Automatic Data Processing (NASDAQ:ADP) Releases Quarterly Earnings Results, Beats Estimates By $0.05 EPS

Automatic Data Processing (NASDAQ:ADP) announced its quarterly earnings results on Wednesday. The business services provider reported $2.62 earnings per share for the quarter, beating the consensus estimate of $2.57 by $0.05, FiscalAI reports. Automatic Data Processing had a net margin of 19.79% and a return on equity of 70.63%. The firm had revenue of $5.36 billion for the quarter, compared to analysts’ expectations of $5.34 billion. During the same quarter in the previous year, the company posted $2.35 EPS. The company’s revenue was up 6.2% compared to the same quarter last year. Automatic Data Processing updated its FY 2026 guidance to 10.091-11.011 EPS.

Here are the key takeaways from Automatic Data Processing’s conference call:

• ADP reported a strong quarter with 6% revenue growth, 80 bps of adjusted EBIT margin expansion and 11% adjusted EPS growth, raised fiscal‑2026 revenue and EPS guidance, approved a $6 billion share buyback and increased the dividend 10%.
• Product and AI momentum — Workforce Now Next Gen and ADP Lyric are gaining traction (Lyric bookings exceeded expectations with >70% new logos, including two >20k‑employee wins), the ADP Workforce Suite launched, and new ADP Assist AI agents were introduced for payroll, HR, tax and analytics.
• PEO performance moderated — PEO revenue ex pass‑throughs slowed to ~3%, new business bookings came in slightly below expectations, PEO margins fell ~70 bps (driven by zero‑margin pass‑throughs and higher selling expenses), and ADP now expects ~2% average worksite employee growth for fiscal‑2026.
• International growth opportunity — management highlighted a large >75,000‑employee European bank win and global payroll improvements; international is lower margin but has very high retention and attractive lifetime value, supporting long‑term expansion.

Automatic Data Processing Trading Down 1.5%

Shares of Automatic Data Processing stock opened at $250.69 on Thursday. The company has a current ratio of 1.05, a quick ratio of 1.05 and a debt-to-equity ratio of 0.62. The company has a fifty day simple moving average of $258.55 and a 200-day simple moving average of $278.55. The stock has a market cap of $101.39 billion, a price-to-earnings ratio of 24.75 and a beta of 0.86. Automatic Data Processing has a 12-month low of $247.18 and a 12-month high of $329.93.

Automatic Data Processing Dividend Announcement

The firm also recently announced a quarterly dividend, which will be paid on Wednesday, April 1st. Investors of record on Friday, March 13th will be paid a dividend of $1.70 per share. The ex-dividend date is Friday, March 13th. This represents a $6.80 annualized dividend and a yield of 2.7%. Automatic Data Processing’s payout ratio is presently 67.13%.

Insider Buying and Selling at Automatic Data Processing

In related news, VP David Kwon sold 900 shares of the firm’s stock in a transaction that occurred on Tuesday, January 6th. The stock was sold at an average price of $260.00, for a total transaction of $234,000.00. Following the transaction, the vice president owned 11,993 shares in the company, valued at $3,118,180. This trade represents a 6.98% decrease in their position. The transaction was disclosed in a filing with the SEC, which is available through the SEC website. Also, VP Christopher D’ambrosio sold 543 shares of the business’s stock in a transaction that occurred on Tuesday, January 13th. The shares were sold at an average price of $262.29, for a total value of $142,423.47. Following the completion of the sale, the vice president owned 9,998 shares of the company’s stock, valued at approximately $2,622,375.42. This represents a 5.15% decrease in their position. The SEC filing for this sale provides additional information. Insiders sold 2,249 shares of company stock valued at $589,852 in the last 90 days. 0.20% of the stock is currently owned by insiders.

Institutional Investors Weigh In On Automatic Data Processing

Large investors have recently modified their holdings of the stock. Credit Agricole S A acquired a new stake in shares of Automatic Data Processing in the third quarter valued at about $94,021,000. MUFG Securities EMEA plc purchased a new stake in shares of Automatic Data Processing during the 2nd quarter worth approximately $69,760,000. Tidal Investments LLC grew its holdings in shares of Automatic Data Processing by 266.3% in the 2nd quarter. Tidal Investments LLC now owns 105,923 shares of the business services provider’s stock worth $32,667,000 after acquiring an additional 77,003 shares during the period. Man Group plc increased its stake in Automatic Data Processing by 30.3% in the 2nd quarter. Man Group plc now owns 262,656 shares of the business services provider’s stock valued at $81,003,000 after purchasing an additional 61,015 shares in the last quarter. Finally, Canada Pension Plan Investment Board raised its holdings in Automatic Data Processing by 19.8% during the second quarter. Canada Pension Plan Investment Board now owns 312,046 shares of the business services provider’s stock worth $96,235,000 after purchasing an additional 51,671 shares during the last quarter. Hedge funds and other institutional investors own 80.03% of the company’s stock.

Automatic Data Processing announced that its Board of Directors has authorized a stock repurchase program on Wednesday, January 14th that authorizes the company to buyback $6.00 billion in shares. This buyback authorization authorizes the business services provider to buy up to 5.8% of its stock through open market purchases. Stock buyback programs are generally a sign that the company’s management believes its shares are undervalued.

Analyst Upgrades and Downgrades

A number of brokerages have recently weighed in on ADP. JPMorgan Chase & Co. dropped their price objective on Automatic Data Processing from $340.00 to $295.00 and set an “underweight” rating for the company in a research note on Thursday, October 30th. Citigroup started coverage on Automatic Data Processing in a research report on Thursday, October 23rd. They issued a “neutral” rating and a $303.00 target price for the company. Cantor Fitzgerald assumed coverage on shares of Automatic Data Processing in a research note on Tuesday. They issued an “overweight” rating and a $306.00 price objective for the company. Weiss Ratings restated a “hold (c+)” rating on shares of Automatic Data Processing in a report on Monday, December 29th. Finally, Jefferies Financial Group reiterated an “underperform” rating and set a $230.00 target price (down from $245.00) on shares of Automatic Data Processing in a report on Tuesday, December 16th. Three research analysts have rated the stock with a Buy rating, nine have assigned a Hold rating and two have assigned a Sell rating to the company. Based on data from MarketBeat.com, the company has an average rating of “Hold” and an average price target of $306.38.

Key Automatic Data Processing News

Here are the key news stories impacting Automatic Data Processing this week:

• Positive Sentiment: Q2 results topped estimates — EPS $2.62 vs. $2.58 and revenue up ~6.2% year-over-year; ADP said demand for payroll/HR services remains steady, and it nudged up parts of its outlook. ADP lifts annual revenue forecast on demand for payroll services
• Positive Sentiment: Cantor Fitzgerald initiated coverage with an “overweight” rating and $306 price target, signaling institutional optimism and ~22% upside to the cited target. Cantor Fitzgerald initiates coverage of Automatic Data Processing (ADP) with overweight recommendation
• Positive Sentiment: Management is advancing product innovation — ADP launched new AI “Assist” agents aimed at automating HR and payroll tasks, which could expand stickiness and long-term margins. ADP® Accelerates AI Leadership with Launch of New AI Agents Designed to Solve Workforce Challenges
• Positive Sentiment: Corporate actions: management recently authorized a sizable share-repurchase program (~$6B), which supports EPS and could be a catalyst as buybacks are deployed. 3 Large Cap Stocks Announce Big Buyback Boosts Amid +20% Falls (ADP)
• Neutral Sentiment: Earnings call and filings are available (transcript/slides) for deeper detail on segment trends and margin drivers; these materials will shape analyst revisions. Automatic Data Processing, Inc. (ADP) Q2 2026 Earnings Call Transcript
• Neutral Sentiment: Reported short-interest data in the feed is anomalous (zeros/NaN) and provides no actionable signal on current positioning. Short interest data (anomalous)
• Negative Sentiment: Valuation and macro concerns: at least one analyst note argues ADP remains expensive given macro headwinds (slower hiring), a key demand risk since ADP’s revenue is tied to payroll counts. Automatic Data Processing: Still Expensive Given Macro Headwinds
• Negative Sentiment: Guidance nuance: FY EPS range published sits near but slightly around consensus — some investors may view the guidance band and commentary as conservative relative to expectations, prompting profit-taking. ADP Reports Second Quarter Fiscal 2026 Results

Automatic Data Processing Company Profile

Automatic Data Processing, Inc (ADP) is a global provider of cloud-based human capital management (HCM) and payroll solutions. Founded in 1949 and headquartered in Roseland, New Jersey, ADP began as a payroll processing company and has evolved into a diversified provider of workforce management, HR, benefits administration, tax and compliance services, and analytics for employers of all sizes.

ADP’s product portfolio includes payroll processing and tax filing, time and attendance systems, benefits administration, talent management, and HR outsourcing.