Payroll solutions firm ADP Q3 adjusted EPS beats, outlook raised

Automatic Data Processing

29/04/2026 12:04

Overview

US HR and payroll solutions firm's fiscal Q3 revenue rose 7%, slightly beating analyst expectations

Adjusted EPS for fiscal Q3 rose 10%, beating analyst expectations

Company raised full-year guidance for revenue, adjusted EBIT margin, and adjusted EPS growth

Outlook

ADP raises fiscal 2026 revenue growth guidance to 6% to 7%

Company expects fiscal 2026 adjusted diluted EPS growth of 10% to 11%

ADP forecasts interest on funds held for clients of $1.34 to $1.35 bln in fiscal 2026

Result Drivers

SEGMENT GROWTH - Revenue rose 7% in both Employer Services and PEO Services segments, with Employer Services margin up and PEO margin down

CLIENT FUNDS INTEREST - Interest on funds held for clients increased 14%, supported by higher average client fund balances and yield

INVESTMENT IN AI - Co said ongoing investment in AI capabilities across products and services supported results, per CEO Maria Black

Key Details

Metric
Beat/Miss
Actual
Consensus Estimate
Q3 Revenue
Slight Beat*
$5.90 bln
$5.85 bln (13 Analysts)
Q3 Adjusted EPS
Beat
$3.37
$3.29 (16 Analysts)
Q3 EPS
$3.38
Q3 Net Income
$1.36 bln
Q3 Adjusted EBIT
Beat
$1.80 bln
$1.74 bln (10 Analysts)
Q3 Adjusted EBIT Margin
30.20%


*Applies to a deviation of less than 1%; not applicable for per-share numbers.

Analyst Coverage

The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 5 "strong buy" or "buy", 11 "hold" and 3 "sell" or "strong sell"

The average consensus recommendation for the it services & consulting peer group is "buy."

Wall Street's median 12-month price target for Automatic Data Processing Inc is $267.50, about 34.3% above its April 28 closing price of $199.17

The stock recently traded at 17 times the next 12-month earnings vs. a P/E of 22 three months ago

For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.

(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)