Automatic Data Processing Q2 Earnings & Revenues Beat Estimates

Core Insights - Automatic Data Processing, Inc. (ADP) reported strong second-quarter fiscal 2025 results, with earnings and revenues exceeding the Zacks Consensus Estimate [1][2] Financial Performance - Earnings per share reached $2.4, beating the consensus estimate by 3.5% and increasing 10.3% year-over-year [2] - Total revenues amounted to $5 billion, surpassing the consensus estimate by 1.6% and growing 8.2% year-over-year [2] - Adjusted EBIT increased 11% year-over-year to $1.3 billion, with an adjusted EBIT margin rising 60 basis points to 25.2% [7] Segment Performance - Employer Services generated revenues of $3.4 billion, an 8% increase on a reported basis, meeting estimates [5] - PEO Services revenues grew 8% year-over-year to $1.7 billion, slightly missing projections [5] - Interest on funds held for clients rose 21% year-over-year to $273 million, exceeding estimates [6] Balance Sheet and Cash Flow - Cash and cash equivalents at the end of the quarter were $2.2 billion, up from $2.1 billion in the previous quarter [8] - Long-term debt remained flat at $3 billion, with cash generated from operating activities totaling $1.2 billion [8] Future Outlook - For fiscal 2025, ADP anticipates revenue growth of 6-7% and adjusted EPS growth of 7-9% [9] - The company expects Employer Services revenue to grow 6-7% and PEO Services revenue to grow 5-6% [9]