Key Takeaways Automatic Data Processing reported Q2 EPS of $2.62, up 11.5% y/y, as revenues increased 6.2%.Employer Services revenues rose 6% to $3.6B, while PEO Services grew 6% to $1.8B, both topping estimates.ADP reaffirmed its FY26 view, projecting a 6% y/y revenue increase and 9-10% adjusted EPS growth.Automatic Data Processing, Inc. (ADP) has reported impressive second-quarter fiscal 2026 results, wherein earnings and revenues outpaced the Zacks Consensus Estimate.ADP’s earnings per share of $2.62 bea ...

Core Insights - Analysts forecast that Automatic Data Processing (ADP) will report quarterly earnings of $2.58 per share, reflecting a year-over-year increase of 9.8% [1] - Expected revenues for ADP are projected to be $5.38 billion, indicating a 6.7% increase compared to the same quarter last year [1] Earnings Estimates - There has been no revision in the consensus EPS estimate for the quarter over the last 30 days, indicating stability in analysts' forecasts [2] - Revisions to earnings estimates are crucial for predicting investor actions regarding the stock, as trends in these revisions correlate with short-term price performance [3] Revenue Projections - Analysts expect 'Segment revenues- Employer Services' to reach $3.57 billion, a change of +5.3% from the year-ago quarter [5] - 'Revenues- Interest on funds held for clients' are forecasted to be $310.24 million, reflecting a +13.7% change from the previous year [5] - 'Revenues- PEO revenues' are projected to be $1.75 billion, indicating a +5.2% increase from the year-ago quarter [5] - 'Segment revenues- PEO Services' are expected to reach $1.77 billion, a +6.3% change from the prior year [6] - The average prediction for 'Revenues, other than interest on funds held for clients and PEO revenues' is $3.27 billion, showing a +4.9% change from the previous year [6] Employment Metrics - The 'Average paid PEO worksite employees during the period' is projected to be 762, up from 746 reported in the same quarter last year [7] Stock Performance - Over the past month, ADP shares have recorded returns of +0.7%, compared to the Zacks S&P 500 composite's +0.6% change [7] - ADP holds a Zacks Rank 3 (Hold), suggesting it will likely perform in line with the overall market in the upcoming period [7]

Core Insights - Automatic Data Processing, Inc. (ADP) reported strong fourth-quarter fiscal 2025 results, with earnings and revenues exceeding the Zacks Consensus Estimate [1][9] - Earnings per share reached $2.26, surpassing estimates by 1.8% and increasing 8.1% year-over-year, while total revenues were $5.1 billion, exceeding estimates by 1.5% and growing 7.5% year-over-year [1][9] Segment Performance - Employer Services generated revenues of $3.5 billion, an 8% increase on a reported basis but missed the estimate of $3.8 billion; pays per control rose 1% year-over-year [3] - PEO Services revenues increased 9% year-over-year to $1.2 billion, falling short of the $1.7 billion estimate; average worksite employees paid by PEO Services grew 3% to 761,000 [3] Financial Metrics - Interest on funds held for clients grew 11% year-over-year to $308 million, missing the estimate of $342.4 million; average client funds balance rose 6% to $38.1 billion, with an average interest yield of 3.2%, up 20 basis points [4] - Adjusted EBIT increased 9% year-over-year to $5.3 billion, with an adjusted EBIT margin rising 50 basis points to 26% [5] Balance Sheet & Cash Flow - At the end of Q4 fiscal 2025, ADP had cash and cash equivalents of $3.3 billion, up from $2.7 billion in the previous quarter; long-term debt increased to $4 billion from $3 billion [6] - The company generated $1.4 billion in cash from operating activities during the quarter [6] Fiscal 2025 Outlook - ADP lowered its revenue growth guidance for fiscal 2025 to 5-6% from the previous 6-7%; adjusted EPS growth guidance was updated to 8-10% from 8-9% [7] - The adjusted effective tax rate is estimated at 23%, and the guidance for adjusted EBIT margin was raised to 50-70 basis points from 40-50 basis points [7][8]

Core Insights - Automatic Data Processing, Inc. (ADP) reported strong third-quarter fiscal 2025 results, with earnings and revenues exceeding the Zacks Consensus Estimate [1] Financial Performance - Earnings per share were $3.06, beating the consensus estimate by 3.4% and increasing 6.3% year-over-year [1] - Total revenues reached $5.6 billion, surpassing the consensus estimate by 1.1% and growing 5.7% year-over-year [1][2] Segment Performance - Employer Services generated revenues of $3.4 billion, a 5% increase year-over-year, but fell short of the estimate of $3.8 billion [3] - PEO Services revenues rose 7% year-over-year to $1.8 billion, exceeding the projection of $1.7 billion [4] Interest and Client Funds - Interest on funds held for clients grew 11% year-over-year to $355 million, surpassing the estimate of $342.4 million [5] - Average client funds balance increased by 7% to $44.5 billion, with an average interest yield of 3.2%, up 10 basis points [5] Margins - Adjusted EBIT increased 6% year-over-year to $1.6 billion, with an adjusted EBIT margin of 29.3%, up 10 basis points [6] - The margin for Employer Services increased by 20 basis points, while PEO Services remained flat compared to the previous year [6] Balance Sheet and Cash Flow - Cash and cash equivalents at the end of the quarter were $2.7 billion, up from $2.2 billion in the previous quarter [7] - Long-term debt remained stable at $3 billion, with $1.5 billion generated from operating activities during the quarter [7] Fiscal Year 2025 Outlook - ADP expects revenue growth of 6-7% for fiscal 2025, with adjusted EPS growth revised to 8-9% [8] - The adjusted effective tax rate is estimated at 23%, and the guidance for adjusted EBIT margin has been updated to 40-50 basis points [8] - Revenue growth for Employer Services is projected at 6-7%, while the guidance for PEO Services has been raised to 6-7% from the previous 5-6% [8]