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Live Earnings Analysis: ADP Beats Earnings – Will Shares Rally?

By Eric Bleeker · Updated Jul 30, 10:45am ET · Published Jul 30, 6:10am ET

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ADP Up 1%

Eric Bleeker

ADP jumped in the first 10 minutes of trading and is now trading up about 1% on the day. Earnings were solid overall and don’t change the narrative on the company. The biggest ‘limiter’ to future gains is ADP’s valuation. Trading at 32X trailing earnings, ADP trades at the upper end of its historical valuation range.

GDP Stronger Than Expected

Eric Bleeker

GDP figures just came out which show the U.S. economy grew at 3% in Q2, higher than expectations. ADP has reacted little to the macro news, shares are flat as of 8:45 a.m. ET.

ADP's Earnings at a Glance

Eric Bleeker

Automatic Data Processing (ADP) reported strong financial results for the fourth quarter and fiscal year 2025, with revenues increasing by 8% to $5.1 billion for the quarter and 7% to $20.6 billion for the year.

Adjusted diluted EPS for the quarter was $2.26, surpassing the estimated EPS of $2.23. The company also announced a 9% increase in adjusted net earnings to $923 million for the quarter.

For fiscal 2025, ADP achieved a 9% growth in adjusted EBIT to $5.3 billion, with a margin expansion of 50 basis points to 26.0%.

Looking ahead, ADP forecasts fiscal 2026 revenue growth of 5% to 6% and adjusted diluted EPS growth of 8% to 10%.

CEO Maria Black highlighted strong client satisfaction and the company’s commitment to innovation as key drivers of performance. ADP’s Employer Services and PEO Services segments both reported revenue growth, with Employer Services seeing an 8% increase for the quarter. The company also noted a 16% increase in interest on funds held for clients for the fiscal year.

ADP Beats on the Top and Bottom Line

Eric Bleeker

Here are the headline figures from ADP:

  • Revenue: $5.10 billion (Wall Street expected $5.05 billion)
  • Adjusted EPS: $2.26 (Wall Street expected $2.23 billion)

ADP Shares are Slightly Higher

Eric Bleeker

ADP earnings are out and shares have edged slightly higher. Right now the stock is up .4% in premarket trading. We’ll follow up with earnings analysis next.

Here's What Wall Street Expects Today

Eric Bleeker

We’ve looked back at what ADP delivered in April, now let’s preview what Wall Street is expecting when the company reports earnings this morning:

Wall Street Consensus for Fiscal Q4

  • Revenue: $5.05 billion
  • Adjusted EPS: $2.23
  • Free Cash Flow: $1.2 Billion

Looking ahead to fiscal 2026 (which will run July 2025 to June 2026), here’s what Wall Street expects from ADP:

  • Revenue: $22.3 billion
  • Adjusted EPS: $11.53

 

Live coverage has ended. The full story is below.

Full Coverage

The story so far

Automatic Data Processing (Nasdaq: ADP | ADP Price Prediction) reports its Fiscal Q4 earnings before the bell today and we’ll be analyzing the release in this live blog. 

So far this year shares are up about 6.5%, but ADP has been on a long run of success. Across the past year, shares are up 21% and across the past five years they’ve gained 132%. Could earnings this morning fuel a rally across the second half of the year? We’ll be digging into the numbers to see what Wall Street likes and Wall Street hates. 

All you have to do is stay on this page and we’ll post automatic updates throughout the morning. Let’s start by looking at ADP’s last earnings report. 

A Look Back at Automatic Data Processing’s Fiscal Q3 

When ADP reported their last earnings on April 30th, here’s what the company delivered:

ADP | Automatic Data Processing Q3’25 Earnings Highlights:

  • Adj. EPS: $3.06 ✅; UP +6% YoY
  • Revenue: $5.6B [✅]; UP +6% YoY
  • Adj. Gross Margin: 29.3% [✅]; UP +10 bps YoY
  • Net Income: $1.2B [✅]; UP +5% YoY

Fiscal 2025 Outlook:

  • Revenue: $19.203B ±6% to 7% [✅]
    • ADP expects continued growth driven by strong demand for its HCM solutions and effective client retention strategies.
    • The company is focused on maintaining its competitive edge through innovation and service excellence.

Q3 Segment Performance:

  • Employer Services Revenue: $3.768B [✅]; UP +5% YoY
  • PEO Services Revenue: $1.789B [✅]; UP +7% YoY
  • Interest on Funds Held for Clients: $355M [✅]; UP +11% YoY

Other Key Q3 Metrics:

  • Adj. Operating Income: $1.629B [✅]; UP +6% YoY
  • Adj. Operating Expenses: $2.535B [✅]; UP +5% YoY
  • R&D Expenses: $247.1M [✅]; UP +2% YoY
  • Free Cash Flow: $3.501B; UP +22% YoY
  • Effective Tax Rate: 23.0% (vs. 23.0% YoY)

CEO Commentary:

  • Maria Black: “Our solid third quarter results reflect the strength and consistency of our business and the dedication of our associates who helped drive new record highs in client satisfaction this fiscal year. As the world of work evolves, we will maintain our strategic progress and continue to lead the way through our resilient and broad-based business portfolio, market-leading product offerings, and the differentiated service we provide our clients each day.”

CFO Commentary:

  • Don McGuire: “With good outcomes in revenue and earnings growth in the third quarter, we are positioned for strong overall fiscal 2025 results. We remain focused on delivering against our revenue and profitability commitments as we continue to invest in our business to drive sustainable, long-term growth.”

Strategic Updates:

  • ADP is raising its full-year guidance for adjusted EBIT margin and adjusted diluted EPS growth, reflecting confidence in its operational performance and market position.

 

Contact [email protected] for any questions or corrections.

Eric Bleeker

Eric Bleeker has been investing for more than 20 years. He began his career working at Microsoft before joining Motley Fool, one of the largest publishers of financial research. In his 15 years at Motley Fool Eric served as the General Manager for Fool.com and led coverage in the Technology & Telecom sector. In addition, he was a featured columnist and has hosted dozens of investing seminars attended by more than a million total investors. Eric has more than 1,000 financial bylines to his name and has been featured in The Wall Street Journal, CNBC, Fox Business, and many other leading publications. He is currently focused on artificial intelligence investing and is a CFA Charterholoder.

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