The operator welcomes participants to the Broadridge Financial Solutions Fourth Quarter and Fiscal Year 2024 Earnings Conference Call. The call will include forward-looking statements and references to non-GAAP measures. CEO Tim Gokey and Interim CFO Ashima Ghei will be discussing the company's strong financial and operating results. Gokey praises Ghei's work and mentions her previous role in driving the success of the ICS business.

The CFO of Broadridge, Ashima Ghei, has brought valuable experience to her role. The market has been stable and improving, with clients focusing on digitization and modernization. Broadridge's strong recurring revenue business model is well-positioned for any market scenario. The company is executing on its growth strategy and has achieved record closed sales and growth. Broadridge is seen as a trusted and transformative partner for clients, leading to its strong sales performance.

Broadridge's strong and sustainable growth has been enabled by its focus on democratization and digitization of governance. This has led to a 10% increase in adjusted EPS and a 6% organic growth in recurring revenues for the full year. The company's strong cash flow and balance sheet allowed for tuck-in M&A investments and the purchase of $450 million in Broadridge shares. The company also saw a 10% increase in annual dividend and is expected to continue delivering strong growth in fiscal year 2025. In terms of governance business, the company reported 5% recurring revenue growth in its ICS business, driven by data-driven fund solutions, issuer and digital communications. The company's focus on democratization has also led to a 6% growth in equity positions, driven by managed accounts, while self-directed position growth remained flat. Mutual fund and ETF growth was 3% for the full year and 6% in the fourth quarter, with mixed demand trends. Money market fund positions grew by 17% in the quarter.

Broadridge is working towards democratizing the investment industry by providing voting choice for shareholders and making shareholder meetings more accessible. They have also successfully implemented tailored shareholder reports to improve communication with shareholders, but this comes with added costs and complexity. To meet this demand, Broadridge has created solutions to lower costs and streamline the digital composition and distribution process.

Broadridge's ability to provide innovative solutions to meet regulatory deadlines has resulted in strong sales growth, particularly in their TSR Solution and digital customer communications business. They have also seen success in their Capital Markets franchise, with revenues crossing the $1 billion mark and new clients being onboarded. They are meeting the needs of their clients by delivering a global SaaS platform for trading and are expanding into the derivatives market with new solutions.

Broadridge is helping clients simplify their back office operations and adapt to regulatory changes, such as the transition to T+1 settlement. They have successfully brought on multiple global banks onto their post-trade platform and have seen improvements in industry-trade affirmation rates and reduced collateral requirements. They are also driving innovation through the adoption of AI and distributed ledger technology.

In fiscal year 2024, Broadridge's distributed ledger repo platform has resulted in reduced fees, increased liquidity, and added two new clients. In Wealth and Investment Management, revenues rose 7%, driven by the go-live of the UBS contract and partially offset by the de-conversion of Morgan Stanley E-Trade. Sales of Wealth and Investment Management solutions also increased, and the acquisition of Kyndryl SIS business in Canada is expected to further accelerate growth in the Canadian market. Broadridge reported record closed sales of $342 million, with strong demand for tailored shareholder reports and digital capabilities in ICS, as well as growth in capital markets and wealth in GTO.

Broadridge's strong sales performance is a reflection of their efforts to help clients adapt to change and grow their business. They are seen as a trusted partner in facilitating growth and have a strong pipeline for the next year. They are executing on their growth strategy, democratizing investing, powering corporate elections, and developing innovative solutions for regulatory fund reporting. They have also invested in digital and GTO solutions, such as AI and distributed ledger technology, and have seen record sales and growth in fiscal '24.

Broadridge expects another year of strong and sustainable growth in fiscal ‘25, with a long runway for future growth. The company is positioned to help clients meet the opportunities and challenges created by technology trends, digitization, trading acceleration, and regulatory updates. They are executing on a growth strategy to attack their $60 billion market opportunity and have a resilient business model that is particularly strong in periods of higher volatility. The CEO thanks the company's associates for their hard work and client focus. The CFO reviews the company's strong results and guidance for fiscal ‘25, highlighting their track record of delivering strong top and bottom line growth and strong shareholder returns. Recurring revenue grew 6% constant currency and adjusted EPS grew 10% in fiscal ‘24.

The company's strong sales and backlog, position growth, expense management, and capital allocation strategies have positioned them well to achieve their fiscal '25 guidance and three-year growth objectives. In fiscal '24, they saw a 6% increase in recurring revenue, 9% growth in adjusted operating income, and a 10% increase in adjusted EPS. In the fourth quarter, recurring revenue grew 5%, adjusted operating income grew 5%, and closed sales rose 74% to a record $157 million.

In the fourth quarter, the company's recurring revenue increased by 5% to $1.3 billion, driven by converting revenue from sales and mid-single digit position growth. For the full year, recurring revenue grew by 6%, in line with the company's three-year organic growth objective. The growth was seen across both the ICS and GTO segments, with ICS recurring revenue growing by 6% and GTO recurring revenue growing by 4%. The company expects continued mid-single digit revenue growth in fiscal year 2025, driven by strong sales, position growth, and digital growth.

The full year GTO revenues grew 8%, meeting the company's organic growth objective. Capital markets revenue increased 6% in the fourth quarter, driven by higher trading volumes. Wealth and investment management revenue increased 7% for the full year, but was flat in the fourth quarter due to the impact of E-Trade. The company expects GTO revenue growth to be at the low end of their guidance range for fiscal '25, with stronger growth in capital markets and lower growth in wealth and investment management. Equity and fund position growth returned to mid to high single digits in the fourth quarter, with healthy growth expected for the first half of fiscal '25. Fund flows have also strengthened in recent months.

In the fourth quarter, trade volumes grew 15%, driven by higher fixed income and equity volumes. Recurring revenue also grew by 5%, with 97% retention rate for the quarter. Two small acquisitions are expected to contribute to fiscal '25 recurring revenue growth. Total revenue grew by 6%, with recurring revenue being the largest contributor. Adjusted operating income margin for the quarter was 28.8%, while for the full year it was 20%, up 20 basis points from the previous year.

Broadridge had a successful fiscal year, thanks to the combination of operating leverage and the benefits from their fiscal ‘23 restructuring. They were able to absorb the deconversion of E-Trade and higher amortization while increasing investments in long-term growth and meeting earnings objectives. The restructuring program completed in the fourth quarter is expected to generate over $100 million in annual cost savings. They also had a strong sales year, with closed sales increasing by 74% in the fourth quarter and lifting their revenue backlog. Additionally, their free cash flow increased by 26% and they expect it to continue at a high level in fiscal ‘25.

The company has a balanced approach to capital allocation and made investments in platform, capital expenditures, and software. They also made acquisitions to enhance their data and analytics solutions. They returned excess capital to shareholders through dividends and share repurchases, and their Board approved a 10% dividend increase. They have a 2.2x leverage ratio and will add the recently announced acquisition to their Fiscal '25 guidance after it closes.

In fiscal year 2025, the company expects sustainable recurring revenue growth of 5-7%, driven by new sales and a proxy campaign. Margins are expected to expand by 50 basis points, but may be offset by higher distribution revenues and lower float income. Adjusted EPS is expected to grow by 8-12%, and closed sales are expected to be strong. The company's first quarter results are not included in this guidance.

Broadridge expects their first quarter earnings to account for 10-11% of their full year adjusted EPS due to lower event-driven revenue and the impact of E-Trade. They had a strong fiscal year in 2024 with recurring revenue and adjusted EPS growth, record closed sales, and a focus on shareholder returns. The company is well positioned for another strong year in 2025. During times of volatility, the company's recurring revenue model has shown stability in the past, and there is no special knowledge on whether the current volatility is temporary or more significant.

The speaker highlights the resiliency of their business model and the positive outlook for their company. They mention their high recurring revenue, a $450 million backlog, and the positive impact of volatility on trading. They also mention their confidence in their guidance for recurring revenue growth and earnings. The next question asks about the strength in bookings trends and the drivers of demand.

Tim Gokey, CEO of Broadridge Financial Solutions, is proud of the company's sales results in 2024, which were driven by four factors: tailored shareholder reports, digital solutions, growth in capital markets and wealth and investment management. The company expects sales to continue growing in 2025, driven by investments in regulatory, digital, and capital markets. They also have a strong pipeline of demand for their solutions that help clients grow revenue and reduce costs. In terms of wealth management, they expect to deliver $20-30 million in incremental sales and see further opportunities for growth in the future.

The company's wealth business performed well, with a 7% increase in the past year due to the onboarding of UBS and offset by E-Trade. The company expects continued momentum in the coming year, with strong sales and a 40% increase year-on-year. The pipeline of opportunities is also 30% higher than it was 12 months ago. The company is looking forward to bringing its investment on the wealth platform to the Canadian market through SIS. The company's M&A strategy is focused on small tuck-in deals in digital areas, but organic growth remains the primary driver of growth.

The speaker discusses the success of M&A as a way to meet client needs and mentions two recent examples, AdvisorTarget and CompSci. They also mention the importance of being strategic and disciplined in their approach to M&A. The speaker also mentions the backlog of $450 million, which includes both ICS and GTO sales, and how it factors into their revenue guidance for fiscal year 2025.

Broadridge's CFO Ashima Ghei responds to a question about the company's margins and explains that while the company has a history of margin expansion, they are more focused on delivering sustainable double-digit earnings growth and investing in long-term growth opportunities. She also mentions that they are expecting a decrease in float income due to rate cuts.

The company is confident that their recent restructuring and focus on core margin expansion will lead to sustainable earnings growth. They are also investing in future growth opportunities and have a strong track record of resilience. The outlook for fiscal year 2025 is positive, with a strong three-year period ahead and a favorable market position in a growing industry.

The company expresses gratitude for the audience's interest and announces that they will report their next set of results in the fall. The conference is now ending and attendees can disconnect.

This summary was generated with AI and may contain some inaccuracies.