Automatic Data Processing Inc
Q4 2025 Earnings
Market Reaction
S&P 500 over the same 30 days: +1.67%.
Did ADP Beat Earnings? Q4 2025 Results
Automatic Data Processing closed fiscal 2025 on a confident note, with Q4 revenue climbing 7.5% year over year to $5.13 billion, clearing the $5.05 billion consensus estimate by 1.62%, while earnings per share of $2.23 landed precisely in line with expectations. <a href="https://247wallst.com/investing/2025/07/30/live-earnings-analysis-will-adp-beat-earnings-today/">Investors tracking the quarter</a> closely watched the Employer Services segment, which proved to be the primary engine behind the results, with full-year revenue rising 7% to $13.88 billion and segment margin expanding 100 basis points to 36.1%, reflecting both client retention improvements to 92.1% and new business bookings growth of 3% to $2.10 billion. Interest on funds held for clients also contributed meaningfully, rising 16% for the full year to $1.19 billion. ADP's responsible debt management and consistent cash generation continue to underpin its financial flexibility as it looks ahead; for fiscal 2026, management guided for revenue growth of 5% to 6%, adjusted EBIT margin expansion of 50 to 70 basis points, and adjusted diluted EPS growth of 8% to 10%.
- Employer Services revenue growth of 8% in Q4, driven by organic growth and acquisitions
- PEO Services revenue growth of 7% in Q4 with average worksite employees up 3% to about 761,000
- Interest on funds held for clients increased 11% in Q4 to $308 million, supported by 6% growth in average client funds balances and 20 basis point yield improvement
- Record-high client satisfaction levels across the company
- Employer Services client revenue retention improved to 92.1%
- Employer Services new business bookings increased 3% to $2.1 billion for the fiscal year
- Net share count reduction contributed to EPS growth
- U.S. pays per control increased 1% in Q4 and for the full year
“We concluded fiscal year 2025 with strong revenue and earnings growth. Revenue growth in our Employer Services and PEO segments came in at the high-end of our full year expectations, bolstered by record-high client satisfaction levels across the company. As we enter a new fiscal year, we remain committed to actively listening to our clients and consistently meeting their needs through cutting-edge products, premium services, and exceptional experiences designed to elevate the world of work.”
ADP CEO, on the earnings call
Forward Guidance & Outlook
For fiscal 2026, ADP expects consolidated revenue growth of 5% to 6%, adjusted EBIT margin expansion of 50 to 70 basis points, adjusted effective tax rate of about 23%, and adjusted diluted EPS growth of 8% to 10%. Employer Services revenue is expected to grow 5% to 6% with new business bookings growth of 4% to 7%, though client revenue retention is expected to decline 10 to 30 basis points. U.S. pays per control growth is expected at 0% to 1%. PEO Services revenue is projected to grow 5% to 7%, with revenue excluding zero-margin benefits pass-throughs growing 3% to 5% and average worksite employee count growth of 2% to 3%. Interest on funds held for clients is expected to be $1.290 to $1.310 billion, based on anticipated client funds balance growth of 2% to 3% and an average yield increase to approximately 3.4%.
ADP YoY Financials
ADP Revenue by Segment
Figures from SEC filings and company reports. Not investment advice.