The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: Dan Perlin - RBC Capital Markets - Analyst
: Thanks. Good morning. I just wanted to revisit the guidance there for a second. I think it's pretty clear on the raising of the recurring numbers
around the acquisition, and then E-Trades, I guess, headwind kind of abating. But not raising the EPS, again, kind of suggests that the incremental
margins associated with what's being brought on are lower, or there's something else that's offsetting it. I think you mentioned a couple. But maybe
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NOVEMBER 05, 2024 / 1:30PM, BR.N - Q1 2025 Broadridge Financial Solutions Inc Earnings Call
if you could talk about some of those puts and takes to kind of reconcile why we'd get a top-line raise, but not something else in earnings. Thank
you.
Question: Dan Perlin - RBC Capital Markets - Analyst
: Got it. No, that's great. Thank you. Just a quick follow-up on M&A and your appetite here. I mean, you have done a couple of deals, relatively small
tuck-ins. You clearly have a lot more capacity. And I think in the past couple of quarters, you kind of alluded to maybe the environment getting a
little bit better in terms of maybe prices and opportunities that you see out in the market, that pipeline getting bigger. So just as we sit here today,
I'm just curious where you are thinking you might want to place some incremental dollars this year. Thank you.
Question: Dan Perlin - RBC Capital Markets - Analyst
: That's great. Thank you.
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NOVEMBER 05, 2024 / 1:30PM, BR.N - Q1 2025 Broadridge Financial Solutions Inc Earnings Call
Question: James Faucette - Morgan Stanley - Analyst
: Great. Thank you for those clarifications on the outlook, et cetera. Wanted to touch really quickly on digital and then some developments in the
market generally. You've got digital revenue growing double digits in fiscal year '24, and digital revenue on average is converting faster and the
better onboarding efficacy you referred to last call.
But I was surprised to see customer communications growth in the quarter consistent with fiscal fourth quarter. What's the driver there? And is
there still a line of sight to that business accelerating to mid-single-digit or even high-single-digit growth in this coming fiscal year?
Question: James Faucette - Morgan Stanley - Analyst
: Got it. Appreciate that. And then just more on a high level and longer-term question, we saw an article during the quarter with one of the heads
of international post-trade, which effectively from -- at least I took that there, while it's not really an acute issue right now, he was starting to see
T+1 lead to increased costs for brokers, particularly as it relates to securities, lending, and FX.
What is Broadridge or how is Broadridge helping to mitigate this dynamic? And what are some of the takeaways the industry is focused on before
that rollout in Europe and the rest of the world?
Question: James Faucette - Morgan Stanley - Analyst
: Great. Thank you very much.
Question: Puneet Jain - JPMorgan - Analyst
: Hi. Thank you for taking my question. So some of the consulting companies have definitely gotten more positive on outlook for financial services
in the US, like the large banks, capital market clients. Are you also seeing any changes in backlog conversion into revenue or the flow of deals from
pipeline into backlog? Are you seeing any change in client behavior as it relates to how they take decisions?
Question: Puneet Jain - JPMorgan - Analyst
: Got it. And then on the other side, ICS side, within regulatory business, like the stock record growth came at 3%. You expect that to improve. How
much visibility you have or what confidence you have that that stock record growth improves from here to mid-single digits?
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NOVEMBER 05, 2024 / 1:30PM, BR.N - Q1 2025 Broadridge Financial Solutions Inc Earnings Call
Question: Puneet Jain - JPMorgan - Analyst
: Got it. Thank you.
Question: Patrick O'Shaughnessy - Raymond James & Associates, Inc. - Analyst
: Hey. Good morning. A follow-up question on SIS. Can you provide the specific revenue contribution that you expect from that business this year?
[And in the past] SIS, would you have still raised your constant currency recurring revenue guide for the year?
Question: Patrick O'Shaughnessy - Raymond James & Associates, Inc. - Analyst
: Terrific. That's very helpful. Thank you. And then looking at your closed sales number, typically, your fiscal first quarter represents less than 15% of
your full year of sales activity. But this past quarter, closed sales was closer to 20% to the midpoint of your full-year fiscal '25 outlook. Was there any
unusual pull forward this quarter, or are things perhaps just trending maybe a little bit better than what you would have expected?
Question: Patrick O'Shaughnessy - Raymond James & Associates, Inc. - Analyst
: Terrific. Thank you.
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