01—Abstract
Summary
Summary of the 10-K filed August 3, 2023. Cited figures are marked; the original filing is the authoritative source.
Automatic Data Processing, Inc. (ADP) reported strong financial performance for the fiscal year ended June 30, 2023, characterized by robust revenue growth and increased profitability.
The company demonstrated significant revenue expansion, with a 9%a increase as reported and a 10% increase on an organic constant currency basis. This growth was driven by new business bookings, strong client retention, and a notable increase in interest income from funds held for clients, benefiting from higher interest rates. ADP's strategic focus on best-in-class HCM technology, unparalleled expertise and outsourcing, and leveraging global scale continues to yield positive results.
The company surpassed the one million client milestone and saw improvements in key metrics like Employer Services client retention, reaching a record high. Profitability also saw a healthy increase, with diluted earnings per share growing by 17%b. The company remains committed to shareholder returns through dividends and share repurchases, underscoring a solid financial position and a positive outlook for continued growth.
02—Key points
Key Highlights
- 9% Total Revenue Growth, reaching $18.0 billion.
- 10% Organic Constant Currency Revenue Growth, indicating strong underlying business expansion.
- 17% Diluted EPS Growth, demonstrating improved profitability.
- Employer Services (ES) segment showed strong performance with 10% new business bookings growth and a record 92.2% client retention rate.
- PEO Services segment also grew, with an 8% revenue increase and 6% average worksite employee growth.
- Significant increase in interest on funds held for clients to $813.4 million, driven by higher interest rates and increased client fund balances.
- Returned $3.0 billion to shareholders through dividends ($1.9 billion) and share repurchases ($1.1 billion).
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2023filed August 3, 2023Financial Statements
FY2023 against FY2022
| Line item | FY2023FY2022 | Change |
|---|---|---|
| Revenue | $18.01B$16.50B | +9.2% |
| Cost of Revenue | $9.95B$9.46B | +5.2% |
| Gross Profit | $8.06B$7.04B | +14.5% |
| R&D Expenses | $844.80M$798.60M | +5.8% |
| SG&A Expenses | $3.55B$3.23B | +9.8% |
| Operating Expenses | $13.76B$12.78B | +7.7% |
| Interest Expense | $253.30M$81.90M | +209.3% |
| Net Income | $3.41B$2.95B | +15.7% |
| EPS (Basic) | $8.25$7.04 | +17.2% |
| EPS (Diluted) | $8.21$7.00 | +17.3% |
| Shares Outstanding (Basic) | 413.70M418.80M | −1.2% |
| Shares Outstanding (Diluted) | 415.70M421.10M | −1.3% |
05—Questions
Frequently Asked Questions
What was ADP's revenue performance in fiscal year 2023?
ADP reported total revenues of $18,012.2 million for the fiscal year ended June 30, 2023, representing a 9% increase year-over-year. On an organic constant currency basis, revenue grew by 10%.
How did ADP's key business segments perform?
The Employer Services segment reported a 10% revenue increase, driven by strong new business bookings and client retention. The PEO Services segment also saw growth, with an 8% revenue increase and a 6% rise in average worksite employees.
What is ADP's outlook or strategy for growth?
ADP's strategy focuses on three key priorities: leading with best-in-class HCM technology, providing unparalleled expertise and outsourcing solutions, and leveraging its global scale. The company aims to continue enhancing its platforms and services to meet evolving client needs in the dynamic world of work.
How did ADP return capital to shareholders?
In fiscal year 2023, ADP returned $3.0 billion to shareholders through $1.9 billion in dividends and $1.1 billion in share repurchases, demonstrating a commitment to shareholder value.
06—Continue