Summary of Automatic Data Processing (ADP) FY Conference Call Company Overview - **Company**: Automatic Data Processing (ADP) - **Industry**: Human Capital Management (HCM) - **Market Opportunity**: $180 billion Total Addressable Market (TAM) with ADP's current revenue at approximately $20 billion [6][7] Key Messages from Investor Day 1. **Scale and Dependability**: ADP has a 76-year history, serving clients from small businesses to large enterprises across 140 countries, showcasing resilience through various economic cycles [5][6] 2. **Innovation and Product Development**: ADP highlighted its commitment to innovation with new products like ADP Lyric and Workforce Now, emphasizing best-in-class platforms for various market segments [8][9] 3. **Distribution Strategy**: ADP has a modern sales force of 8,500 sellers and utilizes various channels for distribution, including CPAs and brokers, to reach clients effectively [9][10] Labor Market Insights 1. **Employment Trends**: ADP's data indicates a complex labor market with a reported loss of 32,000 jobs recently, but wages remain strong with only a 10 basis point change in growth [14][15] 2. **Impact of AI**: There are early signs of AI affecting certain job sectors, but it is still early to determine the full impact on employment levels [15][16] 3. **Resilience in Client Base**: ADP's client base shows lower layoffs and stable employment compared to broader market trends, with a focus on small businesses that invest in ADP's solutions [18][19] Business Performance and Guidance 1. **HCM Demand**: Demand for HCM services is stable, with healthy pipelines across small to enterprise segments, supporting a growth outlook of 4%-7% for new bookings [22][24] 2. **PEO Growth**: ADP expects PEO growth to be 6%-8%, slightly above the previous year's guidance, with a focus on navigating healthcare costs and maintaining client retention [26][30] 3. **Retention Rates**: ADP has consistently outperformed retention expectations, with a focus on product innovation and client experience driving improvements [33][35] AI Integration and Monetization 1. **AI in Products**: ADP has integrated AI into its product offerings, enhancing client workflows and service delivery, with a focus on value-based pricing rather than immediate price increases [39][40] 2. **Long-term Value Creation**: The strategy involves reducing friction in existing processes, which helps retain clients and allows for the potential sale of additional services over time [41][42] Conclusion - ADP is positioned strongly within the HCM industry, leveraging its scale, innovative products, and effective distribution strategies to navigate current market challenges and capitalize on growth opportunities. The integration of AI is expected to enhance operational efficiency and client satisfaction, contributing to long-term revenue growth.

Core Insights - Paychex, Inc. is launching a suite of AI-driven innovations aimed at transforming the human capital management (HCM) experience from user-directed to AI-powered solutions, enhancing efficiency and business outcomes for clients [1][2][3] AI Innovations - The company has deployed agentic AI solutions for payroll automation, developed a patent-pending system for extracting insights from unstructured data, and launched GenAI platforms for personalized recommendations [2][6] - Key innovations include: - Agentic AI technology achieving near 100% accuracy in processing client payrolls via voice and email, improving resolution times and allowing service teams to focus on strategic advisory roles [6] - A patent-pending AI-powered knowledge mesh system that organizes unstructured data into a searchable network, providing actionable workforce management intelligence [6] - A GenAI-powered employment law and compliance platform that helps navigate complex employment laws and regulatory updates [6] - A GenAI Sales & Service Platform that aggregates insights for sales and service teams, enhancing client interactions and support [6] Company Vision and Market Position - The CEO of Paychex emphasizes the goal of democratizing AI technology for all businesses, leveraging the company's extensive dataset to drive superior AI performance and measurable business outcomes [3] - Paychex serves approximately 800,000 customers in the U.S. and Europe, paying 1 out of every 11 American private sector workers, positioning itself as a leader in the HCM space [5]

Core Viewpoint - Paychex, Inc. will release its financial results for the second quarter of fiscal 2026 on December 19, 2025, before the market opens [1] Financial Results Announcement - The financial results will cover the period ended November 30, 2025 [1] - A conference call is scheduled for 9:30 a.m. ET on the same day to discuss these results [1] - Key participants in the call will include John Gibson, President and CEO, and Bob Schrader, Chief Financial Officer [1]

Core Insights - Zacks Premium offers various tools for investors to enhance their stock market strategies, including daily updates, research reports, and stock screens [1] - The Zacks Style Scores are designed to help investors select stocks with the highest potential to outperform the market within a 30-day timeframe [2] Zacks Style Scores Overview - The Style Scores categorize stocks into four main types: Value Score, Growth Score, Momentum Score, and VGM Score, each focusing on different investment strategies [3][4][5][6] - Value Score identifies undervalued stocks using financial ratios [3] - Growth Score assesses a company's future earnings and financial health [4] - Momentum Score tracks price trends to capitalize on upward or downward movements [5] - VGM Score combines all three styles to highlight stocks with the best overall potential [6] Zacks Rank and Performance - The Zacks Rank is a proprietary model that leverages earnings estimate revisions to guide investors in stock selection [7] - Stocks rated 1 (Strong Buy) have historically achieved an average annual return of +23.93%, significantly outperforming the S&P 500 [8] - Investors are encouraged to focus on stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B for optimal investment potential [9] Stock Highlight: Paychex (PAYX) - Paychex, Inc. is a leading provider of integrated human capital management solutions for small- to medium-sized businesses [11] - Currently rated 3 (Hold) with a VGM Score of B, Paychex shows promise for growth investors [11] - The company forecasts a year-over-year earnings growth of 9.8% for the current fiscal year, with a recent earnings estimate increase to $5.47 per share [12]

Core Insights - Paychex, Inc. has launched Participant Event Notifications, an AI-driven wealth management solution designed to enhance financial advisors' ability to support retirement plan participants through real-time insights [1][2] Group 1: Product Features - The Participant Event Notifications tool alerts advisors when participants reach significant milestones, such as age or employment status changes, enabling proactive engagement [2][3] - This solution is integrated within the Paychex Flex® Advisor Console, allowing advisors to receive notifications seamlessly [1][2] - Paychex has enhanced its Retirement Services offerings, including a modernized advisor console, an improved participant portal, and integrated client web experiences [5] Group 2: Company Commitment - Paychex emphasizes its commitment to helping Americans secure their financial futures by providing innovative tools for financial advisors and plan sponsors [3] - The company serves as the 401(k) recordkeeper for 124,000 plans, highlighting its significant role in the retirement services industry [3] - Paychex aims to deliver critical data at no additional charge, allowing advisors to make timely and informed recommendations [3] Group 3: Market Position - Paychex is recognized as a leading provider of 401(k) plans in the U.S., with a focus on innovation and enhancing client relationships [3][5] - The company supports approximately 800,000 customers in the U.S. and Europe, paying 1 out of every 11 American private sector workers [6]

Core Insights - A new report highlights a concerning trend in retirement savings, indicating that fewer workers are saving, with only top earners increasing their contributions year over year [1][2] Summary by Sections Retirement Savings Trends - The analysis, titled "The Retirement Divide," utilizes over 1 million anonymized records from 2021 to 2024, providing a comprehensive view of retirement security in America [2] - The share of full-time workers participating in retirement savings plans decreased from 79.4% in 2021 to 78.7% in 2024 [3] - Average contributions to retirement accounts increased from $8,370 in 2021 to $9,488 in 2024, with the average savings rate rising from 8.8% to 9.3% [3] Impact on Different Income Groups - Most gains in retirement savings participation were observed among top earners, while lower-income groups saw declines [4][6] - Participation in retirement plans for workers earning between $15,000 and $50,000 dropped from 58% in 2022 to 52.9% in 2024 [6] - For those earning between $50,000 and $150,000, participation rates also fell, while only employees earning over $150,000 experienced an increase [6] Savings Rate and Contributions - The average retirement savings rate declined from 2022 to 2024 for all income groups except the highest earners [7] - For workers earning $15,000 to $50,000, the savings rate decreased from 4.9% to 4.6% of income, significantly lower than that of top earners [7] - Average annual contributions for those earning $15,000 to $50,000 fell from $1,918 in 2022 to $1,815 in 2024, while contributions for those earning $50,000 to $100,000 decreased from $6,814 to $6,630 [7]

Core Insights - Dayforce, Inc. released a report titled "The Retirement Divide," highlighting significant disparities in retirement savings among American workers [1][3] Retirement Savings Trends - The research covers retirement savings rates, contributions from employees and employers, participation in retirement plans, and loan usage from 2021 to 2024 [2] - The report reveals that high earners are advancing while lower-income workers are falling behind, with participation rates for those earning less than $50,000 dropping from 58% to 52.9% and savings rates decreasing from 4.9% to 4.6% [6] Gender Disparities - The gap in retirement plan participation between men and women has widened to 3.9 percentage points, with participation rates at 79.9% for men and 76% for women [6] Racial Disparities - In 2024, 84.6% of white workers participated in retirement plans, compared to 61.1% of Latino workers and 68.2% of Black workers [6] - Additionally, 26.4% of Black and Latino plan participants had active loans from their accounts, versus 14.9% of white participants [6] Generational Insights - Gen Z workers have shown significant progress in retirement savings, with participation rates increasing from 64% to 68.7%, savings rates improving from 6.6% to 7.2%, and total contributions rising by 24% since 2022 [6]

Core Insights - The report titled "The Retirement Divide" highlights significant disparities in retirement savings among American workers, emphasizing that those earning between $150,000 to $250,000 contribute nearly 13 times more towards retirement annually compared to those earning under $50,000 [1][2]. Summary by Categories Retirement Savings Trends - The research covers retirement savings rates, contributions from employees and employers, participation in retirement plans, and loan usage among full-time U.S. workers from 2021 to 2024 [2]. - High earners have seen increases in participation rates, total contributions, and overall savings rates since 2022, while lower-income workers have experienced declines, particularly those earning less than $50,000 [6]. Gender Disparities - The gap in retirement plan participation between men and women has widened to 3.9 percentage points, with participation rates at 79.9% for men and 76% for women since 2021 [6]. Racial and Ethnic Disparities - In 2024, 84.6% of white workers participated in retirement plans, compared to 61.1% of Latino workers and 68.2% of Black workers. Additionally, 26.4% of Black and Latino participants had active loans from their accounts, versus 14.9% of white participants [6]. Generational Insights - Gen Z workers have made notable progress in retirement savings, with participation rates increasing from 64% to 68.7%, savings rates improving from 6.6% to 7.2%, and total contributions rising by 24% since 2022 [6].

Core Insights - Automatic Data Processing Inc (ADP) is recognized as a Dividend King, having maintained a 51-year streak of dividend increases, with a recent quarterly cash dividend increase of $0.16, bringing the annual rate to $6.80 per share [2][5] - In the first quarter of fiscal year 2026, ADP exceeded earnings expectations, showing year-over-year growth in both revenue and earnings per share (EPS), while reaffirming its full-year guidance despite market concerns regarding artificial intelligence disruptions [3][5] - ADP's current stock price is $253.09, reflecting a decrease of approximately 0.60% or $1.52, with a market capitalization of approximately $102.36 billion [4][5] Financial Performance - ADP's recent financial performance includes exceeding earnings expectations in Q1 FY2026, with both revenue and EPS demonstrating year-over-year growth [3][5] - The company has reaffirmed its full-year guidance, indicating confidence in its financial stability and growth prospects [3] Stock Information - The current stock price of ADP is $253.09, with a trading range today between $251.22 and $255.72 [4] - Over the past year, ADP's stock has reached a high of $329.93 and a low of $249.68, with a market capitalization of approximately $102.36 billion [4]

Core Points - Dayforce's stockholders approved the acquisition by Thoma Bravo, marking a significant milestone in the transaction [2][3] - Approximately 88.4% of votes cast, representing 78.8% of the voting power, were in favor of the acquisition [2] - The acquisition will provide Dayforce with the opportunity to accelerate its business and drive innovation [2] Company Overview - Dayforce is a global leader in human capital management (HCM) technology, focused on improving work life for customers and employees [4] - The company offers a single AI-powered platform for HR, Pay, Time, Talent, and Analytics, benefiting organizations of all sizes [4] Acquisition Details - Under the merger agreement, Dayforce stockholders will receive US$70.00 per share in cash for each share owned [3] - The transaction is expected to close in late 2025 or early 2026, pending customary closing conditions [3] Thoma Bravo Overview - Thoma Bravo is a leading software-focused investor with approximately $181 billion in assets under management as of June 30, 2025 [5] - The firm has invested in around 535 companies over the past 20+ years, representing approximately $275 billion in enterprise value [5]