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Automatic Data Processing Inc.’s (NASDAQ:ADP) stock slid on Wednesday after it reported fiscal first-quarter results.
The company reported quarterly revenues of $5.18 billion, beating the analyst consensus estimate of $5.14 billion. Revenues increased 7% year-over-year.
Also Read: ADP Q3 Earnings: Tops Estimates, Reaffirms Growth Outlook, New CFO Set To Take Over
The human resources management software company reported quarterly adjusted EPS of $2.49, beating the analyst consensus estimate of $2.44.
ADP primarily earns revenue by charging service fees in its Employer Services and PEO segments, with pricing based on the scope of services each client uses.
Employer Services revenues increased 7% to $3.49 billion. PEO Services revenues increased 7% to $1.69 billion.
Adjusted EBIT increased 7% to $1.3 billion, and adjusted EBIT margin remained firm at 25.5%.
Net earnings increased 6% Y/Y to $1.01 billion. ADP held $7.94 billion in cash and equivalents as of September 30.
ADP acquired Pequity, a 2019-founded compensation management software company. The financial terms of the transaction remained undisclosed.
Pequity's platform combines spreadsheet-like usability with AI-driven insights, budgeting tools, and system integrations to simplify complex compensation planning. ADP plans to integrate Pequity's technology and expertise to accelerate innovation and expand its compensation management capabilities.
ADP president and CEO Maria Black noted that ADP delivered record client satisfaction and high retention while expanding the use of AI in its products and operations to improve efficiency and transform HR processes.
CFO Peter Hadley said first-quarter revenue and margins surpassed expectations, driven by solid new business bookings, strong client retention
FY26 Outlook: ADP maintained its prior revenue growth outlook of 5%-6% or $21.6 billion-$21.8 billion, versus the analyst consensus estimate of $21.8 billion and adjusted diluted EPS growth of 8%-10%, or $10.81-$11.01, versus the analyst consensus estimate of $10.92.
Price Action: ADP stock is down by 5.19% to $265.12 at the last check on Wednesday.
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Posted In: ADP
