Automatic Data Processing Q4 Earnings Outpace Estimates, Revenues Rise 7.5% YoY

Automatic Data Processing (ADP) Q4 earnings and revenues beat estimates, with earnings per share of $2.26 up 8.1% YoY and total revenues of $5.1 billion growing 7.5% YoY. Employer Services' revenues increased 8% to $3.5 billion, while PEO Services' revenues grew 9% to $1.2 billion. Adjusted EBIT rose 9% to $5.3 billion, and the company generated $1.4 billion in cash from operating activities. ADP updated its FY25 guidance, lowering revenue growth to 5-6% and raising adjusted EBIT margin guidance to 50-70 bps.

Automatic Data Processing, Inc. (ADP) reported strong fourth-quarter (Q4) fiscal 2025 results, with earnings per share (EPS) and total revenues exceeding analyst expectations. The company’s EPS of $2.26 increased 8.1% year-over-year (YoY), beating the Zacks Consensus Estimate by 1.8%. Total revenues reached $5.1 billion, up 7.5% YoY, surpassing the consensus estimate by 1.5% [1].

ADP's Employer Services segment saw revenues grow 8% to $3.5 billion, while PEO Services revenues increased 9% to $1.2 billion. Adjusted EBIT rose 9% to $5.3 billion, and the company generated $1.4 billion in cash from operating activities. The company also exited Q4 with $3.3 billion in cash and cash equivalents, up from $2.7 billion in the previous quarter [2].

For fiscal 2025, ADP lowered its revenue growth guidance to 5-6% and raised its adjusted EBIT margin guidance to 50-70 basis points. The company expects adjusted EPS growth of 8-10% for the year, with an effective tax rate of 23% [1].

ADP’s stock has gained 5.4% year-to-date (YTD) compared to the industry’s 15.7% growth and the 7.5% rise of the Zacks S&P 500 Composite. The company currently carries a Zacks Rank #3 (Hold) [1].

References:
[1] https://finance.yahoo.com/news/automatic-data-processing-q4-earnings-143900912.html
[2] https://ng.investing.com/news/company-news/adp-q4-2025-slides-revenue-up-8-raises-fy26-earnings-outlook-93CH-2033289