(Reuters) – Fintech firm Broadridge Financial beats Wall Street estimates for second-quarter profit on Friday, helped by resilient demand in its investor communication business.
WHY IT’S IMPORTANT
Broadridge provides investor communications and technology-driven services to banks, broker-dealers, asset managers and corporate issuers.
Expectations of lower corporate taxes and a more business-friendly regulatory environment under the Trump administration have boosted clients’ confidence, fueling demand for services that strengthen their digital infrastructure and helping companies such as Broadridge.
CONTEXT
The company business is split into two segments, investor communication solutions, which accounts for the majority of its revenue, and global technology and operations.
The first and second quarters are seasonally weaker quarters for Broadridge as the heavier volumes of investor communications occurs in the spring for most public companies.
But, the financial services industry is undergoing rapid digital transformation, with companies increasingly adopting cloud computing, artificial intelligence, and blockchain technologies.
Last Nov, Broadridge completed the acquisition of the Securities Industry Services (SIS) platform, wealth and capital markets technology platform of Kyndryl for around $185 million increasing its exposure in the Canadian wealth market.
BY THE NUMBERS
Broadridge posted adjusted earnings per share of $1.56 for the three months ended Dec. 31, compared with analysts’ average estimate of $1.47, according to data compiled by LSEG.
The Lake Success, New York-based company’s global technology and operations unit recorded revenue of $440 million in the quarter, up from $405.4 million a year ago.
Revenue at its investor communication solutions business rose nearly 15% to $1.15 billion in the second quarter.
The company’s total revenue rose 13% to $1.59 billion, in this quarter.
(Reporting by Prakhar Srivastava in Bengaluru; Editing by Tasim Zahid)
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