Broadridge’s Position Growth Impresses in Seasonally Slow Quarter, GTO Softness Likely a Blip

Broadridge reported a decent start to its fiscal year. Total revenue of $1.19 billion edged out the FactSet consensus of $1.15 billion. The beat was largely driven by ICS segment revenue with strength in both position growth and event-driven revenue. Global Technology and Operations was a bit soft on an organic basis on lower license and consulting revenue, but we don’t view this quarter’s softness as indicative of a longer-term trend. Broadridge’s adjusted operating margin of 14.8% was unchanged from the year-ago period. As is often the case during its first quarter earnings call, Broadridge reaffirmed its full-year guidance. Overall, there was little in the firm’s first-quarter financial results that would alter our long-term view on narrow-moat rated Broadridge, and we will maintain our $158 fair value estimate.