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AUTOMATIC DATA PROCESSING INC 8-K Report, Financial Results (Jul 30, 2025)

Reports
Earnings & Results·Exhibits & Filings
Filing Date
Filed July 30, 2025
Period End
July 30, 2025
Security
ADP
In the record · 2016–202610-K1110-Q328-K103

ADP filed 11 annual reports (10-K), 32 quarterly reports (10-Q) and 103 current reports (8-K) between 2016 and 2026.

  1. Leadership change8-K · Jun ’18Jun ’18
  2. Leadership change8-K · Jun ’20Jun ’20
  3. Material agreement8-K · Jul ’22Jul ’22
  4. Material agreement8-K · Jun ’26Jun ’26

01—Abstract

Summary

Summary of the 8-K filed July 30, 2025. Cited figures are marked; the original filing is the authoritative source.

ADP reported fiscal 2025 (year ended June 30, 2025) results on July 30, 2025, in an earnings release furnished as Exhibit 99 to this 8-K under Item 2.02.

Full-year revenue rose 7% to $20.6 billiona (7% organic constant currency), net earnings rose 9% to $4.1 billion, and diluted EPS rose 10% to $9.98 (adjusted diluted EPS up 9% to $10.01). Adjusted EBIT margin expanded 50 basis points to 26.0%. Employer Services, the larger segment, grew revenue 7% for the year and 8% in the fourth quarter, with segment margin up 100 basis points for the year.

PEO Services revenue grew 7%, though its segment margin declined 60 basis points. The results were driven in part by client funds interest income, which rose 16% to $1.19 billionb for the year on higher average balances and yields. Investors should note that this interest income is sensitive to interest rates, and management's fiscal 2026 outlook assumes the yield on client funds rises to about 3.4% and the net client funds extended strategy contribution reaches $1.25 to $1.27 billion.

Balance sheet activity included a $1.2 billionc acquisition outflow, $4.8 billion of commercial paper issuance, and roughly $2.4 billion in dividends paid, with total stockholders' equity rising to $6.2 billion from $4.5 billion. For fiscal 2026, ADP guided to 5% to 6% consolidated revenue growth, 50 to 70 basis points of adjusted EBIT margin expansion, and 8% to 10% adjusted diluted EPS growth.

Employer Services revenue growth is guided at 5%d to 6% and PEO Services revenue growth at 5% to 7%. Management emphasized consistent revenue growth and continued margin expansion as its priorities for the year.

02—Key points

Key Highlights

  1. Full-year fiscal 2025 revenue grew 7% to $20.6 billion, with 7% organic constant currency growth.
  2. Diluted EPS rose 10% to $9.98; adjusted diluted EPS rose 9% to $10.01, helped by a lower share count.
  3. Adjusted EBIT margin expanded 50 basis points to 26.0%, with Employer Services segment margin up 100 basis points for the year.
  4. Interest on funds held for clients rose 16% to $1.19 billion, a key earnings driver that is sensitive to interest rates.
  5. Fiscal 2026 outlook calls for 5% to 6% revenue growth, 50 to 70 basis points of adjusted EBIT margin expansion, and 8% to 10% adjusted diluted EPS growth.
  6. PEO Services segment margin declined 60 basis points for the year, and PEO revenue excluding zero-margin pass-throughs grew only 6%.
  7. Balance sheet shifted toward short-term financing: commercial paper of $4.8 billion was issued, and cash and short-term marketable securities together reached about $7.8 billion.

03—Questions

Frequently Asked Questions

  1. What were ADP's key fiscal 2025 financial results?

    For the year ended June 30, 2025, ADP reported revenue of $20.6 billion (up 7%), net earnings of $4.1 billion (up 9%), and diluted EPS of $9.98 (up 10%). Adjusted EBIT rose 9% to $5.3 billion, with adjusted EBIT margin of 26.0%.

  2. What is ADP's fiscal 2026 guidance?

    ADP guided to 5% to 6% consolidated revenue growth, 50 to 70 basis points of adjusted EBIT margin expansion, an adjusted effective tax rate of about 23%, and 8% to 10% adjusted diluted EPS growth. Employer Services revenue is expected to grow 5% to 6%, and PEO Services revenue 5% to 7%.

  3. How much of ADP's earnings growth came from client funds interest?

    Interest on funds held for clients rose to $1.19 billion in fiscal 2025, up 16%, and the net client funds strategy contribution rose 22% to $1.07 billion. Management expects the net contribution to reach $1.25 to $1.27 billion in fiscal 2026, based on yields rising to about 3.4%. These figures depend on interest rate assumptions, so investors should weigh this income source against the core operating business.

  4. Why did PEO Services margins decline?

    PEO Services segment margin fell 60 basis points to 14.2% for the year and 20 basis points in the fourth quarter. The filing does not give a detailed cause, but PEO revenue excluding zero-margin benefits pass-throughs grew 6%, slower than total PEO revenue growth of 7%, and average worksite employees rose only 3%.

  5. Did ADP change its capital structure or capital returns in the period?

    ADP issued $2.0 billion of long-term debt and $4.8 billion of commercial paper during the year. It also paid $2.4 billion in dividends, repurchased $1.3 billion of common stock, and spent $1.2 billion on acquisitions, which added to goodwill and intangible assets. Long-term debt rose to $4.0 billion from $3.0 billion.

04—Continue

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