Broadridge reports healthy financial results for FY2023
Broadridge Financial Solutions, Inc. (NYSE:BR), a global provider of technology-based outsourcing solutions to the financial services industry, today reported financial results for the fourth quarter and fiscal year ending June 30, 2023.
Broadridge’s revenues of $1.83 billion increased 7% from the previous year’s $1,.7 billion. The company’s recurring revenues notched a similar increase on a yearly basis, amounting to $1,259 million, compared to $1,177 million previously.
However, event-driven revenues saw a dip of $11 million, marking a 15% decline to $59 million. This decrease was primarily attributed to a decrease in the volume of mutual fund proxy communications. On the flip side, distribution revenues took center stage, marking an impressive $45 million uptick or 9%, totaling $522 million. This boost was attributed to the impact of rate hikes, contributing approximately $35 million to the overall increase.
“Broadridge reported strong fourth quarter results, including 8% Recurring revenue constant currency growth and 21% Adjusted EPS growth. For the full year, Recurring revenues were at the higher end of our guidance and rose 9% constant currency, driving continued margin expansion, 9% Adjusted EPS growth and strong Free cash flow. Our performance enabled Broadridge to deliver at or above the high end of the range of our three year financial objectives,” said Tim Gokey, Broadridge CEO.
Operating income painted a picture of growth, surging to $454 million, up 33% compared to FY 2022’s figure of $342 million. Consequently, the operating income margin improved to 24.7%, higher than the 19.8% recorded during the same period last year.
Broadridge’s Adjusted Operating income followed suit, coming in at $531 million, up from $435 million in the previous year. This increase was primarily attributed to higher Recurring revenues, although event-driven revenues did experience a decrease.
Interest expense, net, rose by $15 million to $36 million, primarily due to increased borrowing costs. The effective tax rate for the period was 22.4%, slightly higher than the previous year’s 22.1%. This increase was largely due to the decreased impact of discrete tax items.
Net earnings saw remarkable growth, jumping by 31% to reach $324 million. On an adjusted basis, it also surged by 22% to $382 million.