Automatic Data Processing (NASDAQ:ADP) Releases Earnings Results, Beats Expectations By $0.05 EPS

Automatic Data Processing (NASDAQ:ADP) announced its quarterly earnings results on Wednesday. The business services provider reported $2.82 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $2.77 by $0.05, FiscalAI reports. The firm had revenue of $5.49 billion for the quarter, compared to analyst estimates of $5.48 billion. The firm’s quarterly revenue was up 6.1% on a year-over-year basis. During the same quarter in the prior year, the business earned $2.49 EPS.

Here are the key takeaways from Automatic Data Processing’s conference call:

• ADP raised its fiscal 2027 outlook, citing strong first-quarter momentum, higher client funds balances and improved reinvestment yields. Full-year revenue growth is now expected at about 6%, adjusted EPS growth at 10%–12%, and client funds interest revenue at $1.59 billion–$1.61 billion.
• First-quarter results exceeded expectations, with revenue up 6%, adjusted EBIT margin expanding 130 basis points, and adjusted EPS increasing 13%. Employer Services revenue grew 6%, while pays per control rose 2%, prompting ADP to raise its full-year pays-per-control assumption to about 1% growth.
• AI adoption and automation are gaining traction; ADP Assist expanded to 100,000 additional clients, while its AI-powered recruiting interviewer reduced interview-related time by 75%. The company also deployed its AI-enabled service platform, The Zone, to 60% of service employees, contributing to lower contacts per client and expected cost-to-serve benefits.
• ADP announced a partnership with PNC Bank to embed payroll, HR, time tracking, insurance and retirement services into PNC’s digital banking platform. Management said the deal expands its embedded-services strategy and noted that additional partnership opportunities are in the pipeline.
• Management maintained its 4%–7% Employer Services bookings-growth outlook despite a softer start in global offerings following a strong prior quarter. ADP also held adjusted EBIT margin expansion guidance at 70–90 basis points, emphasizing continued investments in AI, products, cloud infrastructure and global expansion.

Automatic Data Processing Price Performance

Shares of NASDAQ ADP traded down $6.62 during midday trading on Wednesday, hitting $286.50. 466,711 shares of the company’s stock were exchanged, compared to its average volume of 2,833,377. The firm’s fifty day simple moving average is $276.46 and its 200-day simple moving average is $240.47. Automatic Data Processing has a twelve month low of $188.16 and a twelve month high of $309.40.

Automatic Data Processing Announces Dividend

The firm also recently announced a quarterly dividend, which was paid on Thursday, October 1st. Stockholders of record on Friday, September 11th were given a dividend of $1.70 per share. This represents a $6.80 annualized dividend and a dividend yield of 2.4%. The ex-dividend date of this dividend was Friday, September 11th.

Wall Street Analysts Forecast Growth

A number of equities analysts have recently weighed in on ADP shares. UBS Group increased their price target on Automatic Data Processing from $260.00 to $270.00 and gave the stock a “neutral” rating in a report on Wednesday, July 22nd. Wells Fargo & Company lifted their target price on Automatic Data Processing from $248.00 to $283.00 and gave the company an “equal weight” rating in a research report on Thursday, July 30th. Stifel Nicolaus lifted their target price on Automatic Data Processing from $260.00 to $285.00 and gave the company a “hold” rating in a research report on Thursday, July 30th. Morgan Stanley increased their price target on shares of Automatic Data Processing from $240.00 to $286.00 and gave the stock an “equal weight” rating in a research report on Thursday, July 30th. Finally, Citigroup increased their price target on shares of Automatic Data Processing from $230.00 to $287.00 and gave the stock a “neutral” rating in a research report on Thursday, July 30th. Three analysts have rated the stock with a Buy rating, eight have assigned a Hold rating and one has issued a Sell rating to the stock. Based on data from MarketBeat, the stock currently has a consensus rating of “Hold” and a consensus price target of $276.36.

Automatic Data Processing News Roundup

Here are the key news stories impacting Automatic Data Processing this week:

• Positive Sentiment: ADP beat quarterly estimates: Adjusted earnings were $2.82 per share versus the $2.77 consensus, while revenue rose 6.1% year over year to $5.49 billion, slightly above the $5.48 billion estimate. EPS increased from $2.49 in the prior-year quarter. Automatic Data Processing Tops Q1 Earnings and Revenue Estimates
• Positive Sentiment: Fiscal 2027 outlook was raised: ADP boosted its full-year earnings and revenue-growth expectations following the earnings beat, supporting the case for continued operating momentum. The company also highlighted growing adoption of its AI tools, which could improve product value and long-term growth. ADP Boosts FY2027 Earnings and Revenue Growth After Q1 Results Beat
• Positive Sentiment: Some analyst support remains: Guggenheim raised its price target for ADP to $340, suggesting additional upside based on its assessment of the company’s earnings and outlook. Guggenheim Raised Target for Automatic Data Processing Stock to USD 340
• Neutral Sentiment: Analysts remain divided: UBS maintained a Hold rating, indicating that the improved outlook may already be reflected in ADP’s valuation. UBS Issues a Hold Rating on Automatic Data Processing
• Negative Sentiment: Employment data points to a softer labor market: ADP’s preliminary report showed private employers added an average of only 16,750 jobs per week during the four weeks ended October 10. Slower hiring could weigh on payroll-processing demand, although it may also reinforce expectations for lower interest rates. ADP National Employment Report Preliminary Estimate for October

Insider Activity at Automatic Data Processing

In other Automatic Data Processing news, VP Brian Michaud sold 120 shares of the firm’s stock in a transaction that occurred on Friday, August 21st. The shares were sold at an average price of $279.70, for a total transaction of $33,564.00. Following the sale, the vice president owned 18,442 shares of the company’s stock, valued at approximately $5,158,227.40. This trade represents a 0.65% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO Maria Black sold 29,810 shares of the business’s stock in a transaction that occurred on Wednesday, September 2nd. The stock was sold at an average price of $280.91, for a total transaction of $8,373,927.10. Following the sale, the chief executive officer owned 80,624 shares of the company’s stock, valued at $22,648,087.84. This represents a 26.99% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last three months, insiders have sold 33,773 shares of company stock valued at $9,450,629. Company insiders own 0.15% of the company’s stock.

Automatic Data Processing Company Profile

Automatic Data Processing, Inc (NASDAQ: ADP) is a global provider of human capital management and business outsourcing solutions. The company helps employers manage payroll, human resources, workforce administration, benefits, tax compliance, time and attendance, talent management, and related employment processes.

ADP offers cloud-based platforms and services designed for businesses of various sizes, from small enterprises to large organizations. Its portfolio includes payroll processing, human resources management, employee benefits administration, retirement services, workforce management, data analytics, and professional employer organization services through ADP TotalSource.

Founded in 1949, ADP serves businesses in the United States and international markets.