What was the primary driver of revenue growth in the nine months ended March 31, 2017?

Revenue growth was primarily driven by new business bookings and an increase in the number of employees on clients' payrolls (pays per control). Both the Employer Services and PEO Services segments contributed to this growth, with PEO Services showing a notable 12% increase in revenue.

How did the sale of the CHSA and COBRA businesses impact the company's financials?

The sale of the CHSA and COBRA businesses resulted in a significant pre-tax gain of $205.4 million during the nine months ended March 31, 2017. This gain contributed to the reported increase in earnings from continuing operations before income taxes and positively impacted the "Other Income, net" line item.

What is the Service Alignment Initiative and what is its financial impact?

The Service Alignment Initiative is a multi-year effort to simplify ADP's service organization by aligning operations to strategic platforms and locations. For the nine months ended March 31, 2017, the company incurred $41.6 million in pre-tax charges related to this initiative, primarily for employee separation benefits and other costs. ADP anticipates total pre-tax charges between $100 million and $125 million through fiscal 2018.

How has ADP's approach to returning capital to shareholders evolved?

ADP continues to demonstrate a strong commitment to shareholder returns. During the nine months ended March 31, 2017, the company repurchased $957 million of its common stock and paid $739 million in dividends. This aligns with their strategy of utilizing strong cash flows to reward investors.

ADP 10-Q Quarterly Report Q3 FY2017 — Revenue, Net Income, EPS

Summary

Automatic Data Processing, Inc. (ADP) reported solid financial results for the nine months ended March 31, 2017, with total revenues growing 6% to $9.31 billion. Diluted earnings per share from continuing operations increased significantly to $3.25 from $2.63 in the prior year period. This growth was driven by an increase in revenue from both its Employer Services and PEO Services segments, along with strategic investments in product innovation and sales. The company also highlighted a pre-tax gain of approximately $205 million from the sale of its Consumer Health Spending Account (CHSA) and Consolidated Omnibus Reconciliation Act (COBRA) businesses. ADP continued its commitment to returning capital to shareholders, repurchasing over $957 million in stock and paying approximately $739 million in dividends during the period. The company maintains a strong financial position with robust cash flows and a solid balance sheet.

Financial Highlights

52 data points

Beta

Revenue

$3.41B

0.4% Gross Margin

Net Income

$587.90M

0.2% Net Margin

EPS (Diluted)

$1.31

Total Assets

$43.86B

Cash & Equivalents

$3.00B

Free Cash Flow

$827.60M

Financial Statements

Beta

Revenue	$3.41B
Gross Profit	$1.50B
SG&A Expenses	$665.00M
Operating Expenses	$2.59B
Interest Expense	$16.80M
Net Income	$587.90M
EPS (Basic)	$1.32
EPS (Diluted)	$1.31
Shares Outstanding (Basic)	446.50M
Shares Outstanding (Diluted)	449.20M

Key Highlights

1Total revenues increased by 6% year-over-year to $9.31 billion for the nine months ended March 31, 2017.
2Diluted earnings per share from continuing operations saw a substantial increase, rising to $3.25 from $2.63 in the comparable prior year period.
3The company recognized a significant pre-tax gain of $205.4 million from the sale of its CHSA and COBRA businesses.
4Both Employer Services and PEO Services segments demonstrated revenue growth, with PEO Services seeing a particularly strong 12% increase in revenue.
5ADP returned substantial capital to shareholders through $957 million in share repurchases and $739 million in dividends during the nine-month period.
6Operating expenses increased by 5-6% due to PEO pass-through costs, service costs, and investments, partially offset by the divestiture of certain businesses.
7The company acquired The Marcus Buckingham Company (TMBC) in January 2017 to enhance its talent management capabilities.

AUTOMATIC DATA PROCESSING INC Quarterly Report for Q3 Ended Mar 31, 2017

Summary

Financial Highlights

Key Highlights

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