Broadridge posts 19% Y/Y rise in revenues in Q2 FY22
Broadridge Financial Solutions, Inc. (NYSE:BR) today reported financial results for the second quarter ended December 31, 2021 of its fiscal year 2022.
During the three months to December 31, 2021, total revenues increased 19% to $1,260 million from $1,055 million in the prior year period. The increase was driven by 6pts of net new business and 4pts of internal growth. Growth from acquisitions was 9pts, most notably from the recent Itiviti acquisition which closed in May 2021.
Event-driven fee revenues increased $20 million, or 44%, to $65 million, primarily due to increased mutual fund proxy activity and mutual fund communications.
Distribution revenues increased $58 million, or 17%, to $401 million, primarily due to the increase in customer communications mailings and the recent postage rate increase.
Operating income was $69 million, a decrease of $11 million, or 13%.
Adjusted Operating income was $141 million, an increase of $22 million, or 19%. The increase was driven by higher recurring fee revenues, including from the acquisition of Itiviti, and event-driven fee revenues, partially offset by growth investments and other expenses. Adjusted Operating income margin was 11.2% compared to 11.2% for the prior year period. The increase in distribution revenues negatively impacted margins by 70 basis points.
Net earnings decreased 16% to $47 million and Adjusted Net earnings increased 13% to $97 million.
Diluted earnings per share decreased 17% to $0.40, compared to $0.48 in the prior year period, and Adjusted earnings per share increased 12% to $0.82, compared to $0.73 in the prior year period.
Investor Communication Solutions total revenues were $893 million, an increase of $117 million, or 15%.
Global Technology and Operations Recurring fee revenues were $371 million, an increase of $85 million, or 30%, driven primarily by 22pts of growth from recent acquisitions, primarily Itiviti, as well as 8pts of organic growth from onboarding of new clients and higher license revenues.
“Broadridge delivered another strong quarter, with 19% recurring fee revenues growth and 12% growth in Adjusted EPS,” said Tim Gokey, Broadridge’s CEO. “We are continuing to execute against our long-term growth plan across Governance, Capital Markets and Wealth & Investment Management.”
“Our strong performance is enabling Broadridge to deliver steady and consistent earnings growth and further increase our long-term investments. We expect to deliver at the high end of our 12-15% recurring fee revenues growth guidance and are reaffirming our guidance for Adjusted EPS growth of 11-15%,” Mr. Gokey continued.
“Broadridge remains well positioned to deliver on the higher end of our three-year growth objectives,” he concluded.