ADP(US:ADP)2025-01-30 19:40Revenue and Earnings Growth - Revenue growth of 8% to $9,881.1 million for the six months ended December 31, 2024, with 7% organic constant currency growth[86] - Adjusted diluted earnings per share (EPS) grew by 12% to $4.69 for the six months ended December 31, 2024[86] - For the three months ended December 31, 2024, EBIT increased to $1,261.3 million, reflecting a 10% year-over-year growth from $1,143.8 million[99] - Adjusted EBIT for the same period was $1,272.0 million, an 11% increase compared to $1,147.1 million in the prior year[99] - Net earnings for the three months ended December 31, 2024, were $963.2 million, a 10% increase from $878.4 million in 2023[106] - Diluted EPS rose to $2.35 for the three months ended December 31, 2024, marking a 10% increase from $2.13 in the previous year[106] Shareholder Returns - Cash returned via shareholder-friendly actions totaled $1,790 million, including $1,145 million in dividends and $645 million in share repurchases[86] - The company achieved a milestone by increasing its dividend for the 50th consecutive year[84] - The company repurchased approximately 0.9 million shares during the three months ended December 31, 2024, contributing to the increase in diluted EPS[107] - The company repurchased approximately 2.4 million shares at an average price of $274.42 during the six months ended December 31, 2024[133] Operating Performance - Operating expenses increased by 7% to $4,661.9 million for the six months ended December 31, 2024, compared to $4,370.9 million in 2023[91] - Employer Services revenues increased by 7% to $3,388.5 million for the three months ended December 31, 2024, compared to $3,125.2 million in 2023[109] - PEO Services revenues reached $1,663.3 million, an 8% increase from $1,546.1 million in the same period last year[114] - Employer Services' earnings before income taxes increased by 11% for the three months ended December 31, 2024, due to client funds interest revenues and operational efficiencies[111] - PEO Services' earnings before income taxes decreased by 1% for the three months ended December 31, 2024, due to increased costs[115] Cash Flow and Investments - Cash provided by operating activities for the six months ended December 31, 2024, was $1,974.7 million, an increase of $615.8 million from $1,358.9 million in 2023[130] - Net cash flows used in investing activities were $(2,902.3) million, a significant increase of $2,824.5 million compared to $(77.8) million in 2023, primarily due to the acquisition of Workforce Software for $1,160.6 million[131] - Net cash flows from financing activities increased to $7,482.5 million, up $3,666.4 million from $3,816.1 million in 2023, driven by a net increase in cash flow from client funds obligations[132] Acquisitions and Integration - The integration of WorkForce Software into the global HCM ecosystem has commenced following its acquisition in October[84] - The company acquired Workforce Software for $1,160.6 million, impacting investing activities significantly[131] Tax and Effective Rates - The effective tax rate for the three months ended December 31, 2024, was 23.6%, up from 23.2% in 2023[102] - The adjusted effective tax rate for the six months ended December 31, 2024, was 23.1%, compared to 22.3% in the same period of 2023[122] Capital Expenditures and Debt - Capital expenditures for the six months ended December 31, 2024, were $98.2 million, up from $94.0 million in the same period of 2023, a 2.3% increase[138] - The company expects capital expenditures in fiscal 2025 to be between $180 million and $200 million, down from $211.7 million in fiscal 2024[138] - The company has $4.0 billion in senior unsecured notes maturing in 2025, 2028, 2030, and 2034, and may refinance existing debt or finance acquisitions[134] Investment Portfolio and Market Risk - The investment portfolio is structured to maximize interest income while ensuring safety of principal and liquidity, with no exposure to sub-prime or non-investment grade securities[137] - The company limits credit risk by investing primarily in AAA-rated and AA-rated securities, ensuring a focus on investment-grade securities[147] - The company is exposed to market risk from changes in foreign currency exchange rates, which could impact consolidated results of operations and cash flows[148] Accounting and Compliance - Management continually evaluates accounting policies and estimates used in preparing the Consolidated Financial Statements, which are based on historical experience and reasonable assumptions[149] - Recent accounting pronouncements are discussed in Note 2 of the Consolidated Financial Statements, indicating ongoing compliance with new standards[150]