Automatic Data Processing, Inc.

ADP reported 4Q fiscal 2026 revenue growth of 7%, adjusted EBIT margin expansion of 140 basis points, and adjusted EPS growth of 17%. For full-year fiscal 2026, revenue grew 7% to $21.9 billion, adjusted EBIT margin expanded 80 basis points, and adjusted EPS grew 11%. Employer Services revenue grew 7% in Q4 and 7% for the full year, while PEO revenue grew 7% in Q4 and for the full year; ES margins expanded 90 bps in Q4 and 60 bps for the year, while PEO margins contracted 100 bps in Q4 and 110 bps for the year. For fiscal 2027, ADP expects consolidated revenue growth of 5% to 6%, adjusted EBIT margin expansion of 70 to 90 bps, and adjusted EPS growth of 9% to 11%. Within that, ES revenue is expected to grow 5% to 6%, with client funds interest revenue rising from $1.35 billion in fiscal 2026 to $1.54 billion to $1.56 billion in fiscal 2027; PEO revenue is expected to grow 5% to 7%.

Maria Black framed ADP as a core beneficiary of the AI-driven redesign of work, arguing that payroll, compliance, and human judgment remain essential even as AI changes tasks and roles. She emphasized that ADP’s data, scale, trust, and global infrastructure make it a partner for clients navigating workforce transformation, not just a software vendor. Her tone was confident and optimistic, repeatedly highlighting stronger product traction, better win rates, and the company’s role at the center of a “defining moment for work.”

Peter Hadley said fiscal 2026 finished at the high end of guidance, with total revenue of $21.9 billion, 7% revenue growth, 80 bps of adjusted EBIT margin expansion, and 11% adjusted EPS growth. He noted ES margin expansion of 60 bps for the year despite about 20 bps of acquisition-related drag from Workforce Software, while PEO margins contracted 110 bps due mainly to zero-margin pass-through growth and higher workers’ compensation and selling expenses. He also said ADP repurchased 8.6 million shares for $2.1 billion in fiscal 2026 and expects buybacks to remain elevated in fiscal 2027, supported by a $6 billion authorization and excess cash generation.

Analysts pressed on Lyric traction, international win rates, the potential for ADP to play a more consultative role, and what drove the fiscal 2027 guide. Management said Lyric and international were both key momentum areas, that win rates are improving versus the prior platform, and that large, transformational deals are increasingly being won because clients want ADP’s data and expertise as well as technology. On the 2027 guide, Peter Hadley pointed to Workforce Software anniversary and slightly tougher FX as offsets, but said bookings backlogs are in a better position than a year ago, especially in mid-/upmarket and ESHRO.