01—Abstract
Summary
Summary of the 10-K filed August 4, 2021. Cited figures are marked; the original filing is the authoritative source.
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 billiona, 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 billionb to shareholders through dividends and share repurchases, underscoring its commitment to shareholder value.
02—Key points
Key Highlights
- Total revenues grew by 3% to $15.0 billion for the fiscal year ended June 30, 2021.
- Employer Services segment revenue increased by 1% to $10.2 billion, with new business bookings up 23%.
- PEO Services segment revenue increased by 7% to $4.8 billion, with average worksite employees growing by 2%.
- Interest earned on funds held for clients decreased by 23% to $422.4 million due to lower interest rates.
- The company returned $3.0 billion to shareholders through dividends ($1.6 billion) and share repurchases ($1.4 billion).
- Investments in technology and innovation, including next-gen platforms and ADP DataCloud, continue to be a strategic priority.
- ADP reported effective internal controls over financial reporting, as audited by Deloitte & Touche LLP.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2021filed August 4, 2021Financial Statements
FY2021 against FY2020
| Line item | FY2021FY2020 | Change |
|---|---|---|
| Revenue | $15.01B$14.59B | +2.8% |
| Cost of Revenue | $8.64B$8.45B | +2.3% |
| Gross Profit | $6.37B$6.14B | +3.6% |
| SG&A Expenses | $3.04B$3.00B | +1.2% |
| Operating Expenses | $11.74B$11.56B | +1.6% |
| Interest Expense | $59.70M$107.10M | −44.3% |
| Net Income | $2.60B$2.47B | +5.4% |
| EPS (Basic) | $6.10$5.73 | +6.5% |
| EPS (Diluted) | $6.07$5.70 | +6.5% |
| Shares Outstanding (Basic) | 426.30M430.80M | −1.0% |
| Shares Outstanding (Diluted) | 428.10M432.70M | −1.1% |
05—Questions
Frequently Asked Questions
What was ADP's overall financial performance for the fiscal year ending June 30, 2021?
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.
How did ADP's key segments perform?
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.
What are ADP's strategic priorities and investments?
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.
How did ADP manage its capital and return value to shareholders?
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.
06—Continue