Good morning. My name is Carnesia, and I will be your conference operator today. At this time, I'd like to welcome everyone to the Broadridge third quarter fiscal year 2018 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star, then the number one on your telephone keypad. If you'd like to withdraw your question, press the pound key. Thank you. I would like to turn the conference over to Mr. W. Edings Thibault , Head of Investor Relations. Sir, you may begin.
Thank you, Carnesia. Good morning, everybody, and welcome to Broadridge's third quarter 2018 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 Rich Daly, our CEO, Tim Gokey, our President and Chief Operating Officer, and Jim Young, our Chief Financial Officer. Before I turn the call over to the management team, a few standard reminders. During today's conference call, we will be making forward-looking statements regarding Broadridge that involve risks. A summary of these risks can be found on the second page of the slides. We encourage participants to refer to our SEC filings, including our annual report on Form 10-K, for a complete discussion of forward-looking statements and risk factors faced by our business.
We will also be referring to several non-GAAP financial measures, including adjusted operating income, adjusted EPS, and free cash flow. We believe these non-GAAP measures provide investors with a more complete understanding of Broadridge's underlying operating results. An explanation of our use of these non-GAAP measures and reconciliations to their comparable GAAP measures can be found in the earnings release and in the earnings presentation. Let me now turn the call over to Rich Daly. Rich?
Thanks, Eddings Thibault. Good morning to all of you joining us on this call. I'm delighted to report another strong quarter for our business. With only two months to go before year-end, I'm also pleased to note that Broadridge is firmly on track to deliver strong full-year 2018 results as well. I will begin this morning with the highlights of our third quarter earnings on slide five. Tim will then discuss the performance of our two segments, and Jim will review our financials and walk you through our outlook for fiscal 2018, including the drivers behind the increase in our adjusted EPS guidance. I will then close with some additional thoughts on how we are balancing delivering attractive short-term results while investing for the long term. Let's get started. Broadridge reported strong third-quarter results.
Total revenues rose 6% to $1.1 billion, driven by recurring fee revenue growth of 8%, and to a lesser extent, by 9% growth in event-driven revenues. Strong organic recurring revenue growth resulted in a 13% increase in adjusted operating income and a 90-basis point increase of margin expansion. Broadridge's adjusted EPS was also helped by a tax benefit related to equity compensation and the reduction in corporate tax rates, which further contributed to a 45% year-over-year increase in adjusted EPS to $1 per share. Our third quarter numbers benefited from a confluence of positive factors which contributed to our strong results. The first and most important factor was the continuing benefit we see from the long-term trends that have been a consistent driver of Broadridge's growth.
These trends, which include mutualization and the increasing demand for data and analytics, have driven the strong sales results we reported over the past several years. The onboarding of our sales backlog remains the single biggest engine of our annual organic revenue growth. That backlog gives us excellent visibility into our organic revenue growth over the next 12 to 18 months. The second driver was the increase in market volatility that occurred in the quarter. Higher trading volumes helped our capital markets and wealth management businesses, as well as our Customer Communications product line. The third factor was the continued strength in event-driven revenues. All three of these factors coming together in a single period produced a very strong quarter. Tim will discuss this in more detail in just a few moments. Now let's move to one of my favorite topics.
Year-to-date closed sales were at $100 million through the end of March. Broadridge recorded $38 million in closed sales in the third quarter, down 20% from a year ago. We remain on track to hit our full-year sales targets, as we expect a very healthy close to fiscal 2018. As you know, Broadridge's quarterly closed sales results have historically been weighted towards the fourth quarter, and results for any single quarter can be heavily influenced by the timing of large deals. Our pipeline today is very strong, and it includes some large deals where we are in active dialogues with clients. These dialogues are progressing well, and we expect one or more of these deals to contribute meaningfully in the fourth quarter. Next, let's discuss guidance.
We are raising our adjusted EPS guidance and reaffirming our prior guidance on total revenue, recurring revenue, adjusted operating income margin, free cash flow, and as I have just said, closed sales. In terms of adjusted EPS, we are raising our guidance for adjusted EPS growth for the year to 31%-35% from 27%-31%. Incorporated in our new guidance are, one, strong results over the first nine months of the year, and at this point in the year, our line of sight into full-year numbers. Two, a higher-than-forecasted tax benefit from equity compensation. Three, increased investment as we take advantage of the growth opportunities we see to redeploy some of our strong operating profits back into the business. I'll touch more on this on my wrap-up.
With our strong outlook for fiscal 2018, Broadridge is on track to achieve the three-year financial targets we laid out at our Investor Day this past December. We believe the combination of investments we have already made over the past five years to grow our governance and capital markets franchises, to broaden our product lineup, and to strengthen our sales capabilities have enabled Broadridge to reinforce its strong market position and high 97% client retention rate. The value we deliver to our clients is the reason why we are in a position to report the kind of results we reported this morning and why Broadridge is so well-positioned to deliver on its three-year objectives.
For example, our ability to benefit from the strong underlying growth in equity or mutual fund and ETF positions is a direct result of the investments we have made to build the complex technology and physical infrastructure that underpin corporate governance. Corporate issuers and mutual funds rely on Broadridge to communicate efficiently with millions of investors and accurately count tens of millions of votes. When conflicts do arise, as with Qualcomm this past quarter, they know that Broadridge will ensure that their message is delivered to shareholders, and that the voting process will be counted quickly and accurately, which is what gives all parties such high confidence in the work performed by Broadridge. Remember, if Broadridge standards were universally applied, there would never be another snake pit situation like the P&G proxy fight.
In addition, Broadridge's ability to benefit from the underlying demand for our data and analytics products is a direct result of the investment we have made to integrate our data into our solution set, as well as a result of tuck-in acquisitions to acquire additional data products. Finally, Broadridge's capital markets franchise helps deliver scalable post-trade processing and other technology solutions to our clients. These clients benefit from the investments we have made in enhancing our technology and processes to create integrated and global platforms. By using Broadridge, they do not have to bear the cost of building and maintaining excess capacity to handle the kind of volume spikes associated with volatile trading periods. They know that Broadridge will provide that capacity to them on demand.
The investments we have made in the past have put Broadridge in a strong position it is today, we are continuing to invest in our business. Given the opportunities we see ahead, the combination of stronger operating results and a lower tax rate that are benefiting our results this year, we have increased investment spending over the past few months. We believe these incremental investments will only further strengthen Broadridge's ability to achieve its three-year objectives and deliver long-term sustainable growth. I will now turn the call over to Tim to provide a more in-depth review of our operating results.
Thank you, Rich. Let's turn to slide six for an update on the performance of our two segments. I'm really pleased with the operational momentum we are seeing in both of our segments, which is a testament to the strong work by our teams to align our businesses around longer-term growth drivers. In both our Investor Communication Solutions and Global Technology and Operations segments, these trends are driving underlying growth. At the same time, both segments are also benefiting from the uptick in market volatility that we saw in the quarter. Let's start with Investor Communication Solutions, where total revenues rose 4%, led by 5% growth in recurring fee revenues. What's really nice to see here is positive growth across all of our reported revenue product groups. Excluding Customer Communications, ICS recurring fee revenues rose a very healthy 7%.
Importantly, Broadridge continued to benefit from strong demand trends at our core mutual fund governance products. Mutual fund and ETF interim record growth was 8%, which translated into healthy double-digit revenue growth. On the equity side, the impact of strong stock record growth was muted by mix shift in the quarter. We expect these trends to translate into higher growth in the fourth quarter, which is when roughly 60% of proxy activity takes place. With visibility into more than 90% of proxy at this point, we now expect full-year stock record growth to be 10%. Other ICS revenues grew 7%, led by strong growth in our mutual fund solutions and data-driven products. We've worked hard to build more solutions and data-oriented capabilities into our ICS product suite, and it's gratifying to see that having an impact.
Revenues for our wealth management product set also rose nicely. We benefited from the acquisition of Summit Financial and from a lesser extent from the two small data product acquisitions we made earlier this year, Spence Johnson and the Morningstar fund advisory product line. Customer Communications revenues rose 3% in the quarter. Much of that growth was driven by post-sale revenue, as higher trading activity generated an increased volume for mutual fund prospectuses we distribute on behalf of brokers to their clients. Excluding that pickup, Customer Communications revenues were flat as our recent new sales wins offset lower than expected client losses. ICS event-driven revenues were up 9%. Event-driven revenues from mutual fund proxy activity declined as expected as we started to lap some of the larger mutual fund proxy events of the last four quarters.
That decline was more than offset in the third quarter, however, by an increase in equity-related proxy activity, with much of that coming from the Qualcomm contest. Looking forward to the fourth quarter, we expect event-driven revenues to be lower than in 2017. As you know, fourth quarter 2017, event-driven revenues benefited from the proxy vote and one of the largest mutual fund and ETF complexes, as well as two large equity contests. We don't see a similar level of activity this coming quarter, especially on the mutual fund side, and we don't see a significant equity contest at the moment either. Let's turn to our GTO segment, which reported very strong 13% revenue growth. As is typically the case, onboarding new sales in both our capital markets and wealth management clients remained the biggest overall driver of growth.
During the quarter, we successfully brought a major client online with one of the biggest clearance and settlement platforms in Europe, and we brought the Japanese operations of another large global client onto our global post-trade management platform. Both these milestones represent significant proof points in the implementation of our new global technology platform, for which we continue to see strong client demand. Internal growth was also a significant driver. Increased market volatility in the quarter contributed to strong internal growth, with equity trading volumes up sharply across our platforms. We also benefited from increased professional and managed services. More broadly, we continue to see strong demand for our capital markets and wealth management solutions. As Rich noted, we're in dialogues with several large clients about transformational initiatives, and our clients remain under intense pressure to grow revenues, reshape their businesses, and cut costs.
Beyond these business model changes, a consistent theme in my conversations with clients is a recognition that new technologies are bringing additional opportunities and challenges to their businesses. Our clients are turning to Broadridge to help them manage these technology transitions, and they see the investments we are making in digital, AI, cloud, and blockchain as setting us apart from others. On the blockchain front, we continue to make investments to maximize the benefits of distributed ledger technology. After running an anonymous meeting on blockchain for each of the past two years, we now have built an end-to-end distributed ledger technology solution for the U.S. proxy market, and we conducted the first annual meeting on blockchain for a North American issuer. That process, conducted in parallel to our standard technology, highlighted the potential benefits that blockchain could bring in terms of automating information sharing and increasing transparency.
We have two more proxy blockchain votes on tap for the fourth quarter as well. We also took a tangible step to enhance our digital communications capabilities with the acquisition of ActivePath in March. We're excited to integrate the ActivePath capabilities with our existing digital products to enable our clients to more effectively communicate with their customers at a significantly lower cost. Our investment in blockchain and digital communications are both examples of how Broadridge is focused on enabling our clients to get ahead of the challenges they face today while tapping the opportunities that these shifts will present tomorrow. Our clients see that commitment and are rewarding us for it. For me, it's an exciting time to be at Broadridge.
Between the strong momentum we're seeing in our current business and the investments we're making in new technologies and capabilities, we are making Ready for Next a reality for our clients. Let me now turn it over to Jim for a review of our financial results. Jim?
Thanks, Tim, and good morning, everyone. We had a very strong third quarter as our results benefited from continued strong operating trends, robust market activity, higher event-driven revenues, and tax benefits. I'll start my remarks with a few call-outs. First, 7% organic recurring revenue growth. The engine of our organic growth continues to be the onboarding of new sales. In this quarter, we also saw a nice pickup in internal growth, which drove four points of growth and boosted organic growth. As Tim noted, we are benefiting at the margin from a sharp pickup in our clients' equity trading volumes, as well as the continued growth in mutual fund interims and stock record growth. The latter matters most, of course, in our fourth quarter when the bulk of the proxy revenue is earned. Second, event-driven revenues. Event-driven activity was modestly stronger than anticipated.
In particular, the Qualcomm proxy contest generated a higher level of activity than we had anticipated. Looking ahead to the fourth quarter, we expect a decline in event-driven activity, as I'll discuss later in my remarks. Third, excess tax benefit, or ETB, as I'll refer to it here. As most of you will recall, changes in accounting standards have moved the impact of the tax benefit from equity-based compensation from the cash flow statement into the tax provision on the income statement. Over the first two quarters of the year, we realized just $3 million in ETB. In the third quarter, Broadridge recorded $16 million in ETB or $0.13 per share, which significantly lowered our tax provision.
We are assuming a similar level of ETB in the fourth quarter as well, which would put the full year slightly above our historical four-year average, recognizing that ETB is very volatile year to year. Fourth, investment. Given the numerous opportunities we see in the market, we've increased our level of investment spend in fiscal year 2018. Incremental investments include projects aimed at enhancing our digital offerings, executing on our cloud initiative, building out our data infrastructure, supporting mutual funds, and pursuing efficiency initiatives. These investments will strengthen our business over the medium to long term. Fifth and last, guidance. We are raising our guidance for adjusted EPS growth in fiscal 2018 to a range of 31%-35%, from 27%-31%, and our guidance for diluted EPS growth to a range of 28%-33%, from 22%-26%. We are reaffirming our other guidance measures.
The guidance reflects our strong operating results, the incremental investments we are making in fiscal 2018, and the increase in ETB. Let's move to the slides, starting with the revenue slide on page seven. In the third quarter, total revenues grew 6% to $1.1 billion, with growth across the board in recurring, event-driven, and distribution revenues. Recurring fee revenues, up 8% all in and 7% organic, were the biggest contributor to growth of five points. Onboarding of new business or closed sales, as shown here, was the largest organic contributor. Internal growth contributed four points to recurring fee revenues growth. About two-thirds of this came from our GTO segment, where, as Tim noted, a 28% year-over-year increase in our clients' equity trade volumes and increased professional and managed services translated into a nice uptick in revenue.
Acquisitions, primarily a combination of our [inaudible] , Message Automation, and the Summit Document Management business also contributed modestly to our recurring revenue growth. Event-driven revenues rose 9% in the third quarter, contributing one point to our overall revenue growth. Distribution revenues rose $9 million in the quarter, mainly driven by higher event-driven activity and contributed another point to revenue growth. You can find the nine-month year-to-date revenue results on slide eight, and I will skip ahead to slide nine. Adjusted operating income rose 13% to $152 million in the third quarter. Adjusted operating income margin rose 90 basis points to 14.1%. Our margins benefited from the strong organic growth. When we get a lift from internal growth, which is essentially a higher volume of activity over our existing infrastructure, the marginal profitability of that organic growth tends to be quite favorable.
In this quarter, the uptick in trading volumes contributed nicely to margin expansion. In addition, higher event-driven revenues also contributed to growth in adjusted operating income. The impact of those higher volumes and healthy event-driven activity was partially offset by the incremental investments. We expect the level of those investments to pick up in the fourth quarter as we close out a number of projects. Adjusted EPS grew 45%, or $0.31 to $1 per share. Approximately $0.12 of that growth came from the growth in core operating performance, with the balance coming from a lower tax position, including $0.13 from ETB and $0.06 from the impact of the Tax Act. Broadridge's effective tax rate was 12.9% in the third quarter, down from 28.6% the same period last year.
The biggest driver of the decline in effective tax rate was the $16 million ETB related to equity compensation, which lowered the tax rate by 12.5 percentage points. Excluding that benefit, the effective tax rate would have been 25.4%, which reflects the partial year benefit from the Tax Act. Again, this kind of ETB is not unusual for Broadridge, but this is the first year of adopting new accounting rules for stock-based compensation, which require the ETB impact to be included in the income statement rather than solely as part of cash flows. You can find the nine-month year-to-date operating income and EPS results on slide 10, and I will move to slide 11 for a brief discussion of our ICS and GTO segment results. Our ICS segment had a solid quarter, with revenue up 4% and earnings up 23%.
ICS recurring fee revenues rose 5% to $403 million. On an organic basis, revenues rose 4%, with balanced growth from both net new business and internal growth. Acquisitions contributed an additional one point to ICS recurring revenue growth. ICS earnings before taxes rose 23% to $93 million, driven by higher recurring fee revenues. Higher event-driven contest activity compensated for the large grow-over from last year's strong mutual fund proxy activity. Our GTO segment continued to perform very well, growing its revenue 13% to $235 million. Organic growth was a very strong 12%, with only a modest contribution from acquisitions. The biggest contributor to the strong organic growth was internal growth, which was boosted in part by the impact of the higher trading volumes. In total, internal growth accounted for seven points of overall growth.
Excluding losses, sales-driven growth added 8 points, which matches the performance in the last two quarters. GTO earnings before taxes rose 34% to $57 million, and margins grew by almost 400 basis points. Revenues associated with higher trading volumes tend to carry a higher degree of marginal profitability, and those volumes were an important driver of the GTO segment margin expansion in the quarter. Moving to slide 12. Broadridge generated $115 million of free cash flow in the third quarter, and $204 million year-to-date. We invested $18 million in capital expenditures in the third quarter. We also spent $33 million to acquire ActivePath to enhance our digital communications capabilities across both our Customer Communications and governance businesses, and to acquire the Morningstar fund advisory product line to further add to our suite of data-driven solutions.
As Rich and Tim have noted, we also continue to make progress in strengthening our blockchain capabilities. In fact, during the quarter, the achievement of certain development milestones triggered the payment of the final tranche of the total $135 million we spent to acquire the technology assets of Inveshare, the blockchain investment we made in fiscal 2017. All in, we have deployed approximately $103 million year-to-date for acquisitions. Finally, we continue to return capital to shareholders in the form of our dividends. Let's turn to guidance, which is laid out on slide 13. We are raising our guidance for adjusted EPS growth to 31%-35% from 27%-31%, and reaffirming our guidance for recurring revenue growth, total revenue growth, margins, free cash flow, and closed sales. In addition, we are raising our GAAP diluted EPS growth guidance to 28%-33%.
Let me share a few thoughts on each point. Our recurring revenue guidance is unchanged. With Q3 year-to-date growth of 6%, we continue to expect recurring fee revenue growth to be in the range of 4%-6%. We also continue to expect total revenue growth to be approximately 2%-4%, which, with 8% growth year-to-date, implies contraction in the fourth quarter. Our outlook assumes event-driven revenues, while still on track for a record year, will decline by 30%-40% in the fourth quarter, due to laps from significant mutual fund proxy activity in Q4 of last year. In addition, we do not see on our radar a significant equity proxy contest similar to those at Qualcomm, ADP, or P&G, although contest activity can spin up relatively quickly.
We continue to expect our adjusted operating income margin to be approximately 16%, as we expect to meet our margin expansion goals while maintaining disciplined investment. The contraction in Q4 total revenues, coupled with increased investment, means that our adjusted operating income, which is up 32% year-to-date, will also contract in the fourth quarter. We are raising our outlook for adjusted EPS growth to 31%-35%, up from 27%-31%. Our revised adjusted EPS guidance incorporates our strong year-to-date performance, 63% growth, and our outlook for the fourth quarter. Also included in our outlook is an increase in our ETB forecast assumption to $35 million for fiscal year 2018. Our prior forecast calls for $20 million of ETB. The expected $35 million of ETB on a net basis would contribute $0.27 to our full-year EPS results.
Netting this all out implies single-digit adjusted EPS growth in the fourth quarter. Our free cash flow guidance remains at $500 million-$550 million. As Rich noted, we continue to expect closed sales to be in the range of $170 million-$210 million. To close, Broadridge reported strong financial results, and with two months remaining, we are on track for a strong fiscal 2018. We are investing in our business through internal development and through acquisitions, and building on the demand for our governance, capital markets, and wealth management businesses. With our fiscal 2019 operating plan beginning to take shape, we are confident in our ability to deliver on these three-year financial objectives we set at our Investor Day in December and updated last quarter. We look forward to sharing with you our fiscal 2019 guidance on our August call. Back to Rich.
Thanks, Jim. I'm on slide 14 of the presentation. I'll begin with a quick recap of the key highlights from today's call. First, Broadridge reported strong third-quarter results. We are raising our adjusted EPS guidance to 31%-35%. Finally, Broadridge is on track to achieve its three-year Investor Day growth targets. To sum it up, we're pleased with our year-to-date performance and the operating momentum we are seeing in our business. One of the keys to our success over the past decade has been our focus on building long-term value for our clients, associates, and shareholders. Our three-year objectives play an important role in reminding us of that.
When we sign long-term contracts, either in our governance franchise or in our capital markets franchise, we're making a commitment to our clients that we'll provide high-quality services over the next five to seven years, and we are also implicitly committing to reinvest in those services and ensure that we are integrating new technologies into our product set. Today, these technologies include cloud-based applications, blockchain, AI, and digital capabilities. Our proven track record of delivering innovative and differentiated solutions to complex challenges that drive long-term value sets us apart from our competitors, and it's why I believe our 97% retention rate has room to improve. That longer-term focus is why we have increased our level of investment over the course of this year.
As CEO, in a year with strong performance, it is an easy decision to make these investments, especially when I consider the growth opportunities in our governance and capital market franchises, as well as in wealth management. It's an easy call. One example of these investments is our acquisition of ActivePath last month. ActivePath's innovative digital technology will allow our clients to quickly compose and project the kind of digital content typically found on brand websites and apps into interactive email with new levels of personalization, engagement, and security. The ActivePath acquisition represents another step forward in the creation of a powerful omni-channel communications platform for our clients. Investments like ActivePath, along with other ongoing investments in new technologies like blockchain and AI, and enhancing our fixed income network capabilities, are a key reason why Broadridge is well positioned to deliver long-term value to our clients and shareholders.
I'm proud of our associates and the business we have built over the past three decades here at Broadridge. However, when I think about the potential opportunities that these investments represent, I have to believe that we are only just getting started into making Broadridge all it can become. I've said it before and I'll say it again today, it's really a great time to be at Broadridge. Before I turn the call over to Q&A, I want to thank my fellow Broadridge associates. Their commitment to the service profit chain is the driving force behind our success. Now, let's take your questions. Anisha?
At this time, I'd like to remind everyone, in order to ask a question, please press star then the number one on your telephone keypad. Again, that's star then the number one on your telephone keypad. We'll pause for just a moment to compile the Q&A roster. The first question comes from David Togut with Evercore ISI.
Good morning. This is Anthony Suganovitch on behalf of David Togut. I was hoping, could you quantify your prospect pipeline of potential new equity and fixed income trade processing contracts?
I'm going to start it off here. I believe what you're referring to is the sales activity. Again, we continue to feel very good about the pipeline we have. We believe that's directly correlated to the investments that we make in the business. I'm going to ask Tim to comment a little bit more about how those relationships are expanding with our clients because of these investments we're making. Overall, the ability to retain clients because of the quality of the services we have and the technology we're adding and the ability to attract clients, whether it be for those large clients that aren't on some of our products already, as well as new offerings we have, continues to be strong. Tim, why don't you specifically talk about how these relationships are growing even deeper?
Yeah. Just as a direct answer to the question, because our sales cycles are long, if you look at our pipeline, it is multiples of what our annual sales are. You'd have to really sort of take the next layer down. I think the great news is that we have a strong pipeline across each of our franchises, governance, communications, capital markets, wealth. Across all of these, what we're seeing is clients continuing to need to transform their business to grow revenues, to reduce costs, and we're seeing that with existing clients. We're seeing it with new clients. It's a mix of both near-term and long-term deals, and that's a mix that we obviously like.
Great. Thanks. That's helpful. Just as a follow-up, could you talk about your acquisition pipeline now that you're nearly 2 years post the completion of the DST and NACC business?
Sure. Well, the first thing I want to say is that our commitment to be good stewards of our shareholders' capital remains unchanged. We've been very happy with our efforts to date and its ability to contribute value. The standards of having one clear strategic fit so that we're viewed as being the logical owner, all right, and an appropriate owner where we can leverage our strong brand and distribution channel, remains a clear criteria. Two, we set pretty high financial return standards there as well. Candidly, I would have preferred a little more activity right now in terms of successful results. I assure you, we're very active out there and looking to continue to execute against a strategy that has served us very well.
Great. Thank you.
Our next question is from Peter Heckmann with D.A. Davidson.
Good morning. Just following up. It looked like TD Ameritrade completed the Scottrade conversion. I just wanted to see if-- You had said, "Wait till that closes, and we'll give you an update." Any update there and any contribution in the quarter that is worth calling out?
I'm sorry, Peter, was that a question about Scottrade?
Yes. I'm sorry. Yes.
Well, that continues to be pretty much the same as we have discussed previously. That deal closed, and we continue to receive payments from the new owner, and continue to be in discussions with them about longer term, how we'll work together. There's not really any change to that from what we previously discussed.
Okay. Just, you alluded to this in your comments on the fourth quarter, but you're looking at, it appears to me that event-driven proxy business probably generate revenue around $280 million in fiscal 2018, and that's about $100 million more than your six-year average in that business. Just based on market trends and other dynamics, preliminarily, would you assume for fiscal 2019 that event-driven proxy would revert to that multi-year average, or are there things going on that may lead to stronger event-driven proxy compared to the prior six years?
Peter, this is Jim. As you say, 2018 is shaping up to be a record year, which is terrific. We love it when this revenue comes in. We don't entirely anchor our business off of this. We look forward to updating in August, but as we think about 2019, clearly there's enough activity, but we look more broadly across the whole business, including the strong recurring revenue growth and the sales activity, which should set us up pretty nicely for the next year and really our three-year horizon.
Okay.
I'm going to add that I've been doing this now pretty close to four decades. Event-driven, although not as predictable as the strong percentage of recurring revenue we have, has consistently grown, and it's terrific in that it's going through a relatively fixed cost infrastructure, and it's adding value at a very nice rate, which gives us lots of flexibility to do other things, including the investments. From my point of view, event-driven, for a very long period of time in my career, has been a high-quality additive, has consistently grown over that period of time, and maybe a little bit of year-to-year blipping here and there. I anticipate that it will continue to grow, and with technology, we'll even have more opportunities to bring new activities into some of these dialogues.
For example, in proxy contests, social activity should give us some very good opportunities as we go forward. Not just for a proxy contest, but also for giving issuers a better way to communicate with their base, in the way that these consumers and shareholders are used to getting communications.
Okay. That's helpful. Just to clarify, you're saying you believe event-driven will grow from this base in fiscal 2018, in 2019, or it'll just grow over time?
Rich is saying it'll grow over time. We take a long-term perspective, and it's grown very nicely over time. We'll give you our latest thinking in August on what we think next year. I think the real takeaway, Pete, is the business is really well-balanced right now, and we think we can achieve our growth objectives through a variety of ways.
Yeah. No question. The rest of the business is doing quite well. I just wanted to clarify that issue.
Your next question is from Chris Donat with Sandler O'Neill.
Hi. Good morning, gentlemen. It's Chris Donat here. Wanted to ask first on the closed sales guidance, it implies that your June quarter would be a record quarter of something like $70 million-$110 million. I guess, Rich, what I'm curious about is, you sound very confident about it. How do you feel about the timing of this? Do you really care if it's a June quarter event, given that it appears that you got a lot of large deals in there?
Chris, first of all, my cardiologist isn't that concerned yet because there's a reasonable amount of time to go, and we've had significant fourth quarter sales closed activity. For the majority of years, I've been running Broadridge and running the business. It's to some degree, nature of the beast. Second of all, what we have is we have multiple ways we see in which we can achieve our targets for the year, and we're pursuing all of those.
Okay. Just because it sounds like you do have some larger closed sales out there, are those the sort of things that might not hit FY 2019 revenues as it takes a while to implement them? Or am I thinking about them as being too big if that's
I'll break it into two parts, Chris. First of all, we see on the multiple paths we have to achieve the target. There were some very large deals that we're looking at, but we see clear ways to achieve the guidance without the largest of deals. With that said, we'd like all of it to happen, but it will play out over the time. For the larger the deal, generally speaking, that would mean a longer conversion period. One of the things I specifically pointed out in my comments was the closed sales backlog we have right now, yet to be implemented, gives us confidence as we look at 2019 and even over the next 12 to 18 months. I really like what we did at Investor Day, where Jim gave you some insight into that sales backlog.
We're discussing how we can make that something more consistent we can give you. Hopefully, we'll be there, when we talk about 2019 or during the 2019 fiscal year.
Okay. One question for Tim. Tim, you commented that full year stock record growth looks like it'll be around 10% for the fiscal year. Any commentary? I mean, it's been better than it has been in some recent years. Any commentary on what's likely driving that growth?
Yeah, I think, as you know, the long-term trends here have been pretty steady, and the long-term trend is sort of mid-single digits. It's above that right now. I think the markets have been very strong this fiscal year. The leading indicators that you tend to see here are fund flows. That's sort of an example of driving into the sort of the retail side. I think the other factor that above sort of the overall market activity, in addition, though, are the continued growth of managed accounts, the continued growth of global advisors, which tend to create additional positions above and beyond market activity, and those are trends that we see continuing.
Got it. Thanks very much.
Your next question is from Puneet Jain with JPMorgan.
Yeah. Hi. Good quarter, guys. Can you update us on the $250 million backlog you disclosed in December? Maybe qualitative comments there will be helpful. Also, if you can talk about how's backlog converting into revenue.
Yeah. Hi, Puneet. It's Jim. The backlog, as Rich mentioned, we'll plan to sort of try to give you some visibility. In short, as you recall, we talked about, as of December, about $250 million in backlog. We continue to chip away at that, continue to add sales. It's probably right now at an equilibrium as we add more and convert more. Obviously, with this fourth quarter, we hope to build significantly on that backlog. As Rich mentioned, it gives us great visibility into next year, and even into 2020, which puts us in a really good position for planning and particular investments, which is great. Then, sort of as we think about the onboarding that we're seeing, we've really had some strong contributions, from those closed sales numbers. In particular, I mentioned GTO, growing at 8% on a closed sales basis from revenue.
That's a really high rate of adds. If we think about all in for Broadridge, we've been in the neighborhood of about six points of growth coming from our closed sales. Continues to produce really strong revenue growth and obviously the visibility that comes with it.
Got it. It's been almost a year since NACC client issues. How should we think about long-term growth in that business? It seems like a great strategy. Is it just about adding logos, or is there anything else you need to do to get there?
Yeah, Puneet, this is Tim. Look, we feel very pleased with the progress. We were pleased to see Customer Communications turn to growth, this quarter. I think longer term, we continue to see a lot of client belief in our thesis around omni-channel communications delivery, which is on the physical side, but also on the digital side. That combination, we're seeing a lot of appetite, both in client discussions and in our sales pipeline. While the next few quarters, with implementation timelines and with the little bit of uncertain timing of the runoff of a significant client that we knew was leaving at the time of the acquisition. The next couple of quarters are a little difficult to predict, but long term, we feel very nice about the thesis, and we feel very nice about the long-term growth prospects there.
Got it. Thank you.