Broadridge Financial Solutions, Inc. (BR) Earnings & Analysis

Latest quarter

Broadridge reported Q4 FY2026 revenue of $2.2 billion, up 7.49% from Q4 FY2025. The company reported revenue of $2.2 billion as the consensus counts it, exceeding the consensus measure by 2.08%, although both displayed figures were $2.2 billion. Broadridge reported adjusted EPS, as the consensus counts it, of $3.82 against consensus adjusted EPS of $3.75, a 1.87% result above the consensus.

The company reported diluted EPS of $3.44, up 8.86% from $3.16 a year earlier. Ashima Ghei said recurring revenue grew 8% on a constant-currency basis to $1.5 billion, including 7% organic growth, while total revenue increased 7%, driven principally by recurring revenue. Ghei said lower mutual-fund proxy activity made event-driven revenue a modest headwind, while low- to no-margin distribution revenue grew 8% on higher postage rates. Broadridge reported gross margin of 38.4%, compared with 37.3% a year earlier, and operating margin of 24.6%, compared with 24.1%. The company reported Q4 free cash flow of $642.0 million, compared with $663.3 million a year earlier.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

Tim Gokey said sales accelerated in the fourth quarter after uncertainty had delayed client decisions on business cases and complex legal work for large deals. He said the improvement extended beyond large transactions to mid-sized deals, while deal origination and renewals remained healthy. Gokey said the pipeline was up by more than a third from a year earlier and that Broadridge expected to benefit from fiscal 2026 tuck-in acquisitions.

Gokey said the company’s platform-enabled AI and next-generation offerings accounted for nearly 40% of closed sales and rose 60%. He said Broadridge was deploying AI in product and software development, client onboarding and operations. Ghei said the fiscal 2027 forecast includes $25 million in AI-driven productivity gains, primarily in the technology organization, to fund investments and deliver earnings growth.

On pricing and margins, Ghei said higher postage rates are expected to drive mid-single-digit distribution-revenue growth in fiscal 2027, while those low- to no-margin revenues are expected to dilute reported margins. She said Broadridge expects adjusted operating income margin of approximately 21%, supported by operating leverage and AI productivity gains, while lower event-driven revenue is expected to be an offsetting factor.

Analysts asked about the SEC’s proposed e-delivery rule. Ghei said Broadridge expects no fiscal 2027 financial impact because of implementation timing; beyond that year, she said the company anticipates a modest two- to three-year recurring-revenue growth headwind that it expects largely to offset with new solutions. Gokey said the proposal could change client communications toward digital delivery, and he said Broadridge had prepared for that transition for more than a decade.

Analysts also asked about tokenization and the expansion of DLR. Gokey said Broadridge is onboarding multiple Tier 1 banks and expects DLR volume to grow 50% by December. He said DLX extends DLR’s existing architecture to other asset classes rather than requiring client conversions. Ghei said first-quarter fiscal 2027 adjusted EPS is expected to represent approximately 11% to 13% of full-year earnings, including a four-point license tailwind across GTO.

Guidance

Broadridge set fiscal 2027 constant-currency recurring-revenue growth guidance at 6% to 8% and adjusted EPS growth guidance at 8% to 12%. The company expects adjusted operating income margin of approximately 21%, a 22% tax rate, free-cash-flow conversion greater than 100%, and closed sales of $290 million to $330 million. Broadridge also expects first-quarter fiscal 2027 adjusted EPS to account for approximately 11% to 13% of full-year earnings.