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Automatic Data Processing (NASDAQ: ADP) details 2026 results and 2027 outlook

Filing Impact
(High)
Filing Sentiment
(Neutral)
Form Type
8-K

Rhea-AI Filing Summary

Automatic Data Processing, Inc. reported fourth quarter and fiscal 2026 results and issued fiscal 2027 guidance. Full-year revenue rose 7% to $21.9 billion, with net earnings up 8% to $4.4 billion. Adjusted EBIT grew 10% to $5.9 billion, lifting the adjusted EBIT margin to 26.8%. Diluted EPS increased 10% to $10.94, and adjusted diluted EPS grew 11% to $11.12.

In the fourth quarter, revenue was $5.5 billion, up 7%, and adjusted diluted EPS increased 17% to $2.64. Employer Services delivered 7% revenue growth for the year, 6% growth in new business bookings to $2.2 billion, 92.1% client revenue retention, and margin expansion. PEO Services revenue grew 7% with modest margin compression and worksite employees up 2% to about 762,000.

For fiscal 2027, ADP projects 5% to 6% consolidated revenue growth, 70 to 90 basis points of adjusted EBIT margin expansion, and adjusted diluted EPS growth of 9% to 11%. Interest on funds held for clients is expected at $1.54 to $1.56 billion, based on higher client funds balances and an anticipated yield of about 3.7%.

Positive

  • Strong FY 2026 performance with revenue up 7% to $21.9 billion, net earnings up 8% to $4.4 billion, and adjusted diluted EPS up 11% to $11.12, indicating solid top- and bottom-line growth.
  • Margin expansion and cash generation: adjusted EBIT margin improved 80 bps to 26.8%, and cash flows from operating activities increased to $5.44 billion, supporting ongoing investment and capital returns.
  • Supportive 2027 outlook calling for 5%–6% revenue growth, 70–90 bps adjusted EBIT margin expansion, and 9%–11% adjusted diluted EPS growth, signaling expectations for continued earnings growth.

Negative

  • None.

Insights

Analyzing...

Item 2.02 Results of Operations and Financial Condition Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 9.01 Financial Statements and Exhibits Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Revenue $21,947.4M Fiscal 2026 total revenues, up 7% year over year
Net earnings $4,413.5M Fiscal 2026 net earnings, up 8% year over year
Diluted EPS $10.94 Fiscal 2026 diluted earnings per share, 10% increase
Adjusted diluted EPS $11.12 Fiscal 2026 adjusted diluted EPS, up 11% year over year
Adjusted EBIT margin 26.8% Fiscal 2026 adjusted EBIT margin, 80 basis point expansion
Operating cash flow $5,441.2M Cash flows provided by operating activities for fiscal 2026
2027 revenue growth outlook 5% to 6% Projected consolidated revenue growth for fiscal 2027
2027 adjusted EPS growth outlook 9% to 11% Projected adjusted diluted EPS growth for fiscal 2027
Adjusted EBIT financial
"Adjusted EBIT increased 10% to $5.9 billion for the year"
Adjusted EBIT is a company’s operating profit before interest and taxes, but cleaned up by removing one-time or unusual items that can obscure ongoing performance. Investors use it like a tidied-up report card — it aims to show the underlying profitability of the business by excluding irregular gains, losses, or costs so comparisons across periods or companies are clearer and more meaningful for valuing operational strength.
organic constant currency financial
"revenues increased 7% to $5.5 billion and 6% on an organic constant currency basis"
A performance measure showing how a company’s sales or revenue changed from one period to another after removing the effects of recent acquisitions or disposals (organic) and filtering out the impact of exchange-rate swings (constant currency). Investors use it like comparing the same store’s sales before and after removing new locations and shifting prices, to judge the business’s true underlying growth without distortions from deals or currency moves.
Professional Employer Organization financial
"Professional Employer Organization (“PEO”) revenues are net of direct pass-through costs"
A professional employer organization (PEO) is a firm that companies hire to handle payroll, taxes, benefits and many human-resources tasks on their behalf, effectively acting as an outsourced back-office partner. Investors care because using a PEO can lower administrative costs, shift certain legal and tax responsibilities, and help a business scale more quickly, all of which can affect profitability, cash flow and regulatory risk.
client funds extended investment strategy financial
"we utilize a strategy by which we extend the maturities of our investment portfolio for funds held for clients"
zero-margin benefits pass-throughs financial
"PEO revenues and operating expenses include zero-margin benefits pass-through costs of $1,180.2 million"
pays per control financial
"U.S. pays per control increased 1% for the fourth quarter and for the fiscal year"
Revenue $21,947.4M up 7% year over year
Net earnings $4,413.5M up 8% year over year
Diluted EPS $10.94 up 10% year over year
Adjusted diluted EPS $11.12 up 11% year over year
Q4 revenue $5,473.8M up 7% vs prior-year quarter
Q4 adjusted diluted EPS $2.64 up 17% vs prior-year quarter
Guidance

For fiscal 2027, ADP expects 5% to 6% revenue growth, 70 to 90 basis points of adjusted EBIT margin expansion, and 9% to 11% adjusted diluted EPS growth.

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FAQ

How did ADP (ADP) perform financially in fiscal 2026?
ADP delivered 7% revenue growth to $21.9 billion and increased net earnings 8% to $4.4 billion in fiscal 2026. Adjusted EBIT grew 10% to $5.9 billion, and adjusted diluted EPS rose 11% to $11.12, reflecting broad-based profit growth.

What were ADP (ADP)’s fourth quarter 2026 results?
In Q4 2026, ADP generated $5.5 billion of revenue, up 7% year over year. Net earnings were $1.0 billion, while adjusted net earnings reached $1.1 billion. Adjusted diluted EPS increased 17% to $2.64 and adjusted EBIT margin improved to 25.1%.

What fiscal 2027 outlook did ADP (ADP) provide?
For fiscal 2027, ADP expects 5% to 6% revenue growth, adjusted EBIT margin expansion of 70 to 90 basis points, and adjusted diluted EPS growth of 9% to 11%. The adjusted effective tax rate is projected at approximately 23%.

How did ADP (ADP)’s Employer Services and PEO segments perform in 2026?
Employer Services revenue grew 7% for the year to $14.83 billion, with new business bookings up 6% to $2.2 billion and client revenue retention at 92.1%. PEO Services revenue rose 7% to $7.13 billion, with average worksite employees up about 2% to 762,000.

What is ADP (ADP)’s client funds interest and balance profile?
In fiscal 2026, interest on funds held for clients was $1.35 billion, up 14%. Average client funds balances increased 7% to $40.4 billion, and the average yield on client funds rose to 3.4%, contributing meaningfully to earnings.

How much cash did ADP (ADP) generate from operations in fiscal 2026?
ADP generated $5.44 billion in cash flows from operating activities during fiscal 2026, compared with $4.94 billion a year earlier. This strong cash generation supported $2.63 billion of dividends and $2.08 billion of share repurchases.
7/29/20260000008670FALSE00000086702026-07-292026-07-29

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 29, 2026
Automatic Data Processing, Inc.
(Exact name of registrant as specified in charter)
Delaware1-539722-1467904
(State or Other Jurisdiction
of Incorporation)
(Commission
File Number)
(IRS Employer
Identification No.)

     One ADP Boulevard, Roseland, New Jersey                07068
         (Address of principal executive offices)                 (Zip Code)

(973) 974-5000
(Registrant's telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.10 Par Value
(voting)		ADPNASDAQ Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
    Emerging growth company☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o




Item 2.02. Results of Operations and Financial Condition.

On July 29, 2026, the Registrant issued a press release announcing that the Registrant's financial results for the fourth quarter and fiscal year ended June 30, 2026 were available through an earnings release available on the Registrant's website. A copy of the Registrant's earnings release is attached hereto as Exhibit 99 and is hereby incorporated by reference.

Item 9.01. Financial Statements and Exhibits.    
(d)
Exhibit 99
Earnings Release dated July 29, 2026 issued by Automatic Data Processing, Inc.
104Cover Page Interactive Data File, embedded in Inline XBRL.





SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
AUTOMATIC DATA PROCESSING, INC.
(Registrant)
By:/s/ Peter Hadley
Date: July 29, 2026Name: Peter Hadley
Title: Chief Financial Officer



3


Exhibit Index
 
Exhibit NumberDescription
99
Earnings Release dated July 29, 2026 issued by Automatic Data Processing, Inc.
104Cover Page Interactive Data File, embedded in Inline XBRL.

4


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ADP Reports Fourth Quarter and Fiscal 2026 Results; Provides Fiscal 2027 Outlook
•Revenues increased 7% to $21.9 billion for the year; 6% organic constant currency
•Employer Services new business bookings increased 6% for the year to $2.2 billion
•Net earnings increased 8% to $4.4 billion for the year, and adjusted net earnings increased 10% to $4.5 billion
•Adjusted EBIT increased 10% to $5.9 billion for the year, and adjusted EBIT margin increased 80 basis points to 26.8%
•Diluted earnings per share ("EPS") increased 10% to $10.94 for the year; adjusted diluted EPS increased 11% to $11.12
•Fiscal 2027 consolidated outlook includes revenue growth of 5% to 6%, adjusted EBIT margin expansion of 70 to 90 basis points, and adjusted diluted EPS growth of 9% to 11%

ROSELAND, N.J. – July 29, 2026 – ADP (Nasdaq: ADP), a global leader in HR and payroll solutions, today announced its fourth quarter and fiscal 2026 financial results and provided its fiscal 2027 outlook.
Fourth Quarter and Fiscal 2026 Consolidated Results
Compared to last year’s fourth quarter, revenues increased 7% to $5.5 billion and 6% on an organic constant currency basis. Net earnings increased 7% to $1.0 billion, and adjusted net earnings increased 14% to $1.1 billion. Adjusted EBIT increased 13% to $1.4 billion, and adjusted EBIT margin increased 140 basis points to 25.1%. ADP’s effective tax rate for the quarter was 22.2% on a reported basis, and 22.4% on an adjusted basis. Diluted EPS increased 10% to $2.45, and adjusted diluted EPS increased 17% to $2.64.
For the full year, revenues increased 7% to $21.9 billion and 6% on an organic constant currency basis. Net earnings increased 8% to $4.4 billion, and adjusted net earnings increased 10% to $4.5 billion. Adjusted EBIT increased 10% to $5.9 billion, and adjusted EBIT margin increased 80 basis points to 26.8%. ADP’s effective tax rate for the year was 23.0% on both a reported basis and an adjusted basis. Diluted EPS increased 10% to $10.94, and adjusted diluted EPS increased 11% to $11.12.
“ADP’s strong fiscal 2026 performance is grounded in the long-term value that matters most to our clients: trust,” said Maria Black, President and Chief Executive Officer, ADP. “This is a defining moment for the future of work. AI is reshaping how work gets done, what roles look like, and how teams are organized. This is making HCM more critical than ever and companies need a partner they can trust to help navigate this shift. Our impressive financial results, strong Employer Services retention, and record client satisfaction scores are evidence that ADP is purpose-built for this, and we've never been better positioned to deliver for our clients.”
“We were pleased to deliver a strong fourth quarter to finish the year at the high end of our guidance range for revenue growth, margin expansion and adjusted EPS growth, while continuing to invest in the future growth and success of ADP,” said Peter Hadley, Chief Financial Officer, ADP. “With AI tools now being embedded across our product, service and sales teams in ways that are enhancing quality and productivity, we enter fiscal 2027 in a strong position to drive growth in our business and deliver value for our clients and healthy returns for our shareholders.”



1


Adjusted EBIT, adjusted EBIT margin, adjusted net earnings, adjusted diluted earnings per share, adjusted effective tax rate and organic constant currency are all non-GAAP financial measures. Please refer to the accompanying financial tables at the end of this release for a discussion of why ADP believes these measures are important and for a reconciliation of non-GAAP financial measures to their closest comparable GAAP financial measures.

Fourth Quarter and Fiscal 2026 Segment Results
Employer Services – Employer Services offers a comprehensive range of global HCM and Human Resources Outsourcing solutions. Compared to last year:
•Employer Services revenues increased 7% on a reported basis and 6% on an organic constant currency basis for the fourth quarter, and increased 7% on a reported basis and 5% on an organic constant currency basis for the fiscal year
•Employer Services new business bookings increased 6% to $2.2 billion for the fiscal year
•Employer Services client revenue retention remained flat at 92.1% for the fiscal year
•U.S. pays per control increased 1% for the fourth quarter and for the fiscal year
•Employer Services segment margin increased 90 basis points for the fourth quarter and increased 60 basis points for the fiscal year

PEO Services – PEO Services provides comprehensive employment administration outsourcing solutions. Compared to last year:
•PEO Services revenues increased 7% for the fourth quarter and increased 7% for the fiscal year
•PEO Services revenues excluding zero-margin benefits pass-throughs increased 5% for the fourth quarter and increased 5% for the fiscal year
•Average worksite employees paid by PEO Services increased 2% to about 775,000 for the fourth quarter and increased 2% to about 762,000 for the fiscal year
•PEO Services segment margin decreased 100 basis points for the fourth quarter and decreased 110 basis points for the fiscal year
Included within the results of our segments above:
Interest on Funds Held for Clients – The safety, liquidity, and diversification of ADP clients’ funds are the foremost objectives of the Company’s investment strategy. Client funds are invested in accordance with ADP’s prudent and conservative investment guidelines, and most of the investment portfolio is rated AAA/AA. Compared to last year:
•Interest on funds held for clients increased 15% to $355 million for the fourth quarter and increased 14% to $1.4 billion for the fiscal year
•Average client funds balances increased 8% to $41.0 billion for the fourth quarter and increased 7% to $40.4 billion for the fiscal year
•The average interest yield on client funds increased 20 basis points to 3.5% for the fourth quarter and increased 20 basis points to 3.4% for the fiscal year



2

Fiscal 2027 Outlook
Certain components of ADP’s fiscal 2027 outlook and related growth comparisons exclude the impact of the following items and are discussed on an adjusted basis where applicable. Please refer to the accompanying financial tables for a reconciliation of these adjusted amounts to their closest comparable GAAP measure.
•Fiscal 2026 pre-tax gain of about $5 million related to a partial reversal of the workforce optimization initiatives from fiscal 2025 and 2024
•Fiscal 2026 pre-tax charges of about $91 million related to a business alignment program
•Fiscal 2026 pre-tax gain of about $8 million related to gains on ADP Ventures' investments
•Fiscal 2026 pre-tax net charges of about $18 million related to the settlement of a legal matter

Consolidated Fiscal 2027 Outlook
•Revenue growth of 5% to 6%
•Adjusted EBIT margin expansion of 70 to 90 basis points
•Adjusted effective tax rate of approximately 23%
•Diluted EPS growth of 11% to 13%
•Adjusted diluted EPS growth of 9% to 11%
Employer Services Segment Fiscal 2027 Outlook
•Employer Services revenue growth of 5% to 6%
•Employer Services new business bookings growth of 4% to 7%
•Employer Services client revenue retention decrease of 10 to 30 basis points
•Increase in U.S. pays per control of 0% to 1%
PEO Services Segment Fiscal 2027 Outlook
•PEO Services revenue growth of 5% to 7%
•PEO Services revenue, excluding zero-margin benefits pass-throughs, growth of 3% to 5%
•PEO Services average worksite employee count growth of about 2%
Client Funds Extended Investment Strategy Fiscal 2027 Outlook
The interest assumptions in our outlook are based on Fed Funds futures contracts and various forward yield curves as of July 28, 2026. The Fed Funds futures contracts are used in the client short and corporate cash interest income outlook. A combination of various forward yield curves that reflect our investment mix, resulting in a blended rate of 4.4%, was used to forecast new purchase rates across the client and corporate extended and client long portfolios over the remainder of the fiscal year.

•Interest on funds held for clients of $1.540 to $1.560 billion; this is based on anticipated growth in client funds balances of 3% to 4% and an average yield that is anticipated to increase to approximately 3.7%
•Total contribution from the client funds extended investment strategy of $1.545 to $1.565 billion


3

Fiscal 2027 Outlook
Fiscal 2026
(unaudited)
July 29, 2026
Fiscal 2027 Outlook (a)
Total ADPRevenues$21,947M5 to 6%
Adj. EBIT Margin26.8%70 to 90 bps
Adj. Effective Tax Rate23.0%~23%
Adj. Diluted EPS$11.129 to 11%
Employer ServicesRevenues$14,831M5 to 6%
ES New Business Bookings$2.2B4 to 7%
Client Revenue Retention92.1%(30) to (10) bps
U.S. Pays Per Control1%0 to 1%
PEO ServicesRevenues$7,128M5 to 7%
Revenues Ex Zero-Margin Pass-throughs$2,521M3 to 5%
Average WSEs762,000~2%
Client Funds InterestAverage Client Funds Balances$40.4B3 to 4%
Yield on Client Funds Portfolio3.4%~3.7%
Client Funds Interest Revenue$1,355M$1,540 to $1,560M
Net Impact from Client Funds Extended Strategy$1,315M$1,545 to $1,565M
(a) Outlook contemplates the anticipated impact of foreign currency in revenue and operating results.

Investor Webcast Today
As previously announced, ADP will host a conference call for financial analysts today, Wednesday, July 29, 2026 at 8:30 a.m. ET. The conference call will be webcast live on ADP’s website at investors.adp.com and will be available for replay following the call. A slide presentation accompanying the webcast is also available at investors.adp.com/events-and-presentations. ADP news releases, current financial information, SEC filings, and Investor Relations presentations are posted to ADP’s website at investors.adp.com.
About ADP (Nasdaq: ADP)
ADP has been shaping the world of work with innovation and expertise for more than 75 years. As a global leader in HR and payroll solutions, ADP continuously works to solve business challenges for our clients and their workers, from simple, easy-to-use tools for small businesses to fully integrated platforms for global enterprises – and everything in between. Always Designing for People means we're focused on just that – people. We use our unmatched AI-driven insights and proven expertise to design innovative solutions that help people achieve greater success at work. More than 1.1 million clients across 140+ countries rely on ADP's exceptional service to support their people and drive their business forward. HR, Talent, Time Management, Benefits, Compliance, and Payroll. Learn more at ADP.com
4

Automatic Data Processing, Inc. and Subsidiaries
Statements of Consolidated Earnings
(In millions, except per share amounts)
(Unaudited)
Three Months EndedTwelve Months Ended
June 30,June 30,
2026202520262025
Revenues:
Revenues, other than interest on funds held
     for clients and PEO revenues		$3,342.1 $3,157.6 $13,476.8 $12,692.2 
Interest on funds held for clients355.4 307.8 1,354.8 1,189.1 
PEO revenues (A) (B) (C)1,776.3 1,661.4 7,115.8 6,679.6 
Total revenues5,473.8 5,126.8 21,947.4 20,560.9 
Expenses:
Costs of revenues:
Operating expenses (B) (C)2,574.1 2,426.2 10,240.6 9,622.7 
Research and development265.9 269.3 1,028.8 988.6 
Depreciation and amortization122.5 121.5 490.8 486.0 
Total costs of revenues2,962.5 2,817.0 11,760.2 11,097.3 
Selling, general, and administrative expenses1,252.3 1,103.1 4,408.2 4,051.7 
Interest expense121.0 113.7 459.3 455.9 
Total expenses4,335.8 4,033.8 16,627.7 15,604.9 
Other (income)/expense, net(119.8)(97.6)(410.6)(354.1)
Earnings before income taxes1,257.8 1,190.6 5,730.3 5,310.1 
Provision for income taxes279.2 280.0 1,316.8 1,230.4 
Net earnings$978.6 $910.6 $4,413.5 $4,079.7 
Basic earnings per share$2.45 $2.24 $10.97 $10.02 
Diluted earnings per share$2.45 $2.23 $10.94 $9.98 
Components of Other (income)/expense, net:
Interest income on corporate funds$(108.8)$(88.0)$(371.0)$(319.5)
Realized (gains)/losses on available-for-sale securities, net0.3 0.8 (2.9)1.7 
Gain on sale of assets— (2.6)— (5.0)
Non-service components of pension income, net(7.1)(7.8)(28.3)(31.3)
Net (gain)/loss on ADP Ventures' investments(4.2)— (8.4)— 
Other (income)/expense, net$(119.8)$(97.6)$(410.6)$(354.1)

(A) Professional Employer Organization (“PEO”) revenues are net of direct pass-through costs, primarily consisting of payroll wages and payroll taxes of $20,557.2 million and $18,312.4 million for the three months ended June 30, 2026 and 2025, respectively, and $81,123.2 million and $75,220.1 million for the twelve months ended June 30, 2026 and 2025, respectively.

(B) PEO revenues and operating expenses include zero-margin benefits pass-through costs of $1,180.2 million and $1,094.8 million for the three months ended June 30, 2026 and 2025, respectively, and $4,607.3 million and $4,289.0 million for the twelve months ended June 30, 2026 and 2025, respectively.

(C) PEO revenues and operating expenses include costs related to workers' compensation coverage and state unemployment taxes for worksite employees of $153.6 million and $148.3 million for the three months ended June 30, 2026 and 2025, respectively, and $718.4 million and $681.3 million for the twelve months ended June 30, 2026 and 2025, respectively.

5

Automatic Data Processing, Inc. and Subsidiaries
Consolidated Balance Sheets
(In millions, except per share amounts)
(Unaudited)
June 30,June 30,
20262025
Assets
Current assets:
Cash and cash equivalents$4,230.1 $3,347.8 
Short-term marketable securities (A)— 4,498.8 
   Accounts receivable, net of allowance for doubtful accounts of $44.5 and $47.1, respectively3,521.1 3,579.1 
Other current assets 852.1 840.8 
Total current assets before funds held for clients8,603.3 12,266.5 
Funds held for clients43,957.8 30,985.7 
Total current assets52,561.1 43,252.2 
Property, plant and equipment, net641.3 655.4 
Operating lease right-of-use assets388.6 374.1 
Deferred contract costs3,244.1 3,154.1 
Other assets1,420.5 1,057.0 
Goodwill3,284.4 3,273.5 
Intangible assets, net1,653.3 1,603.0 
Total assets$63,193.3 $53,369.3 
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable$162.5 $169.1 
Accrued expenses and other current liabilities3,218.5 3,092.4 
Accrued payroll and payroll-related expenses1,039.4 973.1 
Dividends payable671.9 620.6 
Short-term deferred revenues267.5 262.8 
Obligations under reverse repurchase agreements (A)139.3 38.4 
Obligations under commercial paper borrowings— 4,769.5 
Income taxes payable110.3 9.1 
Total current liabilities before client funds obligations5,609.4 9,935.0 
Client funds obligations44,415.5 31,343.3 
Total current liabilities50,024.9 41,278.3 
Long-term debt4,964.1 3,974.7 
Operating lease liabilities306.7 321.2 
Other liabilities1,141.4 1,058.3 
Deferred income taxes339.1 163.6 
Long-term deferred revenues385.9 385.2 
Total liabilities57,162.1 47,181.3 
Stockholders' equity:
Preferred stock, $1.00 par value: authorized, 0.3 shares; issued, none— — 
Common stock, $0.10 par value: authorized,1,000.0 shares; issued, 638.7 shares at June 30, 2026 and June 30, 2025; outstanding, 397.8 and 405.3 shares at June 30, 2026 and June 30, 2025, respectively63.9 63.9 
Capital in excess of par value3,067.9 2,788.3 
Retained earnings26,967.4 25,240.6 
Treasury stock - at cost: 240.9 and 233.4 shares at June 30, 2026 and June 30, 2025, respectively(23,165.9)(21,021.4)
Accumulated other comprehensive income/(loss)(902.1)(883.4)
Total stockholders’ equity6,031.2 6,188.0 
Total liabilities and stockholders’ equity$63,193.3 $53,369.3 

(A) As of June 30, 2026, $138.6 million of long-term marketable securities and $0.7 million of cash and cash equivalents have been pledged as collateral under the Company's reverse repurchase agreements. As of June 30, 2025, $38.4 million of short-term marketable securities have been pledged as collateral under the Company's reverse repurchase agreements.
6

Automatic Data Processing, Inc. and Subsidiaries
Statements of Consolidated Cash Flows
(In millions)
(Unaudited)Twelve Months Ended
June 30,
20262025
Cash Flows from Operating Activities:
Net earnings$4,413.5 $4,079.7 
Adjustments to reconcile net earnings to cash flows provided by operating activities:
Depreciation and amortization585.9 582.4 
Amortization of deferred contract costs1,200.5 1,145.3 
Deferred income taxes156.4 37.0 
Stock-based compensation expense242.6 266.1 
Bad debt expense47.5 53.2 
Net pension (income)/expense(15.4)(19.7)
Net accretion of discounts and amortization of premiums on available-for-sale securities(88.2)(72.2)
Other4.2 13.4 
Changes in operating assets and liabilities:
(Increase)/decrease in accounts receivable1.0 (146.6)
Increase in deferred contract costs(1,307.9)(1,290.3)
Increase in other assets(204.5)(59.8)
Increase/(decrease) in accounts payable(4.5)60.6 
Increase in accrued expenses and other liabilities410.1 290.6 
Net cash flows provided by operating activities5,441.2 4,939.7 
Cash Flows from Investing Activities:
Purchases of corporate and client funds marketable securities(12,359.7)(7,857.9)
Proceeds from the sales and maturities of corporate and client funds marketable securities8,344.7 6,539.1 
Capital expenditures(196.6)(168.7)
Additions to intangibles(468.5)(378.3)
Acquisitions of businesses, net of cash acquired(22.8)(1,165.1)
Proceeds from the sale of property, plant, and equipment and other assets— 10.8 
Other(10.9)(14.9)
Net cash flows used in investing activities(4,713.8)(3,035.0)
Cash Flows from Financing Activities:
Net increase/(decrease) in client funds obligations13,242.6 (8,274.0)
Net cash (distributed)/received from the Internal Revenue Service24.0 (552.2)
Payments of debt(1.1)(1,001.2)
Proceeds from the issuance of debt985.7 1,980.3 
Settlement of cash flow hedges3.7 (15.6)
Repurchases of common stock(2,083.3)(1,280.5)
Net (repurchases)/proceeds from stock-based compensation plans and stock purchase plan(1.0)131.0 
Dividends paid(2,626.3)(2,398.9)
Net (payments)/proceeds related to reverse repurchase agreements106.2 (331.8)
Net (payments)/proceeds related to commercial paper(4,769.5)4,769.5 
Net cash flows provided by/(used in) financing activities4,881.0 (6,973.4)
Effect of exchange rate changes on cash, cash equivalents, restricted cash, and restricted cash equivalents(37.8)37.3 
Net change in cash, cash equivalents, restricted cash, and restricted cash equivalents5,570.6 (5,031.4)
Cash, cash equivalents, restricted cash, and restricted cash equivalents, beginning of period5,054.6 10,086.0 
Cash, cash equivalents, restricted cash, and restricted cash equivalents, end of period$10,625.2 $5,054.6 
Reconciliation of cash, cash equivalents, restricted cash, and restricted cash equivalents to the Consolidated Balance Sheets
Cash and cash equivalents$4,230.1 $3,347.8 
Restricted cash and restricted cash equivalents included in funds held for clients6,395.1 1,706.8 
Total cash, cash equivalents, restricted cash, and restricted cash equivalents$10,625.2 $5,054.6 
Supplemental disclosures of cash flow information:
Cash paid for interest$439.6 $426.8 
Cash paid for income taxes, net of income tax refunds$1,006.7 $1,198.0 
7

Automatic Data Processing, Inc. and Subsidiaries
Other Selected Financial Data
(Dollars in millions, except per share amounts)
(Unaudited)
Three Months EndedTwelve Months Ended
June 30,June 30,
20262025% Change20262025% Change
Segment revenues
Employer Services
$3,696.7 $3,465.6 7  %$14,831.4 $13,883.1 7  %
PEO Services
1,779.5 1,664.2 7  %7,128.1 6,690.4 7  %
Other
(2.4)(3.0)n/m(12.1)(12.6)n/m
Total revenues
$5,473.8 $5,126.8 7  %$21,947.4 $20,560.9 7  %
Segment earnings
Employer Services
$1,271.1 $1,161.1 9  %$5,436.8 $5,008.5 9  %
PEO Services
217.1 220.0 (1) %936.1 950.5 (2) %
Other
(230.4)(190.5)n/m(642.6)(648.9)n/m
Total pretax earnings
$1,257.8 $1,190.6 6 %$5,730.3 $5,310.1 8 %
Segment margin
Employer Services
34.4  %33.5  %0.9  %36.7  %36.1  %0.6  %
PEO Services
12.2  %13.2  %(1.0) %13.1  %14.2  %(1.1) %
Other
n/mn/mn/mn/mn/mn/m
Total pretax margin
23.0  %23.2  %(0.2)%26.1  %25.8  %0.3 %
Three Months EndedTwelve Months Ended
June 30,June 30,
Earnings per share information20262025% Change20262025% Change
Net earnings$978.6 $910.6 7 %$4,413.5 $4,079.7 8 %
Basic weighted average shares outstanding398.8 406.0 (2) %402.3 407.1 (1)%
Basic earnings per share$2.45 $2.24 9 %$10.97 $10.02 9 %
Diluted weighted average shares outstanding399.7 407.7 (2) %403.3 408.7 (1)%
Diluted earnings per share$2.45 $2.23 10 %$10.94 $9.98 10 %
Three Months EndedTwelve Months Ended
June 30,June 30,
2026202520262025
Key Statistics:
Employer Services:
Change in pays per control - U.S. (A)
1  %1 %1  %1 %
PEO Services:
Paid PEO worksite employees at end of period775,000 764,000 775,000 764,000 
Average paid PEO worksite employees during the period775,000 761,000 762,000 748,000 
Significant PEO expenses included within Operating expenses
Zero-margin benefits pass-through costs
$1,180.2 $1,094.8 $4,607.3 $4,289.0 
Workers' compensation and state unemployment taxes
$153.6 $148.3 $718.4 $681.3 

(A) U.S. pays per control represents the approximate growth in the number of employees on ADP clients' processed payrolls in the United States when measured on a same-store-sales basis for a subset of Employer Services clients ranging from small to large businesses.
8

Automatic Data Processing, Inc. and Subsidiaries
Other Selected Financial Data, Continued
(Dollars in millions, except where otherwise stated)
(Unaudited)
Client Funds Strategy - Supplemental Information
Three Months EndedTwelve Months Ended
June 30,June 30,
20262025% Change20262025% Change
Average investment balances at cost (in billions)
Funds held for clients$41.0 $38.1 8 %$40.4 $37.6 7 %
Corporate extended (A)$8.4 $7.1 18 %$7.8 $7.0 11 %
Short-term financing to support Client Funds Strategy (A)$8.4 $7.1 18 %$7.8 $7.0 11 %
Average interest rates earned or paid (exclusive of realized gains or losses)
Funds held for clients3.5  %3.2  %3.4  %3.2  %
Corporate extended (A)3.8  %3.3  %3.6  %3.2  %
Short-term financing to support Client Funds Strategy (A)3.7  %4.4  %4.1  %4.8  %
Interest income (expense)
Funds held for clients$355.4 $307.8 15 %$1,354.8 $1,189.1 14  %
Corporate extended (B)79.3 58.3 36 %278.1 225.3 23  %
Short-term financing to support Client Funds Strategy (B)(79.2)(78.4)1 %(318.3)(341.1)(7) %
Net Impact from Client Funds Strategy$355.5 $287.7 24 %$1,314.6 $1,073.3 22  %

Funds Held for Clients - Supplemental Information
Three Months EndedTwelve Months Ended
June 30,June 30,
2026202520262025
Average balance - Client short$9.4 $8.6 $9.5 $8.5 
Average balance - Client extended16.7 15.7 16.6 15.5 
Average balance - Client long14.9 13.8 14.3 13.6 
Average balance - Funds held for clients (in billions)$41.0 $38.1 $40.4 $37.6 
Average interest rate - Client short3.1  %4.0  %3.3  %4.2  %
Average interest rate - Client extended3.8  %2.9  %3.5  %2.7  %
Average interest rate - Client long3.4  %3.2  %3.3  %3.1  %
Average interest rate - Funds held for clients3.5  %3.2  %3.4  %3.2  %

Interest Income and Expense - Non-GAAP Reconciliation
Three Months EndedTwelve Months Ended
June 30,June 30,
2026202520262025
Corporate extended interest income (B)$79.3 $58.3 $278.1 $225.3 
All other interest income29.5 29.7 92.9 94.2 
Total interest income on corporate funds (component of Other (income)/expense, net)$108.8 $88.0 $371.0 $319.5 
Short-term financing to support Client Funds Strategy (B)$79.2 $78.4 $318.3 $341.1 
All other interest expense41.8 35.3141.0 114.8 
Total interest expense$121.0 $113.7 $459.3 $455.9 

(A) We utilize a strategy by which we extend the maturities of our investment portfolio for funds held for clients and employ short-term financing arrangements to satisfy our short-term funding requirements related to client funds obligations. As part of our client funds investment strategy, we use daily collection of funds from our clients to satisfy other unrelated client funds obligations, rather than liquidating previously-collected client funds that have already been invested in available-for-sale securities.

(B) While “Corporate extended interest income” and “Short-term financing to support Client Funds Strategy,” related to our client funds investment strategy, are non-GAAP measures, management believes this information is beneficial to reviewing the financial statements of ADP. Management believes this information is beneficial as it allows the reader to understand the extended investment strategy for ADP's client funds assets, corporate investments, and short-term borrowings.
9

Automatic Data Processing, Inc. and Subsidiaries
Consolidated Statement of Adjusted / Non-GAAP Financial Information
(in millions, except per share amounts)
(Unaudited)
In addition to our GAAP results, we use the adjusted results and other non-GAAP metrics set forth in the table below to evaluate our operating performance in the absence of certain items and for planning and forecasting of future periods:
Adjusted Financial Measures
U.S. GAAP Measures
Adjusted EBITNet earnings
Adjusted provision for income taxes Provision for income taxes
Adjusted net earnings Net earnings
Adjusted diluted earnings per share Diluted earnings per share
Adjusted effective tax rate Effective tax rate
Organic constant currencyRevenues
Corporate extended interest income (see prior page)
Interest income
Short-term financing to Support Client Funds Extended Strategy (see prior page)
Interest expense
We believe that the exclusion of the identified items below helps us reflect the fundamentals of our underlying business model and analyze results against our expectations and against prior periods, and to plan for future periods by focusing on our underlying operations.  We believe that the adjusted results provide relevant and useful information for investors because it allows investors to view performance in a manner similar to the method used by management and improves their ability to understand and assess our operating performance.  The nature of these exclusions is for specific items that are not fundamental to our underlying business operations.  Since these adjusted financial measures and other non-GAAP metrics are not measures of performance calculated in accordance with U.S. GAAP, they should not be considered in isolation from, as a substitute for, or superior to their corresponding U.S. GAAP measures, and they may not be comparable to similarly titled measures at other companies.







10

Three Months Ended
Twelve Months Ended
June 30,% ChangeJune 30,% Change
20262025As Reported20262025As Reported
Net earnings$978.6 $910.6 7 %$4,413.5 $4,079.7 8 %
Adjustments:
Provision for income taxes279.2 280.0 1,316.8 1,230.4 
All other interest expense (a)41.8 35.3 141.0 114.8 
All other interest income (a)(29.5)(29.7)(92.9)(94.2)
Optimization initiatives (b)(3.0)19.3 (4.5)19.4 
Business alignment program (c)91.1 — 91.1 — 
Gain on sale of assets— (2.6)— (2.6)
Net (gain)/loss on ADP Ventures' investments (d)(4.2)— (8.4)— 
Legal settlements (e)18.0 — 18.0 (0.4)
Adjusted EBIT$1,372.0 $1,212.9 13 %$5,874.6 $5,347.1 10 %
Adjusted EBIT Margin25.1  %23.7  %26.8  %26.0  %
Provision for income taxes$279.2 $280.0 — %$1,316.8 $1,230.4 7 %
Adjustments:
Optimization initiatives (f)(0.8)4.8 (1.2)4.8 
Business alignment program (f)23.2 — 23.2 — 
Gain on sale of assets (f)— (0.6)— (0.6)
Net (gain)/loss on ADP Ventures' investments (f)(1.0)— (2.1)— 
Legal settlements (f)4.4 — 4.4 (0.1)
Adjusted provision for income taxes$305.0 $284.2 7 %$1,341.1 $1,234.5 9 %
Adjusted effective tax rate (g)22.4  %23.5  %23.0  %23.2  %
Net earnings$978.6 $910.6 7 %$4,413.5 $4,079.7 8 %
Adjustments:
Optimization initiatives (b)(3.0)19.3 (4.5)19.4 
Income tax provision for/(benefits from) optimization initiatives (f)0.8 (4.8)1.2 (4.8)
Gain on sale of assets— (2.6)— (2.6)
Income tax provision for gain on sale of assets (f)— 0.6 — 0.6 
Business alignment program (c)91.1 — 91.1 — 
Income tax benefit from business alignment program (f)(23.2)— (23.2)— 
Net (gain)/loss on ADP Ventures' investments (d)(4.2)— (8.4)— 
Income tax provision for net (gain)/loss on ADP Ventures' investments (f)1.0 — 2.1 — 
Legal settlements (e)18.0 — 18.0 (0.4)
Income tax (benefit from)/provision for legal settlements (f)(4.4)— (4.4)0.1 
Adjusted net earnings $1,054.7 $923.1 14  %$4,485.4 $4,092.0 10  %
Diluted EPS$2.45 $2.23 (100)%$10.94 $9.98 10 %
Adjustments:
Optimization initiatives (b) (f)(0.01)0.03 (0.01)0.03 
Business alignment program (c) (f)0.17 — 0.17 — 
Net (gain)/loss on ADP Ventures' investments (d) (f)(0.01)— (0.02)— 
Legal settlements (e) (f)0.04 — 0.04 — 
Adjusted diluted EPS $2.64 $2.26 17  %$11.12 $10.01 11  %

11

(a) In adjusted EBIT, we include the interest income earned on investments associated with our client funds extended investment strategy and interest expense on borrowings related to our client funds extended investment strategy as we believe these amounts to be fundamental to the underlying operations of our business model. The adjustments in the table above represent the interest income and interest expense that are not related to our client funds extended investment strategy and are labeled as “All other interest expense” and “All other interest income.”
(b) Represents partial reversals of workforce optimization initiatives from fiscal 2025 and 2024. Severance charges/(reversals) have been taken in the past and not included as an adjustment to get to adjusted results. Unlike severance charges/(reversals) in prior periods, these specific reversals relate to broad-based, company-wide initiatives.
(c) In Q4 2026, we incurred a charge of $91.1 million as part of a corporate-led business alignment program, which is designed to better align our organization and resources with our Strategic Priorities and to streamline the organizational structure. Costs associated with this program included severance costs of $89.1 million and strategic project costs of $2.0 million. Strategic project costs consist primarily of external advisory costs. This charge is excluded from adjusted net earnings to provide a clearer view of ongoing operations and enhance period-over-period comparability. Severance charges have been taken in the past and not included as an adjustment to get to adjusted results. Unlike charges in prior periods, these specific charges relate to a broad-based, company-wide initiative. 
(d) Represents (gains)/losses on investments made through our Corporate Venture Capital arm, ADP Ventures. (Gains)/losses on these investments may result from observable price changes, changes in ownership interest, accrued interest income, and impairment charges. These adjustments may be highly variable, are predominantly non-cash, are outside our control, and are not fundamental to the underlying operations of our business model.
(e) In fiscal 2026, this represents a net charge (reserve and insurance recovery) from a legal matter settled during the year ended June 30, 2026. In fiscal 2025, this represents a reversal of a legal reserve recorded during the year ended June 30, 2023.
(f) The income tax provision was calculated based on the marginal rate in effect during the period of the adjustment.
(g) The adjusted effective tax rate is calculated as our adjusted provision for income taxes divided by the sum of our adjusted net earnings plus our adjusted provision for income taxes.
The following table reconciles our reported growth rates to the non-GAAP measure of organic constant currency, which excludes the impact of acquisitions, the impact of dispositions, and the impact of foreign currency. The impact of acquisitions and dispositions is calculated by excluding the current year revenues of acquisitions until the one-year anniversary of the transaction and by excluding the prior year revenues of divestitures for the one-year period preceding the transaction. The impact of foreign currency is determined by calculating the current year results using foreign exchange rates consistent with the prior year. The PEO segment is not impacted by acquisitions, dispositions or foreign currency.
Three Months EndedTwelve Months Ended
June 30,June 30,
Revenue growth consolidated:2026202520262025
Employer Services
7 %8 %7  %7  %
PEO Services
7 %7 %7  %7  %
Consolidated revenue growth as reported7 %8 %7  %7  %
Adjustments:
Impact of acquisitions
— %(1)%—  %(1) %
Impact of foreign currency
(1)%— %(1) %—  %
Consolidated revenue growth, organic constant currency6 %6 %6  %7  %
Segment:
Employer Services revenue growth as reported7 %8 %7  %7  %
Adjustments:
Impact of acquisitions
— %(1)%—  %(1) %
Impact of foreign currency
(1)%— %(1) %—  %
Employer Services revenue growth, organic constant currency6 %6 %5  %6  %
Note: Numbers may not foot due to rounding.
12

Automatic Data Processing, Inc. and Subsidiaries
Fiscal 2026 to Fiscal 2027 Non-GAAP Guidance Reconciliation
(in millions, except per share amounts)
(Unaudited)
Fiscal 2027
Fiscal 2026Outlook
Earnings before income taxes / margin (GAAP)$5,730.3 26.1 %100 to 120 bps
All other interest expense (a)141.060 bps20 bps
All other interest income (a)(92.9)(40) bps-
Optimization initiatives - FY26(4.5)--
Business alignment program - FY2691.140 bps(40) bps
Net (gain)/loss on ADP Ventures' investments - FY26(8.4)--
Legal settlements - FY2618.010 bps(10) bps
Adjusted EBIT margin (Non-GAAP)$5,874.6 26.8 %70 to 90 bps
Effective tax rate (GAAP)23.0 %23.0 %
Optimization initiatives - FY26--
Business alignment program - FY26--
Net (gain)/loss on ADP Ventures' investments - FY26--
Legal settlements - FY26--
Adjusted effective tax rate (Non-GAAP)23.0 %23.0 %
Diluted earnings per share (GAAP)$10.94 11% to 13%
Optimization initiatives - FY26(0.01)-
Business alignment program - FY260.17 (2)%
Net (gain)/loss on ADP Ventures' investments - FY26(0.02)-
Legal settlements - FY260.04 -
Adjusted diluted earnings per share (Non-GAAP)$11.12 9% to 11%
(a) In Adjusted EBIT, we include the interest income earned on investments associated with our client funds extended investment strategy and interest expense on borrowings related to our client funds extended investment strategy as we believe these amounts to be fundamental to the underlying operations of our business model. The adjustments in the table above represent the interest income and interest expense that are not related to our client funds extended investment strategy and are labeled as “All other interest expense” and “All other interest income.”
        


13

Safe Harbor Statement
This document and other written or oral statements made from time to time by ADP may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Statements that are not historical in nature and which may be identified by the use of words like "outlook," “expects,” “assumes,” “projects,” “anticipates,” “estimates,” “we believe,” “could,” “is designed to” and other words of similar meaning, are forward-looking statements. These statements are based on management’s expectations and assumptions and depend upon or refer to future events or conditions and are subject to risks and uncertainties that may cause actual results to differ materially from those expressed. Factors that could cause actual results to differ materially from those contemplated by the forward-looking statements or that could contribute to such difference include: ADP's success in obtaining and retaining clients, and selling additional services to clients; the pricing of products and services; the success of our new solutions; our ability to respond successfully to changes in technology, including artificial intelligence; compliance with existing or new legislation or regulations; changes in, or interpretations of, existing legislation or regulations; overall market, political and economic conditions, including interest rate and foreign currency trends and inflation; competitive conditions; our ability to maintain our current credit ratings and the impact on our funding costs and profitability; security or cyber breaches, fraudulent acts, and system interruptions and failures, including as a result of artificial intelligence; employment and wage levels; availability of skilled associates; the impact of new acquisitions and divestitures; the impact of any uncertainties related to major natural disasters or catastrophic events; and supply-chain disruptions. ADP disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. These risks and uncertainties, along with the risk factors discussed under “Item 1A. Risk Factors” of our most recent Annual Report on Form 10-K, and in other written or oral statements made from time to time by ADP, should be considered in evaluating any forward-looking statements contained herein.

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Investor Relations Contacts:
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