Automatic Data Processing (ADP) Q4 2026 earnings summary

Executive summary

• Achieved 7% revenue growth and 11% adjusted diluted EPS growth for fiscal 2026, with strong client retention at 92.1% and record-high client satisfaction for the third consecutive year.

• Employer Services new business bookings grew 6% to $2.2 billion, with broad-based growth across small business, HR outsourcing, enterprise, and international segments.

• Retirement Services surpassed $1 billion in annual revenue, serving over 210,000 clients.

• Strategic progress included a 94% increase in clients live on Lyric HCM and accelerated international bookings for global payroll and HR solutions.

• Continued strong demand for PEO and outsourcing solutions amid a complex regulatory environment, with a strategic focus on embedding AI across products and operations.

Financial highlights

• Fiscal 2026 total revenues rose 7% year-over-year to $21.95B, with Q4 revenues up 7% to $5.5B.

• Adjusted EBIT margin expanded 80 bps for the year and 140 bps in Q4; adjusted EBIT grew 10% to $5.9B.

• Adjusted diluted EPS grew 11% year-over-year to $11.12; Q4 adjusted diluted EPS up 17% to $2.64.

• Employer Services Q4 revenue up 7% to $3.70B, margin up 90 bps in Q4 and 60 bps for the year.

• PEO Q4 revenue up 7% to $1.78B, with average worksite employees up 2%; PEO margins contracted 110 bps for the year due to higher pass-through revenues and costs.

Outlook and guidance

• Fiscal 2027 consolidated revenue expected to grow 5–6%, with adjusted EBIT margin expanding 70–90 bps and adjusted diluted EPS up 9–11%.

• Employer Services revenue growth projected at 5–6%, new business bookings up 4–7%, and client revenue retention to remain above 92%.

• PEO Services revenue expected to grow 5–7%, with average worksite employees up ~2% and margins expected to contract further due to pass-through revenue growth.

• Client funds interest revenue forecasted at $1.54–$1.56B, with average client funds balances up 3–4% and yields rising to ~3.7%.

• ES pays per control outlook for flat to 1% growth in FY 2027.