Good morning and welcome to the Broadridge Second Quarter 2020 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions.

[Operator Instructions] Please also note this event is being recorded.I would now like to turn the conference over to Edings Thibault, Head of Investor Relations. Mr. Thibault, please go ahead..

Thank you, Dana. Good morning, everyone, and welcome to Broadridge's fiscal second quarter 2020 earnings conference call. Our earnings release and the slides that accompany this call may be found on the Investor Relations section of broadridge.com.

Joining me on the call this morning are Tim Gokey, our CEO and our CFO Jim Young.Before I turn the call over to Tim, a few standard reminders. We will be making forward-looking statements on today's call regarding Broadridge that involve risks.

A summary of these risks can be found on the second page of the slides and a more complete description on our annual report on Form 10-K. We will also be referring to several non-GAAP measures, which we believe provide investors with a more complete understanding of Broadridge's underlying operating results.

An explanation of these non-GAAP measures and reconciliations to their comparable GAAP measures can be found in the earnings release and presentation.Let me now turn the call over to Tim Gokey..

AI, blockchain, cloud and digital. So we're excited by the launch of the Broadridge private cloud, powered by IBM.

By transitioning our global distributed technology platforms to IBM, we will be able to accelerate our hybrid multi-cloud strategy.Broadridge's private cloud will enable us to more rapidly provision additional capacity and services for our global clients, while increasing the overall resilience of our network.

Extending our long-standing partnership with IBM also positions us to use Red Hat technology to containerize our apps, which enables them to run both in our private cloud as well as on AWS.

Accelerating our hybrid cloud strategy will enable Broadridge to further deliver next-generation SaaS solutions.Investing in new products and capabilities is a key part of our formula for long-term success.

We're funding these growth investments even in a year when we were seeing pressure from event-driven revenues, the technology investments across the ABCD.

These investments are translating into a very healthy pipeline of innovative new capabilities that create additional value for clients and shareholders, driving top quartile results over time.In governance, we're rolling out modernized proxy template as we speak, we're launching an industry solution for 30e-3 and we've introduced a new global fund analytics platform.

We're bringing enhanced digital capabilities to our communications clients and using distributed ledger technology to enable European banks and brokers to meet the requirements and the Shareholder Rights Directive.Capital markets. We continue to strengthen our global post-trade management platform.

We're also expecting a soft launch over the summer of our AI-driven fixed income trading capability and are launching a repo market solution based on blockchain in fiscal 2021. We expect both of these internal builds to contribute meaningfully in the future.

And, of course, we're making very good progress in building a next-generation industry platform for the wealth management industry, which we expect will come live in 2021.Earlier this week we named Mike Alexander as head of our newly combined wealth business, an important milestone in the creation of this new franchise.

Since January 2, I've met with more than a dozen CEOs and other senior leaders at our largest clients. These conversations leave me more convinced than ever about the opportunity we have in front of us.It's clear that financial services CEOs are very engaged in driving technology and business transformation.

And they're excited about Broadridge as a key partner with them on industry solutions, with next-generation technology that will simplify and improve their operations.For all these reasons, our technology leadership, organic product investments, continued tuck-in M&A and a healthy sales pipeline, I'm confident and excited about how Broadridge is capitalizing on a strong and growing market opportunity to create sustained growth, not only in the second half of fiscal 2020, but well into the future.

Before I turn the call over to Jim, I want to thank our associates for the work they do to help our clients and enable better financial lives for millions, by powering investing, governance and communications. It's making a real difference.Let me now turn the call over to Jim to walk through our financials.

Jim?.

Thanks, Tim, and good morning, everyone. Our Q2 financial results had some very positive signs, but were below our own expectations. However, we are on track to deliver against our fiscal year 2020 guidance and long-term objectives. Before reviewing our results, I'll make a few call-outs.First, event-driven activity.

Event fees declined notably from Q2 a year ago, driving a decline in our second quarter earnings. Event fees were also much lighter than our expectations. We now expect full year event-driven fee revenues to be down 20% to 30% versus last year.Second, recurring growth.

Recurring growth for the quarter was 7% with strong contributions from new sales and acquisitions. Third, organic growth. Organic recurring fee growth was light at 1.5% in the quarter. New revenue from sales contributed a Q2 record $39 million or 6 points to organic growth in the quarter. That strong result was offset by negative internal growth.

We expect organic growth to pick up in the second half as sales contributions remained strong and internal growth flips to positive.Fourth, capital, two updates here. The first is M&A. Since our last call, we have announced two additional tuck-in acquisitions ClearStructure and FundsLibrary.

That brings our fiscal year-to-date M&A investments to approximately $310 million. The second update is our debt offering. We issued $750 million in 10-year senior notes at a 2.9% coupon in early December, highlighting the value of strong capital structure.The fifth call-out is the Broadridge private cloud.

In the second quarter, we recorded charges of $33 million representing a non-cash loss on hardware assets to be transferred to IBM and other related charges. Sixth and final, guidance. Our overall guidance remains broadly unchanged.

However, given the slow start to the year in organic growth, we expect organic growth to have less of a contribution to our total recurring fee growth of 8% to 10% versus contributions from acquisitions, with full year organic growth of 3% to 4% versus our prior view of 5% to 7%.

Additionally, we expect the weakness in event-driven activity to continue into the second half. However, we remain on track to deliver 8% to 12% adjusted EPS growth, albeit, at the low end, given the event pressures.Let's turn to slide seven for a review of our second quarter revenue drivers. I'll start with recurring fee revenues.

Overall, our recurring fee revenues rose 7% in the quarter. Within recurring fees, we are especially pleased with our sales-driven growth, contributing 6 points to growth.

This is a Q2 record, as we continue to make progress against our healthy revenue backlog.Acquisitions also contributed six points of growth as a very productive nine months of tuck-in acquisition work are yielding meaningful revenue additions.

Internal growth, which has been a consistent contributor, was notably negative in the second quarter and a drag on organic growth.As Tim noted, lower customer communications volumes and lower trading volumes were the chief contributors here.

Again this negative three points of growth dampened an otherwise good quarter on sales-to-revenue conversion.We expect organic revenue growth to improve in our seasonally larger second half and to exit the year at a healthy clip.

The improvement should come from the combination of sustained strong sales to revenue performance and internal growth flipping to positive territory.Moving down to total revenue. Total revenues grew 2% to $969 million in the quarter.

Strong gains in recurring revenues were offset by declines in event-driven fees which also impacted distribution revenues.

And finally foreign exchange impacts related to growth in our international businesses from acquisitions most notably RPM lowered revenue growth by one point.Next, I'd like to put some context around Q2 and year-to-date event activity. Let's turn to Slide 8. The biggest driver of event volatility is the timing of large mutual funds go out for proxy.

Another driver of volatility is large high-profile equity contests. which are generally episodic and unpredictable.We've experienced both large funds going out for proxy and big contest in recent years, especially fiscal 2018.

Year-to-date, we have had no such large events and at the same time saw very light activity across more run-of-the-mill requests like special meetings, various types of mutual fund shareholder communications and capital markets transactions.To put that in context comparing our fiscal 2020 results to our five-year history shows that Q2 total event fees of $31 million were 36% below last year, 42% below our Q2 average and just above the five-year low in fiscal 2017.

The story is largely the same across both equity and mutual fund types of event revenue.The mutual fund activity slowdown is certainly more pronounced, especially as we are not seeing any large campaigns.

We believe this represents cyclical softness and not some broader secular trend.Looking ahead, we expect that period of softness to extend into the second half.

We are expecting activity to pick up sequentially in the second half, both as a result of normal seasonality as well as our visibility into a few small- to medium-sized mutual fund proxy campaigns.For the full year, we expect event-driven fee revenue to be in the range of $175 million to $195 million, down about 20% to 30% from last year, well below our five-year average and closer to the five-year low.

That implies $104 million to $124 million for the second half. This is down considerably from our outlook a quarter ago but still at a manageable level.Next I'll cover the performance of our ICS and GTO segments on Slide 9. I'll start with ICS. I've already covered event-driven revenues, so I'll focus on recurring revenues, which grew 3%.

Looking at the drivers behind the 3% increase, solid net new business gains contributed three points. Internal growth dipped negative, largely from the impact of lower customer communications volumes offset by higher mutual fund interims.Recent acquisitions contributed an additional three points of growth with TD outperforming.

We expect ICS organic revenue growth to pick up over the balance of fiscal 2020 as we benefit from the full weight of higher proxy volumes in the second half of the year but to be a little below our historical 4% to 6% annual growth rates as the decline in mutual fund communications that Tim referenced will continue to be a drag on growth over the balance of fiscal 2020.ICS total revenues declined 2%, driven primarily by the decline in event-driven revenues and related distribution revenues.

We expect the distribution revenue decline to abate in the second half of the year driven by expected higher regulatory communications and other mix shifts.Turning to GTO. Revenues rose 14%, driven by the acquisitions of RPM and Rockall and more recently Shadow and ClearStructure.

Organic growth was 4%, driven by new revenue from sales which drove eight points of growth as we onboarded new clients onto our platforms. This was offset in part by a decline in equity volumes.Looking ahead, GTO is well positioned for accelerating growth.

We expect the continued benefit of strong sales to revenue growth as we continue to work through our large revenue backlog. We also expect internal growth to turn firmly positive on easing pressures.Net-net, we expect GTO organic revenue growth to be mid- to high single-digit range in the back half of the year.

Combined with acquisitions, we expect strong teens total growth for GTO in the second half.Let's turn to profits on Slide 10. Adjusted operating income declined $7 million or 7% driven by a decline in event-driven revenues.

As most of you know, event-driven revenues are highly profitable so they tend to have an outsized effect on our income when they decline.Adjusted EPS benefited modestly from a lower tax rate due to the relative size of the excess tax benefit for equity compensation, which was $2 million.

With $8 million year-to-date, we continue to expect a full year ETB benefit of $20 million.Pausing to look at our GAAP EPS, you can clearly see the effect of the $33 million charge associated with the Private Cloud Agreement with IBM this quarter.

We've excluded this charge from our adjusted [ph] results.Next is cash flow and the balance sheet on Slide 11. Broadridge generated free cash flow of negative $32 million for the first half of the year. This is not uncommon for our seasonal cash flow, especially with major boardings and flight.

We continue to expect healthy free cash flow for the full year, a big contribution from the seasonally stronger second half of the year.An important benefit of the Private Cloud Agreement is the reduction in our overall capital spending related to technology infrastructure, as we move to a more consumption-based model.

We expect to see some benefit from that in the second half.Rounding out free cash flow and as we discussed in August, we are seeing continued investment commensurate with our revenue backlog related to client-driven work we are doing to build out our global post-trade management platform and our new wealth product, along with more general client onboarding.

This anticipated pickup is evident in our first half free cash flows.As noted, we remain active on the M&A front this quarter. And with three acquisitions representing an aggregate purchase price of about $230 million that brings our year-to-date investment in M&A to approximately $270 million.

This does not include our acquisition of FundsLibrary for approximately $69 million announced last week.

Given two dividend distributions, our capital return to shareholders this year has been $119 million.Finally on capital, our senior notes issuance gives us liquidity to refinance our upcoming $400 million bond maturity in September of this calendar year to fund additional acquisitions, if the opportunity arises and/or return capital to shareholders.Let's turn to guidance on page 12, and starting with recurring revenues.

We continue to expect recurring fee revenue growth to be in the range of 8% to 10%. After a slow start to the year, we now see organic growth for the full year at 3% to 4%, down from 5% to 7%.

We expect organic growth to pick up in the second half of 2020 as a result of healthy proxy revenue, as we enter the heart of the proxy season, continued good growth in mutual fund and ETF interims and GTO acceleration as we see continued benefit from new sales additions and an easy – an easing of internal growth comps.These drivers will be partially offset by continued weakness in ICS customer communications revenues.

In addition, we expect our acquisitions to contribute five-plus points to Broadridge's overall recurring fee growth rate for the year.Total revenues, we expect total revenue growth to be in the range of 3% to 6% even with this latest outlook for event activity. Adjusted EPS, our guidance for adjusted EPS growth of 8% to 12% is unchanged.

However, given lower event-driven revenues, we expect to be at the low end of that range.

Closed sales, we continue to expect closed sales to be in the range of $190 million to $230 million.Finally, we have adjusted our guidance for both GAAP operating income and diluted EPS to reflect higher acquisition amortization in the private cloud-related charge.In summary, after a slow start to the year, we expect GTO acceleration and a healthy proxy season to drive improved organic growth in the seasonally bigger second half of the year.

And we remain on track to deliver our full year revenue and earnings guidance. And importantly, we are also on track to meet our three-year objectives for fiscal years 2018 through 2020.And with that, operator we'll open it up for questions..

Thank you. We will now begin the question-and-answer session. [Operator Instructions] The first question today comes from David Togut with Evercore ISI. Please go ahead..

Thank you. Good morning. I'd just like to clarify, one part of your updated guidance for fiscal 2020, Jim. I think initially in the FY 2020 guide, you were expecting a four percentage point contribution from M&A to recurring fee revenue growth.

So originally you were guiding to 8% to 10% recurring fee revenue growth, which implied four points from M&A and four to six points organic. But with M&A coming in about six percentage points to recurring revenue year-to-date that implies organic about two points lower more like two to four percentage points.

So is that correct in the way I'm thinking about that? And then my follow-up really is on the internal revenue growth, which you have down 3% on slide 7.

Is that really almost all just the decline in event-driven, or is there some other components there that we should focus on?.

Yeah David. As I said in my remarks, we now see organic growth at 3% to 4%. And I also said that, we expect acquisitions to be another five-plus points, which gets us back to this range of 8% to 10%. As we look at that internal growth, I think it's important to remember that 3% to 4% is comprised of the softer first half at about 2%.

And we see strength in the second half, especially the fourth quarter, which helps us exit the year at a healthy rate.And then specifically, and it relates to your next question on internal growth remember that event-driven is not reported in our recurring revenue. So it's not – the internal growth is not related to event.

What you're seeing in that internal growth is a function of trades some of the weaker mutual fund communications that Tim referenced driving that. When we look in the second half and we think about the strength of our proxy season a couple of comps just easing a little bit we think that internal growth flips to positive.

So it's that combination of continued strength on revenue from new sales, plus positive internal growth helps us exit the year at a higher organic growth level..

Is the weakness in trade volumes just market conditions being soft, or are you concerned there might be some share shift there?.

No. This is really the equity volumes that some of the industry has seen much weaker. We were down 16%. And so in hindsight not a big surprise, but clearly that's something that usually is sort of neutral to positive. So we were down 16% that's going to put some pressure on revenue growth at the margin..

Understood. Thank you very much..

The next question comes from Patrick O'Shaughnessy with Raymond James. Please go ahead..

Hey, good morning, guys. So just wanted to drill down a little bit more into the underlying drivers behind lowering the full year organic recurring revenue guide to 3% to 4%. I know you spoke about this a little bit in your prepared remarks, but maybe if you can summarize kind of what are the key moving parts to take that down for the year.

And then, I think building off of that, what are the implications if any in terms of your outlook for fiscal 2021 and beyond for organic recurring revenue growth?.

Patrick I'm going to start, this is Tim, and then I'm going to let Jim add on to that. I think one of the broad points is really implicit in what we've been saying, but I think it's worth just restating is that we are really an annual company.

And so when you think about what are our drivers of organic growth, it's really around position growth and then revenue from new sales.And in the seasonally small first half, that position growth doesn't really have a chance to come through and have the impact that it does for the full year.

Remember that 70% of our proxy business is in the second half.So, I think we see that position growth coming through and having a bigger impact in the second half, a turnaround in some of the smaller internal growth factors that Jim talked about that's why we feel good about -- as well as the continued strong performance on revenue from sales, that's why we feel good about the acceleration in the second half.And then what you're going to see is that building from Q3 into Q4 so the exit rate in Q4 I think is -- will be the strongest part of the year and that gives us a good feeling about 2021..

Got it. Thank you, Tim. And then you mentioned in your prepared remarks some commentary about in the communications business I think increased suppressions weighing on growth going forward.

Can you provide a little bit more detail on kind of what that means?.

Sure. The -- some of our -- our large clients are always looking at how they manage their costs.

And as they've been looking at their client experience and specifically how they handle the treatment of communications to managed account holders, a couple of the -- our larger clients are taking a little different view on that and that's something that we think will persist over time.

And so they're just doing some fine-tuning about who they send what to. And so that is -- didn't have that much of an impact in the first half. It will have some impact in the second half and that's built into all the forecasts and guidance that we've given..

Great. Thank you..

The next question comes from Ken Hill with Rosenblatt Securities. Please go ahead..

Hi, good morning. Had a question on the IBM deal, I know you talked about it a little bit in the prepared remarks.

But I was hoping you can maybe walk through any potential changes we can expect on the operating expenses going forward as a result of that agreement?And then also kind of on the flip side of that maybe talk a little bit more specifically about some of the opportunities you're thinking about given the flexibility this platform might allow you going forward.

Thanks..

Yes. Ken thanks for asking that question and I'll start and let Jim add in anything that I missed. But we're really excited about this. As I said in my prepared remarks, it's a real step forward in our hybrid multi-cloud strategy. We think it's going to enable us to really speed our time to market. It's going to offer enhanced resiliency.

It is going to allow us to offer new capabilities over time and really we think improved strength of our SaaS offering.Importantly, -- and I didn't get into this as much on the cause not a substitute for our public cloud strategy and we continue to invest strongly with AWS.

We have 80 teams at work refactoring various applications and modernizing them and we see that as a real modernization approach.But the nice thing about the private cloud approach is it doesn't require any change to the applications. It doesn't require any client testing and also there were a number of our associates that moved to IBM.

So, those associates will be able to continue to support us and have great career tracks.So, we think it's a win for our clients it's a win for our associates and it does -- when we talk about what's the impact on our operating expense, it is more efficient.

And that is going to enable us in the near-term to increase our investment in terms of moving to the public cloud and developing our application.So, it really is a nice move away from spending money on running servers and things like that to being able to invest in things that will make a real difference for our clients.

So, we are excited about that.And then the last piece is what it will also free up is capital dollars that we're investing. So, in addition to the expense today we have capital dollars that we won't have in the future..

Okay. Thanks for the detail there. One quick one though on closed sales. I think after the first quarter, you guys were up 103% and then the latest update was up double-digits year-to-date basis.

Is there any more color you can provide on just second quarter activity?.

Second quarter we felt really nice about. We have ended the first half really where we had hoped to for the first half. And so it was -- if you take out the very large deal from last year, it was about on track with last year.

And the timing between first and second quarter I think something happened in Q1 that is great that they happened as early as they did. So, we feel really on track in terms of delivering on our full year sales guidance..

Okay. Thanks for taking the questions..

Next question comes from Peter Heckmann with D.A. Davidson. Please go ahead..

Hey good morning gentlemen. Just a couple of follow-ups.

In terms of the M&A that's contributing to fiscal 2020 just in terms of a rough number, the $39 million this quarter, we're thinking it's somewhere around $140 million for the full year?.

Yes, the $39 million peak for this quarter is--.

The sales contribution..

The revenue from sale not specifically the M&A number..

Pete, sorry, I may have misunderstood it. Just remember we're taking about five points -- better than five points of growth coming from M&A and our recurring revenue for this year..

Okay five points to recurring. Okay. And then in terms of a little bit softer revenue in customer communications.

Are you seeing any acceleration to e-delivery or e-billing that's playing into that, or is it other issues?.

We're just -- and you're a little soft, we're approximating the question, Pete, but it is -- I think, I would say, yes and no is my answer, which is we do definitely see continued traction on digital and that's a very positive thing.

But that's not the cause of what you're seeing this quarter.So what you're seeing this quarter is really very much around the post-sale business and the change we saw in really volumes there. And again, we projected those volumes going forward for the second half.And we'll -- just because I -- as you say digital it sort of gets my juices flowing.

I can't help, but talk about that a little bit.

If you look at some of the things that we have going on in digital over the past two years, we have onboarded more than 100 mutual fund complexes and transitioned from DST onto our next-generation cloud-driven digital platform.And we really transferred that like-to-like in the initial instance, but that platform has significant capabilities that those funds aren't using today.

And so we think that's a really nice digital opportunity for us over time and -- that we'll see some nice acceleration there. So we do remain excited about digital, but that wasn't the impact this quarter..

Got it. Thank you..

The next question comes from Chris Donat with Piper Sandler. Please go ahead..

Good morning. Thanks for taking my question. Hi. Tim wanted to follow-up something you said in your prepared remarks about the volume of new mutual fund ETF sales in the quarter and I know it had a tough comp.

But I'm just wondering if you're seeing any impact on new ETF sales now that a lot of the online brokers have gone to zero trading fees? It seems to me like you might see some adjustment in some of the ETFs that were branded by a large broker that now may be just less interesting or I might be wrong.

But anyway I'm just curious if you're seeing any change in end market demand for some ETFs?.

Yeah. I don't think that we are seeing anything related to the zero trading.

I think when we look back and try to correlate this and you can imagine that we spent a few late nights trying to – well, yeah, not me, but the team here as I said a few late nights trying to correlate that and we really see -- the best correlation we see is really with the VIX and with volatility and so we had in periods of high volatility there can be a lot of rebalancing activity.So I was calling it new sales and new purchases, but a lot of this has to do with the things that decisions that individual investors may not be making themselves, but is happening as a matter of rebalancing of large portfolios and our in-managed accounts.

And so I'm not taking us on the zero trading side, and I am thinking it's a matter of just with the pretty quiescent quarter that we just passed there wasn't a lot of that rebalancing activity..

Okay. That's helpful. And then on the -- just on the acquisition front since you've done a lot of them. As we think forward to fiscal 2021, whatever I assume you're keeping the same playbook in terms of accretion.

But can you just remind us what's your expectations are for accretion from the four acquisitions you cited in the press release for example? What's a reasonable expectation for what they'll contribute?.

Yeah, Chris. Hi, this is Jim. As you recall most of these acquisitions in the first year which is everything we're talking about because as a lot of these were done in Q4 and then just this year are pretty neutral to the year. The only -- so I think the assumption is relatively modest.

There are -- as Tim mentioned, a couple of the businesses are overperforming already and doing pretty well.

So, nice contributions.In the grand scheme of brokerage earnings nothing that moves the needle, but nice contributions above our business case, which means that we get a little bit of contribution above and beyond the plan, but nothing that is significant in that respect and worthy of callout..

Yeah. I think I would say that they're not accretive in the first year their margins do increase over time. I think that's really built into the 50 basis points per year that we tend to talk about and have delivered on for a long time.

So I would really think about it that way.It is just a case to talk a little bit more broadly about M&A and I've talked before about how we see this as an evergreen opportunity for Broadridge, because there's always change and all these teams creating new opportunities.

And we've really seen this year that play out in terms of when we can make these companies sort of under our umbrella using our master services agreement, our sales force, our servicing, how that really adds value to them and why it has such good returns from this over time.And just you're not -- we're not buying these and holding them as sort of separate things and ending up as a collection of stuff.

They're being nicely integrated into our product offers and into our service delivery. So we think this is really something that is an important part of our growth strategy that will continue.This year it is at a higher level than it typically has been.

And as you know, we take a lot of time, looking at what are the things that we would like to own and we do that well in advance. And many of these conversations, many of these are companies we've been talking to for many years.

We don't necessarily control when they decide they want to transact, but it's nice that we have with our balance sheet and leverage and other things, we have the ability to act when people do want to transact and we think, we have really nice business cases around these..

Thanks. That’s very helpful..

[Operator Instructions] The next question comes from Darrin Peller with Wolfe Research. Please go ahead. Mr. Peller, your line is open..

Good morning, guys. This is Andrew on behalf of Darrin Peller. Just want to touch upon wealth management briefly.

Are you guys seeing any incremental interest in the market due to the UBS announcement over the last couple of quarters? And how is that translating into the closed sales you've seen in the last couple of quarters?.

Yes. I'll take that. It's Tim. Thank you, Andrew. We are definitely seeing a lot of good interest. First of all, we're making good progress on the implementation with UBS. We had a very high number of deliverables for the first year, which I'm pleased to say we finished on track. And so, we're excited about that.

We're seeing a lot of interest from others in terms of -- with the agreement around the pain points that we've identified and the interest in really being part of the open architecture platform of the future. And -- so that is good.In terms of specifically on the broad platform, the momentum, in terms of closed sales it's really too early for that.

These are long conversations and people want to see it further along in the build, but those conversations are very positive. What we have seen is, we do have a lot of component solutions in and around that platform and those have had nice momentum.I mentioned the sale of an adviser compensation solution to a leading wealth manager.

That was the largest sale ever for that business and that is a really nicely growing business for us and plays right into things like Reg BI, if you think about the number of conversations we're having with clients about Reg BI and all the solutions that we bring to the table, the communication solutions, the advisory solutions and with Fi360, they really to help people really looking to their portfolios and make sure that they are suitable, so lots of good things happening in wealth.

It's a really nicely growing area for us.And then I have to just do a callout to Mike Alexander, who just this past week, we asked to take leadership of this combined business, which we're now bringing together under one leadership. So, we feel really good about it and continue to make good progress..

Thanks. And then, with regards to the customer communications business, it continues to be a headwind in the ICS segment.

When should we expect you start to grow over the one large client that you called out in the past, or is it a couple of other clients that you see some declines in?.

Yes. I'm glad you asked that, so we can just clarify this because, in what we talk about externally as customer communications, there are a few different business lines.

The largest line is the transactional communications business and that is the business we've talked about quite a bit in previous calls, that has had -- was affected by that client -- those departing.This quarter, it was not the transactional communications business.

And that -- the transition off of that client is essentially complete so you won't hear us talk about that again in the future. And that business was stable. It didn't grow, but it didn't shrink either.

And -- so the 3% you saw -- minus 3% you saw this quarter was related to the postsale business that we talked about.And then, I'll just -- I will say on the transactional communications business, just even though -- just to remind people, even though the revenues haven't gone down, it has been a nice contributor to earnings.

And because of synergies and other things in the acquisitions, it has been growing earnings over the time that we've been talking about it. So, that's where that is. It is -- it was stable this quarter. I'm not putting out the mission accomplished sign here, but that transition off of the larger client is complete now..

No, appreciate the color..

This concludes our question-and-answer session. I would like to turn the conference back over to Tim Gokey for any closing remarks..

Yes, I would just like to thank everyone for being on the call today. We remain very excited about our revenue from closed sales, about the level of sales activity, the backlog, the M&A performance. We're looking forward to increase in organic in the second half. And we just remain really confident and excited about what our long-term opportunity is.

And I'll just bring you back to the conversations that I've had since the beginning of January with leaders of our largest clients. And when we look at the challenges that they face and transformations that they're looking to do and the alignment of what we are doing with what their needs are, I feel very optimistic about the future of Broadridge.

Thank you..

This conference has now concluded. Thank you for attending today's presentation. You may now disconnect..