Economic & Earnings CommentaryJobs Week continues this morning, further articulating one half of the Fed’s mandate in determining future interest rate cuts. Pre-market futures haven’t changed much in the minutes following the release, which are mixed right now: the Dow -63 points at this hour, the S&P 500 +3 and the Nasdaq +20 (coming off its first all-time closing high since July).This morning’s jobs figures follow yesterday’s JOLTS numbers — which came in lower-than-expected at 7.44 million open positions ...

Financial Data and Key Metrics - Revenue growth of 7% in Q1 2025, with adjusted EBIT margin expansion of 130 basis points and adjusted EPS growth of 12% [6] - Employer Services (ES) segment revenue increased 7% on both a reported and organic constant currency basis, exceeding expectations [24] - PEO revenue growth of 7% and average worksite employee growth of 3% in Q1, both exceeding expectations [10][30] - Client funds interest revenue increased more than anticipated in Q1, driven by stronger average client funds balance growth [27] - Full-year adjusted EBIT margin expansion forecast increased to 30 to 50 basis points, with adjusted EPS growth expected to be 7% to 9% [34] Business Line Performance - Employer Services new business bookings reached a record volume for Q1, with broad-based strength across small business, mid-market, and HR Outsourcing segments [7][8] - ES retention rate slightly declined but still exceeded expectations, with client satisfaction scores reaching an all-time high [9] - PEO new business bookings growth offset modest deceleration in PEO pays per control growth, leading to strong PEO performance [10][31] - ES pays per control growth of 2% met expectations, with full-year growth forecasted at 1% to 2% [26] Market Performance - International business maintained strong momentum from the previous year, contributing to overall HCM demand stability [8] - ES margin increased by 260 basis points in Q1, driven by operating leverage and client funds interest revenue growth [29] - PEO margin decreased by 80 basis points in Q1, primarily due to higher workers' compensation program costs and zero-margin benefits pass-through revenue growth [32] Strategic Direction and Industry Competition - The acquisition of WorkForce Software strengthens ADP's Workforce Management Solutions, particularly for large global enterprises [12][13] - Introduction of ADP Lyric, a next-gen HCM platform, aims to meet the evolving needs of the modern workforce with integrated Generative AI technology [15][16] - Continued investment in Generative AI capabilities to enhance client experience and associate productivity [18][19] - Focus on three strategic priorities: leading with best-in-class HCM technology, providing unmatched expertise in outsourcing, and leveraging global scale [22] Management Commentary on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to advance strategic goals and deliver strong financial results [22] - The acquisition of WorkForce Software is expected to pressure adjusted EBIT margin in the short term but is seen as a strategic growth opportunity [33] - Management highlighted the importance of client satisfaction and retention, with record NPS scores driving favorable retention results [46][62] Other Important Information - ADP issued $1 billion in 10-year notes in September, increasing corporate interest expense by approximately $40 million for fiscal 2025 [34] - The company expects a full-year effective tax rate of around 23% [34] Q&A Session Summary Question: Demand and bookings backdrop for Employer Services [36] - Demand for HCM remained steady, with strong performance in Retirement Services, mid-market HR Outsourcing, and International segments [37] Question: PEO retention and pays per control growth [38] - PEO retention contributed modestly to outperformance, with new business bookings being the primary driver [38] - PEO pays per control growth is expected to be slower than ES pays per control growth [40] Question: Financial profile of WorkForce Software [41] - WorkForce Software is expected to contribute to ES revenue growth, with modest pressure on EBIT margin and EPS due to integration costs and amortization [43] Question: Client satisfaction drivers [45] - Record client satisfaction scores were driven by investments in product and service tools, particularly in the mid-market and HR Outsourcing segments [46][47] Question: Integration plan for WorkForce Software [48] - The integration plan focuses on leveraging WorkForce Software's capabilities in the global enterprise market, with potential synergies with ADP Lyric [49] Question: PEO bookings outperformance [51] - Strong PEO bookings were attributed to intense focus on execution and the value proposition of PEO offerings, particularly in health benefits and workers' compensation [52] Question: Cross-sell opportunities with WorkForce Software [68] - Cross-sell opportunities are seen as a key growth driver, with potential to leverage ADP's scale and distribution to expand WorkForce Software's client base [68] Question: Generative AI investments [70] - ADP continues to invest modestly in Generative AI, with tools like call summarization and virtual knowledge assist showing positive results [70] Question: Small business health and out-of-business rates [72] - Small business health remains strong, with out-of-business rates almost normalized to pre-pandemic levels [72] Question: Pricing strategies [78] - Pricing strategy remains consistent, with expected price increases of around 100 basis points for the year [78] Question: WorkForce Software revenue contribution [88] - The revenue contribution from WorkForce Software is expected to grow, but it is too early to quantify the exact impact [89] Question: Lyric's impact on financials [92] - Lyric is still in early stages, with strong pipeline growth but limited immediate financial impact [93] Question: PEO pays per control growth [95] - PEO pays per control growth is expected to continue, albeit at a slower pace than ES pays per control growth [95] Question: Employer Services bookings growth [96] - ES bookings growth is expected to remain within the 4% to 7% range, driven by strong demand and execution [96]

Wednesday, October 30, 2024Jobs Week continues this morning, further articulating one half of the Fed’s mandate in determining future interest rate cuts. Pre-market futures haven’t changed much in the minutes following the release, which are mixed right now: the Dow -63 points at this hour, the S&P 500 +3 and the Nasdaq +20 (coming off its first all-time closing high since July).This morning’s jobs figures follow yesterday’s JOLTS numbers — which came in lower-than-expected at 7.44 million open positions fo ...

For the quarter ended September 2024, Automatic Data Processing (ADP) reported revenue of $4.83 billion, up 7.1% over the same period last year. EPS came in at $2.33, compared to $2.08 in the year-ago quarter.The reported revenue compares to the Zacks Consensus Estimate of $4.76 billion, representing a surprise of +1.48%. The company delivered an EPS surprise of +5.91%, with the consensus EPS estimate being $2.20.While investors scrutinize revenue and earnings changes year-over-year and how they compare wit ...

Automatic Data Processing (ADP) came out with quarterly earnings of $2.33 per share, beating the Zacks Consensus Estimate of $2.20 per share. This compares to earnings of $2.08 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 5.91%. A quarter ago, it was expected that this payroll and human resources company would post earnings of $2.07 per share when it actually produced earnings of $2.09, delivering a surprise of 0.97%. Over ...

ROSELAND, N.J., Oct. 30, 2024 /PRNewswire/ -- ADP (Nasdaq: ADP), a leading global technology company providing human capital management (HCM) solutions, today announced its first quarter fiscal 2025 financial results along with its revised fiscal 2025 outlook through an earnings release available on the company's website at investors.adp.com/events-and-presentations. This earnings release will also be furnished to the Securities and Exchange Commission (SEC) on a Current Report on Form 8-K and available at ...

ADP Reports First Quarter Fiscal 2025 Results • Revenues increased 7% compared to last year's first quarter to $4.8 billion; 7% organic constant currency • Net earnings increased 11% to $956 million, and adjusted net earnings increased 11% to $956 million • Adjusted EBIT increased 13% to $1.2 billion, and adjusted EBIT margin increased 130 basis points to 25.5% • Diluted earnings per share ("EPS") increased 13% to $2.34; adjusted diluted EPS increased 12% to $2.33 • Acquired WorkForce Software, a leading wo ...

CHINA - 2023/02/15: In this photo illustration, the American provider of human resources management ... [+] software and services company, Automatic Data Processing (ADP) logo is seen displayed on a smartphone with an economic stock exchange index graph in the background. (Photo Illustration by Budrul Chukrut/SOPA Images/LightRocket via Getty Images)SOPA Images/LightRocket via Getty ImagesPayroll and HR solutions player ADP is expected to publish its Q1 FY’25 results on October 30, reporting on a period tha ...

Wall Street analysts forecast that Automatic Data Processing (ADP) will report quarterly earnings of $2.20 per share in its upcoming release, pointing to a year-over-year increase of 5.8%. It is anticipated that revenues will amount to $4.76 billion, exhibiting an increase of 5.5% compared to the year-ago quarter. Over the past 30 days, the consensus EPS estimate for the quarter has remained unchanged. This demonstrates the covering analysts' collective reassessment of their initial projections during this ...

Automatic Data Processing, Inc. (ADP) is scheduled to release its first-quarter fiscal 2025 results on Oct. 30, before market open.See Zacks Earnings Calendar to stay ahead of market-making news.ADP has an impressive earnings surprise history, surpassing the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 2.3%.Automatic Data Processing’s Q1 ExpectationsThe Zacks Consensus Estimate for the top line is pegged at $4.8 billion, implying a 5.5% increase on a year-over-year basi ...