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 by $10 million to a range of $1.30 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] Company Strategy and Development Direction - The company is focused on leading with best-in-class HCM technology, including scaling embedded payroll solutions for small businesses [7][8] - The acquisition of Pequity aims to enhance capabilities in compensation management, supporting complex planning needs for clients [11][62] - The company continues to advance AI initiatives to improve operational efficiency and client engagement [12][13] Management's Comments on Operating Environment and Future Outlook - Management described the HCM demand backdrop as relatively stable, with no significant changes observed in deal cycles [24][25] - The company maintains its full-year growth guidance for Employer Services at 4% to 7% and PEO revenue growth at 5% to 7% [16][18] - Management expressed confidence in achieving strategic goals and delivering strong financial results despite slight declines in retention rates [15][19] Other Important Information - The company announced the acquisition of Pequity, which is expected to enhance its compensation management offerings [11][62] - The company was recognized as a leader in multi-country payroll solutions by industry analysts [15] Q&A Session Summary Question: Update on deal cycles and time to close - Management indicated that the HCM demand backdrop remains stable, with no meaningful changes in deal cycles observed in Q1 [24][25] Question: Confidence in Employer Services guidance amid slight downticks - Management expressed confidence in the guidance, noting that movements are relatively small and offsetting each other [26][28] Question: Surprising areas of new bookings growth - Management highlighted growth in small business services, particularly in retirement services and HR outsourcing [32] Question: Performance of PEO during enrollment period - Management reported the highest participation rates in four years, indicating strong demand for health benefits among targeted industries [57][58] Question: Insights on international market performance - Management described the international market as "lumpy," with solid execution expected to drive growth in the future [68] Question: Impact of processing days on revenue growth - Management noted a modest impact of around $10 million due to one less processing day compared to the previous year [85][89]

Automatic Data Processing (NasdaqGS:ADP) Q1 2026 Earnings Call October 29, 2025 08:30 AM ET Speaker1Good morning. My name is Michelle and I'll be your conference operator at this time. I would like to welcome everyone to ADP's first quarter 2026 earnings call. I would like to inform you that this conference is being recorded. After the prepared remarks, we will conduct the question and answer session. Instructions will be given at that time. I will now turn the conference over to Matt Keating, Vice Presiden ...