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ADP · AUTOMATIC DATA PROCESSING INC

31 filings

10-K

ADP 10-K Annual Reports

AUTOMATIC DATA PROCESSING INC - 31 annual reports

Filing record · 2016–202610-K1110-Q328-K103

2026
AUTOMATIC DATA PROCESSING INC Annual Report, Year Ended Jun 30, 2026
Automatic Data Processing, Inc. (ADP) reported strong performance for the fiscal year ended June 30, 2026, with total revenues increasing by 7% to $21,947.4 million. This growth was driven by new business bookings, client retention, and increased interest income from client funds. The company demonstrated solid profitability, with an 8% increase in Earnings Before Income Taxes (EBIT) and an expansion in EBIT margin by 30 basis points. The company also returned significant capital to shareholders through dividends and share repurchases, totaling $4.7 billion. ADP continues to heavily invest in its Human Capital Management (HCM) technology, particularly in Artificial Intelligence (AI). The "ADP Assist" AI agents have been integrated across its payroll, benefits, HR, and compliance solutions, enhancing client workflows and improving efficiency. The company's strategic priorities of leading with technology, offering unmatched expertise, and leveraging global scale are proving effective in a dynamic market. While facing competitive pressures and regulatory complexities, ADP's diversified service offerings and strong client relationships position it for continued success.
Aug 5, 2026
2025
AUTOMATIC DATA PROCESSING INC Annual Report, Year Ended Jun 30, 2025
Automatic Data Processing, Inc. (ADP) reported strong financial performance for the fiscal year ended June 30, 2025, with total revenues increasing by 7% to $20.56 billion. This growth was driven by new client acquisitions, strong client retention, strategic acquisitions including WorkForce Software, and increased interest income on funds held for clients. The company demonstrated solid operational efficiency, with Earnings Before Income Taxes (EBIT) and Adjusted EBIT margins expanding by 50 basis points, reflecting effective cost management and revenue growth. ADP continues to prioritize innovation and client experience, evidenced by the launch of ADP Lyric HCM and strategic investments in artificial intelligence (AI) and machine learning. The company's commitment to shareholder returns is highlighted by $3.7 billion in cash returned through dividends and share repurchases. With a robust business model characterized by recurring revenue and low capital intensity, ADP is well-positioned to navigate market dynamics and continue delivering value to its clients and shareholders. The company's financial condition remains solid, supported by ample liquidity and strong cash flow generation, enabling continued investment in growth initiatives and a consistent return of capital to stockholders.
Aug 6, 2025
2024
AUTOMATIC DATA PROCESSING INC Annual Report, Year Ended Jun 30, 2024
Automatic Data Processing, Inc. (ADP) reported a solid fiscal year 2024, demonstrating 7% revenue growth to $19.2 billion, driven by new client acquisition, pricing increases, and strong client retention. The company highlighted its strategic priorities, focusing on leading with best-in-class HCM technology, providing unmatched expertise and outsourcing solutions, and leveraging its global scale. Investments in artificial intelligence, particularly the launch of ADP Assist, are a key area of innovation, aimed at enhancing client and employee experiences. ADP's financial health remains strong, with significant cash flow generation and a commitment to shareholder returns through dividends and share repurchases, totaling $3.4 billion in fiscal year 2024.
Aug 7, 2024
2023
AUTOMATIC DATA PROCESSING INC Annual Report, Year Ended Jun 30, 2023
Automatic Data Processing, Inc. (ADP) reported strong financial performance for the fiscal year ended June 30, 2023, characterized by robust revenue growth and increased profitability. The company demonstrated significant revenue expansion, with a 9% increase as reported and a 10% increase on an organic constant currency basis. This growth was driven by new business bookings, strong client retention, and a notable increase in interest income from funds held for clients, benefiting from higher interest rates. ADP's strategic focus on best-in-class HCM technology, unparalleled expertise and outsourcing, and leveraging global scale continues to yield positive results. The company surpassed the one million client milestone and saw improvements in key metrics like Employer Services client retention, reaching a record high. Profitability also saw a healthy increase, with diluted earnings per share growing by 17%. The company remains committed to shareholder returns through dividends and share repurchases, underscoring a solid financial position and a positive outlook for continued growth.
Aug 3, 2023
2022
AUTOMATIC DATA PROCESSING INC Annual Report, Year Ended Jun 30, 2022
Automatic Data Processing, Inc. (ADP) reported strong performance for the fiscal year ended June 30, 2022, with a 10% increase in total revenue to $16.5 billion. This growth was driven by strong client retention, an increase in "pays per control" (a measure of employees on ADP clients' payrolls), and robust new business bookings in the Employer Services segment. The Professional Employer Organization (PEO) segment also showed significant growth with a 15% increase in average worksite employees. The company generated substantial free cash flow, enabling significant returns to shareholders through dividends and share repurchases. ADP continues to invest in its cloud-based Human Capital Management (HCM) solutions, focusing on platform enhancements, user experience (UX) improvements, and data-driven insights through ADP DataCloud, positioning itself for continued long-term growth in a dynamic labor market. Financially, ADP demonstrated solid operational efficiency, with its Adjusted EBIT margin expanding by 90 basis points. Diluted EPS also saw a healthy increase of 15%. The company maintains a strong financial position with $1.4 billion in cash and cash equivalents and significant committed credit facilities, providing ample liquidity for operations, investments, and shareholder returns. ADP's strategic focus on innovation and client service, combined with its extensive scale and expertise, underpins its market leadership and ability to navigate evolving workplace trends.
Aug 3, 2022
2021
AUTOMATIC DATA PROCESSING INC Annual Report, Year Ended Jun 30, 2021
Automatic Data Processing Inc. (ADP) reported solid results for the fiscal year ending June 30, 2021. The company experienced a 3% year-over-year revenue growth, reaching $15 billion, driven by strong client retention, new business bookings, and a favorable foreign currency impact, partially offset by a decrease in interest earned on client funds. ADP's strategic focus on cloud-based Human Capital Management (HCM) solutions continues to yield positive results. Investments in innovation, such as next-generation platforms, the 'Roll by ADP' mobile payroll solution, and the ADP DataCloud analytics platform, are enhancing its market position. The company also saw strong growth in its Employer Services segment, with a 23% increase in new business bookings, and a 7% increase in PEO Services revenue. The company returned $3.0 billion to shareholders through dividends and share repurchases, underscoring its commitment to shareholder value.
Aug 4, 2021
2020
AUTOMATIC DATA PROCESSING INC Annual Report, Year Ended Jun 30, 2020
Automatic Data Processing, Inc. (ADP) reported its fiscal year results ending June 29, 2020. The company, a leader in cloud-based Human Capital Management (HCM) solutions, navigated the challenges of the COVID-19 pandemic by shifting to remote work and providing support to clients through various government relief programs. Despite a challenging macroeconomic environment that impacted new business bookings and client retention, ADP demonstrated resilience with a 3% increase in total revenues year-over-year, reaching $14.6 billion. Diluted earnings per share saw a notable increase of 9% to $5.70. The company continued to invest in its "next-gen" platforms and digital transformation initiatives, aiming to enhance its comprehensive suite of HCM and HR outsourcing solutions. ADP's financial performance was characterized by a solid business model with strong cash generation and low capital intensity. The company returned value to shareholders through share repurchases and dividends. The Employer Services segment remained the largest contributor to revenue, while the PEO segment showed robust growth. Management remains committed to its long-term strategy, focusing on innovation, service excellence, and distribution enhancements to drive sustainable value for stakeholders, even amidst ongoing economic uncertainties.
Aug 5, 2020
2019
AUTOMATIC DATA PROCESSING INC Annual Report, Year Ended Jun 30, 2019
Automatic Data Processing Inc. (ADP) reported solid performance for the fiscal year ended June 30, 2019. The company experienced a 6% increase in total revenues, reaching $14.18 billion, driven by strong retention and new business bookings in its Employer Services segment, alongside an 8% increase in worksite employees for its PEO Services segment. Net earnings grew by a notable 22% to $2.29 billion, with diluted earnings per share rising 23% to $5.24. This growth was supported by improved EBIT margins, benefiting from operating efficiencies derived from transformation initiatives, increased interest on client funds, and the sale of assets. ADP continues to strategically invest in its cloud-based Human Capital Management (HCM) solutions and next-generation platforms. The company is focused on innovation, client experience, and expanding its global reach. Shareholder returns remained a priority, with approximately $1.3 billion returned via dividends and $940 million through share repurchases during the fiscal year. The company's financial position remains strong, and it anticipates continued positive momentum into fiscal 2020.
Aug 9, 2019
2018
AUTOMATIC DATA PROCESSING INC Annual Report, Year Ended Jun 30, 2018
Automatic Data Processing, Inc. (ADP) in its fiscal year ended June 29, 2018, reported total revenues of $13.3 billion, an 8% increase year-over-year. This growth was driven by an 8% increase in new business bookings and a 5% revenue increase in the Employer Services segment, alongside a strong 12% increase in the PEO Services segment. Diluted earnings per share (EPS) decreased by 5% to $3.66, primarily due to significant transformation initiatives and voluntary early retirement program charges totaling over $400 million. However, adjusted diluted EPS saw a substantial 18% increase to $4.35, reflecting underlying operational improvements and the benefits of the Tax Cuts and Jobs Act. The company continued its shareholder-friendly capital allocation, increasing its dividend by 21% and repurchasing approximately $2.1 billion in shares.
Aug 3, 2018
2017
AUTOMATIC DATA PROCESSING INC Annual Report, Year Ended Jun 30, 2017
Automatic Data Processing, Inc. (ADP) reported strong financial performance for the fiscal year ended June 30, 2017. The company experienced revenue growth of 6%, driven by increases in its Employer Services and PEO Services segments, reflecting successful new business bookings and a healthy client retention rate. ADP demonstrated solid profitability, with net earnings from continuing operations increasing by 16% and diluted earnings per share rising by 18% year-over-year. The company also continued its commitment to shareholder returns, repurchasing approximately $1.3 billion in shares and increasing dividends for the 42nd consecutive year. Strategic initiatives, including investments in cloud-based HCM solutions and the acquisition of The Marcus Buckingham Company, position ADP for continued growth in the human capital management market.
Aug 4, 2017
2016
AUTOMATIC DATA PROCESSING INC Annual Report, Year Ended Jun 30, 2016
Automatic Data Processing, Inc. (ADP) reported robust performance in its fiscal year ending June 30, 2016. The company, a leading provider of Human Capital Management (HCM) solutions, saw a notable 7% increase in total revenues, reaching $11.7 billion, with an 8% growth on a constant dollar basis, indicating strong underlying business momentum. This growth was primarily driven by strong new business bookings, up 12% year-over-year, and the increasing demand for solutions that help businesses comply with regulations like the Affordable Care Act (ACA). ADP demonstrated solid profitability with an 8% increase in net earnings from continuing operations to $1.5 billion, and diluted earnings per share (EPS) grew by 12% to $3.25. The company continued its commitment to shareholder returns by repurchasing $1.2 billion in shares and returning over $900 million in dividends, marking the 41st consecutive year of dividend per share increase. Furthermore, ADP strengthened its capital structure by issuing $2 billion in senior notes, signaling a strategic move to enhance shareholder returns over the long term.
Aug 5, 2016
2015
AUTOMATIC DATA PROCESSING INC Annual Report, Year Ended Jun 30, 2015
Automatic Data Processing, Inc. (ADP) reported solid financial performance for the fiscal year ended June 30, 2015, with total revenues growing 7% to $10.94 billion and net earnings from continuing operations increasing 11% to $1.38 billion. The company's strategic focus on Human Capital Management (HCM) solutions, including cloud-based offerings and HR Business Process Outsourcing, is driving this growth. A significant strategic move during the year was the spin-off of its Dealer Services business into CDK Global, Inc., allowing ADP to concentrate further on its core HCM strategy. ADP's two main segments, Employer Services and Professional Employer Organization (PEO) Services, both demonstrated strong revenue growth. Employer Services saw a 5% increase driven by new business bookings and client retention, while PEO Services experienced a substantial 17% revenue jump due to an increase in worksite employees. The company also highlighted strong new business bookings and continued client retention rates, reinforcing the resilience of its recurring revenue model. ADP returned significant value to shareholders through dividends and share repurchases, underscoring its commitment to shareholder returns.
Aug 7, 2015
2014
AUTOMATIC DATA PROCESSING INC Annual Report, Year Ended Jun 30, 2014
Automatic Data Processing, Inc. (ADP) reported solid financial performance for the fiscal year ended June 30, 2014. The company achieved an 8% increase in total revenues, reaching $12.2 billion, driven by growth across its Employer Services, PEO Services, and Dealer Services segments. Net earnings from continuing operations saw an 11% increase to $1.5 billion, translating to diluted earnings per share of $3.11. The company highlighted strong client retention rates and consistent cash flow generation, underscoring the resilience of its business model. A significant strategic development during the period was the Board of Directors' approval to spin off the Dealer Services business into an independent publicly traded company, expected to be completed by October 2014. This move is intended to allow both entities to focus on their respective core businesses and strategic opportunities. ADP also continued its commitment to shareholder returns, repurchasing approximately $667 million in stock and increasing its dividend for the 39th consecutive year.
Aug 8, 2014
2013
AUTOMATIC DATA PROCESSING INC Annual Report, Year Ended Jun 30, 2013
Automatic Data Processing, Inc. (ADP) reported solid revenue growth in fiscal year 2013, with total revenues increasing by 7% to $11.31 billion. This growth was driven by performance across all three segments: Employer Services, PEO Services, and Dealer Services. The company's strategic focus on cloud-based HCM solutions and expanding its global presence is evident in its continued investment in technology and salesforce productivity, which led to strong new business bookings. While net earnings from continuing operations saw a slight decrease of 1% to $1.36 billion, primarily due to a goodwill impairment charge of $42.7 million related to the ADP AdvancedMD business and a decline in interest income from client funds due to lower interest rates, the adjusted earnings present a more favorable picture. Adjusted net earnings increased by 5% to $1.41 billion, highlighting the underlying operational strength. ADP demonstrated a strong commitment to shareholder returns, repurchasing approximately $647 million in stock and returning $805 million through dividends. The company maintains a robust financial position with ample liquidity and a strong balance sheet. Despite facing challenges such as a lower interest rate environment impacting client fund interest income and ongoing investments in technology, ADP's diversified business model, high client retention rates, and market leadership position in human capital management solutions suggest resilience and continued growth potential. Investors should note the company's ongoing investment in systems development and programming, aiming to further enhance its cloud-based offerings and overall service capabilities.
Aug 19, 2013
2012
AUTOMATIC DATA PROCESSING INC Annual Report, Year Ended Jun 30, 2012
Automatic Data Processing, Inc. (ADP) for the fiscal year ended June 30, 2012, reported total revenues of $10.7 billion, representing an 8% increase year-over-year. This growth was primarily driven by strong performance across its key segments: Employer Services (up 7%), Professional Employer Organization (PEO) Services (up 15%), and Dealer Services (up 10%). Net earnings from continuing operations increased by 11% to $1.4 billion, with diluted EPS rising 12% to $2.82. A notable event during the year was a $66.0 million gain from the sale of assets related to a third-party expense management platform, which contributed to EPS growth. The company's financial health remains robust, characterized by strong cash flow from operations ($1.9 billion), consistent client retention rates (91%), and a solid balance sheet with $1.7 billion in cash and marketable securities. ADP continued to return value to shareholders through dividends and share repurchases, highlighting its commitment to shareholder returns. The company is strategically focused on growing its cloud-based Human Capital Management (HCM) solutions, scaling its HR Business Process Outsourcing (BPO) services, expanding its global HCM offerings, and deepening its solutions in key adjacent markets.
Aug 20, 2012
2011
AUTOMATIC DATA PROCESSING INC Annual Report, Year Ended Jun 30, 2011
Automatic Data Processing, Inc. (ADP) demonstrated robust performance in its fiscal year ended June 30, 2011, with a notable 11% increase in consolidated revenues to $9.88 billion. This growth was driven by strong contributions across all its major segments: Employer Services, PEO Services, and Dealer Services. The company successfully navigated a challenging economic environment, showcasing resilient client retention and strategic acquisitions, including Cobalt Group, which significantly boosted Dealer Services revenue. ADP also returned substantial value to shareholders through dividends and share repurchases, underscoring its commitment to capital return while continuing to invest in innovation and international expansion. The company's strategic focus on strengthening its core offerings, expanding its HR Business Process Outsourcing (BPO) capabilities, and pursuing international growth appears to be yielding positive results. With solid operating cash flow and a healthy balance sheet, ADP is well-positioned to continue its growth trajectory and market leadership in business outsourcing solutions.
Aug 24, 2011
2010
AUTOMATIC DATA PROCESSING INC Annual Report, Year Ended Jun 30, 2010
Automatic Data Processing, Inc. (ADP) filed its 10-K for the fiscal year ended June 29, 2010, revealing a year of resilience amidst a challenging economic environment. Consolidated revenues saw a modest 1% increase to $8.9 billion, largely influenced by favorable foreign currency fluctuations and growth in its Professional Employer Organization (PEO) services. However, earnings from continuing operations before income taxes and net earnings from continuing operations declined by 2% and 9%, respectively, primarily impacted by lower interest income on client funds due to historically low interest rates and increased expenses in its PEO segment. The company highlighted its strategic focus on strengthening its core business, growing its HR Business Process Outsourcing (BPO) offerings, international expansion, entering adjacent markets, and improving pretax margins. Despite the economic headwinds, ADP demonstrated strong client retention, particularly in its Employer Services segment, and continued to return capital to shareholders through share repurchases and dividends, maintaining its history of consistent dividend increases. Acquisitions in Dealer Services (Cobalt) and benefits solutions (Workscape) were completed in August 2010, signaling a forward-looking strategy for growth. Key risk factors identified include changes in laws and regulations, security and privacy breaches, system disruptions, technological adaptation challenges, and the impact of political and economic factors, including currency fluctuations. Management expressed confidence in the company's solid financial condition, liquidity, and robust business model, characterized by approximately 90% recurring revenues.
Aug 25, 2010
2009
AUTOMATIC DATA PROCESSING INC Annual Report, Year Ended Jun 30, 2009
For the fiscal year ended June 30, 2009, Automatic Data Processing, Inc. (ADP) demonstrated resilience amidst challenging economic conditions, reporting a 1% increase in consolidated revenues to $8.87 billion. This growth was primarily driven by its Employer Services and PEO Services segments, which saw revenue increases of 4% and 12% respectively. Despite headwinds from rising unemployment and declining auto sales impacting the Dealer Services segment, ADP's diversified business model and strong recurring revenue base of approximately 90% provided stability. The company successfully increased its earnings from continuing operations before income taxes by 5% and net earnings from continuing operations by 14%, resulting in a 20% rise in diluted earnings per share to $2.63. This performance was supported by cost-saving initiatives and a lower effective tax rate due to favorable tax settlements. ADP also continued to focus on its strategic growth program, including international expansion and strengthening its core offerings, while maintaining a solid liquidity position and returning capital to shareholders through share repurchases and dividends.
Aug 28, 2009
2008
AUTOMATIC DATA PROCESSING INC Annual Report, Year Ended Jun 30, 2008
Automatic Data Processing, Inc. (ADP) reported strong financial performance for the fiscal year ended June 30, 2008, with consolidated revenues from continuing operations growing 13% to $8.78 billion. Diluted earnings per share from continuing operations saw a significant increase of 20% to $2.20, reflecting effective cost management and share repurchases. The company's core Employer Services segment continued its robust growth, complemented by strong performance in PEO Services and Dealer Services. ADP highlighted its strategic focus on high-growth, under-penetrated markets, evidenced by the divestiture of non-strategic businesses in prior periods. The company's balance sheet remains solid, with substantial cash and marketable securities. ADP reiterated its commitment to returning excess cash to stockholders through share buybacks and dividends, with a significant repurchase of common stock during the fiscal year. The company is well-positioned to navigate the economic environment, emphasizing its diversified business model and commitment to innovation.
Aug 29, 2008
2007
AUTOMATIC DATA PROCESSING INC Annual Report, Year Ended Jun 30, 2007
Automatic Data Processing, Inc. (ADP) reported strong performance for the fiscal year ended June 30, 2007. Total revenues grew by 14% to $7.8 billion, driven by significant growth across all its core segments: Employer Services, PEO Services, and Dealer Services. Employer Services, the largest segment, saw an 11% revenue increase, while PEO Services and Dealer Services experienced even more robust growth of 26% and 14%, respectively. The company also demonstrated improved profitability, with earnings from continuing operations before income taxes increasing by 19% and net earnings from continuing operations up by 21%. Diluted earnings per share from continuing operations saw a substantial 26% increase to $1.83. This performance was bolstered by strategic initiatives, including a focus on "beyond payroll" services, successful acquisitions, and disciplined cost management. ADP also successfully completed the spin-off of its Brokerage Services Group, allowing for a more focused business strategy and enhanced shareholder value. The company continued its share repurchase program, reflecting confidence in its future growth prospects.
Aug 29, 2007
2006
AUTOMATIC DATA PROCESSING INC Annual Report, Year Ended Jun 30, 2006
Automatic Data Processing, Inc. (ADP) reported strong financial performance for the fiscal year ended June 30, 2006, with consolidated revenues growing 11% to $8.88 billion. This growth was primarily driven by its Employer Services segment, which saw a 10% increase in revenue, bolstered by strong new business sales and improved client retention. The company also successfully divested its Claims Services business for $975 million, generating a significant gain and strengthening its cash position. Looking ahead, ADP announced a plan to spin off its Brokerage Services Group into a separate, publicly traded company, aiming to streamline operations and allow each entity to focus on its respective markets. The company's outlook for fiscal year 2007 projects continued revenue growth of approximately 10% and earnings per share growth of 17-20%, reflecting confidence in its core businesses and strategic initiatives.
Aug 30, 2006
2005
AUTOMATIC DATA PROCESSING INC Annual Report, Year Ended Aug 31, 2005
Automatic Data Processing, Inc. (ADP) closed fiscal 2005 (year ended June 30, 2005) with a strong year by its own account. Total revenues rose 10% to $8,499.1 million, earnings before income taxes grew 12% to $1,677.9 million, and net earnings increased 13% to $1,055.4 million. Diluted EPS climbed 15% to $1.79, helped by a 14.1 million share repurchase program that reduced the diluted share count to 590.0 million from 598.7 million. Employer Services, the largest segment at $5,199.9 million of revenue, grew 8%, driven by new business sales up 13% to roughly $840 million of annualized recurring revenue, a pricing increase of about 2%, and higher client funds balances. Brokerage Services and Dealer Services grew 5% and 10%, respectively. The main new item for investors is the November 2004 acquisition of Bank of America's U.S. Clearing and BrokerDealer business, which created the Securities Clearing and Outsourcing Services segment. That segment contributed $61.5 million of revenue but posted a $23.6 million pre-tax loss and used $193.0 million of operating cash flow, largely from segregating securities for customers. Management excluded this subsidiary from its internal control assessment, which covers about 1% of revenues and 5% of assets. Balance sheet size is heavily influenced by client funds: total assets reached $27,615.4 million, of which $17,897.5 million is funds held for clients, offset by $17,859.2 million of client funds obligations. Corporate cash and marketable securities were $2,119.1 million, and long-term debt was minimal at $75.8 million. Looking forward, management guided fiscal 2006 to high single-digit revenue growth and diluted EPS growth of 15% to 20% on a stock-compensation-expensed basis, or $1.81 to $1.88 per share. The company adopted SFAS 123R effective July 1, 2005, which is expected to reduce EPS by $0.18 to $0.19 in fiscal 2006. A pending 10-K item is a legacy trade secret lawsuit (UCS), which ADP won at arbitration and is now on appeal; management believes it should prevail.
Aug 31, 2005
2004
AUTOMATIC DATA PROCESSING INC Annual Report, Year Ended Aug 30, 2004
Automatic Data Processing (ADP) reported fiscal 2004 (year ended June 30, 2004) with total revenues up 9% to $7.75 billion, but earnings declined: earnings before income taxes fell 9% to $1.49 billion, net earnings fell 8% to $936 million, and diluted EPS fell 7% to $1.56. Management attributes the profit decline mainly to roughly $170 million of 'incremental investments' in associate compensation, salesforce expansion, and product maintenance, plus lower interest rates that cut investment income on client and corporate funds by about $90 million. Underlying revenue growth excluding acquisitions and divestitures was about 6%, and Employer Services (the largest segment, about 62% of revenue) grew 10%, while Brokerage Services grew 3% and Dealer Services grew 9%. The balance sheet remains very strong, with about $2.1 billion in cash and marketable securities, long-term debt of only $76 million (a debt-to-equity ratio of about 1.4%), and no borrowings under its $4.5 billion of revolving credit facilities. ADP returned capital aggressively, repurchasing about 15.8 million shares for roughly $649 million and paying dividends of $0.54 per share (up from $0.475). Operating cash flow was $1.4 billion, down from $1.6 billion. A significant portion of the balance sheet reflects funds held for clients ($12.9 billion) offset by client funds obligations ($12.8 billion), which are payroll-tax pass-throughs rather than corporate earnings. Management guides to mid-single-digit revenue growth and double-digit EPS growth for fiscal 2005, though it expects slower early-year growth. The pending acquisition of Bank of America's U.S. Clearing and BrokerDealer Services divisions, expected to close by calendar year-end 2004, is a key strategic move into third-party clearing. Investors should watch sensitivity to interest rates, the pace of new business sales, pays-per-control trends, and whether the incremental investment spending translates into the promised growth acceleration.
Aug 30, 2004
2003
AUTOMATIC DATA PROCESSING INC Annual Report, Year Ended Sep 12, 2003
Automatic Data Processing (ADP) reported fiscal 2003 (year ended June 30, 2003) results that showed modest top-line growth but weaker profitability. Total revenues rose 2% to $7.15 billion, led by Employer Services (up 5% to $4.4 billion), while Brokerage Services fell 9% on industry consolidation and lower trade and proxy volumes. Earnings before income taxes declined 8% to $1.65 billion and diluted EPS fell 4% to $1.68, held up somewhat by share repurchases of about 27.4 million shares for roughly $940 million. Lower interest rates (average yield on client and corporate funds down to 3.9% from 4.9%) were a significant drag on interest income. Management guided fiscal 2004 to mid-single-digit revenue growth and diluted EPS of $1.50 to $1.60, below fiscal 2003's $1.68, citing a continued weak economy, lower interest income of $60 to $80 million, and incremental investments of $90 to $100 million. Growth drivers include the June 2003 acquisition of ProBusiness Services (about $517 million cash, expected to add roughly $150 million of fiscal 2004 revenue), the PEO business, and Dealer Services, which grew 12%. The balance sheet remains very strong, with about $2.3 billion in cash and marketable securities, long-term debt of only $85 million, and shareholders' equity of $5.4 billion. Operating cash flow was about $1.6 billion. Investors should note the roughly $2.0 billion of goodwill, the pending $56 million UCS trade-secret arbitration (decision expected October 2003), and the continued sensitivity of earnings to interest rates.
Sep 12, 2003
2002
AUTOMATIC DATA PROCESSING INC Annual Report, Year Ended Sep 16, 2002
Automatic Data Processing, Inc. (ADP) reported fiscal 2002 (year ended June 30, 2002) results that reflected continued profitability despite a weak economy. Total revenues grew 2% to $7.0 billion, with net earnings rising 19% to $1.10 billion and diluted EPS up to $1.75 from $1.44 (a 22% increase as reported, though management cites roughly 10% growth on a comparable, pro forma basis excluding the prior-year Bridge write-off and goodwill amortization). Pre-tax margin improved to 25.5%, driven by cost containment, operating efficiencies, and a shift in the investment portfolio, while return on equity was 22.4%. Management attributed slower top-line growth to bankruptcies reducing client retention, fewer employees on client payrolls, weak brokerage activity, and sharply lower U.S. interest rates that reduced earnings on client funds. The balance sheet remains very strong, with about $2.7 billion in cash and marketable securities against long-term debt of only $91 million, a debt-to-equity ratio of roughly 2%. ADP returned significant capital to shareholders, repurchasing about 17.4 million shares at an average near $50 and paying dividends of $0.4475 per share, up from $0.395. Operating cash flow was $1.53 billion. Management forecasts another record year in fiscal 2003 with mid-single-digit revenue and EPS growth, and capital spending near $150 million. Key risks include continued weakness in employment levels and small-business formation, interest rate exposure on the roughly $11 billion of client funds and corporate investments (a 25 basis point move implies about a $9 million pre-tax impact), pricing pressure in brokerage, and a pending trade secret lawsuit (UCS) related to the CARMan dealer software, which management believes it will defend successfully. Note that the filing incorporates much of its financial detail by reference to the 2002 Annual Report, and that 2001 results include a $90 million non-recurring write-off of the Bridge Information Systems investment.
Sep 16, 2002
2000
AUTOMATIC DATA PROCESSING INC Annual Report, Year Ended Jun 30, 2000
Automatic Data Processing (ADP) reported fiscal 2000 (year ended June 30, 2000) as a record year, with total revenues up 13% to $6.29 billion and net earnings rising 21% to $840.8 million. Diluted EPS reached $1.31, up 19% from $1.10 in fiscal 1999 (the prior year was burdened by about $0.03 of non-recurring charges). Pre-tax margin expanded to 20.5% from 19.3% (pre-charges), and management attributed the gains to market penetration, expanded products, higher transaction volumes, and operating efficiencies. Fiscal 2000 marked the company's 39th consecutive year of double-digit EPS growth since going public in 1961. Segment performance was led by Brokerage Services, where revenues rose 29% to $1.48 billion and operating margin improved to 23%, aided by record trade volumes and ADP's position as a major processor of online trades. Employer Services, the largest unit at $3.62 billion in revenue (up 11%), saw its operating margin rise to 21.4%. Dealer Services was roughly flat at $736 million. The company also absorbed a roughly $32 million pre-tax loss from selling about $2.6 billion of tax-exempt investments to shift into taxable instruments, a move expected to lift future returns but also raise the effective tax rate (34.8% in fiscal 2000). The balance sheet remains very strong, with about $2.5 billion in cash and marketable securities, shareholders' equity of $4.58 billion, and long-term debt of only $132 million (roughly 3% of equity). Operating cash flow was $1.07 billion. Management guided to fiscal 2001 revenue growth of 13% to 15% and diluted EPS growth of 16% to 18%. Investors should note that total assets of $16.85 billion are dominated by client funds held in trust, which is an operating feature of ADP's payroll tax services rather than corporate leverage.
Sep 12, 2000
1999
AUTOMATIC DATA PROCESSING INC Annual Report, Year Ended Jun 30, 1999
Automatic Data Processing, Inc. (ADP) reported a strong fiscal 1999 (year ended June 30, 1999). Revenues rose 12% to $5.54 billion, and reported net earnings were $696.8 million, or $1.10 diluted EPS. Excluding roughly $17 million in after-tax non-recurring charges tied to acquisitions and dispositions, management says pretax earnings grew 20% and diluted EPS grew 15% to $1.13. Employer Services and Brokerage Services, the two largest segments, together make up over 75% of revenue, and Employer Services grew 15% while Brokerage Services grew only 5% after divestitures. Management reports a 19.3% pretax margin before non-recurring items, up from 18.1% the prior year, helped by disposing of lower-margin businesses. The balance sheet is conservative. Cash and marketable securities were about $2.2 billion, shareholders' equity exceeded $4.0 billion, and long-term debt was $146 million, or roughly 4% of equity. Operating cash flow was $854 million. ADP spent $178 million on capital expenditures, $107 million on acquisitions, and $85 million repurchasing shares. Dividends were raised 18% to $.295 per share, the company's 25th consecutive annual increase. Key strategic moves included the Vincam PEO acquisition, which made ADP the second-largest PEO in the U.S., and the Dealer Solutions and OMR Systems acquisitions. The filing flags several watch items. Revenue growth benefited from acquisitions, while dispositions removed about $270 million of annual revenue in fiscal 1999. Management expects fewer dispositions going forward. Client retention in some businesses has not yet reflected service-quality improvements, and rising effective tax rates (35.7% reported, 33.2% excluding non-recurring items) are a headwind. Interest-rate sensitivity is also significant because ADP invests about $6 billion of client and corporate funds. For fiscal 2000, management guided to about 10% revenue growth and 13% to 15% diluted EPS growth before non-recurring items. The company reported no material legal proceedings and noted that Year 2000 remediation costs were not expected to be material.
Sep 21, 1999
1998
AUTOMATIC DATA PROCESSING INC Annual Report, Year Ended Jun 30, 1998
Automatic Data Processing, Inc. (ADP) reported a strong fiscal 1998 (year ended June 30, 1998), with revenue rising 17% to $4.8 billion and basic earnings per share up 13% to $2.04 (from $1.76 in fiscal 1997, or roughly 17% growth excluding a small 1997 non-recurring charge, per management). Net earnings reached $605.3 million, return on equity was 20.1%, and management highlighted its 37th consecutive year of double-digit EPS growth and 148th consecutive quarter of record revenue and EPS. Employer Services, the largest segment at $2.7 billion in revenue (up 21%), drove much of the growth, with internal growth accelerating to about 14%. Brokerage Services grew 23% to $1.1 billion, and Dealer Services grew 7% to $698 million, with margins under pressure. The balance sheet remained very conservative. Cash and marketable securities totaled about $1.7 billion, shareholders' equity rose to $3.4 billion, and long-term debt fell to $192 million after more than half of the zero coupon convertible notes converted to equity, bringing the long-term debt-to-equity ratio to about 6%. Operating cash flow exceeded $850 million, and capital expenditures were about $199 million. Growth was supported by acquisitions, including Audatex (European auto claims), the Royal Bank of Canada payroll business, Mercer's benefits administration unit, and a Brazilian payroll firm, with about $338 million in cash spent on acquisitions during the year. Management guided to another year of double-digit revenue growth and 13% to 16% EPS growth in fiscal 1999. For investors, the filing points to a high-margin, recurring-revenue franchise with a long client retention record, a sound balance sheet, and disciplined capital returns (dividends raised to $.53 per share annualized, plus share repurchases). Key risks flagged in the filing include the effective tax rate rising to 31.5%, a Dealer Services margin decline, a pending divestiture of the $190 million revenue front-office brokerage business, Year 2000 remediation costs (over $30 million spent in fiscal 1998), and reliance on the interest float from roughly $6.5 billion of collected but unremitted payroll tax funds.
Sep 23, 1998
1996
AUTOMATIC DATA PROCESSING INC Annual Report, Year Ended Jun 30, 1996
Automatic Data Processing, Inc. (ADP) reported fiscal 1996 (year ended June 30, 1996) record results, with revenue up 23% to $3.57 billion and net earnings up 15% to $454.7 million, or $1.57 per share (up 14%). The company marked its 35th consecutive year of double-digit EPS growth. Roughly 6 percentage points of the revenue growth came from the November 1995 acquisition of Paris-based GSI, Europe's largest payroll and HR services provider, which was ADP's largest acquisition ever at roughly $460 million in cash. Excluding GSI, revenue growth was about 15%. Pretax margin slipped to 17.8% from 18.5%, partly due to lower-margin acquisitions and a higher effective tax rate of 28.4%. Employer Services remains the core engine, contributing about 56% of revenue ($1.98 billion, up 18%), anchored by the AutoPay payroll product, 401(k) recordkeeping and tax filing for over 260,000 clients. Brokerage Services ($787 million, up 20%) and Dealer Services ($555 million, up 26%) were the other major segments. Management guided to double-digit revenue growth and about 15% EPS growth for fiscal 1997. The company also disclosed that Arthur Weinbach succeeded Josh Weston as CEO effective August 1, 1996, with Weston remaining chairman. Balance sheet strength is a central investor point. Operating cash flow exceeded $644 million, cash and marketable securities were about $1.1 billion, long-term debt to equity was 17%, and return on equity was about 20%. Shareholders' equity reached $2.3 billion. Intangibles rose sharply to $1.25 billion, largely from acquisitions, and the company repurchased 6.6 million shares. Investors should note that collected-but-unremitted payroll tax funds averaged $3.7 billion, a float that generated about $178 million of interest income and is an important, though non-core, contributor to earnings.
Sep 23, 1996
1995
AUTOMATIC DATA PROCESSING INC Annual Report, Year Ended Jun 30, 1995
Automatic Data Processing, Inc. (ADP) closed fiscal 1995 (year ended June 30, 1995) with record results: revenue rose 17% to $2.89 billion, net earnings grew 18% to $394.8 million, and earnings per share increased 17% to $2.77. This marked the company's 46th consecutive year of revenue and earnings growth and its 34th consecutive year of double-digit EPS growth. Pretax margin widened to 18.5% from 18.1%, and after-tax margin reached 13.6%. Return on average equity was about 21%, and the dividend was raised 17% to $0.70 per share effective July 1, 1995. Growth was broad-based. Employer Services (about 56% of revenue, payroll and HR outsourcing for roughly 300,000 employers) grew 13%, and Dealer Services grew 32%, aided by acquisitions such as Turbodata and V-Crest. Brokerage Services grew a more modest 8%, reflecting capacity investments. Growth came mainly from market penetration, new products, and acquisitions, with pricing playing a minor role. Management guided to roughly 15% revenue and EPS growth for fiscal 1996 and pending the acquisition of GSI, a French payroll and HR services company valued at about $460 million. The balance sheet remains very strong. Cash and marketable securities reached about $1.3 billion, shareholders' equity exceeded $2.1 billion, and the long-term debt-to-equity ratio was 19%. Operating cash flow was $478.8 million, and capital expenditures were $118 million. ADP also holds about $4.6 billion of client payroll tax funds, which generate float income. Its largest risks are the cyclicality of auto-industry demand for Dealer Services, the modest growth of Brokerage Services, and the execution risk of the GSI acquisition, which management says may be slightly dilutive to earnings per share.
Sep 21, 1995
1994
AUTOMATIC DATA PROCESSING INC Annual Report, Year Ended Jun 30, 1994
Automatic Data Processing, Inc. (ADP) reported a record fiscal 1994 (year ended June 30, 1994), with revenue of $2,469 million, up 11% from $2,223 million in fiscal 1993, and net earnings before two minor accounting changes of $334 million, up 14%. Earnings per share rose 14% to $2.37 (net $2.34 after a $0.03 charge from adopting FASB Statements 109 and 112). Growth was broad-based: Employer Services (58% of revenue) grew 9%, Brokerage Services (25%) grew 20% on strong Wall Street volumes, and Dealer Services (14%) grew 22% on robust auto sales. Pretax margin improved to 18.1% from 17.4%, reflecting automation and productivity gains, and return on equity was 21%. The company marked its 33rd consecutive year of double-digit EPS growth and management guided to double-digit revenue and EPS growth again in fiscal 1995. The balance sheet remains very conservative. Cash and marketable securities exceeded $1.06 billion, shareholders' equity was $1.69 billion, and the long-term debt-to-equity ratio was about 22%, driven mainly by $319 million (accreted value) of zero-coupon convertible notes due 2012. Operating cash flow rose 30% to $509 million, while capital expenditures increased to $111 million and systems development spending to $161 million. Management repurchased about 2.6 million shares at an average of roughly $50 and raised the annual dividend 15% to $0.60, its twentieth consecutive annual increase. Investors should note several points beyond the headline growth. Brokerage and Dealer growth were partly cyclical, tied to trading volumes and auto sales, and the company acknowledged that acquisitions contributed meaningfully to revenue growth. Employer Services growth slowed to 9% from 17%, lapping the 1992 Bank of America payroll acquisition. The company also disclosed that it does not produce standalone profitability by business unit, which limits segment-level analysis. Collected but unremitted payroll tax funds averaged about $2.8 billion, providing significant float income that is sensitive to interest rates. Litigation was reported as none.
Sep 1, 1994