How did ADP's revenue performance in this quarter compare to the previous year?

ADP reported a 7% increase in total revenues for the three months ended September 30, 2025, reaching $5.2 billion, compared to $4.8 billion in the same period last year. On an organic constant currency basis, revenue grew by 6%.

What is the impact of the WorkForce Software acquisition on ADP's financials?

The acquisition of WorkForce Software, completed in October 2024, contributed to revenue growth, particularly in the Employer Services segment. The company reported increased R&D expenses related to integration costs and noted the acquisition's impact on revenue, although it was not deemed material enough to require pro forma financial information.

How is ADP returning capital to shareholders?

ADP demonstrated a strong commitment to shareholder returns by distributing $1.0 billion in the quarter. This included $626.7 million in dividends paid and $366.0 million in share repurchases. The company also repurchased approximately 1.2 million shares of its common stock during the period.

What factors are driving the increase in interest income on funds held for clients?

Interest income on funds held for clients rose by 13% to $286.8 million. This increase is attributed to a 6.5% rise in average client fund balances to $34.9 billion and an increase in the average interest rate earned to 3.3% from 3.1% in the prior year's comparable period.

ADP 10-Q Quarterly Report Q1 FY2026 — Revenue, Net Income, EPS

Summary

Automatic Data Processing, Inc. (ADP) reported a solid first quarter for fiscal year 2026, with total revenues increasing by 7% year-over-year to $5.2 billion. This growth was driven by new client bookings, strong client retention, higher interest income on client funds, and the impact of the recent WorkForce Software acquisition. Net earnings rose 6% to $1.01 billion, resulting in diluted earnings per share (EPS) of $2.49, a 6% increase. Key financial strengths include continued revenue growth, particularly in the Employer Services segment, and robust profitability. The company returned $1.0 billion to shareholders through dividends and share repurchases, underscoring its commitment to capital return. While operating expenses and R&D increased, partly due to investments in new products and the recent acquisition, the company maintained its adjusted EBIT margin. ADP's strong business model, characterized by low capital intensity and consistent cash flow generation, positions it well to meet operational needs and continue strategic investments.

Financial Highlights

53 data points

Beta

Revenue

$5.18B

0.5% Gross Margin

Net Income

$1.01B

0.2% Net Margin

EPS (Diluted)

$2.49

Total Assets

$54.32B

Cash & Equivalents

$2.48B

Free Cash Flow

$642.30M

Financial Statements

Beta

Revenue	$5.18B
Cost of Revenue	$2.84B
Gross Profit	$2.34B
R&D Expenses	$251.20M
SG&A Expenses	$1.01B
Operating Expenses	$3.98B
Interest Expense	$135.40M
Net Income	$1.01B
EPS (Basic)	$2.50
EPS (Diluted)	$2.49
Shares Outstanding (Basic)	405.10M
Shares Outstanding (Diluted)	406.50M

Key Highlights

1Total revenues grew 7% year-over-year to $5.2 billion, driven by new business, client retention, and acquisitions.
2Net earnings increased 6% to $1.01 billion, with diluted EPS growing 6% to $2.49.
3The company returned $1.0 billion to shareholders via dividends ($0.6 billion) and share repurchases ($0.4 billion).
4Interest on funds held for clients increased 13% due to higher average client fund balances and interest rates.
5Operating expenses and R&D expenses saw an 8% increase, reflecting investments in product development and the WorkForce Software acquisition.
6The Employer Services segment revenue grew 7% (5% organically), while PEO Services revenue grew 7%.
7ADP completed the acquisition of WorkForce Software in October 2024, which is expected to enhance its workforce management solutions.

AUTOMATIC DATA PROCESSING INC Quarterly Report for Q1 Ended Sep 30, 2025

Summary

Financial Highlights

Key Highlights

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