ADP Exceeds Earnings Forecasts in Q3

Core Insights - Automatic Data Processing (ADP) reported strong fiscal 2025 Q3 earnings, exceeding analysts' expectations with adjusted EPS of $3.06 and revenue of $5.55 billion [2][3] - The company demonstrated solid financial efficacy despite competitive challenges and economic conditions [2] Financial Performance - Adjusted EPS for Q3 2025 was $3.06, surpassing the estimate of $2.97, and increased by 6.3% from Q3 2024's $2.88 [3] - Total revenue reached $5.55 billion, exceeding the estimate of $5.49 billion, and reflecting a 5.7% increase from $5.25 billion in Q3 2024 [3] - Adjusted EBIT margin remained stable at 29.3%, with adjusted EBIT rising 6% to $1.6 billion [3][7] - Net income for the quarter was $1.25 billion, a 5% increase from $1.18 billion in the previous year [3] Segment Performance - The Employer Services segment revenue increased by 5% to $3.77 billion [6] - The PEO Services segment reported a 7% revenue increase to $1.79 billion, contributing significantly to total revenue [6] Strategic Focus - ADP aims to reinforce its technological dominance and expand international outreach while maintaining strong compliance and risk management capabilities [5] - The company continues to enhance its service offerings through technology-driven tools and AI platforms, such as ADP Assist [7] Future Outlook - Management raised full-year fiscal 2025 guidance, projecting adjusted diluted EPS growth of 8% to 9% and total revenue growth of 6% to 7% [9] - Adjusted EBIT margin is expected to expand by 40 to 50 basis points from the 2024 margin of 25.5% [9] - Average client fund balances are forecasted to grow by 5% to 6% from the 2024 figure of $35.4 billion [9]