Automatic Data Processing Inc
Q2 2026 Earnings
Market Reaction
S&P 500 over the same 30 days: −1.30%.
Did ADP Beat Earnings? Q2 2026 Results
Automatic Data Processing delivered a clean beat across the board in its fiscal second quarter of 2026, with earnings per share of $2.62 coming in 2.00% ahead of the $2.57 consensus estimate and revenue of $5.36 billion edging past forecasts by 0.39% on 6.2% year-over-year growth. The headline numbers were underpinned by broad momentum across both operating segments, with net earnings climbing 10% and adjusted EBIT margin expanding 80 basis points to 26.0%, while the client funds investment strategy added meaningful lift as interest on funds held for clients grew 13% to $308.60 million, supported by rising yields and a 6% increase in average client fund balances. The results arrive against a mixed backdrop for human capital management peers, with some smaller rivals flagging softer demand from cautious small and mid-sized businesses, making ADP's steady 1% growth in U.S. pays per control a quietly reassuring data point. Management responded to the quarter's strength by tightening full-year guidance, now projecting revenue growth of approximately 6% and adjusted diluted EPS growth of 9% to 10%.
- Employer Services revenue growth of 6% driven by new business bookings and client revenue retention
- Interest on funds held for clients increased 13% to $309 million from higher balances and yields
- U.S. pays per control increased 1%
- Average worksite employees increased 2% to approximately 758,000
- Average client funds balances increased 6% to $37.6 billion
- Average interest yield on client funds increased 20 basis points to 3.3%
- Net impact from client funds extended strategy increased 24% to $294.3 million
“ADP's strong second quarter results reflect the breadth of our innovative products, differentiated service, and exceptional experiences that we deliver for clients every day.”
ADP CEO, on the earnings call
Forward Guidance & Outlook
ADP raised its full-year fiscal 2026 guidance. Revenue growth is now expected at approximately 6% (up from 5% to 6%). Adjusted EBIT margin expansion is expected at 50 to 70 basis points. Adjusted diluted EPS growth is now expected at 9% to 10% (up from 8% to 10%). Employer Services revenue growth is guided at approximately 6% with new business bookings growth of 4% to 7% and client revenue retention decrease of 30 to 10 basis points. PEO Services revenue growth is expected at 5% to 7%, with average worksite employee count growth of about 2%. Interest on funds held for clients is forecast at $1.310 to $1.330 billion, based on anticipated client funds balance growth of 4% to 5% and an average yield increase to approximately 3.4%. The adjusted effective tax rate is expected at approximately 23%.
ADP YoY Financials
ADP Revenue by Segment
Figures from SEC filings and company reports. Not investment advice.