Automatic Data Processing In — Financial Results

Revenue Grew 7% to $20.6 Billion, Driven by Multiple Sources

ADP crossed $20 billion in annual revenue for the first time, with growth coming from several directions at once: new clients, price increases, higher interest earned on client money held between payroll runs, and the WorkForce Software acquisition. Notably, the 7% growth rate held even after stripping out acquisitions and currency effects, meaning the core business is genuinely expanding.

Profits and Earnings Per Share Grew Solidly, Margins Nudged Higher

Earnings per share (EPS) — the profit attributed to each share — grew 10%, helped both by higher profits and by the company buying back 4.4 million of its own shares during the year, which spreads earnings across fewer shares. Margins improved modestly, with operating efficiencies in client servicing partially offset by higher selling costs and acquisition-related expenses.

Employer Services Is the Profit Engine, PEO Margins Squeezed

The Employer Services segment — which covers payroll and HR software for businesses of all sizes — is the higher-margin business and improved its margin by a full percentage point. The PEO (Professional Employer Organization) Services segment, where ADP co-employs workers on behalf of clients and handles their benefits, saw its margin dip 60 basis points (0.6%). The culprit was rising costs for workers' compensation and unemployment insurance, plus growing benefits pass-through costs that add to revenue but carry zero profit.

ADP Returned $3.7 Billion to Shareholders

ADP paid out $2.4 billion in dividends (regular cash payments to shareholders) and spent $1.3 billion buying back its own shares, for a combined $3.7 billion returned to investors in fiscal 2025. This was funded comfortably by $4.9 billion in operating cash flow, up from $4.2 billion the prior year, reflecting the company's consistently strong cash generation.

WorkForce Software Acquisition Added Capability but Also Costs

ADP acquired WorkForce Software — a workforce management platform serving large, global employers — during fiscal 2025 for approximately $1.16 billion in net cash. The deal contributed to revenue growth but also added to depreciation, amortization, and selling expenses, creating a near-term drag on margins. The company is integrating it into its global HCM (Human Capital Management) ecosystem to better compete for large enterprise clients.

Client Retention Remained Strong at 92.1%

Client revenue retention — the share of recurring revenue ADP kept from existing customers — held at 92.1%, with the company reporting record-high client satisfaction scores. New business bookings in Employer Services grew 3%, and the number of employees processed on ADP payrolls (a metric called pays per control) rose 1%, suggesting modest but steady underlying employment growth among its client base.