AUTOMATIC DATA PROCESSING INC Quarterly Report for Q2 Ended Dec 31, 2021

Summary

Automatic Data Processing, Inc. (ADP) reported a solid performance for the six months ended December 31, 2021, with total revenues increasing by 10% to $7.86 billion. This growth was driven by strong client retention, new business, an increase in PEO revenues, and higher pays per control within its Employer Services segment. Net earnings rose by 12% to $1.39 billion, and diluted earnings per share (EPS) grew by 13% to $3.30. The company highlighted robust performance in both its Employer Services and PEO Services segments. Employer Services saw revenue growth of 7% and an improvement in its margin by 90 basis points, while PEO Services experienced a significant 15% revenue increase, driven by a 15% rise in average worksite employees. ADP also continues to invest in its Human Capital Management (HCM) technology solutions, with new product milestones and advancements in user experience.

Key Highlights

• 1Total revenues increased by 10% to $7.86 billion for the six months ended December 31, 2021, compared to the prior year period.
• 2Net earnings grew by 12% to $1.39 billion, with diluted EPS up 13% to $3.30 for the same period.
• 3Employer Services segment revenue grew 7%, and PEO Services revenue increased by 15%, demonstrating strong performance in core business areas.
• 4PEO average worksite employees increased by 15% for the six months ended December 31, 2021.
• 5The company returned $1.8 billion to shareholders through dividends ($0.8 billion) and share repurchases ($1.0 billion) during the period.
• 6ADP continues to invest in its technology solutions, including progress on a unified user experience and enhancements to its Return to Workplace offering.
• 7The company maintained a strong balance sheet with $1.7 billion in cash and cash equivalents as of December 31, 2021, and ample liquidity.

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