10-KPeriod: FY2025

AUTOMATIC DATA PROCESSING INC Annual Report, Year Ended Jun 30, 2025

Filed August 6, 2025For Securities:ADP

Summary

Automatic Data Processing, Inc. (ADP) reported strong financial performance for the fiscal year ended June 30, 2025, with total revenues increasing by 7% to $20.56 billion. This growth was driven by new client acquisitions, strong client retention, strategic acquisitions including WorkForce Software, and increased interest income on funds held for clients. The company demonstrated solid operational efficiency, with Earnings Before Income Taxes (EBIT) and Adjusted EBIT margins expanding by 50 basis points, reflecting effective cost management and revenue growth. ADP continues to prioritize innovation and client experience, evidenced by the launch of ADP Lyric HCM and strategic investments in artificial intelligence (AI) and machine learning. The company's commitment to shareholder returns is highlighted by $3.7 billion in cash returned through dividends and share repurchases. With a robust business model characterized by recurring revenue and low capital intensity, ADP is well-positioned to navigate market dynamics and continue delivering value to its clients and shareholders. The company's financial condition remains solid, supported by ample liquidity and strong cash flow generation, enabling continued investment in growth initiatives and a consistent return of capital to stockholders.

Financial Highlights

55 data points
Beta

Revenue

$20.56B

46.0% Gross Margin

Net Income

$4.08B

19.8% Net Margin

EPS (Diluted)

$9.98

Total Assets

$53.37B

Cash & Equivalents

$3.35B

Free Cash Flow

$4.94B

Financial Statements
Beta
Revenue$20.56B
Cost of Revenue$11.10B
Gross Profit$9.46B
R&D Expenses$988.60M
SG&A Expenses$4.05B
Operating Expenses$15.60B
Interest Expense$455.90M
Net Income$4.08B
EPS (Basic)$10.02
EPS (Diluted)$9.98
Shares Outstanding (Basic)407.10M
Shares Outstanding (Diluted)408.70M

Key Highlights

  • 1Reported a 7% increase in total revenues to $20.56 billion for the fiscal year ended June 30, 2025.
  • 2Achieved a 50 basis point expansion in both EBIT and Adjusted EBIT margins, showcasing improved profitability.
  • 3Returned $3.7 billion to shareholders through dividends ($2.4 billion) and share repurchases ($1.3 billion).
  • 4Launched ADP Lyric HCM and acquired WorkForce Software, bolstering its global HCM and workforce management capabilities.
  • 5Increased investment in AI and machine learning to enhance product offerings and client experiences.
  • 6Maintained strong client retention rates of 92.1% in Employer Services, with client satisfaction scores reaching record highs.
  • 7Ended the fiscal year with a solid financial position, approximately $3.3 billion in cash and cash equivalents, and ample liquidity.

Frequently Asked Questions

ADP reported a 7% increase in total revenues to $20.56 billion for the fiscal year ended June 30, 2025. This growth was consistent on both a reported and organic constant currency basis.

ADP is strategically investing in innovation, particularly in artificial intelligence (AI) and machine learning. Key initiatives include the launch of ADP Lyric HCM, an all-in-one global HCM solution, and the acquisition of WorkForce Software to enhance its workforce management capabilities. The company is also deploying AI tools across its product development, sales, and service functions to improve client experience and operational efficiency.

ADP demonstrated a strong commitment to shareholder returns in fiscal year 2025, returning a total of $3.7 billion. This included $2.4 billion in dividends and $1.3 billion through share repurchases, reflecting the company's solid free cash flow generation and its strategy to enhance shareholder value.

The acquisition of WorkForce Software in October 2024 significantly expanded ADP's workforce management solutions, particularly for large, global enterprises. The acquisition of Procesamiento Externo de Información, S.C. (PEI) in February 2025 strengthened ADP's payroll and HCM capabilities in Mexico. These strategic acquisitions are aligned with ADP's goal of better serving clients and expanding its global reach.