Live Earnings Analysis: ADP Beats Earnings – Will Shares Rally?

Automatic Data Processing (Nasdaq: ADP | ADP Price Prediction) reports its Fiscal Q4 earnings before the bell today and we’ll be analyzing the release in this live blog. 

So far this year shares are up about 6.5%, but ADP has been on a long run of success. Across the past year, shares are up 21% and across the past five years they’ve gained 132%. Could earnings this morning fuel a rally across the second half of the year? We’ll be digging into the numbers to see what Wall Street likes and Wall Street hates. 

All you have to do is stay on this page and we’ll post automatic updates throughout the morning. Let’s start by looking at ADP’s last earnings report. 

A Look Back at Automatic Data Processing’s Fiscal Q3 

When ADP reported their last earnings on April 30th, here’s what the company delivered:

ADP | Automatic Data Processing Q3’25 Earnings Highlights:

• Adj. EPS: $3.06 ✅; UP +6% YoY
• Revenue: $5.6B [✅]; UP +6% YoY
• Adj. Gross Margin: 29.3% [✅]; UP +10 bps YoY
• Net Income: $1.2B [✅]; UP +5% YoY

Fiscal 2025 Outlook:

• Revenue: $19.203B ±6% to 7% [✅]
  • ADP expects continued growth driven by strong demand for its HCM solutions and effective client retention strategies.
  • The company is focused on maintaining its competitive edge through innovation and service excellence.

Q3 Segment Performance:

• Employer Services Revenue: $3.768B [✅]; UP +5% YoY
• PEO Services Revenue: $1.789B [✅]; UP +7% YoY
• Interest on Funds Held for Clients: $355M [✅]; UP +11% YoY

Other Key Q3 Metrics:

• Adj. Operating Income: $1.629B [✅]; UP +6% YoY
• Adj. Operating Expenses: $2.535B [✅]; UP +5% YoY
• R&D Expenses: $247.1M [✅]; UP +2% YoY
• Free Cash Flow: $3.501B; UP +22% YoY
• Effective Tax Rate: 23.0% (vs. 23.0% YoY)

CEO Commentary:

• Maria Black: “Our solid third quarter results reflect the strength and consistency of our business and the dedication of our associates who helped drive new record highs in client satisfaction this fiscal year. As the world of work evolves, we will maintain our strategic progress and continue to lead the way through our resilient and broad-based business portfolio, market-leading product offerings, and the differentiated service we provide our clients each day.”

CFO Commentary:

• Don McGuire: “With good outcomes in revenue and earnings growth in the third quarter, we are positioned for strong overall fiscal 2025 results. We remain focused on delivering against our revenue and profitability commitments as we continue to invest in our business to drive sustainable, long-term growth.”

Strategic Updates:

• ADP is raising its full-year guidance for adjusted EBIT margin and adjusted diluted EPS growth, reflecting confidence in its operational performance and market position.