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Earnings Callsⓘ
Q3 2026April 29, 2026
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ADP Q3 results beat expectations, primarily driven by AI-enhanced operational efficiency, growth in client fund interest income, and improved pricing power.
Total revenue increased 7%, adjusted EPS grew 10%, the ES segment margin expanded 130 bps, while the PEO segment margin contracted 120 bps.
The AI assistant ADP Assist and the Lyric HCM platform significantly improved efficiency, with customer satisfaction and retention rates both reaching quarterly highs. International and compliance businesses posted strong growth, with pricing contribution rising to 130 bps. Small business client contact volume declined 8%, indicating continued operational improvement.
Management raised the full-year guidance: revenue growth of 6-7%, adjusted EBIT margin expansion of 70-80 bps, and adjusted EPS growth of 10-11%. The company plans to increase share repurchase intensity through FY2027.
Positive signals: guidance raise and accelerated buybacks; Risks: PEO margin under cost pressure, lingering macroeconomic uncertainty.
FinancialsⓘFY2025 · Source: SEC EDGAR 10-K
5y revenue CAGR 8% · latest net margin 19.8%
Revenue$20.6B
Rev. YoY+7.1%
Gross margin46%
Net margin19.8%
Net income$4.08B
Free cash flow—
Operating cash flow$4.94B
ROE65.9%
Source: SEC EDGAR company filings (10-K). Foreign issuers (20-F/IFRS) not yet covered.