01—Abstract
Summary
Summary of the 10-K filed August 20, 2012. Cited figures are marked; the original filing is the authoritative source.
Automatic Data Processing, Inc. (ADP) for the fiscal year ended June 30, 2012, reported total revenues of $10.7 billiona, 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 billionb, 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 billionc), 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.
02—Key points
Key Highlights
- Total revenues grew 8% to $10.67 billion, demonstrating continued top-line expansion.
- Net earnings from continuing operations increased 11% to $1.39 billion, reflecting improved profitability.
- Diluted earnings per share (EPS) from continuing operations rose 12% to $2.82, outpacing net earnings growth.
- All three core business segments (Employer Services, PEO Services, Dealer Services) achieved revenue growth, indicating broad-based strength.
- Employer Services' pays per control metric increased by 3.0%, signaling underlying client activity growth.
- The company maintained strong client retention rates at 91%.
- ADP returned significant capital to shareholders through $740 million in dividends and $741 million in share repurchases.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2012filed August 20, 2012Financial Statements
FY2012 against FY2011
| Line item | FY2012FY2011 | Change |
|---|---|---|
| Revenue | $10.60B$9.83B | +7.8% |
| SG&A Expenses | $2.45B$2.31B | +6.0% |
| Operating Expenses | $8.66B$8.03B | +7.9% |
| Interest Expense | $7.70M$8.60M | −10.5% |
| Net Income | $1.39B$1.25B | +10.7% |
| EPS (Basic) | $2.85$2.54 | +12.2% |
| EPS (Diluted) | $2.82$2.52 | +11.9% |
| Shares Outstanding (Basic) | 487.30M493.50M | −1.3% |
| Shares Outstanding (Diluted) | 492.20M498.30M | −1.2% |
05—Questions
Frequently Asked Questions
What was ADP's revenue growth in fiscal year 2012 and what drove it?
ADP's total revenues increased by 8% to $10.67 billion in fiscal year 2012. This growth was driven by solid performance across its segments: Employer Services (+7%), PEO Services (+15%), and Dealer Services (+10%), fueled by new business sales, increased client payrolls, and price increases.
How did ADP's profitability change in fiscal year 2012?
Profitability improved in fiscal year 2012. Net earnings from continuing operations increased by 11% to $1.39 billion, and diluted EPS from continuing operations grew by 12% to $2.82. This was partly due to a $66 million gain from an asset sale, but core operational performance also contributed.
What is ADP's financial position like at the end of fiscal year 2012?
ADP maintained a strong financial position with $1.7 billion in cash and marketable securities and a healthy balance sheet. Operating cash flow was robust at $1.9 billion, and the company continued to return capital to shareholders through dividends and share buybacks.
What are ADP's strategic priorities for growth?
ADP's strategic pillars include growing its integrated cloud-based Human Capital Management (HCM) solutions in the US, scaling its HR Business Process Outsourcing (BPO) services, leveraging its global presence for HCM solutions, and strengthening its offerings in key adjacent markets.
06—Continue