How does ADP's Q3 2025 forecast compare to past performance?

ADP's Q3 2025 forecast demonstrates resilience and growth potential, underpinned by several key factors:

1. Strong Revenue and EPS Growth: ADP reported robust revenue and earnings per share (EPS) growth in Q3 2024, with a 8% reported growth and 7% organic constant currency growth in the Employer Services Segment Revenue. This performance indicates a strong financial outlook for Q3 2025.
2. Record Bookings and Retention: The company experienced unprecedented employer services bookings and retention in Q3 2024. Improved retention rates suggest a stable and growing client base, which is a positive indicator for future revenue and performance.
3. Interest Income Upside: ADP benefited from resilient retention and interest income upside, which could be a contributing factor to its positive financial outlook for Q3 2025. Interest income is often a significant component of a company's total revenue, especially in times of low interest rates, and ADP's ability to capitalize on this could add to its growth potential.
4. Expansion into Latin America: ADP's plans to expand its operations into Latin America, as evidenced by its expansion in Rubrik, suggest a strategic focus on growth opportunities outside of the traditional markets. This expansion could open up new revenue streams and markets, potentially leading to increased performance in Q3 2025 and beyond.
5. Valuation and Market Position: ADP's wide-moat valuation, attributed to its sticky clients and diversified business model, has been maintained despite challenging macroeconomic conditions. This strong market position and valuation are indicative of investor confidence in ADP's ability to navigate economic challenges and deliver consistent performance.

In conclusion, ADP's Q3 2025 forecast is underpinned by strong historical performance, strategic growth initiatives, and a robust market position. These factors collectively suggest a positive outlook for ADP in Q3 2025.