Executive Summary

Q3 FY25 delivered steady execution: Recurring revenue +7% (+8% cc) to $1.204B, total revenue +5% to $1.812B, operating margin up 150 bps YoY to 19.0%, and Adjusted EPS +9% to $2.44 .
Against S&P Global consensus, BR posted a narrow EPS beat ($2.44 vs $2.41*) but a revenue miss ($1.812B vs $1.864B*). Sequentially, results improved from Q2 on both revenue ($1.589B → $1.812B) and Adjusted EPS ($1.56 → $2.44) . Values retrieved from S&P Global.
Guidance reaffirmed for FY25: Recurring revenue growth (cc) 6–8%, AOI margin ~20%, and Adjusted EPS growth at the “middle” of the 8–12% range; closed sales guidance trimmed to $240–$300M (from $290–$330M) on sales-cycle elongation, with minimal impact to FY26 given backlog .
Stock-reaction catalysts: modest top-line miss vs consensus, but resilient KPIs (equity positions +15%, ITG +14%), margin expansion, and maintained earnings outlook despite macro uncertainty and lower event-driven revenues .

What Went Well and What Went Wrong

What Went Well
- Resilient growth with expanding profitability: Recurring revenue +7% (+8% cc), Operating income +14% and AOI +10%; AOI margin +100 bps to 22.4% .
- Strong execution in GTO and healthy capital markets volumes; DLR repo now processing ~$100B average daily trading volume; two notable post-trade wins closed in Q3 .
- Confidence backed by durable model: “94% recurring fee revenues, 98% revenue retention rate and a $450 million revenue backlog” providing 12–18 months visibility (CEO) .
What Went Wrong
- Revenue missed consensus amid event-driven softness (–21% to $53M) and FX/lower license timing: event-driven tumbled on fewer proxy contests; FX and a shifted wealth license renewal created a 160 bps headwind to reported recurring growth (CFO) .
- Closed sales guide lowered ($240–$300M from $290–$330M) on late-Q4 elongation in closings; management emphasized delays (not cancellations) with limited revenue waterfall impact .
- ICS revenue mix muted the full benefit of strong position growth (15% equity positions; 11% equity revenue positions) as smaller/fractional positions don’t yet monetize (CFO) .

Financial Results

Metric	Q1 FY25	Q2 FY25	Q3 FY25
Total Revenue ($B)	$1.423	$1.589	$1.812
Recurring Revenue ($B)	$0.900	$0.980	$1.204
Event-driven Revenue ($M)	$63	$125	$53
Distribution Revenue ($M)	$460	$484	$555
Operating Income ($M)	$134	$211	$345
Operating Margin (%)	9.4%	13.3%	19.0%
Adjusted Operating Income ($M)	$185	$263	$405
AOI Margin (%)	13.0%	16.6%	22.4%
Diluted EPS (GAAP)	$0.68	$1.20	$2.05
Adjusted EPS (Non-GAAP)	$1.00	$1.56	$2.44

Estimates vs Actuals (S&P Global)

Metric	Q1 FY25	Q2 FY25	Q3 FY25
Revenue Consensus Mean ($B)	$1.484*	$1.556*	$1.864*
Revenue Actual ($B)	$1.423	$1.589	$1.812
Primary EPS Consensus Mean ($)	$0.971*	$1.487*	$2.412*
Adjusted EPS Actual ($)	$1.00	$1.56	$2.44

Values retrieved from S&P Global.

Segment Breakdown (Q3 FY25 vs Q3 FY24)

Segment / Line	Q3 FY24	Q3 FY25
ICS Total Revenue ($M)	$1,301	$1,348
• ICS Recurring ($M)	$701	$740
• ICS Event-driven ($M)	$67	$53
• Distribution ($M)	$533	$555
GTO Recurring ($M)	$425	$464
ICS Pre-tax Margin (%)	20.8%	21.7%
GTO Pre-tax Margin (%)	12.5%	15.2%

Key KPIs

KPI	Q1 FY25	Q2 FY25	Q3 FY25
Closed Sales ($M)	$57	$46	$71
Equity Positions Growth	+3%	+11%	+15%
Mutual Fund/ETF Positions Growth	+6%	+5%	+6%
Internal Trade Growth (ITG)	+10%	+13%	+14%

Non-GAAP adjustments: Q3 included $5.5M severance related to a production facility closure (Other); AOI/Adj. EPS adjust for amortization, acquisition/integration and restructuring .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Recurring revenue growth (cc)	FY25	6–8%	6–8%	Maintained
AOI margin (Non-GAAP)	FY25	~20%	~20%	Maintained
Adjusted EPS growth	FY25	8–12%	8–12%; “middle of range”	Maintained (narrowed to midpoint emphasis)
Closed Sales	FY25	$290–$330M	$240–$300M	Lowered

Management reiterated that sales-cycle elongation is driving the closed-sales reduction, with minimal impact to FY26 due to backlog and typical 12–24 month conversion cycles .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q-2 and Q-1)	Current Period (Q3 FY25)	Trend
Demand & Sales Cycle	Q1 raised recurring growth guidance; strong pipeline, closed sales +21% YoY . Q2 reiterated 6–8% cc, closed sales YTD $103M; record event-driven .	Sales-cycle elongation in late Q4; lowered closed sales guide to $240–$300M; pipeline intact; delays not cancellations .	Slightly weaker near-term closings timing; demand intact
Capital Markets Volumes	Q1/Q2: double-digit ITG; higher trading volumes aiding growth .	ITG +14%; settlements platforms handled record fixed income and 2x typical equity volume post-Apr 2 .	Strengthening volumes supporting GTO
DLT/Tokenization	Q1/Q2: Continued innovation; SIS acquisition to broaden platform .	DLR repo at ~$100B ADV; integration with Fnality for real-time intraday repo settlement .	Scaling adoption
Wealth Platform	Q1: work to migrate license to SaaS over time . Q2: SIS integration; wealth growth aided by SIS .	Major U.S. wealth suite win; 34 clients live; 40 onboarding; Q3 license renewal shifted to Q4 (timing) .	Growing acceptance; timing noise
ICS Position Growth & Monetization	Q1: equity +3%, funds +6% . Q2: equity +11%, funds +5% .	Equity +15% with small/fractional positions (non-revenue) scaling; equity revenue positions +11%; funds +6% .	Strong participation; monetization mix lag
Regulation & Digital Assets	Q1/Q2: product launches; guidance intact .	Positive on SEC policy trajectory; building pass-through voting and data-driven voting tools; digital asset disclosure product live with exchanges .	Constructive policy/product positioning

Management Commentary

Strategy and resilience: “With 94% recurring fee revenues, 98% revenue retention rate and a $450 million revenue backlog, we have strong visibility into our growth over the next 12 to 18 months” (CEO) .
Democratization and small positions: “Fractional positions…are free to public companies and funds…do not translate immediately into revenue…we can expect many of these accounts to grow to larger position sizes over time” (CEO) .
Sales-cycle dynamics: “We think we’re seeing an elongation in our closing process…It’s delays not cancellations…whether something closes in June or August is really immaterial to our future growth” (CEO) .
FY outlook and capital: “We remain on track to deliver…Adjusted EPS growth in the middle of our 8–12% range…We continue to expect free cash flow conversion of 95% to 105%” (CFO) .
Print footprint rationalization: “We…reduce[d] our distribution footprint by closing a print operation…resulting in a $5 million restructuring charge” (CFO) .

Q&A Highlights

Demand and macro: Management is cautious on near-term closings amid uncertainty and tariffs; clients prioritize cost reduction and simplification projects; pipeline is strong and deals are in late-stage negotiations .
Monetization of positions: Equity revenue positions grew 11% vs total equity positions +15%; smaller positions (direct indexing/managed accounts) support long-term growth but have limited near-term revenue impact; ~75–80% of regulatory revenues are directly impacted by position growth (CFO) .
License-to-SaaS transition: Some acquired businesses retain license models; BR is migrating to SaaS over time; Q3 had a meaningful wealth license renewal shift into Q4; full-year license is <5% of GTO revenue (CFO) .
Regulatory stance: Positive on SEC direction; building pass-through voting and data-driven voting solutions; advancing digital asset disclosures with live exchange integrations (CEO) .
Revenue waterfall from lower closed sales: The midpoint reduction equates to ~$40M of sales; even if all converted within a year, impact is <1% of recurring revenue, and typical conversion is 12–24 months (CFO) .

Estimates Context

Q3 FY25: Adjusted EPS beat ($2.44 vs $2.412*), revenue missed ($1.812B vs $1.864B*). Q2 FY25: beats on both EPS and revenue ($1.56 vs $1.487*; $1.589B vs $1.556B*). Q1 FY25: EPS beat ($1.00 vs $0.971*), revenue miss ($1.423B vs $1.484B*) . Values retrieved from S&P Global.
Implications: Modest top-line miss amid event-driven softness and FX/license timing, but earnings resilience and margin leverage persisted; consensus may trim near-term revenue/closed-sales assumptions while maintaining FY25 EPS within guidance midpoint given reiterated AOI/EPS outlook .

Key Takeaways for Investors

Core engine intact: High-recurring model, strong retention, and sizable backlog underpin visibility despite macro uncertainty .
Earnings quality: Solid AOI expansion and EPS beat despite revenue miss; cost discipline and operating leverage offset event-driven variability and FX .
Secular tailwinds: Rising investor participation (equity positions +15%) and robust trading volumes (ITG +14%) support ICS and GTO; DLR repo scaling to ~$100B ADV is a tangible innovation proof point .
Watch near-term bookings: Closed sales guidance lowered on timing; limited FY26 revenue impact expected given conversion lags and backlog .
Wealth momentum: Major suite win, 34 clients live and ~40 onboarding; expect Q4 wealth organic growth to benefit from shifted license timing; SIS integration on track .
Guidance credible: Reaffirmed FY25 revenue (cc), AOI margin, and EPS (midpoint) support; free cash conversion 95–105% targets sustained .
Capital returns steady: Dividend maintained at $0.88 per share; next payment Jul 2, 2025 (record date Jun 12) .

Additional Items (Q3 FY25)

Dividend: Board declared $0.88 quarterly dividend, payable July 2, 2025 to holders of record June 12, 2025 .

BROADRIDGE FINANCIAL SOLUTIONS, INC. (BR)·Q3 2025 Earnings Summary