Automatic Data Processing (0HJI.L) Q1 2026 Earnings Report

Automatic Data Processing Inc (0HJI.L) reported QQ1 2026 results with revenue of USD 5.175B, up 7.1% year over year and 0.9% quarter over quarter, supported by ongoing demand for cloud-based human capital management solutions. Gross profit was USD 2.339B, yielding a gross margin of 45.2%. However, operating income was negative USD 0.123B, as the quarter benefited from a substantial non-operating gain of USD 1.430B in total other income/expenses, resulting in income before tax of USD 1.308B and net income of USD 1.013B. Diluted EPS came in at USD 2.49 on 406.8 million diluted shares, with basic EPS at USD 2.50. Cash generation remained robust: cash from operations USD 642.3M and free cash flow USD 595.6M, though capital allocation included USD 366.0M of share repurchases and USD 626.7M in dividends. The balance sheet shows substantial liquidity (cash and equivalents plus short-term investments around USD 7.94B) and a total debt position of USD 9.53B, with the company reporting a net debt metric around USD 7.05B in the materials. While the top-line and cash flow metrics are supportive, the quarter’s profitability was driven by non-operating income rather than core operating leverage, highlighting the need for sustained operating-margin normalization as the company executes its cloud-based HCM strategy and cross-sell opportunities across Employer Services and PEO.