BR - Earnings call transcript Q1 2020 | Broadridge Financial Solutions, Inc.

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Operator

Good morning, everyone and welcome to the Broadridge First Quarter 2020 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. Please also note, today's event is being recorded.

At this time, I'd like to turn the conference call over to Mr. Investor of Head Thibault, Relations. Edings ahead. Sir, please go

Edings Thibault

to Thank quarter first welcome you, Good morning Jamie. Broadridge's XXXX fiscal and earnings call.

Our the of slides be earnings that accompany this the release call found Investor broadridge.com. on section Relations and may

Joining our Jim and Gokey, are CEO the me our call on morning Tim this Young. CFO

to the standard a reminders. Before I Tim turn call over few

the referring risks XX-K. will their understanding we believe of slides report second comparable risks. A be found involve GAAP be measures be earnings Broadridge regarding that the explanation complete provide complete more making We a operating measures, on underlying on of non-GAAP and forward-looking more An can measures these and results. description can a several call to the presentation. Broadridge's page annual found of in non-GAAP statements to of We'll on investors today's our be summary release reconciliations which on also Form these with and

the Tim call Let me over now Gokey. to turn

Tim Gokey

Thank about solid first trends. morning, you, first and to a the is had positioned well recurring growth. Broadridge and year. good business We we everyone call for today. sales revenue Edings, feel record on generated quarter our had X% the underlying quarter and We continue good

We and that across drive also completed each Broadridge tuck-in franchises will long strengthen acquisitions of our term growth.

longer so a ongoing for in anticipated well While is industry deliver activity year small fiscal to seasonally this term underline results year we growth. and event guidance. quarter, our the why well we our trends full Moreover, lower to strong largely impacted are positioned XXXX are positioned driven Broadridge continue reaffirming

solutions together seen overview from of results, M&A advisor strengthen GTO. you quarter our our Jim, an with shift first the And including then the it I'll few will wealth of franchises. This morning, months. we've past our increased fits results. with the how our review of level provide follow brief to ICS given a and overview of over I'll financial

always, close with questions. your we'll As

Broadridge Let's on X. started get Slide first results. quarter reported solid

mind is that's Typically, we adjusted up. generate and in the year keep our the quarter, right the we first that analyze in full seasonally lightest ended of where EPS XX% quarter our we QX XX% of anywhere to from As year.

With With we that stronger the sales. year touch results. $XXX fourth the which taken X% part million on let's already in performing that was in ability in minus revenue revenues made expect both place. by million on are have mind, to our rose backlog growth Jim headline last in acquisitions very mentioned have Recurring from ICS accelerate a growth X driven it good the to X%, well. driven but from we to like Organic on-boarding generate through by $XXX the we sales large quarter, and GTO quarter,

will to significantly revenues event a expected, relative of a from driven how an year plays into benefited decline As that this we our declined of significant quarter driven of event the the Jim proxy at lasting update drove fund in earnings. complex. give first XXXX. mutual XXXX, most large and campaign that And forecast. The full Recall revenues in campaign on

the on than million record, more our rose $XX the point sales. strength Last first speaks to Close business. Strong XXX% which results. quarter underlying to sales of

of M&A tuck our all our months market. in made first in the investments gratifying I'm and with the the strong we with fourth coming focus up over the pleased Our sales in of are quarter our across franchise indication targeted three see quarter past areas. momentum especially business an few we've

business have governance, and the profile long over and management. capital and collectively our discuss minutes, will few I past across wealth strengthened markets, term in investment a months As our investments improved our XX growth

to deliver year track the from takeaway line of key and bottom top the Finally, another is growth. remains strong on quarter Broadridge the

continue to three the Investor EPS on year X% range. adjusted you at in our fee recurring Day, our to We we objective 'XX. high growth including fiscal XXXX and XX% year strong adjusted growth with sales XX% deliver to us end EPS growth the to revenue shared X% This growth expect of outlook positions at

brokers services industry Beyond of have that the months year 'XX, by fiscal industry facing focus move the the cost banks in and evidence global our to the to brought and past to slashed trends significant commissions opportunity strengthened ongoing my online few The financial is in potential challenges faces. industry trading strategic confidence have structural have only The outlook increased the pressures. front growth us. by realign home driven

In and the addition, implement drive are interest directive. the constant for change best growth. with These remains the SEC, moves to the challenges regulation helping rights rapidly regulatory Europe our shareholder in moving

functions; Financial firms businesses clients. neutralize adapt industry their tap, data; and their effectiveness more serve they them move That's embrace the and services evolve how need rapidly non-differentiating solutions to to to to their of communications. raise and better to critical causing

As we provide and solutions. Broadridge in sales our see record these no positioned is one out than to better playing backlog,

challenges by trends so fueled that about reinforce we are growth have why the industry faced underlying our all excited the and they remain the So only real. outlook. our highlight They

segment. a ICS with for start Now let's turn our results. of to Slide review our X I'll

biggest share fund driven the Our assets. recent Ameritrade by in addition drive the X%, where excluding was ETF driver TD communications gains and of XX% helps customer organic higher growth. revenues recurring revenues, organic The retirement rose growth mutual

growth stock X%. was at record Equity solid

and are interim growth record fiscal course record record in 'XX. getting not Our of bound slowed of the early unusual X%, ETF quarter to be over it. interim the bound to fund before expect we interim and slowdowns we growth growth Temporary

and products. nicely strong And losses client fell X% The nutrition. benefited combination Culture progress for bio our data the business. the Assets from acquisition growth. analytics with in segment and ICS demand integration pleased Our I'm by we're of our also the communications added making of TD that driven of to revenue

proxy first quarter year-over-year, the event as As revenues fiscal exceptionally mutual declined fund revenues and in levels. 'XX normalized strong to more expected, driven steeply returned activity left we

of a in the excited by proxy GTO remainder Organic the and our year. the through back organic of We at part to meaningfully the for campaign X% we the driven and delay, fund growth growth by event momentum second be driven business the up half which see complete remainder for I and quarter picking the grew we now at pick of large by mid-teens expect quarter on-boarding for to in the year. quarter growth revenue an complex. where was second mutual continue the up XX% therefore expect held is year, of in

part first driven contributed license in also sales. quarter results, by for strong has RPM of acquisition The nicely

an large when for the Broadridge the scope sales the these as result of meaningful we particularly While for a expand able business, to RPM solution a client a pipeline relationship. acquired we were of

it's good see early on So to an revenue expected return synergies. our

the wealth GTO another management our business creation advisor took by for to of within also ICS step a solutions transferring segment from products separate We GTO.

We is a are from whole wealth this our more from but together a modest share unified a solutions small revenue and perspective; into pulling the detail. will meaningful Jim

posted Broadridge record importantly, and quarter sales. first Finally,

in European sale services trade multiple momentum management see wins technology from Banks, It's as We landmark we're last government result major tough sale product strong as of second the major asset and the we in included as sales year, Notable and off year our strong increase manager. through our a post well quarter an of the we UBS to provide lines. in early a across global faced continue start. platform comp to to a

strengthen past to months, business. our has been front making multiple M&A acquisitions the Broadridge very few the active on

help So I want minutes recent to goals. achieve they strategic take to will few review our a us why and our deals,

Let's with we our turn almost last $XXX out stewardship in and our tuck the the linked of an extend franchise fiscal is XX governance are strategy to are governance, discussion. laid 'XX, These communications to services next goals. million. Slide governance the at tightly network. total part and strategic generation our acquisitions across integral our aligned to of a that strategy capital to strategy Day. investments the we've deploying to investment Acquisitions tightly and our made X, In Investor start build Since are end of of

We recently analytics driven strategy. strengthens the accelerate asset. analytics in regulation of more the capabilities Ameritrade focus TD million help set months expanded that our to that intermediaries and most and significantly our retirement fiduciary data XX advisors accreditation, data for $XXX FiXXX invested provides the than with data FiXXX solutions, solution past interest. We broadens best

to open issuer future architecture an capabilities strengthens suite in end our role We've since we've of nearly Canada, solution in operations. to capabilities. invested vision this the integrate the broadened RPM also management. acquisition fiscal wealth, banking Acquisitions million products was strengthened $XXX digital our our playing And and business for advisors wealth that extends the and added creating are we're important into wealth 'XX. and footprint our investors, The for biggest our communications regulatory and

around lending, space capabilities and new compensation. recently, acquired security, also most We advisor

In we're I'm the October in capital growth Much our were organic. business that driving of growth globally. But Shadow of pleased derivatives objectives classes, Across investments Financial term currencies. wealth our markets been crypto to our profile. has broadening able that acquire our markets, new and we accelerate have growth asset long into traded strengthened including and and capital management, strategic exchange M&A capabilities governance, helped our

financial growth with above organically. what The should front and with exit benefits had to market FYXX on been relationships to for These year our execute. well. contribute months Investor approximately three $XXX have Moreover, M&A busy points for revenue been blended our our additional six recurring we the expect deepened to capabilities total, transactions us CAGR, I'm this corporate a broadened accretive the niche able clients, about have be well given talent excited X added addressable and It in adding line clear run Day In key rate objectives. average. as them organic we've past and rate, investments with growth revenue million our

we're years. prospects sale to period time, in and many cases sheet, able With flow over right opportunity strong short We've even for multiple of talking a the been cash some act properties balance of comes, come for for when these when to time. some

great flexibility. As CEO, it that to is have

capital So continue attractive no change tuck-ins. strategy, and allocation to for look to our

the I key call but review let me do, Jim, turn financials over now I'll our before to who'll messages. our summarize

First, record sales. solid revenue with growth results we first quarter recurring quarter and reported X% first

trends industry positioned Broadridge is longer for why ongoing term Second, well growth. underline

objective And to and to growth fee the make X% business to continue 'XX growth with recurring that Broadridge EPS. we're to adjusted our a strategic growth. XX% and Third, to on fourth, position in fiscal revenue deliver XX% strong across track accelerate for X% investments

services year time a transforming Broadridge. exciting the key in strong energize We're the and role an to track financial It's while another deliver to on be industry. opportunities at play

The it work their our us others. around the and lives Jim? to associates turn Before XX,XXX enables nearly for of clients, do for millions our to of chain. dedication, our they Jim, the world and to thank all financial work over I better I strengthens corresponding want and clients hard for

Jim Young

and a Tim Thanks and quarter to everyone. fiscal strong morning reported a solid good track deliver we're on year Broadridge XXXX. first

reviewing Before a few outs. call results, our I'll make

on First, seasonality. reminder a

quarter the at outlook first with our revenue EPS Our typically the we smallest historical adjusted our in provided quarter year recurring Consistent at guidance our QX of in of average, is XX% EPS came the our August mid-point. year. in full earnings adjusted in

year-to-date fiscal tuck-in have through $XXX targeted million we acquisitions, with in our early aligned franchise acquisitions Second; invested strategy. four November,

point contribute growth these fiscal to 'XX. that expect We acquisitions recurring in additional an will fee

acquisitions dilutive cost. fiscal these 'XX that expect also for after financing be earnings accounting in We will

X.X adjusted to X.X seasonally to the leverage was spike and free in coupled above our times. at our pushed temporary with September This term times investments close XX, target long finish year our These to of cash negative ratio slightly a target. expect up flow our we QX

event Third, driven activity.

declined million bit from revenue decline year a our quarter first A expectations. expected, than As QX first fee event were notably driven lower also a in $XX ago, fees record earnings. driving event quarter a

to prior fees initial a significant to with of event our of normalizing end proxy periods full Fourth, proxy for modest event of some reporting. level X% of expectations at be fees to fund notable mutual this segment activity However, year our now in XX%. changes or expect contest. We decline low line the

our strategy have management into we of part consolidated advisor ICS, from our a $XX million products of manual GTO in franchise, representing revenue As fiscal building wealth solutions 'XX.

Fifth been revenue supplemental remarks. and revised presentation and change the have show All be for I'll 'XX 'XX. product all revised of my to numbers segment numbers quarters the for revised in four guidance. this and referring reflect breakout importantly, the The numbers to Appendix fiscal most fiscal

We year and year expect to reaffirming full metrics. are across deliver XXXX guidance a strong all fiscal

Acquisitions fee with X%, to revenues. fourth Recurring points carry rose revenues drivers. acquisitions, new healthy largest revenue the below as Slide of quarter first quarter Let's both TD X review RPM, business and in turn as light growth coming ICS sales to X% of XXXX our in segments or on-boarding at the for fee and closed a organic was sales the here our Rockall. across was growth recurring quarter. our and continue contributor backlog. I'll GTO Organic on-board quarter ship recurring fee start at fiscal from X was our shown of away we

Internal organic growth, first communications professional contributor a consistent lower the mutual slower quarter work. was and to negative growth, been interims, driven services fund which in has by less customer ETF modestly growth volumes and in

other on-boardings, a on, factors. touched accelerate to organic more by expect Tim we and levels interim the driven proxy in return growth normalized of As year, among of record to GTO revenue remainder growth healthy volumes

following British FX distribution the fee acquisitions million in Rockall quarter. RPM were and levels year the by revenues, in offset event Strong had recurring line. total a $XXX impact largely to and driven revenues driven and the Moving finally, a and Total negative down of gains expected related event And declined record ago. fee decline on a our X% pound revenues modest to revenue. weaker

performance from segments ICS I'll X. Slide GTO Next, and the of cover our

the I start for ICS; GTO fee relocation earlier my As periods. reflect to remarks, both in grew indicated I'll from products certain solutions with results X%. advisory these ICS revenues of recurring

increase, communications. contributed business the impact known Looking at solid inclusive X client and losses net behind the customer points the from drivers new of X% gains

and the fiscal The interim that an Internal activity X assets that year. closed growth in some to growth pushed impact slowdown the negative, proxy slightly 'XX, the largely of weaker Ameritrade of volumes from and record X%, dipped growth. of communication customer contributed equity to later additional in points acquisition QX TD

FiXXX ICS growth. Appatura Going recurring acquisitions will forward, also revenue and the contribute we expect of to

of continued as year contribution the analytics over levels in second We normalized 'XX, the expect event distribution to the the ICS up balance more of growth pick benefit the revenues reported XX% in $XXX primarily full declined growth at total we fiscal decline fiscal driven the ICS record million weight and half to the organic earlier volumes products. driven to come our revenues year 'XX. our fees now year, end from return Again interim expect of proxy and estimate from full low event of data revenues. higher and we decline we from in X% of to of related a of to in the X%

Rockall accelerated points to GTO, Turning in GTO XX% from revenue growth growth in RPM some of that to QX XX and driven remarks. sales strong RPM referenced his included the acquisitions. license by Tim

front to schedule on-boarding Tim On deliver and full terms major single-digit are as back year. for growth the mid-to-high on also GTO the activity noted, of and organic organic in we expect we

gap fill mid-teens Shadow we a as that growth expect forward, stronger the and of with revenue we Looking the will bit, weigh contribution financial from for expect that recurring organic in year. services. revenue growth will addition that the to And the growth in acquisitions database even continue

profits event or the driven Adjusted the incremental infrastructure. significant first leverage income to existing turn event million decline fee profitability, that cost in they revenues. by quarter, XX% operating driven Slide levels as carry Remember, X. revenues in $XX in Let's of declined on

compensation operating and year those drops, excess equity modestly So rate included income million did million our XX.X%, like ago. our tax $X come the investment QX. benefit down small income for $X.X from from Below they in earnings in in revenues QX, tax down quarters of that a especially as when was benefits we significantly number, gains line, effective

of quarter, guidance XX% year typical representing full EPS we outlook August our to XX% adjusted We small first result in seasonally continue the This $X.XX to quarter. EPS the year benefit the with Adjusted a for $XX provided million. midpoint. very of for fell is contribution earnings full at ETB expect consistent and the

quarter. negative flow of and Broadridge in to Free fiscal flow turn the free is Let's million in cash 'XX. negative quarter cash that and $XXX typically case the was generated in XX. on Slide the balance cash first flow again the first sheet

our months is million objectives. two and for and with acquisitions. an $XXX tuck-in Shadow Tim and tightly largest $XX Broadridge quarter. important strategic part million M&A the $XXX first allocation of fiscal 'XX FiXXX, As framework aligned invested second noted, our four four The completing is enclosed a of in million respectively deals the accounted capital in

We and also acquisitions, smaller made October. in two other September one in one

recurring points acquisitions plus revenue our in the will expect combined 'XX fiscal 'XX. 'XX growth fiscal to X and We contribute

Given our It's we're of with the these and $XX modest our peak to from and Broadridge in busy also the In a very form in invested million dividend. 'XX the and million $XX contribution deals. quarter, typical reinvestment we financing in shareholders acquisitions. quarters expenditures quarterly returned expect combined fiscal approach been EPS pleased costs, capital

using ratio, and will a the term result pick bit it the as XX adjusted cash spike and of capital strategy times in September leverage FiXXX. M&A price X.X debt-to-EBITDAR There's $XXX negative and allocation There's the of leverage at flow times that Broadridge's target. the long temporary up for timing million target closings. Again, again no was change X.X purchase free above reflecting QX a to of a and we QX seasonally our anticipate

September that current times debt. $XXX long year XXXX. leverage target. appears in to is shares pursue an we additional the $XXX stronger benefit while Separately, de-lever repurchase the cash seasonally because in finishing as and portion note at course flows notes from in opportunities year, our of of we free M&A This million tuck-in to the have second term flexibility X.X coming and the we attractive normal in you'll As the half to expect line now with due senior generate million or

conditions, at capital to our that opportunistically quarters of next we capital upcoming appropriately raising consider of manage To the plans addition some order couple allocation support and will our point over market to, in subject maturities.

Page turn guidance XX. Let's on to

is XXXX Our unchanged. fiscal year guidance

expect growth as pick fee X% to to XX%. up above expect through revenue That mid-single-digit includes GTO in ICS organic growth to continue recurring year. to be we growth We organic range of a and the

We range a to revenues X% including fee expect of close decline to total of in to the driven growth revenue event be XX%. in X%

adjusted margin approximately We our XX%. operating expect to be income

to adjusted EPS be growth X% expect to We XX%.

the sales close expect million. million range to be to in of We $XXX $XXX

that in we QX, the QX to before as note of line second half the you please strengthening year. revenues driven Finally, think expect event be results, with about in

With expect this represents. EPS with the revenues at and approximately so or event the first typically driven half be level, be level adjusted results year we EPS QX first as to adjusted XX% quarter full

the up, a of also remain fiscal track year sum off deliver our start objectives guidance to track on end of strong we're So fiscal in solid and full fiscal to concluded to three to at our importantly, a we year XXXX and XXXX. meet which we're on XXXX

Jamie we will questions. for open now it up

Operator

Instructions] [Operator

will time at [Operator the question. Instructions] comes from David Togut Ladies from and your and Evercore gentlemen, go this we question ISI. Our today with ahead session. first begin Please question answer

DavidTogut

good Tim Jim. and Thank morning you,

organic Just revenue at expectations on little X%. the late a growth a came quick looks first question for in quarter fiscal XXXX, like

percentage As you XX% XXXX growth in reiterating X% growth fee you're your organic how comes look revenue versus acquisitions? from many to recurring which at the of that points guide,

JimYoung

David, morning this is Jim. Good

us in from mid-single-digit X organic the target acquisitions will growth As keep or I so which for think contribution. right come said, points we about

of course especially year, the balance as see ramp As year. the these you up really over feel the we we good point the GTO of over on-boardings out

DavidTogut

XPPT so you June I call on change? Got acquisitions FYXX growth a think out for the it. Jim, of that's And called from quarter

JimYoung

point these Correct, add acquisitions will growth. added our because about four just a we revenue to which just added, we

DavidTogut

is a is revenue or in so on the anything delay guide and growth, just changing least Understood growth to expectation this for coming final growth revenue GTO? question, with point the a - organic this recurring else just point then at on-boarding your at in the X or below expectations about XX or fee there

JimYoung

kind at QX a few we of when transitory rest of we items. see look David year, to relative definitely the Yeah, the

on-boarding come to as quarter interim beginning opposed low in that of later so slightly the the to growth, record we expect in had pickup You quarter. with the

we benefit. So quarter the will get full

later small activities last quarter, have we things going equity Next pushing in year, to fell proxy quarter, QX that we're some like to be appears but now the in to year. have

types starting and organic organic we the So X% those things is for in that to the of light for the that track are pace put the us pick rate. used quarter mid-single-digit up we on that QX and that growth believe

DavidTogut

very you thank Understood, much.

Operator

Darrin ahead comes Our Peller Research. question. go next from Please with Wolfe question your from

DarrinPeller

all good guess about a Look, see but to I on GTO what mean the on M&A forma mean first I thanks. implementations the GTO little start-off. just the want have the the explain say guys I growth you growth I think then, And follow side. of time to activity side? up it's more now? importantly organic would is profile more I if would been were bit contributing, of pro Hey, that on to what

run you it of have be? year deals in words, profile was be what rate, I all other ago, your GTO growth In owned the these a would know

JimYoung

Jim, Darrin mid-single-digit as be and in we've feeling to like And we quarter. come you of QX ups I looking at year this as well can is growth what have know, been that's downs small what organic opposed to especially this it's and a to rate. a some would measured, going back have sort we think

So mid-single-digit rate. again, this track solid; growth really we on organic we're for feel

average And year. the as actually we that think about above business the for this look being GTO, at we

So to are we're speaking single-digit mentioned, that high accretive to acquisitions mid as to targeting rate. Tim growth GTO The growth. be organic generally

targeting mid expect few they'll us, like with spot. So big on really the deadly rate. revenue backlog for relatively But growth high in we annualized balance to single-digits behind things a small the on grand But good of for GTO GTO. growth help again, balance, feels those

TimGokey

add to that on Darrin. just Yeah, to

because within had. ago, higher it's a year-on-year you these they an nice are We experiencing year interesting think question owned very those organic businesses growth reporting we probably businesses. I be would

where profile, good the especially on sales experiencing year. really good about from the this side revenue feel we we're GTO So

DarrinPeller

mean and years was some point a terms off a from I BRCC at I Do on point, Where or on some reflecting a that still soon? that that's side, that in the turning this of that transitory then been half foresee business? guess at are ago. Okay, you a and of ago full just leveling year headwind, business year, we two

TimGokey

of major it's Darrin are to expecting to means contributor is, through boarding fiscal earnings Tim, Yeah. to that continuing we to work you go we to talking revenue, off news BRCC not a growth. client, which as good a revenue news but the we're 'XX And mentioned and that the client the it. are in about be is bad away make is taking more we'll longer still that growth

continue But think going to anticipated be that had We fiscal done actually by we that's will throughout 'XX. now.

growth that, about here discussions thesis. not thesis, which their good in is that are part mid-term to offset was the in-house we point a with long-term enough do think other continue volumes. seeing of digital investment large we products correct I transaction part to clients communications And, of have is our key our the

DarrinPeller

Okay, that's helpful.

one over quick And of of I continues in mean, how flow the $XXX of and But then million Can terms also, to timing about versus importantly, the was you it next the few through year the bookings, quarters inorganic and beyond? more much new just strong. that backlog through the backlog, of revenue the organic? of one. backlog? look in Just last terms flow the talk

TimGokey

Darren.

features So backlog revenue obviously our prominently revenue in growth. the

our number we points digit a rate of that of mid-single the we're targeting, that majority of organic growth that points growth need in growth, coming from of backlog. So

quantification So that of I our that, but you won't an driver give exact every is year.

business healthy the that But with how to as the add continued always revenue you anticipate can this going coming X period. that it. we thinking give we'll on about is we sense points X, is And of growth have again, do add a type but So any conversion backlog. of a one X, ending we year backlog that of from

DarrinPeller

Alright. guys. That's helpful, Thanks, Tim.

Operator

question. ahead from comes Davidson. go Please your Our next Heckman Peter question D.A. from with

PeterHeckman

looks work you about puts and Can of morning, pursuing gentlemen. the Good that some Broadridge facilitate both the serious of that takes for both like relatively would universal the talk industry? then and how about they're SEC things and confirms, proxy to

TimGokey

Peter, while is there Yeah. on question. - we Investment last Thanks, it's significant work Advisors. proxy. There's broadly, on hasn't just some regulatory made say statements been meeting around around good is this They to a contained since anything I'd really call. issues And Tim. are the front a The definitely And SEC that's our that yesterday.

work when proxy talk of to what and card. some mentioned, proxy which And things on plumbing, universal and potentially they confirmation about And talking invoke the proxy plumbing. some about is largely you they're

well on those. set We are up deliver to both of

We are introducing significant we're end-to-end where confirmation for tabulator companies. is which year, the this public those clients of portion

positive confidence. established. us. with development fee particular any everyone's Not public and from overall characteristic, corporate governance positive for think is to But We a for this of need are the just has terms all industry development a introduce in in a companies. that working for SEC We cooperation others as working but increasing we the group

is are to and the decided definitely industry. universal the look by have to respect able proxy, we With that's whatever and something implementing by prototypes forward SEC around the and to that support

Operator

ahead from from comes your Chris. question Chris next with Our Donat Please Sandler question. O'Neill go

ChrisDonat

want Good some doing brokers to the morning. going related pricing of five with and their XX for zero last It is ETF then to on that. over term having to questions. commissions. a years ask Thanks brokers for promotional to in guess, used proliferation of number ETFs this I ETFs launching taking this my own the the of longer part for be commissions to one sort And of - the growth. position I the, a expectations year about

potentially something commission you to and the think the any rationale consolidate brokerage the have think economic like how one ETF lead what might fees would might zero that impact And fewer away. ETFs. handful outcome think for Now, Is large I industry seems liquid going be a on the see the there ownership? that Are would you that even ETFs on if you ETFs positions? about it those is really happen of general do in

TimGokey

Yeah. Chris, question. very interesting

ETFs are really pricing. in a have liquidity clients think to characteristics for and I benefits of of nice terms vehicle that and intraday their lot a other

It to know held that And I I be those popular. think very been continue true some so how is ones. brokers to they're going trend introducing widely hours. there around has don't

with actually now talking think more trend active different people is proliferation factory And bigger about the of ETFs. ETF. I

lot a So there causing is change there. that is

has I think the while continued. sort that gone has down, of growth growing public interesting companies is number stopped position even and another analogy of

So out I'm a since - choices not you there. of just sure between position and that zero there's I a number growth will mentioned correlation commissions.

actually let about me because I the to a a is of think determine. I that little hard people little what is. that. impact timing is hard And is talk bit about The that wondering something bit that, to Just think

So we've essentially, that the unexpected, a just it's long be term may seen. but timing trends

wealth side biggest the Schwab, Fidelity, are on The brokers, Those is are part online impact e-Trade, much seeing side. ticking more wealth their we really creating how is for clearly need not But the not all that managers on business managers. We're from because our of is book. Ameritrade. model as of the significant and to focused wealth advisor value the asset and trading add they from evolve stock management is terms the as change in it

that evolution, range clients work that a but is support new down really to take to also the in these helps create with services us differentiation. so broad as costs, that it of And accomplish differentiation. of And invest only sources for to think them they I not favoring we need technology

important. those of is signals it's that evolve, continues to So the one just, why is which technology so world clear

ChrisDonat

or change commissions, just on it. the you side of the lower And fixed your really wondering of piece pricing said your more that? small to do But that the or it to that too that and less revenues. Related soon tell books just given Got are you forward think online GTO on your evolution and going is might piece industry. thanks the contracts being on volumetric and for

TimGokey

look and position one focusing discussions the of is these their more a about clients cost number really had aligns contracts for term Yeah, discussions trades, with their impact term term I years. long see and what us pretty revenue in some positions to construct a you any too our model it's idea the expect think cost than drivers we're on to contracts about It revenue and tell. early nature. long But those really go that. because positions. in drivers long is looking with all positions the We've their the I of of wouldn't side aligns And number to And are with at are more wealth that on on our managers - model. may are way a be our and and on between better

ChrisDonat

it. Got

Tim. much, very Thanks Okay.

TimGokey

You bet.

Operator

our question JPMorgan. from question. And your comes next Puneet go from with Please Jain ahead

PuneetJain

sales contribute I trends Okay, expect in growth also gross to rest the thanks acceleration for you Can you my taking internal review growth? expected to know year. of question.

JimYoung

it this as which key you evenly Sure, mentioned, recall a growth as the record in to drivers are back. quarter. expecting of in interim fairly little We're to there comes low couple going come be we throughout year,

in of it. And we that's growth our terms pick up the growth to equity biggest back position SRG refer internal specifically contribution. probably weighted as half to really contributor single is that then, even that'll QX. And in So

those year. we contribution half we come nice as expect as the get growth really the into of So to back internal play,

little than But professional the it's the that of eye number. the of sort we are we contributor as there. growth with of services full drivers in there Other that keep is takes to about always that keep along and trade some really But and really, here year always growth, eye bit which to are mix. position our on on degree a that think that your big throughout rest puts the business,

PuneetJain

you you UBS it from been benefit any the closing too since seeing while from effect or Are contract. a Got it's it. other closed And clients, deal that? wealth flywheel for UBS is management early quite the with

TimGokey

it's Puneet, Tim.

other very just the lot nodding excited large open created of platform the we a discussions And lot about with And managers. all, pain has progress UBS on of a there. architecture good to there's It of when positivity. the and lots we continue and talked points, future, itself. wealth First the I'm about of really of make technology head

said, in these that conversations you as nature. are out, All long-term pointed

about I to with is with our you the to that in say the managers some capability strengthen other of And nothing that would separate and our imminent certainly conversations creation from is What there's wealth are other the wealth and new So ways continuing the we saw platform of platform. wealth report. that M&A.

You what's When are look at progress there. components. some in as look into we develop these that seeing the onboarding, wealth we're third wealth with we of that at some significant our our recent do they happening good moving GTO. underlying our product franchise, lines into seeing you of business include When

we So track, the on the and is we about excited think be to continue opportunity. strategy

PuneetJain

it. Thank Got you.

Operator

management and I'd And the any additional back showing this at remarks. over questions. like ladies turn time conference for no to closing to call gentlemen, I'm

Tim Gokey

Well, thank number. trends. good a everyone, to fee the feel summarize, about for thank very Obviously, X% underlying our today. as just and I business want record recurring being revenue you sales you. And to here we

trend our really As in support full you to growth. confidence long-term making have year heard, the to reiterating we're investments guidance. that the we're continue we a and that in good And

So thank And again to again. quarter. look forward you to very much you next talk

Operator

Ladies and conference you. today's with call joining you gentlemen, presentation. today's does Thank conclude for that

You may your lines. disconnect now

Edings Thibault	Head of Investor Relations
Tim Gokey	President and Chief Executive Officer
Jim Young	Corp Vice President and Chief Financial Officer
David Togut	Evercore ISI
Darrin Peller	Wolfe Research
Peter Heckman	D.A. Davidson
Chris Donat	Sandler O'Neill
Puneet Jain	JP Morgan

Broadridge Financial Solutions (BR) 6 Nov 192020 Q1 Earnings call transcript