Sign in
BF

BROADRIDGE FINANCIAL SOLUTIONS, INC. (BR)·Q4 2025 Earnings Summary

Executive Summary

  • Q4 FY2025 delivered modest top-line outperformance and a clean EPS beat vs. S&P Global consensus: revenue $2.065B vs. $2.058B est., Adjusted EPS $3.55 vs. $3.50 est.; GAAP EPS $3.16. Operating margin expanded YoY to 24.1% while Adjusted Operating margin fell 180 bps on higher growth investments and mix from distribution/float .
  • FY2026 guidance initiated: Recurring revenue growth (cc) 5–7%, Adjusted EPS growth 8–12%, Adjusted Operating margin 20–21%, Closed sales $290–$330M; management reiterated confidence in hitting 3-year objectives .
  • Capital allocation remained shareholder-friendly: annual dividend raised 11% to $3.90 (19th consecutive increase); FY25 free cash flow conversion reached 104% .
  • Key drivers: ICS regulatory strength on equity/fund position growth; GTO Wealth momentum aided by SIS; GTO Capital Markets growth tempered by a 1-pt drag from a business exit; record DLR repo volumes (~$200B/day) underscore tokenization leadership and a secular tailwind .

What Went Well and What Went Wrong

What Went Well

  • Beat/clean prints vs. Street: Q4 revenue $2.065B vs. ~$2.058B est.; Adjusted EPS $3.55 vs. ~$3.50 est.; EBITDA $624.6M vs. ~$618.6M est. (all est. S&P Global) .
  • Healthy FY26 outlook + backlog support: guidance implies continued mid-to-high single-digit EPS growth; $430M recurring revenue backlog (~10% of recurring revenue) provides visibility into FY26–27 .
  • Strategic progress: ICS regulatory recurring up 8% in Q4 on strong equity revenue positions (+14%); DLR repo volumes topped $200B/day; dividend raised 11% to $3.90; free cash flow conversion 104% .

What Went Wrong

  • Q4 Adjusted Operating income flat YoY and margin down 180 bps to 27.0% on higher growth investments and distribution/float mix; GTO Q4 pre-tax margin compressed to 7.3% despite 12% recurring growth .
  • Sales pace: Q4 closed sales $114M, down 28% YoY; FY25 closed sales $288M (-16% YoY) as some deals elongated; management cited elongation but expects healthy FY26 sales .
  • Capital Markets outlook: FY26 GTO Capital Markets guided to lower end of 5–7% on a ~1-pt drag from a business exit; Q4 pre-tax margin contracted on growth investments and other initiatives .

Financial Results

Headline P&L vs. prior periods and estimates

MetricQ4 2024Q3 2025Q4 2025Consensus (Q4 2025)
Revenue ($USD Millions)$1,944.3 $1,811.7 $2,065.4 $2,057.4*
GAAP Diluted EPS ($)$2.72 $2.05 $3.16 N/A
Adjusted EPS ($)$3.50 $2.44 $3.55 $3.498*
Operating Margin (GAAP)22.7% 19.0% 24.1% N/A
Adjusted Operating Margin28.8% 22.4% 27.0% N/A
EBITDA ($USD Millions)N/AN/A$624.6*$618.6*

Values marked with * retrieved from S&P Global.

Notes:

  • Revenue and Adjusted EPS modestly beat consensus (positive surprise); Adjusted Operating margin compressed YoY as management accelerated growth investments and mix from distribution/float was a ~10 bps headwind .
  • GAAP Operating margin expanded YoY on lower restructuring/other costs .

Segment performance (Q4)

SegmentRevenue Q4 2024 ($M)Revenue Q4 2025 ($M)YoYPre-tax Margin Q4 2024Pre-tax Margin Q4 2025
Investor Communication Solutions (ICS)$1,528.3 $1,600.7 +5% 30.7% 30.6%
Global Technology & Operations (GTO)$415.9 $464.7 +12% 11.3% 7.3%
Total$1,944.3 $2,065.4 +6% ——

Select drivers:

  • ICS: Regulatory recurring +8% YoY on strong equity revenue position growth (+14%) and mutual fund/ETF positions (+7%); distribution revenue +4% on postage (approx. +$29M) partially offset by lower volumes .
  • GTO: Wealth & Investment Management recurring +26% (incl. SIS); Capital Markets +4% cc, with a ~1-pt growth drag from a business exit; GTO margin compressed on growth investments/initiatives .

KPIs and Operating Metrics

KPIQ4 2024Q4 2025FY 2025
Closed Sales ($M)$156.6 $113.5 $287.9
Equity Position Growth7% 18% 16%
Equity Revenue Position GrowthN/A14% 12%
Mutual Fund/ETF Position Growth6% 7% 7%
Internal Trade Growth15% 14% 13%
Recurring Revenue Backlog——~$430M (~10% of recurring revenue)
Free Cash Flow Conversion——104%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Recurring Revenue Growth (constant currency)FY2026—5–7% Initiated
Adjusted Operating Income MarginFY2026—20–21% (GAAP 18–19%) Initiated
Adjusted EPS GrowthFY2026—8–12% Initiated
Closed SalesFY2026—$290–$330M Initiated
Event-Driven RevenueFY2026—High end of historical $230–$280M range (qualitative) Initiated
Q1 EPS cadenceFY2026—Q1 ~12–15% of full-year EPS Cadence
Annual DividendOngoing$3.52$3.90 (+11%) Raised

Management highlighted underlying margin expansion (>50 bps) in FY26 excluding float/distribution, with posted postage increases diluting reported margins and lower float income anticipated if rate cuts occur .

Earnings Call Themes & Trends

TopicQ2 FY2025 (Jan 31)Q3 FY2025 (May 1)Q4 FY2025 (Aug 5)Trend
AI/Technology initiativesMultiple AI projects; launching AI-enabled front-office/trading enhancements; OpsGPT and data/analytics traction Continued AI-enabled analytics wins; WealthInFocus digital growth; platform modularization “Transform into a platform company” (open APIs, BRX data layer), OpsGPT interest; Uptiq partnership announced next day (AI for WLN) Broadening adoption, platformization
Tokenization / DLR repoDLR enabling adaptation to treasury clearing; client uptake DLR daily volumes ~$100B; integrated with Fnality for intraday repo Volumes >$200B/day; leadership in tokenized repo; equities tokenization seen lower priority; tokens remain “securities” (SEC) Strong momentum
Macro, sales cycleHealthy markets, higher trading volumes; sales in line Market uncertainty; sales-cycle elongation; lowered FY25 closed sales outlook Normalization in May–June; pipeline strong; continued elongation watch Improving backdrop; watch elongation
Product performance (ICS)ICS rec. +9% cc; record event-driven (MF board elections) ICS rec. +6%; Regulatory +6% on equity positions +15% Regulatory +8% Q4; robust equity revenue positions; distribution + on postage Consistent
Product performance (GTO)GTO +9% rec.; Wealth +12% incl. SIS; Cap Mkts +6% GTO +11% rec.; license timing noise; Wealth +13% incl. SIS GTO rec. +12%; Wealth +26% (incl. SIS); Cap Mkts +4% cc; 1-pt drag to Cap Mkts growth from business exit in FY26 Wealth strength; CM lower end
Regulatory & governancePass-through voting expanding; data/AI insights growing Engagement, digitization, private assets access; regulatory change as opportunity SEC direction on tokens; digital default communications push; pass-through voting growth continues Positive backdrop
Capital allocationBalanced; strong FCF to fund M&A/dividends FCF conversion 95–105% expected FCF conversion 104%; dividend +11%; $100M buyback in Q4 Strong, shareholder-friendly

Management Commentary

  • “Broadridge delivered another strong year in fiscal 2025. Recurring revenue rose 7% constant currency and adjusted EPS grew 11%... We expect another strong year in fiscal 2026 with 5% to 7% recurring revenue growth and 8% to 12% adjusted EPS growth.” – CEO Tim Gokey .
  • “Event driven revenues were $79 million in the fourth quarter, ending a record $319 million year... Looking ahead, we expect that event driven revenues will decline in fiscal 2026, but will remain above the historical average.” – CFO Ashima Ghei .
  • “Our distributed ledger repo solution... Daily average trading volumes rose above $200 billion in June... nearly five times the size of any other platform.” – CEO Tim Gokey .
  • “Our recurring revenue backlog stands at $430 million. At 10% of recurring revenue, it gives us great visibility into the biggest driver of our growth in fiscal ’26 and ’27.” – CFO Ashima Ghei .
  • “Our Board has approved an 11% increase in our annual dividend to $3.90 per share... thirteenth double-digit increase in the last fourteen years.” – CFO Ashima Ghei .

Q&A Highlights

  • Sales cycle elongation persists, but pipeline remains strong in areas of investment (voting choice, WealthInFocus, global demand model, wealth platform, global post-trade, DLR repo) .
  • DLR/tokenization: sponsored repo is a key driver; legal comfort increasing; move toward intraday repo next; platform volumes >$200B/day; long-term tokenization opportunities beyond repo .
  • Capital Markets growth guided to lower end (5–7%) in FY26 due to ~1-pt drag from a business exit; Q4 CM growth partly offset by lower professional services .
  • Backlog ~$430M is ~60/40 ICS/GTO; ICS converts faster, some wealth deals longer (impact more in FY27) .
  • Margins: reported AOI margin flat YoY for FY26 (20–21%); underlying expansion >50 bps ex float/distribution; distribution growth driven by postage; float likely lower with potential rate cuts .
  • Q1 EPS seasonality: ~12–15% of full-year; watch elevated Q1 event activity from a mutual fund proxy campaign .
  • Debt: leverage ~2x; plan to roll forward near-term maturities .

Estimates Context

  • Q4 FY2025 vs. S&P Global consensus: Revenue $2.065B vs. $2.058B est. (beat); Adjusted/Primary EPS $3.55 vs. $3.50 est. (beat); EBITDA $624.6M vs. $618.6M est. (beat). Values retrieved from S&P Global.
MetricQ4 2025 ConsensusQ4 2025 Actual
Revenue ($USD Millions)2,057.4*2,065.4
Adjusted/Primary EPS ($)3.498*3.55
EBITDA ($USD Millions)618.6*624.6*

Values marked with * retrieved from S&P Global.

Implications: modest top-line and EPS beats should support estimate stability-to-upward bias; FY26 guide brackets typical Street ranges, with mix headwinds (distribution/float) and event normalization largely messaged, reducing downside estimate risk .

Key Takeaways for Investors

  • Beat-and-raise profile into FY26: small Q4 beat on revenue/EPS and credible FY26 guide (5–7% cc recurring, 8–12% EPS) with >50 bps underlying margin expansion ex float/distribution; watch postage-driven distribution mix and lower float as the main headwinds .
  • Durable growth pillars: ICS regulatory strength from rising equity revenue positions and mid-single-digit fund positions; Wealth momentum (SIS integration, Canada traction); Cap Mkts growth intact but at low end due to business exit .
  • Tokenization leadership is real: DLR repo >$200B/day provides a differentiated growth vector; incremental clients and potential intraday repo can extend runway; medium-term optionality in other tokenized assets .
  • Visibility is high: $430M backlog (~10% of recurring revenue) plus stable retention underpin FY26/27 revenue—supporting multiple resiliency even if macro wobbles .
  • Capital returns remain supportive: dividend +11% to $3.90, Q4 buyback $100M, leverage ~2x provides flexibility for tuck-ins and repurchases .
  • Trading set-up: event-driven normalizes from a record FY25, and distribution/float mix weighs on reported margins—tempering near-term margin optics; however, underlying expansion and secular drivers (participation, tokenization, wealth modernization) should sustain EPS CAGR within the 8–12% range .
  • Monitoring list: sales-cycle elongation into early FY26; Cap Mkts growth cadence (impact from business exit); Q1 EPS seasonality (12–15% of yearly) and elevated Q1 event activity; interest rate path (float) .