Broadridge Financial Solutions, Inc.

Good morning, everyone, and welcome to the Broadridge Fiscal Fourth Quarter and Full Year 2026 Earnings Conference Call. All participants will be in a 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 and then one using your touchtone telephones. To draw your questions, you may press star and two. Please also note today's event is being recorded. At this time, I'd like to turn the floor over to Edings Thibault, Head of Investor Relations. Please go ahead.

Thank you, Jamie. Good morning, everybody, and welcome to Broderidge's fourth quarter and fiscal year 2026 earnings call. Our earnings release and the slides that accompany this call may be found on the investor relations section of Broderidge.com. Joining me on the call this morning are Tim Gokey, our CEO, and our CFO, Ashima Ghei. Before I turn the call over to Tim, a few standard reminders. One, we will be making forward-looking statements on today's call regarding Broadridge that involve risks. A summary of these risks can be found on the second page of the slides in a more complete description on our annual report on Form 10-K, which will be filed later today. Two, we'll also be referring to several non-GAAP measures, which we believe provide investors with a more complete understanding of Broadridge's underlying operating results. An explanation of these non-gap measures and reconciliations to the comparable gap measures can be found in the earnings release and presentation. Let me now turn the call over to Tim Gokey. Tim?

Thank you, Edings, and good morning. I'm excited to join you this morning to talk about our strong financial results. I'm even more excited to talk about the progress that we're making building the infrastructure for the financial markets of tomorrow, markets that will be digitized, agentic, and increasingly tokenized. Because the real story of fiscal 26 is that Broadridge is delivering today and building for tomorrow. Now turning to the headlines. First, Broadridge delivered strong financial results. Fiscal year 2026 revenue rose 8%, constant currency. Adjusted EPS rose 12%. And thanks to record fourth quarter, closed sales rose to $305 million. Second, Broadridge is executing across governance, capital markets, and wealth, while building the infrastructure for the markets of tomorrow by driving digital communications, scaling agentic AI, and accelerating tokenized assets. Third, as I just noted, we are building the infrastructure for tokenized securities, and we expect the evolution to tokenized markets will be a significant tailwind for Broadridge. Fourth, We returned over $1 billion to our shareholders in fiscal 27 in the form of our dividend and a record $600 million in buybacks. And last night, our board approved a 12% increase in our dividend. We've now raised our annual dividend in each of the 20 years that we've been a public company, underscoring our commitment to creating long-term shareholder value. Fifth and last, as we look ahead to fiscal 27, we expect to drive another year of steady growth while continuing to fund their digital, agente platform, and tokenization investments. We're guiding to 6% to 8% recurring revenue growth and to 8% to 12% adjusted EPS growth. So let's dig into the execution driving those results, starting on slide four. In governance, we're driving the democratization and digitization of investing. Fiscal 26 recurring revenue rose 8%, driven by new sales and double-digit equity position growth. Market innovation continues to bring in new investors and drive portfolio diversification. Total equity record growth for the year was 16%, powered by the continued popularity of managed accounts. Equity revenue position growth was 12%. Funds are also benefiting from increased innovation in both passive and active strategies, driving fund position growth of 6%. For shareholder engagement, Thank you for joining us. and we're re-engineering our proxy edge institutional voting workflow to make institutional voting even more intuitive. We're also enabling passive funds to extend governance decisions to their underlying shareholders with our passive voting solution with more than 900 funds and $8 trillion in AUM using our voting choice capability up from 600 funds and $4 trillion last year. We're also completing the first full year of our Standing Voting Instruction Solutions, or SVI. With a year of proven success and proven retail voting participation, we now have six clients on the platform. As U.S. companies become global bellwethers for innovation, we're seeing growing interest from global investors and global retail platforms in voting capabilities for U.S. equities. The ability to offer property voting solutions is seen as a differentiator, especially for new entrants, and that translated into fiscal 26 sales in both Europe and Japan. Each of these efforts I've discussed this morning extends our core regulatory communications business. By combining our deep voting and engagement expertise, our scaled technology and agentic AI, we've been able to accelerate our time to market and target new revenue sources. We're also extending our governance capabilities to tokenize securities, which I'll address shortly. And finally, our printed digital strategy is driving digitization. Digitization rates in our proxy communications are now nearing 95%, with 80% for funds. In customer communications, digital revenues grew more than 10% for the fourth consecutive year. And our wealth and focus solution continues to gain momentum and we now have six leading U.S. wealth managers either on or in the process of onboarding to the platform. On the topic of digitization, the SEC has issued its much anticipated eDelivery rule proposal, which will allow institutions to shift the default for client communications from physical mail to digital. We are pleased with the proposal, which is an exciting step forward for investors, public companies, funds and brokers. As with any regulatory proposal, it will take time to be fully implemented. Broadridge is well-positioned to help our clients through this change, and we expect it to be an important catalyst driving demand for more engaging digital-first communications like those enabled by our wealth and focus platform. Let's move next to capital markets on slide five. In capital markets, Broadridge is helping our clients simplify and innovate their trading operations. Fiscal 26 revenues rose 5% to $1.2 billion, driven by growth across both front and back office solutions. We closed the acquisition of CQG in early May to strengthen our futures and options capabilities, and it contributed to a nice competitive win with a significant trading institution in the fourth quarter. Our business is benefiting from the ongoing push to extended hours trading. It's driving demand for our real-time post-trade solutions and our managed services.