What is Driving Broadridge Financial Solutions, Inc. (NYSE:BR) Stock?

Broadridge Financial Solutions, Inc. (NYSE:BR) stock rose over 1.4% on August 13th, 2021 (as of  11:02:00 AM UTC-4 · USD; Source: Google finance) after the company posted inline earnings estimates for the fourth quarter of FY 21. Fiscal ’21 recurring revenues rose 10% to $3.3 billion, driven by strong growth in both ICS and GTO. The recurring revenue growth was driven by 8% organic growth, which came in well above the 5% to 7% three-year growth objectives. The combination of organic growth coupled with 2 points of growth from the acquisition of FundsLibrary and Fi360 in fiscal year ’20, and then Itiviti in May, which drove the fiscal year ’21 recurring revenue growth above the 7% to 9%

BR in the fourth quarter of FY 21 has reported the adjusted earnings per share of $2.19, which is inline with the analysts’ estimates for the adjusted earnings per share of $2.19 per share, according to figures compiled by Thomson Reuters. The company had reported the adjusted revenue growth of 12.5 percent to $1.53 billion in the fourth quarter of FY 21. Capital Markets revenue rose 8% to $701 million, driven by new client additions and the acquisition of Itiviti, which has given us a new capability to drive innovation across the trade lifecycle. ICS revenues grew by 17% to $719 million in the fourth quarter driven by the growth in the regulatory business, which grew 27% to $381 million.

The company has also recently launched the Digital Ledger Repo platform and are averaging $35 billion worth of transactions daily, a number which will grow as more clients, including UBS, come onto the platform

Additionally, in fiscal year ’21, the company generated $557 million of free cash flow, up $58 million from fiscal year ’20. Late in the fourth quarter, the company has completed the additional tuck-in acquisition of AdvisorStream. Since the close of the quarter, the company had made two more very small tuck-in acquisitions for the assets of Jordan & Jordan and the remaining share of Alpha Omega. The company has invested almost $300 million in continued platform build-outs, as the company adds to the capabilities across Wealth Management and Capital Markets, and another $100 million in capex and software development.

The company expects to grow recurring revenues in the range of 12% to 15% in fiscal year ’22. That includes organic revenue growth of 5% to 7% with growth balanced across both ICS and GTO. For fiscal 2022, the company expects total revenue growth should be in the range of 9% to 13% and adjusted EPS growth to be in the range of 11% to 15%.

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