ADP · Automatic Data Processing, Inc.

ADP delivered robust Q3 fiscal 2026 results, with revenues rising 7% to $5.9 billion on 6% organic constant currency growth, driven by 7% increases in both Employer Services (5% organic) and PEO Services (5% excluding zero-margin pass-throughs). U.S. pays per control grew 1%, and PEO average worksite employees reached 762,000, up 2%. Profitability expanded meaningfully, as adjusted EBIT climbed 10% to $1.8 billion with a 80 basis point margin improvement to 30.2%, fueled by operational leverage. Diluted EPS advanced 10% to $3.38, aligning with adjusted figures at $3.37. Interest income on client funds surged 14% to $404 million, supported by 9% higher average balances of $48.3 billion and a 10 basis point yield increase to 3.3%. CEO Maria Black highlighted precise execution and AI investments to address HCM complexities, while CFO Peter Hadley noted results exceeded expectations, enabling confident investments. The company raised full-year FY2026 guidance, now projecting 6-7% revenue growth, 70-80 basis points of adjusted EBIT margin expansion, and 10-11% growth in adjusted diluted EPS, up from prior outlooks. Segment outlooks remain firm, with Employer Services revenue growth at 6-7%, new bookings 4-7%, and PEO growth at 6-7%. Client funds interest is guided to $1.340-$1.350 billion on 6% balance growth and 3.4% yield. Balance sheet remains solid, with funds held for clients at $46.4 billion as of March 31, 2026.