ADP 8-K

Automatic Data Processing Inc (ADP)

8-K 2026-01-28 For: 2026-01-28

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Added on April 09, 2026

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Securities registered pursuant to Section 12(b) of the Act:
Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.10 Par Value (voting)	ADP	NASDAQ Global Select Market


Exhibit Number			Description
99			Earnings Release dated January 28, 2026 issued by Automatic Data Processing, Inc.

104			Cover Page Interactive Data File, embedded in Inline XBRL.


Automatic Data Processing, Inc. and Subsidiaries
Statements of Consolidated Earnings
(In millions, except per share amounts)
(Unaudited)
				Three Months Ended				Six Months Ended
				December 31,				December 31,
				2025		2024		2025		2024
Revenues:
		Revenues, other than interest on funds held for clients and PEO revenues		$	3,298.3	$	3,114.8	$	6,501.7	$	6,122.0
		Interest on funds held for clients		308.6		272.8		595.5		526.1
		PEO revenues (A) (B) (C)		1,752.4		1,660.8		3,437.3		3,233.0
			Total revenues	5,359.3		5,048.4		10,534.5		9,881.1

Expenses:
	Costs of revenues:
		Operating expenses (B) (C)		2,509.0		2,376.1		4,970.6		4,661.9
		Research and development		257.8		239.5		509.0		472.1
		Depreciation and amortization		122.9		126.9		246.2		242.2
			Total costs of revenues	2,889.7		2,742.5		5,725.8		5,376.2

	Selling, general, and administrative expenses			1,068.1		1,006.1		2,074.4		1,932.8
	Interest expense			124.1		129.6		259.5		267.4
			Total expenses	4,081.9		3,878.2		8,059.7		7,576.4

	Other (income)/loss, net			(105.8)		(91.1)		(215.9)		(192.8)

Earnings before income taxes				1,383.2		1,261.3		2,690.7		2,497.5

	Provision for income taxes			321.2		298.1		615.6		578.0

Net earnings				$	1,062.0	$	963.2	$	2,075.1	$	1,919.5

	Basic earnings per share			$	2.63	$	2.36	$	5.13	$	4.71

	Diluted earnings per share			$	2.62	$	2.35	$	5.12	$	4.69



Components of Other (income)/expense, net:
	Interest income on corporate funds			$	(96.8)	$	(83.9)	$	(198.3)	$	(175.5)


	Realized (gains)/losses on available-for-sale securities, net			0.3		0.6		(1.2)		0.8

	Gain on sale of assets			—		—		—		(2.4)




	Non-service components of pension income, net			(7.1)		(7.8)		(14.2)		(15.7)
	Net (gain)/loss on ADP Ventures' investments			(2.2)		—		(2.2)		—
	Other (income)/loss, net			$	(105.8)	$	(91.1)	$	(215.9)	$	(192.8)


Automatic Data Processing, Inc. and Subsidiaries
Consolidated Balance Sheets
(In millions, except per share amounts)
(Unaudited)
	December 31,		June 30,
	2025		2025
Assets
Current assets:
Cash and cash equivalents	$	2,424.7	$	3,347.8
Short-term marketable securities (A)	45.7		4,498.8
Accounts receivable, net of allowance for doubtful accounts of $47.5 and $47.1, respectively	3,408.5		3,579.1
Other current assets	1,083.1		840.8
Total current assets before funds held for clients	6,962.0		12,266.5
Funds held for clients	67,510.1		30,985.7
Total current assets	74,472.1		43,252.2


Property, plant and equipment, net	622.7		655.4
Operating lease right-of-use asset	405.7		374.1
Deferred contract costs	3,109.1		3,154.1
Other assets	1,113.1		1,057.0
Goodwill	3,294.2		3,273.5
Intangible assets, net	1,622.5		1,603.0
Total assets	$	84,639.4	$	53,369.3

Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	143.1	$	169.1
Accrued expenses and other current liabilities	2,478.1		3,092.4
Accrued payroll and payroll-related expenses	721.3		973.1
Dividends payable	680.5		620.6
Short-term deferred revenues	261.7		262.8
Obligations under reverse repurchase agreements (A)	45.8		38.4
Obligations under commercial paper borrowings	—		4,769.5


Income taxes payable	197.3		9.1
Total current liabilities before client funds obligations	4,527.8		9,935.0
Client funds obligations	67,613.7		31,343.3
Total current liabilities	72,141.5		41,278.3
Long-term debt	3,976.4		3,974.7
Operating lease liabilities	347.6		321.2
Other liabilities	1,051.2		1,058.3
Deferred income taxes	349.5		163.6
Long-term deferred revenues	380.2		385.2
Total liabilities	78,246.4		47,181.3

Stockholders' equity:
Preferred stock, $1.00 par value: authorized, 0.3 shares; issued, none	—		—
Common stock, $0.10 par value: authorized, 1,000.0 shares; issued, 638.7 shares at December 31, 2025 and June 30, 2025; outstanding, 403.0 and 405.3 shares at December 31, 2025 and June 30, 2025, respectively	63.9		63.9
Capital in excess of par value	2,936.8		2,788.3
Retained earnings	25,992.6		25,240.6
Treasury stock - at cost: 235.7 and 233.4 shares at December 31, 2025 and June 30, 2025, respectively	(21,960.6)		(21,021.4)
Accumulated other comprehensive income/(loss)	(639.7)		(883.4)
Total stockholders’ equity	6,393.0		6,188.0
Total liabilities and stockholders’ equity	$	84,639.4	$	53,369.3


Automatic Data Processing, Inc. and Subsidiaries
Statements of Consolidated Cash Flows
(In millions)
(Unaudited)	Six Months Ended
	December 31,
	2025		2024
Cash Flows from Operating Activities:
Net earnings	$	2,075.1	$	1,919.5
Adjustments to reconcile net earnings to cash flows provided by operating activities:
Depreciation and amortization	292.3		289.7
Amortization of deferred contract costs	598.1		565.9

Deferred income taxes	119.1		32.5
Stock-based compensation expense	131.9		139.7
Bad debt expense	22.5		23.1

Net pension (income)/loss	(7.7)		(9.8)

Net accretion of discounts and amortization of premiums on available-for-sale securities	(45.4)		(31.5)



Other	4.2		4.7
Changes in operating assets and liabilities:
Decrease/(increase) in accounts receivable	145.9		(94.7)
Increase in deferred contract costs	(556.4)		(565.3)
Increase in other assets	(350.1)		(271.0)
(Decrease)/increase in accounts payable	(25.0)		82.4
Decrease in accrued expenses and other liabilities	(629.3)		(110.5)
Net cash flows provided by operating activities	1,775.2		1,974.7

Cash Flows from Investing Activities:
Purchases of corporate and client funds marketable securities	(5,652.0)		(3,990.7)
Proceeds from the sales and maturities of corporate and client funds marketable securities	3,436.1		2,524.1

Capital expenditures	(73.2)		(98.2)
Additions to intangibles	(209.1)		(175.7)
Acquisitions of businesses, net of cash acquired	(22.9)		(1,160.6)
Proceeds from the sale of property, plant, and equipment and other assets	—		3.3





Other	(18.4)		(4.5)
Net cash flows used in investing activities	(2,539.5)		(2,902.3)

Cash Flows from Financing Activities:
Net increase in client funds obligations	36,273.1		9,090.4

Net cash distributed from the Internal Revenue Service	(1.2)		(487.6)
Payments of debt	(0.5)		(0.6)
Proceeds from the issuance of debt	—		988.9
Settlement of cash flow hedges	—		(12.5)
Repurchases of common stock	(881.8)		(644.9)
Net (repurchases)/proceeds from stock-based compensation plans and stock purchase plan	(40.0)		38.6

Dividends paid	(1,256.0)		(1,145.1)
Net (payments)/proceeds related to reverse repurchase agreements	18.5		(344.7)
Net (payments)/proceeds related to commercial paper	(4,769.5)		—



Net cash flows provided by financing activities	29,342.6		7,482.5

Effect of exchange rate changes on cash, cash equivalents, restricted cash, and restricted cash equivalents	28.8		(36.7)

Net change in cash, cash equivalents, restricted cash, and restricted cash equivalents	28,607.1		6,518.2

Cash, cash equivalents, restricted cash, and restricted cash equivalents, beginning of period	5,054.6		10,086.0
Cash, cash equivalents, restricted cash, and restricted cash equivalents, end of period	$	33,661.7	$	16,604.2

Reconciliation of cash, cash equivalents, restricted cash, and restricted cash equivalents to the Consolidated Balance Sheets
Cash and cash equivalents	$	2,424.7	$	2,216.4
Restricted cash and restricted cash equivalents included in funds held for clients	31,237.0		14,387.8
Total cash, cash equivalents, restricted cash, and restricted cash equivalents	$	33,661.7	$	16,604.2

Supplemental disclosures of cash flow information:
Cash paid for interest	$	253.9	$	249.5
Cash paid for income taxes, net of income tax refunds	$	303.7	$	583.5



Automatic Data Processing, Inc.
(Exact name of registrant as specified in charter)


N/A
(Former name or former address, if changed since last report)


☐			Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)


☐			Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)


☐			Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))


Automatic Data Processing, Inc. and Subsidiaries
Other Selected Financial Data
(Dollars in millions, except per share amounts)
(Unaudited)
	Three Months Ended								Six Months Ended
	December 31,								December 31,
	2025			2024			% Change		2025			2024			% Change
Segment revenues
Employer Services	$	3,607.4		$	3,388.5		6	%	$	7,098.6		$	6,649.5		7	%
PEO Services	1,755.2			1,663.3			6	%	3,442.7			3,237.8			6	%
Other	(3.3)			(3.4)			n/m		(6.8)			(6.2)			n/m
Total revenues	$	5,359.3		$	5,048.4		6	%	$	10,534.5		$	9,881.1		7	%

Segment earnings
Employer Services	$	1,278.8		$	1,183.0		8	%	$	2,507.6		$	2,347.3		7	%
PEO Services	252.9			251.7			—	%	471.7			477.3			(1)	%
Other	(148.5)			(173.4)			n/m		(288.6)			(327.1)			n/m
Total pretax earnings	$	1,383.2		$	1,261.3		10	%	$	2,690.7		$	2,497.5		8	%


Segment margin
Employer Services	35.4		%	34.9		%	0.5	%	35.3		%	35.3		%	—	%
PEO Services	14.4		%	15.1		%	(0.7)	%	13.7		%	14.7		%	(1.0)	%
Other	n/m			n/m			n/m		n/m			n/m			n/m
Total pretax margin	25.8		%	25.0		%	0.8	%	25.5		%	25.3		%	0.3	%


	Three Months Ended								Six Months Ended
	December 31,								December 31,
Earnings per share information	2025			2024			% Change		2025			2024			% Change
Net earnings	$	1,062.0		$	963.2		10	%	$	2,075.1		$	1,919.5		8	%

Basic weighted average shares outstanding	403.8			407.6			(1)	%	404.4			407.7			(1)	%
Basic earnings per share	$	2.63		$	2.36		11	%	$	5.13		$	4.71		9	%

Diluted weighted average shares outstanding	404.7			409.0			(1)	%	405.5			409.3			(1)	%
Diluted earnings per share	$	2.62		$	2.35		11	%	$	5.12		$	4.69		9	%


Automatic Data Processing, Inc. and Subsidiaries
Other Selected Financial Data, Continued
(Dollars in millions, except where otherwise stated)
(Unaudited)
Client Funds Strategy - Supplemental Information

	Three Months Ended
	December 31,
	2025			2024			% Change
Average investment balances at cost (in billions)
Funds held for clients	$	37.6		$	35.3		6	%

Corporate extended (A)	$	8.7		$	8.2		6	%

Short-term financing to support Client Funds Strategy (A)	$	8.7		$	8.2		6	%



Average interest rates earned or paid (exclusive of realized gains or losses)
Funds held for clients	3.3		%	3.1		%

Corporate extended (A)	3.5		%	3.2		%


Short-term financing to support Client Funds Strategy (A)	4.1		%	4.8		%












Interest income (expense)
Funds held for clients	$	308.6		$	272.8		13	%
Corporate extended (B)	77.0			65.0			18	%
Short-term financing to support Client Funds Strategy (B)	(91.3)			(100.0)			(9)	%
Net Impact from Client Funds Strategy	$	294.3		$	237.8		24	%


Funds Held for Clients - Supplemental Information

	Three Months Ended
	December 31,
	2025			2024
Average balance - Client short	$	8.2		$	7.1
Average balance - Client extended	15.4			14.6
Average balance - Client long	14.0			13.6
Average balance - Funds held for clients (in billions)	$	37.6		$	35.3

Average interest rate - Client short	3.3		%	4.6		%
Average interest rate - Client extended	3.3		%	2.6		%
Average interest rate - Client long	3.2		%	3.1		%
Average interest rate - Funds held for clients	3.3		%	3.1		%


Interest Income and Expense - Non-GAAP Reconciliation

	Three Months Ended
	December 31,
	2025		2024
Corporate extended interest income (B)	$	77.0	$	65.0
All other interest income	19.8		18.9
Total interest income on corporate funds (component of Other (income)/expense, net)	$	96.8	$	83.9

Short-term financing to support Client Funds Strategy (B)	$	91.3	$	100.0
All other interest expense	32.8		29.6
Total interest expense	$	124.1	$	129.6


(a) In Adjusted EBIT, we include the interest income earned on investments associated with our client funds extended investment strategy and interest expense on borrowings related to our client funds extended investment strategy as we believe these amounts to be fundamental to the underlying operations of our business model. The adjustments in the table above represent the interest income and interest expense that are not related to our client funds extended investment strategy and are labeled as “All other interest expense” and “All other interest income.”

(b) Represents a partial reversal of the workforce optimization initiative from fiscal 2024. Severance charges/(reversals) have been taken in the past and not included as an adjustment to get to adjusted results. Unlike severance charges/(reversals) in prior periods, this specific reversal relates to a broad-based, company-wide initiative.

(c) Represents (gains)/losses on investments made through our Corporate Venture Capital arm, ADP Ventures. (Gains)/losses on these investments may result from observable price changes, changes in ownership interest, and impairment charges. These adjustments may be highly variable, are predominantly non-cash, are outside our control, and are not fundamental to the underlying operations of our business model.

(d) In the six months ended December 31, 2024, this represents a reversal of a legal reserve recorded during the year ended June 30, 2023.





(e) The income tax provision was calculated based on the annualized marginal rate in effect during the quarter of the adjustment.

(f) The adjusted effective tax rate is calculated as our adjusted provision for income taxes divided by the sum of our adjusted net earnings plus our adjusted provision for income taxes.





The following table reconciles our reported growth rates to the non-GAAP measure of organic constant currency, which excludes the impact of acquisitions, the impact of dispositions, and the impact of foreign currency. The impact of acquisitions and dispositions is calculated by excluding the current year revenues of acquisitions until the one-year anniversary of the transaction and by excluding the prior year revenues of divestitures for the one-year period preceding the transaction. The impact of foreign currency is determined by calculating the current year results using foreign exchange rates consistent with the prior year. The PEO segment is not impacted by acquisitions, dispositions or foreign currency.


	Three Months Ended				Six Months Ended
	December 31,				December 31,
Revenue growth consolidated:	2025		2024		2025		2024

Employer Services	6	%	8	%	7	%	8	%
PEO Services	6	%	8	%	6	%	7	%
Consolidated revenue growth as reported	6	%	8	%	7	%	8	%
Adjustments:
Impact of acquisitions	—	%	(1)	%	—	%	—	%

Impact of foreign currency	(1)	%	—	%	(1)	%	—	%
Consolidated revenue growth, organic constant currency	5	%	8	%	6	%	7	%

Segment:

Employer Services revenue growth as reported	6	%	8	%	7	%	8	%
Adjustments:
Impact of acquisitions	—	%	(1)	%	(1)	%	(1)	%

Impact of foreign currency	(1)	%	—	%	(1)	%	—	%
Employer Services revenue growth, organic constant currency	5	%	7	%	5	%	7	%


Emerging growth company			☐


Automatic Data Processing, Inc. and Subsidiaries
Fiscal 2025 to Fiscal 2026 Non-GAAP Guidance Reconciliation
(in millions, except per share amounts)
(Unaudited)
						Fiscal 2026
	Fiscal 2025					Outlook
Earnings before income taxes / margin (GAAP)	$	5,310.1	25.8		%	40 to 60 bps
All other interest expense (a)	114.8		60 bps			10 bps
All other interest income (a)	(94.2)		(50) bps			10 bps
Gain on sale of assets - FY25	(2.6)		-			-
Transformation initiatives - FY25	0.1		-			-
Legal settlements - FY25	(0.4)		-			-
Optimization initiatives - FY25	19.3		10 bps			(10) bps
Adjusted EBIT margin (Non-GAAP)	$	5,347.1	26.0		%	50 to 70 bps

Effective tax rate (GAAP)			23.2		%	23.0	%
Transformation initiatives - FY25			-			-
Legal settlements - FY25			-			-
Optimization initiatives - FY25			-			-
Adjusted effective tax rate (Non-GAAP)			23.2		%	23.0	%

Diluted earnings per share (GAAP)			$	9.98		9% to 10%
Transformation initiatives - FY25			-			-
Legal settlements - FY25			-			-
Optimization initiatives - FY25			0.03			-
Adjusted diluted earnings per share (Non-GAAP)			$	10.01		9% to 10%

(a) In Adjusted EBIT, we include the interest income earned on investments associated with our client funds extended investment strategy and interest expense on borrowings related to our client funds extended investment strategy as we believe these amounts to be fundamental to the underlying operations of our business model. The adjustments in the table above represent the interest income and interest expense that are not related to our client funds extended investment strategy and are labeled as “All other interest expense” and “All other interest income.”