Automatic Data Processing Inc: Beat — EPS $2.82, Revenue $5.49B
Earnings BeatQ1 2027 · Pre-market
Did Automatic Data Processing Inc (ADP) beat earnings today?
Yes, Automatic Data Processing Inc (ADP) beat Wall Street analyst expectations for Q1 2027, reporting higher-than-expected EPS and higher-than-expected revenue.
Earnings Per Share+1.81% surprise
$2.82Actual
Expected: $2.77
vs. year ago +13.0%
Total Revenue+0.38% surprise
$5.49BActual
Expected: $5.47B
vs. year ago +6.0%
Released Oct 28 · 7:02 AM ET
Earning Report
| Metric | Q1 FY27 | Q1 FY26 | YoY Change % |
|---|---|---|---|
| Revenue | $5.49B | $5.18B | +6.0% |
| Revenue detail — reported lines | |||
| └─Revenues, other than interest | $3.36B | $3.20B | +4.8% |
| └─Interest on funds held for clients | $329.30M | $286.80M | +15.0% |
| └─PEO revenues | $1.81B | $1.68B | +7.1% |
| └─Employer Services | $3.69B | $3.49B | +6.0% |
| └─PEO Services | $1.81B | $1.69B | +7.0% |
| └─Other | $(2.8)M | $(3.5)M | - |
| Net earnings | $1.13B | $1.01B | +11.0% |
| GAAP Basic EPS | $2.84 | $2.50 | +14.0% |
| GAAP Diluted EPS | $2.83 | $2.49 | +14.0% |
| Adjusted diluted EPS | $2.82 | $2.49 | +13.0% |
Financial Outlook / Guidance
| Metric | Next Quarter Outlook | FY27 Outlook |
|---|---|---|
| Revenues | — | ~6% (prev. 5-6%) |
| Adj. EBIT Margin | — | 70-90 bps (prev. 70-90 bps) |
| Adj. Diluted EPS | — | 10-12% (prev. 9-11%) |
| Employer Services Revenues | — | ~6% (prev. 5-6%) |
| ES New Business Bookings | — | 4-7% (prev. 4-7%) |
| Client Revenue Retention | — | (30) to (10) bps (prev. (30) to (10) bps) |
| U.S. Pays Per Control | — | ~1% (prev. 0-1%) |
| PEO Services Revenues | — | 5-7% (prev. 5-7%) |
| Revenues Ex Zero-Margin Pass-throughs | — | 3-5% (prev. 3-5%) |
| Average WSEs | — | ~2% (prev. ~2%) |
| Average Client Funds Balances | — | 4-5% (prev. 3-4%) |
| Yield on Client Funds Portfolio | — | ~3.8% (prev. ~3.7%) |
| Client Funds Interest Revenue | — | $1,590M-$1,610M (prev. $1,540M-$1,560M) |
| Net Impact from Client Funds Extended Strategy | — | $1,590M-$1,610M (prev. $1,545M-$1,565M) |
Business Highlights
- ➤Clients’ funds investment portfolio is predominantly rated AAA/AA.
- ➤ADP is advancing its AI transformation through disciplined investment.
- ➤PEO Services paid approximately 771,000 average worksite employees.
- ➤ADP repurchased $758.8M of common stock during the quarter.
- ➤ADP paid $677.0M in dividends during the quarter.
- ➤More than 1.1 million clients rely on ADP across 140+ countries.
- ➤ADP offers HR and payroll solutions from small-business tools to global enterprise platforms.
Management Commentary
Maria Black, President and Chief Executive Officer
“ADP is off to a strong start in fiscal 2027 with first quarter results that reflect the resilience of our business model and the trust our clients continue to place in us. The complexity of work is growing faster than employers can manage alone and our clients are turning to us and our deep domain expertise to fundamentally change how work gets done inside their organizations. We enter the rest of fiscal 2027 well positioned to build on our current momentum.”
Peter Hadley, Chief Financial Officer
“Our first quarter results exceeded our expectations across revenue growth, adjusted EBIT margin expansion, and adjusted EPS growth. Our ongoing commitment to a disciplined investment approach is enabling us to drive our AI transformation forward, and at the same time deliver strong financial results.”