Automatic Data Processing 2025 Q3 Earnings Steady Growth as Net Income Increases 5.5%
Friday, May 2, 2025 9:16 am ET
55min read Revenue
The total revenue for automatic data processing rose by 5.7% in 2025 Q3, reaching $5.55 billion, compared to $5.25 billion in 2024 Q3. Employer Services contributed $3.77 billion, while peo services added $1.79 billion. The 'Other' segment reported a minor negative revenue of $3.40 million, maintaining the total revenue at $5.55 billion.
Earnings/Net Income
ADP's earnings per share increased by 6.2% to $3.07 in 2025 Q3 from $2.89 in 2024 Q3, highlighting continued growth. The net income strengthened to $1.25 billion, up by 5.5% from $1.18 billion in the previous year, demonstrating strong profitability. The EPS growth indicates a positive earnings outlook.
Post Earnings Price Action Review
The post-earnings analysis of Automatic Data Processing (ADP) stock reveals generally positive market reactions, with improved win rates over extended periods following earnings releases. Revenue disclosures led to a 56.30% win rate over three days, increasing to 58.29% over thirty days, indicating short-term gains. Net income announcements fostered a slightly better market response, with win rates rising to 59.02% over thirty days. Although earnings per share (EPS) had lower win rates compared to revenue and net income, they still showed positive market engagement. Overall, the trends suggest potential investment opportunities in ADP stock post-earnings, though the maximum observed return was 5.86% over thirty days, indicating moderate gains.
CEO Commentary
Maria Black, President and CEO, highlighted that ADP's solid third-quarter results were driven by strong growth in new business bookings across various segments. Despite softer international bookings due to macroeconomic uncertainty, she remains optimistic about the robust pipelines and large deals internationally. The integration of Workforce Software and the acquisition of PEI in Mexico were noted as strategic initiatives enhancing ADP's global payroll capabilities, maintaining high client retention and satisfaction levels.
Guidance
For fiscal 2025, ADP projects earnings per share growth between 9 to 11 percent and adjusted earnings per share growth from 8 to 10 percent. The company anticipates revenue growth of 5 to 6 percent. Analysts forecast earnings of $9.97 per share, with revenue growth expectations around 5.5 percent, totaling approximately $20.24 billion for the year.
Additional News
In recent weeks, Automatic Data Processing (ADP) has announced several key developments beyond its earnings report. Notably, the company is undergoing a CFO transition, reflecting its ongoing efforts to strengthen its leadership team. Additionally, ADP has declared a regular quarterly dividend, demonstrating its commitment to returning value to shareholders. The company is also actively involved in integrating Workforce Software following its acquisition, which expands ADP's capabilities in global payroll solutions. These strategic moves are part of ADP's broader effort to enhance its market position and drive long-term growth amidst a competitive landscape.
Ask Aime: "ADP's Q3 earnings beat forecasts, signaling strong profitability. What investment opportunities lie ahead?"
