Early Access

10-QPeriod: Q3 FY2024

AUTOMATIC DATA PROCESSING INC Quarterly Report for Q3 Ended Mar 31, 2024

Filed May 2, 2024For Securities:ADP

Summary

Automatic Data Processing, Inc. (ADP) reported strong financial results for the third quarter and the first nine months of fiscal year 2024. Total revenues increased by 7% year-over-year for both periods, driven by new business, client retention, pricing increases, and growth in interest on client funds. Net earnings saw a significant increase of 14% for the quarter and 11% for the nine months. Diluted Earnings Per Share (EPS) also grew, rising 15% quarterly and 12% year-to-date. The company's strategic priorities, including enhancing its Human Capital Management (HCM) technology with AI and leveraging global scale, are progressing well. ADP continues to demonstrate a strong financial position and robust cash flow generation, enabling consistent returns to shareholders through dividends and share repurchases.

Financial Highlights

54 data points
Beta

Revenue

$5.25B

0.5% Gross Margin

Net Income

$1.18B

0.2% Net Margin

EPS (Diluted)

$2.88

Total Assets

$64.18B

Cash & Equivalents

$3.29B

Free Cash Flow

$1.50B

Financial Statements
Beta
Revenue$5.25B
Cost of Revenue$2.77B
Gross Profit$2.49B
R&D Expenses$242.70M
SG&A Expenses$940.90M
Operating Expenses$3.77B
Interest Expense$62.70M
Net Income$1.18B
EPS (Basic)$2.89
EPS (Diluted)$2.88
Shares Outstanding (Basic)410.50M
Shares Outstanding (Diluted)412.10M

Key Highlights

  • 1Total revenues grew 7% year-over-year for both the three and nine months ended March 31, 2024.
  • 2Net earnings increased by 14% for the three months and 11% for the nine months ended March 31, 2024.
  • 3Diluted EPS rose by 15% for the quarter and 12% for the nine months.
  • 4Interest income on funds held for clients significantly increased due to higher average interest rates and client fund balances.
  • 5Investments in Research and Development and Selling, General, and Administrative expenses increased, reflecting strategic investments in technology (including AI) and sales organization.
  • 6The company returned $2.4 billion to shareholders through dividends ($1.6B) and share repurchases ($0.8B) in the first nine months.
  • 7Employer Services segment revenues grew 8% year-over-year, with a notable increase in Earnings Before Income Taxes (EBIT) of 14% for the quarter.

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