Broadridge CEO Calls Tokenization A 'Generational Opportunity' A Day After NYSE Deal
Tim Gokey says tokenized positions should be processed at economics equal to or better than today's, while first-quarter adjusted EPS was $1.56.
Broadridge CEO Tim Gokey told analysts on the company's earnings call Tuesday that tokenized stocks sit "somewhere between a long-term tailwind and generational opportunity," a day after Broadridge said it would run governance for the New York Stock Exchange's planned tokenized equity marketplace. Broadridge, which provides technology and outsourced services for investing, shareholder voting and communications, also reaffirmed its fiscal 2027 outlook.
A governance layer for every model
Gokey said Broadridge is not trying to pick which tokenization model wins. It is building what he called a horizontal governance layer across all of them, because multiple models and networks add complexity for brokers and issuers.
The company will supply the core governance layer for the NYSE's planned venue and support issuers with digital transfer agency services, Gokey said. It also recently announced an agreement with Kraken Payward, adding to existing relationships with Ondo and Alpaca, and it is supporting the DTCC's tokenization work.
Asked by an RBC Capital Markets analyst how the economics compare with traditional processing, Gokey said he expects tokenized positions to be processed at economics "equal to or superior to today's model." He said most such holdings will probably sit with wealth managers, and noted Broadridge serves 80% of the Fortune 500 at economics better than on the beneficial side.
A Morgan Stanley analyst asked about the SEC's innovation exemption. Gokey said it allows tokenized security venues but with volume limits, and that it is one model among several. "How fast it comes is unclear," he said, adding that faster adoption would drive position growth.
First-quarter numbers and guidance
CFO Ashima Ghei said adjusted earnings per share rose 3% to $1.56, above the company's expectations, helped by timing benefits in regulatory revenue and a 14% tax rate. Recurring revenue grew 11% at constant currency, and total revenue rose 5% to $1.7 billion. Adjusted operating margin was 13.8%, down 200 basis points (two percentage points) as record event-driven revenue a year earlier was not repeated.
A $40 million non-cash loss on digital asset holdings was excluded from adjusted EPS, Ghei said. A year ago the company booked a $227 million non-cash gain on those holdings, and it expects to keep marking them to market each quarter. It also took a $15 million restructuring charge.
Broadridge reaffirmed fiscal 2027 guidance: recurring revenue growth of 6% to 8%, adjusted operating margin of about 21%, adjusted EPS growth of 8% to 12% and closed sales of $290 million to $330 million. It bought back $200 million of stock in the quarter, and AI savings were $6 million against a $25 million full-year target. Shares traded at $180.86 in Tuesday trading, down about 2% from the prior close.
Predictive AI and the road to Investor Day
Gokey said Broadridge's demand model, which covers more than $130 trillion of global assets, was adopted by a leading consulting firm to replace its longstanding in-house model.
Management will hold an Investor Day in New York on December 8, where it plans to give financial objectives for fiscal years 2027 to 2029.
Broadridge's Investor Day on December 8 is where management has said it will lay out its fiscal 2027 to 2029 financial objectives.
Sources
- Broadridge Financial Solutions (BR) Q1 Earnings and Revenues Beat Estimates — Yahoo Finance
- Broadridge Financial: Fiscal Q1 Earnings Snapshot – WTOP News — wtop.com
- Broadridge stock: Tokenization could expand its opportunity — CNBC
- Broadridge Signs On to Run Shareholder Votes for NYSE’s Planned Tokenized Stocks — Yahoo Finance
- Broadridge Reports First Quarter Fiscal 2027 Results – Company Announcement - FT.com — Financial Times
