ROSELAND, N.J., Jan. 7, 2026 /PRNewswire/ -- Private sector employment increased by 41,000 jobs in December and pay was up 4.4 percent year-over-year according to the December ADP National Employment Report® produced by ADP Research in collaboration with the Stanford Digital Economy Lab ("Stanford Lab"). Continue Reading ADP Research (PRNewsfoto/ADP, Inc.) The ADP National Employment Report is an independent measure of the labor market based on the anonymized weekly payroll data of more than 26 million priv ...

Paychex, Inc. (NASDAQ:PAYX) is one of the stocks that was on Jim Cramer’s radar. Cramer noted the company’s earnings and analyst sentiment toward it. The Mad Money host stated: “If you want to get a real read on employment, I always like to check in with Paychex. That’s the payroll processor and outsourced human resources play, mainly serves small and medium-sized businesses. This morning, Paychex reported a modest top and bottom-line beat, management raising the midpoint of the full-year earnings forecas ...

Core Insights - The NER Pulse indicates that U.S. private employers added an average of 16,250 jobs per week for the four weeks ending November 29, 2025, suggesting a potential rebound in hiring after a period of job losses [1] - The data reflects a significant improvement from previous weeks, where job losses were recorded at -9,250, -12,000, and -7,250 for the weeks ending November 15, November 8, and November 1, respectively [1] - The NER Pulse is based on a four-week moving average and is seasonally adjusted, providing a more accurate estimate of real-time employment trends [1] Employment Trends - The four-week moving average for the week ending November 29, 2025, shows a notable increase compared to the previous weeks, indicating a shift in employment dynamics [1] - The job additions in the last week of November mark a significant turnaround from the negative job growth observed in earlier weeks of the month [1] Data Release Information - The NER Pulse is published every Tuesday at 8:15 a.m. ET, except during the weeks when the monthly National Employment Report is released [2] - The next NER Pulse will be released on January 12, 2026, following a pause on December 30, 2025, due to the reference week for the monthly report [3]

Summary of Paychex Conference Call Company Overview - **Company**: Paychex - **Industry**: Human Capital Management (HCM) and Payroll Services Key Points AI Innovations and Product Development - Paychex has been working on AI-related innovations for over a decade, leveraging vast amounts of data from servicing 5 million small businesses annually [3][4] - The company plans to update its three core platforms (SurePayroll, Paychex Flex, and Paycor) to be AI-driven by the next calendar year [4] - A provisional patent has been granted for a tool that curates answers based on client interactions, enhancing HR consulting capabilities [5] - Agentic AI is being utilized to automate payroll processes and improve accuracy [6] Employment Landscape and Market Resilience - Despite concerns about a recession, Paychex reports resilience among small businesses, with a small business index showing only a slight moderation [8] - The primary issue in the labor market is a supply problem, exacerbated by restrictive immigration policies and accelerated retirements [11] - Paychex believes there is underemployment in its client base, with more job openings than available skilled labor [11] Impact of AI on Employment - The CEO does not foresee AI leading to mass unemployment, arguing that technological revolutions typically do not result in significant job losses [13] - Jobs will evolve rather than disappear, with a shift towards advisory roles for Paychex employees [14] Acquisition of Paycor - The acquisition of Paycor is seen as a natural extension of Paychex's business, expanding its total addressable market by $10 billion [20] - Integration of Paycor is progressing well, with cost synergies exceeding expectations and revenue synergies anticipated to grow over time [23][28] - Paychex aims to leverage its existing client base to drive revenue growth from the newly acquired Paycor clients [28] PEO Business Growth - Paychex is optimistic about its Professional Employer Organization (PEO) business, which is experiencing better growth than competitors due to increased investment and a strong value proposition [33] - There is significant room for growth in the PEO model, with only about 200,000 of the 6.5 million U.S. businesses currently utilizing it [33] Financial Performance and Growth Drivers - Paychex operates in a large market growing at mid-single digits, with expectations for PEO to grow faster than management solutions [45] - Revenue growth is driven by client-based growth, pricing power, and increased share of wallet from existing clients [46] - The company anticipates continued growth from M&A, particularly following the Paycor acquisition [47] Capital Allocation Strategy - Paychex plans to prioritize debt repayment, particularly with $400 million coming due in March, while maintaining a target gross leverage below 1.5 times [51] - The company aims to grow dividends in line with earnings, with a free cash flow margin exceeding 30% [52] - Share buybacks will be used to offset dilution, with M&A remaining a focus for future capital deployment [53] Additional Insights - The introduction of the Paychex Perks program aims to provide employees with affordable benefits options, addressing health inflation issues [37][38] - The company is focused on integrating AI into its HCM solutions to enhance user experience and operational efficiency [30][31]

Core Insights - For the four weeks ending November 22, 2025, U.S. private employers added an average of 4,750 jobs per week according to the NER Pulse, which is a weekly update of the monthly ADP National Employment Report [1] Group 1: Employment Data - ADP Research publishes preliminary estimates of week-over-week changes in U.S. employment based on a four-week moving average, utilizing high-frequency data that is seasonally adjusted and released with a two-week lag [2] - The NER Pulse is published every Tuesday at 8:15 am ET, except during NER release weeks, and includes 12 weeks of historical data [2][3] Group 2: ADP Research and Collaboration - The ADP National Employment Report and the NER Pulse are produced by ADP Research in collaboration with the Stanford Digital Economy Lab, with NER Pulse numbers being preliminary and subject to change as new data is added [3] Group 3: About ADP - ADP has over 75 years of experience in shaping the world of work, providing HR and payroll solutions to more than 1.1 million clients across over 140 countries [5] - The company focuses on innovation and expertise to solve business challenges, offering tools for small businesses to fully integrated platforms for global enterprises [5]

Core Insights - For the four weeks ending November 8, 2025, U.S. private employers experienced an average job loss of -13,500 jobs per week according to the NER Pulse, which is a weekly update of the ADP National Employment Report [1] Group 1: Employment Data - The NER Pulse provides preliminary estimates of week-over-week changes in U.S. employment based on a four-week moving average, utilizing ADP's high-frequency data [1][3] - The data is seasonally adjusted and released with a two-week lag, indicating a structured approach to employment reporting [1] Group 2: ADP Research and Collaboration - The ADP National Employment Report and the NER Pulse are produced in collaboration with the Stanford Digital Economy Lab, highlighting a partnership aimed at enhancing employment data accuracy [3] - ADP Research focuses on making the future of work more productive through data-driven discovery, serving companies, workers, and policymakers [3] Group 3: ADP Overview - ADP has over 75 years of experience in shaping the world of work, providing HR and payroll solutions to more than 1.1 million clients across over 140 countries [5] - The company emphasizes innovation and expertise, aiming to solve business challenges for clients of all sizes [5]

Core Viewpoint - Automatic Data Processing Inc. (ADP) is a leading company in the human resources and payroll services industry, reporting strong fiscal first-quarter results despite a stock decline [1][2][3]. Financial Performance - ADP reported quarterly revenues of $5.18 billion, exceeding the analyst consensus estimate of $5.14 billion, representing a 7% year-over-year increase [2][6]. - The company's adjusted earnings per share (EPS) were $2.49, surpassing the expected $2.44, while adjusted earnings before interest and taxes (EBIT) rose by 7% to $1.3 billion, maintaining an adjusted EBIT margin of 25.5% [3][6]. - Net earnings increased by 6% year-over-year to $1.01 billion, indicating strong financial performance [3]. Market Position - ADP's market capitalization is approximately $106.65 billion, with a trading volume of 1,047,374 shares on the NASDAQ exchange [5]. - The stock price is currently around $263.28, showing a slight increase of approximately 0.79% or $2.06, with fluctuations between a low of $260.22 and a high of $265.92 during the trading day [4][5]. - Over the past year, the stock has reached a high of $329.93 and a low of $260.22, reflecting some volatility in the market [5]. Cash Position - As of September 30, ADP held $7.94 billion in cash and equivalents, indicating a robust financial position that suggests potential for future growth [4][6].

Core Insights - Automatic Data Processing Inc. (ADP) reported fiscal first-quarter 2026 results that surpassed Wall Street expectations, yet shares declined over 5% during intra-day trading [1] Financial Performance - Adjusted earnings per share were $2.49, exceeding the analyst estimate of $2.44 [2] - Revenue increased by 7% year-over-year to $5.2 billion, surpassing the consensus forecast of $5.14 billion [2] - Net earnings rose by 6% to $1.0 billion, while adjusted EBIT increased by 7% to $1.3 billion, maintaining margins at 25.5% [2] Segment Performance - Employer Services revenue grew by 7% to $3.49 billion [3] - PEO Services revenue also saw a 7% increase to $1.69 billion [3] - The average number of worksite employees paid through PEO Services rose by 2% to approximately 754,000 [3] - Interest on funds held for clients increased by 13% to $287 million, supported by a 7% rise in average client fund balances to $34.9 billion [3] Future Outlook - ADP reaffirmed its fiscal 2026 outlook, projecting revenue growth of 5% to 6% [4] - Expected adjusted EBIT margin expansion of 50 to 70 basis points [4] - Anticipated adjusted EPS growth of 8% to 10% [4]

Core Insights - Automatic Data Processing (ADP) reported a revenue of $5.18 billion for the quarter ended September 2025, reflecting a year-over-year increase of 7.1% [1] - Earnings per share (EPS) for the quarter was $2.49, up from $2.33 in the same quarter last year, exceeding the consensus estimate of $2.44 [1] Financial Performance - The reported revenue of $5.18 billion surpassed the Zacks Consensus Estimate of $5.13 billion, resulting in a surprise of +0.95% [1] - EPS also exceeded expectations with a surprise of +2.05% compared to the consensus estimate [1] - Average paid PEO worksite employees during the period was 754, slightly below the two-analyst average estimate of 757 [4] Segment Revenue Breakdown - Employer Services revenue was $3.49 billion, exceeding the average estimate of $3.45 billion, marking a +7.1% change year-over-year [4] - Interest on funds held for clients generated $286.8 million, surpassing the average estimate of $281.99 million, with a year-over-year increase of +13.2% [4] - Other revenues, excluding interest and PEO revenues, totaled $3.2 billion, exceeding the three-analyst average estimate of $3.17 billion, representing a +6.5% change year-over-year [4] - PEO revenues reached $1.68 billion, slightly above the average estimate of $1.67 billion, with a +7.2% year-over-year change [4] - PEO Services revenue was $1.69 billion, also exceeding the average estimate of $1.68 billion, reflecting a +7.2% change year-over-year [4] - Other segment revenues reported a loss of $-3.5 million, which was worse than the estimated loss of $-3.05 million, but showed a significant year-over-year improvement of +25% [4] Stock Performance - ADP shares have returned -4.7% over the past month, contrasting with the Zacks S&P 500 composite's +3.8% change [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

Financial Data and Key Metrics Changes - The company reported a 7% revenue growth and a 7% adjusted EPS growth for the first quarter of fiscal 2026 [5][16] - Employer Services segment revenue increased by 7% on a reported basis and 5% on an organic constant currency basis [16] - Client funds interest revenue increased more than anticipated, leading to an increase in the full-year forecast for client funds interest revenue by $10 million to a range of $1.30 billion to $1.32 billion [17][19] Business Line Data and Key Metrics Changes - Employer Services new business bookings showed solid growth, resulting in record sales volume for a first quarter [5] - PEO revenue growth of 7% exceeded expectations, driven by growth in zero margin pass-throughs and higher wages [7][18] - Employer Services pays per control growth rounded down to 0% for the first quarter, reflecting client caution around adding headcount [6][16] Market Data and Key Metrics Changes - Overall client satisfaction score reached a new all-time high for a first quarter, indicating improvements across business units [6] - The company experienced specific strength in ADP Lyric HCM, with new business bookings exceeding expectations [9][10] - International market performance was described as "lumpy," with a solid pipeline but some softness in the first quarter [68] Company Strategy and Development Direction - The company is focused on leading with best-in-class HCM technology, including the scaling of Embedded Payroll Solutions for small businesses [8][11] - Continued investment in AI initiatives aims to enhance operational efficiency and client engagement [12][14] - The acquisition of Pequity is expected to broaden the company's capabilities in compensation management, aligning with its strategic priorities [10][62] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the relatively stable HCM demand backdrop and maintained full-year growth guidance of 4%-7% for Employer Services [16][24] - The company anticipates a slight decline in Employer Services retention but remains optimistic about achieving its growth targets [16][18] - Management highlighted the importance of ongoing investments in technology and client services to drive future growth [14][19] Other Important Information - The company announced the acquisition of Pequity, which is expected to enhance its compensation management offerings [10][62] - The company was recognized as a leader in multi-country payroll solutions, underscoring its global capabilities [15] Q&A Session Summary Question: Update on deal cycles and time to close - Management indicated that the demand backdrop remains stable, with no significant changes observed in deal cycles during Q1 [24] Question: Confidence in Employer Services guidance amid slight downticks - Management expressed confidence in the guidance, noting that movements in pays per control and retention are relatively small and offsetting [26][28] Question: Surprising areas of new bookings growth - Management highlighted strong growth in small business services, particularly in retirement services and HR outsourcing [32] Question: Performance of PEO enrollment period - Management reported the highest participation rates in four years, indicating strong demand for health benefits among targeted industries [57] Question: Insights on the recent acquisition - Management emphasized the strategic importance of the acquisition for enhancing compensation management capabilities, although its financial impact is currently minimal [62][64] Question: Differences between U.S. and international markets - Management described international performance as "lumpy," with solid execution expected to drive growth in the future [68] Question: Impact of recent layoffs in the market - Management stated that recent layoffs are not expected to significantly impact guidance, as hiring levels remain static [99]