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AUTOMATIC DATA PROCESSING INC 8-K Report, Financial Results (Apr 29, 2026)

Reports
Earnings & Results·Exhibits & Filings
Filing Date
Filed April 29, 2026
Period End
April 29, 2026
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 · Sep ’16Sep ’16
  2. Material agreement8-K · Jun ’19Jun ’19
  3. Leadership change8-K · Sep ’21Sep ’21
  4. Material agreement8-K · Jun ’25Jun ’25

01—Abstract

Summary

Summary of the 8-K filed April 29, 2026. Cited figures are marked; the original filing is the authoritative source.

ADP reported third quarter fiscal 2026 results (quarter ended March 31, 2026) that came in ahead of management's expectations across revenue growth, adjusted EBIT margin, and adjusted EPS.

Total revenues rose 7% to $5.9 billiona (6% organic constant currency), net earnings rose 9% to $1.36 billion, and diluted EPS rose 10% to $3.38 (adjusted diluted EPS of $3.37). Adjusted EBIT grew 10% to $1.79 billion, with adjusted EBIT margin expanding 80 basis points to 30.2%. Employer Services drove the quarter, with segment revenue up 7% and segment margin up 130 basis points to 41.1%, while PEO Services revenue grew 7% but segment margin contracted 120 basis points to 13.0%, reflecting higher zero-margin pass-through costs and workers' compensation expenses.

Interest on funds held for clients was a significant contributor, rising 14% to $404 millionb on average client fund balances of $48.3 billion (up 9%) and a 10 basis point increase in average yield to 3.3%. Net impact from the client funds strategy rose 17% to $401 million. Management characterized the quarter as strong and highlighted investment in AI capabilities across products, service delivery, and sales.

Management raised fiscal 2026 guidance: revenue growth is now expected at 6% to 7% (previously about 6%), adjusted EBIT margin expansion at 70 to 80 basis points (previously 50 to 70), and adjusted diluted EPS growth at 10% to 11% (previously 9% to 10%). The client funds interest revenue outlook was increased to $1.340 to $1.350 billionc from $1.310 to $1.330 billion. Investors should note that a portion of the earnings strength stems from elevated interest income on client funds, which is sensitive to interest rate movements, and that the adjusted results exclude minor items such as a roughly $2 million reversal of a prior workforce optimization charge and about $4 million of ADP Ventures investment gains.

02—Key points

Key Highlights

  1. Total revenues grew 7% to $5.9 billion in Q3 FY26 (6% organic constant currency), with nine-month revenues of $16.5 billion, up 7%.
  2. Diluted EPS rose 10% to $3.38 and adjusted diluted EPS rose 10% to $3.37; nine-month diluted EPS was $8.49, up 10%.
  3. Adjusted EBIT increased 10% to $1.79 billion, with adjusted EBIT margin expanding 80 basis points to 30.2%.
  4. Fiscal 2026 guidance raised: revenue growth to 6% to 7%, adjusted EBIT margin expansion to 70 to 80 bps, and adjusted diluted EPS growth to 10% to 11%.
  5. Employer Services segment margin rose 130 bps to 41.1% on 7% revenue growth, while PEO Services segment margin fell 120 bps to 13.0%.
  6. Interest on funds held for clients rose 14% to $404 million, and client funds interest revenue guidance was raised to $1.340 to $1.350 billion for FY26.
  7. Balance sheet shows funds held for clients of $46.4 billion and client funds obligations of $46.8 billion, with $4.8 billion of commercial paper repaid during the nine months.

03—Questions

Frequently Asked Questions

  1. Why did ADP raise its fiscal 2026 guidance?

    Management said third quarter results came in ahead of its expectations for revenue growth, adjusted EBIT margin, and adjusted EPS, and that the updated outlook reflects stronger revenue and earnings growth. Higher client funds interest revenue, now guided to $1.340 to $1.350 billion from $1.310 to $1.330 billion, is a notable contributor to the raised earnings outlook.

  2. How much of ADP's earnings growth comes from interest on client funds?

    Interest on funds held for clients rose $48.7 million year over year to $403.9 million in the quarter, and the net impact from the client funds strategy rose 17% to $401.1 million. This income is sensitive to interest rate trends, so it may be a less stable driver of earnings than core operating growth, though management treats the extended investment strategy income as fundamental to the business model.

  3. Why did PEO Services margins decline while revenue grew?

    PEO Services revenue increased 7%, but segment margin fell 120 basis points to 13.0%, and segment earnings declined 2%. Revenue excluding zero-margin benefits pass-throughs grew a more modest 5%, and workers' compensation and state unemployment tax costs rose to $271 million from $253 million, which pressured profitability.

  4. What are the key items excluded from ADP's adjusted results?

    The adjustments in the quarter were small: a $0.3 million partial reversal of the fiscal 2024 workforce optimization initiative and a $2.1 million net gain on ADP Ventures' investments, which together reduced adjusted results. Adjusted and GAAP diluted EPS differ by only one cent, so the adjustments are not material to reported earnings.

  5. How is ADP's cash and liquidity position after the nine-month period?

    Operating cash flow rose to $4.0 billion from $3.5 billion for the nine months, and shareholders received $1.9 billion in dividends and $1.5 billion in share repurchases. ADP repaid $4.8 billion of commercial paper that was outstanding at fiscal year-end, leaving no commercial paper balance at March 31, 2026, while long-term debt remained about $4.0 billion.

04—Continue

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