10-KPeriod: FY2017

AUTOMATIC DATA PROCESSING INC Annual Report, Year Ended Jun 30, 2017

Filed August 4, 2017For Securities:ADP

Summary

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.

Financial Highlights

53 data points
Beta

Revenue

$12.37B

41.4% Gross Margin

Net Income

$1.79B

14.5% Net Margin

EPS (Diluted)

$3.97

Total Assets

$38.89B

Cash & Equivalents

$2.78B

Free Cash Flow

$2.13B

Financial Statements
Beta
Revenue$12.37B
Cost of Revenue$7.24B
Gross Profit$5.13B
SG&A Expenses$2.77B
Operating Expenses$10.10B
Interest Expense$80.00M
Net Income$1.79B
EPS (Basic)$3.99
EPS (Diluted)$3.97
Shares Outstanding (Basic)447.80M
Shares Outstanding (Diluted)450.30M

Key Highlights

  • 1Revenue increased by 6% to $12,379.8 million in fiscal year 2017.
  • 2Net earnings from continuing operations grew by 16% to $1,733.4 million.
  • 3Diluted earnings per share from continuing operations increased by 18% to $3.85.
  • 4Worldwide new business bookings declined 5% in fiscal 2017, primarily due to a strong prior year driven by Affordable Care Act (ACA) compliance solutions.
  • 5Client revenue retention for Employer Services decreased by 50 basis points to 90.0%, attributed to legacy platforms and the loss of a large client.
  • 6ADP returned $2.3 billion to shareholders through share repurchases ($1.3 billion) and dividends ($1 billion).
  • 7The company acquired The Marcus Buckingham Company to enhance its talent management capabilities.

Frequently Asked Questions

ADP's total revenues increased by 6% to $12,379.8 million for the fiscal year ended June 30, 2017, compared to the prior year. This growth was supported by new business bookings and increased client payrolls.

ADP showed strong profitability improvements. Net earnings from continuing operations increased by 16% to $1,733.4 million, and diluted earnings per share from continuing operations rose by 18% to $3.85, reflecting operational efficiencies and strategic investments.

ADP's growth strategy is centered on three pillars: expanding its suite of cloud-based HCM solutions, scaling its HR Business Process Outsourcing services, and leveraging its global presence to offer HCM solutions wherever clients operate. The acquisition of The Marcus Buckingham Company further supports this strategy by strengthening its talent management offerings.

New business bookings declined by 5% in fiscal 2017 compared to fiscal 2016. This was primarily attributed to a high demand in the prior year for solutions that helped clients comply with the Affordable Care Act (ACA), which is a cyclical demand.