Good morning, and welcome to the Broadridge Fourth Quarter and Full Year 2021 Earnings Call. Please note this event is being recorded. I would now like to turn the conference over to Edings Thibault, Head of Investor Relations. Please go ahead.

Thank you, Iley. Good morning, and welcome to Broadridge's Fourth Quarter and Fiscal Year 2021 Earnings Conference Call. Our earnings release and the slides that accompany this call may be found on the Investor Relations section of broadridge.com. Joining me on the call today are Tim Gokey, our Chief Executive Officer; and our CFO, Edmund Reese. Before I turn the call over to Tim, a few standard reminders. We will be making forward-looking statements regarding Broadridge on today's call that involve risks. A summary of these risks can be found on the second page of the slides and a more complete description on our Annual Report on Form 10-K. We will also be referring to several non-GAAP measures, which we believe provide investors with a more complete understanding of Broadridge's underlying operating results. An explanation of these non-GAAP measures and reconciliations to the comparable GAAP measures can be found on the earnings release and presentation. Let me now turn the call over to Tim Gokey. Tim?

Thank you, Edings. Good morning, everyone. And thank you for joining us today. I'll begin with our key messages and then provide an overview of our performance against our strategic objectives across governance, capital markets, and wealth and investment management. And I'll close with some thoughts about our future before Edmund reviews the financials. Let's get started. I have four headlines. First, Broadridge delivered a strong fiscal year '21. Recurring revenues rose 10%, adjusted EPS rose 13%. And our sales teams delivered a 10th consecutive year of record sales. Our results demonstrate how well positioned Broadridge is to take advantage of increasing investor participation and the growing need to digitize and utilize financial services. Second, we're executing against the strategic growth plan we laid out at our Investor Day in December. We're building a next generation of governance products, growing the scope of our capital markets business across the trade lifecycle, and building our wealth management franchise. Third, we remain committed to balanced capital allocation. In fiscal '21, we increased our level of investment on our internal platforms, completed the largest acquisition in our history, and returned nearly $250 million in capital to shareholders. Yesterday, our Board approved 11% increase in our annual dividend per share. Broadridge has now increased its annual dividend every year since becoming a public company with double digit increases in eight of the last nine years. Fourth and last, we expect another strong year in fiscal '22. Our guidance calls for 12% to 15% recurring revenue growth, further margin expansion 11% to 15%. Adjusted EPS growth and another year of record sales. The combination of strong fiscal year '21 results and our guidance for fiscal '22 leaves Broadridge extremely well positioned to achieve the higher end of our three year growth objectives. As we close…

Thank you, Tim, and good morning, everyone. As you can see from the financial summary on slide 8, Broadridge delivered strong fiscal '21 results capped off by a strong fourth quarter and demonstrating significant progress towards our three year objectives. Fiscal '21 recurring revenues increased 10% to $3.3 billion driven by strong growth in both ICS and GTO. That strong growth enabled us to make the near, medium and long-term investments in our technology platforms and our digital products, while driving 60 basis points of AOI margin expansion for the year. Higher revenues and higher margins drove 13% adjusted EPS growth to $5.66. In the fourth quarter revenues rose 15% year-over-year to $1.1 billion driven by growth in ICS and the acquisition of Itiviti. Adjusted operating income rose 4% as we continued our ongoing investments and adjusted EPS grew 2% to $2.19. Our results came in at the high end of our latest full year guidance range and above our three year recurring revenue and adjusted EPS growth objectives. And as Tim has highlighted, our sales team closed the year on the high note. It pushed us modestly above our close sales guidance range. So let's get into the details of those results starting with recurring revenue on slide 9. The momentum in our business driven by the trends and increased investor participation in digital solutions continued into the fourth quarter and help Broadridge post another year of 10% recurring revenue growth. Our recurring revenue growth is powered by 8% organic growth which came in well above our 5% to 7% three year growth objectives. The combination of organic growth coupled with two points of growth from our acquisition of Funds Library in F5 360 in fiscal year '20. And then Itiviti in May push our fiscal year '21 recurring…

Our first question today comes from David Togut with Evercore ISI.

Thank you. Good morning, for your fiscal '22 guidance, could you discuss some of the potential tailwinds that take you to the high end of the 12% to 15% recurring revenue and 11% to 15% EPS growth range and the headwinds that might land you toward the lower end of that range.

Yes, thanks. Hi, David. Thanks for joining this morning. Look, first, I'd start off by saying that the fiscal '22 growth is strong across both our organic business and the contribution from acquisitions. And I think positions as well, for the three year against the three year objectives that we have positions as well to be towards the high end of that. We still need to execute on sales, converting our sales to revenue and the Itiviti integration. We feel very confident with that. And I think that will actually position as well. I think as we think about some of the areas, you heard us say earlier that we're positioning volume growth to return to mid single digit levels. That obviously can be a tailwind. But we feel confident based on our view into the first, next-- the next two quarters that we can expect that level of event driven revenues, I think, is also something that on a quarterly level has been quite cyclical. We've returned to more historical levels this year in fiscal year '21. And I think that growth was broad based. So we feel confident about that as we go into fiscal year '22, as well. And I'll tell you that we feel good about the margin expansion that helps us get to a strong point from an adjusted EPS growth standpoint, as well, that's driven both by Itiviti, and the continued scale and efficiency gains that we get in our core business, as well. So as you think about the variability in our model, going to fiscal year '22, I think we'll continue to focus on executing on sales, converting that sales to revenue, driving the activity integration, I think event driven revenue is more in line with what we've historically seen in volumes are back to mid single digit levels. And I think that's what drives the range for us. And Tim might want to add a point --

Yes, just add into, I guess, how Edmund started, which is, as we are looking at the strong year, we are having this year, actually I was initially thinking will we be able to keep that same momentum going. And as we saw the trends coming together in the second half of the year, and putting together a plans for next year just became apparent, the strong underlying momentum in the business. And so we're definitely benefiting from Itiviti, but you peel Itiviti out and the organic growth is underneath there is right in line with our three year metrics. So we feel really good about the guide for this year, and about what it says for our momentum as an overall company.

Appreciate that. And just as a follow up, Tim, in your prepared remarks, you underscored your focus on near intermediate and long-term growth. That's a bit of a shift for Broad which historically is focus more on intermediate and longer term growth. Is it just the strength in the underlying metrics that you referenced? Or are there other factors that give you more conviction in the near- term growth prospects of the company?

Yes, Thanks, David. I didn't mean for that to sound like the shift but it might have sounded to you, I just think that with the volume increases that we've been seeing, that making sure that we have everything in place in, in all of our facilities, with all of our technology to support those really the organic numbers that we're seeing, that was really what we're referring to. And so, really as and you're very familiar, we take a long term view, we invest for the future. That's what we're doing. And but there are some near term tailwinds. And we need to make sure that we provide great service to our clients.

Next question comes from Michael Young with Truist Security.

Hey, good morning, thanks for taking the question. I wanted to maybe just start kind of high level things last year were ahead of schedule, I think this year will be, outlook s will be the same so maybe just big picture, Tim, what areas have you been able to invest in maybe more on a strategic basis to accelerate some of those medium term growth dynamics that might sustain this kind of growth rate beyond some of maybe the macro support.

Yes, absolutely, Michael. And we were really pleased to be able to invest in our products and platforms this year and in our people. And we have real money in our budget for next year from the investments we made this year. So we see these things coming to life. I think you can almost kick down the strategies, and you see investments really almost across the board. Because you look at the regulatory business, we're investing to really build that out in Europe, between the shareholder rights directive and our European Fund Communications Business. You look at our funds business and the investments that we're making, in our data intelligence business, that continues to be a very strong growth for us, and we see a lot of future runway there. We've been investing clearly in our VSM capability, but also in our disclosure business for corporate issuers. And, of course, our ongoing investments in digital communication. So right across the whole governance suite, you see investments in each of those areas. And when you look at the product roadmaps, we able to accelerate some of those product roadmaps and look at the number of innovations that we have delivered over the past 18 months in things like core proxy and core distribution and regulatory communications. It's markedly up. And then on the capital markets and wealth management side. Really, they're the investments in things like Digital Ledger Repo things like LTX, applying AI to fixed income trading, making a big difference. And so we're just excited across the whole portfolio. And you are -- that's why you're seeing strength in the underlying growth in each of those areas.

And, Tim, I'll just add, we were able to make those investments that you're talking about it continue to expand margins in line with our three year objectives, and do that while continuing to deliver this double digit EPS growth here. So it really is the right time for us to invest for growth now.

Great and my follow up are on sales, and the sales backlog obviously being up 13%, from where it was at the end of last year. But close sales were pretty similar year-over-year. So is there an expectation that more of that is going to come to fruition in 2022? And then would that be sort of pull forward or additional closings as a result of maybe reopening from the pandemic versus and so we should expect maybe a slight reduction in the size of the sales backlog, or do you think that the things are placed to continue to drive growth or stability of that sales backlog into 2023?

Yes, Michael, thank you. Look, we are really excited also about our sales guide for next year at $240 million to $280 million. I think that really shows how as we continue to add on new solutions, like Itiviti, we see an increased market for us, brought to us in a lot of additional sales resources. And so we do see higher sales for us. In terms of how that will affect the backlog, it is -- when you look at the mix of sales, we had a lot of sales this year that were not strategic sales, they were a lot, and we had a lot of singles this year. And as we bring on the Itiviti sales, those also tend to be a little bit smaller, a little bit faster to implement. So I think sometimes when you see the mix between some of those very large strategic projects, and the singles and doubles, the singles, doubles come online, usually sort of within a year versus within two years. And so I think we may see some fluctuations in backlog. I'm not sure what how to imply what that means for the momentum or business it does. It does flex a little bit based on the product mix. What I will say though, is seeing that backlog grow again, this year, having $400 million of revenue that we know is going to come live over the next two years. It gives us a lot of confidence in the revenue from sales portion of our growth formula. And that is the largest part of our growth formula. And so as CEO and when you think about the environment that we have out there and all the concerns, we have to know that revenue is already been sold. The projects are in flight is happening. It gives a lot of confidence in that and to make some sleep just a little bit better at night.

Our next question comes from Darrin Peller with Wolfe Research.

Hey, thanks guys. I want to start off with the record and the position growth we're seeing being so dramatic and really the infrastructure you guys have said you've expanded and built out to handle the capacity from a physical standpoint. But then if you can also just remind us the difference in the margin profile of digital versus physical, what that's going to be for you guys going forward both from our revenue yield and a margin standpoint. And then just as a quick follow up on that same segment, when you think about your assumptions for next year, I think you said back to the mid to high single digit record growth, you just alluded to that, I think in David's question also being probably conservative. It does seem conservative when you look at the growth rates now. So if you could just expand on that, is that really what you think is the likely outcome? Or is that really just conservatism in your outlook? Thanks.

Yes, Darrin, it's Tim. Let me just delivered a step back. And then I'm going to let Edmund add on to things. I do think it was really remarkable year from the standpoint of physician growth. And we do see it though, as part of the long term trends that are driving position growth, across equities, and funds and ETFs. And those, as you know, are democratization investing, managed accounts, more nascently direct indexing. And so we see those trends continuing in the future. The record growth this year very broad based, which really reinforces our view that as part of these long term trends. In terms of the investments to support, it was really around ensuring that the resiliency of the network and being able to produce sort of output from multiple places. And that is just -- it is not a major thing. But it was just something that we thought we needed to do. So not really almost wouldn't even enter a model but just to show the ongoing investments that we always make in our business. I'm going to let Edmund comment on the margin profile and sort of our confidence about next year and sort of why we believe that and then I'll add on at the end.

Great. So let me first start with the confidence in the next year. Darrin, we look at, we have some insight into stock record positions for companies that we expect to proxy in the next one to two quarters. And when you look at that testing, which I would say covers the large majority of distributions. And maybe there's some movement between the time that we test and the time that we actually mail but the information has been quite reliable. And when you look at that, you see what we said in my prepared remarks low teen growth through the first half of the year. And mind you that's coming off of 16% growth in Q1 last year and 24% growth in Q2 of last year. So low teen growth coming off of that. And that's helpful. That gives us great insight. But I'll remind you that the first half is our seasonally light period of the year, if you look at '21, or look at '20, the first half of the year was 13% of overall volumes. So what really is more important is the back half of the year. And we are assuming and modeling more normal levels in the second half of the year that we return to historical levels. And you combine that and that's what gets us to the mid to high single digit growth level. So you're not, I don't expect to see 33% and 26% coming out of the fourth and full year numbers that we see. But we have good insight into the next six months or so. And I think what we have modeled positions as well, first of all for fiscal year '22, and gives us confidence in that. As we think about the margins of the business, clearly, overall in our business, what we're able to drive bringing on new customers without a new business without incremental cost to scale in our business, the efficiency gains that we're able to get. I think helps us be able to expand margins, but specifically on print, and digital it was good to see our customer communications business, not just driving the earnings growth that we've seen there. But now to see digital, which is a higher margin business, because there's very low to no margin in the distribution revenue, starting to grow in recurring revenue, which is a higher business for us. So you might see lower revenue in that business, but it comes at a higher margin, and we feel good about the progress we're making on that

Yes, Darrin, just I think the other piece that sometimes people think about is when we've seen this very large growth, is that does that tend to fluctuate? Does it go up and does it -- and then what happens when the market sort of goes to a different place and if you can really trace back to sort of previous times of high growth. We have -- what we haven't seen is big fall back after that. What we've seen is positions sort of consolidating at the new level, and then beginning to grow again at more modest pace. And that's if you look back to all the market cycles really over the past 20 years even almost 30 years. That's the pattern that we've seen.

That's helpful. Thanks. My very just quick follow up on GTO for a minute. How should we think about the growth of the components of the segment when just looking at the current quarter? I mean, I know or like, I guess, organically excluding the deal looked a little lower than we expected. But know, the underlying trends are obviously strong, the bookings are strong. So if you just touch on that for a minute. I'll turn back to queue.

Darrin, I don't spend a whole lot of time looking at the quarterly numbers for the GTO components. If you were to look back at Q3, you would have seen the opposite of what you saw in fourth quarter in terms of more of the growth, being in wealth management and less being in capital markets. We're coming off a year of 7% growth in GTO. That I think is the important thing. Now three points of that is driven by the Itiviti acquisition and four points of that was organic. So I think as we think about the growth going forward, trading volumes coming off still 12% in fiscal year '21, over tough comps and maybe less volatility going into fiscal '21. I think we expect to get back in our organic core business back into the 5% to 7% growth range across both of those businesses really driven by net new sales, as Tim talked about earlier in both our capital markets business and wealth management business. And Q4, we were growing over some license revenues, higher license revenues in fiscal year '20 and lower trading volumes. But I think you'll start to see driven by new sales, let's get back to the 5% to 7% three year objectives that we have across both of our businesses.

Our next question comes from Chris Donat with Piper Sandler.

Good morning and thanks for taking my question. Tim wanted to ask one more question on position, equity position growth. And I appreciate the color you've given us on the different types of stocks involved and the trends like democratization and managed accounts and direct indexing. Can you give us some color on from the perspective of the brokerage firms that are involved? Any general generalities you can make there? I imagine with democratization, we're seeing more sort of this startup kind of brokers or is there a lot of activity coming out of the traditional wire houses also?

Yes. Glad you asked. We are definitely seeing higher growth rates in the online brokers. However, we are seeing very strong growth across all segments of brokerage firms and the traditional firms are also seeing double digit growth. And given their exercise, the absolute amount of positions is -- how we --actually bigger in that channel, while the percentage might be bigger, and some of the online ones. So it is really -- it is the one of the things also that we think is very interesting. We did a really landmark study of investing patterns and investors based looking at across $7 trillion of assets that we concluded last year, and it really did show how the millennial are here and their proportion of positions and a growth is really an interesting, but nevertheless, we are seeing really strong growth across all segments of brokerage firms.

Okay, and then just one sort of on recent news and customer concentration, with the news that Robinhood is acquiring say technologies, which has some sort of what I think are kind of interesting solutions on the investor communication side. I don't whatever I'll ask if you quantify Robinhood is the size of a customer, but I imagine it fits in the context of what I seen in your 10-K that like -- your, I think your, yes; your largest customer was 6% of revenues in the last couple of fiscal years. And your five largest were about 20% of revenues. Any way to help think about Robinhood, and if there are customer, any risks of that business?

Absolutely. So first of all, I say just we viewed this acquisition as a positive because it really validates the importance of retail shareholder engagement. Robinhood has been a big leader in that area and their investment are, I think, will be a wake up to two other firms. I'll come back to that in a second. So just to be very clear, Robinhood is a Broadridge client, but it's not a proxy client currently so we really don't see any impact on our -- direct impact on our business. But what we do see there, Chris is we've been really leading an innovation in proxy communications, creating APIs, I talked about that product rollout and the acceleration of roadmap, creating opportunities for our clients to leverage that event as an opportunity to really engage their retail clients, and for corporations to engage their retail clients. And so we think this is going to create sort of heightened interest and a wide range of communications and engagement topics, all of which we really welcome. I think the thing that we bring is we have this unique role, the center of network linking 10s of millions of investors, corporate issuers, or broker dealers. And that network can be really powerful to help corporations engage their retail shareholders.

Our next question comes from Patrick O'Shaughnessy with Raymond James.

Hey, good morning, if I recall correctly, the UBS go live was supposed to be originally completed during this summer. And I think you said today 18 to 24 months is what you're looking at right now. What's driving that extended implementation timeline, versus your prior expectations? And how does that impact opportunities in your ability to win other wealth mandates?

Sure, thank you, Patrick. And just as a step back, it is the wealth management industry, and the trends that we're seeing there is just continued to undergo significant change with everything's going on asset management and fee compression, and then how that plays into wealth management. And so wealth managers are continuing to evolve their strategies and their technologies to compete. And so this digital transformation that we're working on is one of the most exciting initiatives. And the UBS partnership is part of that is part of their transformation, and our mandate with them has grown since our initial agreement. So we are live with components we're working to with them in terms of how we optimize that to align with the pace of their broader digital transformation. In terms of how that affects our ability to bring out others, I think we're excited to announce RBC and I think that really validates the needs that others people -- others see for a similar digital transformation, we have a lot of ongoing discussion with other clients. And the guidance that we've provided fully incorporates all of that doesn't have any revenues from UBS in this next fiscal year. But we're still continuing to grow and UBS knows, we'll call on top of that

Got it. Appreciate that. And then speaking of RBC, can you speak to the implementation timeline for that install?

Yes, and one thing on RBC that I think is important context, first of all, RBC just backing up is a very important client for us, is the client across our businesses, in US and Canada, in wealth management in capital markets so it's very broad and deep relationship and really pleased to be able to help them with the transformation, they are engaged in their US wealth management business. We expect that to go live over the next 18 to 36 months. And since it's already back office client, the scope of incremental services and scope of incremental investment is more limited than UBS but it's very exciting for us. And Patrick, it's particularly interesting, because their business is a unique, they have a high net worth business with what they've done with Citi National, they have sort of traditional regional broker dealer, and then their correspondent as well. And so it really hits on a lot of different segments of the industry that make it pretty interesting.

Our next question comes from Pete Heckmann with D.A. Davidson.

Hey, good morning. Thanks for taking my questions. I missed a little bit of the call. But I believe you expect a roughly 6% decline in event driven proxy in 2022 to about $220 million, would you expect about a normal level of events and proxy revenue in the fiscal first quarter, maybe something in the $45 million range?

Hey, Peter, thanks for joining this morning. So you're right. We said if you look at the last seven years, the average has been about $220 million. If you look at that on a quarterly basis, you're going to see movement a cyclicality each quarter, I think on the slide we shared that the average has been roughly $50 million to $55 million per quarter. And I think that is a good range to think about your modeling on a quarterly basis. I think the key thing about event driven revenue, though, is that as I looked at fiscal year '21, the growth as I said in my prepared remarks was broad base. So it wasn't any one particular contest that drove the growth, it was across a mutual fund proxy, it was across contest that was across capital markets. And I don't think we're looking for any big cont, big one item in fiscal year '22, either. So I think that gives us confidence that we'll return back to the type of average four year numbers that you've seen over the last seven years.

Our next question comes from Puneet Jain with JPMorgan.

Hey, thanks for taking my question. So my question is on margins, can you break down expected margin expansion into ICS and GTO? It seems like there are going to be lot of segments specific dynamics like record growth in ICS. And Itiviti and GTO segment this year.

Yes, so maybe I'll start, Puneet, with one or two comments, and Tim might want to jump in on just the businesses itself. But you look across our businesses, particularly for recurring revenue in our ICS business across regulatory that is volume driven across our data driven solutions, across our issuer businesses. Those businesses really are scale businesses, as we bring on new volume as we bring on new customers, they do come on at attractive and accretive margins in those business. And the same thing as we think about our SaaS platforms and capital markets and wealth management as well. So the margins are quite high there. As we think about the customer communications business, you see a margin dynamic as you move from the lower no margin, print business to higher margin, digital business as well. But overall, I think, as we think about what we expect to do in fiscal '22, and going forward, you can expect collectively will balance the growth in each of those businesses, with our investments and being able to deliver more than the expansion overall in that 50 basis points type range. But, Tim, you might want to add.

I just want -- I was going to add on that almost that last point, which is just we really do think about our margin delivery on an overall basis. And it really can be affected, particularly in any quarter but even in the year across businesses by where investments fall in that year. And but both these businesses have very attractive margin characteristics and margin profiles, but also underlying characteristics as they grow. It creates additional margin. And that is something that really does allow us to continually reinvest in the business, to provide more value to our clients to provide great careers for our associates and long-term growth for our shareholders.

This concludes our question-and-answer session; I'd like to turn the call back over to management for any closing remarks.

Well, I'd like to thank everyone this morning for participating in our call. But before we conclude, I do want to highlight two directors who recently joined our board. As you know, our board plays an important role in the oversight of Broadridge. And I'm pleased that we have continued to add valuable insight and diverse experiences. Melvin Flowers, brings along and valuable experience in both technology and finance. And Nazareth brings deep experience at the confluence of corporate governance, financial markets, and regulatory matters. Broadridge's ability to continue to attract this kind of talent to our board, I think highlights the important role that we play in governance and financial markets. We're really excited to have Melvin and Annette joining the board. We just had a meeting earlier this week and were able to be with them, at least virtually. So welcome, Annette and Melvin. And with that final note, I just want to thank all of you for your interest in Broadridge. We look forward to updating you again in a few months, and just are really excited about what we talked about this morning and about the opportunity going forward to really continue to make a difference for our industry and for millions of investors. Thank you.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.