10-KPeriod: FY2021

AUTOMATIC DATA PROCESSING INC Annual Report, Year Ended Jun 30, 2021

Filed August 4, 2021For Securities:ADP

Summary

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.

Financial Highlights

55 data points
Beta

Revenue

$15.01B

42.4% Gross Margin

Net Income

$2.60B

17.3% Net Margin

EPS (Diluted)

$6.07

Total Assets

$48.77B

Cash & Equivalents

$2.58B

Free Cash Flow

$3.09B

Financial Statements
Beta
Revenue$15.01B
Cost of Revenue$8.64B
Gross Profit$6.37B
SG&A Expenses$3.04B
Operating Expenses$11.74B
Interest Expense$59.70M
Net Income$2.60B
EPS (Basic)$6.10
EPS (Diluted)$6.07
Shares Outstanding (Basic)426.30M
Shares Outstanding (Diluted)428.10M

Key Highlights

  • 1Total revenues grew by 3% to $15.0 billion for the fiscal year ended June 30, 2021.
  • 2Employer Services segment revenue increased by 1% to $10.2 billion, with new business bookings up 23%.
  • 3PEO Services segment revenue increased by 7% to $4.8 billion, with average worksite employees growing by 2%.
  • 4Interest earned on funds held for clients decreased by 23% to $422.4 million due to lower interest rates.
  • 5The company returned $3.0 billion to shareholders through dividends ($1.6 billion) and share repurchases ($1.4 billion).
  • 6Investments in technology and innovation, including next-gen platforms and ADP DataCloud, continue to be a strategic priority.
  • 7ADP reported effective internal controls over financial reporting, as audited by Deloitte & Touche LLP.

Frequently Asked Questions

For the fiscal year ending June 30, 2021, ADP reported a 3% increase in total revenues to $15.0 billion. Earnings before income taxes grew by 6% to $3.4 billion, and diluted earnings per share increased by 6% to $6.07. The company demonstrated strong client retention and positive new business bookings, particularly in its Employer Services segment.

The Employer Services segment, ADP's largest, saw a 1% revenue increase to $10.2 billion, driven by strong client retention and a significant 23% rise in new business bookings. The PEO Services segment experienced a 7% revenue growth to $4.8 billion, supported by a 2% increase in average worksite employees. The company also noted a decrease in interest income on funds held for clients due to lower interest rates.

ADP's strategy centers on three pillars: growing its cloud-based HCM solutions, scaling its HR Outsourcing (HRO) solutions, and leveraging its global presence. The company continues to invest in product and technology innovation, including its next-gen platforms, ADP DataCloud for analytics, and mobile solutions like 'Roll by ADP.' These investments aim to meet the evolving needs of clients and workers in the changing world of work.

ADP maintained a solid financial condition and liquidity. The company returned $3.0 billion to shareholders through dividends ($1.6 billion) and share repurchases ($1.4 billion) during the fiscal year. ADP has significant committed credit facilities and a strong cash flow generation model, enabling it to manage its debt obligations and continue reinvesting in the business.