ADP Stock Edges Higher After Strong Client Demand And FY26 Outlook

Zinger Key Points

ADP beats Q4 estimates with $5.13B revenue and $2.26 EPS; Employer Services and PEO drive strong full-year growth
ADP sees FY26 revenue of up to $21.8B, EPS as high as $11; CEO highlights client satisfaction and margin expansion plans
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Automatic Data Processing ADP reported fiscal fourth-quarter results on Wednesday.

The company reported quarterly revenues of $5.13 billion, beating the analyst consensus estimate of $5.05 billion. Revenues increased 7.5% year-over-year.

The human resources management software company reported quarterly adjusted EPS of $2.26, beating the analyst consensus estimate of $2.23.

Also Read: ADP Q3 Earnings: Tops Estimates, Reaffirms Growth Outlook, New CFO Set To Take Over

ADP primarily earns revenue by charging service fees in its Employer Services and PEO segments, with pricing based on the scope of services each client uses.

Employer Services revenues increased 8% to $3.47 billion. PEO Services revenues increased 7% to $1.66 billion.

Adjusted EBIT increased 9% to $1.21 billion, and adjusted EBIT margin grew by 40 bps to 23.7%. Net earnings increased 10% Y/Y to $911 million.

ADP held $7.85 billion in cash and equivalents as of June 30.

ADP CEO Maria Black reported that the company closed fiscal year 2025 with strong growth in revenue and earnings. The Employer Services and PEO segments delivered revenue at the high end of full-year expectations, supported by record-high client satisfaction across the organization. As ADP begins a new fiscal year, the company remains focused on listening to client needs and delivering innovative products, premium services, and exceptional experiences that enhance the world of work.

CFO Peter Hadley added that solid execution and ADP’s resilient business model drove the full-year performance. Looking ahead to fiscal 2026, the company aims to maintain steady revenue growth and expand margins to generate solid shareholder returns.

FY26 Outlook: ADP projected a revenue growth outlook of 5%-6% or $21.6 billion-$21.8 billion, versus the analyst consensus estimate of $21.7 billion and adjusted diluted EPS growth of 8%-10%, or $10.81-$11.01, versus the analyst consensus estimate of $10.89.

ADP stock gained over 7% year-to-date, lagging the NASDAQ Composite Index’s 10% returns.

Price Action: ADP stock is up by 1.79% to $314.18 at the last check on Wednesday.

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