Summary
Automatic Data Processing, Inc. (ADP) reported solid financial results for the nine months ended March 31, 2022, with total revenues increasing by 10% to $12.37 billion and net earnings growing by 13% to $2.32 billion. The company demonstrated strong operational execution across its Employer Services and PEO Services segments, driven by client retention, new business bookings, and an increase in average worksite employees for PEO services. Key financial highlights include a 10% year-over-year revenue growth and a 13% increase in diluted Earnings Per Share (EPS) to $5.51 for the nine-month period. Management emphasized the company's robust business model, characterized by significant cash flows and low capital intensity, enabling consistent dividend payments and share repurchases. ADP also highlighted strategic investments in enhancing its Human Capital Management (HCM) technology, including the rollout of a unified user experience and advancements in its data analytics capabilities, positioning the company for continued growth in a dynamic market.
Financial Highlights
53 data points| Revenue | $4.51B |
| Cost of Revenue | $2.51B |
| Gross Profit | $2.00B |
| SG&A Expenses | $817.50M |
| Operating Expenses | $3.35B |
| Interest Expense | $18.40M |
| Net Income | $928.50M |
| EPS (Basic) | $2.22 |
| EPS (Diluted) | $2.21 |
| Shares Outstanding (Basic) | 418.10M |
| Shares Outstanding (Diluted) | 420.20M |
Key Highlights
- 1Total revenues for the nine months ended March 31, 2022, increased by 10% to $12.37 billion, compared to $11.27 billion in the prior year period.
- 2Net earnings for the nine months ended March 31, 2022, rose by 13% to $2.32 billion, or $5.51 per diluted share, up from $2.06 billion, or $4.80 per diluted share, in the comparable period.
- 3Employer Services revenue grew 8% year-over-year for the nine months, driven by strong client retention and new business bookings.
- 4PEO Services revenue increased 15% year-over-year for the nine months, primarily due to a 16% increase in average worksite employees.
- 5The company returned $2.7 billion to shareholders through dividends ($1.2 billion) and share repurchases ($1.5 billion) during the nine months.
- 6Cash and cash equivalents stood at $1.63 billion as of March 31, 2022, indicating ample liquidity.
- 7Operating expenses increased by 10% for the nine months, largely due to higher PEO Services zero-margin benefits pass-throughs and increased costs to service the growing client base.