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The most compelling upside opportunity lies in the scaling of Broadridge's Distributed Ledger Repo (DLR) and cross-asset DLX expansion,.
SEC formalizes electronic default proxy delivery rules and mandates a 15% to 20% reduction in maximum allowable proxy processing fees.
We initiate coverage on Broadridge Financial Solutions Inc. (BR) with a Buy rating and a Fair value estimate of $184.36, representing an 11.43% upside from the analysis price of $165.45 as of 2026-10-09.4
We recommend a Buy rating for Broadridge Financial Solutions Inc. For equity compounder investors, this reflects a highly reliable business model with defensive recurring revenues, high client retention exceeding 98%, and steady high-single-digit to low-double-digit total shareholder return compounding driven by earnings growth, dividend yield, and share repurchases,.5
As of 2026-10-09, Broadridge shares traded at $165.45. This price sits at a 10.26% discount to our central Fair value estimate of $184.36, implying 11.43% capital upside. In an accelerated growth expansion scenario, reaches $213.80, offering 29.22% capital upside.
The principal threat to the thesis is potential regulatory fee compression or structural erosion under proposed SEC electronic default proxy distribution rules.5
The core driver of value creation is the self-reinforcing flywheel of Broadridge's regulatory proxy monopoly and capital-light cash generation. Operating with capital expenditures of only $67.2M (0.9% of revenue) in FY2026, the business converted $1,124.3M in net income into $1,278.4M of free cash flow,. This exceptional cash flow directly fuels steady share repurchases under a $1.5B authorization and an expanding dividend,, enabling diluted EPS to compound at 9.9% in FY2027 ($10.55 consensus) and 9.7% in FY2028 ($11.58 consensus).1567
Broadridge commands a near-monopoly in US shareholder communications, generating $5,560.8M in FY2026 ICS revenue with 98%+ client retention and prohibitive bilateral broker-dealer connectivity barriers.8
FY2026 free cash flow reached $1,278.4M, converting over 113% of GAAP net income ($1,124.3M) due to minimal capital intensity ($67.2M capex), funding a 12% dividend increase and a $1.5B buyback authorization,.567
Broadridge's GTO franchise ($1,916.0M FY2026 revenue) is scaling live intraday DLR trading and multi-asset DLX connectivity, unlocking bilateral network effects across Tier 1 global banks,.58
Buy: Broadridge combines an entrenched regulatory proxy monopoly generating over 80% recurring revenue with superior cash flow conversion to deliver durable 9% to 10% annual EPS compounding.
Broadridge Financial Solutions Inc. is a leading global provider of investor communications, technology-driven solutions, and clearing and trade processing services to the financial services industry. The company operates through two primary reportable business segments: Investor Communication Solutions (ICS) and Global Technology and Operations (GTO).
In FY2026, the Investor Communication Solutions segment generated $5,560.8M in revenue, providing mandatory proxy voting processing, regulatory prospectus and financial report distribution, and corporate governance solutions to public corporations, mutual funds, and broker-dealers across North America. The Global Technology and Operations segment delivered $1,916.0M in revenue, providing front-to-back mission-critical trade processing, clearing, collateral optimization via Distributed Ledger Repo (DLR), and wealth management enterprise solutions.
Geographically, Broadridge generated $6,374.6M (85.3%) of its FY2026 revenue in the United States, with Canada contributing $544.4M, the United Kingdom generating $493.6M, and other international operations representing $64.1M. The client base is highly diversified across major financial institutions, with its single largest client accounting for approximately 7% of consolidated revenues.
In a compounding stress test scenario combining regulatory proxy fee compression under SEC electronic default rules and a prolonged capital markets freeze, Broadridge's operating income would face dual headwinds. Event-driven revenues would collapse below $180M (versus guided $250M-$300M), while regulatory unit fee reductions of 20% would compress consolidated operating margin from guided ~21% down to 17.5%. Simultaneously, higher debt service on $3,520.5M total debt at 7.5%+ refinancing rates would reduce net income conversion. Under this stressed path, free cash flow generation would compress from $1,278.4M toward $900M, curbing share repurchases and anchoring valuation support near the downside boundary of $149.55.
A downside path exists wherein capital markets retrenchment coincides with regulatory proxy fee compression. Under these stressed conditions, event-driven transaction revenues fall sharply below historical baselines, while regulatory fee caps compress investor communication margins. Concurrently, elevated interest rates raise debt refinancing costs on outstanding borrowings,, dampening share repurchase execution and leading to valuation multiple compression across the peer group. This conditional risk is monitored quarterly through segment operating margins and transaction volume trends, as detailed in the dedicated downside review.
The SEC formalizes electronic default proxy delivery rules and simultaneously reviews maximum allowable proxy processing fees. Issuers successfully lobby for a 20% reduction in regulated unit fees, reducing ICS high-margin fee revenue while print distribution pass-through declines, compressing consolidated operating margin from guided ~21% to below 18.0%, resulting in an estimated fair value impact of -24.5%.5
Les cinq évolutions qui affaibliraient notre thèse d’investissement.
Indicates that regulatory fee reductions or digital default transitions are compressing ICS operating profitability rather than delivering digital distribution efficiency gains.
Actuel :17.4% reported in FY2026 / ~21.0% guided for FY2027
Alerte siBelow 18.0% on a trailing twelve-month basis
Broadridge Financial Solutions commands a Wide economic moat anchored by its quasi-monopoly in North American regulatory investor communications and expanding capital markets trade processing franchise. The company's core advantage stems from irreplaceable bilateral connectivity linking public issuers, mutual funds, broker-dealers, and retail/institutional shareholders under strict SEC compliance mandates. In FY2026, the Investor Communication Solutions (ICS) segment generated $5,560.8M in revenue, handling the overwhelming majority of proxy distributions and shareholder votes across the United States. Switching away from Broadridge is operationally prohibitive for broker-dealers because doing so would require negotiating and maintaining bespoke interfaces with thousands of corporate issuers and fund complexes.
Beyond regulatory communications, Broadridge has established powerful network effects in its Global Technology and Operations (GTO) segment, which delivered $1,916.0M in FY2026 revenue. The adoption of Distributed Ledger Repo (DLR) has created a bilateral network effect among global Tier 1 banks by enabling real-time intraday repo trading and collateral optimization. The rollout of DLX extends this infrastructure to equities, mutual funds, and alternatives without requiring clients to re-architect existing systems,. These mission-critical processing platforms result in 98%+ client revenue retention and minimal customer concentration, with the largest single client accounting for only 7% of revenues.
Broadridge's economic moat translates into exceptional financial durability. Because its services are legally mandated for corporate governance and trade clearance, revenue is largely insulated from macroeconomic contractions, with over 80% classified as recurring. Capital expenditure requirements are exceptionally light at $67.2M or 0.9% of revenue, allowing the business to convert $1,124.3M in net income into $1,278.4M in free cash flow,. This self-funding economic model supports a sustained return on invested capital above 12% against a WACC of 8.3410%,, reinforcing our Wide moat rating.
Broadridge generates substantial economic profit above its cost of capital. In FY2026, the company generated $1,300.6M in operating income on an asset-light balance sheet with capital expenditures of only $67.2M. This translated into a return on equity of 40.9% and a return on invested capital of approximately 12.4%, comfortably surpassing its computed WACC of 8.3410% and moderate cost of equity of 9.0586%.27
Each lens answers a different valuation question. Only included lenses set Fair value; floors and diagnostics provide context.
The highlighted cell is Fair value when every assumption sits at its base level ($184.36). Each row and column shows what Fair value becomes when one assumption moves.
A free-cash-flow drop test is not available in this run; use the discount-rate and terminal-growth grid as the primary valuation pressure test.
Under the modal Base case path, which carries a probability of 65.0%, Broadridge achieves our Fair value target of $184.36, delivering an implied return of 11.4% from $165.45 (as of 2026-10-09). In this scenario, recurring revenue compounds in line with management guidance at mid-single-digit rates, supported by the scheduled onboarding of the contracted sales backlog and steady retail investor account creation. Operating margins expand toward guided levels as electronic proxy notifications reduce distribution processing overhead,. Free cash flow conversion remains comfortably above reported net income, funding steady dividend increases and systematic share repurchases that retire outstanding shares annually. This case would be disconfirmed if organic recurring revenue growth falls below guided ranges for two consecutive quarters.
A beat driven by accelerated onboarding of the contracted backlog and digital proxy adoption validates operating leverage and confirms that Broadridge is tracking toward Potential value.
Results tracking within guided parameters confirm that core compounding remains intact and that the business remains on path toward Fair value.
A miss driven by temporary event-driven volatility does not impair the core moat, but any structural slowdown in recurring contract onboarding warrants careful re-examination before committing additional capital.
Broadridge exhibits high earnings quality supported by robust cash conversion and clean revenue recognition. Operating cash flow consistently exceeds reported net income, driven by low capital expenditure requirements, high recurring contract billing, and disciplined working capital management,. Non-cash charges are dominated by recurring depreciation and amortization of technology assets, while stock-based compensation remains modest relative to peer norms. The balance between cash flow generation and GAAP net income indicates that reported earnings accurately reflect underlying economic profitability without reliance on aggressive accruals.
Consensus earnings and revenue revisions have moved upward following the latest earnings release. Sell-side analysts raised fiscal year earnings expectations, reflecting confidence in management guidance, backlog onboarding, and steady margin expansion.
Broadridge demonstrates exceptional cash generation characteristics typical of an asset-light mature compounder. In FY2026, the company generated $1,345.6M in cash flow from operations and incurred only $67.2M in capital expenditures, yielding $1,278.4M in free cash flow. This represents a remarkable 113.7% free cash flow conversion of GAAP net income ($1,124.3M). Stock-based compensation of $93.9M represents just 1.26% of revenue, well below the IT services industry benchmark of 1.6%. This high-quality cash flow profile provides substantial flexibility to self-fund organic technology initiatives while returning over $1B annually to shareholders.46
The stable spread of approximately 400 bps between ROIC (12.37%) and WACC (8.3410%) confirms sustained economic profit compounding. High returns are protected by low capital intensity ($67.2M capex in FY2026) and an entrenched regulatory moat that supports operating margin expansion from 17.4% in FY2026 to guided ~21% in FY2027.
Broadridge maintains an estimated ROIC of 12.37% and an ROE of 40.92%, comfortably above its computed WACC of 8.3410% and moderate cost of equity of 9.0586%.
| Chiffre d'affaires | 7 476 800 000 $US |
|---|---|
| Coût des ventes | 5 100 700 000 $US |
| Marge brute | 2 376 100 000 $US |
| Charges d’exploitation | 1 075 500 000 $US |
| Résultat d'exploitation | 1 300 600 000 $US |
| Éléments hors exploitation et impôts | -176 300 000 $US |
| Résultat net | 1 124 300 000 $US |
| Total de l’actif | 8 945 300 000 $US |
|---|---|
| Trésorerie | 402 900 000 $US |
| Actifs courants | 1 748 100 000 $US |
| Total du passif | 6 104 700 000 $US |
| Passifs courants | 1 414 800 000 $US |
| Capitaux propres | 2 840 600 000 $US |
| Résultat net | 1 124 300 000 $US |
|---|---|
| Entrées d’exploitation | 1 559 500 000 $US |
| Dotations aux amortissements | 341 300 000 $US |
| Rémunération en actions | 93 900 000 $US |
| Flux de trésorerie d'exploitation | 1 345 600 000 $US |
| Sorties d’exploitation | 213 900 000 $US |
| Trésorerie disponible | 1 907 100 000 $US |
| Trésorerie d’ouverture | 561 500 000 $US |
| Sorties d’investissement | 452 000 000 $US |
| Capex | 67 200 000 $US |
| Autres activités d’investissement | 384 800 000 $US |
| Sorties de financement | 1 048 500 000 $US |
| Émission nette de dette | 1 400 000 $US |
| Rachats d’actions | 603 700 000 $US |
| Dividendes versés | 443 500 000 $US |
| Autres activités de financement | 2 700 000 $US |
| Effet de change | 3 700 000 $US |
| Trésorerie de clôture | 402 900 000 $US |
| Flux d’investissement | -452 000 000 $US |
| Flux de financement | -1 048 500 000 $US |
Source: SEC EDGAR · Déposé le 2026-08-04 · SEC EDGAR
| Chiffre d’affaires par zone géographique | Chiffre d'affaires | Part | sur un an |
|---|---|---|---|
| United States | 6,4 Md $US | 85,3 % | 7,9 % |
| Canada | 544,4 M $US | 7,3 % | 17,4 % |
| United Kingdom | 493,6 M $US | 6,6 % | 6,2 % |
| Others | 64,1 M $US | 0,9 % | 19,6 % |
Données financières ponctuelles utilisées dans l’analyse du 2026-10-10.
| Période | Chiffre d'affaires | EBITDA | Résultat net | Flux de trésorerie d'exploitation | Flux de trésorerie disponible | Capex | Dotations aux amortissements | Rémunération en actions | Rachats d’actions | Dividendes versés | Émission nette de dette | Flux d’investissement | Flux de financement | Trésorerie d’ouverture | Trésorerie de clôture | Trésorerie et placements | Dette totale | Marge opérationnelle | ROIC | WACC | Écart ROIC−WACC |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2017-06-30 | 4,1 Md $US | 706 M $US | 326,8 M $US | 515,9 M $US | 430,5 M $US | 85,4 M $US | 141,2 M $US | 46,1 M $US | 342,8 M $US | 152,2 M $US | — | -659,3 M $US | -311,7 M $US | — | 271,1 M $US | 271,2 M $US | 1,1 Md $US | 2,1 % | — | 5,8 % | — |
| 2018-06-30 | 4,3 Md $US | 815,5 M $US | 427,9 M $US | 693,6 M $US | 616,9 M $US | 76,7 M $US | 163,5 M $US | 55,1 M $US | 277,1 M $US | 165,8 M $US | — | -249,3 M $US | -449,9 M $US | 271,1 M $US | 263,9 M $US | 264 M $US | 1,1 Md $US | 13,8 % | — | 6,3 % | — |
| 2019-06-30 | 4,4 Md $US | 912,8 M $US | 482,1 M $US | 617 M $US | 566,4 M $US | 50,6 M $US | 172,6 M $US | 58,4 M $US | 397,8 M $US | 211,2 M $US | — | -433,5 M $US | -173,1 M $US | 263,9 M $US | 273,2 M $US | 273,6 M $US | 1,5 Md $US | 15,0 % | — | 5,3 % | — |
| 2020-06-30 | 4,5 Md $US | 924,2 M $US | 462,5 M $US | 598,2 M $US | 535,5 M $US | 62,7 M $US | 196,7 M $US | 60,8 M $US | 69,3 M $US | 241 M $US | — | -441,7 M $US | 51,2 M $US | 273,2 M $US | 476,6 M $US | 477,1 M $US | 1,8 Md $US | 13,8 % | — | 3,9 % | — |
| 2021-06-30 | 5 Md $US | 1 Md $US | 547,5 M $US | 640,1 M $US | 588,2 M $US | 51,9 M $US | 221,1 M $US | 58,6 M $US | 21,5 M $US | 261,7 M $US | — | -2,7 Md $US | 1,8 Md $US | 476,6 M $US | 274,5 M $US | 275,2 M $US | 3,9 Md $US | 13,6 % | — | 4,4 % | — |
| 2022-06-30 | 5,7 Md $US | 1,2 Md $US | 539,1 M $US | 443,5 M $US | 414,5 M $US | 29 M $US | 332,6 M $US | 68,4 M $US | 22,8 M $US | 290,7 M $US | -95,5 M $US | -110,4 M $US | -370,8 M $US | 274,5 M $US | 224,7 M $US | 225,3 M $US | 3,8 Md $US | 13,3 % | — | 5,9 % | — |
| 2023-06-30 | 6,1 Md $US | 1,4 Md $US | 630,6 M $US | 823,3 M $US | 784,9 M $US | 38,4 M $US | 298,8 M $US | 73,1 M $US | 24,3 M $US | 331 M $US | -385 M $US | -80,4 M $US | -714,7 M $US | 224,7 M $US | 252,3 M $US | 253 M $US | 3,4 Md $US | 15,4 % | — | 7,1 % | — |
| 2024-06-30 | 6,5 Md $US | 1,5 Md $US | 698,1 M $US | 1,1 Md $US | 998,8 M $US | 57,4 M $US | 477,9 M $US | 70,6 M $US | 485,4 M $US | 368,2 M $US | -60 M $US | -148 M $US | -855,5 M $US | 252,3 M $US | 304,4 M $US | 305,2 M $US | 3,4 Md $US | 15,6 % | — | 7,6 % | — |
| 2025-06-30 | 6,9 Md $US | 1,7 Md $US | 839,5 M $US | 1,2 Md $US | 1,1 Md $US | 43,8 M $US | 498,1 M $US | 73,4 M $US | 134,9 M $US | 402,3 M $US | -104,4 M $US | -316,2 M $US | -600,8 M $US | 304,4 M $US | 561,5 M $US | 562,2 M $US | 3,3 Md $US | 17,3 % | — | 7,4 % | — |
| 2026-06-30 | 7,5 Md $US | 1,6 Md $US | 1,1 Md $US | 1,3 Md $US | 1,3 Md $US | 67,2 M $US | 341,3 M $US | 93,9 M $US | 603,7 M $US | 443,5 M $US | 1,4 M $US | -452 M $US | -1 Md $US | 561,5 M $US | 402,9 M $US | 402,9 M $US | 3,3 Md $US | 17,4 % | — | 7,1 % | — |
Broadridge Financial Solutions Inc. (BR) trades at 15.5x forward earnings against a peer median of 10.6x. Its EV/EBITDA of 12.1x compares with a peer median of 9.5x. The comparison uses 4 peers: Cognizant Technology Solutions Corporation, Jack Henry & Associates Inc., Gartner Inc. and Leidos Holdings Inc., as of 2026-10-09 to 2026-10-10.
The broader financial technology and IT services sector exhibits moderate capital reinvestment, with an industry benchmark capex-to-revenue ratio of 2.9% and capex-to-depreciation of 0.35. Broadridge operates at an even more capital-efficient level, investing $67.2M in capex (0.9% of revenue) in FY2026, while expanding into digital infrastructure such as Distributed Ledger Repo.57
In a bullish financial market cycle, heightened equity market trading, retail investor account formation, frequent corporate M&A transactions, and active proxy voting boost event-driven revenues above $350M. Simultaneously, Tier 1 banks accelerate digital transformation spending, driving GTO sales backlog conversion and rapid cross-asset DLX adoption.
In a cyclical capital markets retrenchment, IPOs, secondary offerings, contested proxy votes, and mutual fund mergers stall, depressing event-driven revenue toward the $180M stress threshold,. Broker-dealers delay non-essential software migrations, decelerating organic GTO recurring growth toward 2% to 3%.
Because external supply-chain lead times and industry capacity data are proprietary, the industry cycle view is demand-led and evidence-limited. Broadridge positions itself defensively through high recurring revenues (>80%), exceptional client retention (>98%), and minimal customer concentration (largest client at 7%). This insulates core operating cash flows from broad macroeconomic downturns.8
Broadridge represents an exceptional core compounder holding with over 80% recurring revenue, client retention exceeding 98%, and free cash flow conversion exceeding 100% of net income,. A 4-6% weighting balances strong defensive stability with upside compounding toward Fair value.67
Position risk is controlled through disciplined entry sizing (4-6% max portfolio weighting), continuous tracking of regulatory SEC proxy rule developments, and rigorous monitoring of free cash flow conversion. Elevated debt levels ($3,520.5M) in a 5.22% risk-free rate environment require that management prioritize deleveraging and dividend sustainability alongside share buybacks.
Broadridge offers premier utility-like stability with 98%+ client retention, high returns on capital well above its 8.3410% WACC, and multi-decade structural growth in proxy and post-trade processing.28
Trading at 15.46x forward P/E, the stock trades at an attractive entry multiple with 11.43% capital upside to Fair value of $184.36 and 29.22% upside to Potential value of $213.80.4
While the 12% dividend increase and 100%+ FCF conversion provide solid dividend safety, pure income-focused investors face a modest current yield compared to prevailing 5.22% risk-free cash benchmarks.256
Broadridge Financial Solutions represents a high-quality compounder trading at an attractive entry valuation ($165.45 as of 2026-10-09) relative to our central Fair value of $184.36. Backed by an entrenched regulatory proxy monopoly generating over 80% recurring revenue, the business generates exceptional cash flow ($1,278.4M FCF in FY2026) that fuels consistent dividend growth and share repurchases,.456
While event-driven revenue normalization ($250M-$300M guided) creates moderate top-line noise, core recurring growth of 6% to 8% constant currency, a $470M contracted sales backlog, and operating margin expansion toward ~21% support dependable 9% to 10% EPS compounding.
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The records this analysis drew on, as they stood when it was run.
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Capital markets activity enters a cyclical downturn, causing proxy contests, mutual fund mergers, and secondary issuance votes to crater. Event-driven revenue drops below $180M, far below management's guided range of $250M-$300M, while broker-dealers freeze GTO IT implementation budgets, depressing consolidated revenue growth from 5.1% to under 2.0%, causing an estimated -30.8% fair value impact.5
The market re-evaluates Broadridge's compounder premium over IT services peers (CTSH trading at 9.3x forward P/E and IT at 11.7x). As organic recurring revenue decelerates toward 3-4% and leverage remains elevated at 36.4% of capital, Broadridge's terminal multiple derates by 20% from the modeled 16.0x down to 12.8x, implying an estimated -20.0% fair value impact.4
With total debt at $3,520.5M and current risk-free rate at 5.22%, maturing debt is refinanced at 7.5%+. Concurrently, equity risk premiums expand, driving computed WACC from 8.3410% and Ke moderate from 9.0586% upward by 200 bps, sharply reducing present value across DCF lenses by an estimated -28.2%.2
Signals severe capital markets retrenchment that depresses consolidated revenue growth below 2.0% and eliminates high-margin transaction flow.
Actuel :$250M to $300M guided for FY2027
Alerte siBelow $180M annually
Triggers immediate re-underwriting of the ICS moat rating from wide to narrow, reflecting customer pushback or competitive proxy erosion.
Actuel :5% to 7% guided organic revenue growth
Alerte siAt or below 2.0% for two consecutive quarters
Reveals escalating capital expenditure intensity or working capital drag, curtailing share repurchase capacity below the modeled 0.8% annual share retirement.
Actuel :113.7% in FY2026 ($1,278.4M FCF / $1,124.3M net income,)
Alerte siBelow 85.0% for a full fiscal year
Indicates persistent debt refinancing shocks on $3,520.5M total debt and equity risk premium expansion that sharply depress present value across DCF lenses.
Actuel :8.3410% computed WACC / 5.22% risk-free rate
Alerte siAbove 10.34% (a 200 bps increase)
| low |
| 24 to 36 months |
| Enterprise IT peers such as CTSH (17.5% operating margin) and IT lack Broadridge's specialized multi-asset trade processing infrastructure and bilateral clearing network connectivity.35 |
| Cyclical Volatility in Event-Driven Proxy Transactions | medium | 6 to 12 months | Recurring revenue represents over 80% of total revenue, and management's guidance explicitly models event-driven normalization to $250M-$300M in FY2027, establishing a conservative baseline.5 |
Under the moderate discount rate, 39,59 $US comes from forecast-period earnings and 154 $US from the long-term value, totaling 193 $US.
Project EPS through the explicit advantage period, fade growth as competition catches up, and discount the full stream at cost of equity.
Apply a terminal P/E to the dated forward EPS path, then discount that future share value back to the analysis date.
Add depreciation to net income, subtract maintenance capex, divide by diluted shares, and apply a normalized valuation multiple.
Solve for the growth rate that makes the model value equal the report-date share price.
In the upside Bull case path, which carries an assigned probability of 15.0%, Broadridge achieves our Potential value target of $213.80, generating an implied return of 29.2% from $165.45 (as of 2026-10-09). This path reflects accelerated institutional adoption of Distributed Ledger Repo and broad multi-asset connectivity through DLX,. GTO revenue accelerates to double-digit recurring growth as tier-one global banks standardize post-trade workflows on Broadridge infrastructure. Concurrently, rapid transition to digital default proxy delivery eliminates physical handling costs, lifting operating margins beyond guided levels. Investors would confirm this path through accelerated closed sales bookings and recurring revenue outperformance in upcoming earnings releases.5
Demonstrates whether the transition to electronic proxy delivery yields digital operating leverage rather than triggering regulatory fee compression,.5
Tracks Tier 1 financial institution onboarding and cross-asset volume scaling, providing the primary driver for front-to-back capital markets growth,.5
Ensures cash flow conversion exceeds net income to fully fund dividend growth and accretive share repurchases under the board authorization,.5
| $8.66B |
| $9.07B |
| $9.48B |
| Operating income | $1.65B | $1.75B | $1.84B | $1.95B | $2.04B |
| NOPAT | $1.30B | $1.38B | $1.45B | $1.54B | $1.60B |
| Residual cash after reinvestment policy | $1.04B | $1.10B | $1.17B | $1.23B | $1.29B |
| Revenue growth | 5.1% | 4.9% | 5.0% | 4.8% | 4.5% |
| Operating margin | 21.0% | 21.2% | 21.3% | 21.5% | 21.5% |
| Tax rate | 21.3% | 21.3% | 21.3% | 21.3% | 21.3% |
| Reinvestment rate | 19.7% | 19.7% | 19.7% | 19.7% | 19.7% |
| Terminal growth | 2.5% | 2.5% | 2.5% | 2.5% | 2.5% |
Management follows a disciplined, balanced capital allocation framework that prioritizes organic reinvestment, growing dividends, opportunistic M&A, and systematic share repurchases. In FY2026, capital returns surpassed $1B, consisting of cash dividends and a record $600M in share repurchases. The Board recently approved a 12% increase in the annual dividend and established a fresh $1.5B share repurchase authorization,. Net share count is modeled to decrease by 0.5% to 0.8% annually, bridging 5.1% revenue growth into 9.9% EPS growth. On the balance sheet, total debt stands at $3,520.5M with a pre-tax cost of debt of 5.76%. Robust operating cash flows ensure interest coverage remains above 13x, supporting investment-grade stability even under a 5.22% risk-free rate environment.
In FY2026, free cash flow of $1,278.4M exceeded GAAP net income of $1,124.3M by $154.1M due to minimal capex of $67.2M and non-cash D&A of $341.3M.
Confirms exceptional earnings quality and proves that capital reinvestment requirements are modest, leaving maximum cash available for shareholder distributions and balance sheet deleveraging.
FY2026 EBIT was $1,300.6M on $7,476.8M revenue (17.4% margin),, and management guided FY2027 adjusted operating margin to approximately 21.0%.
Digital proxy distribution transition and GTO operational scale generate positive operating leverage, driving operating profit growth faster than top-line revenue.
Management guided event-driven revenues to moderate to $250M-$300M in FY2027, while overall recurring revenue is guided to grow 6% to 8% constant currency.
High recurring revenue share (>80%) insulates consolidated performance from transactional normalization, providing a dependable floor for top-line expansion.
| Marge |
|---|
| BR | Broadridge Financial Solutions Inc. | $18.7B | 15.5x | 2.5x | 12.1x | 40.9% | — |
| CTSH | Cognizant Technology Solutions Corporation | $28.0B | 9.3x | 1.3x | 7.0x | 14.9% | 17.5% |
| JKHY | Jack Henry & Associates Inc. | $10.5B | 18.9x | 4.1x | 15.0x | 24.0% | 22.5% |
| IT | Gartner Inc. | $12.1B | 11.7x | 1.9x | 10.2x | 113.6% | 22.6% |
| LDOS | Leidos Holdings Inc. | $15.3B | 9.6x | 0.9x | 8.8x | 27.8% | 11.7% |
| Postage Inflation and Declining Physical Print Volume | neutral | USPS postage increases lift gross distribution revenues but carry zero operating margin,, accelerating client transition to high-margin electronic delivery channels. |
| Drops below 18.5% on a trailing twelve-month basis |
| Assess whether margin contraction stems from regulatory fee compression or pass-through print costs; downgrade rating if fee cuts are structural. |
| Free Cash Flow Conversion of Net Income | Falls below 85.0% on an annual basis | Investigate capital expenditure escalation or working capital deterioration, reducing buyback-driven EPS growth assumptions. |
| GTO Annual Revenue Growth | Falls at or below 3.0% for FY2027 | Reduce bull case scenario probability from 15% to 5% and lower terminal growth assumptions. |
