Second Quarter Segment Results ADP Reports Second Quarter Fiscal 2026 Results ROSELAND, N.J. – January 28, 2026 – ADP (Nasdaq: ADP), a global leader in HR and payroll solutions, today announced its second quarter fiscal 2026 financial results and updated its fiscal 2026 outlook. Second Quarter Fiscal 2026 Consolidated Results Compared to last year's second quarter, revenues increased 6% to $5.4 billion and 5% on an organic constant currency basis. Net earnings increased 10% to $1.1 billion, and adjusted net ...

Market Overview - U.S. stock markets are experiencing a pivotal moment with anticipation surrounding the Federal Reserve's interest rate decision and earnings reports from major technology companies [1] - Premarket trading shows a mixed but generally upward trend, with S&P 500 Futures up 0.3% to 7,028.75 points and Nasdaq 100 Futures up 0.6% to 26,228.75 points, while Dow Jones Futures remain flat at 49,159.0 points [2] Semiconductor Industry - U.S. chip stocks are seeing notable gains, with Nvidia increasing by 1.7%, AMD rising by 1.4%, and Intel climbing 4.6%, reflecting strong investor confidence in AI and advanced computing [3] Major Market Indexes - The S&P 500 Index closed at a record high of 6,978.60 points, a 0.41% increase, driven by strength in chipmakers and AI infrastructure stocks, particularly Micron Technology, which announced a $24 billion investment in Singapore [4] - The Dow Jones Industrial Average closed at 49,003.41 points, down 0.83%, primarily due to weakness in the healthcare sector, with UnitedHealth Group forecasting a revenue decline for 2026 [5] - The Nasdaq Composite Index closed up 0.91% at 23,817.10 points, reaching a 2.75-month high, with nearly 30% year-over-year growth attributed to AI advancements [6] Upcoming Market Events - The Federal Reserve is expected to hold its key interest rate steady within the 3.5%-3.75% target range, following three consecutive rate cuts in late 2025, with a focus on the labor market and consumer spending [7] - Major earnings reports are anticipated from tech giants Meta Platforms and Microsoft, which will provide insights into the technology sector's health and AI investments [13] Company News - Infosys announced a strategic AI-focused collaboration, indicating ongoing investment in AI solutions [14] - Boeing's CEO outlined a turnaround plan after six consecutive annual losses, addressing operational challenges [14] - HSBC is scaling back its M&A and equities businesses in Europe, the UK, and the Americas to focus on Asian operations [14] - JetBlue Airways reported a significant Q4 loss and provided weaker-than-expected revenue guidance, raising concerns about profitability [14] - RTX Corporation delivered higher-than-expected Q4 results, showcasing strong growth across its business segments [14]

ROSELAND, N.J., Jan. 27, 2026 /PRNewswire/ -- For the four weeks ending January 3, 2026, U.S. private employers added an average of 7,750 jobs per week, according to the NER Pulse, a weekly update of the monthly ADP National Employment Report (NER). ADP Research (PRNewsfoto/ADP, Inc.) Week ending Change (Four-week moving average, seasonally adjusted) 1/3/2026 7,750 12/27/2025 8,000 12/20/2025 11,000 12/13/2025 10,500 12/6/2025 8,750 11/29/2025 13,250 11/22/2025 3,750 11/15/2025 -8,500 11/8/2025 -11,750 11/1 ...

Group 1 - PPG Industries Inc reported a strong quarterly performance, driven by increased demand in the industrial and automotive sectors [1] - Automatic Data Processing Inc showed significant growth in its payroll services, with a notable increase in client retention rates [1] - AbbVie Inc's recent drug approvals are expected to boost its revenue, particularly in the immunology and oncology segments [1] Group 2 - The overall market sentiment remains positive, with analysts highlighting the resilience of key sectors despite economic uncertainties [1] - Investment opportunities are emerging in technology and healthcare, as companies adapt to changing consumer needs [1] - The analysis emphasizes the importance of monitoring quarterly earnings reports for potential shifts in market dynamics [1]

Core Viewpoint - ADP is set to release its second-quarter fiscal 2026 results on January 28, with expectations of solid revenue growth and earnings performance [1][9]. Group 1: Revenue Expectations - The Zacks Consensus Estimate for ADP's total revenue is $5.4 billion, reflecting a year-over-year growth of 6.7% [2][9]. - Employer Services revenues are projected at $3.6 billion, indicating a 5% increase compared to the same quarter last year, driven by strong business bookings [2][9]. - For Professional Employer Organization (PEO) services, revenues are estimated at $1.8 billion, suggesting a 6% year-over-year growth, supported by consistent increases in new business bookings [3]. Group 2: Earnings Projections - The consensus estimate for earnings per share (EPS) is $2.58, which represents a year-over-year growth of 9.8% [4][9]. - Interest on funds held for clients is expected to generate $310 million, indicating a 14% increase from the previous year, attributed to higher client fund balance growth [3][9]. Group 3: Earnings Prediction Model - The current model does not predict a definitive earnings beat for ADP, as it has an Earnings ESP of 0.00% and a Zacks Rank of 3 (Hold) [5].

Core Insights - Analysts forecast that Automatic Data Processing (ADP) will report quarterly earnings of $2.58 per share, reflecting a year-over-year increase of 9.8% [1] - Expected revenues for ADP are projected to be $5.38 billion, indicating a 6.7% increase compared to the same quarter last year [1] Earnings Estimates - There has been no revision in the consensus EPS estimate for the quarter over the last 30 days, indicating stability in analysts' forecasts [2] - Revisions to earnings estimates are crucial for predicting investor actions regarding the stock, as trends in these revisions correlate with short-term price performance [3] Revenue Projections - Analysts expect 'Segment revenues- Employer Services' to reach $3.57 billion, a change of +5.3% from the year-ago quarter [5] - 'Revenues- Interest on funds held for clients' are forecasted to be $310.24 million, reflecting a +13.7% change from the previous year [5] - 'Revenues- PEO revenues' are projected to be $1.75 billion, indicating a +5.2% increase from the year-ago quarter [5] - 'Segment revenues- PEO Services' are expected to reach $1.77 billion, a +6.3% change from the prior year [6] - The average prediction for 'Revenues, other than interest on funds held for clients and PEO revenues' is $3.27 billion, showing a +4.9% change from the previous year [6] Employment Metrics - The 'Average paid PEO worksite employees during the period' is projected to be 762, up from 746 reported in the same quarter last year [7] Stock Performance - Over the past month, ADP shares have recorded returns of +0.7%, compared to the Zacks S&P 500 composite's +0.6% change [7] - ADP holds a Zacks Rank 3 (Hold), suggesting it will likely perform in line with the overall market in the upcoming period [7]

Core Viewpoint - Growth investing can be simplified by focusing on dividend stocks, particularly Dividend Kings, which have a long history of increasing payouts and may outperform traditional growth stocks over time [2][6]. Group 1: Dividend Kings - Dividend Kings are companies that have raised their annual per-share dividend payments for at least 50 consecutive years, with only 56 stocks qualifying as of early 2026 [5]. - These companies often represent stable, slow-moving businesses that can provide reliable income and potential for long-term capital appreciation [6]. Group 2: Company Examples - **Automatic Data Processing (ADP)**: - ADP processes payroll for over 1 million corporate customers and is expected to generate $21.8 billion in revenue this fiscal year, a 5.8% increase from the previous year [8]. - The company has a market cap of $103 billion and a dividend yield of 2.48%, with dividends raised for 51 consecutive years [10][12]. - ADP consistently converts 20% to 25% of its revenue into net income, supporting ongoing dividend increases [11]. - **Walmart**: - Walmart has increased its per-share dividend payout for 52 consecutive years and has a market cap of $946 billion [13]. - The current dividend yield is 0.79%, with a stock price increase of 156% over the past three years [15]. - Walmart's extensive reach in the U.S. allows it to maintain significant earnings, funding stock buybacks and sustaining dividends despite low profit margins of 3% to 4% [17]. - **American States Water**: - This utility company has raised its dividend for 70 consecutive years, with an average annual increase of over 8% in the past decade [21]. - The company serves over 1 million people and has a market cap of $2.9 billion, with a forward-looking dividend yield of 2.8% [22][24]. - The growing scarcity of potable water and demand for electricity provide American States Water with strong pricing power [23].

Group 1 - ADP has been recognized as one of the "World's Most Admired Companies" by FORTUNE magazine for 2026, marking its 20th year on the list [1][2] - The recognition is based on performance in areas such as product and service quality, global business effectiveness, and innovation [1] - Maria Black, ADP's CEO, emphasized the company's commitment to keeping people at the center of its operations, leveraging AI to enhance human creativity and connection [1] Group 2 - FORTUNE collaborates with Korn Ferry to evaluate approximately 1,500 companies, including the largest U.S. companies and non-U.S. companies with revenues of $10 billion or more [2] - The evaluation criteria include investment value, quality of management and products, social responsibility, and talent attraction [2] - A company must rank in the top half of its industry survey to be included in the list [2] Group 3 - The complete list of the "World's Most Admired Companies" will be published in the February/March 2026 issue of FORTUNE magazine, available on newsstands starting February 17th [3] - ADP was also recognized in The Wall Street Journal's Management Top 250 recently [3] Group 4 - ADP has over 75 years of experience in shaping the world of work, providing HR and payroll solutions [4] - The company serves more than 1.1 million clients across over 140 countries, offering a range of services from simple tools for small businesses to integrated platforms for global enterprises [4] - ADP focuses on using AI-driven insights to design innovative solutions that help people achieve greater success at work [4]

Core Insights - The NER Pulse indicates that U.S. private employers added an average of 8,000 jobs per week for the four weeks ending December 27, 2025, reflecting a modest slowdown in hiring during the last week of 2025 [1]. Employment Data Summary - The four-week moving average of job additions showed the following weekly changes: - Week ending 12/27/2025: 8,000 jobs - Week ending 12/20/2025: 11,250 jobs - Week ending 12/13/2025: 10,250 jobs - Week ending 12/6/2025: 8,750 jobs - Week ending 11/29/2025: 13,250 jobs - Week ending 11/22/2025: 3,750 jobs - Week ending 11/15/2025: -8,500 jobs - Week ending 11/8/2025: -11,750 jobs - Week ending 11/1/2025: -7,500 jobs - Week ending 10/25/2025: -4,750 jobs - Week ending 10/18/2025: 11,500 jobs - Week ending 10/11/2025: 10,250 jobs [1]. NER Pulse Release Information - The NER Pulse is published every Tuesday at 8:15 a.m. ET, except during the weeks when the monthly National Employment Report is released [2]. - The next NER Pulse is scheduled for release on January 27, 2026 [3]. About ADP Research - ADP Research aims to enhance workplace productivity through data-driven insights, providing valuable information for companies, workers, and policymakers [4]. - ADP has over 75 years of experience in HR and payroll solutions, serving more than 1.1 million clients across 140+ countries [5].

Core Viewpoint - Automatic Data Processing Inc. (NASDAQ:ADP) has shown mixed performance, with a short-term stock increase of 0.77% over the past month but a significant decline of 12.82% over the past year, prompting long-term shareholders to consider the company's price-to-earnings (P/E) ratio [1]. Group 1: Company Performance - The current share price of Automatic Data Processing Inc. is $260.01, reflecting a slight drop of 0.07% [1]. - The company's P/E ratio stands at 25.69, which is lower than the aggregate P/E ratio of 29.74 for the Professional Services industry [4]. Group 2: P/E Ratio Analysis - The P/E ratio is a critical metric for long-term shareholders to evaluate market performance against historical earnings and industry standards [3]. - A lower P/E ratio may suggest that shareholders expect poorer future performance or that the company is undervalued [3][6]. - Investors are advised to consider the P/E ratio alongside other financial metrics and qualitative factors, as it has limitations and should not be used in isolation [6].