Thank you everybody for joining us this morning. Welcome to the conference. If this is your first presentation, I'm Patrick O'Shaughnessy, the capital markets technology analyst here at Raymond James. Presenting this morning or for our fireside chat, we have Tim Gokey, CEO of Broadridge Financial. Tim, welcome back. Great. Thank you for having me here, and great to help open things up. To get us started, for those in the room who might be less familiar with Broadridge, can you please provide a brief overview of the company and what you think makes it unique? Yes. Thank you. I'm really excited to be here today because I think it is a time of tremendous change, obviously, as we look around, and we think that we are uniquely positioned to help drive innovation at scale in our part of the industry. For those of you less familiar, we sit at the intersection of capital markets, wealth management, asset management, and public companies. You know, we've scaled quite a bit over the past 15 years, and we've done that really by growing and innovating at the intersection of key long-term trends like the acceleration of trading and the democratization of investing. We think some of the changes we're seeing right now are just gonna continue to accelerate those trends, really putting us at a good place. If you think about just some of the positions we have, we process about $15 trillion in trades every day. And of that, about $400 billion are tokenized, which is a really leading position in that space. Our governance platform manages about 1.5 billion positions over across about 150 million accounts, and we serve 28 of the 29 GSIBs. It's a strong position really at the center of things and at a time of change is a really interesting place to be. It gives us high connectivity across a, you know, real group of complex functions. I can go on. I can talk about acceleration of trading. I can talk about digitization and democratization. I think maybe we should get to your questions just to give us time. I see you, sort of looking at the clock there and getting a little nervous. No. No, we have plenty to get through, and we will certainly touch on some of those. One thing I will, 'cause we won't come back to it, though, is just all of that creates a... it rides on a financial model, just for everyone to hear, that is investment grade, 5%-7% organic revenue growth, 7%-9% recurring revenue growth, with a little bit of tuck-in M&A there. With the leverage of being a technology company, call it 8%-12% over the long term in terms of earnings growth, 10% at the midpoint. Buy back a point of shares, pay a nice dividend. We can support really low double digit or low teens, excuse me, returns to shareholders over a long period. Our guidance this year is right in the same place, 9%-12%, including mid-single digit growth in this quarter and in next quarter. Got it. Great. Great place to start from. The conference is obviously just getting underway, but I'm sure the number 1 topic is going to be the threat of disruption from AI. If I gave a blank check to your best salesperson, a subject matter expert, and a great software engineer to build an AI native competitor to Broadridge, why would they still fail to disrupt Broadridge? Yeah. Well, look, I'm really, I'm glad you asked that question because we do think that AI is going to be a tailwind for Broadridge. We are, we're pretty differentiated from pure SaaS players that sort of take your data and do some workflow and sort of a UI on top of that. We are a regulated market infrastructure provider that moves money, moves securities, and moves votes. For the vast majority of what we do is not just code. It is a network, and it's a combination of many capabilities at scale. We compete on connectivity, on event coverage, on operational resilience, and on certified compliance with regulatory change. In governance, we directly collect events from thousands of public companies, and we connect them to over 100 million investors. We combine the physical and the digital at scale, and we monitor and implement regulatory change. Even if you had the code with all of the nuances, of all of the edge cases over all the years across all the clients, you need the other capabilities to be at scale. On the GTO side, we're providing mission-critical services back to the $15 trillion a day, and where one error would be many, many times our annual fees. And as I said, our platforms are engineered to anticipate all of the edge cases that can come up and that can create those kinds of errors. The platform is surrounded by the people and the expertise to operate it daily because, you know, as straight through as everything is, it's not always as straight through as you think with all the various providers that are providing inputs to that, as well as when there's industry and regulatory change. Finally, if someone were to make a change, it's not just our platform. It's all the things that go around it, all their other systems, all the testing that goes into that, so the ROI of change is tough to make that case. Conversely, we think that the opportunity, once you have everything in place that we have and all the connectivity, the opportunity to build on top of that and use AI to attack the $160 billion of unvended space just in the categories where we already serve, is a real positive for us. Gotcha. I think that's a good setup for my next question, which is, what are some of the examples of how Broadridge is embedding AI within its products and services to increase your competitive mode as well as extract operational efficiencies? Yeah. We are, you know, I think about this in really in three buckets. You know, there's a first bucket which is just bringing AI to everything that we do already. We're doing that with natural language search, with embedding self-service help and with all of those things, you know, onto our existing platforms. We think that's gonna be table stakes in the future. The second bucket is where we have unique data or a unique position where we think we'd create, you know, new services. Examples there would be in asset management, our Global Demand Model, which is, you know, predictive. Given economic scenario, it will tell you in what countries, what asset classes, what wrappers. You know, that's been very successful. I think we sold, you know, in the order of 20 clients so far that. Another example would be the Custom Policy Engine, where we're helping people with proxy voting. We just announced that. That wouldn't have been possible without AI. The last opportunity is using agentic AI to be more efficient ourselves in our operations, in our coding to go faster, do more. Great examples there are what we're doing around Managed Services, what we're doing on client onboarding, and other areas where we can really see the acceleration. I wanna go back to something you said about there's a network aspect to Broadridge. Can you flesh that out a little bit and kinda how it applies across your key businesses? Yeah. you know, we are, you know, connected to thousands of brokers or about 1,000 brokers, tens of millions of clients, 30,000 funds and, you know, call it 10,000 corporate issuers. When you think about the economics of when there are many to many connections, having an intermediary, that is a trusted intermediary in the middle of that is something that reduces cost for all the parties involved, that's a core element of what we do. So that's, you know, that's a really key piece. When we think about the governance side, the way we simplify all that for all the parties is something that is, you know, the more people you have on the network, the more effective it is. On the GTO side, I think the scale is also about interoperability. It's about change, it's about scale, and again, it comes back to all the edge cases I talked about and how we drive that. I think people in this room may have read a story a couple weeks ago about Goldman Sachs using AI to handle things such as trade exceptions. Are you hearing anything from your clients about them leveraging AI to handle tasks that Broadridge historically handled for them? Yeah. broadly, no, but we are talking to clients about AI, obviously, and we think it's an opportunity. You know, remember the majority of what we do is really market infrastructure. What Goldman announced a couple weeks ago was really around the operations that ride on top of that, and it was in finance, but there was some in the trading space. Now they don't happen to be a client for these for our market infrastructure services, but if they were, then their AI would be basically riding on top of our platform. All that said, operations do prevent great use cases for agentic AI and we're doing that ourselves, applying it at scale. We do have a Managed Services business that helps clients with operations. It's a pretty small part of our, of our business, about $100 million in revenues. We've seen about a 20% improvement in productivity over the past year. We have line of sight on another 20%. That's something we're sharing with clients, and we're using that to take more business. Really we think here this is a perfect example of mutualization, which is it makes more sense for us to invest in the AI to make that efficient than for each of our clients, to try to invest on themselves. We don't see the Goldman announcement as a risk to AI. It doesn't really affect 98% of what we do, and the part that it does affect, we think is an opportunity. Gotcha. You mentioned your clients letting you invest as opposed to them investing, but I think a lot of broker-dealers and other clients are just kinda trying to figure out how to invest in this new AI world. Does that create any headwinds for Broadridge in terms of your sales pipeline and particularly on the GTO side of things? It's not what we're hearing today from clients. Who knows what the future will bring? What we've actually seen in the first half of the year was an increase in new opportunity generation relative to last year. Our new opportunity generation was up about 20% in the first six months compared to a year ago. Our pipeline is more robust now than it was, you know, a year ago at this time relative to, you know, how much we have to get done. The thing that I really like is that growth has been driven in the areas we're investing, in areas like tokenization, shareholder engagement, digital communications. You know, we like the fact that we're investing, and then we're seeing clients come to us for that. We feel good about it. Obviously, we did $89 million in the first half, which is a little bit less than the first half last year. We have a lot of wood to chop in the second half. That's not unusual given the seasonality of our business. You know, really the strength of the pipeline and the way it aligns with what we're doing is what gave us the confidence in our last call to reaffirm our guidance for the year. Got it. Appreciate that. Want to turn now to tokenization, another current topic of note. Starting with your ICS segment, there's the notion that tokenized equities could potentially disrupt the current model where broker-dealer intermediaries play a critical role in investor communications. Why are you confident that tokens won't change this role? Yeah. Again, I think this is one that we see as an opportunity, not a risk for our governance business. I think that view is really supported as we talk to clients and regulators and exchanges and, you know, all the folks around the ecosystem. Just a few things. I think first it's not clear when or what pace tokenization will come to equities. You know, there are a lot of market observers that think that really this makes more sense in fixed income and collateral and, you know, it may eventually get to equities, but it may not. 23/5 trading, you know, may sort of suck up the demand. You know, we'll see about that. Second, tokenization is going to create more complexity for some of the actors. You know, what we said to our clients and to regulators is that we are gonna solve that complexity for them so that the governance aspects won't become a barrier to growth. You know, we're supporting it. Because third, we think when it comes as a tailwind for Broadridge. You know, over time, position growth for us has always been driven by innovation and by the next thing. We see tokenization as one of those next things, and that as it draws more investors into U.S. equities, whether that's global investors or investors that are on the sideline now, that's gonna, you know, help us with position growth. Now that's high level. Let me just break this down 'cause it is an important topic. You know, the SEC has given guidance that tokenized securities have, you know, are securities and have all the same protections of quote "regular securities." The disruption case really assumes sort of large scale disintermediation of wealth managers and broker-dealers. You know, we just don't see that happening. You know, what we see happening is that the vast majority of tokenized equities when it comes are gonna be purchased through the broker-dealers and wealth managers that are in business today. Digital exchanges, and those are all our clients. They're gonna have the same obligations that they do today, and we're gonna be able to help them with that. People talk about, well, issuers will have direct access to clients' wallets. Again, we don't think that's something that's gonna happen. You know, wealth managers are investing literally hundreds of millions of dollars to acquire clients, and they're very protective about those clients and not letting that through. Finally, when you think about it from the issuer side, it creates a lot of additional complexity. Today I have my registered shares, I have my beneficial shares. In the future on top of that, I could have tokenized shares that could be tokenized in multiple models on multiple layer one networks. You know, today 80% of the Fortune 500 engages us to help them with their election process, this just creates more value for them. Got it. Very thorough answer. On the GTO side of your business, particularly in post-trade processing, would instant settlement on the blockchain change the nature of how Broadridge serves its clients? No. The, you know, it could change the settlement part of it, but when you think about all the downstream activities that need to happen and they're still gonna happen and they're not gonna be able to be compressed into some smart contract. You know, it's gonna go through, as we just said, you know, traditional broker-dealers. They continue to have all those obligations. They are our clients today. You know, whether it's tax, margin, class actions, you know, think about all the asset servicing things that is gonna need to take place. What clients are concerned about is that, as this begins to come, the most likely scenario is, you know, a very long transition period where you have digital assets and tokenized assets and regular assets, and you're trying to operate all of those. People are very concerned about building up a parallel infrastructure where I have to do it one way but also do it the other way. What we're doing is enabling our existing core processing engines to handle all the asset servicing for digital assets so that you can maybe take advantage of quicker settlement but still run things through your existing infrastructure. We think that's gonna be a very powerful value proposition. I think building off of that, so as with AI, Broadridge is not just sitting on his hands regarding tokenization, and you kind of spoke about one of your initiatives, but what are some of the other key things that you guys are doing right now in the tokenized space? Yeah. I've talked about our Distributed Ledger Repo platform quite a bit. That's something we see is very rapidly growing. We're continuing to sign major new logos every quarter. We have a really nice roadmap of that, bringing that to real time, bringing it to new asset classes, bringing it to tokenized deposits. You know, we think that's gonna be something that's really nice. I also just talked about how on the asset servicing side, allowing people who are using our platform today to flow their digital assets through those platforms. That is enabled already. We have, already quote unquote, you know, call it this quarter, we're rolling that out. Then on the governance side, we have, you know, we're talking to all of our clients and to the digital exchanges. We'll be fully enabled for on-chain governance by the end of this calendar year. Again, we think, you know, we don't know how quickly that will come, but we have been very clear that, you know, that we will be an enabler of that. Got it. Another current events item is the SEC's recent proposal to default investor communications to electronic, which comes on the heels of a similar process at FINRA. Broadridge submitted a comment letter to FINRA that was in favor of default electronic communications. Why is this Broadridge's position, and do you worry at all that your preference management fee could be at risk because of this change? Yeah, it is. It's a great question. Thank you. It's in the weeds. you know, I think you know that we have been a leader in digital communications for a long time. It's been an area that we've invested in significantly, and that's why regulatory communications are currently at, you know, nearly 90% digital. When you step back and think about why we have been a market leader and continue to be a market leader. It's really around three things. It's first of all, knowing that the system works and being able to prove that it's 99.49% accurate and having all that certified by third parties. Secondly, it's continuing to drive innovation and showing change and whether that's Tailored Shareholder Reports or universal proxy or, you know, pick your change that we've driven over the past few years. Finally, it's that the cost continues to come down and become more efficient. The cost of sending a communication, you know, all-in is down 75% since 2010. You know, we've really driven a lot there. This is in the current situation. We think there's no question that done the right way, digital delivery can be very engaging for investors, and will be sort of at the next level of driving cost, and that's something we've always been doing for our clients. To the point that you said that 90% of communications are already electronic. If the default were to switch to electronic, I assume that means that there's just not gonna be much financial impact one way or the other. Yeah. I think, and you know, Patrick, your other question, you asked about the preference management fees. Let me just mention that because I realized I didn't address that because it's an important part of your question, which is if it's all digital, then what happens to the preference management fee? For those, this is really in the weeds, but when you look at sort of our total fees that we get, there's a chunk that's sort of a core fee, and then there's a chunk that's a preference management fee for digital communications. That I think, that whole fee is, I would just call it a bit of a misnomer because when you look at how we get paid, we only get paid today for the communication. When you look at what we do, it's much, much broader than that. You know, we are connected to every public company. We collect the events from all the public companies. We're connected to every investor. We collect their preferences for how they want to receive communications. When there's an event, we pull the positions from all of our broker-dealer clients. We communicate to the end investors in the way that they've chosen to be communicated to. We take back their votes and process them and tabulate them. We provide a 365, 24/7 view of that for the brokers, for the issuers, so they can see what's going on. We tabulate all the results, reconcile them, show the end-to-end, that it's worked, and then we provide, you know, one reconciled bill on behalf of the industry. All of that activity right now is all charged. You know, really, it shouldn't be about sending a communication. It should be about, it should be like an annual, you know what, two months ago, I would have called a SaaS fee, but I won't call it that today. You know, an annual fee around a per position for covering all those activities. So all that work, whether it's a digital or physical, it's 98% the same. You know, we feel good about that. Not going away. Yeah. meanwhile, you just asked about a new question. Sorry. Which was, you know, how will this affect if it does go electronic. Mm-hmm. When communications go electronic, as they will, how will that affect our revenue? You know, I think, and you pointed out, look, regulatory communications are already 90% digital, so how much will this affect our revenue? I think, you're right that the impact will be relatively small. Now what we do think is it's gonna make us a more valuable company with higher margins and more growth, and I'll come back to why that is. As I said, we've been investing to make this happen for years. You know, if you go back to our last Investor Day, we shared our strategy for our new digital platform at that time, you know, to really help drive things away from print towards digital. We made a lot of progress with that. Digital default, I would call that sort of the next step on that journey. Now it's important to note that the timing of this is pretty uncertain. There has been talk on the Hill. There's actually a bill passed in the House. It sort of stalled someplace in the Senate. The SEC has said that they're gonna be working on this. We think it is quite possible that in the next, you know, before the summer, that there could be movement on this and, you know, the beginning of a process. If the process begins in that timeframe, these can often be very protracted processes, as you know, but we think this one could play out more quickly, and in 2 to 3 years, we could be there. That would affect a small%, I'm gonna say, you know, a few%, of our revenue, sort of you look at the direct impact. We think that there are directly linked products that would create demand for, that would really make the revenue impact and the profit impact, you know, negligible. Just if you think about, again, for those that follow us closely, you go back a few years, there's something called Tailored Shareholder Reports that were introduced. We talked about at the time that that was gonna be a $30 million-$40 million sort of revenue impact on us. By the time we got to implementation, we had created new products that more than offset that. In the end, the impact was, you know, 0, and we grew our earnings 11% that year. That's really the way we think about this playing out. Yeah. If I remember correctly, Tailored Shareholder Reports actually led to record closed sales activity for you guys that year. That's right. Do you worry at all about a world where nearly 100% of communications are electronic that would reduce your regulatory communications moat by given Broadridge's scale and expertise at handling physical proxies and fund interims? Like, could a digital native competitor maybe come up? I think this probably ties back into some of your earlier comments. Yeah, it definitely does. You know, we're, you know, we don't think that's gonna happen, really for two reasons. First off, even when we move to digital default, that doesn't mean that physical goes away 100%. You know, there are a lot of investors that really prefer the physical side, and that, you know, you look at the people getting paper today about not everyone wants it, but like 80% of people say, well, they wanna continue. They have to default into it and, you know, with defaults they all won't. There will be a relatively small percent of paper left, but a small percent of a lot is still hundreds of millions of communications that someone has to deal with and the integration of all of that. Second, it comes back to the breadth of the value proposition that I just talked about. The event collection. Just, you know, if you look at sort of standard industry feeds, they miss a lot of events. You know, when we've done benchmarking about what we're doing relative to sort of, publicly available information, you'd be at regulatory risk if you just went with the publicly available information. That combination of all the things that we do that come together is a really powerful value proposition, and clients engage us for that. That's why our Net Promoter Score are in the seventies, both with brokers and with issuers and so we think, you know, it's just gonna be the next step in what has been a long evolution. Another interesting development is that Broadridge's role in proxy voting is changing, whether that's pass-through voting or issuer engagement or displacing proxy advisors. Why are these opportunities all emerging right now, and how would you frame the potential upside for Broadridge? Yeah, I think, right now is, you know, there has been frustration building for many years over, you know, a set of problems. A set of problems for passive asset managers as they've grown in this very significant share of voting that they control. A set of problems for active asset managers around sort of lack of choice in the proxy advisor space, and a set of frustrations among corporate issuers around how do they communicate to their end investors and engage their end investors who engage at a lower rate than they'd like. What you're seeing, I talked about this being a very pro-innovation administration. You're seeing a bit of an unlock against all those things that have been building frustrations for a while. Seeing that, we have been working for a while on how do we help each of those. With passive asset managers, we have been driving pass-through voting for a number of years. Last year we did, I think 400 funds with about $2 trillion in assets. This year we'll do about 600 funds with $4 trillion in assets, so it continues to really grow. This year we've introduced this custom policy engine, as I mentioned, to really give asset managers a clean set of data, and then allow them to apply their own rules to it. Be able to do that much earlier in the cycle and also provide visibility into that data to the corporate issuers to really solve some of the pain points there. Then with standing voting instructions, allowing public companies to directly engage with their shareholders and allow them to default, 'cause defaults are popular, default into voting with management. We think those are powerful solutions. I think I said on the last call that collectively they could add something like a point of growth to our governance business, you know, in each of the next several years. Even beyond what that does is it really embeds us strategically with our clients in a way that is much deeper that we really like. Perfect. I see we have about a minute left, so maybe a good place to end the conversation, and this probably will bring it back a little bit higher level, but what are some of the key messages that you wanna make sure that people walk away with today? Well, first of all, I wanna thank you and Raymond James for having us and for allowing me to speak to some of the, you know, core concerns that investors have and why they're opportunities. Then I would just wanna leave people with three messages. First of all, we are doing very well today. You know, we've given strong guidance for the remainder of the year in terms of growing earnings 9%-12%. We don't see any change in that, so we really like where we are today. Second, our growth is being driven by long-term trends like the democratization of investing and the acceleration of trading that are only being pushed further by the changes that we're seeing happen in the environment. We think the changes we're seeing in the environment are really beneficial to us. That really brings me to third, which is, we've been investing really to create the growth platforms for the future. Whether that is tokenization and trading, whether it's all the things I talked about in terms of, new ways for shareholders to engage, whether it's bringing our technology platforms, you know, onto a true platform that, will enable our clients to drive AI, and driving it ourselves. Those things are all, we think, really setting us up really well for the future. We run this company, you know, as you know, with a very long-term view. We view every client as a 99-year client, that they really look to us to help them navigate periods of change. When we invest on their behalf, it allows them to do things even faster, and that's why I always talk about and help our industry drive innovation at scale. All right, perfect. With that, we are out of time, but we'll have a breakout session downstairs. Thank you, everybody, for joining us.