ADP Beats Earnings Estimates with Strong Revenue Growth and Earnings Beat

ADP reported fiscal fourth-quarter revenue of $5.47 billion, edging past the $5.44 billion FactSet consensus and marking 7% year-over-year growth. Adjusted earnings per share came in at $2.64 versus the $2.59 estimate, up 17% on an adjusted basis, while GAAP diluted EPS rose 10% to $2.45.

The print landed the same morning as the Federal Reserve's July rate decision, underscoring ADP's role as an early read on private-sector hiring. That read was soft: U.S. pays per control, the company's proxy for payroll growth, rose just 1% for the quarter and for the full fiscal year, consistent with the broader cooling in the labor market.

Segment results stayed positive. Employer Services revenue grew 7% on a reported basis (6% organic constant currency) for the quarter, while PEO Services revenue rose 7% to $1.78 billion as average worksite employees climbed 2% to about 775,000. Interest income on funds held for clients increased 15% to $355 million as average client funds balances grew 8% to $41.0 billion and the average yield ticked up to 3.5%.

ADP guided fiscal 2027 to 5% to 6% revenue growth and 9% to 11% adjusted diluted EPS growth. Shares were little changed after the report, trading around $265.90, as investors weighed the clean beat against the tepid pays-per-control signal.

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