ADP (ADP) Q1 2027 Earnings
How Did ADP Stock React to Q1 2027 Earnings?
Did ADP Beat Earnings? Q1 2027 Results
Yes. ADP reported Q1 2027 earnings of $2.82 a share on Oct 28, 2026, beating the $2.77 consensus estimate by 2.0%. Revenue was $5.5B against a $5.5B estimate.
Automatic Data Processing kicked off fiscal 2027 with a clean beat on both top and bottom lines, extending its consecutive quarterly EPS beat streak to six straight quarters. The payroll and human capital management giant posted adjusted diluted EPS of $2.82, clearing the $2.77 consensus estimate by 1.95%, while revenue climbed 6.1% year-over-year to $5.49 billion, edging past the $5.47 billion Wall Street had penciled in. The standout driver was a sharp expansion in operating leverage, with adjusted EBIT margin widening 130 basis points to 26.8% as both the Employer Services and PEO segments contributed balanced growth. A meaningful tailwind from the client funds investment strategy also helped, with interest on funds held for clients jumping 15% to $329.30 million as average client fund balances grew to $36.9 billion and yields moved higher. Management responded by lifting full-year guidance, now projecting revenue growth of approximately 6% and adjusted diluted EPS growth of 10% to 12%, a notable step up from prior forecasts that signals confidence heading into the rest of the fiscal year.
- Employer Services revenue grew 6% with segment margin expansion of 130 basis points to 36.5%
- Interest on funds held for clients increased 15% to $329 million driven by 6% higher average balances and 30 bps yield improvement
- U.S. pays per control increased 2%, up from flat in prior year quarter
- Net impact from client funds extended investment strategy increased 26% to $332.9 million
- Share repurchases reduced diluted share count by 2%
“ADP is off to a strong start in fiscal 2027 with first quarter results that reflect the resilience of our business model and the trust our clients continue to place in us. The complexity of work is growing faster than employers can manage alone and our clients are turning to us and our deep domain expertise to fundamentally change how work gets done inside their organizations. We enter the rest of fiscal 2027 well positioned to build on our current momentum.”
ADP CEO, on the earnings call
What Is ADP's Outlook?
ADP raised its fiscal 2027 outlook: consolidated revenue growth of approximately 6% (up from 5% to 6%); adjusted EBIT margin expansion of 70 to 90 basis points; adjusted diluted EPS growth of 10% to 12% (up from 9% to 11%); GAAP diluted EPS growth of 12% to 14%; adjusted effective tax rate of approximately 23%. Employer Services revenue growth of approximately 6%, new business bookings growth of 4% to 7%, client revenue retention decrease of 10 to 30 basis points, and U.S. pays per control increase of about 1%. PEO Services revenue growth of 5% to 7%, revenue excluding zero-margin pass-throughs growth of 3% to 5%, and average worksite employee count growth of about 2%. Interest on funds held for clients expected at $1.59 to $1.61 billion based on client funds balance growth of 4% to 5% and average yield of approximately 3.8%.
ADP YoY Financials
| Metric | Q1 2027 | Q1 2026 | Year over year |
|---|---|---|---|
| Revenue | $5.5B | $5.2B | +6.1% |
| Gross Profit | $2.5B | $2.3B | +8.0% |
| Operating Income | $1.5B | $104.9M | +1,294.0% |
| Net Income | $1.1B | $1.0B | +11.1% |
ADP Revenue by Segment
When Does ADP Report Next?
Figures from SEC filings and company reports. Not investment advice.