"Our new business pipelines were healthy at the end of the quarter and our Q1 Employer Services retention rate exceeded our expectations..."
— Maria Black
03Detailed Report
ADP
Automatic Data Processing Inc
Period
Q1 2025
CurrencyUSD
Report TypeQuarterly Earnings
GeneratedJun 13, 2026
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Executive Summary
Automatic Data Processing Inc (ADP) reported robust financial results for the first quarter of fiscal 2025, showcasing a solid 7% year-over-year revenue growth to $4.83 billion. The company demonstrated effective cost management with a notable adjusted EBIT margin expansion of 130 basis points, alongside a 12% increase in adjusted EPS to $2.34. Management highlighted a strong performance in new business bookings, particularly within Employer Services and Professional Employer Organization (PEO) segments, with a noteworthy increase in client satisfaction and minor retention declines indicating strong operational performance despite market fluctuations. The recent acquisition of WorkForce Software is poised to enhance ADP’s positioning in workforce management solutions, indicating strategic growth in a high-demand sector.
Key Performance Indicators
Revenue
Increasing
4.83B
QoQ: 1.35% | YoY: 7.10%
Gross Profit
Increasing
2.20B
45.50% margin
QoQ: -6.83% | YoY: 10.12%
Operating Income
Increasing
1.27B
QoQ: 15.89% | YoY: 13.91%
Net Income
Increasing
956.30M
QoQ: 15.31% | YoY: 11.28%
EPS
Increasing
2.34
QoQ: 15.27% | YoY: 11.96%
Revenue Trend
Margin Analysis
Financial Highlights
### Key Financial Metrics
- Revenue: $4.83 billion (up 7% YoY, up 1.35% QoQ)
- Gross Profit: $2.20 billion (Gross Margin: 45.5%, YoY increase of 10.1%)
- Operating Income: $1.27 billion (Operating Margin: 26.3%, YoY increase of 13.9%)
- Net Income: $956 million (Net Margin: 19.8%, YoY increase of 11.3%)
- EPS: $2.34 (YoY increase of 12%)
- Total Liabilities/Equity: 8.25
- Cash and Cash Equivalents: $2.10 billion
Management attributes revenue growth to strong demand in Human Capital Management (HCM) solutions and effective execution in diverse market sectors, maintaining a forecast for full-year revenue growth of 6-7%.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
4.83B
7.10%
1.35%
Gross Profit
2.20B
10.12%
-6.83%
Operating Income
1.27B
13.91%
15.89%
Net Income
956.30M
11.28%
15.31%
EPS
2.34
11.96%
15.27%
Key Financial Ratios
Gross Profit Margin
Good
45.50%
Gross profit margin is healthy and competitive within industry standards
Operating Profit Margin
Excellent
26.30%
Operating margin is exceptional, indicating strong pricing power and operational efficiency
Net Profit Margin
Good
19.80%
Net profit margin is healthy and competitive within industry standards
Return on Assets
Weak
1.93%
Return on assets suggests inefficient capital allocation
Return on Equity
Good
17.90%
Return on equity shows solid performance and effective asset utilization
Current Ratio
Strong
3.75
Current ratio indicates excellent liquidity and financial flexibility
Debt to Equity
High Risk
1.62
Debt-to-equity indicates high leverage and elevated financial risk
P/E Ratio
Growth
29.51x
Elevated P/E suggests growth expectations or premium valuation
Price to Book
High Premium
21.10x
Very high premium suggests asset-light business model or lofty expectations
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