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- Recurring revenues grew 6%; up 8% constant currency
- Diluted EPS grew 20% and Adjusted EPS grew 11%
- Reaffirming Fiscal Year 2023 Guidance, including 6 - 9% Recurring revenue growth constant currency and 7 - 11% Adjusted EPS growth
Broadridge Financial Solutions, Inc. (NYSE:BR) today reported financial results for the second quarter ended December 31, 2022 of its fiscal year 2023. Results compared with the same period last year were as follows:
"Broadridge delivered strong results in the second quarter," said Tim Gokey, Broadridge's CEO. "Recurring revenues grew 8% constant currency and Adjusted EPS grew 11%, driven by continued revenue growth and disciplined expense management. We continue to see growth driven by conversion of sales backlog into new revenue and strength in investor participation.
"The strength of our results and the resilience of our business keep us on track to deliver on our full-year guidance, including 6-9% Recurring revenue growth constant currency and 7-11% Adjusted EPS growth. As a result, we continue to expect to deliver at or above the higher end of our three-year financial objectives, including 7-9% Recurring revenue and 8-12% Adjusted EPS growth," he added.
Financial Results for Second Quarter Fiscal Year 2023 compared to Second Quarter Fiscal Year 2022
- Total revenues increased 3% to $1,293 million from $1,260 million.
- Recurring revenues increased $47 million, or 6%, to $840 million. Recurring revenue growth constant currency (Non-GAAP) was 8%, driven by organic growth from a combination of growth in Net New Business in GTO and ICS and Internal Growth, primarily in our ICS business.
- Event-driven revenues decreased $27 million, or 42%, to $38 million, primarily due to the decrease in volume of mutual fund proxy communications.
- Distribution revenues increased $13 million, or 3%, to $415 million, primarily driven by the impact of a postage rate increase of approximately $20 million, partially offset by lower volume of ICS mutual fund communications.
- Operating income was $108 million, an increase of $39 million, or 57%. Operating income margin increased to 8.3%, compared to 5.5% for the prior year period, due to the growth in Recurring revenues and lower amortization expense from acquired intangible assets, more than offsetting lower event-driven revenues, an increase in low-margin distribution revenues, growth investments and other expenses.
- Adjusted Operating income was $173 million, an increase of $32 million, or 23%. The increase was primarily driven by higher Recurring revenues, partially offset by lower event-driven revenues. Adjusted Operating income margin increased to 13.4% compared to 11.2% for the prior year period. The increase in pass through distribution revenues negatively impacted margins by approximately 20 basis points.
- Interest expense, net was $34 million, an increase of $13 million, primarily due to an increase in interest expense from higher borrowing costs, partially offset by savings from the Company's cross-currency swap transaction.
- The effective tax rate was 20.0% compared to 9.1% in the prior year period. The effective tax rate for the three months ended December 31, 2022 was adversely impacted by lower discrete tax benefits, primarily attributable to the excess tax benefits related to equity compensation.
- Net earnings increased 22% to $58 million and Adjusted Net earnings increased 11% to $108 million.
- Diluted earnings per share increased 20% to $0.48, compared to $0.40 in the prior year period, and
- Adjusted earnings per share increased 11% to $0.91, compared to $0.82 in the prior year period.
Click here for a full copy of Broadridge’s financial results.
