What was the impact of the CDK Global spin-off on ADP's financial results?

The spin-off of CDK Global, Inc. on September 30, 2014, resulted in the Dealer Services business being classified as discontinued operations for all periods presented. While this impacts comparability, ADP's core HCM business, comprising Employer Services and PEO Services, showed strong growth. ADP received an $825 million dividend from CDK as part of the spin-off, which is earmarked for future share repurchases.

How did the company's revenue performance trend in its key segments?

ADP experienced robust revenue growth in its core segments. Employer Services revenues increased by 7% to $2.099 billion, driven by new business, an increase in employee payrolls, and price adjustments. PEO Services revenues saw a significant increase of 18% to $594.9 million, primarily due to a 15% rise in the average number of worksite employees.

What is the company's liquidity position and how is it managing its cash?

ADP maintains a strong liquidity position, with cash and cash equivalents totaling $2.18 billion at September 30, 2014. The company generated significant cash flow from operations and has substantial marketable securities. It continues to return excess cash to shareholders through dividends and share repurchases, and plans to utilize the $825 million dividend from the CDK spin-off for further share repurchases.

How did the company's profitability change compared to the prior year period?

Profitability improved significantly. Net earnings from continuing operations increased by 12% to $298.0 million, and diluted earnings per share from continuing operations rose by 13% to $0.62, up from $0.55 in the same period last year. This was supported by a 9% increase in total revenues and improved operating efficiencies across its business segments.

ADP 10-Q Quarterly Report Q1 FY2015 — Revenue, Net Income, EPS

Summary

Automatic Data Processing, Inc. (ADP) reported solid financial results for the three months ended September 30, 2014. Total revenues grew by 9% to $2.57 billion, driven by strong performance in both the Employer Services and PEO Services segments. Net earnings from continuing operations increased by 12% to $298.0 million, translating to a diluted EPS of $0.62, up from $0.55 in the prior year period. This growth reflects increased revenues, operating efficiencies, and effective cost management. A significant event during the quarter was the completion of the spin-off of ADP's Dealer Services business into a new publicly traded company, CDK Global, Inc. While this event resulted in the classification of the Dealer Services business as discontinued operations, the core HCM business demonstrated resilience. The company also received an $825 million dividend from CDK, which it plans to return to shareholders through share repurchases. ADP's financial condition remains robust with substantial cash reserves and a strong balance sheet, positioning it well for continued growth and shareholder returns.

Financial Highlights

51 data points

Beta

Revenue

$2.57B

0.4% Gross Margin

Net Income

$295.20M

0.1% Net Margin

EPS (Diluted)

$0.61

Total Assets

$30.21B

Cash & Equivalents

$2.17B

Free Cash Flow

$378.20M

Financial Statements

Beta

Revenue	$2.57B
Gross Profit	$1.01B
SG&A Expenses	$576.00M
Operating Expenses	$2.14B
Interest Expense	$1.90M
Net Income	$295.20M
EPS (Basic)	$0.62
EPS (Diluted)	$0.61
Shares Outstanding (Basic)	478.40M
Shares Outstanding (Diluted)	481.70M

Key Highlights

1Total revenues increased by 9% to $2.57 billion for the three months ended September 30, 2014, compared to the prior year period.
2Net earnings from continuing operations grew by 12% to $298.0 million, with diluted EPS rising to $0.62 from $0.55.
3The company successfully completed the spin-off of its Dealer Services business into CDK Global, Inc.
4Employer Services segment revenue increased by 7% and PEO Services segment revenue grew by 18%, demonstrating strong operational performance.
5Cash and cash equivalents stood at $2.18 billion at the end of the quarter, indicating strong liquidity.
6ADP received an $825 million dividend from the CDK spin-off, with plans to use it for share repurchases.
7Investment portfolio remains conservative, focused on safety of principal, liquidity, and diversification, with a high proportion of investment-grade securities.

AUTOMATIC DATA PROCESSING INC Quarterly Report for Q1 Ended Sep 30, 2014

Summary

Financial Highlights

Key Highlights

Frequently Asked Questions