Automatic Data Processing to Report Q4 Earnings: What's in Store?

Core Insights - Automatic Data Processing, Inc. (ADP) is set to release its fourth-quarter fiscal 2025 results on July 30, with a history of surpassing earnings estimates, averaging a surprise of 3.5% over the last four quarters [1][5]. Revenue Expectations - The Zacks Consensus Estimate for ADP's revenue is $5.1 billion, reflecting a 5.9% year-over-year increase, driven by growth across various segments [2][10]. - Revenue from Employer Services is estimated at $3.4 billion, indicating a 5.7% increase from the previous year, supported by strong business bookings [2][10]. - Professional Employer Organization (PEO) services are projected to generate $1.6 billion in revenue, representing a 5.6% year-over-year growth, attributed to higher wages and strong client retention [3][10]. - Interest on funds held for clients is expected to be $287.9 million, a 4% rise from the prior year, benefiting from a stronger average client funds balance [3]. Earnings Projections - The consensus estimate for earnings per share is $2.22, suggesting a 6.2% increase year-over-year, supported by strong revenue growth and disciplined cost control [4]. - The average number of paid PEO worksite employees is estimated at 762, with a minimal change of 0.1% in pay per control anticipated for the quarter [4]. Earnings Prediction Model - Current analysis indicates that ADP does not conclusively predict an earnings beat, with an Earnings ESP of -0.53% and a Zacks Rank of 3 (Hold) [5][6].