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  "documentTitle": "Broadridge Financial Solutions, Inc. (BR)",
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  "authorName": "Ben Axler",
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  "presentationDate": "2022-09-28 00:00:00",
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      "text": "BR's Itiviti acquisition was touted as contributing $250 million of revenues with 30% operating margins. Therefore, we should have expected $75 million of EBIT contribution in FY 2022. Yet, GTO segment profit declined from $200 million to approximately $140 million. Furthermore, BR touted revenue synergy guidance at the deal announcement and said absolutely nothing about cost synergies or about earnings expectations. Yet, it disclosed $6.0 million of unplanned cost synergies and claimed earnings targets were exceeded. Absent these unexplained savings, segment margins declined from 16.9% to 9.1%.",
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      "text": "Absent these unexplained savings, segment margins declined from 16.9% to 9.1%.",
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      "text": "GTO segment margin: 9.1%",
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      "text": "We are targeting approximately $20 million of revenue synergies or just under 10% of 2020 revenues by 2025. Those synergies coupled with Itiviti's own strong momentum should sustain strong, high-single digit growth for years to come. And finally, Broadridge's objectives to expand margins through scale and efficiency to strengthen by adding Itiviti. Itiviti's 30% plus operating margin business will increase our adjusted operating income margin by 50 basis points by fiscal '23 and positions us for higher adjusted earnings growth.",
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      "kind": "quote",
      "text": "Last, Itiviti is delivering clear financial benefits. Fiscal '22 revenues came in ahead of our acquisition case at $256 million, and we exceeded our earnings target. We've actioned almost $10 million in synergies, including $3 million of revenue synergies and $6 million on the cost side.",
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      "text": "\"We are targeting approximately $20 million of revenue synergies or just under 10% of 2020 revenues by 2025. Those synergies coupled with Itiviti's own strong momentum should sustain strong, high-single digit growth for years to come.\" — CEO Gokey, Itiviti M&A Call, March 29, 2021. \"Last, Itiviti is delivering clear financial benefits. Fiscal '22 revenues came in ahead of our acquisition case at $256 million, and we exceeded our earnings target. We've actioned almost $10 million in synergies, including $3 million of revenue synergies and $6 million on the cost side.\" — CEO Gokey, Q4 2022 Conf Call, Aug 12, 2022.",
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      "kind": "source-note",
      "text": "Source: Company Filings and Spruce Point Analysis. 1) Itiviti Acquired May 12, 2021 (Q4 2021)",
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      "text": "Global Technology and Operations (GTO) Segment Margin Analysis table",
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      "text": "Mysterious And Unexpected Cost Synergies Can't Forestall Margin Decline",
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