01—Abstract
Summary
Summary of the 10-K filed August 7, 2015. Cited figures are marked; the original filing is the authoritative source.
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 billiona 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%b 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.
02—Key points
Key Highlights
- Total revenues grew 7% to $10.94 billion in fiscal year 2015.
- Net earnings from continuing operations increased 11% to $1.38 billion.
- Successfully spun off its Dealer Services business into CDK Global, Inc.
- Employer Services segment revenues grew 5%, driven by new bookings and client retention.
- PEO Services segment revenues increased by a strong 17%, reflecting growth in worksite employees.
- Total new business bookings increased by 13% globally.
- ADP returned $2.5 billion to shareholders through dividends ($927.6 million) and share repurchases ($1.56 billion).
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2015filed August 7, 2015Financial Statements
FY2015 against FY2014
| Line item | FY2015FY2014 | Change |
|---|---|---|
| Revenue | $10.94B$10.23B | +7.0% |
| SG&A Expenses | $2.50B$2.37B | +5.3% |
| Operating Expenses | $8.93B$10.00B | −10.7% |
| Interest Expense | $6.50M$6.10M | +6.6% |
| Net Income | $1.45B$1.52B | −4.2% |
| EPS (Basic) | $3.07$3.17 | −3.2% |
| EPS (Diluted) | $3.05$3.14 | −2.9% |
| Shares Outstanding (Basic) | 472.60M478.90M | −1.3% |
| Shares Outstanding (Diluted) | 475.80M483.10M | −1.5% |
05—Questions
Frequently Asked Questions
What were the main business segments of ADP in fiscal year 2015?
ADP's operations were primarily organized into two reportable segments: Employer Services and Professional Employer Organization (PEO) Services. The company also had a former Dealer Services business, which was spun off in September 2014.
How did ADP's revenue and earnings perform in fiscal year 2015?
In fiscal year 2015, ADP reported a 7% increase in total revenues to $10.94 billion and an 11% increase in net earnings from continuing operations to $1.38 billion. Diluted earnings per share from continuing operations grew 12% to $2.89.
What was the impact of the CDK Global spin-off?
The spin-off of the Dealer Services business into CDK Global, Inc. on September 30, 2014, allowed ADP to sharpen its focus on its core Human Capital Management (HCM) strategy. The company received an $825 million tax-free dividend from CDK in connection with the spin-off, which partially funded share repurchases.
How did the Employer Services and PEO Services segments perform?
The Employer Services segment saw a 5% revenue increase due to new business bookings and client retention, with earnings from continuing operations before income taxes up 7%. The PEO Services segment experienced robust growth, with revenues up 17% and earnings from continuing operations before income taxes up 30%, driven by an increase in worksite employees.
06—Continue