Automatic Data Processing (NASDAQ:ADP) Issues Earnings Results

Automatic Data Processing (NASDAQ:ADP) issued its quarterly earnings results on Wednesday. The business services provider reported $3.37 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $3.30 by $0.07, Zacks reports. The firm had revenue of $5.94 billion during the quarter, compared to analyst estimates of $5.85 billion. Automatic Data Processing had a return on equity of 68.82% and a net margin of 20.12%.The firm’s quarterly revenue was up 7.0% on a year-over-year basis. During the same period last year, the company posted $3.06 EPS. Automatic Data Processing updated its FY 2026 guidance to 11.010-11.110 EPS.

Here are the key takeaways from Automatic Data Processing’s conference call:

• ADP reported a strong Q3 beat with 7% revenue growth, 80 basis points of adjusted EBIT margin expansion and 10% adjusted EPS growth, and raised full?year guidance to 6%–7% revenue growth, 70–80 bps margin expansion, and 10%–11% adjusted EPS growth.
• The company increased its client funds outlook—average client funds balances growth to ~6% and raised the midpoint of client funds interest revenue by $25 million to a $1.34B–$1.35B range—creating a meaningful near?term revenue tailwind.
• ADP is leaning into AI across products and service delivery (ADP Assist, Lyric HCM, Marketplace agents), citing productivity gains such as ~30 minutes saved per payroll agent and ~80% time reductions for common HR actions, with The Zone rollout expected to cover >40% of service staff by year?end.
• PEO revenue rose but PEO margins fell ~120 basis points in Q3 due to zero?margin passthrough growth, higher SUI costs and increased selling expenses, representing a notable near?term margin headwind for that segment.
• Bookings and retention show strengths—record Employer Services retention and client satisfaction and solid bookings (notably in international and compliance)—but ADP kept its ES bookings range wide (4%–7%) and warned Q4 outcomes remain sensitive to pipeline, FX, and end?of?year dynamics.

Automatic Data Processing Price Performance

Shares of ADP traded down $0.48 during trading hours on Friday, hitting $211.47. 542,943 shares of the company were exchanged, compared to its average volume of 3,421,267. The company has a market capitalization of $85.14 billion, a PE ratio of 19.69 and a beta of 0.85. The company has a debt-to-equity ratio of 0.63, a current ratio of 1.04 and a quick ratio of 1.03. The firm has a fifty day simple moving average of $206.67 and a 200-day simple moving average of $238.64. Automatic Data Processing has a one year low of $188.16 and a one year high of $329.93.

Automatic Data Processing Announces Dividend

The business also recently disclosed a quarterly dividend, which will be paid on Wednesday, July 1st. Stockholders of record on Friday, June 12th will be paid a dividend of $1.70 per share. The ex-dividend date of this dividend is Friday, June 12th. This represents a $6.80 annualized dividend and a dividend yield of 3.2%. Automatic Data Processing’s dividend payout ratio (DPR) is currently 65.38%.

Insider Transactions at Automatic Data Processing

In other news, VP David Foskett sold 266 shares of the firm’s stock in a transaction on Thursday, February 5th. The stock was sold at an average price of $237.00, for a total transaction of $63,042.00. Following the completion of the sale, the vice president directly owned 10,954 shares of the company’s stock, valued at $2,596,098. This trade represents a 2.37% decrease in their position. The transaction was disclosed in a legal filing with the SEC, which is available through this link. Also, VP Brian L. Michaud sold 1,000 shares of the firm’s stock in a transaction on Friday, February 6th. The stock was sold at an average price of $234.18, for a total value of $234,180.00. Following the sale, the vice president directly owned 15,310 shares of the company’s stock, valued at approximately $3,585,295.80. This represents a 6.13% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Insiders sold a total of 1,809 shares of company stock valued at $410,410 in the last three months. 0.20% of the stock is currently owned by corporate insiders.

Institutional Trading of Automatic Data Processing

Hedge funds have recently modified their holdings of the business. Reston Wealth Management LLC boosted its stake in shares of Automatic Data Processing by 5.8% in the fourth quarter. Reston Wealth Management LLC now owns 892 shares of the business services provider’s stock valued at $229,000 after buying an additional 49 shares during the period. LMR Partners LLP boosted its stake in shares of Automatic Data Processing by 1.7% in the second quarter. LMR Partners LLP now owns 3,047 shares of the business services provider’s stock valued at $940,000 after buying an additional 50 shares during the period. First Foundation Advisors boosted its stake in shares of Automatic Data Processing by 5.9% in the third quarter. First Foundation Advisors now owns 1,019 shares of the business services provider’s stock valued at $299,000 after buying an additional 57 shares during the period. Ausdal Financial Partners Inc. boosted its stake in shares of Automatic Data Processing by 7.7% in the third quarter. Ausdal Financial Partners Inc. now owns 813 shares of the business services provider’s stock valued at $238,000 after buying an additional 58 shares during the period. Finally, Great Valley Advisor Group Inc. boosted its stake in shares of Automatic Data Processing by 2.1% in the fourth quarter. Great Valley Advisor Group Inc. now owns 2,824 shares of the business services provider’s stock valued at $727,000 after buying an additional 59 shares during the period. Hedge funds and other institutional investors own 80.03% of the company’s stock.

Automatic Data Processing announced that its board has authorized a stock repurchase program on Wednesday, January 14th that authorizes the company to buyback $6.00 billion in shares. This buyback authorization authorizes the business services provider to repurchase up to 5.8% of its shares through open market purchases. Shares buyback programs are generally an indication that the company’s leadership believes its stock is undervalued.

More Automatic Data Processing News

Here are the key news stories impacting Automatic Data Processing this week:

• Positive Sentiment: Q3 results beat estimates and ADP raised FY?2026 guidance (updated revenue and adjusted EPS growth of ~10%–11%), supporting revenue resilience and product/AI momentum. Read More.
• Positive Sentiment: Mizuho cut its target but left a high PT at $305, signaling continued conviction in ADP’s long?run growth trajectory above the current level. Read More.
• Neutral Sentiment: UBS raised its price target modestly to $218 and set a neutral rating — a small near?term vote of confidence but not a strong buy signal. Read More.
• Neutral Sentiment: TD Cowen nudged its target to $216 (hold), another modestly supportive but cautious note from the Street. Read More.
• Negative Sentiment: Jefferies cut its target sharply to $190 (below the current price), representing direct downside pressure and signaling more conservative expectations. Read More.
• Negative Sentiment: Stifel lowered its target to $240 and Baird trimmed its target to $270; multiple mid/large?cap brokers reducing targets is dragging investor sentiment despite mixed magnitude. Read More. Read More.
• Negative Sentiment: Citigroup trimmed its target to $230 and Cantor Fitzgerald also lowered its target (to $244), adding to the cluster of downward revisions that can weigh on price momentum. Read More. Read More.

Wall Street Analysts Forecast Growth

A number of brokerages have issued reports on ADP. Mizuho decreased their price target on Automatic Data Processing from $332.00 to $305.00 in a research note on Thursday. Guggenheim began coverage on Automatic Data Processing in a research note on Thursday, March 19th. They set a “buy” rating and a $270.00 price target for the company. Morgan Stanley decreased their price target on Automatic Data Processing from $311.00 to $274.00 and set an “equal weight” rating for the company in a research note on Tuesday. Citigroup decreased their price target on Automatic Data Processing from $265.00 to $230.00 and set a “neutral” rating for the company in a research note on Thursday. Finally, TD Cowen increased their price target on Automatic Data Processing from $208.00 to $216.00 and gave the company a “hold” rating in a research note on Thursday. One equities research analyst has rated the stock with a Strong Buy rating, two have given a Buy rating, ten have assigned a Hold rating and two have issued a Sell rating to the stock. According to data from MarketBeat.com, the company presently has a consensus rating of “Hold” and a consensus price target of $254.40.

About Automatic Data Processing

Automatic Data Processing, Inc (ADP) is a global provider of cloud-based human capital management (HCM) and payroll solutions. Founded in 1949 and headquartered in Roseland, New Jersey, ADP began as a payroll processing company and has evolved into a diversified provider of workforce management, HR, benefits administration, tax and compliance services, and analytics for employers of all sizes.

ADP’s product portfolio includes payroll processing and tax filing, time and attendance systems, benefits administration, talent management, and HR outsourcing.