Broadridge Financial Solutions, Inc.

Good day and welcome to the Broadridge Fiscal Second Quarter 2025 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your touchtone phone. To withdraw your question, please press star and then two. Please note this event is being recorded. I would now like to turn the conference over to Edding Tebow, Head of Investor Relations. Please go ahead.

Thank you. Good morning, everybody, and welcome to Broadridge's second quarter fiscal year 2025 earnings call. Our earnings release and the slides of the company this call may be found on the Investor Relations section of Broadridge.com. Joining me on the call this morning are Tim Gokey, our CEO, and our Chief Financial Officer, Ash Mugei. Before I turn the call over to Tim, I do want to make a few standard reminders. One, we will be making forward-looking statements on today's call regarding Broderidge that involve risks. A summary of these risks can be found on the second page of the slides and a more complete description on our annual report on Form 10-K. Two, we'll also be referring to several non-GAAP measures, which we believe provide investors with a more complete understanding of Broderidge's underlying operating results. An explanation of these non-GAAP measures and reconciliations to the comparable GAAP measures can be found in the earnings release and presentation. Let me now turn the call over to Tim Gokey.

Tim? Thank you, Eddings, and good morning. I'd like to start this morning by congratulating our new Chief Financial Officer. As you know, Ashton was named our permanent CFO last month after serving as our interim CFO since the summer. She's had a very positive impact since joining Broadridge three years ago and I'm looking forward to partnering with her even more closely as we continue to grow and transform our company and our industry. Before I go to my review of our results, I want to share some thoughts on the market backdrop. Financial markets remain strong even as we continue to see heightened global uncertainty. Our clients especially in the United States, are benefiting from a combination of a healthy economy, strong markets, increased trading, and growing optimism about a recovery in capital markets activity and M&A. That is driving an uptick in position growth and other activity that's positive for Broadridge, keeping us on track to deliver another year of strong top and bottom line growth while funding important investments for the future. With that, let's go to the headlines. First, Roger delivered strong second quarter results. Recurring revenues rose 9%, giving organic growth of 7% and the impact of our SIS acquisition. And we set a new quarterly record for event-driven revenues. Adjusted EPS grew 70% to $1.56. Second, that growth is being driven by long-term trends and by the execution of our strategy as we continue to democratize and digitize investing, simplify and innovate capital markets, and modernize wealth management. Third, we are now entering the seasonally more significant second half of our fiscal year, well-positioned to deliver another strong set of full-year results. And finally, our outlook for a strong fiscal 2015 keeps us on pace to deliver on the three-year financial objectives we laid out at our investor day in December of 23. It was a strong quarter, so let's move to review of what drove those results on slide four. I'll start with our governance business, where we're driving democratization and digitization by delivering innovation and by helping our clients adapt to change. ICS recurring revenues rose 9% in constant currency. driven by strong revenue from sales and continued growth in investor participation, with strong growth across all our four product lines. Investor participation continues to be an important growth driver for our governance business. Equity position growth strengthened to 11% in the second quarter, the highest quarterly growth rate since the end of fiscal 22. Equity position growth, which had been trending around 7% since the summer, began to pick up in October, and we now expect low double-digit growth in the seasonally more meaningful second half of the year, if the auction will share in a few minutes. Managed accounts continue to be the biggest driver of equity position growth. Notably, positions in self-directed accounts also grew in mid-single digits, an acceleration from fiscal 24 when growth was essentially flat. That increased level of engagement from Main Street investors was a key driver of the acceleration in overall equity position growth. Fund position growth remains stable at 5% in the second quarter, driven by balanced growth across both fixed income and equity funds. While fund position growth has picked up from the 3% rate we saw in fiscal 24, it remains at the lower end of its historic mid-to-high single-digit range. Across our governance business, our revenue growth is grounded in our focus on delivering innovative solutions to our clients. Two quarters in, our tailored shareholder reporting solution continues to perform very well. And as we prepare for the upcoming proxy season, more than 400 funds will be using our pass-through voting solutions to give their shareholders a greater voice on governance and other issues. Up from 100 funds, at the end of fiscal 24. We are adding new governance clients in Europe, and our data and analytics business is benefiting from strong demand for our AI-enabled global demand model. And customer communications, our wealth in focus solution, is powering digital growth. Beyond our recurring revenues, we saw a new quarterly record for event-driven revenues, driven in significant part by our work facilitating board elections at a leading global mutual fund complex. Working closely with our fund client, we seamlessly processed more than 100 million beneficial positions in over 400 funds held at more than 1,000 brokers. Thanks to the investments we have made, 90% of these communications were fully digital, which means that our efforts to enable digital alternatives save that fund complex and its shareholders tens of millions of dollars in print and mail expenses. Boards of Directors elections like these highlight the critical role we play behind the scenes in ensuring that funds can communicate with their investors and get the approvals they need on key governance matters securely and on demand. Let's turn to capital markets, which reported 6% recurring revenue growth. In capital markets, we're simplifying and innovating trading across the front and back office. In the front office, we continue to roll out new solutions to speed trading and reduce the costs of trade execution with a new AI-enabled trading solution that uses real-time liquidity mapping to help our clients optimize trade execution for algorithmic trading strategies. We also introduced new trading capabilities that simplify and improve trading for structured products. In the back office, our post-trade platforms continue to support strong trading volumes across both equity and fixed income markets. We also introduced new Gen AI enhancements for operations GPT post-trade platform. And with three new clients added in Q2, our cutting-edge distributed ledger repo product is enabling a growing number of institutions to more easily adapt to the new treasury clearing requirements. In wealth and investment management, revenues grew 12%, largely driven by the acquisition of SIS. As we discussed last quarter, the SIS acquisition extends our Canadian wealth business by adding new clients and creating a greater opportunity for us to upsell our broader set of solutions. We saw an early indication of our strategy bearing fruit as a leading Canadian bank and current back office client selected our advisor marketing solutions to address their goal of making it easier for investors to connect with their advisors. More broadly, our Broadridge Wealth Management Platform continues to be recognized for its leading-edge capabilities, winning awards in the quarter from both Chartas and the Everest Group. That recognition is helping to drive a record pipeline for our wealth business. Speaking of pipeline, I'll turn to closed sales. We ended December with year-to-date closed sales of $103 million, essentially flat with fiscal 24. After a strong start to fiscal 25, our sales were modestly lower in the second quarter, with a handful of large deals slipping into the third quarter. Some of those deals have already closed, and we expect to close the remainder over the coming weeks. Our pipeline remains healthy, and we are on track to achieve our outlook for closed sales of $290 to $330 million for the full year. I'll close my remarks with a few summary comments on slide 5. First, Rogers delivered strong second quarter results. Second, those strong results are being driven by the execution of our long-term strategy. We're driving the democratization of investing by helping tens of millions of mutual fund investors get the information they need to weigh in on governance, while our investments in digitization are helping to drive down the cost of serving those investors. We're delivering innovation to our capital markets clients that will simplify their trading infrastructure and reduce trading costs. And we're extending our wealth business in Canada and the U.S. to bring increased innovation to the wealth market. Third, as a result, we are well positioned to achieve another year of strong recurring revenue and adjusted EPS growth in fiscal 25. That outlook also keeps us on track to deliver again on our three-year financial objectives while continuing to invest for the future. Finally, Broadridge is well-positioned for long-term growth. In this era of technology transformation, the gap between digital leaders and laggards in financial services is set to grow even wider. Firms who have traded in their fragmented legacy systems in exchange for cohesive platform-based strategies will continue to set themselves apart. Our position at the Center of Financial Services and our investments in our business have positioned Broadridge to be the trusted and transformative partner of choice for our clients if they make that transition. That is driving a strong pipeline that includes a significant number of large opportunities across each of our businesses. And that's a great place to be. Before I turn it over to Ashima, I want to thank my 15,000 fellow Broadridge associates around the world. Earlier this week, Broadridge was named as one of the world's most admired companies for the 11th year. That's a tremendous testament to the work and client focus of everyone here at Broadridge. Thank you. And now, I'll turn it over to Ashima. Ashima?