ADP Reports First Quarter Fiscal 2027 Results
• Net earnings increased 11% to $1.1 billion, and adjusted net earnings increased 11% to $1.1 billion
• Adjusted EBIT increased 12% to $1.5 billion, and adjusted EBIT margin increased 130 basis points to 26.8%
• Diluted earnings per share ("EPS") increased 14% to $2.83; adjusted diluted EPS increased 13% to $2.82
– ADP (Nasdaq: ADP), a global leader in HR and payroll solutions, today announced its first quarter fiscal 2027 financial results and updated its fiscal 2027 outlook.
Compared to last year’s first quarter, revenues increased 6% to $5.5 billion and 6% on an organic constant currency basis. Net earnings increased 11% to $1.1 billion, and adjusted net earnings increased 11% to $1.1 billion. Adjusted EBIT increased 12% to $1.5 billion, and adjusted EBIT margin increased 130 basis points to 26.8%. ADP’s effective tax rate for the quarter was 22.7% on both a reported basis and an adjusted basis. Diluted EPS increased 14% to $2.83, and adjusted diluted EPS increased 13% to $2.82.
"ADP is off to a strong start in fiscal 2027 with first quarter results that reflect the resilience of our business model and the trust our clients continue to place in us,” said Maria Black, President and Chief Executive Officer, ADP. “The complexity of work is growing faster than employers can manage alone and our clients are turning to us and our deep domain expertise to fundamentally change how work gets done inside their organizations. We enter the rest of fiscal 2027 well positioned to build on our current momentum."
“Our first quarter results exceeded our expectations across revenue growth, adjusted EBIT margin expansion, and adjusted EPS growth," said Peter Hadley, Chief Financial Officer, ADP. “Our ongoing commitment to a disciplined investment approach is enabling us to drive our AI transformation forward, and at the same time deliver strong financial results." 1 Adjusted EBIT, adjusted EBIT margin, adjusted net earnings, adjusted diluted earnings per share, adjusted effective tax rate and organic constant currency are all non-GAAP financial measures. Please refer to the accompanying financial tables at the end of this release for a discussion of why ADP believes these measures are important and for a reconciliation of non-GAAP financial measures to their closest comparable GAAP financial measures.
Employer Services – Employer Services offers a comprehensive range of global HCM and Human Resources Outsourcing solutions. Compared to last year's first quarter:
• Employer Services revenues increased 6% on a reported basis and 6% on an organic constant currency basis
PEO Services – PEO Services provides comprehensive employment administration outsourcing solutions. Compared to last year's first quarter:
• PEO Services revenues excluding zero-margin benefits pass-throughs increased 4%
Interest on Funds Held for Clients – The safety, liquidity, and diversification of ADP clients’ funds are the foremost objectives of the Company’s investment strategy. Client funds are invested in accordance with ADP’s prudent and conservative investment guidelines, and most of the investment portfolio is rated AAA/AA. Compared to last year's first quarter:
• The average interest yield on client funds increased 30 basis points to 3.6% 2
Certain components of ADP’s fiscal 2027 outlook and related growth comparisons exclude the impact of the following items and are discussed on an adjusted basis where applicable. Please refer to the accompanying financial tables for a reconciliation of these adjusted amounts to their closest comparable GAAP measure.
• Fiscal 2026 pre-tax gain of about $5 million related to a partial reversal of the workforce optimization initiatives from fiscal 2025 and 2024
• Fiscal 2026 pre-tax charges of about $91 million related to a business alignment program
• Fiscal 2026 pre-tax gain of about $8 million related to gains on ADP Ventures' investments
• Fiscal 2026 pre-tax net charges of about $18 million related to the settlement of a legal matter
• Fiscal 2027 pre-tax gain of about $3 million related to gains on ADP Ventures' investments
• PEO Services revenue, excluding zero-margin benefits pass-throughs, growth of 3% to 5%
The interest assumptions in our outlook are based on Fed Funds futures contracts and various forward yield curves as of October 27, 2026. The Fed Funds futures contracts are used in the client short and corporate cash interest income outlook. A combination of various forward yield curves that reflect our investment mix, resulting in a blended rate of 5.3%, was used to forecast new purchase rates across the client and corporate extended and client long portfolios over the remainder of the fiscal year.
• Interest on funds held for clients of $1.59 to $1.61 billion; this is based on anticipated growth in client funds balances of 4% to 5% and an average yield that is anticipated to increase to approximately 3.8%
• Total contribution from the client funds extended investment strategy of $1.59 to $1.61 billion 3 Fiscal 2027 Outlook
(a) Outlook contemplates the anticipated impact of foreign currency in revenue and operating results.
As previously announced, ADP will host a conference call for financial analysts today, Wednesday, October 28, 2026 at 8:30 a.m. ET. The conference call will be webcast live on ADP’s website at investors.adp.com and will be available for replay following the call. A slide presentation accompanying the webcast is also available at investors.adp.com/events-and-presentations . ADP news releases, current financial information, SEC filings, and Investor Relations presentations are posted to ADP’s website at investors.adp.com .
ADP has been shaping the world of work with innovation and expertise for more than 75 years. As a global leader in HR and payroll solutions, ADP continuously works to solve business challenges for our clients and their workers, from simple, easy-to-use tools for small businesses to fully integrated platforms for global enterprises – and everything in between. Always Designing for People means we're focused on just that – people . We use our unmatched AI-driven insights and proven expertise to design innovative solutions that help people achieve greater success at work. More than 1.1 million clients across 140+ countries rely on ADP's exceptional service to support their people and drive their business forward. HR, Talent, Time Management, Benefits, Compliance, and Payroll. Learn more at ADP.com 4
Intere… income on $ -133.7 $ -101.5 corpor… funds Realiz… (gains… on 1.4 -1.5 availa… securi… net Non-se… compon… of -5.1 -7.1 pension income, net Net (gain)… on ADP -2.9 — Ventur… invest… Other (incom… $ -140.3 $ -110.1 net
(a) Professional Em ployer Organization (“PEO”) revenues are net of direct pass- through costs, primarily consisting of payroll wages and payroll taxes of $18,991.0 million and $18,534.4 million for the three months ended September 30, 2026 and 2025, respectively.
(b) PEO revenues and operating expenses include zero-margin benefits pass- through costs of $1,228.6 million and $1,131.0 million for the three months ended September 30, 2026 and 2025, respectively.
(c) PEO revenues and operating expenses include costs related t o workers' compensation coverage and state unemployment taxes fo r worksite employee s of $145.1 million and $134.9 million for the three months ended September 30, 2026 and 2025, respectively. 5
Automatic Data Processing, Inc. and Subsidiaries Consolidated Balance Sheets (In millions, except per share amounts) (Unaudited) Assets September 30, June 30, Current assets: 2026 2026 ────────────────────────────────────────────────────────────────────────────── Cash and cash equivalents $ 3,277.0 $ 4,230.1 Accounts receivable, net of allowance for doubtful accounts of 3,524.0 3,521.1 $50.3 and $44.5, respectively Other current assets 1,291.6 852.1 Total current assets before funds held 8,092.6 8,603.3 for clients Funds held for clients 44,733.3 43,957.8 Total current assets 52,825.9 52,561.1 Property, plant and 644.3 641.3 equipment, net Operating lease 382.5 388.6 right-of-use assets Deferred contract costs 3,200.8 3,244.1 Other assets 1,463.1 1,420.5 Goodwill 3,281.1 3,284.4 Intangible assets, net 1,656.1 1,653.3 Total assets $ 63,453.8 $ 63,193.3 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 138.7 $ 162.5 Accrued expenses and other current 3,329.3 3,218.5 liabilities Accrued payroll and payroll-related 579.2 1,039.4 expenses Dividends payable 670.2 671.9 Short-term deferred 257.9 267.5 revenues Obligations under reverse repurchase 198.3 139.3 agreements (a) Income taxes payable 153.1 110.3 Total current liabilities before client 5,326.7 5,609.4 funds obligations Client funds obligations 46,039.6 44,415.5 Total current liabilities 51,366.3 50,024.9 Long-term debt 4,965.3 4,964.1 Operating lease 308.0 306.7 liabilities Other liabilities 1,127.1 1,141.4 Deferred income taxes 218.8 339.1 Long-term deferred 376.2 385.9 revenues Total liabilities 58,361.7 57,162.1 Stockholders' equity: Preferred stock, $1.00 par value: — — authorized, 0.3 shares; issued, none Common stock, $0.10 par value: authorized, 1,000.0 shares; issued, 638.7 shares at September 30, 2026 and 63.9 63.9 June 30, 2026; outstanding, 395.6 and 397.8 shares at September 30, 2026 and June 30, 2026, respectively Capital in excess of par 3,145.1 3,067.9 value Retained earnings 27,412.1 26,967.4 Treasury stock - at cost: 243.1 and 240.9 shares at September 30, -23,958.6 -23,165.9 2026 and June 30, 2026, respectively Accumulated other comprehensive -1,570.4 -902.1 income/(loss) Total stockholders’ 5,092.1 6,031.2 equity Total liabilities and stockholders’ $ 63,453.8 $ 63,193.3 equity
(a) As of September 30, 2026, $195.2 million of long-term marketable securities, and $3.1 million of cash and cash equivalents have been pledged as collateral under the Company's reverse repurchase agreements. As of June 30, 2026, $138.6 million of long-term marketable securities, and $0.7 million of cash and cash equivalents have been pledged as collateral under the Company's reverse repurchase agreements. 6
Automatic Data Processing, Inc. and Subsidiaries Statements of Consolidated Cash Flows (In millions) (Unaudited) Three Months Ended Cash Flows from Operating September 30, Activities: 2026 2025 ────────────────────────────────────────────────────────────────────────────── Net earnings $ 1,125.2 $ 1,013.0 Adjustments to reconcile net earnings to cash flows provided by operating activities: Depreciation and 155.0 146.7 amortization Amortization of deferred 302.6 298.6 contract costs Deferred income taxes 80.6 64.8 Stock-based compensation 67.2 58.7 expense Bad debt expense 16.4 10.3 Net pension income -2.2 -3.8 Net accretion of discounts and amortization of premiums -50.0 -22.5 on available-for-sale securities Other 2.0 2.5 Changes in operating assets and liabilities: (Increase)/decrease in accounts -21.5 102.0 receivable Increase in deferred -263.1 -271.4 contract costs Increase in other assets -346.2 -342.4 Decrease in accounts -25.6 -38.0 payable Decrease in accrued expenses and other -389.4 -376.2 liabilities Net cash flows provided by operating 651.0 642.3 activities Cash Flows from Investing Activities: Purchases of corporate and client funds -2,665.7 -3,604.6 marketable securities Proceeds from the sales and maturities of corporate and client 1,958.5 1,896.0 funds marketable securities Capital expenditures -52.7 -46.7 Additions to intangibles -117.1 -94.1 Acquisitions of businesses, net of cash — 0.5 acquired Other -5.4 -13.7 Net cash flows used in investing -882.4 -1,862.6 activities Cash Flows from Financing Activities: Net increase in client 1,654.0 573.1 funds obligations Net cash received/(distributed) 50.9 -11.5 from the Internal Revenue Service Payments of debt -0.3 -0.3 Repurchases of common -758.8 -366.0 stock Net repurchases for stock-based compensation plans and -27.6 -57.8 stock purchase plan Dividends paid -677.0 -626.7 Net proceeds related to reverse 49.9 214.8 repurchase agreements Net proceeds related to — 438.5 commercial paper Other 13.9 — Net cash flows provided by financing 305.0 164.1 activities Effect of exchange rate changes on cash, cash equivalents, 6.6 -6.7 restricted cash, and restricted cash equivalents Net change in cash, cash equivalents, restricted cash, and 80.2 -1,062.9 restricted cash equivalents Cash, cash equivalents, restricted cash, and restricted cash 10,625.2 5,054.6 equivalents, beginning of period Cash, cash equivalents, restricted cash, and restricted cash $ 10,705.4 $ 3,991.7 equivalents, end of period Reconciliation of cash, cash equivalents, restricted cash, and restricted cash equivalents to the Consolidated Balance Sheets Cash, cash equivalents, and restricted $ 3,299.2 $ 2,478.0 cash Restricted cash and restricted cash equivalents included in 7,406.2 1,513.7 funds held for clients Total cash, cash equivalents, restricted $ 10,705.4 $ 3,991.7 cash, and restricted cash equivalents Supplemental disclosures of cash flow information: Cash paid for interest $ 130.7 $ 130.3 Cash paid for income taxes, net of $ 187.2 $ 73.8 income tax refunds
Key Statistics: Employer Services: Change in pays per control - U.S. (a) PEO Services: Paid PEO worksite employees at end of period Average paid PEO worksite employees during the period Significant PEO expenses included Three Months Ended 2 0 within Operating September 30, 770,000 752,000 expenses 2026 771,000 % 2025 754,000 % ────────────────────────────────────────────────────────────────────────────── Zero-margin benefits $ 1,228.6 $ 1,131.0 pass-through costs Workers' compensation and state $ 145.1 $ 134.9 unemployment taxes
(a) U.S. pays per control represents the approximate growth in the number of employees on ADP clients' processed payrolls in the United States when measured on a same-store-sales basis for a subset of Employer Services clients ranging from small to large businesses. 8
Automatic Data Processing, Inc. and Subsidiari… Other Selected Financial Data, Continued (Dollars in millions, except where otherwise stated) (Unaudited) Client Funds Strategy - Supplement… Information Average Three Months investment Ended balances at September cost (in 30, billions) 2026 2025 % Change ────────────────────────────────────────────────────────────────────────────── Funds held $ 36.9 $ 34.9 6 % for clients Corporate extended $ 10.7 $ 9.0 19 % (a) Short-term financing to support Client $ 10.7 $ 9.0 19 % Funds Strategy (a) Average interest rates earned or paid (exclusive of realized gains or losses) Funds held 3.6 % 3.3 % for clients Corporate extended 4.0 % 3.5 % (a) Short-term financing to support Client 3.7 % 4.4 % Funds Strategy (a) Interest income (expense) Funds held $ 329.3 $ 286.8 15 % for clients Corporate extended 106.1 78.7 35 % (b) Short-term financing to support Client -102.5 -101.8 1 % Funds Strategy (b) Net Impact from Client $ 332.9 $ 263.7 26 % Funds Strategy
Funds Held for Clients - Supplemental Information Three Months Ended September 30, 2026 2025 Average balance - Client $ 6.9 $ 6.6 short Average balance - Client 15.0 14.5 extended Average balance - Client 15.0 13.8 long Average balance - Funds held for clients $ 36.9 $ 34.9 (in billions) Average interest rate - 3.1 % 3.8 % Client short Average interest rate - 3.9 % 3.1 % Client extended Average interest rate - 3.4 % 3.2 % Client long Average interest rate - Funds held for 3.6 % 3.3 % clients
Interest Income and Expense - Non-GAAP Reconciliation Three Months Ended September 30, 2026 2025 Corporate extended $ 106.1 $ 78.7 interest income (b) All other interest income 27.6 22.8 Total interest income on corporate funds (component of Other $ 133.7 $ 101.5 (income)/expense, net) Short-term financing to support Client $ 102.5 $ 101.8 Funds Strategy (b) All other interest expense 45.6 33.6 Total interest expense $ 148.1 $ 135.4
(a) We utilize a strategy by which we extend the maturities of our investment portfolio for funds held for clients and employ short-term financing arrangements to satisfy our short-term funding requirements related to client funds obligations. As part of our client funds investment strategy, we use daily collection of funds from our clients to satisfy other unrelated client funds obligations, rather than liquidating previously-collected client funds that have already been invested in available-for-sale securities.
(b) While “Corporate extended interest income” and “Short-term financing to support Client Funds Strategy,” related to our client funds investment strategy, are non-GAAP measures, management believes this information is beneficial to reviewing the financial statements of ADP. Management believes this information is beneficial as it allows the reader to understand the extended investment strategy for ADP's client funds assets, corporate investments, and short-term borrowings. 9
Automatic Data Processing, Inc. and Subsidiaries Consolidated Statement of Adjusted / Non-GAAP Financial Information (in millions, except per share amounts) (Unaudited) In addition to our GAAP results, we use the adjusted results and other non-GAAP metrics set forth in the table below to evaluate our operating performance in the absence of certain items and for planning and forecasting of future periods:
Adjusted Financial Measures U.S. GAAP Measures Adjusted EBIT Net earnings Adjusted provision for income taxes Provision for income taxes Adjusted net earnings Net earnings Adjusted diluted earnings per share Diluted earnings per share Adjusted effective tax rate Effective tax rate Organic constant currency Revenues Corporate extended interest income (see prior Interest income page) Short-term financing to Support Client Funds Interest expense Extended Strategy (see prior page) We believe that the exclusion of the identified items below helps us reflect the fundamentals of our underlying business model and analyze results against our expectations and against prior periods, and to plan for future periods by focusing on our underlying operations. We believe that the adjusted results provide relevant and useful information for investors because it allows investors to view performance in a manner similar to the method used by management and improves their ability to understand and assess our operating performance. The nature of these exclusions is for specific items that are not fundamental to our underlying business operations. Since these adjusted financial measures and other non-GAAP metrics are not measures of performance calculated in accordance with U.S. GAAP, they should not be considered in isolation from, as a substitute for, or superior to their corresponding U.S. GAAP measures, and they may not be comparable to similarly titled measures at other companies.
(a) In adjusted EBIT, we include the interest income earned on investments associated with our client funds extended investment strategy and interest expense on borrowings related to our client funds extended investment strategy as we believe these amounts to be fundamental to the underlying operations of our business model. The adjustments in the table above represent the interest income and interest expense that are not related to our client funds extended investment strategy and are labeled as “All other interest expense” and “All other interest income.” (b) 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. (c) The income tax provision was calculated based on the marginal rate in effect during the period of the adjustment. (d) The adjusted effective tax rate is calculated as our adjusted provision for income taxes divided by the sum of our adjusted net earnings plus our adjusted provision for income taxes.
The following table reconciles our reported growth rates to the non-GAAP measure of organic constant currency, which excludes the impact of acquisitions, the impact of dispositions, and the impact of foreign currency. The impact of acquisitions and dispositions is calculated by excluding the current year revenues of acquisitions until the one-year anniversary of the transaction and by excluding the prior year revenues of divestitures for the one-year period preceding the transaction. The impact of foreign currency is determined by calculating the current year results using foreign exchange rates consistent with the prior year. The PEO segment is not impacted by acquisitions, dispositions or foreign currency. ────────────────────────────────────────────────────────────────────────────── Three Months Ended September 30, Revenue growth consolidated: 2026 2025 Employer Services 6 % 7 % PEO Services 7 % 7 % Consolidated revenue growth as 6 % 7 % reported Adjustments: Impact of acquisitions — % -1 % Impact of foreign currency — % -1 % Consolidated revenue growth, organic 6 % 6 % constant currency Segment: Employer Services revenue growth as 6 % 7 % reported Adjustments: Impact of acquisitions — % -1 % Impact of foreign currency — % -1 % Employer Services revenue growth, 6 % 5 % organic constant currency
Autom… Data Proce… Inc. and Subsi… Fiscal 2026 to Fiscal 2027 Non-G… Guida… Recon… (in milli… except per share Fiscal amoun… Fiscal 2027 (Unau… 2026 Outlook ────────────────────────────────────────────────────────────────────────────── Earni… before income 120 to taxes $ 5,730.3 26.1 % 140 / bps margin (GAAP) All other inter… 141.0 60 bps 10 bps expen… (a) All other (40) (10) inter… -92.9 bps bps income (a) Optim… initi… -4.5 - - - FY26 Busin… align… 91.1 40 bps (40) progr… bps - FY26 Net (gain… on ADP -8.4 - - Ventu… inves… - FY26 Legal (10) settl… 18.0 10 bps bps - FY26 Adjus… EBIT $ 5,874.6 26.8 % 70 to margin 90 bps (Non-… Effec… tax 23.0 % 23.0 % rate (GAAP) Optim… initi… - - - FY26 Busin… align… - - progr… - FY26 Net (gain… on ADP - - Ventu… inves… - FY26 Legal settl… - - - FY26 Adjus… effec… tax 23.0 % 23.0 % rate (Non-… Dilut… earni… 12% to per $ 10.94 14% share (GAAP) Optim… initi… -0.01 - - FY26 Busin… align… 0.17 (2)% progr… - FY26 Net (gain… on ADP -0.02 - Ventu… inves… - FY26 Legal settl… 0.04 - - FY26 Adjus… dilut… earni… $ 11.12 10% to per 12% share (Non-… (a) In Adjus… EBIT, we inclu… the inter… income earned on inves… assoc… with our client funds exten… inves… strat… and inter… expen… on borro… relat… to our client funds exten… inves… strat… as we belie… these amoun… to be funda… to the under… opera… of our busin… model. The adjus… in the table above repre… the inter… income and inter… expen… that are not relat… to our client funds exten… inves… strat… and are label… as “All other inter… expen… and “All other inter… incom…
This document and other written or oral statements made from time to time by ADP may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Statements that are not historical in nature and which may be identified by the use of words like "outlook," “expects,” “assumes,” “projects,” “anticipates,” “estimates,” “we believe,” “could,” “is designed to” and other words of similar meaning, are forward- looking statements. These statements are based on management’s expectations and assumptions and depend upon or refer to future events or conditions and are subject to risks and uncertainties that may cause actual results to differ materially from those expressed. Factors that could cause actual results to differ materially from those contemplated by the forward-looking statements or that could contribute to such difference include: ADP's success in obtaining and retaining clients, and selling additional services to clients; the pricing of products and services; the success of our new solutions; our ability to respond successfully to changes in technology, including artificial intelligence; compliance with existing or new legislation or regulations; changes in, or interpretations of, existing legislation or regulations; overall market, political and economic conditions, including interest rate and foreign currency trends and inflation; competitive conditions; our ability to maintain our current credit ratings and the impact on our funding costs and profitability; security or cyber breaches, fraudulent acts, and system interruptions and failures, including as a result of artificial intelligence; employment and wage levels; availability of skilled associates; the impact of new acquisitions and divestitures; the impact of any uncertainties related to major natural disasters or catastrophic events; and supply-chain disruptions. ADP disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. These risks and uncertainties, along with the risk factors discussed under “Item 1A. Risk Factors” of our most recent Annual Report on Form 10-K, and in other written or oral statements made from time to time by ADP, should be considered in evaluating any forward-looking statements contained herein.
Full text with the tables
ADP Reports First Quarter Fiscal 2027 Results
• Revenues increased 6% compared to last year's first quarter to $5.5 billion;
6% organic constant currency
• Net earnings increased 11% to $1.1 billion, and adjusted net earnings
increased 11% to $1.1 billion
• Adjusted EBIT increased 12% to $1.5 billion, and adjusted EBIT margin
increased 130 basis points to 26.8%
• Diluted earnings per share ("EPS") increased 14% to $2.83; adjusted diluted
EPS increased 13% to $2.82
• Raising full year guidance for revenue and adjusted diluted EPS growth
ROSELAND, N.J. – October 28, 2026
– ADP (Nasdaq: ADP), a global leader in HR and payroll solutions, today
announced its first quarter fiscal 2027 financial results and updated its fiscal
2027 outlook.
First Quarter Fiscal 2027 Consolidated Results
Compared to last year’s first quarter, revenues increased 6% to $5.5 billion and
6% on an organic constant currency basis. Net earnings increased 11% to $1.1
billion, and adjusted net earnings increased 11% to $1.1 billion. Adjusted EBIT
increased 12% to $1.5 billion, and adjusted EBIT margin increased 130 basis
points to 26.8%. ADP’s effective tax rate for the quarter was 22.7% on both a
reported basis and an adjusted basis. Diluted EPS increased 14% to $2.83, and
adjusted diluted EPS increased 13% to $2.82.
"ADP is off to a strong start in fiscal 2027 with first quarter results that
reflect the resilience of our business model and the trust our clients continue
to place in us,” said Maria Black, President and Chief Executive Officer, ADP.
“The complexity of work is growing faster than employers can manage alone and
our clients are turning to us and our deep domain expertise to fundamentally
change how work gets done inside their organizations. We enter the rest of
fiscal 2027 well positioned to build on our current momentum."
“Our first quarter results exceeded our expectations across revenue growth,
adjusted EBIT margin expansion, and adjusted EPS growth," said Peter Hadley,
Chief Financial Officer, ADP. “Our ongoing commitment to a disciplined
investment approach is enabling us to drive our AI transformation forward, and
at the same time deliver strong financial results."
1
Adjusted EBIT, adjusted EBIT margin, adjusted net earnings, adjusted diluted
earnings per share, adjusted effective tax rate and organic constant currency
are all non-GAAP financial measures. Please refer to the accompanying financial
tables at the end of this release for a discussion of why ADP believes these
measures are important and for a reconciliation of non-GAAP financial measures
to their closest comparable GAAP financial measures.
First Quarter Segment Results
Employer Services – Employer Services offers a comprehensive range of global HCM
and Human Resources Outsourcing solutions. Compared to last year's first
quarter:
• Employer Services revenues increased 6% on a reported basis and 6% on an
organic constant currency basis
• U.S. pays per control increased 2%
• Employer Services segment margin increased 130 basis points
PEO Services – PEO Services provides comprehensive employment administration
outsourcing solutions. Compared to last year's first quarter:
• PEO Services revenues increased 7%
• PEO Services revenues excluding zero-margin benefits pass-throughs increased
4%
• Average worksite employees paid by PEO Services increased 2% to about 771,000
• PEO Services segment margin was flat
Included within the results of our segments above:
Interest on Funds Held for Clients – The safety, liquidity, and diversification
of ADP clients’ funds are the foremost objectives of the Company’s investment
strategy. Client funds are invested in accordance with ADP’s prudent and
conservative investment guidelines, and most of the investment portfolio is
rated AAA/AA. Compared to last year's first quarter:
• Interest on funds held for clients increased 15% to $329 million
• Average client funds balances increased 6% to $36.9 billion
• The average interest yield on client funds increased 30 basis points to 3.6%
2
Fiscal 2027 Outlook
Certain components of ADP’s fiscal 2027 outlook and related growth comparisons
exclude the impact of the following items and are discussed on an adjusted basis
where applicable. Please refer to the accompanying financial tables for a
reconciliation of these adjusted amounts to their closest comparable GAAP
measure.
• Fiscal 2026 pre-tax gain of about $5 million related to a partial reversal of
the workforce optimization initiatives from fiscal 2025 and 2024
• Fiscal 2026 pre-tax charges of about $91 million related to a business
alignment program
• Fiscal 2026 pre-tax gain of about $8 million related to gains on ADP Ventures'
investments
• Fiscal 2026 pre-tax net charges of about $18 million related to the settlement
of a legal matter
• Fiscal 2027 pre-tax gain of about $3 million related to gains on ADP Ventures'
investments
Consolidated Fiscal 2027 Outlook
• Revenue growth of about 6%
• Adjusted EBIT margin expansion of 70 to 90 basis points
• Adjusted effective tax rate of approximately 23%
• Diluted EPS growth of 12% to 14%
• Adjusted diluted EPS growth of 10% to 12%
Employer Services Segment Fiscal 2027 Outlook
• Employer Services revenue growth of about 6%
• Employer Services new business bookings growth of 4% to 7%
• Employer Services client revenue retention decrease of 10 to 30 basis points
• Increase in U.S. pays per control of about 1%
PEO Services Segment Fiscal 2027 Outlook
• PEO Services revenue growth of 5% to 7%
• PEO Services revenue, excluding zero-margin benefits pass-throughs, growth of
3% to 5%
• PEO Services average worksite employee count growth of about 2%
Client Funds Extended Investment Strategy Fiscal 2027 Outlook
The interest assumptions in our outlook are based on Fed Funds futures contracts
and various forward yield curves as of October 27, 2026. The Fed Funds futures
contracts are used in the client short and corporate cash interest income
outlook. A combination of various forward yield curves that reflect our
investment mix, resulting in a blended rate of 5.3%, was used to forecast new
purchase rates across the client and corporate extended and client long
portfolios over the remainder of the fiscal year.
• Interest on funds held for clients of $1.59 to $1.61 billion; this is based on
anticipated growth in client funds balances of 4% to 5% and an average yield
that is anticipated to increase to approximately 3.8%
• Total contribution from the client funds extended investment strategy of $1.59
to $1.61 billion
3
Fiscal 2027 Outlook
October 28,
July 29, 2026 2026
Fiscal 2026 Fiscal 2027 Fiscal 2027
(unaudited) Outlook (a) Outlook (a)
──────────────────────────────────────────────────────────────────────────────
Total ADP Revenues $21,947M 5 to 6% ~6%
Adj. EBIT 26.8% 70 to 90 bps 70 to 90 bps
Margin
Adj.
Effective 23.0% ~23% ~23%
Tax Rate
Adj. $11.12 9 to 11% 10 to 12%
Diluted EPS
Employer Revenues $14,831M 5 to 6% ~6%
Services
ES New
Business $2.2B 4 to 7% 4 to 7%
Bookings
Client (30) to (10) (30) to (10)
Revenue 92.1% bps bps
Retention
U.S. Pays 1% 0 to 1% ~1%
Per Control
PEO Revenues $7,128M 5 to 7% 5 to 7%
Services
Revenues Ex
Zero-Margin $2,521M 3 to 5% 3 to 5%
Pass-throu…
Average 762,000 ~2% ~2%
WSEs
Client Average
Funds Client Funds $40.4B 3 to 4% 4 to 5%
Interest Balances
Yield on
Client 3.4% ~3.7% ~3.8%
Funds
Portfolio
Client
Funds $1,355M $1,540 to $1,590 to
Interest $1,560M $1,610M
Revenue
Net Impact
from Client $1,545 to $1,590 to
Funds $1,315M $1,565M $1,610M
Extended
Strategy
(a) Outlook contemplates the anticipated impact of foreign currency in revenue
and operating results.
Investor Webcast Today
As previously announced, ADP will host a conference call for financial analysts
today, Wednesday, October 28, 2026 at 8:30 a.m. ET. The conference call will be
webcast live on ADP’s website at investors.adp.com and will be available for
replay following the call. A slide presentation accompanying the webcast is also
available at investors.adp.com/events-and-presentations . ADP news releases,
current financial information, SEC filings, and Investor Relations presentations
are posted to ADP’s website at investors.adp.com .
About ADP (Nasdaq: ADP)
ADP has been shaping the world of work with innovation and expertise for more
than 75 years. As a global leader in HR and payroll solutions, ADP continuously
works to solve business challenges for our clients and their workers, from
simple, easy-to-use tools for small businesses to fully integrated platforms for
global enterprises – and everything in between. Always Designing for People
means we're focused on just that – people . We use our unmatched AI-driven
insights and proven expertise to design innovative solutions that help people
achieve greater success at work. More than 1.1 million clients across 140+
countries rely on ADP's exceptional service to support their people and drive
their business forward. HR, Talent, Time Management, Benefits, Compliance, and
Payroll. Learn more at ADP.com
4
Autom…
Data
Proce…
Inc.
and
Subsi…
State…
of
Conso…
Earni…
(In
milli…
except Three
per Months
share Ended
amoun… Septem…
(Unau… 30,
Reven… 2026 2025
──────────────────────────────────────────────────────────────────────────────
Revenu…
other
than
intere…
on
funds $ 3,356.2 $ 3,203.5
held
for
clients
and PEO
revenu…
Intere…
on
funds 329.3 286.8
held
for
clients
PEO
revenu… 1,805.2 1,684.9
(a) (b)
(c)
Total 5,490.7 5,175.2
revenu…
Expen…
Costs
of
revenu…
Operat…
expens… 2,584.9 2,461.6
(b) (c)
Resear…
and 251.3 251.2
develo…
Deprec…
and 129.0 123.3
amorti…
Total
costs 2,965.2 2,836.1
of
revenu…
Sellin…
genera…
and 1,062.8 1,006.3
admini…
expens…
Intere… 148.1 135.4
expense
Total 4,176.1 3,977.8
expens…
Other
(incom… -140.3 -110.1
net
Earni…
before 1,454.9 1,307.5
income
taxes
Provis…
for 329.7 294.5
income
taxes
Net $ 1,125.2 $ 1,013.0
earni…
Basic
earnin… $ 2.84 $ 2.50
per
share
Diluted
earnin… $ 2.83 $ 2.49
per
share
Compo…
of
Other
(inco…
net:
Intere…
income
on $ -133.7 $ -101.5
corpor…
funds
Realiz…
(gains…
on 1.4 -1.5
availa…
securi…
net
Non-se…
compon…
of -5.1 -7.1
pension
income,
net
Net
(gain)…
on ADP -2.9 —
Ventur…
invest…
Other
(incom… $ -140.3 $ -110.1
net
(a) Professional Em ployer Organization (“PEO”) revenues are net of direct pass-
through costs, primarily consisting of payroll wages and payroll taxes of
$18,991.0 million and $18,534.4 million for the three months ended September 30,
2026 and 2025, respectively.
(b) PEO revenues and operating expenses include zero-margin benefits pass-
through costs of $1,228.6 million and $1,131.0 million for the three months
ended September 30, 2026 and 2025, respectively.
(c) PEO revenues and operating expenses include costs related t o workers'
compensation coverage and state unemployment taxes fo r worksite employee s of
$145.1 million and $134.9 million for the three months ended September 30, 2026
and 2025, respectively.
5
Automatic Data
Processing, Inc. and
Subsidiaries
Consolidated Balance
Sheets
(In millions, except per
share amounts)
(Unaudited)
Assets September 30, June 30,
Current assets: 2026 2026
──────────────────────────────────────────────────────────────────────────────
Cash and cash equivalents $ 3,277.0 $ 4,230.1
Accounts receivable, net
of allowance
for doubtful accounts of 3,524.0 3,521.1
$50.3 and
$44.5, respectively
Other current assets 1,291.6 852.1
Total current assets
before funds held 8,092.6 8,603.3
for clients
Funds held for clients 44,733.3 43,957.8
Total current assets 52,825.9 52,561.1
Property, plant and 644.3 641.3
equipment, net
Operating lease 382.5 388.6
right-of-use assets
Deferred contract costs 3,200.8 3,244.1
Other assets 1,463.1 1,420.5
Goodwill 3,281.1 3,284.4
Intangible assets, net 1,656.1 1,653.3
Total assets $ 63,453.8 $ 63,193.3
Liabilities and
Stockholders' Equity
Current liabilities:
Accounts payable $ 138.7 $ 162.5
Accrued expenses and
other current 3,329.3 3,218.5
liabilities
Accrued payroll and
payroll-related 579.2 1,039.4
expenses
Dividends payable 670.2 671.9
Short-term deferred 257.9 267.5
revenues
Obligations under reverse
repurchase 198.3 139.3
agreements (a)
Income taxes payable 153.1 110.3
Total current liabilities
before client 5,326.7 5,609.4
funds obligations
Client funds obligations 46,039.6 44,415.5
Total current liabilities 51,366.3 50,024.9
Long-term debt 4,965.3 4,964.1
Operating lease 308.0 306.7
liabilities
Other liabilities 1,127.1 1,141.4
Deferred income taxes 218.8 339.1
Long-term deferred 376.2 385.9
revenues
Total liabilities 58,361.7 57,162.1
Stockholders' equity:
Preferred stock, $1.00
par value: — —
authorized, 0.3 shares;
issued, none
Common stock, $0.10 par
value:
authorized, 1,000.0
shares; issued,
638.7 shares at September
30, 2026 and 63.9 63.9
June 30, 2026;
outstanding, 395.6 and
397.8 shares at September
30, 2026 and
June 30, 2026,
respectively
Capital in excess of par 3,145.1 3,067.9
value
Retained earnings 27,412.1 26,967.4
Treasury stock - at cost:
243.1 and 240.9 shares at
September 30, -23,958.6 -23,165.9
2026 and June 30, 2026,
respectively
Accumulated other
comprehensive -1,570.4 -902.1
income/(loss)
Total stockholders’ 5,092.1 6,031.2
equity
Total liabilities and
stockholders’ $ 63,453.8 $ 63,193.3
equity
(a) As of September 30, 2026, $195.2 million of long-term marketable securities,
and $3.1 million of cash and cash equivalents have been pledged as collateral
under the Company's reverse repurchase agreements. As of June 30, 2026, $138.6
million of long-term marketable securities, and $0.7 million of cash and cash
equivalents have been pledged as collateral under the Company's reverse
repurchase agreements.
6
Automatic Data Processing,
Inc. and Subsidiaries
Statements of Consolidated
Cash Flows
(In millions)
(Unaudited) Three Months Ended
Cash Flows from Operating September 30,
Activities: 2026 2025
──────────────────────────────────────────────────────────────────────────────
Net earnings $ 1,125.2 $ 1,013.0
Adjustments to reconcile
net earnings to
cash flows provided by
operating
activities:
Depreciation and 155.0 146.7
amortization
Amortization of deferred 302.6 298.6
contract costs
Deferred income taxes 80.6 64.8
Stock-based compensation 67.2 58.7
expense
Bad debt expense 16.4 10.3
Net pension income -2.2 -3.8
Net accretion of discounts
and
amortization of premiums -50.0 -22.5
on
available-for-sale
securities
Other 2.0 2.5
Changes in operating
assets and
liabilities:
(Increase)/decrease in
accounts -21.5 102.0
receivable
Increase in deferred -263.1 -271.4
contract costs
Increase in other assets -346.2 -342.4
Decrease in accounts -25.6 -38.0
payable
Decrease in accrued
expenses and other -389.4 -376.2
liabilities
Net cash flows provided by
operating 651.0 642.3
activities
Cash Flows from Investing
Activities:
Purchases of corporate and
client funds -2,665.7 -3,604.6
marketable securities
Proceeds from the sales
and maturities
of corporate and client 1,958.5 1,896.0
funds marketable
securities
Capital expenditures -52.7 -46.7
Additions to intangibles -117.1 -94.1
Acquisitions of
businesses, net of cash — 0.5
acquired
Other -5.4 -13.7
Net cash flows used in
investing -882.4 -1,862.6
activities
Cash Flows from Financing
Activities:
Net increase in client 1,654.0 573.1
funds obligations
Net cash
received/(distributed) 50.9 -11.5
from the
Internal Revenue Service
Payments of debt -0.3 -0.3
Repurchases of common -758.8 -366.0
stock
Net repurchases for
stock-based
compensation plans and -27.6 -57.8
stock purchase
plan
Dividends paid -677.0 -626.7
Net proceeds related to
reverse 49.9 214.8
repurchase agreements
Net proceeds related to — 438.5
commercial paper
Other 13.9 —
Net cash flows provided by
financing 305.0 164.1
activities
Effect of exchange rate
changes on cash,
cash equivalents, 6.6 -6.7
restricted cash, and
restricted cash
equivalents
Net change in cash, cash
equivalents,
restricted cash, and 80.2 -1,062.9
restricted cash
equivalents
Cash, cash equivalents,
restricted cash,
and restricted cash 10,625.2 5,054.6
equivalents,
beginning of period
Cash, cash equivalents,
restricted cash,
and restricted cash $ 10,705.4 $ 3,991.7
equivalents, end of
period
Reconciliation of cash,
cash
equivalents, restricted
cash, and
restricted cash
equivalents to the
Consolidated Balance
Sheets
Cash, cash equivalents,
and restricted $ 3,299.2 $ 2,478.0
cash
Restricted cash and
restricted cash
equivalents included in 7,406.2 1,513.7
funds held for
clients
Total cash, cash
equivalents, restricted $ 10,705.4 $ 3,991.7
cash, and restricted cash
equivalents
Supplemental disclosures
of cash flow
information:
Cash paid for interest $ 130.7 $ 130.3
Cash paid for income
taxes, net of $ 187.2 $ 73.8
income tax refunds
7
Automa…
Data
Proces…
Inc.
and
Subsid…
Other
Select…
Financ…
Data
(Dolla…
in
millio…
except
per Three
share Months
amount… Ended
(Unaud… Septemb…
Segment 30, %
revenu… 2026 2025 Change
──────────────────────────────────────────────────────────────────────────────
Employ… $ 3,685.4 $ 3,491.2 6 %
Servic…
PEO 1,808.1 1,687.5 7 %
Servic…
Other -2.8 -3.5 n/m
Total $ 5,490.7 $ 5,175.2 6 %
revenu…
Segment
earnin…
Employ… $ 1,343.5 $ 1,228.8 9 %
Servic…
PEO 234.4 218.8 7 %
Servic…
Other -123.0 -140.1 n/m
Total
pretax $ 1,454.9 $ 1,307.5 11 %
earnin…
Segment
margin
Employ… 36.5 % 35.2 % 1.3 %
Servic…
PEO 13.0 % 13.0 % 0.0 %
Servic…
Other n/m n/m n/m
Total
pretax 26.5 % 25.3 % 1.2 %
margin
Three
Months
Ended
Septemb…
30,
Earnin…
per 2026 2025 %
share Change
inform…
Net $ 1,125.2 $ 1,013.0 11 %
earnin…
Basic
weight…
average 396.5 405.1 -2 %
shares
outsta…
Basic
earnin… $ 2.84 $ 2.50 14 %
per
share
Diluted
weight…
average 397.6 406.5 -2 %
shares
outsta…
Diluted
earnin… $ 2.83 $ 2.49 14 %
per
share
Key Statistics:
Employer Services:
Change in pays per
control - U.S. (a)
PEO Services:
Paid PEO worksite
employees at end of
period
Average paid PEO
worksite employees
during the period
Significant PEO
expenses included Three Months Ended 2 0
within Operating September 30, 770,000 752,000
expenses 2026 771,000 % 2025 754,000 %
──────────────────────────────────────────────────────────────────────────────
Zero-margin benefits $ 1,228.6 $ 1,131.0
pass-through costs
Workers' compensation
and state $ 145.1 $ 134.9
unemployment taxes
(a) U.S. pays per control represents the approximate growth in the number of
employees on ADP clients' processed payrolls in the United States when measured
on a same-store-sales basis for a subset of Employer Services clients ranging
from small to large businesses.
8
Automatic
Data
Processing,
Inc. and
Subsidiari…
Other
Selected
Financial
Data,
Continued
(Dollars in
millions,
except
where
otherwise
stated)
(Unaudited)
Client
Funds
Strategy -
Supplement…
Information
Average Three Months
investment Ended
balances at September
cost (in 30,
billions) 2026 2025 % Change
──────────────────────────────────────────────────────────────────────────────
Funds held $ 36.9 $ 34.9 6 %
for clients
Corporate
extended $ 10.7 $ 9.0 19 %
(a)
Short-term
financing
to support
Client $ 10.7 $ 9.0 19 %
Funds
Strategy
(a)
Average
interest
rates
earned or
paid
(exclusive
of realized
gains or
losses)
Funds held 3.6 % 3.3 %
for clients
Corporate
extended 4.0 % 3.5 %
(a)
Short-term
financing
to support
Client 3.7 % 4.4 %
Funds
Strategy
(a)
Interest
income
(expense)
Funds held $ 329.3 $ 286.8 15 %
for clients
Corporate
extended 106.1 78.7 35 %
(b)
Short-term
financing
to support
Client -102.5 -101.8 1 %
Funds
Strategy
(b)
Net Impact
from Client $ 332.9 $ 263.7 26 %
Funds
Strategy
Funds Held for Clients -
Supplemental
Information
Three Months Ended
September 30,
2026 2025
Average balance - Client $ 6.9 $ 6.6
short
Average balance - Client 15.0 14.5
extended
Average balance - Client 15.0 13.8
long
Average balance - Funds held
for clients $ 36.9 $ 34.9
(in billions)
Average interest rate - 3.1 % 3.8 %
Client short
Average interest rate - 3.9 % 3.1 %
Client extended
Average interest rate - 3.4 % 3.2 %
Client long
Average interest rate -
Funds held for 3.6 % 3.3 %
clients
Interest Income and
Expense - Non-GAAP
Reconciliation
Three Months Ended
September 30,
2026 2025
Corporate extended $ 106.1 $ 78.7
interest income (b)
All other interest income 27.6 22.8
Total interest income on
corporate funds
(component of Other $ 133.7 $ 101.5
(income)/expense,
net)
Short-term financing to
support Client $ 102.5 $ 101.8
Funds Strategy (b)
All other interest expense 45.6 33.6
Total interest expense $ 148.1 $ 135.4
(a) We utilize a strategy by which we extend the maturities of our investment
portfolio for funds held for clients and employ short-term financing
arrangements to satisfy our short-term funding requirements related to client
funds obligations. As part of our client funds investment strategy, we use daily
collection of funds from our clients to satisfy other unrelated client funds
obligations, rather than liquidating previously-collected client funds that have
already been invested in available-for-sale securities.
(b) While “Corporate extended interest income” and “Short-term financing to
support Client Funds Strategy,” related to our client funds investment strategy,
are non-GAAP measures, management believes this information is beneficial to
reviewing the financial statements of ADP. Management believes this information
is beneficial as it allows the reader to understand the extended investment
strategy for ADP's client funds assets, corporate investments, and short-term
borrowings.
9
Automatic Data Processing, Inc. and
Subsidiaries
Consolidated Statement of Adjusted / Non-GAAP
Financial Information
(in millions, except per share amounts)
(Unaudited)
In addition to our GAAP results, we use the
adjusted results and other non-GAAP metrics
set
forth in the table below to evaluate our
operating
performance in the absence of certain items
and
for planning and forecasting of future
periods:
Adjusted Financial Measures U.S. GAAP Measures
Adjusted EBIT Net earnings
Adjusted provision for income taxes Provision for income taxes
Adjusted net earnings Net earnings
Adjusted diluted earnings per share Diluted earnings per share
Adjusted effective tax rate Effective tax rate
Organic constant currency Revenues
Corporate extended interest income (see prior Interest income
page)
Short-term financing to Support Client Funds Interest expense
Extended Strategy (see prior page)
We believe that the exclusion of the
identified
items below helps us reflect the fundamentals
of
our underlying business model and analyze
results
against our expectations and against prior
periods, and to plan for future periods by
focusing on our underlying operations. We
believe
that the adjusted results provide relevant and
useful information for investors because it
allows
investors to view performance in a manner
similar
to the method used by management and improves
their ability to understand and assess our
operating performance. The nature of these
exclusions is for specific items that are not
fundamental to our underlying business
operations.
Since these adjusted financial measures and
other
non-GAAP metrics are not measures of
performance
calculated in accordance with U.S. GAAP, they
should not be considered in isolation from, as
a
substitute for, or superior to their
corresponding
U.S. GAAP measures, and they may not be
comparable
to similarly titled measures at other
companies.
10
Three
Months
Ended
September As
30, 2026 2025 % Change Reported
──────────────────────────────────────────────────────────────────────────────
Net $ 1,125.2 $ 1,013.0 11 %
earnings
Adjustm…
Provisi…
for 329.7 294.5
income
taxes
All
other
interest 45.6 33.6
expense
(a)
All
other
interest -27.6 -22.8
income
(a)
Net
(gain)/…
on ADP -2.9 —
Venture…
investm…
(b)
Adjusted $ 1,470.0 $ 1,318.3 12 %
EBIT
Adjusted
EBIT 26.8 % 25.5 %
Margin
Provisi…
for $ 329.7 $ 294.5 12 %
income
taxes
Adjustm…
Net
(gain)/…
on ADP -0.7 —
Venture…
investm…
(c)
Adjusted
provisi…
for $ 329.0 $ 294.5 12 %
income
taxes
Adjusted
effecti… 22.7 % 22.5 %
tax rate
(d)
Net $ 1,125.2 $ 1,013.0 11 %
earnings
Adjustm…
Net
(gain)/…
on ADP -2.9 —
Venture…
investm…
(b)
Income
tax
provisi…
for net
(gain)/… 0.7 —
on ADP
Venture…
investm…
(c)
Adjusted
net $ 1,123.0 $ 1,013.0 11 %
earnings
Diluted $ 2.83 $ 2.49 14 %
EPS
Adjustm…
Net
(gain)/…
on ADP -0.01 —
Venture…
investm…
(b) (c)
Adjusted
diluted $ 2.82 $ 2.49 13 %
EPS
(a) In adjusted EBIT, we include the interest
income earned on investments associated with our
client funds extended investment strategy and
interest expense on borrowings related to our
client funds extended investment strategy as we
believe these amounts to be fundamental to the
underlying operations of our business model. The
adjustments in the table above represent the
interest income and interest expense that are not
related to our client funds extended investment
strategy and are labeled as “All other interest
expense” and “All other interest income.”
(b) 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.
(c) The income tax provision was calculated based
on the marginal rate in effect during the period
of the adjustment.
(d) The adjusted effective tax rate is calculated
as our adjusted provision for income taxes divided
by the sum of our adjusted net earnings plus our
adjusted provision for income taxes.
11
The following table reconciles
our
reported growth rates to the
non-GAAP
measure of organic constant
currency,
which excludes the impact of
acquisitions, the impact of
dispositions, and the impact of
foreign
currency. The impact of
acquisitions and
dispositions is calculated by
excluding
the current year revenues of
acquisitions until the one-year
anniversary of the transaction
and by
excluding the prior year revenues
of
divestitures for the one-year
period
preceding the transaction. The
impact of
foreign currency is determined by
calculating the current year
results
using foreign exchange rates
consistent
with the prior year. The PEO
segment is
not impacted by acquisitions,
dispositions or foreign currency.
──────────────────────────────────────────────────────────────────────────────
Three Months Ended
September 30,
Revenue growth consolidated: 2026 2025
Employer Services 6 % 7 %
PEO Services 7 % 7 %
Consolidated revenue growth as 6 % 7 %
reported
Adjustments:
Impact of acquisitions — % -1 %
Impact of foreign currency — % -1 %
Consolidated revenue growth,
organic 6 % 6 %
constant currency
Segment:
Employer Services revenue growth
as 6 % 7 %
reported
Adjustments:
Impact of acquisitions — % -1 %
Impact of foreign currency — % -1 %
Employer Services revenue growth, 6 % 5 %
organic constant currency
Note: Numbers may not foot due to rounding.
12
Autom…
Data
Proce…
Inc.
and
Subsi…
Fiscal
2026
to
Fiscal
2027
Non-G…
Guida…
Recon…
(in
milli…
except
per
share Fiscal
amoun… Fiscal 2027
(Unau… 2026 Outlook
──────────────────────────────────────────────────────────────────────────────
Earni…
before
income 120 to
taxes $ 5,730.3 26.1 % 140
/ bps
margin
(GAAP)
All
other
inter… 141.0 60 bps 10 bps
expen…
(a)
All
other (40) (10)
inter… -92.9 bps bps
income
(a)
Optim…
initi… -4.5 - -
- FY26
Busin…
align… 91.1 40 bps (40)
progr… bps
- FY26
Net
(gain…
on ADP -8.4 - -
Ventu…
inves…
- FY26
Legal (10)
settl… 18.0 10 bps bps
- FY26
Adjus…
EBIT $ 5,874.6 26.8 % 70 to
margin 90 bps
(Non-…
Effec…
tax 23.0 % 23.0 %
rate
(GAAP)
Optim…
initi… - -
- FY26
Busin…
align… - -
progr…
- FY26
Net
(gain…
on ADP - -
Ventu…
inves…
- FY26
Legal
settl… - -
- FY26
Adjus…
effec…
tax 23.0 % 23.0 %
rate
(Non-…
Dilut…
earni… 12% to
per $ 10.94 14%
share
(GAAP)
Optim…
initi… -0.01 -
- FY26
Busin…
align… 0.17 (2)%
progr…
- FY26
Net
(gain…
on ADP -0.02 -
Ventu…
inves…
- FY26
Legal
settl… 0.04 -
- FY26
Adjus…
dilut…
earni… $ 11.12 10% to
per 12%
share
(Non-…
(a) In
Adjus…
EBIT,
we
inclu…
the
inter…
income
earned
on
inves…
assoc…
with
our
client
funds
exten…
inves…
strat…
and
inter…
expen…
on
borro…
relat…
to our
client
funds
exten…
inves…
strat…
as we
belie…
these
amoun…
to
be
funda…
to the
under…
opera…
of our
busin…
model.
The
adjus…
in the
table
above
repre…
the
inter…
income
and
inter…
expen…
that
are
not
relat…
to our
client
funds
exten…
inves…
strat…
and
are
label…
as
“All
other
inter…
expen…
and
“All
other
inter…
incom…
13
Safe Harbor Statement
This document and other written or oral statements made from time to time by ADP
may contain “forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995. Statements that are not historical in
nature and which may be identified by the use of words like "outlook,"
“expects,” “assumes,” “projects,” “anticipates,” “estimates,” “we believe,”
“could,” “is designed to” and other words of similar meaning, are forward-
looking statements. These statements are based on management’s expectations and
assumptions and depend upon or refer to future events or conditions and are
subject to risks and uncertainties that may cause actual results to differ
materially from those expressed. Factors that could cause actual results to
differ materially from those contemplated by the forward-looking statements or
that could contribute to such difference include: ADP's success in obtaining and
retaining clients, and selling additional services to clients; the pricing of
products and services; the success of our new solutions; our ability to respond
successfully to changes in technology, including artificial intelligence;
compliance with existing or new legislation or regulations; changes in, or
interpretations of, existing legislation or regulations; overall market,
political and economic conditions, including interest rate and foreign currency
trends and inflation; competitive conditions; our ability to maintain our
current credit ratings and the impact on our funding costs and profitability;
security or cyber breaches, fraudulent acts, and system interruptions and
failures, including as a result of artificial intelligence; employment and wage
levels; availability of skilled associates; the impact of new acquisitions and
divestitures; the impact of any uncertainties related to major natural disasters
or catastrophic events; and supply-chain disruptions. ADP disclaims any
obligation to update any forward-looking statements, whether as a result of new
information, future events or otherwise, except as required by law. These risks
and uncertainties, along with the risk factors discussed under “Item 1A. Risk
Factors” of our most recent Annual Report on Form 10-K, and in other written or
oral statements made from time to time by ADP, should be considered in
evaluating any forward-looking statements contained herein.
ADP, the ADP logo, and Always Designing for People are trademarks of ADP, Inc.
Copyright © 2026 ADP, Inc. All rights reserved.
ADP - Investor Relations
Investor Relations Contacts:
Matthew Keating, CFA
973.974.3037
Matthew.Keating@adp.com
ADP - Media
Media Contact:
Allyce Hackmann
201.400.4583
Allyce.Hackmann@adp.com
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