Broadridge’s first quarter results drew a negative market reaction, reflecting disappointment over revenue falling short of Wall Street expectations. Management attributed the slower top-line growth to elongated sales cycles and a shift in timing of certain license renewals, while also highlighting the resilience of its recurring revenue base. CEO Tim Gokey emphasized the company’s “strong scalability” and noted that volatility in trading volumes and the acceleration of smaller account growth contributed to operational momentum. CFO Ashima Ghei pointed to disciplined expense management and a strategic reduction in the company’s distribution footprint as additional factors influencing quarterly performance.
Is now the time to buy BR? Find out in our full research report (it’s free).
Broadridge (BR) Q1 CY2025 Highlights:
- Revenue: $1.81 billion vs analyst estimates of $1.86 billion (4.9% year-on-year growth, 2.5% miss)
- Adjusted EPS: $2.44 vs analyst estimates of $2.41 (1.2% beat)
- Adjusted EBITDA: $474.5 million vs analyst estimates of $444.5 million (26.2% margin, 6.8% beat)
- Operating Margin: 19%, up from 17.5% in the same quarter last year
- Market Capitalization: $27.98 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Broadridge’s Q1 Earnings Call
- Dan Perlin (RBC Capital Markets) asked about the impact of elongated sales cycles on demand. CEO Tim Gokey explained that delays are limited to deal timing rather than lost business, with the backlog supporting next year’s revenues.
- Scott Wurtzel (Wolfe Research) inquired whether sales cycle delays were isolated by product line or geography. Gokey stated the delays are broad-based and not concentrated in any specific segment or region.
- Michael Infante (Morgan Stanley) queried about the gap between equity position growth and revenue growth. CFO Ashima Ghei clarified that smaller accounts, while growing quickly, do not yet contribute proportionally to revenue.
- Puneet Jain (JPMorgan) questioned the effect of regulatory changes on Broadridge’s business. Gokey said most policy shifts have minimal direct impact, but evolving SEC disclosure requirements could open new product opportunities.
- Patrick O’Shaughnessy (Raymond James) sought details on the new wealth platform sale. Gokey described its architecture as modular and based on a common data layer, enabling flexible integration with client and third-party systems.
Catalysts in Upcoming Quarters
As we look to future quarters, our team will focus on (1) the pace of onboarding for newly signed digital and AI solutions, (2) progress integrating SIS and expanding the next-generation wealth platform, and (3) signs that elongated sales cycles are stabilizing. Developments in regulatory policy and the adoption of blockchain-based settlement tools will also be closely monitored for their potential to drive incremental growth.
Broadridge currently trades at $238.16, down from $242.12 just before the earnings. Is there an opportunity in the stock?The answer lies in our full research report (it’s free).
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