01—Abstract
Summary
Summary of the 10-K filed August 6, 2025. 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, 2025, with total revenues increasing by 7% to $20.56 billiona.
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 billionb 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.
02—Key points
Key Highlights
- Reported a 7% increase in total revenues to $20.56 billion for the fiscal year ended June 30, 2025.
- Achieved a 50 basis point expansion in both EBIT and Adjusted EBIT margins, showcasing improved profitability.
- Returned $3.7 billion to shareholders through dividends ($2.4 billion) and share repurchases ($1.3 billion).
- Launched ADP Lyric HCM and acquired WorkForce Software, bolstering its global HCM and workforce management capabilities.
- Increased investment in AI and machine learning to enhance product offerings and client experiences.
- Maintained strong client retention rates of 92.1% in Employer Services, with client satisfaction scores reaching record highs.
- Ended the fiscal year with a solid financial position, approximately $3.3 billion in cash and cash equivalents, and ample liquidity.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2025filed August 6, 2025Financial Statements
FY2025 against FY2024
| Line item | FY2025FY2024 | Change |
|---|---|---|
| Revenue | $20.56B$19.20B | +7.1% |
| Cost of Revenue | $11.10B$10.48B | +5.9% |
| Gross Profit | $9.46B$8.73B | +8.5% |
| R&D Expenses | $988.60M$955.70M | +3.4% |
| SG&A Expenses | $4.05B$3.78B | +7.2% |
| Operating Expenses | $15.60B$14.62B | +6.8% |
| Interest Expense | $455.90M$361.40M | +26.1% |
| Net Income | $4.08B$3.75B | +8.7% |
| EPS (Basic) | $10.02$9.14 | +9.6% |
| EPS (Diluted) | $9.98$9.10 | +9.7% |
| Shares Outstanding (Basic) | 407.10M410.60M | −0.9% |
| Shares Outstanding (Diluted) | 408.70M412.20M | −0.8% |
05—Questions
Frequently Asked Questions
What was ADP's revenue growth for fiscal year 2025?
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.
How is ADP investing in innovation and technology?
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.
What is ADP's approach to returning capital to shareholders?
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.
How did the acquisitions of WorkForce Software and PEI impact ADP's business?
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.
06—Continue