$ADP · AUTOMATIC DATA PROCESSING INC
ADP filed its 10-Q for Q1 FY2027 (ended September 30, 2026), reporting total revenues of $5.491B (+6.1% YoY), net earnings of $1.125B (+11.1%), and diluted EPS of $2.83 (+13.7%). Revenue growth was broad-based across HCM, HRO, Global, and client fund interest. The company repurchased 2.9M shares for $821.2M and declared a $1.70/share dividend.
- Revenue rose 6.1% YoY to $5.491B, driven by HCM (+4.6%), HRO (+4.6%), Global (+4.9%), and higher client fund interest.
- Diluted EPS of $2.83 grew 13.7% from $2.49 a year ago, aided by a 2.2% reduction in diluted share count.
- Net earnings reached $1.125B, up 11.1% from $1.013B in the prior-year quarter.
- ADP repurchased 2.9M shares for $821.2M in the quarter, more than double the $366M spent in Q1 FY2026.
- Employer Services segment earnings before income taxes rose 9.3% to $1.344B; PEO segment earnings grew 7.1% to $234.4M.
ADP shares are up 3.36% to $295.69 in regular trading, adding roughly $3.8B in market cap on the $117B company. The broad-based revenue growth and aggressive buyback pace are being rewarded.
ADP's double-digit EPS growth and aggressive $821M buyback signal strong confidence, but the $855M AOCI hit from rising rates is a notable balance-sheet drag.
ADP's 6.1% organic revenue growth and 13.7% EPS expansion reinforce its position as the payroll/HCM bellwether. The $821M buyback pace signals confidence relative to peers like PAYX, which typically runs a more conservative capital return program.
Unrealized losses on available-for-sale securities surged to $855M (pre-tax), swinging other comprehensive income to a $668.3M loss and compressing total equity from $6.03B to $5.09B. Rising interest expense (+$12.7M YoY to $148.1M) reflects the higher-rate environment.