Automatic Data Processing (ADP)
Market Price (9/19/2026): $271.09 | Market Cap: $108.1 BilInvestor Relations Sector: Industrials | Industry: Human Resource & Employment Services
Automatic Data Processing (ADP)
Market Price (9/19/2026): $271.09Market Cap: $108.1 BilSector: IndustrialsIndustry: Human Resource & Employment Services
Investment Highlights Why It Matters Detailed financial logic regarding cash flow yields vs trend-riding momentum.
Attractive yieldTotal YieldTotal Yield = Earnings Yield + Dividend Yield, Earnings Yield = Net Income / Market Cap Dividend Yield = Total Dividends / Market Cap is 6.5%, Dividend Yield is 2.4% Attractive operating marginsOp Mgn LTMOperating Margin = Operating Income / Revenue Reflects profitability before taxes and before impact of capital structure (interest payments). is 26% Attractive cash flow generationCFO/Rev LTMCash Flow from Operations / Revenue (Sales), Last Twelve Months (LTM) is 25%, FCF/Rev LTMFree Cash Flow / Revenue (Sales), Last Twelve Months (LTM) is 22%, CFO LTM is 5.4 Bil, FCF LTM is 4.8 Bil Stock buyback supportStock Buyback 3Y Total is 4.6 Bil Low stock price volatilityVol 12M is 27% Megatrend and thematic driversMegatrends include Cloud Computing, Fintech & Digital Payments, Automation & Robotics, Cybersecurity, Show more. | Weak multi-year price returns2Y Excs Rtn is -33%, 3Y Excs Rtn is -54% | Key risksADP key risks include [1] growth headwinds from increased competition by scaled competitors, Show more. |
| Attractive yieldTotal YieldTotal Yield = Earnings Yield + Dividend Yield, Earnings Yield = Net Income / Market Cap Dividend Yield = Total Dividends / Market Cap is 6.5%, Dividend Yield is 2.4% |
| Attractive operating marginsOp Mgn LTMOperating Margin = Operating Income / Revenue Reflects profitability before taxes and before impact of capital structure (interest payments). is 26% |
| Attractive cash flow generationCFO/Rev LTMCash Flow from Operations / Revenue (Sales), Last Twelve Months (LTM) is 25%, FCF/Rev LTMFree Cash Flow / Revenue (Sales), Last Twelve Months (LTM) is 22%, CFO LTM is 5.4 Bil, FCF LTM is 4.8 Bil |
| Stock buyback supportStock Buyback 3Y Total is 4.6 Bil |
| Low stock price volatilityVol 12M is 27% |
| Megatrend and thematic driversMegatrends include Cloud Computing, Fintech & Digital Payments, Automation & Robotics, Cybersecurity, Show more. |
| Weak multi-year price returns2Y Excs Rtn is -33%, 3Y Excs Rtn is -54% |
| Key risksADP key risks include [1] growth headwinds from increased competition by scaled competitors, Show more. |
Qualitative Assessment
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Automatic Data Processing (ADP) stock has gained about 25% since 5/31/2026 because of the following key factors:
1. Automatic Data Processing (ADP) reported strong fiscal Q4 2026 earnings that exceeded analyst expectations and provided an optimistic outlook for fiscal year 2027.
The company announced its fiscal Q4 2026 results on July 29, 2026, with adjusted earnings per share of $2.64, beating consensus estimates of $2.59 or $2.60, representing a 17% increase year-over-year. Revenue for the quarter reached $5.47 billion, surpassing forecasts of $5.44 billion and marking a 7% year-over-year growth. Additionally, ADP projected consolidated revenue growth of 5% to 6% and adjusted diluted EPS growth of 9% to 11% for fiscal year 2027, signaling continued momentum.
2. Significant growth in interest income from client funds provided a substantial boost to profitability.
In fiscal Q4 2026, interest income from funds held for clients surged by 15% to $355.4 million. This was driven by an average client balance of $41.0 billion and an average interest yield of 3.5%. For the full fiscal year 2026, interest on funds held for clients increased by 14% to $1.35 billion, with the average client funds yield rising to 3.4%. Management anticipates this positive trend to continue into fiscal year 2027, forecasting client funds interest revenue between $1.54 billion and $1.56 billion, with an average yield of approximately 3.7%.
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Automatic Data Processing (ADP) stock has gained about 25% since 5/31/2026 because of the following key factors:
1. Automatic Data Processing (ADP) reported strong fiscal Q4 2026 earnings that exceeded analyst expectations and provided an optimistic outlook for fiscal year 2027.
The company announced its fiscal Q4 2026 results on July 29, 2026, with adjusted earnings per share of $2.64, beating consensus estimates of $2.59 or $2.60, representing a 17% increase year-over-year. Revenue for the quarter reached $5.47 billion, surpassing forecasts of $5.44 billion and marking a 7% year-over-year growth. Additionally, ADP projected consolidated revenue growth of 5% to 6% and adjusted diluted EPS growth of 9% to 11% for fiscal year 2027, signaling continued momentum.
2. Significant growth in interest income from client funds provided a substantial boost to profitability.
In fiscal Q4 2026, interest income from funds held for clients surged by 15% to $355.4 million. This was driven by an average client balance of $41.0 billion and an average interest yield of 3.5%. For the full fiscal year 2026, interest on funds held for clients increased by 14% to $1.35 billion, with the average client funds yield rising to 3.4%. Management anticipates this positive trend to continue into fiscal year 2027, forecasting client funds interest revenue between $1.54 billion and $1.56 billion, with an average yield of approximately 3.7%.
3. A robust U.S. labor market, characterized by consistent job growth and steady pay increases, fostered a favorable operating environment for ADP's services.
ADP's National Employment Report indicated healthy private sector job gains throughout the period. In May 2026, private sector employment increased by 122,000 jobs, exceeding forecasts and marking the strongest monthly total since January 2025. Subsequent reports showed increases of 98,000 jobs in June 2026 and 44,000 (later revised to 46,000) in July 2026, followed by 38,000 jobs in August 2026. Median job-stayer pay growth held steady at 4.4% year-over-year in May 2026, further supporting demand for payroll and HR solutions.
4. Strategic advancements, including accelerated AI adoption, contributed to operational efficiencies and strengthened ADP's market position.
ADP emphasized its strategic initiatives, such as the accelerated adoption of artificial intelligence through "ADP Assist" and the introduction of "Lyric HCM". Management specifically highlighted operational productivity improvements and AI-driven efficiency benefits as key factors in the 140 basis points expansion of adjusted EBIT margin in fiscal Q4 2026. The company's CFO, Peter Hadley, noted that ADP is "only in the early innings" of realizing the full benefits of AI-driven efficiencies.
5. Positive analyst sentiment and upgrades contributed to investor confidence.
JPMorgan upgraded ADP's stock to "Overweight" on September 8, 2026, citing potential for outperformance driven by upcoming regulatory visibility. Following the strong fiscal Q4 2026 results and positive fiscal 2027 outlook, several analysts maintained or reiterated "Buy" or "Overweight" ratings and increased their price targets. For example, Cantor Fitzgerald reiterated "Overweight" and raised its price target from $295 to $310 on August 5, 2026. Morgan Stanley increased its price target from $240.00 to $286.00 with an "equal weight" rating on July 30, 2026.
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Stock Movement Drivers
Fundamental Drivers
The 24.0% change in ADP stock from 5/31/2026 to 9/18/2026 was primarily driven by a 21.2% change in the company's P/E Multiple.| (LTM values as of) | 5312026 | 9182026 | Change |
|---|---|---|---|
| Stock Price ($) | 218.77 | 271.22 | 24.0% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 21,600 | 21,948 | 1.6% |
| Net Income Margin (%) | 20.1% | 20.1% | 0.0% |
| P/E Multiple | 20.2 | 24.5 | 21.2% |
| Shares Outstanding (Mil) | 402 | 399 | 0.8% |
| Cumulative Contribution | 24.0% |
Market Drivers
5/31/2026 to 9/18/2026| Return | Correlation | |
|---|---|---|
| ADP | 24.0% | |
| Market (SPY) | 0.9% | -17.8% |
| Sector (XLI) | -2.0% | -35.3% |
Fundamental Drivers
The 29.4% change in ADP stock from 2/28/2026 to 9/18/2026 was primarily driven by a 22.6% change in the company's P/E Multiple.| (LTM values as of) | 2282026 | 9182026 | Change |
|---|---|---|---|
| Stock Price ($) | 209.66 | 271.22 | 29.4% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 21,214 | 21,948 | 3.5% |
| Net Income Margin (%) | 20.0% | 20.1% | 0.7% |
| P/E Multiple | 20.0 | 24.5 | 22.6% |
| Shares Outstanding (Mil) | 404 | 399 | 1.3% |
| Cumulative Contribution | 29.4% |
Market Drivers
2/28/2026 to 9/18/2026| Return | Correlation | |
|---|---|---|
| ADP | 29.4% | |
| Market (SPY) | 11.6% | -15.1% |
| Sector (XLI) | -3.9% | -32.2% |
Fundamental Drivers
The -7.7% change in ADP stock from 8/31/2025 to 9/18/2026 was primarily driven by a -16.2% change in the company's P/E Multiple.| (LTM values as of) | 8312025 | 9182026 | Change |
|---|---|---|---|
| Stock Price ($) | 293.95 | 271.22 | -7.7% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 20,561 | 21,948 | 6.7% |
| Net Income Margin (%) | 19.8% | 20.1% | 1.3% |
| P/E Multiple | 29.2 | 24.5 | -16.2% |
| Shares Outstanding (Mil) | 406 | 399 | 1.8% |
| Cumulative Contribution | -7.7% |
Market Drivers
8/31/2025 to 9/18/2026| Return | Correlation | |
|---|---|---|
| ADP | -7.7% | |
| Market (SPY) | 19.4% | -0.4% |
| Sector (XLI) | 12.8% | -17.6% |
Fundamental Drivers
The 15.0% change in ADP stock from 8/31/2023 to 9/18/2026 was primarily driven by a 21.8% change in the company's Total Revenues ($ Mil).| (LTM values as of) | 8312023 | 9182026 | Change |
|---|---|---|---|
| Stock Price ($) | 235.78 | 271.22 | 15.0% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 18,012 | 21,948 | 21.8% |
| Net Income Margin (%) | 18.9% | 20.1% | 6.2% |
| P/E Multiple | 28.5 | 24.5 | -14.0% |
| Shares Outstanding (Mil) | 412 | 399 | 3.4% |
| Cumulative Contribution | 15.0% |
Market Drivers
8/31/2023 to 9/18/2026| Return | Correlation | |
|---|---|---|
| ADP | 15.0% | |
| Market (SPY) | 75.6% | 29.9% |
| Sector (XLI) | 63.4% | 24.5% |
Price Returns Compared
| 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | Total [1] | |
|---|---|---|---|---|---|---|---|
| Returns | |||||||
| ADP Return | 43% | -1% | -0% | 28% | -10% | 8% | 75% |
| Peers Return | 22% | -20% | 11% | 19% | -12% | 3% | 17% |
| S&P 500 Return | 27% | -19% | 24% | 23% | 16% | 12% | 103% |
Monthly Win Rates [3] | |||||||
| ADP Win Rate | 67% | 50% | 50% | 75% | 42% | 56% | |
| Peers Win Rate | 55% | 40% | 52% | 58% | 45% | 49% | |
| S&P 500 Win Rate | 75% | 42% | 67% | 75% | 67% | 44% | |
Max Drawdowns [4] | |||||||
| ADP Max Drawdown | -9% | -20% | -17% | -8% | -23% | -28% | |
| Peers Max Drawdown | -22% | -35% | -30% | -23% | -35% | -38% | |
| S&P 500 Max Drawdown | -5% | -25% | -10% | -8% | -19% | -9% | |
[1] Cumulative total returns since the beginning of 2021
[2] Peers: PAYX, WDAY, ORCL, PAYC, PCTY. See ADP Returns vs. Peers.
[3] Win Rate = % of calendar months in which monthly returns were positive
[4] Max drawdown represents maximum peak-to-trough decline within a year
[5] 2026 data is for the year up to 9/18/2026 (YTD)
How Low Can It Go
| Event | ADP | S&P 500 |
|---|---|---|
| 2025 US Tariff Shock | ||
| % Loss | -11.2% | -18.8% |
| % Gain to Breakeven | 12.6% | 23.1% |
| Time to Breakeven | 37 days | 79 days |
| Summer-Fall 2023 Five Percent Yield Shock | ||
| % Loss | -12.1% | -9.5% |
| % Gain to Breakeven | 13.7% | 10.5% |
| Time to Breakeven | 42 days | 24 days |
| 2022 Inflation Shock & Fed Tightening | ||
| % Loss | -19.6% | -24.5% |
| % Gain to Breakeven | 24.3% | 32.4% |
| Time to Breakeven | 161 days | 427 days |
| 2020 COVID-19 Crash | ||
| % Loss | -39.5% | -33.7% |
| % Gain to Breakeven | 65.2% | 50.9% |
| Time to Breakeven | 269 days | 140 days |
| Q4 2018 Fed Policy Error / Growth Scare | ||
| % Loss | -19.1% | -19.2% |
| % Gain to Breakeven | 23.6% | 23.8% |
| Time to Breakeven | 59 days | 105 days |
| 2015-2016 China Devaluation / Global Growth Scare | ||
| % Loss | -13.2% | -12.2% |
| % Gain to Breakeven | 15.2% | 13.9% |
| Time to Breakeven | 44 days | 62 days |
In The Past
Automatic Data Processing's stock fell -11.2% during the 2025 US Tariff Shock. Such a loss loss requires a 12.6% gain to breakeven.
Preserve Wealth
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Asset Allocation
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| Event | ADP | S&P 500 |
|---|---|---|
| 2020 COVID-19 Crash | ||
| % Loss | -39.5% | -33.7% |
| % Gain to Breakeven | 65.2% | 50.9% |
| Time to Breakeven | 269 days | 140 days |
| 2008-2009 Global Financial Crisis | ||
| % Loss | -30.2% | -53.4% |
| % Gain to Breakeven | 43.3% | 114.4% |
| Time to Breakeven | 378 days | 1085 days |
In The Past
Automatic Data Processing's stock fell -11.2% during the 2025 US Tariff Shock. Such a loss loss requires a 12.6% gain to breakeven.
Preserve Wealth
Limiting losses and compounding gains is essential to preserving wealth.
Asset Allocation
Actively managed asset allocation strategies protect wealth. Learn more.
About Automatic Data Processing (ADP)
Automatic Data Processing (ADP) is a global leader in providing cloud-based Human Capital Management (HCM) solutions. The company offers a comprehensive suite of services and technology platforms designed to help businesses efficiently manage their workforce throughout the entire employee lifecycle. Essentially, ADP simplifies and automates complex human resources tasks, allowing companies to focus on their core operations.
ADP operates through two primary segments: Employer Services and Professional Employer Organization (PEO) Services. The Employer Services segment delivers strategic, cloud-based platforms and HR outsourcing solutions that encompass critical functions such as payroll processing, benefits administration, talent management, HR management, workforce management, insurance, retirement services, and compliance. These offerings provide businesses with integrated tools to manage their human resources more effectively.
The PEO Services segment specifically caters to small and mid-sized businesses (SMBs) through a co-employment model. Under this model, ADP takes on certain employer responsibilities, providing these businesses with comprehensive HR outsourcing, including access to competitive benefits packages, regulatory protection and compliance, talent engagement strategies, and even recruitment process outsourcing. Both segments serve a wide range of businesses seeking to streamline HR operations, ensure compliance, and enhance their overall workforce management.
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Here are 1-3 brief analogies for Automatic Data Processing (ADP):
ADP is like Intuit (TurboTax or QuickBooks) for business payroll and HR.
ADP is like Salesforce, but for human resources and workforce management.
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- Payroll Services: Manages employee compensation, deductions, and tax filings.
- Benefits Administration: Administers employee health, welfare, and other fringe benefits programs.
- Talent Management Solutions: Provides tools for recruiting, onboarding, performance management, and employee development.
- HR Management Solutions: Offers cloud-based platforms and outsourcing for core human resources functions.
- Workforce Management Solutions: Assists with time tracking, scheduling, and labor cost optimization.
- Insurance Services: Facilitates various business and employee insurance offerings.
- Retirement Services: Helps businesses manage and administer retirement plans for their employees.
- Compliance Services: Ensures businesses meet regulatory and legal HR requirements.
- Professional Employer Organization (PEO) Services: Provides comprehensive HR outsourcing through a co-employment model, including benefits, compliance, and talent services for small and mid-sized businesses.
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Automatic Data Processing (ADP) primarily sells its human capital management and HR outsourcing solutions to other companies. Due to the nature of its business model, which involves serving a vast and highly diversified client base across nearly all industries and company sizes (from small businesses to large enterprises), ADP does not have a few specific "major customers" that are publicly identified or constitute a significant concentration of its revenue. Therefore, it is not possible to list individual customer companies or their symbols.
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Maria Black, President and Chief Executive Officer
Maria Black was appointed President and CEO of ADP in 2023. She joined ADP in 1996 as a sales associate. Throughout her tenure, she has held various leadership roles, including President of TotalSource, President of Small Business Solutions and Human Resources Outsourcing, and President of Worldwide Sales and Marketing.
Peter Hadley, Chief Financial Officer
Peter Hadley will assume the role of Chief Financial Officer of ADP, effective July 1, 2025. He joined ADP in 2002 and has held increasingly senior executive leadership positions. Since 2022, he has served as Corporate Vice President and Treasurer of ADP, overseeing capital structure, client funds investment portfolio, and global operations funding. In 2017, he was appointed President – Asia Pacific. Prior to that, he served as CFO for ADP's Global Enterprise Solutions and Employer Services International. Before joining ADP, he worked at KPMG in the United Kingdom and Arthur Andersen in Australia.
Joe DeSilva, Executive Vice President, North America and Chief of Operations
Joe DeSilva is the Executive Vice President, North America and Chief of Operations for ADP, a role effective January 1, 2025. He joined ADP in 2003, beginning his career in benefits sales. He has held various leadership positions in sales, operations, and client services, including President of Global Sales, and President of Small Business Services, Retirement Services and Insurance Services. Before joining ADP, he worked in benefits with Mellon HR Solutions and started his career with PwC in their Benefits Outsourcing group.
Sreeni Kutam, President, Global Product & Innovation
Sreeni Kutam is the President of Global Product & Innovation at ADP, responsible for leading product strategy and management and driving new innovations. Prior to this role, he served as ADP's Chief Human Resources Officer. Earlier in his career at ADP, he led the alignment between HR initiatives, workforce planning, and business objectives. Before joining ADP in 2014, he led HR transformation at Medco Health Solutions and Express Scripts. He had the experience of being an ADP client in North America and Europe for over 10 years before joining the company.
Brian Michaud, Executive Vice President, Human Resources Outsourcing & Smart Compliance Solutions
Brian Michaud is the Executive Vice President responsible for ADP's Smart Compliance Solutions, Human Resources Outsourcing, and Employee Financial Solutions businesses. He joined ADP in 1991 as a sales representative in Small Business Services and later joined ADP TotalSource in 1999, contributing to its growth. Throughout his tenure, he has held various roles of increasing responsibility in sales, operations, and service leadership. He is a former member of the board of directors for the National Association of Professional Employer Organizations (NAPEO).
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The key risks to Automatic Data Processing (ADP) are primarily related to cybersecurity, intense competition and technological disruption, and the complexities of regulatory compliance.
- Cybersecurity and Data Breaches: ADP handles vast amounts of sensitive personal and financial data for its clients and their employees worldwide. This makes the company a prime target for cyberattacks and data breaches. A significant security incident could lead to severe financial losses, substantial legal and regulatory penalties, reputational damage, and a significant erosion of client trust, directly impacting its revenue and market position.
- Competition and Technological Disruption (including AI): The Human Capital Management (HCM) market in which ADP operates is highly competitive. The company faces continuous innovation from rivals, including established players and emerging companies offering specialized HR technology and AI-driven solutions. Failure to adapt to new technologies, such as generative AI, or to innovate at a competitive pace, could lead to market share erosion, pressure on pricing, and challenges in client retention.
- Regulatory Changes and Compliance: ADP's core services, including payroll, tax, and benefits administration, are deeply intertwined with complex and constantly evolving labor laws, tax regulations, and data privacy mandates across more than 140 countries. Keeping pace with these regulatory changes requires continuous and costly system updates and expert interpretation. Non-compliance could result in significant fines, legal liabilities, and damage to ADP's reputation as a trusted compliance partner.
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The emergence of integrated platforms that consolidate HR, IT, and finance management into a single system of record represents a clear emerging threat. Companies like Rippling are pioneering this approach, offering businesses a unified platform to manage everything from payroll, benefits, and HR to IT provisioning (device management, software access) and financial tools (expense management, corporate cards). This holistic, "employee system of record" model simplifies operations and vendor management, particularly for small to mid-sized businesses and tech-forward companies. It challenges ADP's traditional, primarily HR-centric human capital management (HCM) solutions by offering a broader, more streamlined, and deeply integrated approach to employee lifecycle management that extends beyond the scope of typical HCM, potentially making standalone or less integrated HR solutions less appealing.
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Automatic Data Processing (ADP) operates within several significant addressable markets for its human capital management (HCM) solutions and Professional Employer Organization (PEO) services.
Human Capital Management (HCM)
- The global human capital management market size was estimated at USD 27.5 billion in 2024 and is projected to reach USD 41.3 billion by 2029, growing at a CAGR of 8.5% from 2024 to 2029. Other estimates place the global HCM market at USD 31.34 billion in 2024, projected to reach USD 64.97 billion by 2032. Another report projects the global HCM market at USD 34.12 billion in 2025, reaching USD 76.22 billion by 2034 with a CAGR of 9.40%.
- North America holds the largest share of the Human Capital Management market. The HCM market in North America is experiencing robust growth due to increased adoption of HCM solutions in HR processes and advancements in AI and IT. In 2025, North America accounted for 38.9% of the market share.
- Globally, companies are projected to spend USD 34.3 billion on HCM solutions in the next 12 months. Nearly 45% of this spending comes from the AMER (Americas) region.
Payroll Services
- The global payroll services market size is estimated at USD 35.32 billion in 2026 and is projected to reach USD 52.75 billion by 2031, growing at an 8.35% CAGR over 2026-2031.
- Another estimate states the global payroll services market is projected to reach USD 18.24 billion by 2030, increasing from USD 12.94 billion in 2024, with a 6.01% CAGR from 2025-2030.
- The payroll services market is expected to increase from USD 71.23 billion in 2024 to USD 73.25 billion in 2025, with a compound annual growth rate (CAGR) of 2.8%, and is forecasted to reach USD 84.83 billion in 2029 with a CAGR of 3.7%.
- North America contributed 38.12% of the global payroll services market size in 2025.
- The global payroll and HR solution and services market size was valued at USD 30.8 billion in 2024 and is expected to reach USD 157.9 billion by 2032, growing at a CAGR of 22.69% during 2025-2032. The U.S. Payroll and HR Solution and Services Market is expected to grow from USD 9.1 billion in 2024 to USD 45.9 billion by 2032.
Human Resource Outsourcing (HRO) / HR Business Process Outsourcing (HR BPO)
- The global Human Resource Outsourcing Service market size was valued at USD 10.52 billion in 2025 and is projected to grow to USD 16.78 billion by 2034, exhibiting a CAGR of 7.0%.
- The global HR outsourcing market is expected to reach a value of USD 112.2 billion by 2027. In 2022, the global HRO services market size was estimated to be worth USD 115 billion.
- The global human resource outsourcing market size is forecasted to be worth USD 42,694.52 million in 2026, expected to achieve USD 62,652 million by 2035 with a CAGR of 4.3%.
- The global human resource business process outsourcing market size was valued at US$ 36,365.9 million in 2025 and is estimated to grow at a CAGR of 10.6% from 2025 to 2033, reaching USD 80,759.6 million by 2033.
Professional Employer Organization (PEO) Services
- The global Professional Employer Organization (PEO) market size was valued at USD 66.23 billion in 2024 and is projected to reach USD 170.8 billion by 2033, growing at a CAGR of 11.10% during the forecast period (2025-2033). Another report estimates the global PEO services market at USD 17.2 billion in 2025, projected to reach USD 44.4 billion by 2034 at a CAGR of 11.1%.
- In the United States, the PEO Services Market was valued at USD 174.70 million in 2024 and is projected to reach USD 420.10 million by 2032, at a CAGR of 10.80%.
- The U.S. PEO industry market size is also reported as $254.8 billion in 2026. There are 523 U.S.-based PEOs managing 4.5 million worksite employees across 208,000 client companies. This represents about 17% of U.S. employers with 10–99 staff.
- North America leads the global market for PEO services, contributing about 58% of the global PEO share. The North American PEO market was valued at approximately USD 10 billion in 2023 and is expected to grow at a CAGR of 6.5%.
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Here are 3-5 expected drivers of future revenue growth for Automatic Data Processing (ADP) over the next 2-3 years:
- Strong New Business Bookings Growth: ADP anticipates continued revenue growth driven by solid new business bookings across both its Employer Services and Professional Employer Organization (PEO) segments. This growth is particularly strong in international markets, U.S. enterprise, and compliance businesses, as well as its small business and mid-market offerings. The company maintains healthy pipelines for new business, indicating ongoing client acquisition.
- Product Innovation and Technology Enhancements, including AI Integration: Investments in next-generation payroll engines, product innovation, and the enhancement of its Workforce Now platform are expected to drive revenue. ADP is actively integrating generative AI functionality, exemplified by the launch of "ADP assist payroll, HR, analytics, and tax agents" to expand AI capabilities and automation. The rebranding of Next-Gen HCM to ADP Lyric signifies its market readiness, human-centric design, and enhanced AI integration, with new business bookings for ADP Lyric HCM substantially increasing and its pipeline doubling.
- Expansion of Global Reach and International Business: ADP plans to expand its GlobalView and Celergo platforms and extend GlobalView's reach into additional countries. The company has observed strong performance and the fastest growth in new business bookings within its international segments, indicating a continued focus on geographical expansion as a revenue driver.
- Growth in Professional Employer Organization (PEO) Services: The PEO Services segment is a significant driver, with expected revenue increases stemming from growth in average worksite employees and the strong value proposition of its PEO offerings. These offerings, particularly in benefits and competitive workers' compensation programs, contribute to robust new business bookings in this segment.
- Client Funds Interest Revenue: Interest earned on client funds is a substantial, high-margin contribution to ADP's revenue. With an increased average client funds balance and an expanded average interest yield on these funds, this stable revenue stream is expected to continue supporting overall revenue growth.
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Share Repurchases
- ADP's Board of Directors authorized a new $6 billion common stock repurchase program on January 14, 2026, which replaced a prior $5 billion authorization from 2022.
- The company executed $1.28 billion in annual share repurchases in 2025 and $1.232 billion in 2024.
- Share buybacks for the quarter ending December 31, 2025, amounted to $515.8 million.
Share Issuance
- As of December 31, 2025, Automatic Data Processing had approximately 403 million common shares outstanding.
- The number of shares outstanding decreased by 0.74% in the year leading up to March 14, 2026.
Outbound Investments
- In October 2025, ADP acquired Pequity, an innovative compensation management software provider, to expand its global compensation management offering.
- ADP acquired WorkForce Software, a premier workforce management solutions provider, in October 2024 for approximately $1.2 billion ($1.17 billion net of cash). This acquisition is intended to expand ADP's global workforce management solutions and drive innovation.
- ADP launched ADP Ventures in Fall 2023, a corporate venture capital arm, to invest in and partner with early-stage and scaling tech startups that align with its innovation strategy.
Capital Expenditures
- Capital expenditures were $176.8 million in fiscal year 2025 and $211.7 million in fiscal year 2024.
- For fiscal year 2026, ADP anticipates capital expenditures to be between $225.0 million and $250.0 million.
- The primary focus of capital expenditures includes investments in artificial intelligence (AI) to enhance HR and payroll solutions, expand sales force headcount, invest in partner channels, and augment digital marketing efforts.
Peer Outperformance in Human Resource & Employment Services
| Industry | Names | 1Y med | 3Y med | 5Y med | Top 3 by 5Y |
|---|---|---|---|---|---|
| Construction & Engineering | 31 | 7.6% | 101.5% | 179.0% | FIX 2325% · CDNL 2275% · STRL 2177% |
| Marine Transportation | 5 | 83.2% | 67.4% | 170.7% | HOS 44163% · MATX 199% · SFL 171% |
| Construction Machinery & Heavy Transportation Equipment | 13 | 9.3% | 56.2% | 124.5% | CAT 341% · ALSN 253% · WAB 230% |
| Aerospace & Defense | 55 | -6.6% | 68.1% | 68.1% | ATI 1043% · FTAI 964% · HWM 652% |
| Rail Transportation | 7 | 29.5% | 58.9% | 48.8% | FSTR 143% · CSX 66% · UNP 55% |
| Trading Companies & Distributors | 19 | 3.3% | 36.9% | 48.2% | DXPE 570% · AIT 302% · WCC 212% |
| Industrial Machinery & Supplies & Components | 72 | 7.4% | 47.7% | 41.2% | CRS 1269% · PSIX 1091% · EROC 652% |
| Diversified Support Services | 33 | 10.6% | 30.8% | 31.7% | LIME 3498% · TH 499% · WLFC 368% |
| Passenger Ground Transportation | 3 | -25.6% | 34.9% | 30.0% | UBER 77% · CAR 30% · LYFT -71% |
| Cargo Ground Transportation | 16 | 32.4% | -0.2% | 29.4% | XPO 244% · R 242% · CVLG 204% |
| Electrical Components & Equipment | 41 | 3.4% | 55.2% | 20.3% | POWL 2471% · BE 1257% · VRT 956% |
| Building Products | 33 | -13.7% | 1.1% | 18.5% | LMB 701% · GFF 373% · PPIH 293% |
| Industrial Conglomerates | 17 | 8.7% | 5.7% | 6.1% | RCMT 454% · CSW 141% · DD 72% |
| Agricultural & Farm Machinery | 17 | 2.2% | 3.6% | -5.6% | BLBD 191% · DE 109% · GENC 54% |
| Environmental & Facilities Services | 29 | -12.5% | 20.6% | -6.6% | CECO 932% · NVRI 354% · GEO 353% |
| Research & Consulting Services | 13 | -14.0% | -24.4% | -9.7% | HURN 205% · CRAI 90% · GRNQ 55% |
| Data Processing & Outsourced Services | 6 | -33.6% | -15.9% | -26.3% | EXLS 44% · BR 7% · G -25% |
| Passenger Airlines | 11 | 3.1% | 10.4% | -28.8% | LTM 3092% · UAL 144% · SKYW 107% |
| Office Services & Supplies | 9 | 6.6% | 20.5% | -35.1% | PBI 194% · TILE 141% · HNI 46% |
| Human Resource & Employment Services ← | 22 | 5.4% | -20.1% | -38.0% | BBSI 88% · ADP 53% · PAYX 25% |
| Air Freight & Logistics | 12 | -13.0% | -21.1% | -38.5% | CHRW 97% · FDX 64% · EXPD 63% |
| Security & Alarm Services | 10 | -26.4% | 17.5% | -44.2% | CIX 150% · MG 127% · NL 63% |
| Airport Services | 3 | -72.8% | -79.0% | -58.3% | JOBY -34% · ASLE -58% · UP -100% |
Latest Trefis Analyses
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Peer Comparisons
| Peers to compare with: |
Financials
| Median | |
|---|---|
| Name | |
| Mkt Price | 170.74 |
| Mkt Cap | 41.5 |
| Rev LTM | 6,512 |
| Op Inc LTM | 1,220 |
| FCF LTM | 2,322 |
| FCF 3Y Avg | 1,922 |
| CFO LTM | 2,557 |
| CFO 3Y Avg | 2,118 |
Growth & Margins
| Median | |
|---|---|
| Name | |
| Rev Chg LTM | 11.0% |
| Rev Chg 3Y Avg | 11.2% |
| Rev Chg Q | 11.0% |
| QoQ Delta Rev Chg LTM | 2.5% |
| Op Inc Chg LTM | 17.7% |
| Op Inc Chg 3Y Avg | 16.2% |
| Op Mgn LTM | 26.3% |
| Op Mgn 3Y Avg | 26.1% |
| QoQ Delta Op Mgn LTM | 0.5% |
| CFO/Rev LTM | 30.3% |
| CFO/Rev 3Y Avg | 29.9% |
| FCF/Rev LTM | 26.7% |
| FCF/Rev 3Y Avg | 22.5% |
Valuation
| Median | |
|---|---|
| Name | |
| Mkt Cap | 41.5 |
| P/S | 4.8 |
| P/Op Inc | 18.7 |
| P/EBIT | 17.5 |
| P/E | 24.5 |
| P/CFO | 15.4 |
| Total Yield | 5.4% |
| Dividend Yield | 0.7% |
| FCF Yield 3Y Avg | 5.1% |
| D/E | 0.1 |
| Net D/E | 0.0 |
Returns
| Median | |
|---|---|
| Name | |
| 1M Rtn | -1.9% |
| 3M Rtn | 33.6% |
| 6M Rtn | 30.1% |
| 12M Rtn | -10.2% |
| 3Y Rtn | -2.8% |
| 1M Excs Rtn | -1.2% |
| 3M Excs Rtn | 31.6% |
| 6M Excs Rtn | 14.3% |
| 12M Excs Rtn | -26.7% |
| 3Y Excs Rtn | -75.8% |
Comparison Analyses
Segment Financials
Revenue by Segment| $ Mil | 2025 | 2024 | 2023 | 2022 | 2021 |
|---|---|---|---|---|---|
| Employer Services | 13,883 | 12,981 | 12,043 | 10,968 | 10,195 |
| Professional Employer Organization (PEO) Services | 6,690 | 6,234 | 5,984 | 5,546 | 4,818 |
| Intercompany eliminations | -13 | -12 | -15 | -15 | -8 |
| Total | 20,561 | 19,203 | 18,012 | 16,498 | 15,005 |
| $ Mil | 2005 | 2004 | 2003 | 2002 | 2001 |
|---|---|---|---|---|---|
| Employer Services | 1,143,800 | 993 | 1,193 | 1,110 | 938 |
| Brokerage Services | 294,300 | 245 | 230 | 354 | 335 |
| Dealer Services | 142,800 | 144 | 132 | 116 | 101 |
| Intercompany eliminations | 73,100 | 112 | 143 | 151 | |
| Sercurities Clearing | -23,600 | ||||
| Total | 1,630,400 | 1,494 | 1,698 | 1,580 | 1,525 |
| $ Mil | 2021 | 2020 | 2019 | 2018 | 2017 |
|---|---|---|---|---|---|
| Employer Services | 50,279 | 37,072 | 34,606 | 30,251 | 30,108 |
| Professional Employer Organization (PEO) Services | 1,543 | 1,443 | 1,584 | 760 | 587 |
| Intercompany eliminations | -3,050 | 651 | 5,697 | 6,078 | 6,486 |
| Total | 48,773 | 39,165 | 41,888 | 37,089 | 37,180 |
Price Behavior
| Market Price | $271.22 | |
| Market Cap ($ Bil) | 108.1 | |
| First Trading Date | 04/06/1983 | |
| Distance from 52W High | -5.1% | |
| 50 Days | 200 Days | |
| DMA Price | $266.91 | $234.53 |
| DMA Trend | up | up |
| Distance from DMA | 1.6% | 15.6% |
| 3M | 1YR | |
| Volatility | 30.3% | 27.5% |
| Downside Capture | -98.47 | 8.62 |
| Upside Capture | 30.51 | 2.22 |
| Correlation (SPY) | -20.1% | -1.0% |
| 1M | 2M | 3M | 6M | 1Y | 3Y | |
|---|---|---|---|---|---|---|
| Beta | 0.46 | -0.74 | -0.50 | -0.40 | -0.03 | 0.43 |
| Up Beta | 0.25 | -1.48 | -1.26 | -0.91 | -0.48 | 0.45 |
| Down Beta | -0.04 | -1.39 | -0.26 | 0.17 | 0.21 | 0.51 |
| Up Capture | 105% | 50% | 29% | 1% | 2% | 12% |
| Bmk +ve Days | 10 | 21 | 32 | 68 | 138 | 427 |
| Stock +ve Days | 12 | 23 | 32 | 64 | 121 | 391 |
| Down Capture | -12% | -144% | -120% | -113% | 11% | 62% |
| Bmk -ve Days | 11 | 21 | 32 | 59 | 113 | 324 |
| Stock -ve Days | 9 | 19 | 32 | 63 | 130 | 360 |
[1] Upside and downside betas calculated using positive and negative benchmark daily returns respectively
Based On 1-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with ADP | |
|---|---|---|---|---|
| ADP | -3.4% | 27.4% | -0.15 | - |
| Sector ETF (XLI) | 13.5% | 17.2% | 0.57 | -18.7% |
| Equity (SPY) | 16.9% | 12.9% | 0.94 | -1.0% |
| Gold (GLD) | 19.1% | 29.3% | 0.60 | -18.1% |
| Commodities (DBC) | 46.9% | 20.6% | 1.76 | -2.4% |
| Real Estate (VNQ) | 4.9% | 13.6% | 0.10 | 21.8% |
| Bitcoin (BTCUSD) | -34.5% | 43.9% | -0.84 | 3.1% |
Smart multi-asset allocation framework can stack odds in your favor. Learn How
Based On 5-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with ADP | |
|---|---|---|---|---|
| ADP | 8.6% | 22.8% | 0.31 | - |
| Sector ETF (XLI) | 12.4% | 17.6% | 0.54 | 45.7% |
| Equity (SPY) | 12.9% | 17.2% | 0.57 | 51.2% |
| Gold (GLD) | 19.1% | 18.8% | 0.83 | -1.8% |
| Commodities (DBC) | 11.3% | 19.5% | 0.45 | 7.9% |
| Real Estate (VNQ) | 1.1% | 18.8% | -0.05 | 50.0% |
| Bitcoin (BTCUSD) | 11.2% | 52.5% | 0.39 | 19.0% |
Smart multi-asset allocation framework can stack odds in your favor. Learn How
Based On 10-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with ADP | |
|---|---|---|---|---|
| ADP | 14.2% | 24.8% | 0.54 | - |
| Sector ETF (XLI) | 13.1% | 20.1% | 0.57 | 60.8% |
| Equity (SPY) | 15.1% | 18.0% | 0.72 | 65.2% |
| Gold (GLD) | 12.1% | 16.4% | 0.61 | 0.5% |
| Commodities (DBC) | 8.3% | 18.1% | 0.37 | 18.6% |
| Real Estate (VNQ) | 4.4% | 20.7% | 0.18 | 58.9% |
| Bitcoin (BTCUSD) | 61.7% | 66.1% | 1.02 | 13.4% |
Smart multi-asset allocation framework can stack odds in your favor. Learn How
Returns Analyses
Earnings Returns History
Updated 8/31/2026| Forward Returns | |||
|---|---|---|---|
| Earnings Date | 1D Returns | 5D Returns | 21D Returns |
| 7/29/2026 | 3.5% | 2.4% | 6.5% |
| 4/29/2026 | 8.0% | 5.7% | 10.4% |
| 1/28/2026 | -1.5% | -7.6% | -14.2% |
| 10/29/2025 | -6.6% | -7.3% | -9.0% |
| 7/30/2025 | 0.7% | -3.0% | -1.8% |
| 4/30/2025 | 1.6% | 2.6% | 9.6% |
| 1/29/2025 | 0.8% | 2.1% | 4.4% |
| 10/30/2024 | 1.7% | 1.1% | 6.6% |
| ... | |||
| SUMMARY STATS | |||
| # Positive | 15 | 16 | 15 |
| # Negative | 9 | 8 | 9 |
| Median Positive | 2.2% | 2.5% | 6.6% |
| Median Negative | -4.7% | -5.4% | -3.9% |
| Max Positive | 8.0% | 14.0% | 19.2% |
| Max Negative | -9.2% | -9.2% | -14.2% |
| Forward Returns | |||
|---|---|---|---|
| Earnings Date | 1D Returns | 5D Returns | 21D Returns |
| 7/29/2026 | 3.5% | 2.4% | 6.5% |
| 4/29/2026 | 8.0% | 5.7% | 10.4% |
| 1/28/2026 | -1.5% | -7.6% | -14.2% |
| 10/29/2025 | -6.6% | -7.3% | -9.0% |
| 7/30/2025 | 0.7% | -3.0% | -1.8% |
| 4/30/2025 | 1.6% | 2.6% | 9.6% |
| 1/29/2025 | 0.8% | 2.1% | 4.4% |
| 10/30/2024 | 1.7% | 1.1% | 6.6% |
| 7/31/2024 | 1.9% | 0.7% | 5.8% |
| 5/1/2024 | 2.2% | 1.3% | -0.4% |
| 1/31/2024 | 3.0% | 5.1% | 5.3% |
| 10/25/2023 | -9.2% | -9.2% | -3.9% |
| 7/26/2023 | 5.4% | 3.3% | 4.3% |
| 4/26/2023 | -0.4% | 2.3% | 1.1% |
| 1/25/2023 | -4.7% | -5.6% | -6.8% |
| 10/26/2022 | -1.1% | 2.5% | 10.4% |
| 7/27/2022 | 7.4% | 10.4% | 17.5% |
| 4/27/2022 | 2.6% | -0.3% | -3.8% |
| 1/26/2022 | -9.0% | -5.2% | -7.7% |
| 10/27/2021 | 1.4% | 2.9% | 7.1% |
| 7/28/2021 | -0.5% | 2.7% | 0.1% |
| 4/28/2021 | -4.7% | -1.0% | -0.8% |
| 1/27/2021 | 0.7% | 2.3% | 6.7% |
| 10/28/2020 | 6.2% | 14.0% | 19.2% |
| SUMMARY STATS | |||
| # Positive | 15 | 16 | 15 |
| # Negative | 9 | 8 | 9 |
| Median Positive | 2.2% | 2.5% | 6.6% |
| Median Negative | -4.7% | -5.4% | -3.9% |
| Max Positive | 8.0% | 14.0% | 19.2% |
| Max Negative | -9.2% | -9.2% | -14.2% |
SEC Filings
Expand for More| Report Date | Filing Date | Filing |
|---|---|---|
| 06/30/2026 | 08/05/2026 | 10-K |
| 03/31/2026 | 04/30/2026 | 10-Q |
| 12/31/2025 | 01/29/2026 | 10-Q |
| 09/30/2025 | 10/31/2025 | 10-Q |
| 06/30/2025 | 08/06/2025 | 10-K |
| 03/31/2025 | 05/01/2025 | 10-Q |
| 12/31/2024 | 01/30/2025 | 10-Q |
| 09/30/2024 | 11/01/2024 | 10-Q |
| 06/30/2024 | 08/07/2024 | 10-K |
| 03/31/2024 | 05/02/2024 | 10-Q |
| 12/31/2023 | 02/01/2024 | 10-Q |
| 09/30/2023 | 11/02/2023 | 10-Q |
| 06/30/2023 | 08/03/2023 | 10-K |
| 03/31/2023 | 05/01/2023 | 10-Q |
| 12/31/2022 | 02/02/2023 | 10-Q |
| 09/30/2022 | 11/02/2022 | 10-Q |
| Report Date | Filing Date | Filing |
|---|---|---|
| 06/30/2026 | 08/05/2026 | 10-K |
| 03/31/2026 | 04/30/2026 | 10-Q |
| 12/31/2025 | 01/29/2026 | 10-Q |
| 09/30/2025 | 10/31/2025 | 10-Q |
| 06/30/2025 | 08/06/2025 | 10-K |
| 03/31/2025 | 05/01/2025 | 10-Q |
| 12/31/2024 | 01/30/2025 | 10-Q |
| 09/30/2024 | 11/01/2024 | 10-Q |
| 06/30/2024 | 08/07/2024 | 10-K |
| 03/31/2024 | 05/02/2024 | 10-Q |
| 12/31/2023 | 02/01/2024 | 10-Q |
| 09/30/2023 | 11/02/2023 | 10-Q |
| 06/30/2023 | 08/03/2023 | 10-K |
| 03/31/2023 | 05/01/2023 | 10-Q |
| 12/31/2022 | 02/02/2023 | 10-Q |
| 09/30/2022 | 11/02/2022 | 10-Q |
| 06/30/2022 | 08/03/2022 | 10-K |
| 03/31/2022 | 04/29/2022 | 10-Q |
| 12/31/2021 | 01/31/2022 | 10-Q |
| 09/30/2021 | 10/29/2021 | 10-Q |
| 06/30/2021 | 08/04/2021 | 10-K |
| 03/31/2021 | 04/30/2021 | 10-Q |
| 12/31/2020 | 02/01/2021 | 10-Q |
| 09/30/2020 | 10/30/2020 | 10-Q |
| 06/30/2020 | 08/05/2020 | 10-K |
| 03/31/2020 | 05/01/2020 | 10-Q |
| 12/31/2019 | 01/31/2020 | 10-Q |
| 09/30/2019 | 11/04/2019 | 10-Q |
Recent Forward Guidance
Updated 7/30/2026Latest: Q4 2026 Earnings Reported 7/29/2026
| Forward Guidance | Guidance Change | |||||||
|---|---|---|---|---|---|---|---|---|
| Metric | Source | Low | Mid | High | % Chg | % Delta | Change | Prior |
| 2027 Adjusted EBIT Margin Expansion | Reported | 0.7% | 0.8% | 0.9% | 0.0% | Higher New | Guidance: 0.75% for 2026 | |
| 2027 Revenue Growth | Reported | 5.0% | 5.5% | 6.0% | -1.0% | Lower New | Guidance: 6.5% for 2026 | |
| 2027 Employer Services Revenue Growth | Reported | 5.0% | 5.5% | 6.0% | -1.0% | Lower New | Guidance: 6.5% for 2026 | |
| 2027 PEO Services Revenue Growth | Reported | 5.0% | 6.0% | 7.0% | -0.5% | Lower New | Guidance: 6.5% for 2026 | |
| 2027 Interest on Funds Held for Clients | Reported | 1.54 Bil | 1.55 Bil | 1.56 Bil | 15.2% | Higher New | Guidance: 1.34 Bil for 2026 | |
| 2027 Adjusted Diluted EPS Growth | Reported | 9.0% | 10.0% | 11.0% | -0.5% | Lower New | Guidance: 10.5% for 2026 | |
Prior: Q3 2026 Earnings Reported 4/29/2026
| Forward Guidance | Guidance Change | |||||||
|---|---|---|---|---|---|---|---|---|
| Metric | Source | Low | Mid | High | % Chg | % Delta | Change | Prior |
| 2026 Adjusted EBIT Margin Expansion | Reported | 0.7% | 0.75% | 0.8% | 0.2% | Raised | Guidance: 0.6% for 2026 | |
| 2026 Revenue Growth | Reported | 6.0% | 6.5% | 7.0% | 0.5% | Raised | Guidance: 6.0% for 2026 | |
| 2026 Employer Services Revenue Growth | Reported | 6.0% | 6.5% | 7.0% | 0.5% | Raised | Guidance: 6.0% for 2026 | |
| 2026 PEO Services Revenue Growth | Reported | 6.0% | 6.5% | 7.0% | 0.5% | Raised | Guidance: 6.0% for 2026 | |
| 2026 Interest on funds held for clients | Reported | 1.34 Bil | 1.34 Bil | 1.35 Bil | 1.9% | Raised | Guidance: 1.32 Bil for 2026 | |
| 2026 Adjusted Diluted EPS Growth | Reported | 10.0% | 10.5% | 11.0% | 1.0% | Raised | Guidance: 9.5% for 2026 | |
Q2 2026 Earnings Reported 1/28/2026
| Forward Guidance | Guidance Change | |||||||
|---|---|---|---|---|---|---|---|---|
| Metric | Source | Low | Mid | High | % Chg | % Delta | Change | Prior |
| 2026 Adjusted EBIT Margin Expansion | Reported | 0.5% | 0.6% | 0.0% | Affirmed | Guidance: 0.6% for 2026 | ||
| 2026 Employer Services New Business Bookings Growth | Reported | 4.0% | 5.5% | |||||
| 2026 Revenue Growth | Reported | 6.0% | 9.1% | 0.5% | Raised | Guidance: 5.5% for 2026 | ||
| 2026 Employer Services Revenue Growth | Reported | 6.0% | 9.1% | 0.5% | Raised | Guidance: 5.5% for 2026 | ||
| 2026 PEO Services Revenue Growth | Reported | 5.0% | 6.0% | 0.0% | 0.0% | Affirmed | Guidance: 6.0% for 2026 | |
| 2026 Client Funds Interest Revenue | Reported | 1.31 Bil | 1.32 Bil | 0.8% | Raised | Guidance: 1.31 Bil for 2026 | ||
| 2026 Adjusted Effective Tax Rate | Reported | 23.0% | ||||||
| 2026 Diluted EPS Growth | Reported | 9.0% | 9.5% | |||||
| 2026 Adjusted Diluted EPS Growth | Reported | 9.0% | 9.5% | 5.6% | 0.5% | Raised | Guidance: 9.0% for 2026 | |
Q1 2026 Earnings Reported 10/29/2025
| Forward Guidance | Guidance Change | |||||||
|---|---|---|---|---|---|---|---|---|
| Metric | Source | Low | Mid | High | % Chg | % Delta | Change | Prior |
| 2026 Adjusted EBIT Margin Expansion | Reported | 0.5% | 0.6% | 0.7% | 0.0% | Affirmed | Guidance: 0.6% for 2026 | |
| 2026 Revenue Growth | Reported | 5.0% | 5.5% | 6.0% | 0.0% | Affirmed | Guidance: 5.5% for 2026 | |
| 2026 Employer Services Revenue Growth | Reported | 5.0% | 5.5% | 6.0% | 0.0% | Affirmed | Guidance: 5.5% for 2026 | |
| 2026 PEO Services Revenue Growth | Reported | 5.0% | 6.0% | 7.0% | 0.0% | Affirmed | Guidance: 6.0% for 2026 | |
| 2026 Interest on funds held for clients | Reported | 1.30 Bil | 1.31 Bil | 1.32 Bil | 0.8% | Raised | Guidance: 1.30 Bil for 2026 | |
| 2026 Adjusted Diluted EPS Growth | Reported | 8.0% | 9.0% | 10.0% | 0.0% | Affirmed | Guidance: 9.0% for 2026 | |
Insider Activity
Updated 9/10/2026| # | Owner | Title | Holding | Action | Filing Date | Price | Shares | Transacted Value | Value of Held Shares | Form |
|---|---|---|---|---|---|---|---|---|---|---|
| 1 | Desilva, Joseph | Executive VP | Direct | Sell | 9042026 | 282.87 | 631 | 178,491 | 5,324,798 | Form |
| 2 | Foskett, David | Corp. VP | Direct | Sell | 9032026 | 283.00 | 1,529 | 432,707 | 4,003,447 | Form |
| 3 | Desilva, Joseph | Executive VP | Direct | Sell | 9032026 | 283.00 | 6,512 | 1,842,896 | 5,505,818 | Form |
| 4 | D'Ambrosio, Christopher | Corp. VP | Direct | Sell | 9032026 | 283.00 | 1,872 | 529,776 | 2,809,531 | Form |
| 5 | Black, Maria | President & CEO | Direct | Sell | 9032026 | 280.91 | 29,810 | 8,373,873 | 22,647,990 | Form |
| # | Owner | Title | Holding | Action | Filing Date | Price | Shares | Transacted Value | Value of Held Shares | Form |
|---|---|---|---|---|---|---|---|---|---|---|
| 1 | Desilva, Joseph | Executive VP | Direct | Sell | 9042026 | 282.87 | 631 | 178,491 | 5,324,798 | Form |
| 2 | Foskett, David | Corp. VP | Direct | Sell | 9032026 | 283.00 | 1,529 | 432,707 | 4,003,447 | Form |
| 3 | Desilva, Joseph | Executive VP | Direct | Sell | 9032026 | 283.00 | 6,512 | 1,842,896 | 5,505,818 | Form |
| 4 | D'Ambrosio, Christopher | Corp. VP | Direct | Sell | 9032026 | 283.00 | 1,872 | 529,776 | 2,809,531 | Form |
| 5 | Black, Maria | President & CEO | Direct | Sell | 9032026 | 280.91 | 29,810 | 8,373,873 | 22,647,990 | Form |
| 6 | Michaud, Brian L | Executive VP | Direct | Sell | 8242026 | 279.70 | 120 | 33,564 | 5,158,092 | Form |
| 7 | Kwon, David | Corp VP | Direct | Sell | 8242026 | 280.00 | 798 | 223,440 | 3,693,967 | Form |
| 8 | Kwon, David | Corp VP | Direct | Sell | 7312026 | 265.62 | 2,414 | 641,207 | 2,565,770 | Form |
| 9 | Michaud, Brian L | Executive VP | Direct | Sell | 5112026 | 212.13 | 848 | 179,886 | 3,067,899 | Form |
| 10 | Swan, Robert Holmes | Direct | Buy | 5112026 | 206.05 | 3,619 | 745,695 | 1,045,086 | Form | |
| 11 | D'Ambrosio, Christopher | Corp. VP | Direct | Sell | 4152026 | 195.74 | 543 | 106,287 | 1,638,193 | Form |
| 12 | D'Ambrosio, Christopher | Corp. VP | Direct | Sell | 3172026 | 208.45 | 543 | 113,188 | 1,857,754 | Form |
| 13 | D'Ambrosio, Christopher | Corp. VP | Direct | Sell | 2182026 | 212.43 | 543 | 115,349 | 2,008,575 | Form |
| 14 | Michaud, Brian L | Executive VP | Direct | Sell | 2092026 | 234.18 | 1,000 | 234,180 | 3,585,378 | Form |
| 15 | Foskett, David | Corp. VP | Direct | Sell | 2092026 | 237.00 | 266 | 63,042 | 2,595,984 | Form |
| 16 | D'Ambrosio, Christopher | Corp. VP | Direct | Sell | 1142026 | 262.29 | 543 | 142,423 | 2,622,436 | Form |
| 17 | Kwon, David | Corp VP | Direct | Sell | 1142026 | 264.80 | 806 | 213,429 | 2,962,199 | Form |
| 18 | Black, Maria | President & CEO | Direct | Sell | 1062026 | 257.17 | 715 | 183,880 | 19,301,465 | Form |
| 19 | Rodriguez, Carlos A | Direct | Sell | 9152025 | 293.87 | 1,273 | 374,100 | 6,252,277 | Form | |
| 20 | Rodriguez, Carlos A | Direct | Sell | 9152025 | 295.89 | 2,813 | 832,325 | 6,671,750 | Form | |
| 21 | D'Ambrosio, Christopher | Corp. VP | Direct | Sell | 9112025 | 296.90 | 597 | 177,249 | 3,129,691 | Form |
| 22 | Rodriguez, Carlos A | Direct | Sell | 9112025 | 292.96 | 21,950 | 6,430,440 | 7,429,851 | Form | |
| 23 | Bonarti, Michael A | Corporate Vice President | Direct | Sell | 9112025 | 298.43 | 8,728 | 2,604,697 | 24,032,995 | Form |
| 24 | Rodriguez, Carlos A | Direct | Sell | 9112025 | 297.14 | 21,950 | 6,522,114 | 7,535,773 | Form | |
| 25 | Rodriguez, Carlos A | Direct | Sell | 9082025 | 297.12 | 12,056 | 3,582,032 | 7,535,294 | Form | |
| 26 | Rodriguez, Carlos A | Direct | Sell | 9052025 | 300.29 | 11,701 | 3,513,661 | 11,235,982 | Form | |
| 27 | Black, Maria | President & CEO | Direct | Sell | 9052025 | 298.32 | 23,605 | 7,041,744 | 22,720,076 | Form |
| 28 | Desilva, Joseph | Executive VP | Direct | Sell | 9052025 | 296.57 | 4,614 | 1,368,374 | 5,200,537 | Form |
| 29 | Foskett, David | Corp. VP | Direct | Sell | 9052025 | 296.57 | 1,373 | 407,191 | 3,493,780 | Form |
| 30 | McGuire, Don | Corp VP | Direct | Sell | 9052025 | 296.57 | 13,599 | 4,033,055 | 5,244,568 | Form |
| 31 | Rodriguez, Carlos A | Direct | Sell | 9052025 | 298.33 | 11,701 | 3,490,745 | 14,653,445 | Form | |
| 32 | Desilva, Joseph | Executive VP | Direct | Sell | 9032025 | 301.64 | 1,987 | 599,359 | 8,463,726 | Form |
| 33 | Foskett, David | Corp. VP | Direct | Sell | 9032025 | 301.13 | 1,043 | 314,079 | 4,445,049 | Form |
| 34 | Black, Maria | President & CEO | Direct | Sell | 9032025 | 299.93 | 7,721 | 2,315,777 | 37,337,085 | Form |
Investor Activity (13F)
Updated Sep 19, 2026Active managers (13F portfolio over $250M, at least 3 holdings) with a position over $5M that is either over 10% of their portfolio or held in a concentrated book of 50 or fewer total positions. Index/ETF, sovereign, bank, community-bank and charitable/donor-advised filers are excluded.
| Active Manager | Value | % of Portfolio | Total Positions | QoQ | Filing |
|---|---|---|---|---|---|
| BLS Capital Fondsmaeglerselskab A/S | $239.4 Mil | 8.2% | 11 | ADD +6.2% | 13F |
| Fundsmith Investment Services LTD. | $269.7 Mil | 6.1% | 24 | Hold | 13F |
| Fundsmith LLP | $783.3 Mil | 6.1% | 34 | TRIM -7.7% | 13F |
| Camrose Capital Investment Partners LLP | $36.9 Mil | 4.8% | 10 | ADD +6.0% | 13F |
| Coerente Capital Management | $24.9 Mil | 4.6% | 47 | ADD +29.1% | 13F |
| America First Investment Advisors, LLC | $23.3 Mil | 4.3% | 41 | ADD +32.8% | 13F |
| Heathbridge Capital Management Ltd. | $11.5 Mil | 4.2% | 29 | ADD +87.7% | 13F |
| Saybrook Capital /NC | $14.2 Mil | 3.8% | 42 | Hold | 13F |
| GUARDCAP ASSET MANAGEMENT Ltd | $63.0 Mil | 3.6% | 27 | TRIM -44.9% | 13F |
| Local Pensions Partnership Investment Ltd | $146.5 Mil | 3.2% | 32 | Hold | 13F |
| Raub Brock Capital Management LP | $10.8 Mil | 2.7% | 43 | TRIM -5.8% | 13F |
| HFR Wealth Management, LLC | $9.7 Mil | 2.4% | 49 | Hold | 13F |
| Cincinnati Specialty Underwriters Insurance CO | $9.5 Mil | 2.3% | 46 | Hold | 13F |
| Dundas Partners LLP | $28.7 Mil | 2.3% | 49 | Hold | 13F |
| Act Two Investors LLC | $9.5 Mil | 2.1% | 36 | New | 13F |
| Troy Asset Management Ltd | $21.9 Mil | 0.7% | 30 | TRIM -8.2% | 13F |
| Active Manager | Value | % of Portfolio | Total Positions | QoQ | Filing |
|---|---|---|---|---|---|
| Act Two Investors LLC | $9.5 Mil | 2.1% | 36 | New | 13F |
| Heathbridge Capital Management Ltd. | $11.5 Mil | 4.2% | 29 | ADD +87.7% | 13F |
| America First Investment Advisors, LLC | $23.3 Mil | 4.3% | 41 | ADD +32.8% | 13F |
| Coerente Capital Management | $24.9 Mil | 4.6% | 47 | ADD +29.1% | 13F |
| BLS Capital Fondsmaeglerselskab A/S | $239.4 Mil | 8.2% | 11 | ADD +6.2% | 13F |
| Camrose Capital Investment Partners LLP | $36.9 Mil | 4.8% | 10 | ADD +6.0% | 13F |
| Active Manager | Value | % of Portfolio | Total Positions | QoQ | As Of | Filing |
|---|---|---|---|---|---|---|
| Bowie Capital Management, LLC | $20.0 Mil | 0.8% | 32 | Exited | Dec 31, 2025 | 13F |
| GUARDCAP ASSET MANAGEMENT Ltd | $63.0 Mil | 3.6% | 27 | TRIM -44.9% | Mar 31, 2026 | 13F |
| Troy Asset Management Ltd | $21.9 Mil | 0.7% | 30 | TRIM -8.2% | Mar 31, 2026 | 13F |
| Fundsmith LLP | $783.3 Mil | 6.1% | 34 | TRIM -7.7% | Mar 31, 2026 | 13F |
| Raub Brock Capital Management LP | $10.8 Mil | 2.7% | 43 | TRIM -5.8% | Mar 31, 2026 | 13F |
| Active Manager | Value | % of Portfolio | Total Positions | QoQ | Filing |
|---|---|---|---|---|---|
| Fundsmith LLP | $783.3 Mil | 6.1% | 34 | TRIM -7.7% | 13F |
| Fundsmith Investment Services LTD. | $269.7 Mil | 6.1% | 24 | Hold | 13F |
| BLS Capital Fondsmaeglerselskab A/S | $239.4 Mil | 8.2% | 11 | ADD +6.2% | 13F |
| Local Pensions Partnership Investment Ltd | $146.5 Mil | 3.2% | 32 | Hold | 13F |
| GUARDCAP ASSET MANAGEMENT Ltd | $63.0 Mil | 3.6% | 27 | TRIM -44.9% | 13F |
| Camrose Capital Investment Partners LLP | $36.9 Mil | 4.8% | 10 | ADD +6.0% | 13F |
| Dundas Partners LLP | $28.7 Mil | 2.3% | 49 | Hold | 13F |
| Coerente Capital Management | $24.9 Mil | 4.6% | 47 | ADD +29.1% | 13F |
| America First Investment Advisors, LLC | $23.3 Mil | 4.3% | 41 | ADD +32.8% | 13F |
| Troy Asset Management Ltd | $21.9 Mil | 0.7% | 30 | TRIM -8.2% | 13F |
| Saybrook Capital /NC | $14.2 Mil | 3.8% | 42 | Hold | 13F |
| Heathbridge Capital Management Ltd. | $11.5 Mil | 4.2% | 29 | ADD +87.7% | 13F |
| Raub Brock Capital Management LP | $10.8 Mil | 2.7% | 43 | TRIM -5.8% | 13F |
| HFR Wealth Management, LLC | $9.7 Mil | 2.4% | 49 | Hold | 13F |
| Cincinnati Specialty Underwriters Insurance CO | $9.5 Mil | 2.3% | 46 | Hold | 13F |
| Act Two Investors LLC | $9.5 Mil | 2.1% | 36 | New | 13F |
ADP Trade Sentinel
Constructive
CONVICTION RATIONALE
Conviction is constructive, not high, because ADP is navigating a clear pivot. While revenue growth is moderating to a guided 5% to 6%, the company is leveraging its scale to drive profitability, forecasting 70 to 90 basis points of margin expansion. Its 92.1% client retention provides a stable foundation, but execution on new product adoption is critical.
STOCK ARCHETYPE
Recurring Services & Financial Float(Number of Employees Serviced x Fee per Employee) + (Client Fund Balances x Average Interest Yield) Operating leverage from its scaled platform and interest income earned on client funds, which has low associated costs.
INVESTMENT THESIS
Evidence suggests ADP is successfully pivoting to a profitability-driven story, leveraging its scale and AI investments to expand margins amid a moderating top-line.
- Fiscal 2027 guidance calls for 70 to 90 basis points of adjusted EBIT margin expansion.
- Employer Services client revenue retention remains high at 92.1% for fiscal 2026.
- New business bookings grew 6% in fiscal 2026, at the top of the guided range.
- The company's AI-infused service platform is yielding a 4% decrease in contact per client.
- Fiscal 2027 adjusted EPS growth is guided to be 9% to 11%.
PRIMARY RISK
Slowing top-line growth, with revenue guided to 5-6% and employee counts at existing clients flat, could signal market share loss to faster, more innovative competitors.
- Fiscal 2027 revenue growth guidance was lowered to 5% to 6%.
- 'Pays per control' growth was only 1% in fiscal 2026 and is guided flat to 1% for 2027.
- Peer Workday grew revenue 13.3% and Paychex grew 16.9% in the last twelve months.
- Workday's R&D spend of $2.8 billion is significantly higher than ADP's $1,028.8 million.
- Operating expenses grew 8.8% year-over-year, outpacing revenue growth of 6.7%.
| KPI | Status | Rationale |
|---|---|---|
| Employer Services (ES) New Business Bookings Growth | 6% year-over-year growth for fiscal year 2026 - Stable | The company finished fiscal 2026 with strong sales momentum, driven by broad-based demand across its portfolio, including enterprise solutions like Lyric HCM and international markets. While the full-year result was strong, the guidance for fiscal 2027 is wide and implies a potential slight deceleration from the pace set in the prior year. |
| Employer Services (ES) Client Retention | 92.1% for fiscal year 2026 - Stable | Client retention has remained exceptionally strong and stable, consistently outperforming the company's more cautious guidance throughout the year. This stability provides a solid recurring revenue base and reflects high client satisfaction. |
| U.S. Pays Per Control Growth | 1% (Fiscal Year 2026) | This metric approximates the growth in the number of employees on ADP clients' payrolls in the U.S. on a same-store-sales basis. It is a direct indicator of organic growth tied to employment trends within the existing client base. |
| PEO Average Worksite Employees Growth | 2% (Fiscal Year 2026) | This measures the growth in the number of employees served through the PEO segment, a primary driver of PEO revenue. |
Profitable Compounding vs. Competitive Erosion
BULL VIEW
Bulls believe ADP's scale and 92.1% retention create a durable base to drive guided margin expansion of 70-90 basis points, funding strong shareholder returns even with slower growth.
CORE TENSION
Can guided margin expansion offset slowing 'pays per control' growth of 0-1%, a dynamic to which the market reacted with a neutral 0.0% stock move?
PREVAILING SENTIMENT
The latest evidence favors the bulls. Management has a strong record of delivering on its promises and has already identified specific AI-driven productivity gains supporting its margin targets.
BEAR VIEW
Bears see the lowered 5-6% revenue growth guidance as a sign of erosion to faster-moving peers like a business partner, whose R&D spend is more than double ADP's.
| Timeline | Event & Metric To Watch |
|---|---|
11/2/2026 | Intensifying Competitive Pressure Watch: Peer revenue growth rates and commentary on market share wins, particularly from Paylocity reporting on 11/2/2026. |
11/3/2026 | Paycom Software Earnings Report Watch: Peer Paycom Software (PAYC) is scheduled to report earnings. |
11/23/2026 | Workday Earnings Report Watch: Peer Workday (WDAY) is scheduled to report earnings. |
June 2027 | Credit Agreement Maturity Watch: |
No set date | Slowing Employment Growth Watch: The monthly ADP National Employment Report and management's commentary on 'pays per control' in the next earnings release. |
Next earnings call | PEO Segment Underperformance Watch: PEO segment revenue growth and margin trends in the next quarterly report to see if pressure is abating. |
| Date | Event | Stock Impact |
|---|---|---|
2026-09-08 | Expanded AWS Strategic Partnership Details: ADP announced an expanded strategic partnership with Amazon Web Services (AWS), affirming AWS as its strategic cloud provider to accelerate AI-powered innovation in human capital management. | -4.5% $275.85 -> $263.53 |
2026-09-02 | August Jobs Report Released Details: The ADP National Employment Report indicated that private-sector employment increased by 38,000 jobs in August, a slowdown from prior months. | +0.0% $281.69 -> $281.73 |
2026-07-29 | Q4 Results and Lowered Guidance Details: The company reported strong Q4 results with 7% revenue growth but issued new, lower guidance for fiscal 2027 revenue and adjusted EPS growth. The stock reaction was neutral at 0.0%. | -0.1% $262.49 -> $262.19 |
2026-06-29 | Stock Selloff on AI Fears Details: Press reports noted the stock had become attractive after a 17% price decline, attributing the selloff to market overreaction to AI disruption risks. | +0.2% $222.13 -> $222.53 |
2026-05-18 | Reports on Raised Guidance Details: Press reports in May highlighted that the company had recently raised its guidance for fiscal 2026 to 6%-7% for revenue growth and 10%-11% for adjusted diluted EPS growth. | +2.8% $211.51 -> $217.39 |
2026-04-29 | Positive Q3 Earnings Reaction Details: The stock had a positive two-day reaction of 6.0% around the company's earnings call for the quarter ending March 31, 2026. | +6.4% $196.41 -> $209.01 |
Position Sizing
4% - 6%
NORMAL POSITION
Sizing is volatility-based: ADP trades at roughly 28% annualized options-implied volatility versus about 13% for the S&P 500 (2.1x the market), around the 57th percentile of its own trailing year. A 4% - 6% position keeps a single-name swing of that size within a diversified portfolio's risk budget.
Diversification Alternatives
WDAY - a business partner
Higher Growth Exposurea business partner offers faster revenue growth, reported at 13.3% year-over-year, and higher R&D investment for investors prioritizing technological innovation in a pure-play cloud model.
PAYX - a business partner
Higher Margin Profilea business partner provides a more focused investment in the small and mid-sized business market with a superior operating margin of 38.6% compared to ADP's 26.3%.
ADP is a highly scaled, non-discretionary utility for businesses, monetizing employment levels, regulatory complexity, and the float from massive, short-term cash holdings.
ADP's business model is exceptionally durable, providing essential payroll and HR services that are critical for businesses to operate. Its growth is tied to stable, recurring fees, new client wins, and two key macro factors: employment levels (which drive per-employee fees) and interest rates (which drive income from its large client fund balances). The company's massive scale and trusted brand create a significant competitive moat, making it a central player in the infrastructure of work.
Stronger-than-expected employment reports (like the ADP National Employment Report), rising interest rates, and announcements of new large enterprise client wins would confirm the thesis.
A sharp economic downturn leading to significant layoffs, a rapid decline in interest rates, or a major security breach that damages client trust would be thesis-damaging.
Short-term stock price reactions to individual monthly job reports or minor changes in peer company performance are likely noise, as ADP's business is driven by longer-term employment trends and its own execution on sales and retention.
Repricing Catalyst
The market's reaction to the company's fiscal 2027 guidance, which includes lowered revenue growth expectations but higher margin expansion, alongside the ongoing AI-driven product transformation (e.g., ADP Assist, Lyric HCM) aimed at improving efficiency and client value.
Employer Services
$14.6B TTM (68% of Total)What It Is
This segment provides a suite of HCM solutions including payroll, benefits administration, talent management, workforce management, compliance, and retirement services to employers of all sizes, from small businesses to large global enterprises.
Who Pays & How
Employers pay for these services to manage their workforce, ensure accurate and compliant payroll, and administer employee benefits. They choose ADP for its scale, data-driven insights, domain expertise, and trusted brand in navigating complex HR and regulatory environments.
Competition
Professional Employer Organization (PEO) Services
$7.0B TTM (32% of Total)What It Is
This segment provides a comprehensive HR outsourcing solution where ADP acts as a co-employer for its clients' employees. Services include benefits administration, workers' compensation insurance, and state unemployment insurance administration.
Who Pays & How
Worksite employers pay ADP for a bundled solution that includes payroll, payroll taxes, fees for benefits, and an administrative fee. They use this service to outsource complex HR functions and gain access to benefits and insurance at scale.
Competition
Automatic Data Processing — Investor Video Playlist
Industry Resources
| Industrials Resources |
| IndustryWeek |
| Manufacturing.net |
| Aviation Week |
| Human Resource & Employment Services Resources |
| HR Magazine (SHRM) |
| HR Dive |
| Personnel Today |
External Quote Links
| Y Finance | Barrons |
| TradingView | Morningstar |
| SeekingAlpha | ValueLine |
| Motley Fool | Robinhood |
| CNBC | Etrade |
| MarketWatch | Unusual Whales |
| YCharts | Perplexity Finance |
| FinViz |
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