Sentences and paragraphs of ADP's Risk Factors and MD&A, 10-K 2026-08-05 against 10-K 2025-08-06.
Each links to the text at sec.gov.
AddedRisk Factors
For our PEO to sponsor many of its employee benefit plan offerings, it must qualify as the employer of the WSEs under certain provisions of the Internal Revenue Code and ERISA. Additionally, our PEO’s status as an employer for purposes of ERISA is important because ERISA preempts certain state laws that could limit our PEO’s ability to offer certain benefit plan offerings as we do today. The definition of employer under the Internal Revenue Code and ERISA is not uniform and there is no definitive judicial or legislative interpretation of employer in the context of PEOs. Because many of our PEO employee benefit plan offerings are subject to ERISA, our PEO must administer and operate these plans in accordance with ERISA requirements. We believe that our PEO benefit plans satisfy all applicable ERISA requirements, but if it were determined that the PEO benefit
Read it in 10-K 2026-08-05 at sec.gov ↗
AddedRisk Factors
plans fail to satisfy any such requirements, our PEO would likely be required to modify its current business model, and the PEO could be subject to material fines or penalties. Any such event could have an adverse impact on our financial results and liquidity.
Read it in 10-K 2026-08-05 at sec.gov ↗
AddedRisk Factors
The collection, storage, hosting, transfer, processing, disclosure, use, security and retention and destruction of personal information required to provide our services is subject to federal, state and foreign privacy, data protection and cyber security laws. These laws, which are not uniform, generally do one or more of the following: regulate the collection, storage, hosting,
Read it in 10-K 2026-08-05 at sec.gov ↗
AddedRisk Factors
In addition, laws and regulations covering marketing, advertising, and email, telephone and text messaging communications, including the Telephone Consumer Protection Act, are applicable to our business. Claims that we have violated such laws or regulations could expose us to costly litigation, and if successful, significant statutory damages or other liabilities that could adversely affect our reputation, business, financial condition or results of operations.
Read it in 10-K 2026-08-05 at sec.gov ↗
AddedRisk Factors
of confidential or proprietary information which could limit our ability to protect, or prevent us from protecting, our intellectual property rights.
Read it in 10-K 2026-08-05 at sec.gov ↗
AddedRisk Factors
Our payroll and tax processing services involve the collection, custody and transmission of a significant volume of funds in short-time frames. Our operations and the systems on which we rely have been, and may in the future be, subject to processing, technological, fraud-related or human errors, as well as failures, delays or disruptions, despite our efforts to design and implement effective processing systems, controls and procedures. The inability to properly perform our money movement services, operational errors in the performance of these services (including as a result of human or system errors, timing mismatches, settlement failures, unauthorized transactions or failures or delays attributable to financial institutions or other third parties), or our failure to recover any funds from clients could result in significant financial losses, regulatory intervention, fines and penalties, litigation and reputational harm, which could have a material adverse effect on our business, financial condition and results of operations.
Read it in 10-K 2026-08-05 at sec.gov ↗
AddedMD&A
During fiscal 2026, we made meaningful progress on our Strategic Priorities. We continued to leverage our data advantages, domain expertise, and trusted brand to lead the HCM industry's AI transformation. ADP Assist became increasingly embedded in our clients' workflows, delivering meaningful time savings and improved accuracy. Since launching ADP Assist agents in January, we steadily expanded their availability across our payroll, benefits, HR, and compliance solutions, making AI-powered HCM agents accessible to nearly all of our more than 1.1 million clients. We also launched a dedicated space within ADP Marketplace for our partners' AI agents, further expanding our AI ecosystem. Additionally, we continued deploying AI tools across our sales, service, and research and development functions to improve the client experience and drive internal productivity gains. During the year, we experienced strong enterprise sales momentum for ADP Lyric HCM and the ADP WorkForce Suite, as our unified global payroll, global HR, and global time solutions continued to resonate with clients. Finally, we remained focused on delivering value through our global scale by providing compliant HCM solutions, local expertise, and trusted relationships wherever our clients operate.
Read it in 10-K 2026-08-05 at sec.gov ↗
AddedMD&A
ANALYSIS OF REPORTABLE SEGMENTSRevenues Years Ended % Change June 30, 2026 2025 As Reported Organic Constant Currency Employer Services $ 14,831.4 $ 13,883.1 7% 5% PEO Services 7,128.1 6,690.4 7% 7% Intercompany eliminations (12.1) (12.6) n/m n/m $ 21,947.4 $ 20,560.9 7% 6%
Read it in 10-K 2026-08-05 at sec.gov ↗
Show the other 3
AddedMD&A
(d) Represents (gains)/losses on investments made through our Corporate Venture Capital arm, ADP Ventures. (Gains)/losses on these investments may result from observable price changes, changes in ownership interest, accrued interest income, and impairment charges. These adjustments may be highly variable, are predominantly non-cash, are outside our control, and are not fundamental to the underlying operations of our business model.
Read it in 10-K 2026-08-05 at sec.gov ↗
AddedMD&A
(e) In fiscal 2026, this represents a net charge (establishment of a legal reserve and insurance recovery) from a legal matter settled during the year ended June 30, 2026. Refer to Note 13, Commitments and Contingencies, within the Notes to the Consolidated Financial Statements for further discussion. In fiscal 2025, this represents a reversal of a legal reserve recorded during the year ended June 30, 2023.
Read it in 10-K 2026-08-05 at sec.gov ↗
AddedMD&A
assumptions including projected revenue growth rates and profitability projections are dependent on our ability to upgrade, enhance, and expand our technology and services to meet client needs and preferences.
Read it in 10-K 2026-08-05 at sec.gov ↗