ADP(ADP) - 2025 Q3 - Quarterly Report

Revenue and Earnings Growth - Revenue growth of 7% to $15,434.1 million for the nine months ended March 31, 2025, with 7$7.75[84] - Net earnings for the three months ended March 31, 2025, were $1,249.5 million, up 5$1,184.9 million in the same period last year[106] - Diluted EPS for the nine months ended March 31, 2025, increased to $7.75, representing a 10$7.07 in the prior year[106] - Adjusted EBIT for the nine months ended March 31, 2025, reached $4,134.2 million, reflecting a 9$3,779.1 million in the previous year[99] Client and Employee Metrics - Pays per control metric grew 1% for the nine months ended March 31, 2025, compared to the same period in 2024[82] - PEO average worksite employees increased by 3% for the nine months ended March 31, 2025, compared to the same period in 2024[82] - The average client funds balance increased by 6.6% to $37.5 billion for the nine months ended March 31, 2025[88] - Funds held for clients rose to$44,495.8 million for the three months ended March 31, 2025, up from $41,701.7 million in 2024, indicating an increase of 6.8$11,571.2 million for the nine months ended March 31, 2025[89] - Cash provided by operating activities for the nine months ended March 31, 2025, was $3,500.5 million, up$643.5 million from $2,857.0 million in 2024[132] - Cash returned to shareholders totaled$2.8 billion, including $1.8 billion in dividends and$1.0 billion in share repurchases[84] Acquisitions and Investments - The company closed the acquisition of PEI in January and WorkForce Software in October, enhancing its global payroll capabilities[81] - Net cash flows used in investing activities included a net cash disbursement of $1,158.3 million for the acquisition of Workforce Software[133] - Capital expenditures for the nine months ended March 31, 2025, were$139.9 million, down from $151.6 million for the same period in 2024, with expectations for fiscal 2025 capital expenditures between$180.0 million and $200.0 million[140] Financial Position and Securities - Cash and cash equivalents as of March 31, 2025, were$2.7 billion, primarily invested in time deposits and money market funds[129] - The total available-for-sale securities at fair value increased from $31.2 billion as of June 30, 2024, to$33.9 billion as of March 31, 2025[147] - The company reported net unrealized pre-tax losses on available-for-sale securities of $(688.0) million as of March 31, 2025, compared to$(1,515.8) million as of June 30, 2024[147] Debt and Credit Facilities - The company has $10.3 billion available under committed credit facilities, with no borrowings through March 31, 2025[138] - The company has$4.0 billion of senior unsecured notes maturing in 2025, 2028, 2030, and 2034, and may revisit the long-term debt market for refinancing and acquisitions[136] Market and Risk Management - The company is exposed to market risk from foreign currency exchange rates, which could impact consolidated results, and manages this risk through operating activities and derivative financial instruments[149] - The company limits credit risk by investing primarily in AAA-rated and AA-rated securities, ensuring a focus on investment-grade securities[148] Accounting and Compliance - The preparation of financial statements requires management to make estimates and assumptions that could differ from actual results, as noted in the critical accounting policies[150] - Recent accounting pronouncements are discussed in Note 2 of the Consolidated Financial Statements, indicating ongoing compliance with updated accounting standards[151]