Early Access

10-QPeriod: Q1 FY2025

AUTOMATIC DATA PROCESSING INC Quarterly Report for Q1 Ended Sep 30, 2024

Filed November 1, 2024For Securities:ADP

Summary

Automatic Data Processing, Inc. (ADP) reported a strong first fiscal quarter ended September 30, 2024, with total revenues increasing by 7% to $4.83 billion, driven by new business, client retention, and pricing increases. Profitability also saw a notable improvement, with Net Earnings rising 11% to $956.3 million, and Diluted EPS growing 13% to $2.34. The company highlighted strategic investments in technology, including generative AI, and a significant acquisition of WorkForce Software in October 2024 for $1.2 billion, which is expected to bolster its Employer Services segment. ADP's financial position remains robust, supported by consistent operating cash flows and a strong balance sheet. The company returned $940 million to shareholders through dividends ($570 million) and share repurchases ($370 million). Management's focus on strategic priorities, coupled with operational efficiencies and favorable interest income on client funds, positions ADP for continued growth and value creation for shareholders.

Financial Highlights

54 data points
Beta

Revenue

$4.83B

0.5% Gross Margin

Net Income

$956.30M

0.2% Net Margin

EPS (Diluted)

$2.34

Total Assets

$49.51B

Cash & Equivalents

$2.10B

Free Cash Flow

$824.40M

Financial Statements
Beta
Revenue$4.83B
Cost of Revenue$2.63B
Gross Profit$2.20B
R&D Expenses$232.60M
SG&A Expenses$926.70M
Operating Expenses$3.70B
Interest Expense$137.80M
Net Income$956.30M
EPS (Basic)$2.34
EPS (Diluted)$2.34
Shares Outstanding (Basic)407.90M
Shares Outstanding (Diluted)409.50M

Key Highlights

  • 1Total Revenues grew 7% to $4.83 billion, driven by new business, client retention, and pricing strategies.
  • 2Net Earnings increased 11% to $956.3 million, and Diluted EPS rose 13% to $2.34.
  • 3Acquisition of WorkForce Software for approximately $1.2 billion in October 2024, aimed at strengthening the Employer Services segment.
  • 4Introduced ADP Lyric HCM, a new global platform combining HR, payroll, and services with a human-centric approach.
  • 5Investments in generative AI capabilities to enhance client experience and associate empowerment.
  • 6Returned $940 million to shareholders via dividends ($570 million) and share repurchases ($370 million).
  • 7Interest income on funds held for clients increased due to higher interest rates and average client fund balances.

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