Broadridge Financial Solutions Inc Q2 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Alex Kramm - UBS Group AG - Analyst : Yeah. Hey. Good morning, everyone. Maybe just starting off on the guidance here where you ended. Obviously, the tone and the year-to-date performance is really, really strong. but then no real change in the outlook. And I know you mentioned FX at the end there being a headwind. So excluding that, do you feel like underlying results are running better than you expected? Or is there anything else that you would call out?

Question: Alex Kramm - UBS Group AG - Analyst : Okay. Great. And then maybe just shifting gears quickly. sales pretty much in line with last year. And the year-over-year decline in the quarter, I think you explained some slippage. Obviously, a lot of things going on in the last quarter. But just wondering, post-election, a lot of enthusiasm around the financial services industry. So just wondering if you see a pickup in conversations, if you're feeling more optimistic around end markets. Yes, anything you would note as, again, like the financial service industry seems to be more bullish on these days.

Question: Alex Kramm - UBS Group AG - Analyst : Thank you very much.

Question: Scott Wurtzel - Wolfe Research, LLC - Analyst : Hey. Good morning, guys. Thanks for taking my questions. I just wanted to follow up on a point you made in the answer to Alex there just in terms of investing and with the event-driven upside. Can you maybe highlight some of the areas that you are deploying those incremental investment dollars into? Thanks

Question: Scott Wurtzel - Wolfe Research, LLC - Analyst : Got it. That's helpful. And then just as a follow-up on the wealth side. I mean, it seems like with the SIS acquisition, things are trending well post close. Wondering if you can maybe share if you've had any incremental learnings now that you've had the asset under control for a few months and just broadly how you're viewing that opportunity? Thanks.

Question: Scott Wurtzel - Wolfe Research, LLC - Analyst : Great. Thanks, guys.

Question: James Faucette - Morgan Stanley - Analyst : Great. Thank you very much. I wanted to ask a couple of questions. First, on monetization AI-related product improvements. Previously, you talked about the fact that over time, you thought you might be able to charge incrementally for AI-related product improvements. How are you thinking about that among the key factors or what the key factors are that would drive that transition as well when we can expect some contribution there.

Question: James Faucette - Morgan Stanley - Analyst : Great. Appreciate that. And then on the Wealth segment, just wondering if you can give us an update on where you are for your targets to add incremental module sales within wealth and how that's tracking?

Question: James Faucette - Morgan Stanley - Analyst : That's great. Thank you very much.

Question: Daniel Perlin - RBC Capital Markets - Analyst : Thanks. Good morning, everyone. I just wanted to clarify a couple of things on -- I think you called out in GTO that there were lower license sales revenues, and that was a 3-point headwind in the quarter. But then I think actually, you called out in the third quarter, guidance that there's going to be some changes in license sales that's going to impact capital markets like I thought you said low double digits. So would you mind just maybe helping me reconcile some of the book lot there?

Question: Daniel Perlin - RBC Capital Markets - Analyst : Yeah. No, I just wanted to clarify that because historically, I don't feel like it has maybe that much of a swing on the specific. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 31, 2025 / 1:30PM, BR.N - Q2 2025 Broadridge Financial Solutions Inc Earnings Call

Question: Daniel Perlin - RBC Capital Markets - Analyst : Okay. That's great. And then, Tim, I just had a question for you. Again, you talked a lot about the market backdrop and the strength. What I'm wondering specifically, though, is as we think about maybe two things: one, kind of a potentially more robust M&A backdrop. How does that flow into the business, all else equal, if these deals start to flow in over the next six to nine months, you see a bunch of the stuff happening. Can you just remind us how that impacts your business and where it would show up kind of in the P&L? And then the other piece is just on the regulatory horizon. Are there any things that we need to be mindful of that could be changes with this new administration that could potentially impact your business, both good or bad as a whole? Thank you.

Question: Daniel Perlin - RBC Capital Markets - Analyst : That's great. Thank you, both very much.

Question: Peter Heckmann - D.A. Davidson - Analyst : Hey, good morning. Most of my questions have been answered, but just a few little more housekeeping items. So even event-driven proxy revenue for the year, is that tracking towards the low $300 million range. Is that right? And then any reason why it wouldn't kind of revert back to a more normalized range in fiscal '26?

Question: Peter Heckmann - D.A. Davidson - Analyst : Okay. That's helpful. And then just in terms of the postage increase, I'm just trying to get a better feel of how that affects margins. When do you lap that postage rate increase? And are there others that are already planned that would drive distribution higher? I guess, ex-postage increase, would you expect distribution to kind of grow in the 3% to 5% range a year?

Question: Peter Heckmann - D.A. Davidson - Analyst : Thanks, both.

Question: Puneet Jain - JPMorgan Chase & Co - Analyst : Hey. Thanks for taking my question. I wanted to quickly follow up on the earlier question about the new administration's priorities. Like have you seen any change in your client behavior from potential deregulation specifically in your GTO segment? And if you can remind us like how -- like reduced level of regulations, how has that impacted client behavior and your GTO bookings?

Question: Puneet Jain - JPMorgan Chase & Co - Analyst : Understood. Thanks for that. And then like as you think about your capital budgeting plans for next fiscal year? How are you thinking about like M&A versus investments and for the investments, how should we think about ROI or like payback period of those investments?

Question: Puneet Jain - JPMorgan Chase & Co - Analyst : Thank you.