ADP Raises The Bar After Q1 Earnings Surprise

ADP reported Q1 2025 revenues of $4.83B, beating estimates. Adjusted EPS of $2.33 also beat estimates. FY25 outlook projects 6%-7% revenue growth and 7%-9% EPS growth.

Automatic Data Processing, Inc ADP reported fiscal first-quarter 2025 revenues of $4.83 billion, beating the analyst consensus estimate of $4.77 billion. Revenues increased 7% year-over-year.

The human resources management software company reported quarterly adjusted EPS of $2.33, beating the analyst consensus estimate of $2.21.

Employer Services revenues increased 7% to $3.26 billion.

PEO Services revenues increased 7% to $1.57 billion.

Adjusted EBIT increased 13% to $1.23 billion, and adjusted EBIT margin increased 130 bps to 25.5%.

Net earnings increased 11% Y/Y to $956.3 million, and adjusted net earnings increased 11% Y/Y to $956.1 million.

ADP held $7.35 billion in cash and equivalents as of September 30.

"Our recent acquisition of WorkForce Software, a leading workforce management solutions provider, and the introduction of ADP Lyric HCM, our flexible, intelligent, and human-centric global HCM platform, position us to provide our enterprise clients with a unique global HR, payroll, time, and service solution,” said CEO Maria Black.

“Our first quarter revenue and margin performance exceeded our expectations, as we benefited from solid new business bookings growth, strong client revenue retention, and higher client funds interest revenue,” said CFO Don McGuire.

FY25 Outlook: ADP projected a revenue growth outlook of 6%-7% or $20.36 billion-$20.46 billion (prior 5%-6%), versus the consensus of $20.24 billion and adjusted diluted EPS growth of 7%-9% or $9.82-$10.01 (prior 8%-10%), versus the consensus of $10.03.

Automatic Data Processing stock gained over 23% year-to-date.

Price Action: ADP stock is up 0.8% to $290.39 at last check Wednesday.

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