beat with revenue and EPS exceeding consensus estimates.

*Consensus estimates from S&P Global

The outperformance was broad-based:

• Recurring revenue grew 9% reported (8% constant currency), propelled by strong equity position growth (+15% YTD) and robust demand for shareholder engagement solutions
• Closed sales of $57 million increased 24% year-over-year, signaling healthy demand for Broadridge's solutions
• Free cash flow surged to $319 million YTD vs. just $56 million in the prior year period

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What Did Management Guide?

Broadridge raised its FY26 adjusted EPS growth guidance while maintaining all other metrics.

The EPS guidance raise reflects:

• Strong first-half execution with recurring revenue growth tracking at 8% constant currency
• Margin expansion opportunities as investments in platforms begin to scale
• Confidence in second-half momentum from closed sales backlog

Management noted the company remains "on track to deliver on our three-year objectives" of 7-9% recurring revenue growth, 50+ bps annual margin expansion, and 8-12% adjusted EPS growth.

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How Did the Stock React?

BR shares rose approximately 2.4% in after-hours trading following the earnings release.

The positive reaction reflects:

• Double beat on revenue and EPS
• Guidance raise signaling management confidence
• Strong free cash flow supporting capital returns

For context, BR shares have pulled back from their 52-week high of $271.91 to current levels around $200, creating potential value for investors focused on the company's consistent execution.

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What Changed From Last Quarter?

Key sequential changes from Q1 FY2026:

Notable developments this quarter:

1. Digital assets gaining traction — Broadridge contributed 342 million Canton Coins valued at $53 million for an ~8% stake in the Tharameon Digital Asset Treasury, signaling strategic commitment to tokenization

2. Acolin acquisition closed — The January 2026 acquisition expands Broadridge's fund distribution capabilities

3. Event-driven revenue normalized — Q2 event-driven revenue of $91M (YTD record of $204M) was elevated due to fund elections and corporate events including "the M&A contest for a major media company." Management expects H2 to normalize to ~$60M quarterly average.

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Tokenization & Digital Assets: Key Opportunity

Management addressed investor concerns about tokenized equities head-on, positioning Broadridge as a key enabler rather than a disruptor victim.

Key tokenization metrics this quarter:

• $384 billion/day tokenized on DLR platform in December ($9 trillion for the month) — more than 2x since June
• 600 funds covering $4 trillion of assets using Voting Choice solution (up from 400 funds and $2T last year)
• $265 million in digital asset holdings at quarter end ($187M non-cash mark-to-market gain)
• Completed Société Générale's first U.S. digital bond issuance

Strategic roadmap:

• Real-time repo capability launching in FY2026 with stablecoin integration
• Tokenization platform extending to deposits in FY2027
• Integration of tokenized equities into proxy capabilities by end of calendar 2025

CEO Tim Gokey on tokenization opportunity: "The vast majority of tokenized equities... are going to be purchased through a broker-dealer or through a digital trading platform. Those intermediaries are going to have the same asset servicing obligations that they have today, including proxy, but also corporate actions, class actions, tax."

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Segment Performance

Investor Communication Solutions (ICS)

The regulatory sub-segment was the standout performer, driven by:

• 15% equity revenue position growth (excluding non-revenue fractional positions)
• Strong institutional and retail voting demand
• New capabilities for tokenized equities governance

Global Technology & Operations (GTO)

GTO growth was driven by:

• Front and back office trading solutions
• Digital asset revenues and rapid growth in tokenized DLR volumes
• Wealth platform onboarding in U.S. and Canada

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Margin Analysis

Adjusted operating margin contracted 110 bps year-over-year to 15.5%, though full-year guidance of 20-21% remains intact.

The margin pressure reflects:

• Ongoing investments in platform capabilities and digital infrastructure
• Restructuring costs from production facility closure (expected to complete in Q3)
• Mix shift as lower-margin distribution revenue grew 14%

Management expects margins to expand in the back half of the fiscal year as seasonal revenue builds and investments scale.

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Capital Allocation

Broadridge continues its balanced approach to capital allocation.

Shareholder returns:

• FY26 dividend of $3.90/share represents 11% growth
• Strong free cash flow conversion expected at 100%+ for full year

Management emphasized the company's "strong capital position gives us the flexibility to pursue additional compelling M&A opportunities while returning capital to shareholders."

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Key Volume Drivers

Broadridge continues to benefit from secular tailwinds:

• Democratization of investing driving equity position growth well above historical averages
• Strong trading activity supporting capital markets volumes (11% growth in equities and fixed income)
• Growing adoption of managed accounts and ETFs
• Fund position growth normalized to 8% in H1 after Q1 timing distortion

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Forward Catalysts

Near-term catalysts to watch:

1. Q3 FY26 earnings (May 2026) — Seasonally stronger quarter; watch for margin expansion and closed sales progress toward $290-330M target. Note: Expect 7-point headwind to Capital Markets growth from term license timing.

2. Tokenization momentum — Real-time repo launching in H1 calendar 2026; digital bond issuance capabilities expanding; Canton main net migration expected H2 2026

3. Shareholder engagement expansion — Standing voting instructions pilot expanding beyond ExxonMobil; AI voting policy engine adoption by major asset managers

4. Pipeline conversion — New pipeline generation up 20%+ in H1, driven by tokenization, shareholder engagement, and digital communications opportunities

Board changes: Brett Keller departing after 11 years; Trish Mosconi (former BlackRock/Synchrony executive) and Chris Perry (Broadridge executive) joining.

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Q&A Highlights

On tokenization concerns (Alex Kram, UBS): The analyst noted market debate that tokenized equities could disintermediate Broadridge. CEO Gokey pushed back firmly: "Irrespective of the model of tokenization... we see the vast majority of those are going to be purchased through a broker-dealer." He emphasized that new entrants like Coinbase and Kraken "are drawing in new investors... that expands the market and that's going to contribute to long-term growth."

On proxy advisory disruption: Management disclosed that J.P. Morgan and Wells Fargo are adopting Broadridge's AI-native custom policy engine and vote implementation capabilities — allowing them to reduce reliance on traditional proxy advisors. Gokey called this a "multi-hundred million dollar market" opportunity that could add "as much as a point of growth to our governance business over the next few years."

On closed sales confidence (Michael Infante, Morgan Stanley): With $89M year-to-date against $290-330M guidance, management acknowledged "we have wood to chop in the second half" but expressed confidence based on pipeline origination up 20%+ and recent wins including a "strategically significant DLR sale to a tier-one global bank" — the largest DLR sale to date.

On SEC and regulatory outlook (Patrick O'Shaughnessy, Raymond James): Gokey indicated the SEC is "clearly going to let the market decide" on tokenization models. Broadridge has been communicating to regulators that they can solve the complexity of tokenized securities governance, suggesting "I don't think there's a need for exemptive relief in this area."

On DLR platform expansion (Kyle Peterson, Needham): Management outlined plans to move DLR to real-time repo capability "in the first half of the calendar year" and eventually to the Canton main net (expected H2 calendar 2026). The company is committed to being on "multiple L1s beyond the Canton Network."

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Historical Earnings Performance

Broadridge has delivered consistent revenue growth and has beaten EPS estimates in 8 of the last 9 quarters, demonstrating reliable execution.

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Bottom Line

Broadridge delivered a strong Q2 with beats on both revenue (+6.8%) and EPS (+16.9%), raised full-year EPS guidance, and demonstrated continued momentum across its governance and capital markets platforms. The company's strategic positioning in tokenization and digital assets provides optionality for future growth, while the core business continues to benefit from secular trends in investor participation and trading volumes.

With shares trading well below their 52-week high and management raising guidance, the risk/reward appears favorable for long-term investors focused on steady compounders in the financial technology space.

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Data sources: Company filings, S&P Global estimates. Stock prices as of market close February 3, 2026.