What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-08-04 compared with 2025-08-05 · 116 added, 132 removed, 390 unchanged (39% of the section changed)

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Acquisitions of Businesses

In November 2024, the Company acquired SIS to provide wealth management, capital markets, and information technology solutions in Canada.

SIS is included in the Company’s GTO reportable segment.

Our discussions with the Canadian Competition Bureau are ongoing.

In July 2024, the Company acquired CompSci, a provider of cloud-based financial technology software for the preparation and processing of SEC filings for public companies and funds.

CompSci is included in the Company’s ICS reportable segment.

We acquired these businesses for an aggregate purchase price of $193.5 million.

Announced Acquisition

In July 2025, Broadridge announced the proposed acquisition of Acolin Group Holdco Limited (“Acolin”).

Acolin is a European provider of cross-border fund distribution and regulatory services.

The total purchase price is approximately $70 million plus an additional contingent consideration liability.

The acquisition is expected to close in the first half of Broadridge’s 2026 fiscal year, subject to customary closing conditions, including regulatory approvals.

Acolin will be included in the Company’s ICS reportable segment.

Please refer to Note 6, “Acquisitions” to our Consolidated Financial Statements under Item 8.

We acquired four businesses in fiscal year 2026, including CQG, Acolin, iJoin, and Signal, for an aggregate purchase price of $300.2 million in cash ($282.8 million net of cash acquired).

Refer to Note 6, “Acquisitions” to our Consolidated Financial Statements under Item 8.

of Part II of this Annual Report on Form 10-K for a more detailed discussion.

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generally accepted accounting principles (“GAAP”) and in accordance with the SEC requirements for Annual Reports on Form 10-K.

These financial statements present the consolidated position of the Company and include the entities in which the Company directly or indirectly has a controlling financial interest as well as various entities in which the Company has investments recorded under the equity method of accounting as well as certain marketable and non-marketable securities.

Intercompany balances and transactions have been eliminated.

Amounts presented may not sum due to rounding.

Certain prior period amounts have been reclassified to conform to the current year presentation where applicable.

In presenting the Consolidated Financial Statements, management makes estimates and assumptions that affect the amounts reported and related disclosures.

Management continually evaluates the accounting policies and estimates used to prepare the Consolidated Financial Statements.

The estimates, by their nature, are based on judgment, available information, and historical experience and are believed to be reasonable.

However, actual amounts and results could differ from those estimates made by management.

In management’s opinion, the Consolidated Financial Statements contain all normal recurring adjustments necessary for a fair presentation of results reported.

The results of operations reported for the periods presented are not necessarily indicative of the results of operations for subsequent periods.

Refer to Note 1, “Basis of Presentation” to our Consolidated Financial Statements under Item 8 of Part II of this Annual Report on Form 10-K for a more detailed discussion.

Processing and distributing proxy materials and annual reports to investors comprises a large portion of our Investor Communication Solutions business.

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Certain accounting policies that require significant management estimates and are deemed critical to our results of operations or financial position are discussed below.

See Note 2, “Summary of Significant Accounting Policies” included within this Annual Report on Form 10-K for discussion of the use of estimates in preparing the Consolidated Financial Statements.

We review the carrying value of all our Goodwill by comparing the carrying value of our reporting units to their fair values.

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Treasury yield curve in effect at the time of grant.

The binomial option-pricing model also incorporates exercise and forfeiture assumptions based on an analysis of historical data.

The expected life of the stock option grants is derived from the output of the binomial model and represents the period of time that options granted are expected to be outstanding.

The expected life of the stock option grants is derived from the historical settlement data combined with a hypothetical settlement assumption for outstanding options and represents the period of time that options granted are expected to be outstanding.

Determining these assumptions are subjective and complex, and therefore, a change in the assumptions utilized could impact the calculation of the fair value of our stock options.

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Management focuses on a variety of key indicators to plan, measure and evaluate the Company’s business and financial performance.

These performance indicators include Revenue and Recurring revenue as well as not generally accepted accounting principles measures (“Non-GAAP”) of Adjusted Operating income, Adjusted Net earnings, Adjusted earnings per share, Free Cash flow, Recurring revenue growth constant currency, and Closed sales.

These performance indicators include Revenue, Recurring revenue, and Closed sales as well as not generally accepted accounting principles measures (“Non-GAAP”) of Adjusted Operating income, Adjusted Net earnings, Adjusted earnings per share, Free Cash flow, and Recurring revenue growth constant currency.

In addition, management focuses on select operating metrics specific to Broadridge of Position Growth and Internal Trade Growth, as defined below.

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Event-driven activity is impacted by financial market conditions and changes in regulatory compliance requirements, resulting in fluctuations in the timing and levels of event-driven revenues.

Distribution revenues primarily include revenues related to the physical mailing of proxy materials, interim communications, transaction reporting, customer communications and fulfillment services as well as Broadridge Retirement and Workplace administrative services.

Distribution revenues primarily include revenues related to the physical mailing of proxy materials, interim communications, transaction reporting, customer communications and fulfillment services as well as administrative services related to our fund processing solutions.

Recurring revenue growth represents the Company’s total annual revenue growth, less growth from event-driven and distribution revenues.

We distinguish recurring revenue growth between organic and acquired:

• Organic – We define organic revenue as the recurring revenue generated from Net New Business and Internal Growth.

• Acquired – We define acquired revenue as the recurring revenue generated from acquired services in the first twelve months following the date of acquisition.

• Organic – Includes recurring revenue generated from Net New Business and Internal Growth.

• Acquired – Includes recurring revenue generated from acquired services in the first twelve months following the date of acquisition.

This type of growth comes as a result of our strategy to purchase, integrate, and leverage the value of assets we acquire.

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Position Growth is comprised of “equity position growth” and “mutual fund/ETF position growth.” Equity position growth measures the estimated annual change in positions eligible for equity proxy materials.

Beginning in the fourth quarter of fiscal year 2025, the Company began presenting information on “equity revenue position growth.” Equity revenue position growth excludes small or fractional equity positions for which the Company does not recognize revenue (“non-revenue positions”).

Prior period comparative information for this metric is not available.

Equity revenue position growth excludes small or fractional equity positions for which the Company does not recognize revenue (“non-revenue positions”).

Mutual fund/ETF position growth measures the estimated change in mutual fund and exchange traded fund positions eligible for interim communications.

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Position Growth and Internal Trade Growth are useful non-financial metrics for investors in understanding how management measures and evaluates Broadridge’s ongoing operational performance within its Investor Communication Solutions and Global Technology and Operations reportable segments, respectively.

The key performance indicators for the fiscal years ended June 30, 2025, and 2024, are as follows:

Select Operating Metrics

Position Growth and Internal Trade Growth for the fiscal years ended June 30, 2026, and 2025, are as follows:

Years Ended June 30,

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Equity positions 16 % 16 %

Equity revenue positions 12 % N/A

Equity revenue positions 12 % 12 %

Mutual fund / ETF positions 6 % 7 %

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“Amortization of Acquired Intangibles and Purchased Intellectual Property” and “Acquisition and Integration Costs” represent certain non-cash amortization expenses associated with acquired intangible assets and purchased intellectual property assets, as well as certain transaction and integration costs associated with the Company’s acquisition activities, respectively.

“Restructuring and Other Related Costs” represent costs associated with the Company’s Corporate Restructuring Initiative to exit and/or realign some of our businesses, streamline the Company’s management structure, reallocate work to lower cost locations, and reduce headcount in deprioritized areas, in addition to other restructuring activities.

“Litigation Settlement Charges” represents reserves established during the third and fourth quarter of 2024 related to the settlement of claims.

“Net New Business” refers to recurring revenue from Closed sales for the initial twelve-month contract period after which the client goes live with the Company’s service(s), less recurring revenue from client losses.

“Gains or Losses on Digital Assets” represent the unrealized gains or losses, as applicable, related to the mark to market of the Company’s digital asset holdings and the unrealized and realized gains or losses, as applicable, associated with the Canton Digital Asset Treasury transaction.

Refer to Note 2, “Summary of Significant Accounting Policies” for further details

related to the Company’s accounting for Canton Coins.

Refer to Note 8, “Fair Value of Financial Instruments” for details related to realized and unrealized gains or losses.

“Internal Growth” is a component of recurring revenue and generally reflects year over year changes in existing services to our existing customers’ multi-year contracts beyond the initial twelve-month period in which it was included in Net New Business.

“Investment Gain” represents a non-operating, non-cash gain on a privately held investment.

“Recurring revenue growth constant currency” refers to our Recurring revenue growth presented on a constant currency basis to exclude the impact of foreign currency exchange fluctuations.

“Restructuring and Other Related Costs” consists of severance and other costs related to the closure of substantially all operations of a production facility.

The following definitions describe the Company’s Revenues:

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Generally, mutual fund proxy activity has been subject to a greater level of volatility than the other components of event-driven activity.

During fiscal year 2025, mutual fund proxy revenues were 75% higher than the prior fiscal year.

During fiscal year 2026, mutual fund proxy revenues were flat compared to the prior fiscal year.

During fiscal year 2025, mutual fund proxy revenues were 75% higher than the prior fiscal year.

Although it is difficult to forecast the levels of event-driven activity, we expect that the portion of revenues derived from mutual fund proxy activity may continue to experience volatility in the future.

Distribution revenues primarily include revenues related to the physical mailing of proxy materials, interim communications, transaction reporting, customer communications and fulfillment services, as well as Broadridge Retirement and Workplace administrative services.

Distribution cost of revenues consists primarily of postage-related expenses incurred in connection with our Investor Communication Solutions segment, as well as Broadridge Retirement and Workplace administrative services expenses.

Distribution revenues primarily include revenues related to the physical mailing of proxy materials, interim communications, transaction reporting, customer communications and fulfillment services, as well as administrative services related to our fund processing solutions.

Distribution cost of revenues consists primarily of postage-related expenses incurred in connection with our Investor Communication Solutions segment, as well as administrative services expenses related to our fund processing solutions.

These costs are reflected in Cost of revenues.

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The fiscal years ended June 30, 2026 and 2025, are net of an allowance adjustment of $16.1 million and $15.2 million, respectively.

Recent Developments

On July 16, 2026, the SEC proposed Regulation E-Delivery, a new rule addressing the investor communications disclosure framework (“Reg E-Delivery” or the “Proposal”).

If the Proposal is adopted as proposed, the rule would permit, but not require, entities to use electronic delivery as the default method for delivery of required disclosures, reports, and other regulatory materials under the federal securities laws instead of paper delivery.

Reg E-Delivery would not require entities to obtain affirmative consent from their customers or investors before using e-delivery.

The Proposal covers all disclosures required to be delivered under the federal securities laws (“covered information”) by corporate issuers, investment advisers, broker-dealers, and transfer agents (“covered entities”) to their current or prospective customers, investors, or shareholders (“covered recipients”), including prospectuses, proxy statements, shareholder reports, and trade confirmations.

The Proposal provides for a transition process for those covered recipients who currently receive covered information in paper format, requiring that they receive two paper notices that include the ability to opt out of e-delivery.

The Proposal is subject to a 60-day comment period.

We are reviewing the impact of the Proposal on our business, however based on our preliminary analysis, if the Proposal is adopted and implemented as proposed, we expect no impact on our financial results in fiscal year 2027.

As our clients implement the proposed rule changes, we anticipate a modest decrease in our recurring revenue growth over a two- to three-year period, which we expect to largely offset with new solutions.

We also expect a decline in distribution revenues, which should increase our margins.

Overall, we anticipate being able to mitigate any adverse impact on our earnings results resulting from Reg E-Delivery.

We will closely monitor and evaluate the progress of the Proposal and its potential impact on our business.

Please see our “Risk Factors” in Part I, Item 1A.

of this Annual Report.

ANALYSIS OF CONSOLIDATED STATEMENTS OF EARNINGS

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Interest expense, net (99.9) (122.7) 22.8 (19)

Other non-operating expenses, net (7.1) (1.7) (5.5) 318

Other non-operating income (expenses), net 245.2 (7.1) 252.3 NM

Earnings before income taxes 1,445.8 1,058.7 387.1 37

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Net New Business Internal Growth Acquisitions Foreign Exchange Total

Recurring revenue Growth Drivers 3pts 2pts 2pts 0pts 7 %

Recurring revenue Growth Drivers 3pts 3pts 2pts 1pt 8 %

Revenues increased $587.6 million, or 9%, to $7,476.8 million from $6,889.1 million.

• Recurring revenues increased $370.1 million, or 8%, to $4,878.0 million.

Recurring revenue growth constant currency (Non-GAAP) was 7%, driven primarily by organic growth in ICS and GTO and acquisitions in GTO.

• Event-driven revenues increased $34.0 million, or 12%, driven by a higher volume of mutual fund communications partially offset by a lower level of equity proxy contest activity.

• Distribution revenues increased $63.0 million, or 3%, driven by the postage rate increase of approximately $114 million partially offset by lower mail volumes .

Recurring revenue growth constant currency (Non-GAAP) was 8%, driven by organic growth and acquisitions in ICS and GTO.

• Event-driven revenues increased $28.9 million, or 9%, driven by higher equity and other communications.

• Distribution revenues increased $188.7 million, or 9%, primarily driven by the postage rate increases of approximately $123 million and higher volumes .

Total operating expenses.

Operating expenses increased $475.7 million, or 8%, to $6,176.2 million from $5,700.6 million:

• Cost of revenues - The increase of $179.5 million primarily reflects higher expenses related to the SIS acquisition, the impact of higher postage and distribution costs in our ICS segment of approximately $58 million, and higher expenses related to higher revenues.

• Selling, general and administrative expenses - The increase of $31.4 million was primarily driven by higher technology-related investments.

• Cost of revenues - The increase of $348.4 million primarily reflects higher expenses, including postage and distribution costs in our ICS segment of approximately $176.7 million, higher labor and technology expenses and higher expenses related to acquisitions.

• Selling, general and administrative expenses - The increase of $127.2 million was primarily driven by higher labor and compensation-related expenses in addition to higher investment expenses.

Interest expense, net.

Interest expense, net, was $99.9 million, a decrease of $22.8 million, or 19%, from $122.7 million in the fiscal year ended June 30, 2025.

The decrease was primarily due to lower average borrowings rates.

Other non-operating expenses, net.

Other non-operating expenses, net for the fiscal year ended June 30, 2025 was $7.1 million, compared to $1.7 million for the fiscal year ended June 30, 2024.

The decrease was primarily due to lower average borrowings and lower borrowing costs.

Other non-operating income (expenses), net.

Other non-operating income, net for the fiscal year ended June 30, 2026 was $245.2 million, compared to Other non-operating expenses, net of $7.1 million for the fiscal year ended June 30, 2025, primarily as a result of non-cash Gains on Digital Assets of $227.0 million in the current year period.

Refer to Note 8, “Fair Value of Financial Instruments” for details related to the Company’s Canton Coin holdings and the Canton Digital Asset Treasury.

Provision for income taxes .

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• Effective tax rate for the fiscal year ended June 30, 2025 - 20.7%.

The increase in the effective tax rate for the fiscal year ended June 30, 2025 compared to the fiscal year ended June 30, 2024 was primarily driven by an increase in pre-tax income and lower tax benefits from statutory tax incentives, which was partially offset by an increase in discrete tax benefits.

The increase in the effective tax rate for the fiscal year ended June 30, 2026 compared to the fiscal year ended June 30, 2025 was primarily driven by an increase in pre-tax income and lower total discrete tax benefits.

The decrease in discrete tax benefits was primarily driven by a decrease in the Excess Tax Benefit (“ETB”) associated with stock based compensation.

ANALYSIS OF REPORTABLE SEGMENTS

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Net New Business Internal Growth Acquisitions Foreign Exchange Total

Recurring revenue Growth Drivers 5pts 1pt 0pts 0pts 6 %

Recurring revenue Growth Drivers 3pts 4pts 1pt 0pts 8 %

For the fiscal year ended June 30, 2026:

• Recurring revenues increased $230.3 million, or 8%, to $2,962.1 million.

Recurring revenue growth constant currency (Non-GAAP) was 6%, driven by Net New Business and Internal Growth.

Recurring revenue growth constant currency (Non-GAAP) was 8%, driven by 7pts of organic growth.

• By product line, Recurring revenue growth and Recurring revenue growth constant currency (Non-GAAP) were as follows:

◦ Regulatory rose 7% and 7%, respectively, driven by equity position growth of 16% and mutual fund/ETF position growth of 7%.

◦ Data-Driven Fund Solutions rose 6% and 5%, respectively, driven primarily by growth in our global distribution insights and retirement and workplace products.

◦ Issuer rose 5% and 5%, respectively, driven by growth in shareholder engagement solutions and disclosure solutions products.

◦ Customer Communications rose 5% and 5%, respectively, driven by growth in digital communications and print revenues.

• Event-driven revenues increased $34.0 million, or 12% driven by a higher volume of mutual fund communications partially offset by a lower level of equity proxy contest activity.

• Distribution revenues increased $63.0 million, or 3%, driven by the postage rate increase of approximately $114 million partially offset by lower mail volumes .

• Earnings before income taxes increased $103.7 million, or 11%, primarily from higher Recurring and Event-driven revenues.

Operating expenses rose 4%, or $151.5 million, to $4,059.0 million driven by the impact of the postage rate increase and higher volume related expenses.

• Pre-tax margins increased by 1.0 percentage points to 20.6% from 19.6%.

◦ Regulatory rose 12% and 12%, respectively.

Equity revenue position growth was 12% and Mutual fund/ETF position growth of 6%.

◦ Data-Driven Fund Solutions rose 4% and 4%, respectively, driven by growth in data and analytics revenues, and the acquisitions of Acolin and iJoin.

◦ Issuer rose 8% and 8%, respectively, driven by growth in shareholder engagement solutions and disclosure solutions.

◦ Customer communications rose 5% and 5%, respectively, driven by growth in digital and print revenues, as well as the acquisition of Signal.

• Event-driven revenues increased $28.9 million, or 9% driven by higher equity and other communications revenues.

• Distribution revenues increased $188.7 million, or 9%, primarily driven by the postage rate increases of approximately $123 million and higher volumes .

• Earnings before income taxes increased $49.5 million, or 5%, to $1,103.5 million.

The earnings benefit from higher Recurring revenue and Event-driven revenue was partially offset by higher Operating expenses.

Operating expenses rose 10%, or $398.3 million to $4,457.3 million driven by distribution expenses, as well as other volume-related expenses and the impact of acquisitions.

• Pre-tax margins decreased by 0.8 percentage points to 19.8% from 20.6%.

Global Technology and Operations

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Net New Business Internal Growth Acquisitions Foreign Exchange Total

Recurring revenue Growth Drivers 1pt 3pts 4pts -1pt 8 %

Recurring revenue Growth Drivers 2pts 3pts 2pts 1pt 8 %

For the fiscal year ended June 30, 2026:

• Recurring revenues increased $139.9 million, or 8%, to $1,916.0 million.

Recurring revenue growth constant currency (Non-GAAP) was 8%, driven by 4pts of organic growth and 4pts from the acquisition of SIS.

Recurring revenue growth constant currency (Non-GAAP) was 7%, driven by 4pts of organic growth and 2pts from the acquisitions of Kyndryl’s Securities Industry Services (“SIS”) business and CQG.

• By product line, Recurring revenue growth and Recurring revenue growth constant currency (Non-GAAP) were as follows:

◦ Capital markets rose 6% and 6%, respectively, driven by revenue from new sales and Internal Growth.

Internal Growth benefited from higher trading volumes.

◦ Wealth and investment management rose 10% and 12%, respectively, driven by 10pts from the SIS acquisition and 1pt of Organic growth.

Organic growth was negatively impacted by 4pts as a result of the loss of a large client during the prior year period.

• Earnings before income taxes increased $28.0 million, as higher revenues more than offset higher expenses, including the impact of the SIS acquisition.

• Pre-tax margins increased by 0.8 percentage points to 11.3% from 10.5%.

◦ Capital markets rose 6% and 5%, respectively, driven by 4pts of organic growth and 1pt from the acquisition of CQG.

Digital asset revenues related to Canton Coins contributed $16.5 million or 1pt of growth.

◦ Wealth and investment management rose 11% and 10%, respectively, driven by 5pts of Organic growth and 5pts from the acquisition of SIS.

• Earnings before income taxes increased $96.5 million, or 48%, to $297.8 million, as higher revenues more than offset higher expenses, including the impact of the SIS and CQG acquisitions.

• Pre-tax margins increased by 4.2% to 15.5% from 11.3%.

Corporate and Other

Loss before income taxes was $196.7 million for the fiscal year ended June 30, 2025, a decrease of $49.7 million, or 20%, compared to $246.3 million for the fiscal year ended June 30, 2024.

The decreased loss before income taxes was due to lower Restructuring and Other Related Costs, a decline in litigation expense of $18.4 million, and a decline in Interest expense, net of $15.4 million.

Earnings before income taxes was $44.5 million for the fiscal year ended June 30, 2026, an increase of $241.1 million, or 123%, compared to Loss before income taxes of $196.7 million for the fiscal year ended June 30, 2025.

• The increased Earnings before income taxes was primarily due to the non-cash Gains on Digital Assets of $227.0 million and a $22.8 million decline in Interest expense, net which more than offset higher technology spending, including the impact of investments.

Refer to Note 8, “Fair Value of Financial Instruments” for details related to the Company’s Canton Coin holdings and the Canton Digital Asset Treasury transaction.

Explanation and Reconciliation of the Company’s Use of Non-GAAP Financial Measures

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(ii) Acquisition and Integration Costs, which represent certain transaction and integration costs associated with the Company’s acquisition activities.

(iii) Restructuring and Other Related Costs, which represent costs associated with the Company’s Corporate Restructuring Initiative to exit and/or realign some of our businesses, streamline the Company’s management structure, reallocate work to lower cost locations, and reduce headcount in deprioritized areas, in addition to other restructuring activities.

Refer to Note 13, “Payables and Accrued Expenses” for further details on the Company’s Corporate Restructuring Initiative.

(iv) Litigation Settlement Charges, which represent reserves established during the third and fourth quarters of fiscal year 2024 related to the settlement of claims.

Refer to Note 19, “Contractual Commitments, Contingencies and Off-Balance Sheet Arrangements” for further details.

We exclude Acquisition and Integration Costs, Restructuring and Other Related Costs and Litigation Settlement Charges from our Adjusted Operating income (as applicable) and other adjusted earnings measures because excluding such information provides us with an understanding of the results from the primary operations of our business and enhances comparability across fiscal reporting periods, as these items are not reflective of our underlying operations or performance.

(iii) Restructuring and Other Related Costs, which represent severance and other costs related to the closure of substantially all operations of a production facility.

Refer to Note 14, “Payables and Accrued Expenses” for further details.

(iv) Gains or Losses on Digital Assets, which represent the unrealized gains or losses, as applicable, related to the mark to market of the Company’s digital asset holdings and the realized and unrealized gains or losses, as applicable, associated with the Canton Digital Asset Treasury transaction.

Refer to Note 2, “Summary of Significant Accounting Policies” for further details related to the Company’s accounting for Canton Coins.

Refer to Note 8, “Fair Value of Financial Instruments” for details related to realized and unrealized gains or losses.

(v) Investment Gain represents a non-operating, non-cash gain on a privately held investment.

We exclude Acquisition and Integration Costs, Restructuring and Other Related Costs, Gains or Losses on Digital Assets, and Investment Gain from our Adjusted Operating income (as applicable) and other adjusted earnings measures because excluding such information provides us with an understanding of the results from the primary operations of our business and enhances comparability across fiscal reporting periods, as these items are not reflective of our underlying operations or performance.

We also exclude the impact of Amortization of Acquired Intangibles and Purchased Intellectual Property, as these non-cash amounts are significantly impacted by the timing and size of individual acquisitions and do not factor into the Company's capital allocation decisions, management compensation metrics or multi-year objectives.

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Restructuring and Other Related Costs (a) 13.2 7.4

Litigation Settlement Charges — 18.4

Adjusted Operating income (Non-GAAP) $ 1,534.8 $ 1,410.9

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Restructuring and Other Related Costs (a) 13.2 7.4

Litigation Settlement Charges — 18.4

Gains or Losses on Digital Assets (227.0) —

Investment Gain (7.3)

Subtotal of adjustments (0.1) 222.3

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Restructuring and Other Related Costs (a) 0.11 0.06

Litigation Settlement Charges — 0.15

Gains or Losses on Digital Assets (1.94) —

Investment Gain (0.06) —

Subtotal of adjustments — 1.88

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Adjusted earnings per share (Non-GAAP) $ 9.60 $ 8.55

(a) Restructuring and Other Related Costs for the fiscal year ended June 30, 2025 consists of severance and other costs related to the closure of substantially all operations of a production facility.

(a) Restructuring and Other Related Costs consists of severance and other costs related to the closure of substantially all operations of a production facility.

Costs incurred are not reflected in segment profit and are recorded within Corporate and Other.

The total estimated pre-tax costs for actions and associated costs related to the closure are approximately $20 million to $25 million and are expected to be completed by the end of the second quarter of fiscal year 2026.

Restructuring and Other Related Costs for the fiscal year ended June 30, 2024 includes $56.0 million of severance and professional services costs directly related to the Corporate Restructuring Initiative and a $7.0 million asset impairment charge as a result of the exit of a business in connection with the Corporate Restructuring Initiative.

Refer to Note 13, “Payables and Accrued Expenses” to our Consolidated Financial Statements under Item 8.

of Part II of this Annual Report on Form 10-K for a more detailed discussion.

(b) Calculated using the GAAP effective tax rate, adjusted to exclude $20.5 million of excess tax benefits (“ETB”) associated with stock-based compensation for the fiscal year ended June 30, 2025, and $12.9 million of ETB associated with stock-based compensation for the fiscal year ended June 30, 2024.

Actions and associated costs related to the closure were completed in the third quarter of fiscal year 2026.

(b) Calculated using the GAAP effective tax rate, adjusted to exclude $2.5 million of ETB associated with stock-based compensation for the fiscal year ended June 30, 2026, and $20.5 million of ETB associated with stock-based compensation for the fiscal year ended June 30, 2025.

For purposes of calculating the Adjusted earnings per share, the same adjustments were made on a per share basis.

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However, while we may do so at a future date, the Company does not need to repatriate future foreign earnings to fund U.S.

Outstanding borrowings and available capacity under the Company’s borrowing arrangements were as follows:

Date Principal amount outstanding at June 30, 2025 Carrying value at June 30, 2025 Carrying value at June 30, 2024 Unused

Capacity Fair Value at June 30, 2025

(in millions)

Current portion of long-term debt

Fiscal 2016 Senior Notes (a) June 2026 $ 500.0 $ 499.3 $ — $ — $ 494.1

Total $ 500.0 $ 499.3 $ — $ — $ 494.1

Long-term debt, excluding current portion

Fiscal 2025 Revolving Credit Facility:

dollar tranche December 2029 $ — $ — $ — $ 1,000.0 $ —

Multicurrency tranche December 2029 133.5 133.5 — 366.5 133.5

Total Revolving Credit Facility $ 133.5 $ 133.5 $ — $ 1,366.5 $ 133.5

Fiscal 2024 Amended Term Loan August 2026 $ 880.0 $ 879.1 $ 1,117.9 $ — $ 880.0

Fiscal 2016 Senior Notes (a) June 2026 $ — $ — $ 498.7 $ — $ —

Fiscal 2020 Senior Notes December 2029 750.0 746.0 745.1 — 702.8

Fiscal 2021 Senior Notes May 2031 1,000.0 994.4 993.4 — 891.4

Total Senior Notes $ 1,750.0 $ 1,740.3 $ 2,237.2 $ — $ 1,594.2

Total long-term debt $ 2,763.5 $ 2,753.0 $ 3,355.1 $ 1,366.5 $ 2,607.7

Total debt $ 3,263.5 $ 3,252.3 $ 3,355.1 $ 1,366.5 $ 3,101.8

(a) The Fiscal 2016 Senior Notes were reclassified from Long-term debt to Current portion of long-term debt in the fourth quarter of fiscal year 2025 to reflect the remaining maturity of less than one year.

Future principal payments on the Company’s outstanding debt are as follows:

Years ending June 30, 2026 2027 2028 2029 2030 Thereafter Total

(in millions) $ 500.0 $ 880.0 $ — $ — $ 883.5 $ 1,000.0 $ 3,263.5

The Fiscal 2025 Revolving Credit Facility, Fiscal 2024 Amended Term Loans, Fiscal 2016 Senior Notes, Fiscal 2020 Senior Notes and Fiscal 2021 Senior Notes are senior unsecured obligations of the Company and are ranked equally in right of payment.

Please refer to Note 14, “Borrowings” to our Consolidated Financial Statements under Item 8.

of Part II of this Annual Report on Form 10-K for a more detailed discussion.

Our financing strategy is designed to maintain adequate liquidity and financial flexibility, support our operating and strategic investment needs, and provide efficient access to capital markets.

We maintain a diversified borrowing profile through a mix of debt instruments enabling us to manage our capital structure, funding costs, and refinancing risk.

Our borrowings include:

the Fiscal 2025 Revolving Credit Facility, Fiscal 2026 Term Loan, Fiscal 2020 Senior Notes, Fiscal 2021 Senior Notes, and Fiscal 2026 Senior Notes, each of which are senior unsecured obligations of the Company and are ranked equally in right of payment.

Future principal payments on the Company’s outstanding debt are as follows (in millions):

2027 2028 2029 2030 2031 Thereafter Total

Years ending June 30, $ — $ — $ — $ 1,024.7 $ 1,750.0 $ 500.0 $ 3,274.7

Refer to Note 15, “Borrowings” to our Consolidated Financial Statements under Item 8.

of Part II of this Annual Report on Form 10-K for a more detailed discussion, including outstanding borrowings and available capacity under the Company’s borrowing arrangements.

Fiscal Year 2026 Compared to Fiscal Year 2025

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Free cash flow (Non-GAAP) $ 1,233.0 $ 1,056.4 $ 176.6

The increase in cash from operating activities of $115.0 million for the fiscal year ended June 30, 2025, as compared to the fiscal year ended June 30, 2024, was due to an increase in Net earnings of $141.4 million, an increase in cash provided from Accounts receivable of $69.1 million driven by higher cash collections relative to billings, an increase in the non-cash adjustments of $167.1 million, primarily related to a decrease in Deferred income taxes of $114.5 million and a decrease in cash used for client-related implementation costs of $25.2 million included in Other non-current assets.

This was primarily offset by an increase in cash used for Accounts Payable and accrued expenses of $283.1 million, inclusive of an increase in taxes paid.

The decrease in cash from investing activities of $168.2 million primarily reflects an increase in cash used for acquisitions of $159.2 million and cash used in software purchases and capitalized internal use software of $15.5 million.

The increase in cash from financing activities of $254.8 million primarily reflects a decrease in cash used for stock buybacks of $350.5 million partially offset by a decrease in net borrowings of $44.4 million and an increase in dividends paid of $34.1 million.

The increase in cash from operating activities of $174.3 million for the fiscal year ended June 30, 2026, as compared to the fiscal year ended June 30, 2025, was due to an increase in Net earnings of $284.8 million, reduced by noncash adjustments primarily related to $231.4 million of Digital asset gains, partially offset by an increase of Deferred income taxes of $111.0 million.

The decrease in cash from investing activities of $135.8 million primarily reflects an increase in cash used for acquisitions of $89.2 million and cash used for other investing activities of $48.9 million related to strategic investments.

The decrease in cash from financing activities of $447.7 million primarily reflects an increase in purchases of treasury stock of $468.9 million.

The Company, headquartered in the U.S., is routinely examined by the IRS and is also routinely examined by the tax authorities in the U.S.

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The Company sponsors a Supplemental Officer Retirement Plan (the “SORP”), a Supplemental Executive Retirement Plan (the “SERP”), an Executive Retiree Health Insurance Plan, and certain non-US benefits-related plans.

Please refer to Note 17, “Employee Benefit Plans” to our Consolidated Financial Statements under Item 8.

Refer to Note 18, “Employee Benefit Plans” to our Consolidated Financial Statements under Item 8.

of Part II of this Annual Report on Form 10-K for a discussion on the Company’s Employee Benefit Plans.

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(in millions)

Debt(1) $ 3,263.5 $ 500.0 $ 880.0 $ 883.5 $ 1,000.0

Interest and facility fee on debt(2) 352.6 121.9 115.2 93.8 21.7

Facility and equipment operating leases(3) 232.7 42.7 81.1 49.7 59.3

Purchase obligations(4) 633.7 240.7 306.8 84.5 1.7

Capital commitment to fund investment(5) — — — — —

Uncertain tax positions(6) — — — — —

Total(7) $ 4,482.6 $ 905.3 $ 1,383.1 $ 1,111.4 $ 1,082.7

(1) These amounts represent the principal repayments of Long-term debt and are included on our Consolidated Balance Sheets.

Debt (a) $ 3,274.7 $ — $ — $ 2,774.7 $ 500.0

Interest and facility fee on debt (b) 687.6 128.2 256.3 163.0 140.2

Facility and equipment operating leases (c) 316.9 48.5 84.8 59.1 124.5

Purchase obligations (d) 997.0 268.6 443.6 249.3 35.5

Capital commitment to fund investment (e) — — — — —

Uncertain tax positions (f) — — — — —

Total (g) $ 5,276.1 $ 445.2 $ 784.8 $ 3,246.0 $ 800.1

(a) These amounts represent the principal repayments of Long-term debt and are included on our Consolidated Balance Sheets.

See Note 15, “Borrowings” to our Consolidated Financial Statements under Item 8.

of Part II of this Annual Report on Form 10-K for additional information about our Borrowings and related matters.

(2) Includes estimated future interest payments on our long-term debt and interest and facility fee on the revolving credit facility.

(3) We enter into operating leases in the normal course of business relating to facilities and equipment.

(b) Includes estimated future interest payments on our long-term debt and interest and facility fee on the revolving credit facility.

The majority of our lease agreements have fixed payment terms based on the passage of time.

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See Note 9, “Leases” to our Consolidated Financial Statements under Item 8 of Part II of this Annual Report on Form 10-K for additional information about our Leases and related matters.

(4) Purchase obligations relate to payments to Kyndryl, Inc.

related to the Amended IT Services Agreement (as described below) that expires in fiscal year 2027, the Private Cloud Agreement (as described below) that expires in fiscal year 2030, the AWS Cloud Agreement (as described below) that expires in fiscal year 2027, as well as other data center arrangements and software license agreements including hosted software arrangements, and software and hardware maintenance and support agreements, and certain other related arrangements.

(d) Purchase obligations relate to payments to Kyndryl, Inc.

related to the Amended and Restated IT Services Agreement (as described below) that expires in fiscal year 2032, the Private Cloud Agreement (as described below) that expires in fiscal year 2030, the AWS Cloud Agreement (as described below) that expires in fiscal year 2027, as well as other data center arrangements and software license agreements including hosted software arrangements, and software and hardware maintenance and support agreements, and certain other related arrangements.

Purchase obligations also includes $128.5 million of other liabilities recorded on the Company’s Consolidated Balance Sheet as of June 30, 2026.

(5) The Company has a future commitment to fund $26.0 million to an investee that is not included in the table above due to the uncertainty of the timing of this future payment.

(6) Due to the uncertainty related to the timing of the reversal of uncertain tax positions, only uncertain tax benefits related to certain settlements have been provided in the table above.

(e) The Company has a future commitment to fund $20.2 million to investees that is not included in the table above due to the uncertainty of the timing of this future payment.

(f) Due to the uncertainty related to the timing of the reversal of uncertain tax positions, only uncertain tax benefits related to certain settlements have been provided in the table above.

The Company is unable to make reasonably reliable estimates related to the timing of the remaining gross unrecognized tax benefit liability of $99.8 million (inclusive of interest).

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of Part II of this Annual Report on Form 10-K for further detail.

(7) Certain post-employment benefit obligations reported in our Consolidated Balance Sheets in the amount of $83.5 million as of June 30, 2025 were not included in the table above due to the uncertainty of the timing of these future payments.

Please refer to Note 19, “Contractual Commitments, Contingencies, and Off-Balance Sheet Arrangements” to our Consolidated Financial Statements under Item 8.

(g) Certain post-employment benefit obligations reported in our Consolidated Balance Sheets in the amount of $89.3 million as of June 30, 2026 were not included in the table above due to the uncertainty of the timing of these future payments.

Refer to Note 20, “Contractual Commitments, Contingencies and Off-Balance Sheet Arrangements” to our Consolidated Financial Statements under Item 8.

of Part II of this Annual Report on Form 10-K for a more detailed discussion of the Company’s contractual obligations.

Recently Issued Accounting Pronouncements

Please refer to Note 2, “Summary of Significant Accounting Policies” to our Consolidated Financial Statements under Item 8.

Refer to Note 2, “Summary of Significant Accounting Policies” to our Consolidated Financial Statements under Item 8.

of Part II of this Annual Report on Form 10-K for a discussion on the impact of the adoption of new accounting pronouncements.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis