Part I [Business](index=4&type=section&id=Item%201.%20Business) ADP is a global leader in Human Capital Management solutions, serving over 1.1 million clients across 140+ countries, leveraging AI and strategic acquisitions - ADP is a global leader in HR and payroll solutions, serving over **1.1 million clients** and paying over **42 million workers** in more than **140 countries and territories**[10](index=10&type=chunk) - The company's three strategic priorities are: leading with best-in-class HCM technology, providing unmatched expertise and outsourcing solutions, and benefiting clients with its global scale[16](index=16&type=chunk) - ADP is strategically infusing AI into its products, highlighted by the rollout of ADP Assist, a generative AI-powered solution that provides actionable insights across all HR functions[23](index=23&type=chunk)[24](index=24&type=chunk) - In fiscal year 2025, ADP acquired WorkForce Software to enhance its workforce management solutions and Procesamiento Externo de Información, S.C. (PEI) to strengthen its capabilities in Mexico[33](index=33&type=chunk) Reportable Segments Overview | Segment | Description | | :--- | :--- | | **Employer Services** | Offers a comprehensive range of technology-based HCM solutions, including payroll, benefits administration, talent management, and HRO solutions to clients of all sizes | | **Professional Employer Organization (PEO)** | Provides a full-service PEO solution called ADP TotalSource® through a co-employment model for small and mid-sized businesses | [Risk Factors](index=17&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant legal, compliance, cybersecurity, technology, and economic risks, including interest rate fluctuations and rapid AI advancements - **Legal and Compliance Risks:** Failure to comply with a wide range of U.S. and foreign laws, including privacy, data protection (GDPR, CPRA), AI regulations, anti-corruption, and anti-money laundering laws, could result in substantial costs, penalties, and reputational damage[111](index=111&type=chunk)[116](index=116&type=chunk)[118](index=118&type=chunk) - **Security and Technology Risks:** The business is regularly targeted by sophisticated cyber-attacks. A security breach could lead to the disclosure of confidential information, disruption of operations, and significant financial loss. System disruptions or failures in data centers could also materially harm the business[126](index=126&type=chunk)[127](index=127&type=chunk)[133](index=133&type=chunk) - **Business and Industry Risks:** The HCM industry is subject to rapid technological change, particularly from AI, which could render existing solutions obsolete. The business is also exposed to market risks from changes in foreign currency exchange rates, economic slowdowns, and changes in employment levels and interest rates, which can impact client fund balances and investment income[137](index=137&type=chunk)[140](index=140&type=chunk)[146](index=146&type=chunk) [Unresolved Staff Comments](index=25&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the SEC - None[153](index=153&type=chunk) [Cybersecurity](index=25&type=section&id=Item%201C.%20Cybersecurity) ADP maintains an enterprise-wide cybersecurity program based on industry frameworks, overseen by CISO/CSO and the Board, to protect client data and funds - ADP has implemented a cybersecurity program based on industry frameworks like the NIST Cybersecurity Framework and ISO standards to manage risks from cybersecurity threats[156](index=156&type=chunk) - The program includes a global team for 24/7 monitoring and incident response, periodic external and internal assessments, threat intelligence collaboration, and a third-party risk management process[156](index=156&type=chunk) - Cybersecurity governance is led by the Chief Information Security Officer (CISO) and Chief Security Officer (CSO), with the Board of Directors actively engaged in oversight through regular quarterly reports and an annual third-party assessment[161](index=161&type=chunk)[162](index=162&type=chunk)[163](index=163&type=chunk) [Properties](index=27&type=section&id=Item%202.%20Properties) ADP owns approximately **2.6 million square feet** and leases **5.6 million square feet** of property worldwide, deeming its facilities adequate for operations - ADP owns 6 processing/print centers and 10 other offices, including its corporate headquarters, totaling approximately **2,555,369 square feet**[164](index=164&type=chunk) - The company leases approximately **5,640,668 square feet** of space worldwide, with leases expiring at various times up to the year 2036[164](index=164&type=chunk) [Legal Proceedings](index=27&type=section&id=Item%203.%20Legal%20Proceedings) The company is subject to various legal claims and litigation, but management anticipates no material adverse impact on its financial condition or operations - The company is subject to various claims and litigation in the normal course of business[165](index=165&type=chunk) - Management believes the resolution of pending legal matters will not have a materially adverse impact on its financial condition or results of operations[165](index=165&type=chunk) [Mine Safety Disclosures](index=28&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[166](index=166&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities](index=29&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity,%20Related%20Stockholder%20Matters,%20and%20Issuer%20Purchases%20of%20Equity%20Securities) ADP's common stock trades on NASDAQ, with the company detailing Q4 FY2025 share repurchases under a **$5 billion** authorization and providing a performance graph - The company's common stock is principally traded on the NASDAQ Global Select Market under the symbol ADP[168](index=168&type=chunk) Issuer Purchases of Equity Securities (Q4 FY2025) | Period | Total Shares Purchased | Average Price Paid per Share ($) | Maximum Dollar Value Remaining for Repurchase ($) | | :--- | :--- | :--- | :--- | | April 2025 | 400,430 | $296.09 | $2,010,261,167 | | May 2025 | 333,958 | $315.74 | $1,904,817,267 | | June 2025 | 327,239 | $314.51 | $1,801,895,701 | | **Total** | **1,061,627** | - | - | - The share repurchase plan was approved by the Board of Directors in November 2022 for **$5 billion** and has no expiration date[168](index=168&type=chunk)[169](index=169&type=chunk) [Selected Financial Data](index=30&type=section&id=Item%206.%20Selected%20Financial%20Data) This item is not applicable to the company - Not applicable[173](index=173&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) ADP achieved strong FY2025 financial results with **7% revenue growth** to **$20.6 billion**, **50 bps adjusted EBIT margin expansion**, and **9% adjusted diluted EPS growth**, maintaining solid liquidity Fiscal 2025 Financial Highlights | Metric | FY 2025 Result (in millions) | YoY Growth | | :--- | :--- | :--- | | **Revenue** | $20,560.9 | 7% | | **Revenue (Organic Constant Currency)** | - | 7% | | **Diluted EPS ($)** | $9.98 | 10% | | **Adjusted Diluted EPS ($)** | $10.01 | 9% | | **Adjusted EBIT Margin** | 26.0% | +50 bps | - Revenue growth was driven by new business bookings, strong client retention, increased pricing, higher interest on funds held for clients, and the acquisition of WorkForce Software[183](index=183&type=chunk) - The company returned **$3.7 billion** to shareholders in fiscal 2025, consisting of **$2.4 billion** in dividends and **$1.3 billion** in share repurchases[182](index=182&type=chunk) [Results and Analysis of Consolidated Operations](index=33&type=section&id=Results%20and%20Analysis%20of%20Consolidated%20Operations) FY2025 consolidated revenues grew **7%** to **$20.6 billion**, with EBIT margin expanding **50 bps** to **25.8%** and net earnings increasing **9%** to **$4.1 billion** Consolidated Revenue (FY2025 vs FY2024) | Metric | FY 2025 (in millions) | FY 2024 (in millions) | YoY Growth | | :--- | :--- | :--- | :--- | | **Total Revenues** | $20,560.9 | $19,202.6 | 7% | | **Organic Constant Currency Growth** | - | - | 7% | - Interest on funds held for clients increased to **$1,189.1 million** in FY2025 from **$1,024.7 million** in FY2024, due to a higher average interest rate (**3.2% vs 2.9%**) and a **6.4% increase** in average client funds balances to **$37.6 billion**[184](index=184&type=chunk) Consolidated Earnings (FY2025 vs FY2024) | Metric | FY 2025 (in millions) | FY 2024 (in millions) | YoY Growth | | :--- | :--- | :--- | :--- | | **EBIT** | $5,310.1 | $4,872.3 | 9% | | **EBIT Margin** | 25.8% | 25.4% | +50 bps | | **Net Earnings** | $4,079.7 | $3,752.0 | 9% | | **Diluted EPS ($)** | $9.98 | $9.10 | 10% | [Analysis of Reportable Segments](index=36&type=section&id=Analysis%20of%20Reportable%20Segments) In FY2025, Employer Services revenue grew **7%** to **$13.9 billion** with **100 bps margin expansion**, while PEO Services revenue also grew **7%** to **$6.7 billion** but saw a **60 bps margin contraction** Segment Performance (FY2025) | Segment | Revenues (in millions) | YoY Growth | Earnings before Income Taxes (in millions) | YoY Growth | Margin | Margin Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Employer Services** | $13,883.1 | 7% | $5,008.5 | 10% | 36.1% | +100 bps | | **PEO Services** | $6,690.4 | 7% | $950.5 | 3% | 14.2% | -60 bps | - Employer Services revenue growth was supported by a **1% increase** in pays per control, new business, strong client retention, and the WorkForce Software acquisition[199](index=199&type=chunk) - PEO Services revenue growth was driven by a **3% increase** in average worksite employees and an **8% increase** in zero-margin benefits pass-throughs[202](index=202&type=chunk) [Financial Condition, Liquidity and Capital Resources](index=40&type=section&id=Financial%20Condition,%20Liquidity%20and%20Capital%20Resources) As of June 30, 2025, ADP maintained a strong financial position with **$3.3 billion** cash, **$10.6 billion** credit facilities, and **$4.9 billion** cash from operations, supporting acquisitions, repurchases, and dividends - The company ended fiscal 2025 with **$3.3 billion** in cash and cash equivalents[217](index=217&type=chunk) - ADP has access to significant liquidity through a **$10.6 billion** commercial paper program and **$10.6 billion** in committed credit facilities[218](index=218&type=chunk)[219](index=219&type=chunk) Cash Flow Summary (FY2025) | Cash Flow Activity | Amount (in millions) | | :--- | :--- | | **Operating Activities** | $4,939.7 | | **Investing Activities** | ($3,035.0) | | **Financing Activities** | ($6,973.4) | - The company repurchased approximately **4.4 million shares** of common stock for about **$1.3 billion** during fiscal 2025[223](index=223&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=43&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) ADP is exposed to interest rate and foreign currency risks, with a **25 bps** rate change impacting pre-tax earnings by **$24 million**, managed through investment strategies and high-quality securities - The company's primary market risks are interest rate risk on its investment portfolio and foreign currency exchange rate risk[234](index=234&type=chunk)[242](index=242&type=chunk) - A hypothetical **25 basis point change** in both short-term and intermediate-term interest rates would result in an approximate **$24 million** impact to earnings before income taxes over the next twelve months[240](index=240&type=chunk) - The client funds investment strategy is designed to average through interest rate cycles by laddering maturities out to **ten years**, supported by short-term financing arrangements like a **$10.6 billion** commercial paper program and **$7.5 billion** in committed reverse repurchase agreements[237](index=237&type=chunk)[238](index=238&type=chunk) - Credit risk is managed by investing in investment-grade securities, with minimum ratings of **BBB** for corporate bonds and **AAA** for asset-backed securities at the time of purchase[239](index=239&type=chunk)[241](index=241&type=chunk) [Financial Statements and Supplementary Data](index=47&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents ADP's audited consolidated financial statements for FY2023-2025, including earnings, balance sheets, and cash flows, with auditor-identified critical audit matters - The independent auditor's report from Deloitte & Touche LLP provides an unqualified opinion on the financial statements and the effectiveness of internal control over financial reporting[256](index=256&type=chunk)[257](index=257&type=chunk) - Critical Audit Matters identified were the valuation of Goodwill for the Employer Services segment, particularly concerning forecasts for the next-gen platform, and the accuracy and completeness of Client Funds Obligations due to high transaction volume and complexity[261](index=261&type=chunk)[264](index=264&type=chunk) [Statements of Consolidated Earnings](index=50&type=section&id=Statements%20of%20Consolidated%20Earnings) FY2025 consolidated earnings show total revenues of **$20.6 billion** and net earnings of **$4.1 billion**, or **$9.98 per diluted share** Consolidated Earnings Summary (in millions, except per share amounts) | Metric | FY 2025 | FY 2024 | FY 2023 | | :--- | :--- | :--- | :--- | | **Total Revenues** | $20,560.9 | $19,202.6 | $18,012.2 | | **Earnings Before Income Taxes** | $5,310.1 | $4,872.3 | $4,437.6 | | **Net Earnings** | $4,079.7 | $3,752.0 | $3,412.0 | | **Diluted EPS ($)** | $9.98 | $9.10 | $8.21 | [Consolidated Balance Sheets](index=52&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2025, ADP's balance sheet shows **$53.4 billion** in total assets, **$47.2 billion** in total liabilities, and **$6.2 billion** in total stockholders' equity Consolidated Balance Sheet Summary (in millions) | Account | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $43,252.2 | $45,542.5 | | *Funds held for clients* | *$30,985.7* | *$37,996.1* | | **Total Assets** | **$53,369.3** | **$54,362.7** | | **Total Current Liabilities** | $41,278.3 | $45,080.0 | | *Client funds obligations* | *$31,343.3* | *$39,503.9* | | **Long-Term Debt** | $3,974.7 | $2,991.3 | | **Total Liabilities** | **$47,181.3** | **$49,815.1** | | **Total Stockholders' Equity** | **$6,188.0** | **$4,547.6** | [Statements of Consolidated Cash Flows](index=54&type=section&id=Statements%20of%20Consolidated%20Cash%20Flows) FY2025 cash flows show **$4.9 billion** from operations, **$3.0 billion** used in investing, and **$7.0 billion** used in financing, primarily for client funds, dividends, and share repurchases Consolidated Cash Flow Summary (in millions) | Cash Flow Activity | FY 2025 | FY 2024 | FY 2023 | | :--- | :--- | :--- | :--- | | **Net Cash from Operating Activities** | $4,939.7 | $4,157.6 | $4,207.6 | | **Net Cash from Investing Activities** | ($3,035.0) | ($1,389.0) | ($2,517.3) | | **Net Cash from Financing Activities** | ($6,973.4) | ($1,431.7) | ($15,680.7) | [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=86&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants regarding accounting and financial disclosure - None[432](index=432&type=chunk) [Controls and Procedures](index=86&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective as of June 30, 2025, with an unqualified auditor opinion - Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[434](index=434&type=chunk) - Based on an assessment using the COSO framework, management determined that ADP's internal control over financial reporting was effective as of June 30, 2025[438](index=438&type=chunk) - There were no changes in internal control over financial reporting during the fourth quarter of fiscal 2025 that materially affected, or are reasonably likely to materially affect, these controls[440](index=440&type=chunk) [Other Information](index=90&type=section&id=Item%209B.%20Other%20Information) The company disclosed a separation agreement for Don McGuire effective September 30, 2025, and reported no Rule 10b5-1 trading plan changes by officers or directors - Don McGuire entered into a separation agreement and release on August 1, 2025, related to his departure from the company on September 30, 2025[447](index=447&type=chunk) [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=90&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This item is not applicable to the company - None[448](index=448&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=91&type=section&id=Item%2010.%20Directors,%20Executive%20Officers%20and%20Corporate%20Governance) This section lists executive officers and incorporates information on directors, the audit committee, and corporate governance from the 2025 Proxy Statement - Provides a list of executive officers, including CEO Maria Black, CFO Peter Hadley, and CAO Michael A. Bonarti, along with their professional backgrounds[450](index=450&type=chunk) - Information regarding Directors and the Audit Committee is incorporated by reference from the Proxy Statement for the 2025 Annual Meeting of Stockholders[460](index=460&type=chunk)[463](index=463&type=chunk) [Executive Compensation](index=92&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding executive compensation, including the Compensation Discussion and Analysis, is incorporated by reference from the 2025 Proxy Statement - All information regarding executive compensation is incorporated by reference from the Proxy Statement for the Company's 2025 Annual Meeting of Stockholders[464](index=464&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=92&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information on security ownership by beneficial owners and management, and equity compensation plans, is incorporated by reference from the 2025 Proxy Statement - All information regarding security ownership and equity compensation plans is incorporated by reference from the Proxy Statement for the Company's 2025 Annual Meeting of Stockholders[465](index=465&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=92&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions,%20and%20Director%20Independence) Information on certain relationships, related transactions, and director independence is incorporated by reference from the 2025 Proxy Statement - All information regarding related transactions and director independence is incorporated by reference from the Proxy Statement for the Company's 2025 Annual Meeting of Stockholders[466](index=466&type=chunk) [Principal Accounting Fees and Services](index=93&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Information regarding principal accounting fees and services is incorporated by reference from the 2025 Proxy Statement - Information regarding principal accounting fees and services is incorporated by reference from the Proxy Statement for the Company's 2025 Annual Meeting of Stockholders[467](index=467&type=chunk) Part IV [Exhibits, Financial Statement Schedules](index=93&type=section&id=Item%2015.%20Exhibits,%20Financial%20Statement%20Schedules) This section lists all financial statements, schedules, and exhibits filed as part of the Annual Report on Form 10-K, including governance documents and material contracts - Lists all financial statements and schedules included in the filing, such as the Report of Independent Registered Public Accounting Firm and the Consolidated Financial Statements[469](index=469&type=chunk) - Provides a detailed index of all exhibits filed with the report, including governance documents, material contracts, and certifications by the CEO and CFO[471](index=471&type=chunk)

Group 1 - The primary goal of the "High Income DIY Portfolios" service is to provide high income with low risk and capital preservation for DIY investors [1] - The service offers six different portfolios tailored for various investment strategies, including two High-Income portfolios, a Dividend Growth Investing (DGI) portfolio, a conservative strategy for 401K accounts, a Sector-Rotation strategy, and a High-Growth portfolio [1] - The target audience for these portfolios includes income-seeking investors, particularly retirees or those nearing retirement [1] Group 2 - The monthly series on Dividend Stocks involves scanning approximately 7,500 stocks listed on U.S. exchanges using proprietary filtering criteria [2] - The author has disclosed beneficial long positions in a wide range of stocks, indicating a vested interest in the performance of these companies [2]

Core Insights - The ADP report indicates that the U.S. private sector added 104,000 jobs in July, significantly exceeding market expectations of 76,000, marking the largest month-over-month increase since April [1][3] - Despite the positive July data, overall hiring remains below last year's average, highlighting an uneven recovery in the U.S. labor market [3][5] - The report reflects cautious attitudes among businesses amid economic uncertainty, with mixed signals regarding the strength of the labor market [5][6] Employment Data - The leisure and hospitality sector saw the most significant job growth, adding 46,000 positions, followed by the financial sector with an increase of 28,000 jobs [3] - Conversely, the education and healthcare services sector experienced job losses for the fourth consecutive month, shedding 38,000 positions [3][5] - The manufacturing sector added only 7,000 jobs, while construction grew by 15,000, indicating varied recovery rates across different industries [5] Wage Growth - Wage growth remained stable in July, with salaries for job switchers increasing by 7% year-over-year, while those remaining in their positions saw a 4.4% increase [3] - This trend suggests that despite a slowdown in hiring, competition in the labor market is still supporting wage levels [3] Economic Outlook - Economists express that the labor market's performance reflects businesses' cautiousness in the face of economic uncertainty, with July's rebound not fully alleviating concerns about potential economic slowdown [5][6] - The upcoming non-farm payroll report is anticipated to show an increase of about 100,000 jobs, with the unemployment rate possibly rising to 4.2% [5] - The strong ADP report may reduce the likelihood of interest rate cuts in the near term, as sustained wage growth above inflation could lead the Federal Reserve to maintain a cautious stance [6]

Economic Indicators - Pre-market futures show slight increases with Dow up +20 points, S&P 500 up +8 points, and Nasdaq up +50 points, following economic news [1] - ADP reported +104K new private-sector jobs in July, a significant rebound from the revised -23K in June and exceeding the consensus estimate of +64K [3][6] - Q2 GDP growth was reported at +3.0%, surpassing the expected +2.3% and marking a recovery from the -0.5% in Q1 [7][8] Company Earnings - Kraft Heinz (KHC) exceeded bottom-line earnings estimates by +7.8%, reporting 69 cents per share [2] - V.F. Corp. (VFC) reported a smaller-than-expected loss, improving by +31.5% [2] - Etsy (ETSY) missed Zacks consensus estimates by -53.7% [2] Sector Performance - The job growth breakdown shows Goods-producing jobs at +30% and Services at +70%, with Leisure & Hospitality leading at +46K new jobs [4] - Small companies added +12K jobs, while medium and large businesses contributed +46K jobs [5] - The Core PCE Price Index rose to +2.5%, indicating stronger-than-expected economic growth without runaway inflation [8][9] Market Expectations - The Federal Open Market Committee (FOMC) is expected to maintain interest rates at +4.25-4.50% during the upcoming meeting [9] - Anticipation surrounds whether voting members will support or oppose Fed Chair Jerome Powell's stance on interest rates [10] - Major companies like Microsoft (MSFT) and Meta Platforms (META) are set to report earnings after the market closes [11]

Core Insights - Automatic Data Processing, Inc. (ADP) reported strong fourth-quarter fiscal 2025 results, with earnings and revenues exceeding the Zacks Consensus Estimate [1][9] - Earnings per share reached $2.26, surpassing estimates by 1.8% and increasing 8.1% year-over-year, while total revenues were $5.1 billion, exceeding estimates by 1.5% and growing 7.5% year-over-year [1][9] Segment Performance - Employer Services generated revenues of $3.5 billion, an 8% increase on a reported basis but missed the estimate of $3.8 billion; pays per control rose 1% year-over-year [3] - PEO Services revenues increased 9% year-over-year to $1.2 billion, falling short of the $1.7 billion estimate; average worksite employees paid by PEO Services grew 3% to 761,000 [3] Financial Metrics - Interest on funds held for clients grew 11% year-over-year to $308 million, missing the estimate of $342.4 million; average client funds balance rose 6% to $38.1 billion, with an average interest yield of 3.2%, up 20 basis points [4] - Adjusted EBIT increased 9% year-over-year to $5.3 billion, with an adjusted EBIT margin rising 50 basis points to 26% [5] Balance Sheet & Cash Flow - At the end of Q4 fiscal 2025, ADP had cash and cash equivalents of $3.3 billion, up from $2.7 billion in the previous quarter; long-term debt increased to $4 billion from $3 billion [6] - The company generated $1.4 billion in cash from operating activities during the quarter [6] Fiscal 2025 Outlook - ADP lowered its revenue growth guidance for fiscal 2025 to 5-6% from the previous 6-7%; adjusted EPS growth guidance was updated to 8-10% from 8-9% [7] - The adjusted effective tax rate is estimated at 23%, and the guidance for adjusted EBIT margin was raised to 50-70 basis points from 40-50 basis points [7][8]

Economic Overview - Pre-market futures show slight increases with Dow up +20 points, S&P 500 up +8, and Nasdaq up +50, following positive economic news [1] - Q2 GDP growth outperformed expectations at +3.0%, rebounding from a -0.5% decline in Q1, marking the strongest quarter for jobs growth since Q3 2024 [7][8] - Consumption increased to +1.4% from +0.5% in Q1, while the Core PCE Price Index rose to +2.5%, indicating robust economic growth without runaway inflation [8][10] Employment Data - ADP reported +104K new private-sector jobs in July, a significant recovery from the revised -23K in June and exceeding the consensus estimate of +64K [3][6] - Job growth was led by the Leisure & Hospitality sector with +46K jobs, while Education & Healthcare saw a decline of -38K [4] - Small companies added +12K jobs, while medium and large businesses contributed +46K jobs, indicating a diverse hiring landscape [5] Company Earnings - Kraft Heinz (KHC) exceeded earnings expectations by +7.8%, reporting 69 cents per share [2] - V.F. Corp. (VFC) reported a smaller-than-expected loss, improving by +31.5% [2] - Etsy (ETSY) missed earnings estimates by -53.7%, indicating potential challenges in its business model [2] Market Expectations - The Federal Open Market Committee (FOMC) is expected to maintain interest rates at +4.25-4.50% during its meeting, reflecting a stable economic environment [10] - The upcoming earnings reports from major companies like Microsoft, Meta Platforms, Qualcomm, and Ford are anticipated to impact market sentiment [12]

Core Insights - Automatic Data Processing (ADP) reported a revenue of $5.13 billion for the quarter ended June 2025, marking a year-over-year increase of 7.5% and exceeding the Zacks Consensus Estimate by 1.5% [1] - The earnings per share (EPS) for the same period was $2.26, up from $2.09 a year ago, representing an EPS surprise of 1.8% over the consensus estimate [1] Financial Performance Metrics - Average paid PEO worksite employees during the period were 761, slightly above the two-analyst average estimate of 757 [4] - Revenues from interest on funds held for clients were $307.8 million, exceeding the estimated $286.31 million by 7.3% and reflecting an 11.2% increase year-over-year [4] - Revenues excluding interest on funds held for clients and PEO revenues were $3.16 billion, surpassing the $3.13 billion estimate, with a year-over-year change of 7.3% [4] - PEO revenues reached $1.66 billion, above the estimated $1.63 billion, showing a 7.2% increase compared to the previous year [4] - Employer Services segment revenues were $3.47 billion, exceeding the four-analyst average estimate of $3.43 billion, with a year-over-year change of 7.7% [4] - Other segment revenues reported a loss of $3 million, slightly worse than the estimated loss of $2.44 million, but reflecting a year-over-year improvement of 25% [4] Stock Performance - ADP shares returned -0.5% over the past month, contrasting with the Zacks S&P 500 composite's increase of 3.4% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Financial Data and Key Metrics Changes - The company reported an 8% revenue growth in Q4 2025 and a 7% revenue growth for the full year [5][18] - Adjusted EBIT margin expanded by 40 basis points in Q4 and 50 basis points for the full year [5][18] - Adjusted EPS grew by 8% in Q4 and 9% for the full year [5] Business Line Data and Key Metrics Changes - Employer Services (ES) revenue increased by 8% in Q4 and 7% for the full year, with margins expanding by 50 basis points in Q4 and 100 basis points for the year [18][19] - Professional Employer Organization (PEO) revenue grew by 7% in Q4 and for the full year, with average worksite employee growth of 3% [19][20] - PEO margins contracted by 20 basis points in Q4 and 60 basis points for the full year due to higher zero-margin pass-through benefits revenues [19][20] Market Data and Key Metrics Changes - The company achieved approximately $2.1 billion in new business bookings for employer services, representing a 3% growth [6][8] - The retention rate for employer services increased by 10 basis points to 92.1% for the year [8] - International bookings improved in Q4 but did not offset earlier softness in the fiscal year [7][8] Company Strategy and Development Direction - The company is focused on accelerating employer services new business bookings growth in fiscal 2026, with a healthy pipeline and strong client satisfaction scores [8][12] - Investments in AI and proprietary tools are aimed at enhancing client experience and operational efficiency [12][13] - The company plans to expand its global payroll capabilities and enhance its offerings in markets like Japan and Saudi Arabia [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, citing a dynamic and growing market with opportunities for innovation and client support [14][15] - The macroeconomic environment remains uncertain, but the company believes it is well-positioned for solid financial results while continuing to invest in growth [20][25] - Management expects a slight moderation in the macroeconomic environment but remains confident in achieving revenue growth of 5% to 6% in fiscal 2026 [20][25] Other Important Information - The company will no longer provide point margin forecasts for its ES and PEO segments but will continue to share actual margin results each quarter [20] - Client funds interest revenue is expected to increase from $1.19 billion in fiscal 2025 to a range of $1.29 billion to $1.31 billion in fiscal 2026 [23] Q&A Session Summary Question: Can you share more thoughts on the HRO softness? - Management noted that the softness in the domestic HRO business was due to complex opportunities with long sales cycles, which saw delayed decisions in Q4 [29][31] Question: What are the expectations for bookings growth? - Management expressed confidence in reaccelerating bookings growth due to product maturity and investments in sales headcount and technology [34][35] Question: How is pricing expected to contribute in fiscal 2026? - Pricing assumptions for fiscal 2026 are expected to be in the 100 basis points range, reflecting recent trends rather than pre-pandemic norms [44] Question: What are the early results from the workforce software integration? - Management reported strong receptivity and contributions from workforce software, with expectations for significant growth in multinational opportunities [48][49] Question: How does the company view the impact of partnerships on sales channel management? - Management believes partnerships enhance visibility and do not impede forecasting, providing more opportunities for client engagement [109][110]

Financial Data and Key Metrics Changes - The company reported an 8% revenue growth in Q4 2025 and a 7% revenue growth for the full fiscal year [5][18] - Adjusted EBIT margin expanded by 40 basis points in Q4 and 50 basis points for the full year [5][18] - Adjusted EPS grew by 8% in Q4 and 9% for the full year [5] Business Line Data and Key Metrics Changes - Employer Services (ES) revenue increased by 8% in Q4 and 7% for the full year, with margins expanding by 50 basis points in Q4 and 100 basis points for the year [18][19] - Professional Employer Organization (PEO) revenue grew by 7% in Q4 and for the full year, with average worksite employee growth of 3% [19][20] - PEO margins contracted by 20 basis points in Q4 and 60 basis points for the full year due to higher zero-margin pass-through benefits revenues [19][20] Market Data and Key Metrics Changes - The company achieved approximately $2.1 billion in new business bookings for employer services, representing a 3% growth [6] - Small business suite and domestic enterprise offerings saw solid bookings growth, while HR outsourcing experienced a softer finish [6][7] - International bookings improved in Q4 but did not offset earlier softness in the fiscal year [6] Company Strategy and Development Direction - The company is focused on accelerating employer services new business bookings growth in fiscal 2026, with a healthy pipeline and strong client retention [7][11] - Investments in HCM technology, AI capabilities, and global payroll capabilities are key strategic priorities [10][11] - The company aims to leverage its extensive dataset to enhance product offerings and client experiences [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, citing a dynamic and growing market with opportunities for innovation and client support [13][14] - The macroeconomic environment remains uncertain, but the company is positioned to deliver solid financial results while investing for future growth [20][25] - Management expects a slight moderation in the macroeconomic environment but remains confident in achieving revenue growth of 5% to 6% in fiscal 2026 [20][25] Other Important Information - The company has made significant strides in client satisfaction, achieving record highs [7] - The acquisition of workforce software is expected to enhance capabilities and contribute to growth in multinational markets [10][50] Q&A Session Summary Question: Demand and HRO softness - Management noted that the softness in HR outsourcing was due to complex opportunities with long sales cycles, but the pipeline remains strong with active deals [28][31] Question: Confidence in bookings reacceleration - Management highlighted product maturity, investments in sales headcount, and technology as key factors for confidence in bookings growth [33][36] Question: Pricing contribution in fiscal 2026 - Pricing assumptions for fiscal 2026 are expected to be in the 100 basis points range, reflecting recent trends rather than pre-pandemic norms [45] Question: Retention performance - Retention results were broad-based, with no specific callouts, and management was pleased with the performance across all segments [46] Question: Workforce software integration - Early results from the integration of workforce software have exceeded expectations, contributing positively to bookings and sales [49][50] Question: PEO guidance and pass-through revenue - Higher expected contributions from zero-margin pass-through revenues are driven by medical health insurance inflation and state unemployment insurance costs [99] Question: Embedded payroll and Clover partnership - The partnership with Clover is progressing well, with expectations for broader deployment and contributions to bookings in fiscal 2026 [102][104] Question: Sales channel management and partnerships - Partnerships are enhancing visibility into results and pipelines, allowing for better forecasting and opportunity identification [110][111]

金十数据7月30日讯，ADP周三公布，7月份私营企业招聘人数反弹速度强于预期，表明劳动力市场正在 站稳脚跟。经季节调整后，7月份就业人数增加10.4万人，扭转了6月份减少2.3万人（从-3.3万人上修 至-2.3万人）的局面，超过了经济学家预测的增加6.4万人的预期。尽管招聘速度远低于去年，但6月份 的总招聘人数为自3月份以来最佳，与放缓但仍相当活跃的就业形势相一致。ADP首席经济学家内拉·理 查森表示："我们的招聘和薪酬数据大致表明经济健康。雇主们越来越乐观地认为，作为经济支柱的消 费者将保持韧性。" ADP报告：美国7月份私营企业招聘人数反弹 增加10.4万人 ...