Automatic Data Processing Inc

Latest Results (15.07.2026):

Automatic Data Processing, Inc. (ADP) — Third Quarter Fiscal 2026: ADP reported a strong quarter with revenues of $5.9 billion (up 7% year-over-year; 6% organic constant currency), net earnings of $1.4 billion (up 9%), adjusted EBIT of $1.8 billion (up 10%) and adjusted EBIT margin of 30.2% (up 80 basis points). Diluted EPS rose 10% to $3.38 (adjusted diluted EPS $3.37), and the company raised its full-year fiscal 2026 guidance for revenue, adjusted EBIT margin and adjusted diluted EPS growth.

Revenue and segment growth

Total revenues were $5,939.2 million, +7% YoY (6% organic cc). Employer Services revenues were $4,036.1 million (+7% reported, 5% organic), with U.S. pays per control up ~1%. PEO Services revenues were $1,906.0 million (+7% reported; +5% excluding zero‑margin pass‑throughs); average paid PEO worksite employees rose ~2% to ~762,000.

Profitability and EPS

Net earnings were $1,359.8 million, up 9% YoY. Diluted EPS increased 10% to $3.38; adjusted diluted EPS was $3.37, also +10%. ADP reported an adjusted effective tax rate for the quarter of 23.7%.

Adjusted operating performance

Adjusted EBIT was $1,791.5 million, up 10% versus last year, driving an adjusted EBIT margin of 30.2% (improvement of ~80 bps). Total pretax margin for the quarter was ~30.0% (vs. 29.2% prior year).

Client funds and investment contribution

Interest on funds held for clients was $403.9 million (+14%). Average client funds balances were $48.3 billion (+9%), with an average yield of 3.3% (up ~10 bps). For fiscal 2026 the company expects client funds interest of $1.340–$1.350 billion and total contribution from the client funds extended strategy of $1.300–$1.310 billion.

Outlook (Fiscal 2026)

ADP raised/confirmed fiscal 2026 targets: revenue growth of 6–7%, adjusted EBIT margin expansion of 70–80 bps, adjusted diluted EPS growth of 10–11%, and an adjusted effective tax rate of ~23%.

Cash flow, balance sheet and capital returns

Nine‑month operating cash flow was $4.013 billion. Funds held for clients on the balance sheet were $46.4 billion at March 31, 2026. Year‑to‑date through nine months ADP repurchased ~$1.46 billion of stock and paid ~$1.94 billion in dividends, reflecting continued shareholder returns.

Segment margin dynamics

Employer Services segment margin improved ~130 bps to 41.1%, while PEO Services segment margin declined ~120 bps to 13.0%, reflecting differing mix and pass‑through/expense dynamics across the businesses.