Automatic Data Processing (ADP)
Market Price (11/3/2026): $298.47 | Market Cap: $117.8 BilInvestor Relations Sector: Industrials | Industry: Human Resource & Employment Services
Automatic Data Processing (ADP)
Market Price (11/3/2026): $298.47Market Cap: $117.8 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 6.1%, Dividend Yield is 2.3% Attractive operating marginsOp Mgn LTMOperating Margin = Operating Income / Revenue Reflects profitability before taxes and before impact of capital structure (interest payments). is 27% Attractive cash flow generationCFO/Rev LTMCash Flow from Operations / Revenue (Sales), Last Twelve Months (LTM) is 24%, FCF/Rev LTMFree Cash Flow / Revenue (Sales), Last Twelve Months (LTM) is 21%, CFO LTM is 5.4 Bil, FCF LTM is 4.8 Bil Stock buyback supportStock Buyback 3Y Total is 5.1 Bil Low stock price volatilityVol 12M is 28% Megatrend and thematic driversMegatrends include Cloud Computing, Fintech & Digital Payments, Automation & Robotics, Cybersecurity, Show more. | Trading close to highsDist 52W High is -3.0%, Dist 3Y High is -5.0% Weak multi-year price returns2Y Excs Rtn is -20%, 3Y Excs Rtn is -36% | 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 6.1%, Dividend Yield is 2.3% |
| Attractive operating marginsOp Mgn LTMOperating Margin = Operating Income / Revenue Reflects profitability before taxes and before impact of capital structure (interest payments). is 27% |
| Attractive cash flow generationCFO/Rev LTMCash Flow from Operations / Revenue (Sales), Last Twelve Months (LTM) is 24%, FCF/Rev LTMFree Cash Flow / Revenue (Sales), Last Twelve Months (LTM) is 21%, CFO LTM is 5.4 Bil, FCF LTM is 4.8 Bil |
| Stock buyback supportStock Buyback 3Y Total is 5.1 Bil |
| Low stock price volatilityVol 12M is 28% |
| Megatrend and thematic driversMegatrends include Cloud Computing, Fintech & Digital Payments, Automation & Robotics, Cybersecurity, Show more. |
| Trading close to highsDist 52W High is -3.0%, Dist 3Y High is -5.0% |
| Weak multi-year price returns2Y Excs Rtn is -20%, 3Y Excs Rtn is -36% |
| 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 15% since 7/31/2026 because of the following key factors:
1. ADP reported strong fiscal Q1 2027 financial results that surpassed analyst expectations and led to an upward revision of its full-year guidance.
Automatic Data Processing's fiscal first quarter, which ended September 30, 2026, saw adjusted diluted earnings per share (EPS) reach $2.82, exceeding the consensus estimate of $2.77 by 2.0%. Revenue for the quarter was $5.49 billion, slightly above the estimated $5.47 billion to $5.48 billion. Following this performance, management increased its full-year fiscal 2027 adjusted diluted EPS growth outlook to a range of 10%-12% (up from the prior 9%-11%) and raised consolidated revenue growth projection to approximately 6%.
2. A favorable interest rate environment significantly boosted ADP's interest income from client funds.
A key driver of the strong fiscal Q1 2027 results was a substantial 15% jump in interest on funds held for clients, reaching $329.30 million. This increase was primarily attributed to higher average client fund balances and improved yields on those investments. The company also raised its fiscal 2027 outlook for client funds interest revenue, reflecting continued confidence in this revenue stream.
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Automatic Data Processing (ADP) stock has gained about 15% since 7/31/2026 because of the following key factors:
1. ADP reported strong fiscal Q1 2027 financial results that surpassed analyst expectations and led to an upward revision of its full-year guidance.
Automatic Data Processing's fiscal first quarter, which ended September 30, 2026, saw adjusted diluted earnings per share (EPS) reach $2.82, exceeding the consensus estimate of $2.77 by 2.0%. Revenue for the quarter was $5.49 billion, slightly above the estimated $5.47 billion to $5.48 billion. Following this performance, management increased its full-year fiscal 2027 adjusted diluted EPS growth outlook to a range of 10%-12% (up from the prior 9%-11%) and raised consolidated revenue growth projection to approximately 6%.
2. A favorable interest rate environment significantly boosted ADP's interest income from client funds.
A key driver of the strong fiscal Q1 2027 results was a substantial 15% jump in interest on funds held for clients, reaching $329.30 million. This increase was primarily attributed to higher average client fund balances and improved yields on those investments. The company also raised its fiscal 2027 outlook for client funds interest revenue, reflecting continued confidence in this revenue stream.
3. Strategic partnerships and continued innovation with AI-enabled solutions expanded ADP's market reach and integrated offerings.
ADP announced two significant partnerships within the period, enhancing its Human Capital Management (HCM) solutions. On October 28, 2026, ADP partnered with PNC Bank to embed its payroll and HR capabilities directly into PNC's digital banking platform for small businesses. This was followed by a strategic partnership with Campfire on October 30, 2026, to integrate ADP's enterprise-grade payroll and HCM solutions into Campfire's AI-native Enterprise Resource Planning (ERP) system, providing a unified workforce and financial view for clients. The company's Q1 fiscal 2027 earnings call also highlighted ongoing momentum in AI adoption and productivity.
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Stock Movement Drivers
Fundamental Drivers
The 12.8% change in ADP stock from 7/31/2026 to 11/2/2026 was primarily driven by a 7.0% change in the company's P/E Multiple.| (LTM values as of) | 7312026 | 11022026 | Change |
|---|---|---|---|
| Stock Price ($) | 264.77 | 298.78 | 12.8% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 21,600 | 22,263 | 3.1% |
| Net Income Margin (%) | 20.1% | 20.3% | 1.0% |
| P/E Multiple | 24.5 | 26.2 | 7.0% |
| Shares Outstanding (Mil) | 402 | 396 | 1.3% |
| Cumulative Contribution | 12.8% |
Market Drivers
7/31/2026 to 11/2/2026| Return | Correlation | |
|---|---|---|
| ADP | 12.8% | |
| Market (SPY) | 0.7% | -10.1% |
| Sector (XLI) | -5.6% | -11.4% |
Fundamental Drivers
The 43.0% change in ADP stock from 4/30/2026 to 11/2/2026 was primarily driven by a 35.5% change in the company's P/E Multiple.| (LTM values as of) | 4302026 | 11022026 | Change |
|---|---|---|---|
| Stock Price ($) | 209.01 | 298.78 | 43.0% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 21,600 | 22,263 | 3.1% |
| Net Income Margin (%) | 20.1% | 20.3% | 1.0% |
| P/E Multiple | 19.3 | 26.2 | 35.5% |
| Shares Outstanding (Mil) | 402 | 396 | 1.3% |
| Cumulative Contribution | 43.0% |
Market Drivers
4/30/2026 to 11/2/2026| Return | Correlation | |
|---|---|---|
| ADP | 43.0% | |
| Market (SPY) | 4.9% | -24.2% |
| Sector (XLI) | -2.6% | -32.0% |
Fundamental Drivers
The 18.1% change in ADP stock from 10/31/2025 to 11/2/2026 was primarily driven by a 6.5% change in the company's Total Revenues ($ Mil).| (LTM values as of) | 10312025 | 11022026 | Change |
|---|---|---|---|
| Stock Price ($) | 252.96 | 298.78 | 18.1% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 20,903 | 22,263 | 6.5% |
| Net Income Margin (%) | 19.8% | 20.3% | 2.7% |
| P/E Multiple | 24.8 | 26.2 | 5.7% |
| Shares Outstanding (Mil) | 405 | 396 | 2.2% |
| Cumulative Contribution | 18.1% |
Market Drivers
10/31/2025 to 11/2/2026| Return | Correlation | |
|---|---|---|
| ADP | 18.1% | |
| Market (SPY) | 11.2% | -6.1% |
| Sector (XLI) | 10.4% | -20.3% |
Fundamental Drivers
The 47.1% change in ADP stock from 10/31/2023 to 11/2/2026 was primarily driven by a 23.6% change in the company's Total Revenues ($ Mil).| (LTM values as of) | 10312023 | 11022026 | Change |
|---|---|---|---|
| Stock Price ($) | 203.09 | 298.78 | 47.1% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 18,012 | 22,263 | 23.6% |
| Net Income Margin (%) | 18.9% | 20.3% | 7.3% |
| P/E Multiple | 24.5 | 26.2 | 6.7% |
| Shares Outstanding (Mil) | 412 | 396 | 4.0% |
| Cumulative Contribution | 47.1% |
Market Drivers
10/31/2023 to 11/2/2026| Return | Correlation | |
|---|---|---|
| ADP | 47.1% | |
| Market (SPY) | 86.0% | 25.6% |
| Sector (XLI) | 79.4% | 21.0% |
Price Returns Compared
| 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | Total [1] | |
|---|---|---|---|---|---|---|---|
| Returns | |||||||
| ADP Return | 43% | -1% | -0% | 28% | -10% | 19% | 92% |
| Peers Return | 22% | -20% | 11% | 19% | -12% | 9% | 22% |
| S&P 500 Return | 27% | -19% | 24% | 23% | 16% | 10% | 101% |
Monthly Win Rates [3] | |||||||
| ADP Win Rate | 67% | 50% | 50% | 75% | 42% | 64% | |
| Peers Win Rate | 55% | 40% | 52% | 58% | 45% | 51% | |
| S&P 500 Win Rate | 75% | 42% | 67% | 75% | 67% | 36% | |
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 11/2/2026 (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.
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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 | 29 | -8.2% | 92.7% | 152.3% | STRL 1265% · FIX 1201% · AGX 751% |
| Marine Transportation | 5 | 47.3% | 44.2% | 146.6% | MATX 183% · KEX 151% |
| Construction Machinery & Heavy Transportation Equipment | 13 | 16.0% | 61.2% | 102.0% | ALSN 260% · WAB 224% · CAT 221% |
| Aerospace & Defense | 52 | -12.4% | 62.8% | 70.6% | ATI 975% · FTAI 967% · HWM 604% |
| Trading Companies & Distributors | 19 | 20.9% | 40.4% | 58.3% | DXPE 413% · AIT 222% · URI 216% |
| Industrial Machinery & Supplies & Components | 72 | 6.2% | 55.1% | 36.5% | CRS 888% · MLI 337% · SYM 271% |
| Rail Transportation | 7 | 33.9% | 56.1% | 34.2% | CSX 55% · UNP 43% · NSC 34% |
| Diversified Support Services | 32 | 21.0% | 43.3% | 33.6% | CXW 240% · OPLN 169% · CACI 137% |
| Building Products | 32 | -6.2% | 13.0% | 24.0% | GFF 368% · TT 141% · JCI 118% |
| Cargo Ground Transportation | 16 | 33.6% | 10.8% | 9.9% | R 273% · XPO 263% · ARCB 27% |
| Electrical Components & Equipment | 37 | -6.2% | 74.9% | 5.4% | POWL 1808% · VRT 796% · BE 511% |
| Industrial Conglomerates | 17 | 14.6% | -0.6% | -5.4% | CSW 104% · CSL 81% · DD 67% |
| Office Services & Supplies | 9 | 25.6% | 20.4% | -11.2% | PBI 174% · TILE 165% · HNI 55% |
| Data Processing & Outsourced Services | 6 | -16.4% | 0.3% | -14.2% | EXLS 64% · BR 13% · G -13% |
| Research & Consulting Services | 13 | 4.9% | -10.7% | -19.3% | HURN 270% · FCN 31% · BAH 11% |
| Agricultural & Farm Machinery | 16 | 12.4% | -5.6% | -21.0% | DE 101% · TTC 22% · AGCO 6% |
| Security & Alarm Services | 9 | -54.3% | 16.3% | -27.6% | BCO 67% |
| Environmental & Facilities Services | 29 | -33.0% | 23.7% | -29.1% | GEO 228% · CLH 153% · RSG 95% |
| Passenger Airlines | 11 | 1.0% | 52.5% | -29.7% | LTM 2790% · UAL 128% · DAL 115% |
| Air Freight & Logistics | 12 | -24.7% | -8.8% | -39.0% | FDX 86% · EXPD 74% · CHRW 53% |
| Human Resource & Employment Services ← | 22 | 21.2% | -9.1% | -42.3% | ADP 48% · FA 28% · PAYX 9% |
| Passenger Ground Transportation | 3 | -18.8% | 39.7% | -63.3% | UBER 56% · LYFT -63% · CAR -67% |
| Airport Services | 4 | -53.4% | -61.7% | -86.5% | JOBY -51% |
Latest Trefis Analyses
Research & Analysis
Invest in Strategies
Wealth Management
Peer Comparisons
| Peers to compare with: |
Financials
| Median | |
|---|---|
| Name | |
| Mkt Price | 185.00 |
| Mkt Cap | 41.1 |
| Rev LTM | 6,602 |
| Op Inc LTM | 1,220 |
| FCF LTM | 2,017 |
| FCF 3Y Avg | 1,823 |
| CFO LTM | 2,252 |
| CFO 3Y Avg | 2,025 |
Growth & Margins
| Median | |
|---|---|
| Name | |
| Rev Chg LTM | 11.0% |
| Rev Chg 3Y Avg | 11.2% |
| Rev Chg Q | 9.8% |
| QoQ Delta Rev Chg LTM | 2.3% |
| Op Inc Chg LTM | 17.7% |
| Op Inc Chg 3Y Avg | 16.2% |
| Op Mgn LTM | 26.5% |
| Op Mgn 3Y Avg | 26.3% |
| 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 | 41.1 |
| P/S | 5.3 |
| P/Op Inc | 20.0 |
| P/EBIT | 18.6 |
| P/E | 26.1 |
| P/CFO | 17.4 |
| Total Yield | 4.6% |
| Dividend Yield | 0.6% |
| FCF Yield 3Y Avg | 5.1% |
| D/E | 0.1 |
| Net D/E | 0.0 |
Returns
| Median | |
|---|---|
| Name | |
| 1M Rtn | 16.1% |
| 3M Rtn | 15.2% |
| 6M Rtn | 48.4% |
| 12M Rtn | 10.3% |
| 3Y Rtn | 17.5% |
| 1M Excs Rtn | 18.4% |
| 3M Excs Rtn | 15.3% |
| 6M Excs Rtn | 43.7% |
| 12M Excs Rtn | -0.6% |
| 3Y Excs Rtn | -69.5% |
Comparison Analyses
Segment Financials
Revenue by Segment| $ Mil | 2026 | 2025 | 2024 | 2023 | 2022 |
|---|---|---|---|---|---|
| Employer Services | 14,831 | 13,883 | 12,981 | 12,043 | 10,968 |
| Professional Employer Organization (PEO) Services | 7,128 | 6,690 | 6,234 | 5,984 | 5,546 |
| Intercompany eliminations | -12 | -13 | -12 | -15 | -15 |
| Total | 21,947 | 20,561 | 19,203 | 18,012 | 16,498 |
| $ 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 | $298.78 | |
| Market Cap ($ Bil) | 118.5 | |
| First Trading Date | 04/06/1983 | |
| Distance from 52W High | -3.0% | |
| 50 Days | 200 Days | |
| DMA Price | $277.15 | $238.19 |
| DMA Trend | up | up |
| Distance from DMA | 7.8% | 25.4% |
| 3M | 1YR | |
| Volatility | 24.9% | 27.9% |
| Downside Capture | -33.36 | -2.18 |
| Upside Capture | 32.22 | 17.51 |
| Correlation (S&P 500) | -14.2% | -5.7% |
| 1M | 2M | 3M | 6M | 1Y | 3Y | |
|---|---|---|---|---|---|---|
| Beta | -1.43 | -0.52 | -0.21 | -0.57 | -0.13 | 0.37 |
| Up Beta | -4.85 | -0.79 | -0.17 | -1.18 | -0.70 | 0.44 |
| Down Beta | -1.48 | -1.61 | -1.39 | -0.61 | 0.03 | 0.42 |
| Up Capture | -14% | -4% | 33% | 3% | 7% | 10% |
| Bmk +ve Days | 12 | 18 | 28 | 62 | 130 | 427 |
| Stock +ve Days | 16 | 21 | 33 | 61 | 124 | 394 |
| Down Capture | -225% | -32% | -28% | -124% | -12% | 46% |
| Bmk -ve Days | 10 | 25 | 36 | 64 | 121 | 325 |
| Stock -ve Days | 6 | 21 | 30 | 64 | 126 | 357 |
[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 | 17.6% | 27.9% | 0.56 | - |
| Sector ETF (XLI) | 10.7% | 17.3% | 0.42 | -20.3% |
| Equity (SPY) | 11.6% | 12.8% | 0.57 | -6.1% |
| Gold (GLD) | -2.3% | 28.6% | -0.09 | -19.7% |
| Commodities (DBC) | 43.1% | 20.9% | 1.60 | -2.2% |
| Real Estate (VNQ) | 11.0% | 13.7% | 0.50 | 21.3% |
| Bitcoin (BTCUSD) | -28.8% | 43.6% | -0.66 | -0.2% |
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 | 8.9% | 23.1% | 0.32 | - |
| Sector ETF (XLI) | 11.7% | 17.6% | 0.50 | 44.1% |
| Equity (SPY) | 12.0% | 17.1% | 0.52 | 49.1% |
| Gold (GLD) | 16.5% | 19.0% | 0.69 | -2.2% |
| Commodities (DBC) | 8.4% | 19.6% | 0.31 | 7.3% |
| Real Estate (VNQ) | 1.1% | 18.9% | -0.05 | 50.1% |
| Bitcoin (BTCUSD) | 4.1% | 51.6% | 0.26 | 18.1% |
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 | 15.7% | 24.9% | 0.59 | - |
| Sector ETF (XLI) | 13.4% | 20.1% | 0.58 | 60.0% |
| Equity (SPY) | 15.2% | 17.9% | 0.72 | 64.2% |
| Gold (GLD) | 11.6% | 16.5% | 0.57 | 0.0% |
| Commodities (DBC) | 7.8% | 18.1% | 0.34 | 18.3% |
| Real Estate (VNQ) | 5.4% | 20.7% | 0.22 | 58.8% |
| Bitcoin (BTCUSD) | 61.7% | 66.3% | 1.01 | 13.3% |
Smart multi-asset allocation framework can stack odds in your favor. Learn How
Returns Analyses
Earnings Returns History
Updated 11/2/2026| Forward Returns | |||
|---|---|---|---|
| Earnings Date | 1D Returns | 5D Returns | 21D Returns |
| 10/28/2026 | -2.6% | ||
| 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% |
| ... | |||
| SUMMARY STATS | |||
| # Positive | 14 | 15 | 14 |
| # Negative | 10 | 8 | 9 |
| Median Positive | 2.1% | 2.5% | 6.6% |
| Median Negative | -3.6% | -5.4% | -3.9% |
| Max Positive | 8.0% | 10.4% | 17.5% |
| Max Negative | -9.2% | -9.2% | -14.2% |
| Forward Returns | |||
|---|---|---|---|
| Earnings Date | 1D Returns | 5D Returns | 21D Returns |
| 10/28/2026 | -2.6% | ||
| 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% |
| SUMMARY STATS | |||
| # Positive | 14 | 15 | 14 |
| # Negative | 10 | 8 | 9 |
| Median Positive | 2.1% | 2.5% | 6.6% |
| Median Negative | -3.6% | -5.4% | -3.9% |
| Max Positive | 8.0% | 10.4% | 17.5% |
| Max Negative | -9.2% | -9.2% | -14.2% |
SEC Filings
Expand for More| Report Date | Filing Date | Filing |
|---|---|---|
| 09/30/2026 | 10/30/2026 | 10-Q |
| 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 |
| Report Date | Filing Date | Filing |
|---|---|---|
| 09/30/2026 | 10/30/2026 | 10-Q |
| 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 |
Recent Forward Guidance
Updated 10/29/2026Latest: Q1 2027 Earnings Reported 10/28/2026
| 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% | Affirmed | Guidance: 0.8% for 2027 | |
| 2027 Employer Services New Business Bookings Growth | Reported | 4.0% | 5.5% | 7.0% | ||||
| 2027 U.S. Pays Per Control Growth | Reported | 1.0% | ||||||
| 2027 Average Worksite Employees Growth | Reported | 2.0% | ||||||
| 2027 Average Client Funds Balances Growth | Reported | 4.0% | 4.5% | 5.0% | ||||
| 2027 Yield on Client Funds Portfolio | Reported | 0.04 | ||||||
| 2027 Net Impact from Client Funds Extended Strategy | Reported | 1.59 Bil | 1.60 Bil | 1.61 Bil | ||||
| 2027 Revenue Growth | Reported | 6.0% | 0.5% | Raised | Guidance: 5.5% for 2027 | |||
| 2027 Employer Services Revenue Growth | Reported | 6.0% | 0.5% | Raised | Guidance: 5.5% for 2027 | |||
| 2027 Employer Services Client Revenue Retention Change | Reported | 0 | 0 | 0 | ||||
| 2027 PEO Services Revenue Growth | Reported | 5.0% | 6.0% | 7.0% | 0.0% | Affirmed | Guidance: 6.0% for 2027 | |
| 2027 PEO Services Revenues Ex Zero-Margin Pass-throughs Growth | Reported | 3.0% | 4.0% | 5.0% | ||||
| 2027 Client Funds Interest Revenue | Reported | 1.59 Bil | 1.60 Bil | 1.61 Bil | 3.2% | Raised | Guidance: 1.55 Bil for 2027 | |
| 2027 Adjusted Effective Tax Rate | Reported | 23.0% | ||||||
| 2027 GAAP Earnings Before Income Taxes Margin Expansion | Reported | 1.2% | 1.3% | 1.4% | ||||
| 2027 GAAP Effective Tax Rate | Reported | 23.0% | ||||||
| 2027 Diluted EPS Growth | Reported | 12.0% | 13.0% | 14.0% | ||||
| 2027 Adjusted Diluted EPS Growth | Reported | 10.0% | 11.0% | 12.0% | 1.0% | Raised | Guidance: 10.0% for 2027 | |
Prior: 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 | |
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 | |
Insider Activity
Updated 11/2/2026| # | Owner | Title | Holding | Action | Filing Date | Price | Shares | Transacted Value | Value of Held Shares | Form |
|---|---|---|---|---|---|---|---|---|---|---|
| 1 | Magliulo, Virginia | Executive VP | Direct | Sell | 11022026 | 293.70 | 2,927 | 859,660 | 4,365,858 | Form |
| 2 | Desilva, Joseph | Executive VP | Direct | Sell | 9042026 | 282.87 | 631 | 178,491 | 5,324,798 | Form |
| 3 | Foskett, David | Corp. VP | Direct | Sell | 9032026 | 283.00 | 1,529 | 432,707 | 4,003,447 | Form |
| 4 | Desilva, Joseph | Executive VP | Direct | Sell | 9032026 | 283.00 | 6,512 | 1,842,896 | 5,505,818 | Form |
| 5 | D'Ambrosio, Christopher | Corp. VP | Direct | Sell | 9032026 | 283.00 | 1,872 | 529,776 | 2,809,531 | Form |
| # | Owner | Title | Holding | Action | Filing Date | Price | Shares | Transacted Value | Value of Held Shares | Form |
|---|---|---|---|---|---|---|---|---|---|---|
| 1 | Magliulo, Virginia | Executive VP | Direct | Sell | 11022026 | 293.70 | 2,927 | 859,660 | 4,365,858 | Form |
| 2 | Desilva, Joseph | Executive VP | Direct | Sell | 9042026 | 282.87 | 631 | 178,491 | 5,324,798 | Form |
| 3 | Foskett, David | Corp. VP | Direct | Sell | 9032026 | 283.00 | 1,529 | 432,707 | 4,003,447 | Form |
| 4 | Desilva, Joseph | Executive VP | Direct | Sell | 9032026 | 283.00 | 6,512 | 1,842,896 | 5,505,818 | Form |
| 5 | D'Ambrosio, Christopher | Corp. VP | Direct | Sell | 9032026 | 283.00 | 1,872 | 529,776 | 2,809,531 | Form |
| 6 | Black, Maria | President & CEO | Direct | Sell | 9032026 | 280.91 | 29,810 | 8,373,873 | 22,647,990 | Form |
| 7 | Michaud, Brian L | Executive VP | Direct | Sell | 8242026 | 279.70 | 120 | 33,564 | 5,158,092 | Form |
| 8 | Kwon, David | Corp VP | Direct | Sell | 8242026 | 280.00 | 798 | 223,440 | 3,693,967 | Form |
| 9 | Kwon, David | Corp VP | Direct | Sell | 7312026 | 265.62 | 2,414 | 641,207 | 2,565,770 | Form |
| 10 | Michaud, Brian L | Executive VP | Direct | Sell | 5112026 | 212.13 | 848 | 179,886 | 3,067,899 | Form |
| 11 | Swan, Robert Holmes | Direct | Buy | 5112026 | 206.05 | 3,619 | 745,695 | 1,045,086 | Form | |
| 12 | D'Ambrosio, Christopher | Corp. VP | Direct | Sell | 4152026 | 195.74 | 543 | 106,287 | 1,638,193 | Form |
| 13 | D'Ambrosio, Christopher | Corp. VP | Direct | Sell | 3172026 | 208.45 | 543 | 113,188 | 1,857,754 | Form |
| 14 | D'Ambrosio, Christopher | Corp. VP | Direct | Sell | 2182026 | 212.43 | 543 | 115,349 | 2,008,575 | Form |
| 15 | Michaud, Brian L | Executive VP | Direct | Sell | 2092026 | 234.18 | 1,000 | 234,180 | 3,585,378 | Form |
| 16 | Foskett, David | Corp. VP | Direct | Sell | 2092026 | 237.00 | 266 | 63,042 | 2,595,984 | Form |
| 17 | D'Ambrosio, Christopher | Corp. VP | Direct | Sell | 1142026 | 262.29 | 543 | 142,423 | 2,622,436 | Form |
| 18 | Kwon, David | Corp VP | Direct | Sell | 1142026 | 264.80 | 806 | 213,429 | 2,962,199 | Form |
| 19 | Black, Maria | President & CEO | Direct | Sell | 1062026 | 257.17 | 715 | 183,880 | 19,301,465 | Form |
Investor Activity (13F)
Updated Nov 3, 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
ADP's operational momentum is strengthening, with record new business bookings and an accelerating employment metric in its client base. This prompted raised full-year guidance for revenue to about 6% and adjusted EPS to 10-12%. While the market is focused on the pace of profit expansion, the underlying business health and shareholder returns appear robust.
STOCK ARCHETYPE
Recurring Service & Transactional(Number of Clients * Avg. Employees per Client * Fee per Employee) + Fixed Fees + Interest on Client Funds Operating leverage from scale, productivity gains from AI and automation, and interest income generated from the client funds float.
INVESTMENT THESIS
Evidence suggests ADP is successfully using AI to enhance its scale advantage, driving efficiency and defending its market leadership.
- FY2027 adjusted EPS growth guidance was raised to 10% to 12%.
- Employer Services 'pays per control' growth accelerated to 2% in Q1 FY27.
- The company reported a record ES new business bookings result for Q1 FY27.
- Client revenue retention remains strong at 92.1% for fiscal year 2026.
- AI-powered ADP Assist added over 100,000 clients in the latest quarter.
PRIMARY RISK
Operating expenses are growing faster than revenue (8.1% vs 6.5%), suggesting investments are defensive and profit margins, already at 5-year peaks, have limited room to expand.
- Operating expenses grew 8.1% YoY, outpacing 6.5% revenue growth.
- PEO Services segment margin decreased in fiscal 2026.
- Competitor Workday's R&D spend of $2.8B is more than double ADP's $1,028.8M.
- Trailing-twelve-month operating margin of 26.5% is a five-year peak.
- FY27 adjusted EBIT margin guidance was affirmed, not raised, in October.
| KPI | Status | Rationale |
|---|---|---|
| Employer Services (ES) New Business Bookings Growth | A "record ES new business bookings result for the first quarter" of fiscal 2027. - Stable | The company achieved 6% growth for the full fiscal year 2026. While the first quarter of fiscal 2027 was a record, the full-year guidance of 4% to 7% brackets the prior year's performance, suggesting a stable and strong, rather than accelerating, growth trajectory for new sales. |
| Employer Services (ES) Pays Per Control Growth | 2% for the first quarter of fiscal 2027. - Accelerating | The metric showed clear acceleration to 2% in the latest quarter after two consecutive quarters of 1% growth. This prompted management to improve its full-year fiscal 2027 forecast for the metric to "around 1%" from a prior range of 0% to 1%. |
| U.S. Pays Per Control Growth | 2% (Q1 FY2027 (three months ended September 30, 2026)) | This metric signals the growth in the number of employees on existing clients' payrolls in the U.S., indicating organic growth within the client base and reflecting broader employment trends. |
| PEO Average Worksite Employees Growth | 2% (Q1 FY2027 (three months ended September 30, 2026)) | This KPI measures the growth in the number of employees served through the PEO co-employment model, reflecting the sales momentum and expansion of the PEO business. |
| Employer Services (ES) Client Revenue Retention | 92.1% (Fiscal Year 2026) | This KPI indicates the stickiness of the client base and the company's ability to retain revenue, reflecting high client satisfaction and the essential nature of its services. |
Reinvestment Drag vs. Productivity Flywheel
BULL VIEW
AI-driven efficiency gains, like the 7% reduction in service contacts, and record Q1 bookings will fuel margin expansion beyond the currently guided 70 to 90 basis points.
CORE TENSION
Can AI productivity gains offset reinvestment costs, which the market punished with a -2.0% post-earnings stock decline?
PREVAILING SENTIMENT
The latest evidence favors the bull case, with accelerating 'pays per control' growth to 2% and raised FY27 revenue guidance to approximately 6%.
BEAR VIEW
Faster opex growth (8.1%) versus revenue (6.5%) shows investments are defensive necessities to counter innovators, capping profit potential at current levels.
| Timeline | Event & Metric To Watch |
|---|---|
12/17/2026 | Negative Peer Read-Through Watch: Commentary from Paychex on SMB demand, employment trends, or pricing pressure, which could signal headwinds for ADP. |
1/26/2027 | Continued PEO Margin Pressure Watch: The PEO segment margin figure and management commentary on zero-margin pass-throughs and selling expenses in the next earnings report. |
No set date | Slowing Labor Market Watch: Further deceleration in the monthly ADP jobs report or a downward revision to the company's 'pays per control' metric. |
| Date | Event | Stock Impact |
|---|---|---|
2026-10-28 | New Partnership with PNC Bank Details: Management announced an expansion of its embedded payroll offering through a new partnership with PNC Bank to integrate ADP's capabilities into PNC's digital banking platform. | -2.4% $293.11 -> $286.08 |
2026-10-28 | Q1 Fiscal 2027 Earnings Reported Details: The company reported first quarter revenue growth of 6.1% year-over-year and raised its fiscal 2027 guidance for revenue and adjusted diluted EPS. | -2.4% $293.11 -> $286.08 |
2026-09-30 | September Jobs Report Beats Expectations Details: The ADP National Employment Report showed private-sector employment increased by 90,000 jobs in September, which press reports noted significantly beat expectations. | +0.8% $261.80 -> $263.96 |
2026-07-29 | Q4 and Full-Year 2026 Results Details: The company reported full-year new business bookings growth of 6% and a retention rate of 92.1%, providing its initial outlook for fiscal 2027. | -0.1% $262.49 -> $262.19 |
2026-05-18 | Fiscal 2026 Guidance Raised Details: Press reports noted the company 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 | Q3 Fiscal 2026 Earnings Beat Details: The company reported quarterly earnings that beat consensus estimates, with revenue growing 7% year-over-year to $5.9B. | +6.4% $196.41 -> $209.01 |
Position Sizing
4% - 6%
NORMAL POSITION
Sizing is volatility-based: ADP trades at roughly 24% annualized realized (three-month) volatility versus about 10% for the S&P 500 (2.4x the market). 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
Performance-Sensitive Innovatora business partner offers exposure to a faster-growing, AI-native platform and outspends ADP on R&D, potentially appealing to investors prioritizing pure-play technology innovation for large enterprises.
PAYX - a business partner
SMB-Focused Efficiencya business partner operates with a substantially higher gross margin of 74.4% versus ADP's 46.6%, suggesting a more focused and efficient model tailored to the small and mid-sized business segment.
ADP is a highly durable, scaled utility for workforce management, leveraging its vast dataset and trusted brand to transition from a legacy service provider to an AI-powered HCM platform.
ADP's business is anchored in the non-discretionary need for payroll and HR compliance. Its immense scale and 77-year history provide a data and trust moat that is difficult to replicate. The company is now layering AI capabilities, like ADP Assist, onto this foundation to drive internal productivity and enhance client value. The investment thesis hinges on ADP successfully using AI to defend its market leadership and expand margins, rather than being disrupted by more agile competitors.
Sustained high client retention and new business bookings growth, coupled with margin expansion driven by AI-enabled productivity gains.
A significant and prolonged decline in U.S. employment levels (negative 'pays per control') or evidence of market share loss to AI-native HCM startups in key segments.
Short-term stock price reactions to monthly employment reports or minor fluctuations in quarterly growth rates.
Repricing Catalyst
The successful scaling and monetization of AI-driven products like ADP Assist and The Zone platform, leading to accelerated margin expansion and reinforcing its market leadership narrative.
Employer Services
$14.8B TTM (68% of Total)What It Is
This segment provides a suite of cloud-based HCM solutions, including payroll, benefits administration, talent management, and compliance services, to employers of all sizes, from small businesses to multinational corporations.
Who Pays & How
Employers pay for these services to streamline HR processes, ensure accurate payroll and tax compliance, and manage their workforce more effectively. They choose ADP for its scale, trusted brand, and comprehensive technology.
Competition
Professional Employer Organization (PEO) Services
$7.1B TTM (32% of Total)What It Is
This segment offers a comprehensive HR outsourcing solution where ADP acts as a co-employer for clients. It manages payroll, benefits, workers' compensation, and state unemployment insurance for the client's worksite employees.
Who Pays & How
Employers pay for PEO services to offload the administrative and regulatory complexities of being an employer, gaining access to a broader range of benefits and risk management services than they could typically secure on their own.
Competition
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