BR Q2 Deep Dive: Digitization, Wealth Platform Momentum, and Tokenization Drive Growth

Financial technology provider Broadridge (NYSE:BR) met Wall Street’s revenue expectations in Q2 CY2025, with sales up 6.2% year on year to $2.07 billion. The company expects next quarter’s revenue to be around $1.51 billion, close to analysts’ estimates. Its non-GAAP profit of $3.55 per share was 1.5% above analysts’ consensus estimates.

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StockStory’s Take

Broadridge’s second quarter saw a strong positive market reaction as the company met Wall Street’s revenue expectations and slightly exceeded profit forecasts. Management attributed this performance to broad-based gains across its core governance, capital markets, and wealth management businesses. CEO Tim Gokey highlighted growth in investor positions, a continued shift toward digital communications, and increased demand for solutions supporting capital markets and wealth modernization. Notably, recurring revenue growth was driven by higher investor engagement, strong demand for fund voting choice solutions, and new client wins for the company’s wealth management platform.

Looking forward, Broadridge’s guidance is supported by expectations for continued growth in regulatory revenues, robust sales pipelines in wealth and capital markets, and expanding adoption of digital and AI-enabled products. Management noted that the pipeline is especially strong for offerings like distributed ledger repo and wealth platform solutions, which are expected to meet evolving client needs for scalability and modernization. CFO Ashima Ghei emphasized, “We expect another year of steady and consistent growth in the ICS business, in line with our overall recurring revenue guidance.” The company also sees ongoing regulatory changes and increased digitization as long-term growth catalysts.

Key Insights from Management’s Remarks

Management credited recurring revenue growth and margin expansion to increased investor engagement, digital adoption, and strong momentum across governance, capital markets, and wealth management platforms.

• Investor participation surge: The number of equity shareholder positions grew 16% year-over-year, reflecting heightened engagement from both managed accounts and self-directed investors, which fueled recurring revenue gains.
• Digital transformation in communications: Broadridge’s print-to-digital strategy continued to gain traction, with digital proxy communications now exceeding 90% in equities and over 77% in funds, leading to significant cost savings for clients.
• Fund voting choice adoption: Nearly 400 funds, managing $1.8 trillion in assets, now offer Broadridge’s voting choice solution to shareholders—up sharply from 100 funds in the prior year—highlighting growing demand for shareholder engagement tools.
• Capital markets innovation: Demand for trade processing and tokenized asset solutions, including the distributed ledger repo platform, accelerated, with daily average trading volumes doubling to over $200 billion by June, indicating strong client interest in scalable, modern infrastructure.
• Wealth management platform wins: The acquisition of SIS strengthened Broadridge’s position in Canada, and the wealth platform secured notable new U.S. and Canadian clients. The company is also seeing rising interest in its Sentry private credit solution, supporting the 12% recurring revenue growth in the wealth segment.

Drivers of Future Performance

Broadridge’s outlook is anchored by steady regulatory revenue growth, ongoing digital and AI adoption, and strong sales pipelines in wealth and capital markets.

• Regulatory and digitization momentum: Management expects regulatory changes and continued digitization of financial communications to drive recurring revenue, with digital becoming the default for many client communications over time.
• Wealth and capital markets pipeline: The company anticipates robust sales in wealth and investment management, with new product launches and the onboarding of a $430 million backlog set to support organic growth, though some wealth platform sales may have longer conversion timelines.
• Event-driven and margin headwinds: While event-driven revenues are forecast to decline from last year’s elevated levels, they will remain above historical averages. Margins are expected to be flat year-over-year, as operating leverage and cost discipline offset headwinds from higher distribution costs and lower float income.

Catalysts in Upcoming Quarters

In upcoming quarters, our analyst team will focus on (1) the pace of digital product adoption and growth in digital communications, (2) progress on onboarding the wealth platform backlog—especially in the U.S. and Canada, and (3) traction for the distributed ledger repo and tokenization initiatives in capital markets. Developments in regulatory changes and margin trends will also be closely monitored.

Broadridge currently trades at $262.50, up from $248.49 just before the earnings. Is the company at an inflection point that warrants a buy or sell? See for yourself in our full research report (it’s free).

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