EX-99 2 q4fy26exhibit99.htm EXHIBIT 99 Document ADP Reports Fourth Quarter and Fiscal 2026 Results; Provides Fiscal 2027 Outlook • Revenues increased 7% to $21.9 billion for the year; 6% organic constant currency • Employer Services new business bookings increased 6% for the year to $2.2 billion • Net earnings increased 8% to $4.4 billion for the year, and adjusted net earnings increased 10% to $4.5 billion • Adjusted EBIT increased 10% to $5.9 billion for the year, and adjusted EBIT margin increased 80 basis points to 26.8% • Diluted earnings per share ("EPS") increased 10% to $10.94 for the year; adjusted diluted EPS increased 11% to $11.12 • Fiscal 2027 consolidated outlook includes revenue growth of 5% to 6%, adjusted EBIT margin expansion of 70 to 90 basis points, and adjusted diluted EPS growth of 9% to 11% ROSELAND, N.J. – July 29, 2026 – ADP (Nasdaq: ADP), a global leader in HR and payroll solutions, today announced its fourth quarter and fiscal 2026 financial results and provided its fiscal 2027 outlook. Fourth Quarter and Fiscal 2026 Consolidated Results Compared to last year’s fourth quarter, revenues increased 7% to $5.5 billion and 6% on an organic constant currency basis. Net earnings increased 7% to $1.0 billion, and adjusted net earnings increased 14% to $1.1 billion. Adjusted EBIT increased 13% to $1.4 billion, and adjusted EBIT margin increased 140 basis points to 25.1%. ADP’s effective tax rate for the quarter was 22.2% on a reported basis, and 22.4% on an adjusted basis. Diluted EPS increased 10% to $2.45, and adjusted diluted EPS increased 17% to $2.64. For the full year, revenues increased 7% to $21.9 billion and 6% on an organic constant currency basis. Net earnings increased 8% to $4.4 billion, and adjusted net earnings increased 10% to $4.5 billion. Adjusted EBIT increased 10% to $5.9 billion, and adjusted EBIT margin increased 80 basis points to 26.8%. ADP’s effective tax rate for the year was 23.0% on both a reported basis and an adjusted basis. Diluted EPS increased 10% to $10.94, and adjusted diluted EPS increased 11% to $11.12. “ADP’s strong fiscal 2026 performance is grounded in the long-term value that matters most to our clients: trust,” said Maria Black, President and Chief Executive Officer, ADP. “This is a defining moment for the future of work. AI is reshaping how work gets done, what roles look like, and how teams are organized. This is making HCM more critical than ever and companies need a partner they can trust to help navigate this shift. Our impressive financial results, strong Employer Services retention, and record client satisfaction scores are evidence that ADP is purpose-built for this, and we've never been better positioned to deliver for our clients.” “We were pleased to deliver a strong fourth quarter to finish the year at the high end of our guidance range for revenue growth, margin expansion and adjusted EPS growth, while continuing to invest in the future growth and success of ADP,” said Peter Hadley, Chief Financial Officer, ADP. “With AI tools now being embedded across our product, service and sales teams in ways that are enhancing quality and productivity, we enter fiscal 2027 in a strong position to drive growth in our business and deliver value for our clients and healthy returns for our shareholders.” 1 Adjusted EBIT, adjusted EBIT margin, adjusted net earnings, adjusted diluted earnings per share, adjusted effective tax rate and organic constant currency are all non-GAAP financial measures. Please refer to the accompanying financial tables at the end of this release for a discussion of why ADP believes these measures are important and for a reconciliation of non-GAAP financial measures to their closest comparable GAAP financial measures. Fourth Quarter and Fiscal 2026 Segment Results Employer Services – Employer Services offers a comprehensive range of global HCM and Human Resources Outsourcing solutions. Compared to last year: • Employer Services revenues increased 7% on a reported basis and 6% on an organic constant currency basis for the fourth quarter, and increased 7% on a reported basis and 5% on an organic constant currency basis for the fiscal year • Employer Services new business bookings increased 6% to $2.2 billion for the fiscal year • Employer Services client revenue retention remained flat at 92.1% for the fiscal year • U.S. pays per control increased 1% for the fourth quarter and for the fiscal year • Employer Services segment margin increased 90 basis points for the fourth quarter and increased 60 basis points for the fiscal year PEO Services – PEO Services provides comprehensive employment administration outsourcing solutions. Compared to last year: • PEO Services revenues increased 7% for the fourth quarter and increased 7% for the fiscal year • PEO Services revenues excluding zero-margin benefits pass-throughs increased 5% for the fourth quarter and increased 5% for the fiscal year • Average worksite employees paid by PEO Services increased 2% to about 775,000 for the fourth quarter and increased 2% to about 762,000 for the fiscal year • PEO Services segment margin decreased 100 basis points for the fourth quarter and decreased 110 basis points for the fiscal year Included within the results of our segments above: Interest on Funds Held for Clients – The safety, liquidity, and diversification of ADP clients’ funds are the foremost objectives of the Company’s investment strategy. Client funds are invested in accordance with ADP’s prudent and conservative investment guidelines, and most of the investment portfolio is rated AAA/AA. Compared to last year: • Interest on funds held for clients increased 15% to $355 million for the fourth quarter and increased 14% to $1.4 billion for the fiscal year • Average client funds balances increased 8% to $41.0 billion for the fourth quarter and increased 7% to $40.4 billion for the fiscal year • The average interest yield on client funds increased 20 basis points to 3.5% for the fourth quarter and increased 20 basis points to 3.4% for the fiscal year 2 Fiscal 2027 Outlook Certain components of ADP’s fiscal 2027 outlook and related growth comparisons exclude the impact of the following items and are discussed on an adjusted basis where applicable. Please refer to the accompanying financial tables for a reconciliation of these adjusted amounts to their closest comparable GAAP measure. • Fiscal 2026 pre-tax gain of about $5 million related to a partial reversal of the workforce optimization initiatives from fiscal 2025 and 2024 • Fiscal 2026 pre-tax charges of about $91 million related to a business alignment program • Fiscal 2026 pre-tax gain of about $8 million related to gains on ADP Ventures' investments • Fiscal 2026 pre-tax net charges of about $18 million related to the settlement of a legal matter Consolidated Fiscal 2027 Outlook • Revenue growth of 5% to 6% • Adjusted EBIT margin expansion of 70 to 90 basis points • Adjusted effective tax rate of approximately 23% • Diluted EPS growth of 11% to 13% • Adjusted diluted EPS growth of 9% to 11% Employer Services Segment Fiscal 2027 Outlook • Employer Services revenue growth of 5% to 6% • Employer Services new business bookings growth of 4% to 7% • Employer Services client revenue retention decrease of 10 to 30 basis points • Increase in U.S. pays per control of 0% to 1% PEO Services Segment Fiscal 2027 Outlook • PEO Services revenue growth of 5% to 7% • PEO Services revenue, excluding zero-margin benefits pass-throughs, growth of 3% to 5% • PEO Services average worksite employee count growth of about 2% Client Funds Extended Investment Strategy Fiscal 2027 Outlook The interest assumptions in our outlook are based on Fed Funds futures contracts and various forward yield curves as of July 28, 2026. The Fed Funds futures contracts are used in the client short and corporate cash interest income outlook. A combination of various forward yield curves that reflect our investment mix, resulting in a blended rate of 4.4%, was used to forecast new purchase rates across the client and corporate extended and client long portfolios over the remainder of the fiscal year. • Interest on funds held for clients of $1.540 to $1.560 billion; this is based on anticipated growth in client funds balances of 3% to 4% and an average yield that is anticipated to increase to approximately 3.7% • Total contribution from the client funds extended investment strategy of $1.545 to $1.565 billion 3 Fiscal 2027 Outlook Fiscal 2026 (unaudited) July 29, 2026 Fiscal 2027 Outlook (a) Total ADP Revenues $21,947M 5 to 6% Adj. EBIT Margin 26.8% 70 to 90 bps Adj. Effective Tax Rate 23.0% ~23% Adj. Diluted EPS $11.12 9 to 11% Employer Services Revenues $14,831M 5 to 6% ES New Business Bookings $2.2B 4 to 7% Client Revenue Retention 92.1% (30) to (10) bps U.S. Pays Per Control 1% 0 to 1% PEO Services Revenues $7,128M 5 to 7% Revenues Ex Zero-Margin Pass-throughs $2,521M 3 to 5% Average WSEs 762,000 ~2% Client Funds Interest Average Client Funds Balances $40.4B 3 to 4% Yield on Client Funds Portfolio 3.4% ~3.7% Client Funds Interest Revenue $1,355M $1,540 to $1,560M Net Impact from Client Funds Extended Strategy $1,315M $1,545 to $1,565M (a) Outlook contemplates the anticipated impact of foreign currency in revenue and operating results. Investor Webcast Today As previously announced, ADP will host a conference call for financial analysts today, Wednesday, July 29, 2026 at 8:30 a.m. ET. The conference call will be webcast live on ADP’s website at investors.adp.com and will be available for replay following the call. A slide presentation accompanying the webcast is also available at investors.adp.com/events-and-presentations . ADP news releases, current financial information, SEC filings, and Investor Relations presentations are posted to ADP’s website at investors.adp.com . About ADP (Nasdaq: ADP) ADP has been shaping the world of work with innovation and expertise for more than 75 years. As a global leader in HR and payroll solutions, ADP continuously works to solve business challenges for our clients and their workers, from simple, easy-to-use tools for small businesses to fully integrated platforms for global enterprises – and everything in between. Always Designing for People means we're focused on just that – people . We use our unmatched AI-driven insights and proven expertise to design innovative solutions that help people achieve greater success at work. More than 1.1 million clients across 140+ countries rely on ADP's exceptional service to support their people and drive their business forward. HR, Talent, Time Management, Benefits, Compliance, and Payroll. Learn more at ADP.com 4 Automatic Data Processing, Inc. and Subsidiaries Statements of Consolidated Earnings (In millions, except per share amounts) (Unaudited) Three Months Ended Twelve Months Ended June 30, June 30, 2026 2025 2026 2025 Revenues: Revenues, other than interest on funds held      for clients and PEO revenues $ 3,342.1  $ 3,157.6  $ 13,476.8  $ 12,692.2  Interest on funds held for clients 355.4  307.8  1,354.8  1,189.1  PEO revenues (A) (B) (C) 1,776.3  1,661.4  7,115.8  6,679.6  Total revenues 5,473.8   5,126.8   21,947.4   20,560.9   Expenses: Costs of revenues: Operating expenses (B) (C) 2,574.1  2,426.2  10,240.6  9,622.7  Research and development 265.9  269.3  1,028.8  988.6  Depreciation and amortization 122.5  121.5  490.8  486.0  Total costs of revenues 2,962.5  2,817.0  11,760.2  11,097.3  Selling, general, and administrative expenses 1,252.3  1,103.1  4,408.2  4,051.7  Interest expense 121.0  113.7  459.3  455.9  Total expenses 4,335.8   4,033.8   16,627.7   15,604.9   Other (income)/expense, net (119.8) (97.6) (410.6) (354.1) Earnings before income taxes 1,257.8   1,190.6   5,730.3   5,310.1   Provision for income taxes 279.2  280.0  1,316.8  1,230.4  Net earnings $ 978.6   $ 910.6   $ 4,413.5   $ 4,079.7   Basic earnings per share $ 2.45  $ 2.24  $ 10.97  $ 10.02  Diluted earnings per share $ 2.45  $ 2.23  $ 10.94  $ 9.98  Components of Other (income)/expense, net: Interest income on corporate funds $ (108.8) $ (88.0) $ (371.0) $ (319.5) Realized (gains)/losses on available-for-sale securities, net 0.3  0.8  (2.9) 1.7  Gain on sale of assets —  (2.6) —  (5.0) Non-service components of pension income, net (7.1) (7.8) (28.3) (31.3) Net (gain)/loss on ADP Ventures' investments (4.2) —  (8.4) —  Other (income)/expense, net $ (119.8) $ (97.6) $ (410.6) $ (354.1) (A) Professional Em ployer Organization (“PEO”) revenues are net of direct pass-through costs, primarily consisting of payroll wages and payroll taxes of $20,557.2 million and $18,312.4 million for the three months ended June 30, 2026 and 2025, respectively, and $81,123.2 million and $75,220.1 million for the twelve months ended June 30, 2026 and 2025, respectively . (B) PEO revenues and operating expenses include zero-margin benefits pass-through costs of $1,180.2 million and $1,094.8 million for the three months ended June 30, 2026 and 2025, respectively , and $4,607.3 million and $4,289.0 million for the twelve months ended June 30, 2026 and 2025, respectively . (C) PEO revenues and operating expenses include costs related t o workers' compensation coverage and state unemployment taxes fo r worksite employee s of $153.6 million and $148.3 million for the three months ended June 30, 2026 and 2025, respectively, and $718.4 million and $681.3 million for the twelve months ended June 30, 2026 and 2025, respectively . 5 Automatic Data Processing, Inc. and Subsidiaries Consolidated Balance Sheets (In millions, except per share amounts) (Unaudited) June 30, June 30, 2026 2025 Assets Current assets: Cash and cash equivalents $ 4,230.1  $ 3,347.8  Short-term marketable securities (A) —  4,498.8     Accounts receivable, net of allowance for doubtful accounts of $44.5 and $47.1, respectively 3,521.1  3,579.1  Other current assets 852.1  840.8  Total current assets before funds held for clients 8,603.3  12,266.5  Funds held for clients 43,957.8  30,985.7  Total current assets 52,561.1  43,252.2  Property, plant and equipment, net 641.3  655.4  Operating lease right-of-use assets 388.6  374.1  Deferred contract costs 3,244.1  3,154.1  Other assets 1,420.5  1,057.0  Goodwill 3,284.4  3,273.5  Intangible assets, net 1,653.3  1,603.0  Total assets $ 63,193.3  $ 53,369.3  Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 162.5  $ 169.1  Accrued expenses and other current liabilities 3,218.5  3,092.4  Accrued payroll and payroll-related expenses 1,039.4  973.1  Dividends payable 671.9  620.6  Short-term deferred revenues 267.5  262.8  Obligations under reverse repurchase agreements (A) 139.3  38.4  Obligations under commercial paper borrowings —  4,769.5  Income taxes payable 110.3  9.1  Total current liabilities before client funds obligations 5,609.4  9,935.0  Client funds obligations 44,415.5  31,343.3  Total current liabilities 50,024.9  41,278.3  Long-term debt 4,964.1  3,974.7  Operating lease liabilities 306.7  321.2  Other liabilities 1,141.4  1,058.3  Deferred income taxes 339.1  163.6  Long-term deferred revenues 385.9  385.2  Total liabilities 57,162.1  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 June 30, 2026 and June 30, 2025; outstanding, 397.8 and 405.3 shares at June 30, 2026 and June 30, 2025, respectively 63.9  63.9  Capital in excess of par value 3,067.9  2,788.3  Retained earnings 26,967.4  25,240.6  Treasury stock - at cost: 240.9 and 233.4 shares at June 30, 2026 and June 30, 2025, respectively (23,165.9) (21,021.4) Accumulated other comprehensive income/(loss) (902.1) (883.4) Total stockholders’ equity 6,031.2  6,188.0  Total liabilities and stockholders’ equity $ 63,193.3  $ 53,369.3  (A) As of June 30, 2026, $138.6 million of long-term marketable securities and $0.7 million of cash and cash equivalents have been pledged as collateral under the Company's reverse repurchase agreements. As of June 30, 2025, $38.4 million of short-term marketable securities have been pledged as collateral under the Company's reverse repurchase agreements. 6 Automatic Data Processing, Inc. and Subsidiaries Statements of Consolidated Cash Flows (In millions) (Unaudited) Twelve Months Ended June 30, 2026 2025 Cash Flows from Operating Activities: Net earnings $ 4,413.5  $ 4,079.7  Adjustments to reconcile net earnings to cash flows provided by operating activities: Depreciation and amortization 585.9  582.4  Amortization of deferred contract costs 1,200.5  1,145.3  Deferred income taxes 156.4  37.0  Stock-based compensation expense 242.6  266.1  Bad debt expense 47.5  53.2  Net pension (income)/expense (15.4) (19.7) Net accretion of discounts and amortization of premiums on available-for-sale securities (88.2) (72.2) Other 4.2  13.4  Changes in operating assets and liabilities: (Increase)/decrease in accounts receivable 1.0  (146.6) Increase in deferred contract costs (1,307.9) (1,290.3) Increase in other assets (204.5) (59.8) Increase/(decrease) in accounts payable (4.5) 60.6  Increase in accrued expenses and other liabilities 410.1  290.6  Net cash flows provided by operating activities 5,441.2  4,939.7  Cash Flows from Investing Activities: Purchases of corporate and client funds marketable securities (12,359.7) (7,857.9) Proceeds from the sales and maturities of corporate and client funds marketable securities 8,344.7  6,539.1  Capital expenditures (196.6) (168.7) Additions to intangibles (468.5) (378.3) Acquisitions of businesses, net of cash acquired (22.8) (1,165.1) Proceeds from the sale of property, plant, and equipment and other assets —  10.8  Other (10.9) (14.9) Net cash flows used in investing activities (4,713.8) (3,035.0) Cash Flows from Financing Activities: Net increase/(decrease) in client funds obligations 13,242.6  (8,274.0) Net cash (distributed)/received from the Internal Revenue Service 24.0  (552.2) Payments of debt (1.1) (1,001.2) Proceeds from the issuance of debt 985.7  1,980.3  Settlement of cash flow hedges 3.7  (15.6) Repurchases of common stock (2,083.3) (1,280.5) Net (repurchases)/proceeds from stock-based compensation plans and stock purchase plan (1.0) 131.0  Dividends paid (2,626.3) (2,398.9) Net (payments)/proceeds related to reverse repurchase agreements 106.2  (331.8) Net (payments)/proceeds related to commercial paper (4,769.5) 4,769.5  Net cash flows provided by/(used in) financing activities 4,881.0  (6,973.4) Effect of exchange rate changes on cash, cash equivalents, restricted cash, and restricted cash equivalents (37.8) 37.3  Net change in cash, cash equivalents, restricted cash, and restricted cash equivalents 5,570.6  (5,031.4) 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 $ 10,625.2  $ 5,054.6  Reconciliation of cash, cash equivalents, restricted cash, and restricted cash equivalents to the Consolidated Balance Sheets Cash and cash equivalents $ 4,230.1  $ 3,347.8  Restricted cash and restricted cash equivalents included in funds held for clients 6,395.1  1,706.8  Total cash, cash equivalents, restricted cash, and restricted cash equivalents $ 10,625.2  $ 5,054.6  Supplemental disclosures of cash flow information: Cash paid for interest $ 439.6  $ 426.8  Cash paid for income taxes, net of income tax refunds $ 1,006.7  $ 1,198.0  7 Automatic Data Processing, Inc. and Subsidiaries Other Selected Financial Data (Dollars in millions, except per share amounts) (Unaudited) Three Months Ended Twelve Months Ended June 30, June 30, 2026 2025 % Change 2026 2025 % Change Segment revenues Employer Services $ 3,696.7  $ 3,465.6  7   % $ 14,831.4  $ 13,883.1  7   % PEO Services 1,779.5  1,664.2  7   % 7,128