Broadridge (BR)

Financial technology provider Broadridge (NYSE:BR) reported Q3 CY2025 results exceeding the market’s revenue expectations, with sales up 11.7% year on year to $1.59 billion. On top of that, next quarter’s revenue guidance ($1.68 billion at the midpoint) was surprisingly good and 4.4% above what analysts were expecting. Its non-GAAP profit of $1.51 per share was 21.2% above analysts’ consensus estimates.

Company Overview

Processing over $10 trillion in equity and fixed income trades daily and managing proxy voting for over 800 million equity positions, Broadridge Financial Solutions (NYSE:BR) provides technology-driven solutions that power investing, governance, and communications for banks, broker-dealers, asset managers, and public companies.

A combination of increasing reliance on data and analytics across various industries and the desire for cost efficiency through outsourcing could mean that companies in this space gain. As functions such as payroll, HR, and credit risk assessment rely on more digitization, key players in the data & business process services industry could be increased demand. On the other hand, the sector faces headwinds from growing regulatory scrutiny on data privacy and security, with laws like GDPR and evolving U.S. regulations potentially limiting data collection and monetization strategies. Additionally, rising cyber threats pose risks to firms handling sensitive personal and financial information, creating outsized headline risk when things go wrong in this area.

Broadridge's competitors include FIS Global (NYSE: FIS), Fiserv (NASDAQ: FISV), and SS&C Technologies (NASDAQ: SSNC) in financial technology services. In the investor communications space, it competes with Mediant Communications and AST Financial, while in wealth management technology, it faces competition from Envestnet (NYSE: ENV) and Orion Advisor Solutions.

A company’s long-term sales performance can indicate its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years.

With $7.06 billion in revenue over the past 12 months, Broadridge is one of the larger companies in the business services industry and benefits from a well-known brand that influences purchasing decisions.

As you can see below, Broadridge grew its sales at a solid 8.9% compounded annual growth rate over the last five years. This is an encouraging starting point for our analysis because it shows Broadridge’s demand was higher than many business services companies.

We at StockStory place the most emphasis on long-term growth, but within business services, a half-decade historical view may miss recent innovations or disruptive industry trends. Broadridge’s annualized revenue growth of 6.6% over the last two years is below its five-year trend, but we still think the results were respectable.

This quarter, Broadridge reported year-on-year revenue growth of 11.7%, and its $1.59 billion of revenue exceeded Wall Street’s estimates by 3.4%. Company management is currently guiding for a 6% year-on-year increase in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 3.5% over the next 12 months, a deceleration versus the last two years. This projection is underwhelming and suggests its products and services will face some demand challenges. At least the company is tracking well in other measures of financial health.

Broadridge has been an efficient company over the last five years. It was one of the more profitable businesses in the business services sector, boasting an average operating margin of 15.3%.

Looking at the trend in its profitability, Broadridge’s operating margin rose by 4 percentage points over the last five years, as its sales growth gave it operating leverage.

This quarter, Broadridge generated an operating margin profit margin of 11.9%, up 2.4 percentage points year on year. This increase was a welcome development and shows it was more efficient.

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Broadridge’s EPS grew at a remarkable 11.2% compounded annual growth rate over the last five years, higher than its 8.9% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

Diving into Broadridge’s quality of earnings can give us a better understanding of its performance. As we mentioned earlier, Broadridge’s operating margin expanded by 4 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its higher earnings; interest expenses and taxes can also affect EPS but don’t tell us as much about a company’s fundamentals.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

For Broadridge, its two-year annual EPS growth of 11.7% is similar to its five-year trend, implying stable earnings power.

In Q3, Broadridge reported adjusted EPS of $1.51, up from $1 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Broadridge’s full-year EPS of $9.06 to grow 4.6%.

Free cash flow isn't a prominently featured metric in company financials and earnings releases, but we think it's telling because it accounts for all operating and capital expenses, making it tough to manipulate. Cash is king.

Broadridge has shown robust cash profitability, giving it an edge over its competitors and the ability to reinvest or return capital to investors. The company’s free cash flow margin averaged 12.2% over the last five years, quite impressive for a business services business.

Taking a step back, we can see that Broadridge’s margin expanded by 8.8 percentage points during that time. This is encouraging, and we can see it became a less capital-intensive business because its free cash flow profitability rose more than its operating profitability.

Broadridge’s free cash flow clocked in at $27.1 million in Q3, equivalent to a 1.7% margin. Its cash flow turned positive after being negative in the same quarter last year, building on its favorable historical trend.

EPS and free cash flow tell us whether a company was profitable while growing its revenue. But was it capital-efficient? A company’s ROIC explains this by showing how much operating profit it makes compared to the money it has raised (debt and equity).

Although Broadridge has shown solid business quality lately, it historically did a mediocre job investing in profitable growth initiatives. Its five-year average ROIC was 14%, somewhat low compared to the best business services companies that consistently pump out 25%+.

We like to invest in businesses with high returns, but the trend in a company’s ROIC is what often surprises the market and moves the stock price. Broadridge’s ROIC has increased over the last few years. its rising ROIC is a good sign and could suggest its competitive advantage or profitable growth opportunities are expanding.

Broadridge reported $290.7 million of cash and $3.28 billion of debt on its balance sheet in the most recent quarter. As investors in high-quality companies, we primarily focus on two things: 1) that a company’s debt level isn’t too high and 2) that its interest payments are not excessively burdening the business.

With $1.69 billion of EBITDA over the last 12 months, we view Broadridge’s 1.8× net-debt-to-EBITDA ratio as safe. We also see its $66.3 million of annual interest expenses as appropriate. The company’s profits give it plenty of breathing room, allowing it to continue investing in growth initiatives.

It was good to see Broadridge beat analysts’ EPS expectations this quarter. We were also glad its revenue guidance for next quarter trumped Wall Street’s estimates. Zooming out, we think this was a good print with some key areas of upside. The stock remained flat at $221.18 immediately after reporting.

Updated: December 4, 2025 at 11:08 PM EST

The latest quarterly earnings matters, sure, but we actually think longer-term fundamentals and valuation matter more. Investors should consider all these pieces before deciding whether or not to invest in Broadridge.

There’s plenty to admire about Broadridge. First off, its revenue growth was solid over the last five years. And while its projected EPS for the next year is lacking, its rising cash profitability gives it more optionality. On top of that, its impressive operating margins show it has a highly efficient business model.

Broadridge’s P/E ratio based on the next 12 months is 24.6x. When scanning the business services space, Broadridge trades at a fair valuation. If you’re a fan of the business and management team, now is a good time to scoop up some shares.

Wall Street analysts have a consensus one-year price target of $269.38 on the company (compared to the current share price of $230.87), implying they see 16.7% upside in buying Broadridge in the short term.