NEW YORK - Broadridge Financial Solutions , Inc. (NYSE: NYSE:BR) faced a challenging third quarter as both earnings and revenue fell short of Wall Street expectations.
The company reported an adjusted EPS of $2.23, narrowly missing the analyst estimate of $2.24. Revenue for the quarter was reported at $1.73 billion, also below the consensus estimate of $1.77 billion.
The company's stock responded negatively to the news, dropping 3.6%.
CEO Tim Gokey noted that the quarter was modestly impacted by the timing of annual meetings.
Despite the shortfall, Broadridge reported a 4% growth in recurring revenues and a 9% increase in adjusted EPS compared to the same quarter last year. Closed sales saw a significant rise of 29%, contributing to a 19% increase year-to-date. The company's focus on expanding its digital and governance solutions has been a key driver of growth, as evidenced by the robust closed sales figures.
Looking ahead, Broadridge expects recurring revenue growth in constant currency at the low end of its 6-9% guidance range for fiscal year 2024. Adjusted EPS growth is anticipated to hit the middle of the 8-12% range, along with record closed sales of $280-320 million. The company also aims to achieve a 100% free flow conversion, which would enable further capital return to shareholders and support strategic acquisitions.
Despite the optimistic outlook for the full fiscal year, the market's immediate reaction to the third-quarter results was undeniably bearish. Investors may be weighing the current performance against the company's long-term growth objectives, including organic recurring revenue growth of 5-8%, total recurring revenue growth in constant currency of 7-9%, and adjusted EPS growth of 8-12%.
CEO Tim Gokey remains confident in Broadridge's positioning for long-term growth, stating, "Broadridge is poised to deliver another year of steady and consistent growth." The company's commitment to democratizing governance, simplifying capital market trading, and modernizing wealth management continues to be at the forefront of its strategic initiatives.
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