filings.toolsItem 8. Financial Statements and Supplementary Data
199K characters. Original on sec.gov · Markdown
Item 8. Financial Statements and Supplementary Data
INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders and the Board of Directors of Broadridge Financial Solutions, Inc.
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated balance sheets of Broadridge Financial Solutions, Inc. and subsidiaries (the “Company”) as of June 30, 2025 and 2024, the related consolidated statements of earnings, comprehensive income, stockholders’ equity, and cash flows, for each of the three years in the period ended June 30, 2025, and the related notes and the financial statement schedule listed in the Index at Item 15 (collectively referred to as the “financial statements”). We also have audited the Company’s internal control over financial reporting as of June 30, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of June 30, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended June 30, 2025, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of June 30, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.
Basis for Opinions
The Company’s management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on these financial statements and an opinion on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
Our audits of the financial statements included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures to respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
| Goodwill - Refer to Notes 2 and 10 to the financial statements | ||
| Critical Audit Matter Description The Company’s evaluation of goodwill for impairment involves the comparison of the fair value of each reporting unit to its carrying value. The Company determines the fair value of its reporting units using the income approach, which considers a discounted future cash flow analysis using various assumptions, including projections of revenues based on assumed long-term growth rates and projections of earnings before interest and taxes, estimated costs and appropriate discount rates based on the particular reporting unit’s weighted-average cost of capital. The principal factors used in the discounted cash flow analysis requiring judgment are the projected future operating cash flows based on forecasted earnings before interest and taxes, including projections of revenues, and the selection of the terminal value growth rate and discount rate assumptions. During fiscal year 2025, the Company performed the required impairment tests of goodwill and determined that there was no impairment. The Company also performed a sensitivity analysis under Step 1 of the goodwill impairment test assuming hypothetical reductions in the fair values of the reporting units. A 10% change in their estimates of projected future operating cash flows, discount rates, or terminal value growth rates used in their calculations of the fair values of the reporting units would not result in an impairment of their goodwill. Auditing the fair value of a reporting unit within the Global Technology Operations (GTO) segment involved a high degree of subjectivity, including the need to involve our fair value specialists, as it relates to evaluating whether management’s judgments in determining whether the projected future operating cash flows based on forecasted earnings before interest and taxes, including projections of revenues, selection of terminal value growth rates and the weighted-average cost of capital used to determine the discount rates were appropriate. | ||
| How this Critical Audit Matter Was Addressed in the Audit | ||
| Our audit procedures related to the projected future operating cash flows based on forecasted earnings before interest and taxes, including projections of revenues, selection of the terminal value growth rates and weighted-average cost of capital used to determine the discount rates for a reporting unit within the GTO segment included the following, among others: • We tested the effectiveness of controls over goodwill, including those over the projected future operating cash flows based on forecasted earnings before interest and taxes, including projections of revenues, and the selection of the terminal value growth rates and weighted-average cost of capital used to determine the discount rates. • We performed a sensitivity analysis on the projected future operating cash flows to determine what revenue and earnings before interest and taxes growth rates are needed to cause an impairment for certain of the reporting units. • We evaluated the reasonableness of management’s projected future operating cash flows based on forecasted earnings before interest and taxes, including projections of revenues by comparing to (1) historical results for the reporting unit, (2) internal communications to management and the Board of Directors, and (3) forecasted information included in Company press releases, analyst and industry reports of the Company and companies in its peer group. • We considered the impact of changes in the regulatory environment, uncertainty in the market, and economic conditions on management’s forecasts. • With the assistance of our fair value specialists, we evaluated the discount rate and terminal value growth rate for the reporting unit, including testing the underlying source information and the mathematical accuracy of the calculations by developing a range of independent estimates and comparing those to the discount and terminal value growth rates selected by management. |
/s/ DELOITTE & TOUCHE LLP
New York, New York
August 5, 2025
We have served as the Company's auditor since 2007.
Broadridge Financial Solutions, Inc.
Consolidated Statements of Earnings
(In millions, except per share amounts)
| Years ended June 30, | |||||||||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||||||||
| Revenues | (Note 3) | $ | 6,889.1 | $ | 6,506.8 | $ | 6,060.9 | ||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Cost of revenues | 4,752.3 | 4,572.9 | 4,275.5 | ||||||||||||||||||||
| Selling, general and administrative expenses | 948.2 | 916.8 | 849.0 | ||||||||||||||||||||
| Total operating expenses | 5,700.6 | 5,489.7 | 5,124.5 | ||||||||||||||||||||
| Operating income | 1,188.6 | 1,017.1 | 936.4 | ||||||||||||||||||||
| Interest expense, net | (Note 5) | (122.7) | (138.1) | (135.5) | |||||||||||||||||||
| Other non-operating expenses, net | (7.1) | (1.7) | (6.0) | ||||||||||||||||||||
| Earnings before income taxes | 1,058.7 | 877.4 | 794.9 | ||||||||||||||||||||
| Provision for income taxes | (Note 18) | 219.2 | 179.3 | 164.3 | |||||||||||||||||||
| Net earnings | $ | 839.5 | $ | 698.1 | $ | 630.6 | |||||||||||||||||
| Basic earnings per share | $ | 7.17 | $ | 5.93 | $ | 5.36 | |||||||||||||||||
| Diluted earnings per share | $ | 7.10 | $ | 5.86 | $ | 5.30 | |||||||||||||||||
| Weighted-average shares outstanding: | |||||||||||||||||||||||
| Basic | (Note 4) | 117.1 | 117.7 | 117.7 | |||||||||||||||||||
| Diluted | (Note 4) | 118.3 | 119.1 | 119.0 |
Amounts may not sum due to rounding.
See notes to consolidated financial statements.
Broadridge Financial Solutions, Inc.
Consolidated Statements of Comprehensive Income
(In millions)
| Years ended June 30, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| Net earnings | $ | 839.5 | $ | 698.1 | $ | 630.6 | ||||||||||||||
| Other comprehensive income (loss), net: | ||||||||||||||||||||
| Foreign currency translation adjustments | 56.7 | (46.8) | (59.4) | |||||||||||||||||
| Pension and post-retirement liability adjustment, net of tax benefit (provision) of $(0.4), $0.4 and $(0.1) for the years ended June 30, 2025, 2024 and 2023, respectively | 1.3 | (1.1) | 0.2 | |||||||||||||||||
| Cash flow hedge amortization, net of taxes of $(0.3), $(0.3), and $(0.3) for the years ended June 30, 2025, 2024 and 2023, respectively | 0.8 | 0.8 | 0.8 | |||||||||||||||||
| Total other comprehensive income (loss), net | 58.8 | (47.0) | (58.4) | |||||||||||||||||
| Comprehensive income | $ | 898.3 | $ | 651.1 | $ | 572.2 |
Amounts may not sum due to rounding.
See notes to consolidated financial statements.
Broadridge Financial Solutions, Inc.
Consolidated Balance Sheets
(In millions, except per share amounts)
| June 30, 2025 | June 30, 2024 | ||||||||||||||||
| Assets | |||||||||||||||||
| Current assets: | |||||||||||||||||
| Cash and cash equivalents | $ | 561.5 | $ | 304.4 | |||||||||||||
| Accounts receivable, net of allowance for doubtful accounts of $12.5 and $9.7, respectively | 1,077.1 | 1,065.6 | |||||||||||||||
| Other current assets | 178.5 | 170.9 | |||||||||||||||
| Total current assets | 1,817.1 | 1,540.9 | |||||||||||||||
| Property, plant and equipment, net | (Note 9) | 170.1 | 162.2 | ||||||||||||||
| Goodwill | (Note 10) | 3,609.6 | 3,469.4 | ||||||||||||||
| Intangible assets, net | (Note 10) | 1,277.4 | 1,307.2 | ||||||||||||||
| Deferred client conversion and start-up costs | (Note 11) | 842.9 | 892.1 | ||||||||||||||
| Other non-current assets | (Note 12) | 827.9 | 870.6 | ||||||||||||||
| Total assets | $ | 8,545.0 | $ | 8,242.4 | |||||||||||||
| Liabilities and Stockholders’ Equity | |||||||||||||||||
| Current liabilities: | |||||||||||||||||
| Current portion of long-term debt | (Note 14) | $ | 499.3 | $ | — | ||||||||||||
| Payables and accrued expenses | (Note 13) | 1,112.8 | 1,194.4 | ||||||||||||||
| Contract liabilities | 249.1 | 227.4 | |||||||||||||||
| Total current liabilities | 1,861.2 | 1,421.8 | |||||||||||||||
| Long-term debt | (Note 14) | 2,753.0 | 3,355.1 | ||||||||||||||
| Deferred taxes | (Note 18) | 261.0 | 277.3 | ||||||||||||||
| Contract liabilities | 429.2 | 469.2 | |||||||||||||||
| Other non-current liabilities | (Note 15) | 585.5 | 550.9 | ||||||||||||||
| Total liabilities | 5,889.9 | 6,074.2 | |||||||||||||||
| Commitments and contingencies | (Note 19) | ||||||||||||||||
| Stockholders’ equity: | |||||||||||||||||
| Preferred stock: Authorized, 25.0 shares; issued and outstanding, none | — | — | |||||||||||||||
| Common stock, $0.01 par value: Authorized, 650.0 shares; issued, 154.5 and 154.5 shares, respectively; outstanding, 117.1 and 116.7 shares, respectively | 1.6 | 1.6 | |||||||||||||||
| Additional paid-in capital | 1,663.0 | 1,552.5 | |||||||||||||||
| Retained earnings | 3,862.5 | 3,435.1 | |||||||||||||||
| Treasury stock, at cost: 37.3 and 37.8 shares, respectively | (2,599.0) | (2,489.2) | |||||||||||||||
| Accumulated other comprehensive income (loss) | (Note 20) | (272.9) | (331.7) | ||||||||||||||
| Total stockholders’ equity | 2,655.1 | 2,168.2 | |||||||||||||||
| Total liabilities and stockholders’ equity | $ | 8,545.0 | $ | 8,242.4 |
Amounts may not sum due to rounding.
See notes to consolidated financial statements.
Broadridge Financial Solutions, Inc.
Consolidated Statements of Cash Flows
(In millions)
| Years ended June 30, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| Cash Flows From Operating Activities | ||||||||||||||||||||
| Net earnings | $ | 839.5 | $ | 698.1 | $ | 630.6 | ||||||||||||||
| Adjustments to reconcile Net earnings to net cash flows from operating activities: | ||||||||||||||||||||
| Depreciation and amortization | 130.7 | 119.8 | 84.4 | |||||||||||||||||
| Amortization of acquired intangibles and purchased intellectual property | 196.6 | 200.3 | 214.4 | |||||||||||||||||
| Amortization of other assets | 170.8 | 157.8 | 126.2 | |||||||||||||||||
| Write-down of long lived assets and related charges | 14.5 | 18.2 | 2.5 | |||||||||||||||||
| Stock-based compensation expense | 73.4 | 70.6 | 73.1 | |||||||||||||||||
| Deferred income taxes | (5.2) | (119.7) | (50.8) | |||||||||||||||||
| Other | (24.4) | (57.7) | (27.4) | |||||||||||||||||
| Changes in operating assets and liabilities, net of assets and liabilities acquired: | ||||||||||||||||||||
| Accounts receivable, net | 31.8 | (37.4) | 19.6 | |||||||||||||||||
| Other current assets | (5.4) | (2.8) | (10.0) | |||||||||||||||||
| Payables and accrued expenses | (146.5) | 136.5 | (104.5) | |||||||||||||||||
| Contract liabilities | 56.5 | 80.6 | 328.5 | |||||||||||||||||
| Other non-current assets | (148.2) | (232.4) | (472.4) | |||||||||||||||||
| Other non-current liabilities | (12.8) | 24.3 | 9.1 | |||||||||||||||||
| Net cash flows from operating activities | 1,171.3 | 1,056.2 | 823.3 | |||||||||||||||||
| Cash Flows From Investing Activities | ||||||||||||||||||||
| Capital expenditures | (43.8) | (57.4) | (38.4) | |||||||||||||||||
| Software purchases and capitalized internal use software | (71.1) | (55.6) | (36.8) | |||||||||||||||||
| Acquisitions, net of cash acquired | (193.5) | (34.3) | — | |||||||||||||||||
| Other investing activities | (7.8) | (0.8) | (5.3) | |||||||||||||||||
| Net cash flows from investing activities | (316.2) | (148.0) | (80.4) | |||||||||||||||||
| Cash Flows From Financing Activities | ||||||||||||||||||||
| Debt proceeds | 1,238.1 | 1,022.7 | 990.0 | |||||||||||||||||
| Debt repayments | (1,342.5) | (1,082.7) | (1,375.0) | |||||||||||||||||
| Dividends paid | (402.3) | (368.2) | (331.0) | |||||||||||||||||
| Purchases of Treasury stock | (134.9) | (485.4) | (24.3) | |||||||||||||||||
| Proceeds from exercise of stock options | 62.3 | 72.4 | 43.1 | |||||||||||||||||
| Other financing activities | (21.6) | (14.3) | (17.5) | |||||||||||||||||
| Net cash flows from financing activities | (600.8) | (855.5) | (714.7) | |||||||||||||||||
| Effect of exchange rate changes on Cash and cash equivalents | 2.8 | (0.6) | (0.6) | |||||||||||||||||
| Net change in Cash and cash equivalents | 257.1 | 52.1 | 27.6 | |||||||||||||||||
| Cash and cash equivalents, beginning of fiscal year | 304.4 | 252.3 | 224.7 | |||||||||||||||||
| Cash and cash equivalents, end of fiscal year | $ | 561.5 | $ | 304.4 | $ | 252.3 | ||||||||||||||
| Supplemental disclosure of cash flow information: | ||||||||||||||||||||
| Cash payments made for interest | $ | 131.5 | $ | 143.0 | $ | 136.6 | ||||||||||||||
| Cash payments made for income taxes, net of refunds | $ | 279.8 | $ | 240.2 | $ | 180.2 | ||||||||||||||
| Non-cash investing and financing activities: | ||||||||||||||||||||
| Accrual of unpaid property, plant, equipment and software | $ | 13.3 | $ | 1.2 | $ | 0.8 | ||||||||||||||
| Accrual of unpaid stock repurchase excise tax | $ | — | $ | 2.7 | $ | — |
Amounts may not sum due to rounding.
See notes to consolidated financial statements.
Broadridge Financial Solutions, Inc.
Consolidated Statements of Stockholders’ Equity
(In millions, except per share amounts)
| Common Stock | Additional Paid-In Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Total Stockholders’ Equity | |||||||||||||||||||||||||||||||||||||||
| Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||
| Balances, June 30, 2022 | 154.5 | $ | 1.6 | $ | 1,344.7 | $ | 2,824.0 | $ | (2,024.8) | $ | (226.3) | $ | 1,919.1 | |||||||||||||||||||||||||||||||
| Comprehensive income (loss) | — | — | — | 630.6 | — | (58.4) | 572.2 | |||||||||||||||||||||||||||||||||||||
| Stock option exercises | — | — | 43.2 | — | — | — | 43.2 | |||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | 72.0 | — | — | — | 72.0 | |||||||||||||||||||||||||||||||||||||
| Treasury stock acquired (0.2 shares) | — | — | — | — | (24.3) | — | (24.3) | |||||||||||||||||||||||||||||||||||||
| Treasury stock reissued (1.0 shares) | — | — | (23.1) | — | 23.1 | — | — | |||||||||||||||||||||||||||||||||||||
| Common stock dividends ($2.90 per share) | — | — | — | (341.6) | — | — | (341.6) | |||||||||||||||||||||||||||||||||||||
| Balances, June 30, 2023 | 154.5 | 1.6 | 1,436.8 | 3,113.0 | (2,026.1) | (284.7) | 2,240.6 | |||||||||||||||||||||||||||||||||||||
| Comprehensive income (loss) | — | — | — | 698.1 | — | (47.0) | 651.1 | |||||||||||||||||||||||||||||||||||||
| Stock option exercises | — | — | 72.0 | — | — | — | 72.0 | |||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | 68.5 | — | — | — | 68.5 | |||||||||||||||||||||||||||||||||||||
| Treasury stock acquired (2.5 shares) | — | — | — | — | (488.1) | — | (488.1) | |||||||||||||||||||||||||||||||||||||
| Treasury stock reissued (1.1 shares) | — | — | (24.9) | — | 24.9 | — | — | |||||||||||||||||||||||||||||||||||||
| Common stock dividends ($3.20 per share) | — | — | — | (376.0) | — | — | (376.0) | |||||||||||||||||||||||||||||||||||||
| Balances, June 30, 2024 | 154.5 | 1.6 | 1,552.5 | 3,435.1 | (2,489.2) | (331.7) | 2,168.2 | |||||||||||||||||||||||||||||||||||||
| Comprehensive income (loss) | — | — | — | 839.5 | — | 58.8 | 898.3 | |||||||||||||||||||||||||||||||||||||
| Stock option exercises | — | — | 62.4 | — | — | — | 62.4 | |||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | 70.4 | — | — | — | 70.4 | |||||||||||||||||||||||||||||||||||||
| Treasury stock acquired (0.6 shares) | — | — | — | — | (132.1) | — | (132.1) | |||||||||||||||||||||||||||||||||||||
| Treasury stock reissued (1.0 shares) | — | — | (22.3) | — | 22.3 | — | — | |||||||||||||||||||||||||||||||||||||
| Common stock dividends ($3.52 per share) | — | — | — | (412.1) | — | — | (412.1) | |||||||||||||||||||||||||||||||||||||
| Balances, June 30, 2025 | 154.5 | $ | 1.6 | $ | 1,663.0 | $ | 3,862.5 | $ | (2,599.0) | $ | (272.9) | $ | 2,655.1 |
Amounts may not sum due to rounding.
See notes to consolidated financial statements.
Broadridge Financial Solutions, Inc.
Notes to Consolidated Financial Statements
NOTE 1. BASIS OF PRESENTATION
A. Description of Business. Broadridge Financial Solutions, Inc. (“Broadridge” or the “Company”), a Delaware corporation and a part of the S&P 500® Index, is a global financial technology leader powering investing, corporate governance, and communications to enable our clients to operate, innovate, and grow. We deliver technology-driven solutions to banks, broker-dealers, asset and wealth managers, public companies, investors, and mutual funds. The principal markets in which the Company operates are located in North America and Europe.
The Company operates in two reportable segments: Investor Communication Solutions (“ICS”) and Global Technology and Operations (“GTO”).
- Investor Communication Solutions - Broadridge provides the following governance and communications solutions through its Investor Communication Solutions business segment: Regulatory Solutions, Data-Driven Fund Solutions, Corporate Issuer Solutions, and Customer Communications Solutions.
A large portion of Broadridge’s ICS business involves the processing and distribution of proxy materials to investors in equity securities and mutual funds, as well as the facilitation of related vote processing. In addition to proxy services, Broadridge also provides regulatory communications solutions that enable global asset managers to communicate with large audiences of investors efficiently and reliably by centralizing all investor communications through one resource. Through its Fund Communication Solutions business, Broadridge provides fund managers with a single, integrated provider to manage data, perform calculations, compose documents, manage regulatory compliance, and disseminate information across multiple jurisdictions. Broadridge also provides a range of other regulatory communications solutions, including reorganization communications notifying investors of U.S. reorganizations or corporate action events such as tender offers, mergers and acquisitions, bankruptcies, and global class action services for the identification, filing and recovery of class actions and collective redress proceedings involving securities and other financial products.
For asset managers and retirement service providers, Broadridge offers data-driven solutions and an end-to-end platform for content management, composition, and omni-channel distribution of regulatory, marketing, and transactional information. Broadridge’s data and analytics solutions provide investment product distribution data, analytical tools, insights, and research to enable asset managers to optimize product distribution across retail and institutional channels globally. Broadridge also provides fiduciary-focused learning and development, software and technology, and data and analytics services to advisors, institutions and asset managers across the retirement and wealth ecosystem.
Through its Retirement and Workplace business (“Broadridge Retirement and Workplace”), Broadridge provides automated mutual fund and exchange-traded funds trade processing services for financial institutions who submit trades on behalf of their clients such as qualified and non-qualified retirement plans and individual wealth accounts. In addition, Broadridge’s marketing and transactional communications solutions provide a content management and omni-channel distribution platform for marketing and sales communications for asset managers, insurance providers and retirement service providers.
Broadridge also provides a range of corporate solutions that revolve around shareholder meetings and proxy, corporate governance and sustainability, regulatory filings and disclosure, and stock transfer services. Broadridge services provide corporate issuers a single source solution that spans the entire corporate disclosure and shareholder communications and corporate disclosure lifecycle. Broadridge shareholder meetings and proxy services and corporate governance and sustainability governance and communications services include a full suite of annual meeting and shareholder engagement solutions which include proxy services, virtual shareholder meeting services, shareholder engagement, and governance and sustainability services. Broadridge also offers regulatory filings and disclosure solutions, including annual SEC filing services and capital markets transaction services, and provides registrar, stock transfer and record-keeping services through its transfer agency services.
Broadridge provides omni-channel customer communications solutions which include print and digital solutions to modernize technology infrastructures, simplify communications processes, accelerate digital adoption and improve the customer experience. Through one point of integration, the Broadridge Communications CloudSM platform helps companies create, deliver, and manage their communications and customer engagement. The platform includes data-driven composition tools, identity and preference management, omni-channel optimization and digital communication experience, archive and information management, digital and print delivery, and analytics and reporting tools.
- Global Technology and Operations** - Broadridge’s Global Technology and Operations business provides mission-critical, scale infrastructure to the global financial markets. As a leading software as a service (“SaaS”) provider, Broadridge offers capital markets, wealth and investment management firms modern technology to enable growth, simplify their technology stacks and mutualize costs. Broadridge’s highly scalable, resilient, component-based platform automate the front-to-back transaction lifecycle of equity, mutual fund, fixed income, foreign exchange and exchange-traded derivatives, from order capture and execution through trade confirmation, margin, cash management, clearing and settlement, reference data management, reconciliations, securities financing and collateral management, asset servicing, compliance and regulatory reporting, portfolio accounting and custody-related services. Broadridge’s Wealth Management business provides solutions for advisors and investors and also streamlines back and middle-office operations for broker-dealers by providing systems for critical post-trade activities, including books and records, transaction processing, clearance and settlement, and reporting. Broadridge’s Investment Management business provides portfolio and order management solutions for traditional and alternative asset managers, which bring insights into trading, portfolio construction, risk and analytics. Broadridge’s solutions connect asset managers to a global network of broker-dealers for trade execution and post-trade matching and confirmation. In addition, Broadridge provides business process outsourcing services for its buy- and sell-side clients’ businesses. These services combine Broadridge’s technology with its operations expertise to support the entire trade lifecycle, including securities clearing and settlement, reconciliations, record-keeping, wealth management asset servicing, and custody-related functions.
Broadridge’s capital markets platform and solutions deliver simplification and innovation across the trade lifecycle, from order initiation to settlement. Through Broadridge Trading and Connectivity Solutions, Broadridge offers a set of global front-office trade order and execution management systems and connectivity solutions that enable market participants to connect and trade. Broadridge’s front-office solutions, post-trade product suite and other capital markets capabilities enable its clients to streamline their front-to-back technology platforms and operations and increase straight-through-processing efficiencies, across equities, fixed income, exchange-traded derivatives, and other asset classes. Broadridge also provides a set of multi-asset, multi-entity and multi-currency trading, connectivity and post-trade solutions that support processing of securities transactions in equities, options, fixed income securities, foreign exchange, exchange-traded derivatives and mutual funds. Provided on a SaaS basis within large user communities, Broadridge’s technology is a global solution, processing clearance and settlement in over 90 markets. Broadridge’s technology enables its clients to meet the requirements of market change such as the T+1 securities settlement cycle and Broadridge’s solutions enable global capital markets firms to access market liquidity, drive more effective market making and efficient front-to-back trade processing.
Broadridge’s Wealth Management business delivers front-to-back technology solutions and other capabilities across the entire wealth management lifecycle and streamlines all aspects of wealth management services, including account management, fee management and client on-boarding. The wealth technology solutions enable full-service, regional and independent broker-dealers and investment advisors to better engage with customers through digital marketing and customer communications tools. Broadridge also integrates data, content and technology to drive new customer acquisition, support holistic and personalized advice and cross-sell opportunities. Broadridge’s advisor solutions help advisors optimize their practice management through customer and account data aggregation and reporting.
Broadridge’s Investment Management business services the global investment management industry with a range of buy-side technology solutions such as portfolio management, compliance and fee billing and operational support solutions for hedge funds, family offices, alternative asset managers, traditional asset managers and the providers that service this space including prime brokers, fund administrators and custodians.
B. Consolidation and Basis of Presentation. The Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) in the U.S. and in accordance with the SEC requirements for Annual Reports on Form 10-K. These financial statements present the consolidated position of the Company and include the entities in which the Company directly or indirectly has a controlling financial interest, entities in which the Company has investments recorded under the equity method of accounting as well as certain marketable and non-marketable securities. Intercompany balances and transactions have been eliminated. Amounts presented may not sum due to rounding. Certain prior period amounts have been reclassified to conform to the current year presentation where applicable.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Use of Estimates. The preparation of these financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the Consolidated Financial Statements and accompanying notes thereto. These estimates are based on management’s best knowledge of current events, historical experience, actions that the Company may undertake in the future and on various other assumptions and judgment that are believed to be reasonable under the circumstances. Accordingly, actual results could differ from those estimates. The use of estimates in specific accounting policies is described further in the notes to the Consolidated Financial Statements, as appropriate.
B. Revenue Recognition. ASC 606 “Revenue from Contracts with Customers” outlines a single comprehensive model to use in accounting for revenue arising from contracts with customers. The core principle is that an entity recognizes revenue to reflect the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.
The Company’s revenues from clients are primarily generated from fees for providing investor communications and technology-enabled services and solutions. Revenues are recognized for the two reportable segments as follows:
-
Investor Communication Solutions**—Revenues are generated primarily from processing and distributing investor communications and other related services as well as vote processing and tabulation. The Company typically enters into agreements with clients to provide services on a fee for service basis. Fees received for processing and distributing investor communications are generally variably priced and recognized as revenue over time as the Company provides the services to clients based on the number of units processed, which coincides with the pattern of value transfer to the client. Broadridge works directly with corporate issuers (“Issuers”) and mutual funds to ensure that the account holders of the Company’s bank and broker clients, who are also the shareholders of Issuers and mutual funds, receive the appropriate investor communications materials and the services are fulfilled in accordance with each Issuer’s and mutual fund’s requirements. Broadridge works directly with the Issuers and mutual funds to resolve any issues that may arise. As such, Issuers and mutual funds are viewed as the customer of the Company’s services. As a result, revenues for distribution services as well as proxy materials fulfillment services are recorded in Revenue on a gross basis with corresponding costs including amounts remitted to the broker-dealers and banks (referred to as “Nominees”) recorded in Cost of revenues. Fees for the Company’s investor communications services arrangements are typically billed and paid on a monthly basis following the delivery of the services. The Company also offers certain hosted service arrangements that can be priced on a fixed and/or variable basis for which revenue is recognized over time as the Company satisfies its performance obligation by delivering services to the client on a monthly basis based on the number of transactions processed or units delivered, in the case of variable priced arrangements, or a fixed monthly fee in the case of fixed price arrangements, in each case which coincides with the pattern of value transfer to the client. These services may be billed in a variety of payment frequencies depending on the specific arrangement.
-
Global Technology and Operations**—Revenues are generated primarily from fees for trade processing and related services. Revenue is recognized over time as the Company satisfies its performance obligation by delivering services to the client. The Company’s arrangements for processing and related services typically consist of an obligation to provide specific services to its clients on a when and if needed basis (a stand ready obligation) with revenue recognized from the satisfaction of the performance obligations on a monthly basis generally in the amount billable to the client. These services are generally provided under variable priced arrangements based on volume of service and can include minimum monthly usage fees. Client service agreements often include up-front consideration in addition to the recurring fee for trade processing. Up-front implementation fees, as well as certain enhancements to existing technology platforms, are deferred and recognized on a straight-line basis over the service term of the contract which corresponds to the timing of transfer of value to the client that commences after client acceptance when the processing term begins. In addition, revenue is also generated from the fulfillment of professional services engagements which are generally priced on a time and materials or fixed price basis, and are recognized as the services are provided to the client which corresponds to the timing of transfer of value to the client. Finally, the Company generally recognizes license revenues from software term licenses installed on clients’ premises upon delivery and acceptance of the software license, assuming a contract is deemed to exist, and recognizes revenue attributed to the associated software maintenance and support obligation over the contract term. Software term license revenue is not a significant portion of the Company’s revenues.
The Company uses the following methods, inputs, and assumptions in determining amounts of revenue to recognize:
Identification of Performance Obligations
For revenue arrangements containing multiple goods or services, the Company accounts for the individual goods or services as a separate performance obligation if they are distinct, the good or service is separately identifiable from other items in the arrangement, and if a client can benefit from it on its own or with other resources that are readily available to the client. If these criteria are not met, the promised goods or services are accounted for as a combined performance obligation.
Transaction Price
Once separate performance obligations are determined, the transaction price is allocated to the individual performance obligations within a contract. If the contracted prices reflect the relative standalone selling prices for the individual performance obligations, no allocations are made. Otherwise, the Company uses the relative selling price method to allocate the transaction price, obtained from sources such as the observable price of a good or service when the Company sells that good or service separately in similar circumstances and to similar clients. If such evidence is unavailable, the Company uses the best estimate of the selling price, which includes various internal factors such as pricing strategy and market factors. A significant portion of the Company’s performance obligations are generated from transactions with volume based fees and includes services that are delivered at the same time. The Company recognizes revenue related to these arrangements over time as the services are provided to the client. While many of the Company’s contracts contain some component of variable consideration, the Company only recognizes variable consideration that is not expected to reverse. The Company allocates variable payments to distinct services in an overall contract when the variable payment relates specifically to that particular service and for which the variable payment reflects what the Company expects to receive in exchange for that particular service. As a result, the Company generally allocates and recognizes variable consideration in the period it has the contractual right to invoice the client.
As described above, our most significant performance obligations involve variable consideration which constitutes the majority of our revenue streams. The Company’s variable consideration components meet the criteria in ASC 606 for exclusion from disclosure of the remaining transaction price allocated to unsatisfied performance obligations as does any contracts with clients with an original duration of one year or less. The Company has contracts with clients that vary in length depending on the nature of the services and contractual terms negotiated with the client, and they generally extend over a multi-year period.
Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a client, are excluded from revenue. Distribution revenues associated with shipping and handling activities are accounted for as a fulfillment activity and recognized as the related services or products are transferred to the client. As a practical expedient, the Company does not adjust the transaction price for the effects of a significant financing component if, at contract inception, the period between client payment and the transfer of goods or services is expected to be one year or less.
C. Cash and Cash Equivalents. Investment securities with an original maturity of 90 days or less are considered cash equivalents. The fair value of the Company’s Cash and cash equivalents approximates carrying value due to their short term nature.
D. Financial Instruments. Substantially all of the financial instruments of the Company other than Long-term debt are carried at fair values, or at carrying amounts that approximate fair values because of the short maturity of the instruments. The carrying value of the Company’s long-term fixed-rate senior notes represent the face value of the long-term fixed-rate senior notes net of the unamortized discount and net of the associated unamortized debt issuance cost. The fair value of the Company’s long-term fixed-rate senior notes is based on quoted market prices. Refer to Note 14, “Borrowings,” for a further description of the Company’s long-term fixed-rate senior notes as well as Note 7, “Fair Value of Financial Instruments” for additional details on the fair value of the Company’s financial instruments. In addition, refer to Note 19, “Contractual Commitments, Contingencies, and Off-Balance Sheet Arrangements” for details on the Company’s cross-currency swap derivative contracts which are carried at fair value.
E. Property, Plant and Equipment. Property, plant and equipment is initially recorded at cost and depreciated over the estimated useful lives of the assets using the straight-line method. Leasehold improvements are amortized over the shorter of the term of the lease or the estimated useful lives of the improvements. The estimated useful lives of assets are as follows:
| Equipment | 3 to 7 years | |||||||
| Buildings and Building Improvements | 5 to 20 years | |||||||
| Furniture and fixtures | 4 to 7 years |
Refer to Note 9, “Property, Plant and Equipment, Net”, for a further description of the Company’s Property, plant and equipment, net.
F. Securities. Securities are non-derivatives that are reflected in Other non-current assets in the Consolidated Balance Sheets, unless management intends to dispose of the investment within twelve months of the end of the reporting period, in which case they are reflected in Other current assets in the Consolidated Balance Sheets. These investments are in entities over which the Company does not have control, joint control, or significant influence. Securities that have a readily determinable fair value are carried at fair value. Securities without a readily determinable fair value are initially recognized at cost and subsequently carried at cost minus impairment, if any, plus or minus changes resulting from observable price changes in transactions for an identical or similar investment of the same issuer, such as subsequent capital raising transactions. Changes in the value of securities with or without a readily determinable fair value are recorded in the Consolidated Statements of Earnings. In determining whether a security without a readily determinable fair value is impaired, management considers qualitative factors to identify an impairment including the financial condition and near-term prospects of the issuer. Refer to Note 7, “Fair Value of Financial Instruments” for additional details on the fair value of the Company’s securities.
G. Inventories. Inventories are stated at the lower of cost (determined on a first-in, first-out basis) or market. Inventory balances of $32.1 million and $30.5 million, consisting of forms and envelopes used in the mailing of proxy and other materials to our customers, are reflected in Other current assets in the Consolidated Balance Sheets at June 30, 2025 and 2024, respectively.
H. Deferred Client Conversion and Start-Up Costs. Deferred client conversion and start-up costs include direct costs incurred to set up or convert a client’s systems to function with the Company’s technology, and are generally deferred and recognized on a straight-line basis over the service term of the arrangement to which the costs relate, which commences when the client goes live with the Company’s services. The key judgment for determining the amount of costs to be deferred relates to the extent to which such costs are recoverable. This estimate includes (i) projected future client revenues, including variable revenues, offset by an estimate of conversion costs including an estimate of onboarding costs as well as ongoing operational costs, and (ii) an estimate of the expected client life. This is also the basis for which the Company assesses such costs for impairment. Refer to Note 11, “Deferred Client Conversion and Start-up Costs” for a further description of the Company’s Deferred client conversion and start-up costs.
I. Deferred Sales Commission Costs. The Company defers incremental costs to obtain a client contract that it expects to recover, which consists of sales commissions incurred, only if the contract is executed. Deferred sales commission costs are amortized on a straight-line basis using a portfolio approach consistent with the pattern of transfer of the goods or services to which the asset relates, which also considers expected customer lives. As a practical expedient, the Company recognizes the sales commissions as an expense when incurred if the amortization period of the sales commission asset that the entity otherwise would have recognized is one year or less. The Company evaluates the carrying value of deferred sales commission costs for impairment on the basis of whether these costs are fully recoverable from the expected future undiscounted net operating cash flows of the portfolio of clients to which the deferred sales commission costs relate. Refer to Note 12, “Other Non-Current Assets” for further information related to the Company’s Deferred sales commission costs.
J. Deferred Data Center Costs. Data center costs relate to conversion costs associated with our principal data center systems and applications. Costs directly related to the activities necessary to make the data center usable for its intended purpose are deferred and amortized over the life of the contract on a straight-line basis commencing on the date the data center has achieved full functionality. These deferred costs are reflected in Other non-current assets in the Consolidated Balance Sheets at June 30, 2025 and 2024, respectively. Refer to Note 12, “Other Non-Current Assets” for a further description of the Company’s Deferred data center costs.
K. Goodwill. The Company does not amortize goodwill but instead tests goodwill for impairment at the reporting unit level at least annually or more frequently if circumstances indicate possible impairment. The Company tests for goodwill impairment annually in the fourth quarter of the fiscal year, using the March 31 financial statement balances. The Company’s evaluation of goodwill for impairment involves the comparison of the fair value of each reporting unit to its carrying value. The Company determines the fair value of its reporting units using the income approach, which considers a discounted future cash flow analysis using various assumptions, including projections of revenues based on assumed long-term growth rates, estimated costs and appropriate discount rates based on the particular reporting unit’s weighted-average cost of capital. The principal factors used in the discounted cash flow analysis requiring judgment are the projected future operating cash flows based on forecasted earnings before interest and taxes, and the selection of the terminal value growth rate and discount rate assumptions. The weighted-average cost of capital takes into account the relative weight of each component of our consolidated capital structure (equity and long-term debt). The estimates of long-term growth and costs are based on historical data, various internal estimates and a variety of external sources, and are developed as part of the Company’s routine, long-range planning process. If the carrying amount of the reporting unit exceeds its fair value, an impairment loss shall be recognized in an amount equal to that excess, not to exceed the total amount of goodwill allocated to that reporting unit. Refer to Note 10, “Goodwill and Intangible Assets, Net” for a further description on the Company’s accounting for goodwill.
L. Impairment of Long-Lived Assets. Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset (or asset group) may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset (or asset group) to the estimated undiscounted future cash flows expected to be generated by the asset (or asset group). If the carrying amount of an asset (or asset group) exceeds its expected estimated future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset (or asset group) exceeds its fair value. Intangible assets with finite lives are amortized on a straight-line basis over their estimated useful lives and are also reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Refer to Note 9, “Property, Plant and Equipment, Net” for a further description of the Company’s Property, plant and equipment, net. Refer to Note 6, “Acquisitions” and Note 10, “Goodwill and Intangible Assets, Net” for a further description of the Company’s Intangible assets, net.
M. Equity Method Investments. The Company’s investments resulting in a 20% to 50% ownership interest are accounted for using the equity method of accounting when the ability to exercise significant influence is maintained by the Company. The Company’s share of net income or losses of equity method investments is included in Other non-operating income (expenses), net. Equity method investments are included in Other non-current assets. Equity method investments are reviewed for impairment by assessing if a decline in market value of the investment below the carrying value is other than temporary, which considers the intent and ability to retain the investment, the length of time and extent that the market value has been less than cost, and the financial condition of the investee.
N. Foreign Currency Translation and Transactions. The assets and liabilities of the Company’s foreign subsidiaries are translated into U.S. dollars based on exchange rates in effect at the end of each period. Revenues and expenses are translated at average exchange rates during the periods. Currency transaction gains or losses are included in Non-operating income (expenses), net. Gains or losses from balance sheet translation are included in Accumulated other comprehensive income (loss).
O. Distribution Cost of Revenues. Distribution cost of revenues consists primarily of postage related expenses incurred in connection with the Company’s Investor Communication Solutions segment, as well as Broadridge Retirement and Workplace administrative services expenses. These costs are reflected in Cost of revenues in the Consolidated Statements of Earnings.
P. Stock-Based Compensation. The Company accounts for stock-based compensation by recognizing the measurement of stock-based compensation expense in the Consolidated Statements of Earnings based on the fair value of the award on the date of grant. For stock options issued, the fair value of each stock option was estimated on the date of grant using a binomial option-pricing model. The binomial model considers a range of assumptions related to volatility, dividend yield, risk-free interest rate, and employee exercise behavior. Expected volatilities utilized in the binomial model are based on a combination of implied market volatilities, historical volatility of the Company’s stock price, and other factors. Similarly, the dividend yield is based on historical experience and expected future changes. The risk-free rate is derived from the U.S. Treasury yield curve in effect at the time of grant. The binomial model also incorporates exercise and forfeiture assumptions based on an analysis of historical data. The expected life of the stock option grants is derived from the output of the binomial model and represents the period of time that options granted are expected to be outstanding. For restricted stock units, the fair value of the award is based on the current fair value of the Company’s stock on the date of grant less the present value of future expected dividends discounted at the risk-free-rate derived from the U.S. Treasury yield curve in effect at the time of grant. Refer to Note 16, “Stock-Based Compensation” for a further description of the Company’s stock-based compensation.
Q. Internal Use Software. Expenditures for major software purchases and software developed or obtained for internal use are capitalized and amortized on a straight-line basis generally over a three- to five-year period or another period deemed appropriate based on the specific characteristics of the software, considering the potential impact of obsolescence, speed of technology changes, competition, and other economic factors. For software developed or obtained for internal use, the Company’s accounting policy provides for the capitalization of external direct costs of materials and services associated with developing or obtaining internal use computer software. In addition, the Company also capitalizes payroll and payroll-related costs for employees who are directly associated with internal use computer software projects. The amount of capitalizable payroll costs with respect to these employees is limited to direct time spent on such projects. Costs associated with preliminary project stage activities, training, maintenance, and all other post-implementation stage activities are expensed as incurred. The Company also expenses internal costs related to minor upgrades and enhancements, as it is impractical to separate these costs from normal maintenance activities. Refer to Note 10, “Goodwill and Intangible assets, Net” for a further description of the Company’s capitalized software.
R. Income Taxes. The Company accounts for income taxes under the asset and liability method, which establishes financial accounting and reporting standards for the effect of income taxes. The objectives of accounting for income taxes are to recognize the amount of taxes payable or refundable for the current year and deferred tax liabilities and assets for the future tax consequences of events that have been recognized in the Company’s Consolidated Financial Statements or tax returns. Deferred tax assets and liabilities are recognized based on temporary differences between the consolidated financial statement carrying amounts and tax bases of assets and liabilities using enacted tax rates in effect in the years in which the temporary differences are expected to reverse.
Judgment is required in addressing the future tax consequences of events that have been recognized in our Consolidated Financial Statements or tax returns (e.g., realization of deferred tax assets, changes in tax laws or interpretations thereof). Valuation allowances are recognized to reduce deferred tax assets when it is more likely than not that the Company will not be able to utilize the deferred tax assets of certain subsidiaries to offset future taxable earnings. The determination as to whether a deferred tax asset will be recognized is made on a jurisdictional basis and is based on the evaluation of historical taxable income or loss, projected future taxable income, carryforward periods, scheduled reversals of deferred tax liabilities and tax planning strategies. Projected future taxable income is based on expected results and assumptions as to the jurisdiction in which the income will be earned. The assumptions used to project future taxable income requires significant judgment and are consistent with the plans and estimates used to manage the underlying businesses.
Pursuant to provisions under the Inflation Reduction Act, the Company purchased transferable federal tax credits during fiscal year 2025. Such federal tax credits were purchased at negotiated discounts, resulting in an income tax benefit recorded during the year ended June 30, 2025. Purchased tax credits that will offset the current income tax liability are recorded as an adjustment to income taxes payable or refundable. The cash payments made for income taxes as disclosed on the Consolidated Statement of Cash Flows include amounts paid to third parties for the purchase of tax credits.
On July 4, 2025, the U.S. government enacted The One Big Beautiful Bill Act of 2025 which includes, among other provisions, changes to the U.S. corporate income tax system including the allowance of immediate expensing of qualifying research and development expenses and permanent extensions of certain provisions within the Tax Cuts and Jobs Act. Certain provisions are effective for Broadridge beginning with the fiscal year ending June 30, 2026. We are evaluating the future impact of these tax law changes on our financial statements.
Refer to Note 18, “Income Taxes” for a further description of the Company’s income taxes.
S. Concentration of Risk. The majority of our clients operate in the financial services industry. Our largest single client in each of our fiscal years 2025, 2024 and 2023 accounted for approximately 7%, 8%, and 7% of our consolidated revenues.
T. New Accounting Pronouncements.
Recently Adopted Accounting Pronouncements
In November 2023, the FASB issued ASU No. 2023-07, “Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures” (“ASU No. 2023-07”), which requires an entity to improve its disclosures related to reportable segments and provide additional, more detailed information about a reportable segment’s expenses. ASU No. 2023-07 was effective for the Company in the fourth quarter of fiscal year 2025. The amendments in this ASU were applied on a retrospective basis to all prior periods presented in the financial statements. The adoption of ASU No. 2023-07 impacted disclosures only. Refer to Note 21, “Financial Data by Segment”.
Recently Issued Accounting Pronouncements
In November 2024, the FASB issued ASU No. 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses”, which requires an entity to disclose additional information about specific expense categories. ASU No. 2024-03 is effective for the Company in the fourth quarter of fiscal year 2028. The amendments in this ASU must be applied either (1) prospectively to financial statements issued for reporting periods after the effective date of this ASU or (2) retrospectively to any or all prior periods presented in the financial statements. Early adoption of the amendments is permitted. Upon adoption, this guidance is not expected to have a material impact on the Company’s Consolidated Financial Statements.
In March 2024, the FASB issued ASU No. 2024-01, “Compensation—Stock Compensation - Scope Application of Profits Interest and Similar Awards” (“ASU No. 2024-01”), which provides illustrative guidance to help entities determine whether profits interest and similar awards should be accounted for as share-based payment arrangements within the scope of Topic 718 or another accounting standard. ASU No. 2024-01 is effective for the Company in the first quarter of fiscal year 2026. Early adoption of the amendments is permitted. Upon adoption, this guidance is not expected to have a material impact on the Company’s Consolidated Financial Statements.
In December 2023, the FASB issued ASU No. 2023-09, “Income Taxes (Topic 740) - Improvements to Income Tax Disclosures” (“ASU No. 2023-09”), which requires an entity to annually disclose specific categories in the rate reconciliation, additional information for reconciling items that meet a quantitative threshold, and certain information about income taxes paid. ASU No. 2023-09 is effective for the Company in the fourth quarter of fiscal year 2026. Early adoption of the amendments is permitted. The Company is currently assessing the impact that the adoption of ASU No. 2023-09 will have on its Consolidated Financial Statements.
In December 2023, the FASB issued ASU 2023-08, “Intangibles-Goodwill and Other-Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets” (“ASU 2023-08”), which addresses the accounting and disclosure requirements for certain crypto assets. ASU 2023-08 requires entities to measure crypto assets that meet specific criteria at fair value, with changes recognized in net income each reporting period. ASU 2023-08 is effective for the Company in the first quarter of fiscal year 2026. The Company is currently assessing the impact that the adoption of ASU 2023-08 will have on the Company’s Consolidated Financial Statements.
Under current accounting requirements, the Company’s crypto asset holdings are accounted for as indefinite-lived intangible assets in accordance with ASC 350, “Intangibles - Goodwill and Other”. The assets are carried at cost and reviewed for impairment if events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. The current cost basis of the crypto assets is immaterial.
NOTE 3. REVENUE RECOGNITION
Disaggregation of Revenue
The Company has presented below its revenue disaggregated by product line and by revenue type within each of its Investor Communication Solutions and Global Technology and Operations reportable segments.
Revenues in the Investor Communication Solutions segment are derived from both recurring and event-driven activity. In addition, the level of recurring and event-driven activity the Company processes directly impacts Distribution revenues. While event-driven activity is highly repeatable, it may not recur on an annual basis. Event-driven revenues are based on the number of special events and corporate transactions the Company processes. Event-driven activity is impacted by financial market conditions and changes in regulatory compliance requirements, resulting in fluctuations in the timing and levels of event-driven revenues. Distribution revenues primarily include revenues related to the physical mailing and distribution of proxy materials, interim communications, transaction reporting, customer communications and fulfillment services, as well as Broadridge Retirement and Workplace administrative services.
| Years ended June 30, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (in millions) | |||||||||||||||||
| Investor Communication Solutions | |||||||||||||||||
| Regulatory | $ | 1,280.6 | $ | 1,195.6 | $ | 1,141.4 | |||||||||||
| Data-driven fund solutions | 459.2 | 435.2 | 404.3 | ||||||||||||||
| Issuer | 273.2 | 259.8 | 242.6 | ||||||||||||||
| Customer communications | 718.8 | 683.1 | 673.1 | ||||||||||||||
| Total ICS Recurring revenues | 2,731.8 | 2,573.6 | 2,461.4 | ||||||||||||||
| Equity and other | 115.5 | 151.0 | 116.5 | ||||||||||||||
| Mutual funds | 203.8 | 134.2 | 94.5 | ||||||||||||||
| Total ICS Event-driven revenues | 319.3 | 285.2 | 211.0 | ||||||||||||||
| Distribution revenues | 2,062.0 | 1,999.0 | 1,863.1 | ||||||||||||||
| Total ICS Revenues | $ | 5,113.0 | $ | 4,857.9 | $ | 4,535.6 | |||||||||||
| Global Technology and Operations | |||||||||||||||||
| Capital markets | $ | 1,115.3 | $ | 1,049.2 | $ | 965.2 | |||||||||||
| Wealth and investment management | 660.8 | 599.7 | 560.1 | ||||||||||||||
| Total GTO Recurring revenues | 1,776.1 | 1,648.9 | 1,525.2 | ||||||||||||||
| Total Revenues | $ | 6,889.1 | $ | 6,506.8 | $ | 6,060.9 | |||||||||||
| Revenues by Type | |||||||||||||||||
| Recurring revenues | $ | 4,507.9 | $ | 4,222.6 | $ | 3,986.7 | |||||||||||
| Event-driven revenues | 319.3 | 285.2 | 211.0 | ||||||||||||||
| Distribution revenues | 2,062.0 | 1,999.0 | 1,863.1 | ||||||||||||||
| Total Revenues | $ | 6,889.1 | $ | 6,506.8 | $ | 6,060.9 |
Contract Balances
The following table provides information about contract assets and liabilities:
| June 30, 2025 | June 30, 2024 | June 30, 2023 | |||||||||||||||
| (in millions) | |||||||||||||||||
| Contract assets | $ | 137.5 | $ | 125.3 | $ | 109.1 | |||||||||||
| Contract liabilities | $ | 678.3 | $ | 696.6 | $ | 692.6 |
Contract assets result from revenue already recognized but not yet invoiced, including certain future amounts to be collected under software term licenses and certain other client contracts. Contract liabilities represent consideration received or receivable from clients before the transfer of control occurs (deferred revenue). Contract balances are reported in a net contract asset or liability position on a contract-by-contract basis at the end of each reporting period.
During the fiscal year ended June 30, 2025, contract assets increased primarily due to a difference between the timing of billing and the revenue recognition of software term license revenues, while contract liabilities decreased due to the timing of client invoices in relation to the timing of revenue recognized. During the fiscal year ended June 30, 2024, contract assets increased primarily due to a increase in software term license revenues and contract liabilities increased primarily due to the timing of client invoices in relation to the timing of revenue recognized. The Company recognized $288.4 million of revenue during the fiscal year ended June 30, 2025 that was included in the contract liability balance as of June 30, 2024. The Company recognized $249.4 million of revenue during the fiscal year ended June 30, 2024 that was included in the contract liability balance as of June 30, 2023. The Company recognized $236.5 million of revenue during fiscal year ended June 30, 2023 that was included in the contract liability balance as of June 30, 2022.
NOTE 4. WEIGHTED-AVERAGE SHARES OUTSTANDING
Basic earnings per share (“EPS”) is calculated by dividing the Company’s Net earnings by the basic Weighted-average shares outstanding for the periods presented. The Company calculates diluted EPS using the treasury stock method, which reflects the potential dilution that could occur if outstanding stock options at the presented date are exercised and restricted stock unit awards have vested.
As of June 30, 2025, 2024 and 2023, the computation of diluted EPS excluded 0.5 million, 0.3 million and 1.2 million options and restricted stock units to purchase Broadridge common stock, respectively, as the effect of their inclusion would have been anti-dilutive.
The following table sets forth the denominators of the basic and diluted EPS computations:
| Years ended June 30, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| (in millions) | ||||||||||||||||||||
| Weighted-average shares outstanding: | ||||||||||||||||||||
| Basic | 117.1 | 117.7 | 117.7 | |||||||||||||||||
| Common stock equivalents | 1.2 | 1.4 | 1.3 | |||||||||||||||||
| Diluted | 118.3 | 119.1 | 119.0 |
NOTE 5. INTEREST EXPENSE, NET
Interest expense, net consisted of the following:
| Years ended June 30, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| (in millions) | ||||||||||||||||||||
| Interest expense on borrowings | $ | (135.8) | $ | (150.2) | $ | (143.7) | ||||||||||||||
| Interest income | 13.1 | 12.1 | 8.2 | |||||||||||||||||
| Interest expense, net | $ | (122.7) | $ | (138.1) | $ | (135.5) |
NOTE 6. ACQUISITIONS
Assets acquired and liabilities assumed in business combinations are recorded on the Company’s Consolidated Balance Sheets as of the respective acquisition date based upon the estimated fair values at such date. The results of operations of the businesses acquired by the Company are included in the Company’s Consolidated Statements of Earnings since the respective dates of acquisition. The excess of the purchase price over the estimated fair values of the underlying assets acquired and liabilities assumed is allocated to Goodwill. Pro forma information for these acquired businesses is not provided because they did not have a material effect, individually or in the aggregate, on the Company’s consolidated results of operations.
FISCAL YEAR 2025 BUSINESS COMBINATION
SIS
On November 1, 2024, the Company acquired Kyndryl’s Securities Industry Services (“SIS”) business (“SIS Business”) to provide wealth management, capital markets, and information technology solutions in Canada. SIS is included in the Company’s GTO reportable segment.
-
For tax purposes, Goodwill is amortizable and tax deductible.
-
Intangible assets acquired consist primarily of software technology and customer relationships, which are being amortized over a ten-year life.
-
Our discussions with the Canadian Competition Bureau are ongoing.
In connection with the acquisition, on November 1, 2024, Broadridge Software Limited, a subsidiary of the Company, entered into the SIS Services Agreement with Kyndryl Canada Limited (“Kyndryl Canada”) pursuant to which Kyndryl Canada will provide infrastructure managed services for the SIS Business. Refer to Note 19, “Contractual Commitments, Contingencies and Off-Balance Sheet Arrangements” for further details.
Financial information for SIS is as follows:
| SIS | ||||||||
| Cash payments | $ | 185.5 | ||||||
| Net tangible liabilities assumed | $ | (1.9) | ||||||
| Goodwill | 38.3 | |||||||
| Intangible assets | 149.1 | |||||||
| Aggregate purchase price | $ | 185.5 |
During the three months ended September 30, 2024, there was also an immaterial acquisition with an aggregate purchase price of $8.0 million.
FISCAL YEAR 2024 BUSINESS COMBINATION
AdvisorTarget
In May 2024, the Company acquired AdvisorTarget, a market leader in providing asset management and wealth management firms with data products to help power digital marketing, sales and engagement programs targeting financial advisors. AdvisorTarget is included in the Company’s ICS reportable segment. The aggregate purchase price included $34.3 million in cash, $0.2 million in deferred payments, $1.6 million for the settlement of a preexisting relationship, and contingent consideration with a maximum potential pay-out of $30.5 million. The contingent consideration is payable through fiscal year 2028 upon the achievement by the acquired business of certain defined revenue targets. After measurement period adjustments, net tangible liabilities assumed in the transaction were $0.8 million, and contingent liabilities incurred were valued at $14.0 million. This acquisition resulted in $38.6 million of Goodwill, which is tax deductible. Intangible assets acquired, which totaled $12.1 million, consist primarily of software technology and customer relationships, which are being amortized over a five-year life.
During the fiscal year ended June 30, 2023, there were no material acquisitions.
NOTE 7. FAIR VALUE OF FINANCIAL INSTRUMENTS
Accounting guidance on fair value measurements for certain financial assets and liabilities requires that assets and liabilities carried at fair value be classified and disclosed in one of the following three categories:
| Level 1 | Quoted market prices in active markets for identical assets and liabilities. | |||||||
| Level 2 | Observable market-based inputs other than quoted prices in active markets for identical assets and liabilities. | |||||||
| Level 3 | Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. |
In valuing assets and liabilities, the Company is required to maximize the use of quoted market prices and minimize the use of unobservable inputs. The Company calculates the fair value of its Level 1 and Level 2 instruments, as applicable, based on the exchange-traded price of similar or identical instruments where available or based on other observable instruments. These calculations take into consideration the credit risk of both the Company and its counterparties. The Company has not changed its valuation techniques in measuring the fair value of any financial assets and liabilities during the period.
The fair values of contingent consideration obligations are based on a probability weighted approach derived from the estimates of earn-out criteria and the probability assessment with respect to the likelihood of achieving those criteria. The measurement is based on significant inputs that are not observable in the market, therefore, the Company classifies this liability as Level 3 in the table below.
The following tables set forth the Company’s financial assets and liabilities at June 30, 2025 and 2024, respectively, that are recorded at fair value, segregated by level within the fair value hierarchy:
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||
| (in millions) | ||||||||||||||||||||||||||
| Assets: | ||||||||||||||||||||||||||
| Other current assets: | ||||||||||||||||||||||||||
| Securities | $ | 0.7 | $ | — | $ | — | $ | 0.7 | ||||||||||||||||||
| Other non-current assets: | ||||||||||||||||||||||||||
| Securities (a) | 195.2 | — | — | 195.2 | ||||||||||||||||||||||
| Derivative asset | — | — | — | — | ||||||||||||||||||||||
| Total assets as of June 30, 2025 | $ | 195.9 | $ | — | $ | — | $ | 195.9 | ||||||||||||||||||
| Liabilities: | ||||||||||||||||||||||||||
| Derivative liability | $ | — | $ | 24.6 | $ | — | $ | 24.6 | ||||||||||||||||||
| Contingent consideration obligations | — | — | 14.0 | 14.0 | ||||||||||||||||||||||
| Total liabilities as of June 30, 2025 | $ | — | $ | 24.6 | $ | 14.0 | $ | 38.6 |
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||
| (in millions) | ||||||||||||||||||||||||||
| Assets: | ||||||||||||||||||||||||||
| Other current assets: | ||||||||||||||||||||||||||
| Securities | $ | 0.8 | $ | — | $ | — | $ | 0.8 | ||||||||||||||||||
| Other non-current assets: | ||||||||||||||||||||||||||
| Securities (a) | 170.6 | — | — | 170.6 | ||||||||||||||||||||||
| Derivative asset | — | 59.9 | — | 59.9 | ||||||||||||||||||||||
| Total assets as of June 30, 2024 | $ | 171.4 | $ | 59.9 | $ | — | $ | 231.3 | ||||||||||||||||||
| Liabilities: | ||||||||||||||||||||||||||
| Contingent consideration obligations | $ | — | $ | — | $ | 14.0 | $ | 14.0 | ||||||||||||||||||
| Total liabilities as of June 30, 2024 | $ | — | $ | — | $ | 14.0 | $ | 14.0 |
(a) Includes investments related to the Company’s Defined Benefit Pension Plans and Executive Retirement and Savings Plan (the “ERSP”).
In addition, the Company has non-marketable securities with a carrying amount of $60.5 million as of June 30, 2025 and $58.3 million as of June 30, 2024 that are classified as Level 2 financial assets and included as part of Other non-current assets on the Consolidated Balance Sheets.
The following table sets forth an analysis of changes during fiscal years 2025 and 2024 in Level 3 financial liabilities of the Company:
| June 30, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| (in millions) | ||||||||||||||
| Beginning balance | $ | 14.0 | $ | 12.0 | ||||||||||
| Additional contingent consideration incurred | — | 14.0 | ||||||||||||
| Net decrease in contingent consideration liability | — | (6.7) | ||||||||||||
| Foreign currency impact on contingent consideration liability | — | (0.1) | ||||||||||||
| Payments | — | (5.2) | ||||||||||||
| Ending balance | $ | 14.0 | $ | 14.0 |
The Company did not incur any Level 3 fair value asset impairments during fiscal year 2025 or fiscal year 2024. Changes in economic conditions or model based valuation techniques may require the transfer of financial instruments between levels. The Company’s policy is to record transfers between levels, if any, as of the beginning of the fiscal year.
NOTE 8. LEASES
The Company’s leases consist primarily of real estate leases in locations where the Company maintains operations, and are classified as operating leases.
The Company evaluates each lease and service arrangement at inception to determine if the arrangement is, or contains, a lease. A lease exists if the Company obtains substantially all of the economic benefits of and has the right to control the use of an asset for a period of time. The lease term begins on the commencement date, which is the date the Company takes possession of the leased property and also classifies the lease as either operating or finance, and may include options to extend or terminate the lease if exercise of the option to extend or terminate the lease is considered to be reasonably certain. The Company’s options to extend or terminate a lease generally do not exceed five years. The lease term is used both to determine lease classification as an operating or finance lease and to calculate straight-line lease expense for operating leases. The weighted average remaining operating lease term as of June 30, 2025 was 6.5 years.
ROU assets represent the Company’s right to use an underlying asset for the lease term while lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at commencement date based on the present value of fixed lease payments over the lease term. ROU assets also include prepaid lease payments and exclude lease incentives received. Certain leases require the Company to pay taxes, insurance, maintenance, and/or other operating expenses associated with the leased asset. Such amounts are not included in the measurement of the lease liability to the extent they are variable in nature (e.g. based on actual costs incurred). These variable lease costs are recognized as a variable lease expense when incurred. As the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate to measure the lease liability and the associated ROU asset at commencement date. The incremental borrowing rate was determined based on the rate of interest that the Company would have to pay to borrow an amount equal to the lease payments on a collateralized basis over a similar term. The Company uses the unsecured borrowing rate and risk-adjusts that rate to approximate a collateralized rate. The weighted average discount rate used in measurement of the Company’s operating lease liabilities as of June 30, 2025 was 3.2%.
Supplemental Balance Sheet Information
| June 30, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| (in millions) | ||||||||||||||
| Assets: | ||||||||||||||
| Operating lease ROU assets (a) | $ | 176.1 | $ | 186.2 | ||||||||||
| Liabilities: | ||||||||||||||
| Operating lease liabilities (a) - Current | $ | 37.2 | $ | 38.0 | ||||||||||
| Operating lease liabilities (a) - Non-current | 169.5 | 183.8 | ||||||||||||
| Total Operating lease liabilities | $ | 206.7 | $ | 221.9 |
(a)Operating lease assets are included within Other non-current assets, and operating lease liabilities are included within Payables and accrued expenses (current portion) and Other non-current liabilities (non-current portion) in the Company’s Consolidated Balance Sheets as of June 30, 2025 and 2024, respectively.
Components of Lease Cost (a)
| Years ended June 30, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| (in millions) | ||||||||||||||
| Operating lease cost | $ | 41.3 | $ | 39.9 | ||||||||||
| Variable lease cost | $ | 28.3 | $ | 29.0 |
(a)Lease cost is included within Cost of revenues and Selling, general and administrative expenses, dependent upon the nature and use of the ROU asset, in the Company’s Consolidated Statements of Earnings.
Supplemental Cash Flow Information
| Years ended June 30, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| (in millions) | ||||||||||||||
| Cash paid for amounts included in the measurement of lease liabilities | ||||||||||||||
| Operating cash outflows from operating leases | $ | 37.3 | $ | 35.9 | ||||||||||
| ROU assets obtained in exchange for operating lease liabilities | $ | 28.3 | $ | 21.8 |
Maturity of Lease Liabilities under ASC 842 (Leases)
Future rental payments on leases with initial non-cancellable lease terms in excess of one year were due as follows at June 30, 2025:
| Operating Leases | |||||
| Years Ending June 30, | (in millions) | ||||
| 2026 | $ | 42.7 | |||
| 2027 | 43.5 | ||||
| 2028 | 37.5 | ||||
| 2029 | 30.4 | ||||
| 2030 | 19.3 | ||||
| Thereafter | 59.3 | ||||
| Total lease payments | 232.7 | ||||
| Less: Discount Amount | 26.0 | ||||
| Present value of operating lease liabilities | $ | 206.7 |
NOTE 9. PROPERTY, PLANT AND EQUIPMENT, NET
Property, plant and equipment at cost and Accumulated depreciation at June 30, 2025 and 2024 are as follows:
| June 30, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| (in millions) | ||||||||||||||
| Property, plant and equipment: | ||||||||||||||
| Land and buildings | $ | 2.5 | $ | 2.5 | ||||||||||
| Equipment | 440.1 | 383.4 | ||||||||||||
| Furniture, leaseholds and other | 216.7 | 220.7 | ||||||||||||
| 659.2 | 606.6 | |||||||||||||
| Less: Accumulated depreciation | (489.1) | (444.4) | ||||||||||||
| Property, plant and equipment, net | $ | 170.1 | $ | 162.2 |
In fiscal years 2025 and 2024, Property, plant and equipment and Accumulated depreciation were each reduced by $1.1 million and $3.7 million, respectively, for asset retirements related to fully depreciated property, plant and equipment no longer in use.
Depreciation expense for Property, plant and equipment for the years ended June 30, 2025, 2024 and 2023 was as follows:
| Years ended June 30, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| (in millions) | ||||||||||||||||||||
| Depreciation expense for Property, plant and equipment | $ | 43.6 | $ | 40.6 | $ | 41.2 |
NOTE 10. GOODWILL AND INTANGIBLE ASSETS, NET
Changes in Goodwill for the fiscal years ended June 30, 2025 and 2024 are as follows:
| Investor Communication Solutions | Global Technology and Operations | Total | ||||||||||||||||||
| (in millions) | ||||||||||||||||||||
| Goodwill, gross, at June 30, 2023 | $ | 1,042.8 | $ | 2,418.8 | $ | 3,461.6 | ||||||||||||||
| Additions | 41.8 | — | 41.8 | |||||||||||||||||
| Foreign currency translation and other | (0.3) | (33.7) | (34.0) | |||||||||||||||||
| Fair value adjustments (a) | — | — | — | |||||||||||||||||
| Accumulated impairment losses | — | — | — | |||||||||||||||||
| Goodwill, net, at June 30, 2024 | $ | 1,084.3 | $ | 2,385.1 | $ | 3,469.4 | ||||||||||||||
| Goodwill, gross, at June 30, 2024 | $ | 1,084.3 | $ | 2,385.1 | $ | 3,469.4 | ||||||||||||||
| Additions | 6.2 | 38.3 | 44.5 | |||||||||||||||||
| Foreign currency translation and other | 3.4 | 95.5 | 98.9 | |||||||||||||||||
| Fair value adjustments (a) | (3.2) | — | (3.2) | |||||||||||||||||
| Accumulated impairment losses | — | — | — | |||||||||||||||||
| Goodwill, net, at June 30, 2025 | $ | 1,090.7 | $ | 2,518.9 | $ | 3,609.6 |
(a) Fair value adjustments includes adjustments to goodwill as part of finalization of the purchase price allocations.
Additions for the fiscal year ended June 30, 2025 include $38.3 million for the acquisition of SIS.
Additions for the fiscal year ended June 30, 2024 include $38.6 million for the acquisition of AdvisorTarget.
During fiscal years 2025, 2024 and 2023, the Company performed the required impairment tests of Goodwill and determined that there was no impairment. The Company also performs a sensitivity analysis under Step 1 of the goodwill impairment test assuming hypothetical reductions in the fair values of the reporting units. A 10% change in our estimates of projected future operating cash flows, discount rates, or terminal value growth rates, which are the most significant estimates used in our calculations of the fair values of the reporting units, would not result in an impairment of our goodwill.
Intangible assets at cost and accumulated amortization at June 30, 2025 and 2024 are as follows:
| June 30, | ||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | |||||||||||||||||||||||||||||||||||||
| Original Cost | Accumulated Amortization | Intangible Assets, net | Original Cost | Accumulated Amortization | Intangible Assets, net | |||||||||||||||||||||||||||||||||
| (in millions) | ||||||||||||||||||||||||||||||||||||||
| Software licenses | $ | 250.7 | $ | (178.3) | $ | 72.4 | $ | 233.9 | $ | (168.5) | $ | 65.3 | ||||||||||||||||||||||||||
| Acquired software technology | 376.5 | (209.4) | 167.1 | 295.0 | (215.3) | 79.7 | ||||||||||||||||||||||||||||||||
| Customer contracts and lists | 1,129.8 | (802.5) | 327.4 | 1,140.4 | (698.0) | 442.4 | ||||||||||||||||||||||||||||||||
| Acquired intellectual property | 136.6 | (136.6) | — | 136.6 | (136.6) | — | ||||||||||||||||||||||||||||||||
| Internal use software | 853.1 | (142.5) | 710.6 | 823.1 | (103.3) | 719.8 | ||||||||||||||||||||||||||||||||
| Other intangibles | 20.2 | (20.2) | — | 20.2 | (20.2) | 0.1 | ||||||||||||||||||||||||||||||||
| $ | 2,766.9 | $ | (1,489.5) | $ | 1,277.4 | $ | 2,649.2 | $ | (1,342.0) | $ | 1,307.2 |
All of the intangible assets have finite lives and as such, are subject to amortization.
The weighted-average remaining useful life of the intangible assets is as follows:
| Weighted-Average Remaining Useful Life (Years) | ||||||||
| Acquired software technology | 7.3 | |||||||
| Software licenses | 3.7 | |||||||
| Customer contracts and lists | 2.9 | |||||||
| Internal use software | 16.3 | |||||||
| Other intangibles | 0.0 | |||||||
| Total weighted-average remaining useful life | 11.0 |
Expenditures for major software purchases and software developed or obtained for internal use are capitalized and amortized on a straight-line basis generally over a three- to five-year period or another period deemed appropriate based on the specific characteristics of the software, considering the potential impact of obsolescence, speed of technology changes, competition, and other economic factors.
Amortization of intangibles for the years ended June 30, 2025, 2024 and 2023 was as follows:
| Years ended June 30, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| (in millions) | ||||||||||||||||||||
| Amortization expense for intangible assets | $ | 283.8 | $ | 279.5 | $ | 257.6 |
Estimated remaining amortization expenses of the Company’s existing intangible assets for the next five fiscal years and thereafter are as follows:
| Years Ending June 30, | (in millions) | |||||||
| 2026 | $ | 272.8 | ||||||
| 2027 | 192.2 | |||||||
| 2028 | 170.0 | |||||||
| 2029 | 79.8 | |||||||
| 2030 | 64.5 | |||||||
| Thereafter | 498.2 | |||||||
| Total | $ | 1,277.4 |
NOTE 11. DEFERRED CLIENT CONVERSION AND START-UP COSTS
Deferred client conversion and start-up costs consisted of the following:
| June 30, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| (in millions) | ||||||||||||||
| Deferred client conversion and start-up costs | $ | 837.5 | $ | 884.5 | ||||||||||
| Other start-up costs | 5.4 | 7.6 | ||||||||||||
| Total | $ | 842.9 | $ | 892.1 |
Deferred Client Conversion and Start-up Costs
Deferred client conversion and start-up costs include direct costs incurred to set up or convert a client’s systems to function with the Company’s technology, and are generally deferred and recognized on a straight-line basis over the service term of the arrangement to which the costs relate, which commences when the client goes live with the Company’s services. The key judgment for determining the amount of costs to be deferred relates to the extent to which such costs are recoverable. This estimate includes (i) projected future client revenues, including variable revenues, offset by an estimate of conversion costs including an estimate of onboarding costs as well as ongoing operational costs, and (ii) an estimate of the expected client life. This is also the basis for how the Company assesses such costs for impairment.
Deferred client conversion and start-up costs of $842.9 million as of June 30, 2025 consist of costs incurred to set-up or convert a client’s systems to function with the Company’s technology of $837.5 million, as well as other start-up costs of $5.4 million. Deferred client conversion and start-up costs of $892.1 million as of June 30, 2024 consist of costs incurred to set-up or convert a client’s systems to function with the Company’s technology of $884.5 million, as well as other start-up costs of $7.6 million.
The total amount of deferred client conversion and start-up costs and deferred sales commission costs amortized in Operating expenses for the fiscal year ended June 30, 2025 and 2024 was $148.8 million and $132.9 million, respectively.
NOTE 12. OTHER NON-CURRENT ASSETS
Other non-current assets consisted of the following:
| June 30, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| (in millions) | ||||||||||||||
| Long-term investments | $ | 299.2 | $ | 271.1 | ||||||||||
| ROU assets (a) | 176.1 | 186.2 | ||||||||||||
| Contract assets (b) | 137.5 | 125.3 | ||||||||||||
| Deferred sales commissions costs | 131.7 | 131.2 | ||||||||||||
| Long-term broker fees | 24.3 | 34.9 | ||||||||||||
| Deferred data center costs (c) | 8.3 | 11.8 | ||||||||||||
| Other (d) | 50.9 | 110.1 | ||||||||||||
| Total | $ | 827.9 | $ | 870.6 |
(a) ROU assets represent the Company’s right to use an underlying asset for the lease term. Please refer to Note 8, “Leases” for a further discussion.
(b) Contract assets result from revenue already recognized but not yet invoiced, including certain future amounts to be collected under software term licenses and certain other client contracts.
(c) Represents deferred data center costs associated with the Company’s information technology services agreements. Please refer to Note 19, “Contractual Commitments, Contingencies and Off-Balance Sheet Arrangements” for a further discussion.
(d) Includes $59.9 million derivative assets as of June 30, 2024 related to the Company’s cross-currency swap derivative contracts. The derivative was in a liability position as of June 30, 2025 and was included within Other non-current liabilities. Refer to Note 15, “Other Non-Current Liabilities” for details. Please refer to Note 19, “Contractual Commitments, Contingencies and Off-Balance Sheet Arrangements” for a further discussion.
NOTE 13. PAYABLES AND ACCRUED EXPENSES
Payables and accrued expenses consisted of the following:
| June 30, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| (in millions) | ||||||||||||||
| Accounts payable | $ | 220.3 | $ | 314.0 | ||||||||||
| Employee compensation and benefits | 372.8 | 354.4 | ||||||||||||
| Accrued broker fees | 137.0 | 126.3 | ||||||||||||
| Accrued dividend payable | 103.1 | 93.4 | ||||||||||||
| Customer deposits | 84.4 | 52.7 | ||||||||||||
| Accrued taxes | 60.1 | 112.5 | ||||||||||||
| Business process outsourcing administration fees | 52.6 | 59.9 | ||||||||||||
| Operating lease liabilities | 37.2 | 38.0 | ||||||||||||
| Other | 45.4 | 43.3 | ||||||||||||
| Total | $ | 1,112.8 | $ | 1,194.4 |
Restructuring Charges
The total Employee compensation and benefits liability within the table above of $372.8 million and $354.4 million, respectively, includes a restructuring liability of $22.7 million and $38.9 million as of June 30, 2025 and 2024, respectively.
During the fourth quarter of fiscal year 2024, Broadridge completed a corporate restructuring initiative to exit and realign some of its businesses, streamline the Company’s management structure, reallocate work to lower cost locations, and reduce headcount in deprioritized areas (the “Corporate Restructuring Initiative”), which was initiated in the fourth quarter of fiscal year 2023. For fiscal years 2024, this restructuring resulted in total severance costs of $45.2 million recorded in Operating expenses. These costs were not reflected in segment profit and are recorded within Corporate and Other.
NOTE 14. BORROWINGS
Outstanding borrowings and available capacity under the Company’s borrowing arrangements were as follows:
| Expiration Date | Principal amount outstanding at June 30, 2025 | Carrying value at June 30, 2025 | Carrying value at June 30, 2024 | Unused Available Capacity | Fair Value at June 30, 2025 | ||||||||||||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||||||||||||||
| Current portion of long-term debt | |||||||||||||||||||||||||||||||||||
| Fiscal 2016 Senior Notes (a) | June 2026 | $ | 500.0 | $ | 499.3 | $ | — | $ | — | $ | 494.1 | ||||||||||||||||||||||||
| Total | $ | 500.0 | $ | 499.3 | $ | — | $ | — | $ | 494.1 | |||||||||||||||||||||||||
| Long-term debt, excluding current portion | |||||||||||||||||||||||||||||||||||
| Fiscal 2025 Revolving Credit Facility: | |||||||||||||||||||||||||||||||||||
| U.S. dollar tranche | December 2029 | $ | — | $ | — | $ | — | $ | 1,000.0 | $ | — | ||||||||||||||||||||||||
| Multicurrency tranche | December 2029 | 133.5 | 133.5 | — | 366.5 | 133.5 | |||||||||||||||||||||||||||||
| Total Revolving Credit Facility | $ | 133.5 | $ | 133.5 | $ | — | $ | 1,366.5 | $ | 133.5 | |||||||||||||||||||||||||
| Fiscal 2024 Amended Term Loan | August 2026 | $ | 880.0 | $ | 879.1 | $ | 1,117.9 | $ | — | $ | 880.0 | ||||||||||||||||||||||||
| Fiscal 2016 Senior Notes (a) | June 2026 | $ | — | $ | — | $ | 498.7 | $ | — | $ | — | ||||||||||||||||||||||||
| Fiscal 2020 Senior Notes | December 2029 | 750.0 | 746.0 | 745.1 | — | 702.8 | |||||||||||||||||||||||||||||
| Fiscal 2021 Senior Notes | May 2031 | 1,000.0 | 994.4 | 993.4 | — | 891.4 | |||||||||||||||||||||||||||||
| Total Senior Notes | $ | 1,750.0 | $ | 1,740.3 | $ | 2,237.2 | $ | — | $ | 1,594.2 | |||||||||||||||||||||||||
| Total long-term debt | $ | 2,763.5 | $ | 2,753.0 | $ | 3,355.1 | $ | 1,366.5 | $ | 2,607.7 | |||||||||||||||||||||||||
| Total debt | $ | 3,263.5 | $ | 3,252.3 | $ | 3,355.1 | $ | 1,366.5 | $ | 3,101.8 |
(a) The Fiscal 2016 Senior Notes were reclassified from Long-term debt to Current portion of long-term debt in the fourth quarter of fiscal year 2025 to reflect the remaining maturity of less than one year.
Future principal payments on the Company’s outstanding debt are as follows (in millions):
| 2026 | 2027 | 2028 | 2029 | 2030 | Thereafter | Total | ||||||||||||||||||||||||||||||||||||||
| Years ending June 30, | $ | 500.0 | $ | 880.0 | $ | — | $ | — | $ | 883.5 | $ | 1,000.0 | $ | 3,263.5 |
Fiscal 2025 Revolving Credit Facility: In December 2024, the Company entered into an amended and restated $1.5 billion five-year revolving credit facility (the “Fiscal 2025 Revolving Credit Facility”), which replaced the $1.5 billion five-year revolving credit facility entered during April 2021 (the “Fiscal 2021 Revolving Credit Facility) (together the “Revolving Credit Facilities”). The Fiscal 2025 Revolving Credit Facility is comprised of a $1.0 billion U.S. dollar tranche and a $500.0 million multicurrency tranche.
The weighted-average interest rate on the Revolving Credit Facilities was 5.49%, 6.50% and 4.95% for the fiscal years ended June 30, 2025, 2024 and 2023, respectively. The fair value of the variable-rate Fiscal 2025 Revolving Credit Facility borrowings at June 30, 2025 approximates carrying value and has been classified as a Level 2 financial liability (as defined in Note 7, “Fair Value of Financial Instruments”).
Under the Fiscal 2025 Revolving Credit Facility, revolving loans denominated in U.S. Dollars, Canadian Dollars, Euro, Sterling, Swedish Kronor and Yen bears interest at Adjusted Term SOFR, Adjusted Term CORRA, EURIBOR, TIBOR, SONIA and STIBOR, respectively, plus 1.000% (subject to multiple step-ups to 1.250% and multiple step-downs to 0.785%, in each case based on ratings). The Fiscal 2025 Revolving Credit Facility also has a facility fee of 0.125% per annum (subject to multiple step-ups to 0.25% per annum and multiple step-downs to 0.090% per annum, in each case, based on ratings). The Company may voluntarily prepay, in whole or in part and without premium or penalty, borrowings under the Fiscal 2025 Revolving Credit Facility in accordance with individual drawn loan maturities. The Fiscal 2025 Revolving Credit Facility is subject to certain covenants, including a leverage ratio. At June 30, 2025, the Company is in compliance with all covenants of the Fiscal 2025 Revolving Credit Facility.
Fiscal 2021 Term Loans: In March 2021, the Company entered into an amended and restated term credit agreement as amended on December 23, 2021 and May 23, 2023, (“Term Credit Agreement”) providing for term loan commitments in an aggregate principal amount of $2.55 billion, comprised of a $1.0 billion tranche (“Tranche 1”) and a $1.55 billion tranche (“Tranche 2,” together with Tranche 1, the “Fiscal 2021 Term Loans”). The proceeds of the Fiscal 2021 Term Loans were used by the Company to solely finance the acquisition of Itiviti Holding AB and pay certain fees and expenses in connection therewith. Once borrowed, amounts repaid or prepaid in respect of such Fiscal 2021 Term Loans may not be reborrowed. The Tranche 1 Loan was to mature on the date that is 18 months after the date on which the Fiscal 2021 Term Loans were borrowed (the “Funding Date”), but was repaid in full in May 2021 with proceeds from the Fiscal 2021 Senior Notes (as discussed further below). The Tranche 2 Loan was to mature in May 2024. The Tranche 2 Loan bore interest at Adjusted Term SOFR plus 1.000% per annum (subject to step-ups to Adjusted Term SOFR plus 1.250% or a step-down to SOFR plus 0.750% based on ratings). On May 23, 2023, we amended the interest rate index from LIBOR to Adjusted Term SOFR. All other terms remained unchanged.
Fiscal 2024 Amended Term Loan: On August 17, 2023, the Company amended and restated the Term Credit Agreement (the “Amended and Restated Term Credit Agreement”), providing for term loan commitment in an aggregate principal amount of $1.3 billion, replacing the Tranche 2 Loan of the Fiscal 2021 Term Loans (the “Fiscal 2024 Amended Term Loan”). The Fiscal 2024 Amended Term Loan will mature in August 2026 on the third anniversary of the amended Funding Date of August 17, 2023. The Fiscal 2024 Term Loan bears interest at Adjusted Term SOFR plus 1.250% per annum (subject to a step-up to Adjusted Term SOFR plus 1.375% or step-downs to Adjusted Term SOFR plus 1.125% and Adjusted Term SOFR plus 1.000% in each case, based on ratings).
The Company may voluntarily prepay the Fiscal 2024 Amended Term Loan in whole or in part and without premium or penalty. In the event of receipt of cash proceeds by the Company or its subsidiaries from certain incurrences of indebtedness, certain equity issuances, and certain sales, transfers or other dispositions of assets, the Company will be required to prepay the Fiscal 2024 Term Loan, subject to certain limitations and qualifications as set forth in the Amended and Restated Term Credit Agreement. The Amended and Restated Term Credit Agreement is subject to certain covenants, including a leverage ratio. At June 30, 2025, the Company is in compliance with all covenants of the Fiscal 2024 Amended Term Loan.
Fiscal 2016 Senior Notes: In June 2016, the Company completed an offering of $500.0 million in aggregate principal amount of senior notes (the “Fiscal 2016 Senior Notes”). The Fiscal 2016 Senior Notes will mature on June 27, 2026 and bear interest at a rate of 3.40% per annum. Interest on the Fiscal 2016 Senior Notes is payable semi-annually in arrears on June 27 and December 27 of each year. The Fiscal 2016 Senior Notes were issued at a price of 99.589% (effective yield to maturity of 3.449%). The indenture governing the Fiscal 2016 Senior Notes contains certain covenants including covenants restricting the Company’s ability to create or incur liens securing indebtedness for borrowed money, to enter into certain sale-leaseback transactions, certain subsidiary indebtedness, and to engage in mergers or consolidations and transfer or lease all or substantially all of our assets. At June 30, 2025, the Company is in compliance with the covenants of the indenture governing the Fiscal 2016 Senior Notes. The indenture also contains covenants regarding the purchase of the Fiscal 2016 Senior Notes upon a change of control triggering event. The Company may redeem the Fiscal 2016 Senior Notes in whole or in part at any time before their maturity. The fair value of the fixed-rate Fiscal 2016 Senior Notes at June 30, 2025 and June 30, 2024 was $494.1 million and $480.4 million, respectively, based on quoted market prices and has been classified as a Level 1 financial liability (as defined in Note 7, “Fair Value of Financial Instruments”).
Fiscal 2020 Senior Notes: In December 2019, the Company completed an offering of $750.0 million in aggregate principal amount of senior notes (the “Fiscal 2020 Senior Notes”). The Fiscal 2020 Senior Notes will mature on December 1, 2029 and bear interest at a rate of 2.90% per annum. Interest on the Fiscal 2020 Senior Notes is payable semi-annually in arrears on June 1 and December 1 of each year. The Fiscal 2020 Senior Notes were issued at a price of 99.717% (effective yield to maturity of 2.933%). The indenture governing the Fiscal 2020 Senior Notes contains certain covenants including covenants restricting the Company’s ability to create or incur liens securing indebtedness for borrowed money, to enter into certain sale-leaseback transactions, certain subsidiary indebtedness, and to engage in mergers or consolidations and transfer or lease all or substantially all of our assets. At June 30, 2025, the Company is in compliance with the covenants of the indenture governing the Fiscal 2020 Senior Notes. The indenture also contains covenants regarding the purchase of the Fiscal 2020 Senior Notes upon a change of control triggering event. The Company may redeem the Fiscal 2020 Senior Notes in whole or in part at any time before their maturity. The fair value of the fixed-rate Fiscal 2020 Senior Notes at June 30, 2025 and June 30, 2024 was $702.8 million and $667.7 million, respectively, based on quoted market prices and has been classified as a Level 1 financial liability (as defined in Note 7, “Fair Value of Financial Instruments”).
Fiscal 2021 Senior Notes: In May 2021, the Company completed an offering of $1.0 billion in aggregate principal amount of senior notes (the “Fiscal 2021 Senior Notes”). The Fiscal 2021 Senior Notes will mature on May 1, 2031 and bear interest at a rate of 2.60% per annum. Interest on the Fiscal 2021 Senior Notes is payable semi-annually in arrears on May 1 and November 1 of each year. The Fiscal 2021 Senior Notes were issued at a price of 99.957% (effective yield to maturity of 2.605%). The indenture governing the Fiscal 2021 Senior Notes contains certain covenants including covenants restricting the Company’s ability to create or incur liens securing indebtedness for borrowed money, to enter into certain sale-leaseback transactions, certain subsidiary indebtedness, and to engage in mergers or consolidations and transfer or lease all or substantially all of our assets. At June 30, 2025, the Company is in compliance with the covenants of the indenture governing the Fiscal 2021 Senior Notes. The indenture also contains covenants regarding the purchase of the Fiscal 2021 Senior Notes upon a change of control triggering event. The Company may redeem the Fiscal 2021 Senior Notes in whole or in part at any time before their maturity. The fair value of the fixed-rate Fiscal 2021 Senior Notes at June 30, 2025 and June 30, 2024 was $891.4 million and $843.5 million, respectively, based on quoted market prices and has been classified as a Level 1 financial liability (as defined in Note 7, “Fair Value of Financial Instruments”).
The Fiscal 2025 Revolving Credit Facility, Fiscal 2024 Amended Term Loan, Fiscal 2016 Senior Notes, Fiscal 2020 Senior Notes and Fiscal 2021 Senior Notes are senior unsecured obligations of the Company and are ranked equally in right of payment.
In addition, certain of the Company’s subsidiaries established unsecured, uncommitted lines of credit with banks. As of June 30, 2025 and 2024, respectively, there were no outstanding borrowings under these lines of credit.
NOTE 15. OTHER NON-CURRENT LIABILITIES
Other non-current liabilities consisted of the following:
| June 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| (in millions) | |||||||||||
| Operating lease liabilities | $ | 169.5 | $ | 183.8 | |||||||
| Post-employment retirement obligations | 238.0 | 214.8 | |||||||||
| Non-current income taxes | 74.6 | 59.0 | |||||||||
| Acquisition related contingencies | 14.0 | 15.0 | |||||||||
| Other (a) | 89.3 | 78.3 | |||||||||
| Total | $ | 585.5 | $ | 550.9 |
(a) Includes $24.6 million derivative liability as of June 30, 2025 related to the Company’s cross-currency swap derivative contracts. The derivative was in an asset position as of June 30, 2024 and was included within Other non-current assets. Please refer to Note 12, “Other Non-Current Assets” for details. Please refer to Note 19, “Contractual Commitments, Contingencies and Off-Balance Sheet Arrangements” for a further discussion.
The Company sponsors a Supplemental Officer Retirement Plan (the “SORP”). The SORP is a non-qualified ERISA defined benefit plan pursuant to which the Company will pay supplemental pension benefits to certain key officers upon retirement based upon the officers’ years of service and compensation. The SORP was closed to new participants beginning in fiscal year 2015. The Company also sponsors a Supplemental Executive Retirement Plan (the “SERP”). The SERP is also a non-qualified ERISA defined benefit plan pursuant to which the Company will pay supplemental pension benefits to certain key executives upon retirement based upon the executives’ years of service and compensation. The SERP was closed to new participants beginning in fiscal year 2015.
The SORP and SERP are effectively funded with assets held in a Rabbi Trust. The assets invested in the Rabbi Trust are to be used in part to fund benefit payments to participants under the terms of the plans. The Rabbi Trust is irrevocable and no portion of the trust funds may be used for any purpose other than the delivery of those assets to the participants, except that assets held in the Rabbi Trust would be subject to the claims of the Company’s general creditors in the event of bankruptcy or insolvency of the Company. The SORP and SERP are non-qualified plans for federal tax purposes and for purposes of Title I of ERISA. The Rabbi Trust assets had a value of $66.4 million at June 30, 2025 and $61.8 million at June 30, 2024 and are included in Other non-current assets in the accompanying Consolidated Balance Sheets. The SORP and the SERP had a total benefit obligation of $62.6 million at June 30, 2025 and $61.6 million at June 30, 2024 and are included in Other non-current liabilities in the accompanying Consolidated Balance Sheets.
NOTE 16. STOCK-BASED COMPENSATION
Incentive Equity Awards. The Broadridge Financial Solutions, Inc. 2007 Omnibus Award Plan (the “2007 Plan”) and 2018 Omnibus Award Plan (the “2018 Plan”) provide for the granting of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units, phantom stock awards, stock bonuses and performance compensation awards to employees, non-employee directors, and other key individuals who perform services for the Company. The 2018 Plan was approved by shareholders in November 2018 and replaced the 2007 Plan. As of June 30, 2025, there were 5.6 million shares available for future issuance under the 2018 Plan. The accounting for stock-based compensation requires the measurement of stock-based compensation expense to be recognized in the Consolidated Statements of Earnings based on the fair value of the award on the date of grant. In accordance with the 2007 Plan and 2018 Plan, the Company’s stock-based compensation consists of the following:
Stock Options: Stock options are granted to employees at exercise prices equal to the fair market value of the Company’s common stock on the dates of grant. Stock options are generally issued under a graded vesting schedule, meaning that they vest ratably over four years, and have a term of 10 years. A portion of the stock options granted in fiscal year 2018 have a cliff vesting schedule meaning that they fully vest in four years from the grant date and have a term of 10 years. Compensation expense for stock options under a graded vesting schedule is recognized over the requisite service period for each separately vesting portion of the stock option award. Compensation expense for stock options under a cliff vesting schedule is recognized equally over the vesting period of four years with 25 percent of the cost recognized over each 12 months period net of estimated forfeitures.
Time-based Restricted Stock Units: The Company has a time-based restricted stock unit (“RSU”) program under which RSUs representing the right to receive one share of the Company’s common stock for each vested RSU granted. Time-based RSUs typically vest two and one-half years from the date of grant. The Company records stock compensation expense for time-based RSUs net of estimated forfeitures on a straight-line basis over the vesting period.
Performance-based Restricted Stock Units: The Company has a performance-based RSU program under which RSUs representing the right to receive one share of the Company’s common stock for each vested RSU granted. RSUs vest upon the achievement by the Company of specific performance metrics. The Company records stock compensation expense for performance-based RSUs net of estimated forfeitures on a straight-line basis over the performance period, plus a subsequent vesting period, which typically totals approximately two and one-half years from the date of grant.
The activity related to the Company’s incentive equity awards for the fiscal years ended June 30, 2025, 2024 and 2023 consisted of the following:
| Stock Options | Time-based RSUs | Performance-based RSUs | ||||||||||||||||||||||||||||||||||||
| Number of Options | Weighted Average Exercise Price | Number of Shares | Weighted Average Grant-Date Fair Value | Number of Shares | Weighted Average Grant-Date Fair Value | |||||||||||||||||||||||||||||||||
| Balances at June 30, 2022 | 2,706,685 | $ | 102.34 | 750,852 | $ | 135.94 | 210,281 | $ | 148.59 | |||||||||||||||||||||||||||||
| Granted | 577,046 | 144.34 | 393,541 | 139.36 | 110,624 | 139.00 | ||||||||||||||||||||||||||||||||
| Exercised (a) | (565,470) | 76.38 | — | — | — | — | ||||||||||||||||||||||||||||||||
| Vesting of RSUs (b) | — | — | (333,625) | 134.02 | (108,475) | 130.18 | ||||||||||||||||||||||||||||||||
| Expired/forfeited | (21,456) | 141.35 | (79,441) | 144.18 | (10,725) | 144.91 | ||||||||||||||||||||||||||||||||
| Balances at June 30, 2023 | 2,696,805 | $ | 116.46 | 731,327 | $ | 137.76 | 201,705 | $ | 153.42 | |||||||||||||||||||||||||||||
| Granted | 338,301 | 197.04 | 299,368 | 173.18 | 92,905 | 168.95 | ||||||||||||||||||||||||||||||||
| Exercised (a) | (732,491) | 98.34 | — | — | — | — | ||||||||||||||||||||||||||||||||
| Vesting of RSUs (b) | — | — | (294,088) | 152.47 | (85,914) | 158.22 | ||||||||||||||||||||||||||||||||
| Expired/forfeited | (121,994) | 158.93 | (53,923) | 152.23 | (46,891) | 145.22 | ||||||||||||||||||||||||||||||||
| Balances at June 30, 2024 | 2,180,621 | $ | 132.68 | 682,684 | $ | 146.05 | 161,805 | $ | 152.21 | |||||||||||||||||||||||||||||
| Granted | 322,641 | 238.93 | 278,262 | 207.22 | 107,142 | 203.13 | ||||||||||||||||||||||||||||||||
| Exercised (a) | (579,863) | 107.62 | — | — | — | — | ||||||||||||||||||||||||||||||||
| Vesting of RSUs (b) | — | — | (321,759) | 135.08 | (79,046) | 137.47 | ||||||||||||||||||||||||||||||||
| Expired/forfeited | (6,071) | 186.33 | (48,584) | 173.56 | (10,788) | 143.51 | ||||||||||||||||||||||||||||||||
| Balances at June 30, 2025 (c) | 1,917,328 | $ | 157.97 | 590,603 | $ | 178.58 | 179,113 | $ | 189.69 |
(a)Stock options exercised during the fiscal years ended June 30, 2025, 2024 and 2023 had intrinsic values of $69.0 million, $66.7 million and $51.2 million, respectively.
(b)Time-based RSUs that vested during the fiscal years ended June 30, 2025, 2024 and 2023 had a total fair value of $77.2 million, $59.0 million and $49.6 million, respectively. Performance-based RSUs that vested during the fiscal years ended June 30, 2025, 2024 and 2023 had a total fair value of $19.2 million, $17.2 million and $15.9 million, respectively.
(c)As of June 30, 2025, the Company’s outstanding stock options using the fiscal year-end share price of $243.03 had an aggregate intrinsic value of $163.1 million. As of June 30, 2025, the Company’s outstanding “in the money” vested stock options using the fiscal year-end share price of $243.03 had an aggregate intrinsic value of $123.9 million. As of June 30, 2025, time-based RSUs and performance-based RSUs expected to vest using the fiscal year-end share price of $243.03 had an aggregate intrinsic value of $134.2 million and $40.4 million, respectively. Performance-based RSUs granted in the table above represent initial target awards, and performance adjustments for (i) change in shares issued based upon attainment of performance goals determined in the period, and (ii) estimated change in shares issued resulting from attainment of performance goals to be determined at the end of the prospective performance period.
The tables below summarize information regarding the Company’s outstanding and exercisable stock options as of June 30, 2025:
| Outstanding Options | ||||||||||||||||||||||||||
| Options Outstanding | Weighted Average Remaining Contractual Term (in years) | Weighted Average Exercise Price Per Share | Aggregate Intrinsic Value (in millions) (a) | |||||||||||||||||||||||
| Range of Exercise Prices | ||||||||||||||||||||||||||
| $50.01 to $65.00 | 9,506 | 1.38 | $ | 64.89 | ||||||||||||||||||||||
| $65.01 to $80.00 | 5,129 | 1.62 | $ | 67.32 | ||||||||||||||||||||||
| $80.01 to $95.00 | 177,950 | 2.52 | $ | 93.64 | ||||||||||||||||||||||
| $95.01 to $110.00 | 133,564 | 3.48 | $ | 99.08 | ||||||||||||||||||||||
| $110.01 to $125.00 | 170,860 | 4.43 | $ | 117.53 | ||||||||||||||||||||||
| $125.01 to $140.00 | 23,205 | 6.66 | $ | 133.74 | ||||||||||||||||||||||
| $140.01 to $155.00 | 769,864 | 6.67 | $ | 145.68 | ||||||||||||||||||||||
| $155.01 to $185.00 | 39,020 | 7.15 | $ | 174.83 | ||||||||||||||||||||||
| $185.01 to $200.00 | 239,902 | 8.46 | $ | 198.30 | ||||||||||||||||||||||
| $200.01 to $215.00 | 26,497 | 8.88 | $ | 203.30 | ||||||||||||||||||||||
| $215.01 to $230.00 | 32,136 | 9.36 | $ | 224.23 | ||||||||||||||||||||||
| $230.01 to $243.03 | 289,695 | 9.60 | $ | 240.55 | ||||||||||||||||||||||
| 1,917,328 | 6.58 | $ | 157.97 | $ | 163.1 |
| Exercisable Options | ||||||||||||||||||||||||||
| Range of Exercise Prices | Options Exercisable | Weighted Average Remaining Contractual Term (in years) | Weighted Average Exercise Price Per Share | Aggregate Intrinsic Value (in millions) (a) | ||||||||||||||||||||||
| $50.01 to $65.00 | 9,506 | 1.38 | $ | 64.89 | ||||||||||||||||||||||
| $65.01 to $80.00 | 5,129 | 1.62 | $ | 67.32 | ||||||||||||||||||||||
| $80.01 to $95.00 | 177,950 | 2.52 | $ | 93.64 | ||||||||||||||||||||||
| $95.01 to $110.00 | 133,564 | 3.48 | $ | 99.08 | ||||||||||||||||||||||
| $110.01 to $125.00 | 170,860 | 4.43 | $ | 117.53 | ||||||||||||||||||||||
| $125.01 to $140.00 | 23,205 | 6.66 | $ | 133.74 | ||||||||||||||||||||||
| $140.01 to $155.00 | 473,918 | 6.31 | $ | 146.16 | ||||||||||||||||||||||
| $155.01 to $185.00 | 35,636 | 7.04 | $ | 174.63 | ||||||||||||||||||||||
| $185.01 to $200.00 | 58,938 | 8.25 | $ | 198.30 | ||||||||||||||||||||||
| $200.01 to $215.00 | 6,623 | 8.88 | $ | 203.30 | ||||||||||||||||||||||
| $215.01 to $230.00 | 15,375 | 9.37 | $ | 227.56 | ||||||||||||||||||||||
| $230.01 to $243.03 | 1,185 | 9.60 | $ | 240.59 | ||||||||||||||||||||||
| 1,111,889 | 5.20 | $ | 131.63 | $ | 123.9 |
(a) Calculated using the closing stock price on the last trading day of fiscal year 2025 of $243.03, less the option exercise price, multiplied by the number of instruments.
Stock-based compensation expense of $73.4 million, $70.6 million, and $73.1 million was recognized in the Consolidated Statements of Earnings for the fiscal years ended June 30, 2025, 2024 and 2023, respectively, as well as related tax benefits of $12.5 million, $13.7 million, and $13.1 million, respectively.
As of June 30, 2025, the total remaining unrecognized compensation cost related to non-vested stock options and RSU awards amounted to $20.2 million and $68.1 million, respectively, which will be amortized over the weighted-average remaining requisite service periods of 1.6 years and 1.9 years, respectively.
The Company may reissue treasury stock to satisfy stock option exercises and issuances under the Company’s RSU awards. From time to time, the Company may repurchase shares of its common stock under its authorized share repurchase programs. The Company repurchased 0.4 million shares in fiscal year 2025 under our share repurchase program as compared to 2.3 million shares repurchased in fiscal year 2024 under our share repurchase program, which excludes shares withheld by the Company to cover payroll taxes on the vesting of RSU awards, which are also accounted for as treasury stock. The Company considers several factors in determining when to execute share repurchases, including, among other things, actual and potential acquisition activity, cash balances and cash flows, issuances due to employee benefit plan activity, and market conditions.
The following table presents the assumptions used to determine the fair values of the stock option grants using the Binomial options pricing model during the fiscal years ended June 30, 2025, 2024 and 2023:
| Years ended June 30, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| Graded Vesting | ||||||||||||||||||||
| Risk-free interest rate | 4.4 | % | 4.3 | % | 4.0 | % | ||||||||||||||
| Dividend yield | 1.5 | % | 1.7 | % | 2.0 | % | ||||||||||||||
| Weighted-average volatility factor | 23.9 | % | 23.7 | % | 25.8 | % | ||||||||||||||
| Weighted-average expected life (in years) | 5.5 | 5.5 | 5.5 | |||||||||||||||||
| Weighted-average fair value (in dollars) | $ | 62.15 | $ | 49.31 | $ | 35.43 |
NOTE 17. EMPLOYEE BENEFIT PLANS
A. Defined Contribution Savings Plans. The Company sponsors a 401(k) savings plan covering eligible U.S. employees of the Company. This plan provides a base contribution plus Company matching contributions on a portion of employee contributions.
The ERSP was adopted effective January 1, 2015 for those executives who are not participants in the SORP or SERP. The ERSP is a defined contribution plan that allows eligible full-time U.S. employees to defer compensation until a later date and the Company will match a portion of the deferred compensation above the qualified defined contribution compensation and deferral limitations.
The costs recorded by the Company for these plans were:
| Years ended June 30, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| (in millions) | ||||||||||||||||||||
| 401(k) savings plan | $ | 50.0 | $ | 47.2 | $ | 54.0 | ||||||||||||||
| ERSP | 3.4 | 3.7 | 4.1 | |||||||||||||||||
| Total | $ | 53.4 | $ | 50.9 | $ | 58.1 |
B. Defined Benefit Pension Plans. The Company sponsors the SORP. The SORP is a nonqualified ERISA defined benefit plan pursuant to which the Company will pay supplemental pension benefits to certain key officers upon retirement based upon the officers’ years of service and compensation. The SORP was closed to new participants beginning in fiscal year 2015. The Company also sponsors the SERP. The SERP is also a nonqualified ERISA defined benefit plan pursuant to which the Company will pay supplemental pension benefits to certain key executives upon retirement based upon the executives’ years of service and compensation. The SERP was closed to new participants beginning in fiscal year 2015.
The SORP and SERP are effectively funded with assets held in a Rabbi Trust. The assets invested in the Rabbi Trust are to be used in part to fund benefit payments to participants under the terms of the plans. The Rabbi Trust is irrevocable and no portion of the trust funds may be used for any purpose other than the delivery of those assets to the participants, except that assets held in the Rabbi Trust would be subject to the claims of the Company’s general creditors in the event of bankruptcy or insolvency of the Company. The SORP and SERP are nonqualified plans for federal tax purposes and for purposes of Title I of ERISA. The Rabbi Trust assets had a value of $66.4 million at June 30, 2025 and $61.8 million at June 30, 2024 and are included in Other non-current assets in the accompanying Consolidated Balance Sheets.
The amounts charged to expense by the Company for these plans were:
| Years ended June 30, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| (in millions) | ||||||||||||||||||||
| SORP | $ | 3.5 | $ | 3.5 | $ | 3.4 | ||||||||||||||
| SERP | 0.3 | 0.3 | 0.4 | |||||||||||||||||
| Total | $ | 3.8 | $ | 3.7 | $ | 3.8 |
The benefit obligation to the Company under these plans at June 30, 2025, 2024 and 2023 was:
| Years ended June 30, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| (in millions) | ||||||||||||||||||||
| SORP | $ | 57.6 | $ | 56.4 | $ | 53.4 | ||||||||||||||
| SERP | 5.0 | 5.2 | 5.2 | |||||||||||||||||
| Total | $ | 62.6 | $ | 61.6 | $ | 58.6 |
C. Other Post-retirement Benefit Plan. The Company sponsors an Executive Retiree Health Insurance Plan. It is a post-retirement benefit plan pursuant to which the Company helps defray the health care costs of certain eligible key executive retirees and qualifying dependents, based upon the retirees’ age and years of service, until they reach the age of 65. The plan is currently unfunded.
The amounts charged to expense by the Company for this plan were:
| Years ended June 30, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| (in millions) | ||||||||||||||||||||
| Executive Retiree Health Insurance Plan | $ | 0.8 | $ | 0.6 | $ | 0.3 |
The benefit obligation to the Company under this plan at June 30, 2025, 2024 and 2023 was:
| Years ended June 30, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| (in millions) | ||||||||||||||||||||
| Executive Retiree Health Insurance Plan | $ | 4.7 | $ | 5.4 | $ | 4.7 |
D. Other Post-employment Benefit Obligations. The Company sponsors certain non-U.S. benefits-related plans covering certain eligible international employees who are eligible under the terms of their employment in their respective countries. These plans are generally unfunded.
The amounts charged to expense by the Company for these plans were in fiscal years 2025, 2024 and 2023 was:
| Years ended June 30, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| (in millions) | ||||||||||||||||||||
| Other Non-U.S. Benefits-Related Plans | $ | 4.8 | $ | 2.8 | $ | 1.8 |
The benefit obligation to the Company under these plans at June 30, 2025, 2024 and 2023 was:
| Years ended June 30, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| (in millions) | ||||||||||||||||||||
| Other Non-U.S. Benefits-Related Plans | $ | 16.3 | $ | 12.4 | $ | 10.4 |
NOTE 18. INCOME TAXES
Earnings before income taxes shown below are based on the geographic location to which such earnings are attributable.
| Years Ended June 30, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| (in millions) | ||||||||||||||||||||
| Earnings before income taxes: | ||||||||||||||||||||
| U.S. | $ | 903.6 | $ | 716.1 | $ | 710.6 | ||||||||||||||
| Foreign | 155.1 | 161.3 | 84.2 | |||||||||||||||||
| Total | $ | 1,058.7 | $ | 877.4 | $ | 794.9 |
The Provision for income taxes consists of the following components:
| Years Ended June 30, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| (in millions) | ||||||||||||||||||||
| Current: | ||||||||||||||||||||
| U.S. Federal | $ | 148.8 | $ | 205.8 | $ | 143.2 | ||||||||||||||
| Foreign | 45.3 | 63.9 | 45.4 | |||||||||||||||||
| U.S. State | 30.3 | 29.4 | 26.5 | |||||||||||||||||
| Total current | 224.4 | 299.0 | 215.1 | |||||||||||||||||
| Deferred: | ||||||||||||||||||||
| U.S. Federal | 10.3 | (89.4) | (23.7) | |||||||||||||||||
| Foreign | (15.1) | (25.6) | (29.3) | |||||||||||||||||
| U.S. State | (0.4) | (4.7) | 2.2 | |||||||||||||||||
| Total deferred | (5.2) | (119.7) | (50.8) | |||||||||||||||||
| Total Provision for income taxes | $ | 219.2 | $ | 179.3 | $ | 164.3 |
| Years Ended June 30, | ||||||||||||||||||||||||||||||||||||||
| 2025 | % | 2024 | % | 2023 | % | |||||||||||||||||||||||||||||||||
| (in millions) | ||||||||||||||||||||||||||||||||||||||
| Provision for income taxes at U.S. statutory rate | $ | 222.3 | 21.0 | $ | 184.2 | 21.0 | $ | 166.9 | 21.0 | |||||||||||||||||||||||||||||
| Increase (decrease) in Provision for income taxes from: | ||||||||||||||||||||||||||||||||||||||
| State taxes, net of federal tax | 24.9 | 2.4 | 20.5 | 2.3 | 23.7 | 3.0 | ||||||||||||||||||||||||||||||||
| Foreign rate differential | 2.3 | 0.2 | 5.8 | 0.7 | 2.7 | 0.3 | ||||||||||||||||||||||||||||||||
| Valuation allowances | 0.3 | — | 0.5 | 0.1 | (0.3) | — | ||||||||||||||||||||||||||||||||
| Stock-based compensation - excess tax benefits (“ETB”) | (20.5) | (1.9) | (12.9) | (1.5) | (10.4) | (1.3) | ||||||||||||||||||||||||||||||||
| Tax Credits and Foreign-Derived Intangible Income Deduction (“FDII”) | (10.4) | (1.0) | (21.2) | (2.4) | (20.2) | (2.5) | ||||||||||||||||||||||||||||||||
| Other | 0.4 | — | 2.2 | 0.3 | 1.9 | 0.2 | ||||||||||||||||||||||||||||||||
| Total Provision for income taxes | $ | 219.2 | 20.7 | $ | 179.3 | 20.4 | $ | 164.3 | 20.7 |
The Provision for income taxes and effective tax rates for the fiscal year ended June 30, 2025 were $219.2 million and 20.7%, compared to $179.3 million and 20.4%, for the fiscal year ended June 30, 2024, respectively. The increase in the effective tax rate for the fiscal year ended June 30, 2025 compared to the fiscal year ended June 30, 2024 was primarily driven by an increase in pre-tax income and lower tax benefits from statutory tax incentives, which was partially offset by an increase in discrete tax benefits. The increase in discrete tax benefits was primarily attributable to an increase in the ETB.
The Provision for income taxes and effective tax rates for the fiscal year ended June 30, 2024 were $179.3 million and 20.4%, compared to $164.3 million and 20.7%, for the fiscal year ended June 30, 2023, respectively. The decrease in the effective tax rate for the fiscal year ended June 30, 2024 compared to the fiscal year ended June 30, 2023 was driven by an increase in discrete tax benefits relative to pre-tax income, primarily attributable to an ETB of $12.9 million for the fiscal year ended June 30, 2024 compared to $10.4 million for the fiscal year ended June 30, 2023.
As of June 30, 2025, the Company had approximately $826.3 million of accumulated earnings and profits attributable to foreign subsidiaries. The Company considers $726.3 million of accumulated earnings attributable to foreign subsidiaries to be permanently reinvested outside the U.S. and has not determined the cost to repatriate such earnings since it is not practicable to calculate the amount of income taxes payable in the event all such foreign earnings are repatriated. The Company does not consider the remaining $100.0 million of accumulated earnings to be permanently reinvested outside the U.S. The Company has accrued approximately $8.0 million of foreign income and withholding taxes, state income taxes, and tax on exchange gain attributable to such earnings.
In December 2021, the Organization for Economic Co-operation and Development (“OECD”) adopted model rules for a global framework to impose a 15% global minimum tax referred to as Pillar Two effective for tax years beginning after January 1, 2024. The OECD continues to issue additional guidance on the operation of the model rules. While the United States has not enacted Pillar Two, certain countries in which we operate have adopted their own version of the Pillar Two model rules. Management continues to monitor additional guidance from the OECD and countries which are implementing Pillar Two. Based on current guidance, we believe that our net income, cash flows, or financial condition will not be materially impacted by Pillar Two.
Deferred income taxes reflect the net tax effects of temporary differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when such differences are expected to reverse. Significant components of the Company’s deferred tax assets and liabilities at June 30, 2025 and 2024 were as follows:
| June 30, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| (in millions) | ||||||||||||||
| Classification: | ||||||||||||||
| Long-term deferred tax assets (included in Other non-current assets) | $ | 26.8 | $ | 23.8 | ||||||||||
| Long-term deferred tax liabilities | (261.0) | (277.3) | ||||||||||||
| Net deferred tax liabilities | $ | (234.2) | $ | (253.5) | ||||||||||
| Components: | ||||||||||||||
| Deferred tax assets: | ||||||||||||||
| Accrued expenses not currently deductible | $ | 14.9 | $ | 21.4 | ||||||||||
| Compensation and benefits not currently deductible | 91.5 | 86.5 | ||||||||||||
| Net operating losses | 24.6 | 23.1 | ||||||||||||
| Tax credits | 7.3 | 6.0 | ||||||||||||
| Research and development expenses | 139.0 | 162.1 | ||||||||||||
| Deferred revenue | 70.5 | 85.6 | ||||||||||||
| Cross Currency Swap and Treasury-Locks | 7.7 | — | ||||||||||||
| Other | 3.4 | 4.3 | ||||||||||||
| Total deferred tax assets | 358.8 | 388.9 | ||||||||||||
| Less: Valuation allowances | (11.2) | (10.8) | ||||||||||||
| Deferred tax assets, net | 347.6 | 378.1 | ||||||||||||
| Deferred tax liabilities: | ||||||||||||||
| Goodwill and identifiable intangibles | 174.5 | 186.4 | ||||||||||||
| Depreciation | 5.5 | 11.9 | ||||||||||||
| Deferred expenses | 376.6 | 390.6 | ||||||||||||
| Unremitted earnings | 8.0 | 10.4 | ||||||||||||
| Cross Currency Swap and Treasury-Locks | — | 13.1 | ||||||||||||
| Other | 17.3 | 19.1 | ||||||||||||
| Deferred tax liabilities | 581.9 | 631.6 | ||||||||||||
| Net deferred tax liabilities | $ | (234.2) | $ | (253.5) |
The Company has estimated foreign net operating loss carryforwards of approximately $48.7 million as of June 30, 2025 of which $6.9 million are subject to expiration in the June 30, 2035 through June 30, 2043 period, and of which $41.7 million has an indefinite utilization period. In addition, the Company has estimated U.S. federal net operating loss carryforwards of approximately $25.0 million of which $9.3 million are subject to expiration in the June 30, 2026 through June 30, 2037 period with the balance of $15.7 million having an indefinite utilization period.
Valuation allowances are recognized to reduce deferred tax assets when it is more likely than not that the Company will not be able to utilize the deferred tax assets of certain subsidiaries to offset future taxable earnings. The Company has recorded valuation allowances of $11.2 million and $10.8 million at June 30, 2025 and 2024, respectively. The determination as to whether a deferred tax asset will be recognized is made on a jurisdictional basis and is based on the evaluation of historical taxable income or loss, projected future taxable income, carryforward periods, scheduled reversals of deferred tax liabilities and tax planning strategies. Projected future taxable income is based on expected results and assumptions as to the jurisdiction in which the income will be earned. The assumptions used to project future taxable income require significant judgment and are consistent with the plans and estimates used to manage the underlying businesses.
In the next twelve months, the Company does not expect a material change to its net reserve balance for unrecognized tax benefits.
The following table summarizes the activity related to the Company’s gross unrecognized tax positions:
| Fiscal Year Ended June 30, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| (in millions) | ||||||||||||||||||||
| Beginning balance | $ | 74.7 | $ | 68.8 | $ | 57.6 | ||||||||||||||
| Gross increases related to prior period tax positions | 23.6 | 8.0 | 13.2 | |||||||||||||||||
| Gross decreases related to prior period tax positions | (6.2) | (2.0) | (3.3) | |||||||||||||||||
| Gross increases related to current period tax positions | 7.1 | 7.5 | 6.9 | |||||||||||||||||
| Gross decreases related to settlements | (0.4) | (0.4) | (0.3) | |||||||||||||||||
| Gross decreases due to lapse of the statute of limitations | (6.0) | (7.2) | (5.4) | |||||||||||||||||
| Ending balance | $ | 92.8 | $ | 74.7 | $ | 68.8 |
As of June 30, 2025, 2024 and 2023, the net reserve for unrecognized tax positions recorded by the Company that is included in the preceding table of gross unrecognized tax positions was $82.6 million, $67.3 million, and $62.0 million, respectively, and if reversed in full, would favorably affect the effective tax rate by these amounts, respectively.
During the fiscal year ended June 30, 2025, the Company adjusted accrued interest by $3.5 million and recognized a total liability for interest on unrecognized tax positions of $7.8 million; in the fiscal year ended June 30, 2024, the Company adjusted accrued interest by $0.1 million and recognized a total liability for interest on unrecognized tax positions of $4.2 million; in the fiscal year ended June 30, 2023, the Company adjusted accrued interest by $0.3 million and recognized a total liability for interest on unrecognized tax positions of $4.1 million.
The Company is regularly subject to examination of its income tax returns by U.S. Federal, state and foreign income tax authorities. The tax years that are currently open and could be subject to income tax audits for U.S. federal and most state and local jurisdictions are fiscal years ending June 30, 2021 through June 30, 2025, and for Canadian operations that could be subject to audit in Canada, fiscal years ending June 30, 2021 through June 30, 2025. A change in the assessment of the outcomes of such matters could materially impact our Consolidated Financial Statements.
NOTE 19. CONTRACTUAL COMMITMENTS, CONTINGENCIES, AND OFF-BALANCE SHEET ARRANGEMENTS
Data Center Agreements
The Company is a party to an Amended and Restated IT Services Agreement with Kyndryl, Inc. (“Kyndryl”), an entity formed by IBM’s spin-off of its managed infrastructure services business, under which Kyndryl provides certain aspects of the Company’s information technology infrastructure, including supporting its mainframe, midrange, network and data center operations, as well as providing disaster recovery services. The Amended and Restated IT Services Agreement expires on June 30, 2027, however the Company may renew the agreement for up to one additional 12-month period. Fixed minimum commitments remaining under the Amended and Restated IT Services Agreement at June 30, 2025 are $75.0 million through June 30, 2027, the final year of the Amended and Restated IT Services Agreement.
Broadridge Software Limited, a subsidiary of the Company is party to the SIS Services Agreement with Kyndryl Canada, under which Kyndryl Canada provides infrastructure managed services for the SIS Business. The SIS Services Agreement expires on October 31, 2029. Fixed minimum commitments remaining under the SIS Services Agreement at June 30, 2025 are $137.3 million through October 31, 2029, the final year of the SIS Services Agreement.
The Company is a party to an information technology agreement for private cloud services (the “Private Cloud Agreement”) under which Kyndryl operates, manages and supports the Company’s private cloud global distributed platforms and products, and operates and manages certain Company networks. The Private Cloud Agreement expires on March 31, 2030. Fixed minimum commitments remaining under the Private Cloud Agreement at June 30, 2025 are $85.7 million through March 31, 2030, the final year of the contract.
The following table summarizes the capitalized costs related to data center agreements as of June 30, 2025:
| Amended and Restated IT Services Agreement | Other | Total | ||||||||||||||||||
| (in millions) | ||||||||||||||||||||
| Capitalized costs, beginning balance | $ | 63.0 | $ | 7.7 | $ | 70.7 | ||||||||||||||
| Capitalized costs incurred | — | — | — | |||||||||||||||||
| Impact of foreign currency exchange | — | 0.5 | 0.5 | |||||||||||||||||
| Total capitalized costs, ending balance | 63.0 | 8.1 | 71.2 | |||||||||||||||||
| Total accumulated amortization | (56.5) | (6.7) | (63.2) | |||||||||||||||||
| Net Deferred Costs | $ | 6.5 | $ | 1.4 | $ | 7.9 |
Cloud Services Resale Agreement
On December 31, 2021, the Company and Presidio Networked Solutions LLC (“Presidio”), a reseller of services of Amazon Web Services, Inc. and its affiliates (collectively, “AWS”), entered into an Order Form and AWS Private Pricing Addendum, dated December 31, 2021 (the “Order Form”), to the Cloud Services Resale Agreement, dated December 15, 2017, as amended (together with the Order Form, the “AWS Cloud Agreement”), whereby Presidio will resell to the Company certain public cloud infrastructure and related services provided by AWS for the operation, management and support of the Company’s cloud global distributed platforms and products. The AWS Cloud Agreement expires on December 31, 2026. Fixed minimum commitments remaining under the AWS Cloud Agreement at June 30, 2025 are $92.8 million through December 31, 2026.
Investments
The Company has an equity method investment that is a variable interest in a variable interest entity. The Company is not the primary beneficiary and therefore does not consolidate the investee. The Company’s potential maximum loss exposure related to its unconsolidated investment in this variable interest entity totaled $30.3 million as of June 30, 2025, which represents the carrying value of the Company's investment.
In addition, as of June 30, 2025, the Company also has a future commitment to fund $26.0 million to one of the Company’s other investees.
Contractual Obligations
The Company has obligations under the Amended IT Services Agreement, the Private Cloud Agreement, the AWS Cloud Agreement, software license agreements including hosted software arrangements, and software and hardware maintenance and support agreements.
The following table summarizes the total expenses related to these agreements:
| Years ended June 30, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| (in millions) | ||||||||||||||||||||
| Data center expenses | $ | 254.8 | $ | 223.7 | $ | 235.1 | ||||||||||||||
| Software license agreements | 105.8 | 101.5 | 90.6 | |||||||||||||||||
| Software/hardware maintenance agreements | 68.5 | 72.4 | 73.8 | |||||||||||||||||
| Total expenses | $ | 429.0 | $ | 397.5 | $ | 399.5 |
The future minimum commitments at June 30, 2025 for the aforementioned Amended IT Services Agreement, the Private Cloud Agreement, the AWS Cloud Agreement, software license agreements including hosted software arrangements, and software and hardware maintenance and support agreements are as follows:
| Years Ending June 30, | (in millions) | |||||||
| 2026 | $ | 224.8 | ||||||
| 2027 | 176.8 | |||||||
| 2028 | 96.6 | |||||||
| 2029 | 55.6 | |||||||
| 2030 | 23.9 | |||||||
| Thereafter | 1.4 | |||||||
| Total | $ | 579.2 |
The future minimum commitments table excludes $54.6 million of other liabilities recorded on the Company’s Consolidated Balance Sheet as of June 30, 2025.
Litigation
Broadridge or its subsidiaries are subject to various claims and legal matters that arise in the normal course of business (referred to as “Litigation”). The Company establishes reserves for Litigation and other loss contingencies when it is both probable that a loss will occur, and the amount of such loss can reasonably be estimated. For certain Litigation matters for which the Company does not believe it probable that a loss will occur at this time, the Company is able to estimate a range of reasonably possible losses in excess of established reserves. Management currently estimates an aggregate range of reasonably possible losses for such matters of up to $5.0 million in excess of any established reserves. The Litigation matters underlying the estimated range will change from time to time, and it is reasonably possible that the actual results may vary significantly from this estimate. The Company’s management currently believes that resolution of any outstanding legal matters will not have a material adverse effect on the Company’s financial position or results of operations. However, legal matters are subject to inherent uncertainties and there exists the possibility that the ultimate resolution of these matters could have a material adverse impact on the Company’s financial position and results of operations in the period in which any such effects are recorded.
Plan Management Corp. Claim
Paramount Financial Communications, Inc. d/b/a Plan Management Corp. (“Plan Management”) and Jonathan Miller filed a complaint on January 28, 2015 in the United States District Court for the Eastern District of Pennsylvania. Plan Management claimed that Broadridge Investor Communication Solutions, Inc. (“BRICS”) breached a marketing agreement between BRICS and Plan Management and Mr. Miller asserted a fraud claim. In August 2024, Broadridge settled the matter for $11.0 million and provided an incremental accrual of $10.3 million in the fourth quarter of the 2024 fiscal year. The final payment related to the settlement was made by Broadridge during the second fiscal quarter of the 2025 fiscal year, and no further liability remains.
Broadridge Customer Communications (“BRCC”) Machine Operator Claim
A law firm representing a machine operator currently employed by BRCC, a business within the ICS segment in Edgewood, New York sought compensation under the Fair Labor Standards Act and New York Labor Law on behalf of the machine operator and a proposed class of machine operators. During the third quarter of the 2024 fiscal year, Broadridge agreed to settle the matter for $9.9 million and provided an incremental accrual of $8.2 million. The settlement has been approved by the court. The payment related to the settlement was made by Broadridge during the fourth fiscal quarter of the 2025 fiscal year, and no further liability remains.
Other
It is not the Company’s business practice to enter into off-balance sheet arrangements. However, the Company is exposed to market risk from changes in foreign currency exchange rates that could impact its financial position, results of operations, and cash flows. The Company manages its exposure to these market risks through its regular operating and financing activities and, when deemed appropriate, through the use of derivative financial instruments.
In January 2022, the Company executed a series of cross-currency swap derivative contracts with an aggregate notional amount of €880.0 million which are designated as net investment hedges to hedge a portion of its net investment in its subsidiaries whose functional currency is the Euro. The cross-currency swap derivative contracts are agreements to pay fixed-rate interest in Euros and receive fixed-rate interest in U.S. Dollars, thereby effectively converting a portion of the Company’s U.S. Dollar denominated fixed-rate debt into Euro denominated fixed-rate debt. The cross-currency swaps mature in May 2031 to coincide with the maturity of the Fiscal 2021 Senior Notes. Accordingly, foreign currency transaction gains or losses on the qualifying net investment hedge instruments are recorded as foreign currency translation within other comprehensive income (loss), net in the Consolidated Statements of Comprehensive Income and will remain in Accumulated other comprehensive income (loss) in the Consolidated Balance Sheets until the sale or complete liquidation of the underlying foreign subsidiary. At June 30, 2025, the Company’s position on the cross-currency swaps was a liability of $24.6 million, and is recorded as part of Other non-current liabilities on the Consolidated Balance Sheets with the offsetting amount recorded as part of Accumulated other comprehensive income (loss), net of tax. The Company has elected the spot method of accounting whereby the net interest savings from the cross-currency swaps is recognized as a reduction in interest expense in the Company’s Consolidated Statements of Earnings.
In May 2021, the Company settled a forward treasury lock agreement that was designated as a cash flow hedge, for a pre-tax loss of $11.0 million, after which the final settlement loss is being amortized into Interest expense, net ratably over the 10-year term of the Fiscal 2021 Senior Notes. The expected amount of the existing loss that will be amortized into earnings before income taxes within the next twelve months is approximately $1.1 million.
In the normal course of business, the Company enters into contracts in which it makes representations and warranties that relate to the performance of the Company’s products and services. The Company does not expect any material losses related to such representations and warranties, or collateral arrangements.
The Company’s business process outsourcing and mutual fund processing services are performed by Broadridge Business Process Outsourcing, LLC (“BBPO”), an indirect subsidiary, which is a broker-dealer registered with the Securities and Exchange Commission and a member of the Financial Industry Regulatory Authority, Inc. (“FINRA”). Although BBPO’s FINRA membership agreement allows it to engage in clearing and the retailing of corporate securities in addition to mutual fund retailing on a wire order basis, BBPO does not clear customer transactions, process any retail business or carry customer accounts. As a registered broker-dealer and member of FINRA, BBPO is subject to the Uniform Net Capital Rule 15c3-1 of the Securities Exchange Act of 1934, as amended, which requires BBPO to maintain a minimum net capital amount. At June 30, 2025, BBPO was in compliance with this net capital requirement.
In addition, Matrix Trust Company, a subsidiary of the Company, is a Colorado State non-depository trust company and National Securities Clearing Corporation trust member, whose primary business is to provide cash agent, custodial and directed trustee services to institutional customers, and investment management services to collective investment trust funds. As a result, Matrix Trust Company is subject to various regulatory capital requirements administered by the Colorado Division of Banking and the Arizona Department of Financial Institutions, as well as the National Securities Clearing Corporation. Specific capital requirements that involve quantitative measures of assets, liabilities, and certain off-balance sheet items, when applicable, must be met. At June 30, 2025, Matrix Trust Company was in compliance with its capital requirements.
NOTE 20. CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) BY COMPONENT
The following tables summarize the changes in the accumulated balances for each component of accumulated other comprehensive income/(loss):
| Foreign Currency Translation | Pension and Post- Retirement Liabilities | Cash Flow Hedge | Total | |||||||||||||||||||||||
| (in millions) | ||||||||||||||||||||||||||
| Balances at June 30, 2022 | $ | (214.1) | $ | (4.8) | $ | (7.4) | $ | (226.3) | ||||||||||||||||||
| Other comprehensive income (loss) before reclassifications | (59.4) | 0.1 | — | (59.3) | ||||||||||||||||||||||
| Amounts reclassified from accumulated other comprehensive income/(loss) | — | 0.1 | 0.8 | 0.9 | ||||||||||||||||||||||
| Balances at June 30, 2023 | $ | (273.6) | $ | (4.6) | $ | (6.5) | $ | (284.7) | ||||||||||||||||||
| Other comprehensive income (loss) before reclassifications | (46.8) | (1.3) | — | (48.0) | ||||||||||||||||||||||
| Amounts reclassified from accumulated other comprehensive income/(loss) | — | 0.2 | 0.8 | 1.1 | ||||||||||||||||||||||
| Balances at June 30, 2024 | $ | (320.3) | $ | (5.7) | $ | (5.7) | $ | (331.7) | ||||||||||||||||||
| Other comprehensive income (loss) before reclassifications | 56.7 | 0.9 | — | 57.6 | ||||||||||||||||||||||
| Amounts reclassified from accumulated other comprehensive income/(loss) | — | 0.4 | 0.8 | 1.2 | ||||||||||||||||||||||
| Balances at June 30, 2025 | $ | (263.6) | $ | (4.4) | $ | (4.9) | $ | (272.9) |
NOTE 21. FINANCIAL DATA BY SEGMENT
The Company operates in two reportable segments: Investor Communication Solutions and Global Technology and Operations. See Note 1, “Basis of Presentation” for a further description of the Company’s reportable segments.
The Company’s chief operating decision maker is the Chief Executive Officer (“CEO”). The chief operating decision maker utilizes earnings before income taxes, to make decisions on resource allocation, including investment of profits, potential acquisitions, or return of capital. The chief operating decision maker does not review assets and capital expenditures in evaluating the results of the Company’s segments, therefore such information is not presented.
| Investor Communication Solutions (a), (b) | Global Technology and Operations (a), (b) | Total Reportable Segments | Corporate and Other (c) | Total | ||||||||||||||||||||||||||||
| (in millions) | ||||||||||||||||||||||||||||||||
| Year ended June 30, 2025 | ||||||||||||||||||||||||||||||||
| Revenues | $ | 5,113.0 | $ | 1,776.1 | $ | 6,889.1 | $ | — | $ | 6,889.1 | ||||||||||||||||||||||
| Depreciation and amortization | 44.7 | 52.8 | 97.5 | 33.2 | 130.7 | |||||||||||||||||||||||||||
| Amortization of acquired intangibles | 42.9 | 153.7 | 196.6 | — | 196.6 | |||||||||||||||||||||||||||
| Amortization of other assets | 39.4 | 113.9 | 153.3 | 17.5 | 170.8 | |||||||||||||||||||||||||||
| Other direct expenses | 3,633.2 | 1,105.6 | 4,738.8 | 593.4 | 5,332.2 | |||||||||||||||||||||||||||
| Other segment items | 298.8 | 148.7 | 447.5 | (447.5) | — | |||||||||||||||||||||||||||
| Earnings (loss) before income taxes | $ | 1,054.0 | $ | 201.4 | $ | 1,255.4 | $ | (196.7) | $ | 1,058.7 | ||||||||||||||||||||||
| Year ended June 30, 2024 | ||||||||||||||||||||||||||||||||
| Revenues | $ | 4,857.9 | $ | 1,648.9 | $ | 6,506.8 | $ | — | $ | 6,506.8 | ||||||||||||||||||||||
| Depreciation and amortization | 40.1 | 49.4 | 89.5 | 30.3 | 119.8 | |||||||||||||||||||||||||||
| Amortization of acquired intangibles | 45.4 | 154.9 | 200.3 | — | 200.3 | |||||||||||||||||||||||||||
| Amortization of other assets | 38.5 | 102.6 | 141.1 | 16.7 | 157.8 | |||||||||||||||||||||||||||
| Other direct expenses | 3,514.5 | 1,032.7 | 4,547.2 | 604.3 | 5,151.5 | |||||||||||||||||||||||||||
| Other segment items | 269.0 | 135.9 | 404.9 | (404.9) | — | |||||||||||||||||||||||||||
| Earnings (loss) before income taxes | $ | 950.4 | $ | 173.3 | $ | 1,123.7 | $ | (246.3) | $ | 877.4 | ||||||||||||||||||||||
| Year ended June 30, 2023 | ||||||||||||||||||||||||||||||||
| Revenues | $ | 4,535.6 | $ | 1,525.2 | $ | 6,060.9 | $ | — | $ | 6,060.9 | ||||||||||||||||||||||
| Depreciation and amortization | 37.9 | 18.3 | 56.1 | 28.3 | 84.4 | |||||||||||||||||||||||||||
| Amortization of acquired intangibles | 55.5 | 158.9 | 214.4 | — | 214.4 | |||||||||||||||||||||||||||
| Amortization of other assets | 41.1 | 68.3 | 109.3 | 16.9 | 126.2 | |||||||||||||||||||||||||||
| Other direct expenses | 3,356.0 | 973.0 | 4,329.0 | 511.9 | 4,840.9 | |||||||||||||||||||||||||||
| Other segment items | 233.7 | 122.9 | 356.5 | (356.5) | — | |||||||||||||||||||||||||||
| Earnings (loss) before income taxes | $ | 811.4 | $ | 183.9 | $ | 995.4 | $ | (200.5) | $ | 794.9 |
(a)Other Direct expenses included in the Segment earnings (loss) before income taxes include interest, distribution, labor, lease, data center, and other expenses that are directly incurred by the segment.
(b)Other segment items include expenses related to centrally managed activities that are allocated to the reportable segments based on usage and other factors.
(c)The primary components of “Corporate and Other” are certain gains, losses, centrally managed activities, and non-operating expenses that have not been allocated to the reportable segments, such as interest expense.
Revenues and assets by geographic area are as follows:
| United States | Canada | Europe | Other | Total | ||||||||||||||||||||||||||||
| (in millions) | ||||||||||||||||||||||||||||||||
| Year ended June 30, 2025 | ||||||||||||||||||||||||||||||||
| Revenues | $ | 5,907.0 | $ | 463.8 | $ | 464.7 | $ | 53.6 | $ | 6,889.1 | ||||||||||||||||||||||
| Assets | $ | 5,667.4 | $ | 619.2 | $ | 2,000.9 | $ | 257.5 | $ | 8,545.0 | ||||||||||||||||||||||
| Year ended June 30, 2024 | ||||||||||||||||||||||||||||||||
| Revenues | $ | 5,620.1 | $ | 393.9 | $ | 445.9 | $ | 46.8 | $ | 6,506.8 | ||||||||||||||||||||||
| Assets | $ | 5,620.1 | $ | 457.2 | $ | 1,926.7 | $ | 238.4 | $ | 8,242.4 | ||||||||||||||||||||||
| Year ended June 30, 2023 | ||||||||||||||||||||||||||||||||
| Revenues | $ | 5,260.0 | $ | 367.4 | $ | 392.2 | $ | 41.3 | $ | 6,060.9 | ||||||||||||||||||||||
| Assets | $ | 5,514.3 | $ | 448.4 | $ | 2,024.3 | $ | 246.2 | $ | 8,233.2 |
NOTE 22. SUBSEQUENT EVENTS
In July 2025, Broadridge announced the proposed acquisition of Acolin Group Holdco Limited (“Acolin”). Acolin is a European provider of cross-border fund distribution and regulatory services. The total purchase price is approximately $70 million plus an additional contingent consideration liability. The acquisition is expected to close in the first half of Broadridge’s 2026 fiscal year, subject to customary closing conditions, including regulatory approvals. Acolin will be included in the Company’s ICS reportable segment.
On August 4, 2025, the Company’s Board of Directors approved an increase in the Company’s quarterly cash dividend by $0.095 per share to $0.975 per share, an increase in the expected annual dividend amount from $3.52 to $3.90 per share. The declaration and payment of future dividends to holders of the Company’s common stock will be at the discretion of the Company’s Board of Directors, and will depend upon many factors, including the Company’s financial condition, earnings, capital requirements of its businesses, legal requirements, regulatory constraints, industry practice, and other factors that the Board of Directors deems relevant.
Broadridge Financial Solutions, Inc.
Schedule II—Valuation and Qualifying Accounts
(in millions)
| Column A | Column B | Column C | Column D | Column E | ||||||||||||||||||||||||||||
| Additions | ||||||||||||||||||||||||||||||||
| Balance at beginning of period | (1) Charged to costs and expenses | (2) Charged to other accounts | Deductions | Balance at end of period | ||||||||||||||||||||||||||||
| Fiscal year ended June 30, 2025: | ||||||||||||||||||||||||||||||||
| Allowance for doubtful accounts | $ | 9.7 | $ | 11.6 | $ | — | $ | (8.7) | $ | 12.5 | ||||||||||||||||||||||
| Deferred tax valuation allowance | $ | 10.8 | $ | 0.3 | $ | 0.1 | $ | — | $ | 11.2 | ||||||||||||||||||||||
| Other receivables | $ | 3.6 | $ | — | $ | — | $ | (0.8) | $ | 2.8 | ||||||||||||||||||||||
| Fiscal year ended June 30, 2024: | ||||||||||||||||||||||||||||||||
| Allowance for doubtful accounts | $ | 7.2 | $ | 7.5 | $ | — | $ | (5.1) | $ | 9.7 | ||||||||||||||||||||||
| Deferred tax valuation allowance | $ | 10.3 | $ | 0.5 | $ | — | $ | — | $ | 10.8 | ||||||||||||||||||||||
| Other receivables | $ | 3.6 | $ | — | $ | — | $ | — | $ | 3.6 | ||||||||||||||||||||||
| Fiscal year ended June 30, 2023: | ||||||||||||||||||||||||||||||||
| Allowance for doubtful accounts | $ | 6.8 | $ | 2.4 | $ | — | $ | (1.9) | $ | 7.2 | ||||||||||||||||||||||
| Deferred tax valuation allowance | $ | 10.7 | $ | — | $ | — | $ | (0.4) | $ | 10.3 | ||||||||||||||||||||||
| Other receivables | $ | 1.7 | $ | 1.7 | $ | 0.5 | $ | (0.2) | $ | 3.6 |
Amounts may not sum due to rounding.
Previous: Item 7A. Quantitative and Qualitative Disclosures About Market Risk · Next: Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure