Broadridge (BR) Q1 2026: Tokenization Adds $4M Recurring Revenue, Accelerating Digital Asset Strategy
Broadridge’s early lead in tokenization and digital assets is now delivering measurable recurring revenue, while strong equity position growth and tuck-in M&A reinforce its multi-pronged platform strategy. With a robust pipeline and investments in digital communications, AI, and shareholder engagement, Broadridge is raising its recurring revenue outlook and signaling confidence in long-term growth drivers that extend well beyond legacy proxy and governance services.
Summary
- Digital Asset Monetization: Recurring revenue from tokenization and Canton coin validates Broadridge’s platform-first innovation push.
- Equity Position Growth: Managed account and direct indexing adoption fuel double-digit equity position expansion.
- Pipeline Strength: Healthy sales backlog and expanded product set support a raised recurring revenue outlook.
Performance Analysis
Broadridge delivered 8% recurring revenue growth (constant currency) and 51% adjusted EPS growth, driven by strength across governance, capital markets, and wealth management. The ICS (Investor Communication Solutions) segment, which anchors Broadridge’s governance business, grew 5% to $518 million, benefiting from position growth and recent acquisitions, while GTO (Global Technology and Operations) recurring revenue advanced 12% with a notable 22% surge in wealth and investment management, reflecting the impact of the SIS acquisition.
Capital markets revenue rose 6%, buoyed by higher trading volumes and a $4 million contribution from digital asset revenues tied to Broadridge’s super validator role on the Canton network. Event-driven revenue, at $114 million, was well above historical norms due to a large mutual fund proxy event, but management expects normalization in coming quarters. Margins expanded by 280 basis points to 15.8%, reflecting operating leverage and the high incremental margin of event-driven activity, though Broadridge is channeling some of this upside into reinvestments in innovation and platform development.
- Tokenization Revenue Emerges: Digital asset activities now contribute one point to capital markets growth, offering early validation of Broadridge’s blockchain investments.
- Persistent Equity Tailwind: 12% equity position growth and robust managed account adoption underpin future governance revenue streams.
- Cash Flow and Capital Return: Free cash flow conversion remains strong, supporting $150 million in share repurchases and $103 million in dividends this quarter.
The company’s 98% retention rate and $430 million sales backlog conversion remain central to organic growth, while tuck-in deals (Signal and iJoin) and the SIS integration further diversify and modernize the product suite.
Executive Commentary
"Tokenization is just one of the many innovations we are driving that are transforming our industry and setting the stage for long-term growth... The combination of a pro-innovation regulatory backdrop and accelerating technology change is putting digital assets and tokenization front and center as a new megatrend in financial services that creates significant opportunity for Broadridge."
Tim Gokey, Chief Executive Officer
"Broadridge recognized $4 million of digital asset revenues related to our work as a supervalidator on the Canton network. As a result, we recorded a $46 million unrealized gain on the value of the 1.7 billion coins we held at the end of the quarter... recurring revenue growth constant currency was 8%, primarily driven by five points of organic growth."
Ashma Ghaib, Chief Financial Officer
Strategic Positioning
1. Digital Asset and Tokenization Leadership
Broadridge’s early investments in distributed ledger technology (DLT) and the Canton network are now producing tangible revenue, with $4 million recognized this quarter from its super validator role. The company is positioning DLR, its distributed ledger repo platform, as the backbone for real-time, multi-asset trading and plans to expand into new asset classes and stablecoin rails over the next year. Management frames tokenization as a decade-long megatrend, with the Canton network potentially serving as the “operating system” for institutional markets.
2. Governance and Shareholder Engagement Innovation
Broadridge continues to drive democratization in governance, introducing new voting choice solutions for passive funds and piloting standing voting instructions for retail shareholders with ExxonMobil. These initiatives are designed to increase shareholder engagement and solidify Broadridge’s role as the technology backbone for corporate governance, regardless of whether securities are traditional or tokenized.
3. Wealth Platform Expansion and Integration
The SIS acquisition and ongoing integration efforts in Canada are fueling 22% growth in wealth management revenues. Broadridge is onboarding major new clients and expects to begin recognizing significant new revenue streams by the end of fiscal 2026. The platform’s modernization is also positioning Broadridge to enable digital asset servicing for wealth managers, responding to rising client demand for integrated crypto and digital asset solutions.
4. Balanced Capital Allocation and Tuck-In M&A
Broadridge is actively deploying capital through a mix of tuck-in acquisitions, share buybacks, and dividends, while maintaining an investment-grade balance sheet. Recent acquisitions (Signal and iJoin) expand digital communications and retirement plan capabilities, while the pending Akilin deal will further strengthen the governance franchise in Europe.
5. Mutualized Platform Advantage
The company’s mutualized technology platform model—where clients share infrastructure, cost, and regulatory adaptation— is highlighted as a key competitive advantage, especially as regulatory and trading structure changes (such as 23x5 trading and centralized treasury clearing) approach in 2026.
Key Considerations
Broadridge’s Q1 2026 results reinforce its transformation beyond legacy proxy processing toward a multi-rail fintech platform, yet the business remains exposed to cyclical and event-driven swings. Investors should weigh the following:
Key Considerations:
- Event-Driven Revenue Volatility: Q1 benefited from a major mutual fund proxy, but future quarters will revert to lower, more normalized event-driven levels.
- Interest Rate Sensitivity: Lower rates exert a modest drag on ICS earnings, though partially hedged by lower debt costs.
- Tokenization Revenue Still Early-Stage: Digital asset revenues are small but growing; their long-term impact depends on broader adoption and Canton network scaling.
- Sales Pipeline and Backlog Conversion: Recurring revenue growth is increasingly supported by a $430 million sales backlog and robust client retention.
- Ongoing Investment in Innovation: Management is prioritizing reinvestment in AI, digital communications, and platform enhancements, which may moderate near-term margin upside.
Risks
Broadridge’s exposure to event-driven revenue and trading volumes introduces quarter-to-quarter volatility, while digital asset holdings (Canton coin) add mark-to-market risk and potential non-operating income swings. Regulatory changes, client adoption rates for tokenization, and the pace of wealth platform integration remain key variables. Management’s guidance assumes no significant macro or regulatory shocks, but the evolving digital asset landscape could introduce unforeseen risks.
Forward Outlook
For Q2 2026, Broadridge guided to:
- Normalized event-driven revenue, with adjusted EPS expected at 13% to 15% of full-year outlook
- Continued mid-teens equity position growth and mid-single-digit fund position growth
For full-year 2026, management raised recurring revenue growth guidance to the higher end of the 5% to 7% range and reaffirmed:
- Adjusted operating income margin of 20% to 21%
- Adjusted EPS growth of 8% to 12%
- Closed sales of $290 million to $330 million
Management emphasized ongoing reinvestment in tokenization, digital assets, and platform innovation as critical to sustaining long-term growth, even as near-term event-driven revenue normalizes.
- Digital asset revenue is expected to add one point to capital markets growth in fiscal 2026
- Acquisitions (Signal, iJoin) and SIS integration will continue to contribute incremental recurring revenue
Takeaways
Broadridge’s Q1 2026 marks a clear inflection in its digital asset strategy, with tokenization and blockchain now delivering real revenue and positioning the company as an early mover in institutional DLT infrastructure.
- Platform Leverage: The mutualized platform model and pipeline strength reinforce Broadridge’s ability to convert innovation into recurring revenue and margin expansion.
- Strategic Reinvestment: Management’s willingness to reinvest event-driven windfalls into AI, tokenization, and digital communications signals a focus on durable growth over short-term earnings maximization.
- Future Watchpoints: Monitor further revenue contribution from digital assets, the pace of tokenization adoption, and the impact of new regulatory and trading structure changes on platform demand and retention.
Conclusion
Broadridge’s first quarter results showcase the tangible benefits of its multi-year innovation and platform strategy, with digital assets and tokenization now contributing to growth. The company’s raised outlook and ongoing investments signal confidence in its ability to lead the next wave of financial infrastructure transformation.
Industry Read-Through
Broadridge’s emergence as a revenue-generating player in digital asset infrastructure and tokenization offers a blueprint for traditional fintechs seeking to monetize blockchain at scale. Its integration of tokenized asset servicing, real-time repo, and shareholder engagement solutions highlights the growing demand for institutional-grade DLT platforms. Competitors in wealth management, capital markets, and governance technology will need to accelerate digital asset integration and platform modernization to keep pace. The regulatory clarity supporting tokenized securities reinforces the view that digital assets are rapidly moving from experimentation to core infrastructure across financial services.