Summary
Automatic Data Processing, Inc. (ADP) reported solid financial results for the third quarter and the first nine months of fiscal year 2025. Total revenues increased by 6% year-over-year to $5.55 billion for the quarter and 7% to $15.43 billion for the nine-month period, driven by new business, client retention, pricing increases, and interest income on client funds. The company also benefited from its recent acquisitions, WorkForce Software and PEI. Net earnings grew 5% to $1.25 billion ($3.06 per diluted share) for the quarter, and 8% to $3.17 billion ($7.75 per diluted share) for the nine months. The company continued its commitment to shareholder returns, repurchasing shares and increasing its dividend for the 50th consecutive year. ADP's financial condition remains strong, supported by consistent cash flow generation and ample liquidity, positioning the company well for future growth and investments in its HCM technology solutions.
Financial Highlights
54 data points| Revenue | $5.55B |
| Cost of Revenue | $2.90B |
| Gross Profit | $2.65B |
| R&D Expenses | $247.10M |
| SG&A Expenses | $1.02B |
| Operating Expenses | $3.99B |
| Interest Expense | $74.80M |
| Net Income | $1.25B |
| EPS (Basic) | $3.07 |
| EPS (Diluted) | $3.06 |
| Shares Outstanding (Basic) | 406.90M |
| Shares Outstanding (Diluted) | 408.50M |
Key Highlights
- 1Total revenues increased by 6% to $5.55 billion in Q3 FY25 and by 7% to $15.43 billion in the first nine months of FY25.
- 2Net earnings grew 5% to $1.25 billion ($3.06 diluted EPS) for the quarter and 8% to $3.17 billion ($7.75 diluted EPS) for the nine-month period.
- 3The company successfully integrated the WorkForce Software acquisition and completed the PEI acquisition in Mexico, enhancing its global HCM capabilities.
- 4Interest on funds held for clients increased due to higher average client fund balances and a rise in average interest rates earned.
- 5Employer Services segment revenue grew 5% year-over-year for the quarter and 10% for the nine-month period, driven by new bookings, retention, and the WorkForce Software acquisition.
- 6PEO Services revenue increased 7% for both the quarter and nine-month period, supported by growth in average worksite employees.
- 7ADP returned $2.8 billion to shareholders through dividends ($1.8 billion) and share repurchases ($1.0 billion) in the first nine months of FY25, marking its 50th consecutive annual dividend increase.