ADP (ADP) Tops Q2 EPS by 5c, Beats on Revenue; Offers Guidance

ADP (NASDAQ: ADP) reported Q2 EPS of $2.62, $0.05 better than the analyst estimate of $2.57. Revenue for the quarter came in at $5.4 billion versus the consensus estimate of $5.34 billion.

Certain components of ADP’s fiscal 2026 outlook and related growth comparisons exclude the impact of the following items and are discussed on an adjusted basis where applicable. Please refer to the accompanying financial tables for a reconciliation of these adjusted amounts to their closest comparable GAAP measure.

• Fiscal 2025 pre-tax gain of about $3 million related to the sale of assets
• Fiscal 2025 pre-tax charges of about $19 million related to optimization initiatives

Consolidated Fiscal 2026 Outlook

• Revenue growth of about 6%
• Adjusted EBIT margin expansion of 50 to 70 basis points
• Adjusted effective tax rate of approximately 23%
• Diluted EPS growth of 9% to 10%
• Adjusted diluted EPS growth of 9% to 10%

Employer Services Segment Fiscal 2026 Outlook

• Employer Services revenue growth of about 6%
• Employer Services new business bookings growth of 4% to 7%
• Employer Services client revenue retention decrease of 10 to 30 basis points
• U.S. pays per control of approximately flat

PEO Services Segment Fiscal 2026 Outlook

• PEO Services revenue growth of 5% to 7%
• PEO Services revenue, excluding zero-margin benefits pass-throughs, growth of 3% to 5%
• PEO Services average worksite employee count growth of about 2%

For earnings history and earnings-related data on ADP (ADP) click here.

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