Summary
Automatic Data Processing, Inc. (ADP) reported solid financial results for the six months ended December 31, 2019, demonstrating robust revenue growth and improved profitability. Total revenues increased by 5% to $7.2 billion, driven by strong performance in both Employer Services and PEO Services segments, with organic constant currency revenue growth at 6%. Net earnings saw a significant increase of 16% to $1.23 billion, translating to diluted earnings per share of $2.84, up 17% compared to the prior year period. The company also highlighted improved operating efficiencies and margin expansion, with Adjusted EBIT Margin increasing by 70 basis points to 22.3%. Shareholder returns remained a priority, with substantial amounts returned through dividends and share repurchases, underscoring a commitment to delivering long-term shareholder value.
Financial Highlights
53 data points| Revenue | $3.67B |
| Cost of Revenue | $2.09B |
| Gross Profit | $1.58B |
| SG&A Expenses | $754.30M |
| Operating Expenses | $2.88B |
| Interest Expense | $31.60M |
| Net Income | $651.60M |
| EPS (Basic) | $1.51 |
| EPS (Diluted) | $1.50 |
| Shares Outstanding (Basic) | 431.50M |
| Shares Outstanding (Diluted) | 433.30M |
Key Highlights
- 1Total revenues grew 5% to $7.2 billion for the six months ended December 31, 2019, with organic constant currency growth at 6%, indicating strong underlying business performance.
- 2Net earnings increased by a robust 16% to $1.23 billion, and diluted EPS rose 17% to $2.84, reflecting improved profitability and operational efficiency.
- 3Both Employer Services and PEO Services segments showed strong revenue growth, up 4% and 9% respectively, demonstrating the company's diversified revenue streams.
- 4Adjusted EBIT Margin improved by 70 basis points to 22.3%, showcasing the positive impact of cost management and operational efficiencies.
- 5The company returned approximately $690 million via dividends and $620 million via share repurchases during the six-month period, demonstrating a commitment to shareholder returns.
- 6The balance sheet remains solid, with total assets growing to $49.1 billion and total liabilities at $43.7 billion, leading to total stockholders' equity of $5.4 billion.
- 7Operating cash flow increased by approximately $200 million to $1.13 billion for the six months ended December 31, 2019, highlighting the company's strong cash generation capabilities.