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- **Revenue & EPS Growth**: 7% YoY revenue and 7% adjusted EPS growth, driven by strong new business bookings.
- **AI & Innovation**: Expanded AI capabilities (e.g., ADP Assist) and acquired Pequity to enhance compensation management.
- **Client Satisfaction**: Record-high satisfaction scores, with 80% mid-market clients adopting Next-Gen Workforce Now.
- **Financial Guidance**: FY26 revenue 5-6%, EPS growth 8-10%, despite flat pays per control growth.
- **PEO Momentum**: PEO revenue up 7% YoY, WSE growth 2% in Q1, aligned with 2-3% FY26 target.

**【CEO Summary Section】**
- **Revenue Growth**: 7% year-over-year (YoY) revenue growth, driven by strong new business bookings in Employer Services and PEO. Adjusted EPS grew 7% YoY.
- **Strategic Initiatives**: Expanded AI capabilities (e.g., ADP Assist for payroll anomalies) and embedded payroll solutions for small businesses. Acquired Pequity to enhance compensation management software.
- **Client Satisfaction**: Record-high client satisfaction scores, with 80% of mid-market clients adopting Next-Gen Workforce Now.
- **Global Expansion**: Launched GlobalView in Costa Rica, reinforcing ADP's global payroll leadership.

**【CFO Financial Commentary】**
- **Financial Highlights**: GAAP revenue $4.2B (7% YoY), PEO revenue up 7% YoY. Client funds interest revenue increased by $10M to $1.30B-$1.32B.
- **Margins**: Maintained 50-70bp EBIT margin expansion guidance. ES segment margin down 50bps due to WorkForce Software integration costs.
- **Guidance**: Full-year revenue growth 5-6%, adjusted EPS growth 8-10%. Client funds balances expected to grow 3-4%.
- **Macro Impact**: Pays per control growth rounded down to 0% for Q1, with flat guidance for FY26 due to cautious headcount additions.

**【Q&A Key Highlights】**
- **Booking Trends**: ES new business bookings strong, with small business and mid-market demand stable. PEO new business growth exceeded expectations.
- **PEO Performance**: WSE growth 2% in Q1, aligned with 2-3% FY26 guidance. PEO margin pressure from higher selling expenses and retroactive tax credits.
- **AI Impact**: AI tools (e.g., ADP Assist) reduced client inquiries by 5.5M conversations. Sales productivity gains from generative AI tools.
- **Macro Risks**: Flat pays per control growth reflects cautious hiring environment. Client funds yield curve decline offset by balance growth.
- **Acquisition Update**: Pequity acquisition to enhance compensation planning, with no material financial impact in FY26.

Automatic Data Processing, Inc. (ADP) Q1 2026 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

ADP

ADP fundamentals

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