Automatic Data Processing, Inc.
- Open
- 283.34
- Day high
- 287.25
- Day low
- 281.40
- Prev close
- 281.16
- Volume
- 2.2M
- Mkt cap
- $112.6B
- P/E (TTM)
- 25.8
- EPS (TTM)
- $10.97
- P/B
- 18.7
- P/S
- 5.1
- Yield
- 2.34%
- Per share
- $6.64
- ▼Insiders net selling -$898K over the last 3 months (0 open-market buys, 5 sales)
- 🏛Institutions mixed (13F)
Automatic Data Processing, Inc. (ADP) is a Industrials company listed on NASDAQ. The stock is down 6% over the past year. Over the trailing 3 months, insiders filed 0 open-market buys and 5 sales (SEC Form 4). Drillr has 1 published research article covering ADP.
Automatic Data Processing, Inc. (ADP) financials & analyst ratings
Fundamentals (TTM)
Analyst consensus · 8 analysts
Source: exchange market data + company filings. Figures are trailing-twelve-month or as most recently reported. For informational purposes only — not investment advice.
ADP earnings date, history & EPS estimates
| Report date | EPS est | EPS actual | Surprise | Revenue | Rev. surprise |
|---|---|---|---|---|---|
| Jul 29, 2026 | $2.59 | $2.64 | +2.0% | $5.5B | +0.6% |
| Apr 29, 2026 | $3.30 | $3.37 | +2.1% | $5.9B | +1.4% |
| Jan 28, 2026 | $2.57 | $2.62 | +2.0% | $5.4B | +0.4% |
| Oct 29, 2025 | $2.44 | $2.49 | +2.0% | $5.2B | +0.7% |
| Jul 30, 2025 | $2.23 | $2.26 | +1.3% | $5.1B | +1.6% |
| Apr 30, 2025 | $2.97 | $3.06 | +3.0% | $5.6B | +1.1% |
| Jan 29, 2025 | $2.30 | $2.35 | +2.2% | $5.0B | +1.6% |
| Oct 30, 2024 | $2.21 | $2.33 | +5.4% | $4.8B | +1.2% |
| Jul 31, 2024 | $2.06 | $2.09 | +1.5% | $4.8B | +0.6% |
| May 1, 2024 | $2.79 | $2.88 | +3.2% | $5.3B | +0.6% |
| Jan 31, 2024 | $2.10 | $2.13 | +1.4% | $4.7B | +0.2% |
| Oct 25, 2023 | $2.03 | $2.08 | +2.5% | $4.5B | +0.0% |
ADP insider trading activity (SEC Form 4)
| Date | Insider | Type | Shares | Price |
|---|---|---|---|---|
| Aug 24, 2026 | Kwon Davidofficer: Corp VP | Option | 967 | $169.84 |
| Aug 24, 2026 | Kwon Davidofficer: Corp VP | Sell | 798 | $280.00 |
| Aug 24, 2026 | Michaud Brian L.officer: Executive VP | Sell | 120 | $279.70 |
| Aug 6, 2026 | Michaud Brian L.officer: Executive VP | Grant | 4,050 | — |
| Aug 6, 2026 | Foskett Davidofficer: Corp. VP | Grant | 2,647 | — |
| Aug 6, 2026 | Black Mariaofficer: President & CEO | Grant | 44,859 | — |
| Aug 6, 2026 | Lehberger Jonathan Sofficer: Corp. VP | Grant | 747 | — |
| Aug 6, 2026 | Hadley Peter Jofficer: CFO | Grant | 1,479 | — |
| Aug 6, 2026 | Kwon Davidofficer: Corp VP | Grant | 3,114 | — |
| Aug 6, 2026 | D'Ambrosio Christopherofficer: Corp. VP | Grant | 2,601 | — |
| Aug 6, 2026 | Magliulo Virginiaofficer: Executive VP | Grant | 4,050 | — |
| Aug 6, 2026 | Bonarti Michael Aofficer: Corporate Vice President | Grant | 11,573 | — |
| Aug 6, 2026 | Boland Paulofficer: Corp. VP | Grant | 4,672 | — |
| Aug 6, 2026 | KUTAM SREENIVASAofficer: Corp VP | Grant | 11,083 | — |
| Aug 6, 2026 | Rodriguez Carlos Adirector | Grant | 24,922 | — |
Source: ADP SEC Form 4 filings, latest Aug 24, 2026. For informational purposes only — not investment advice.
See the full ADP insider & 13F page →Automatic Data Processing, Inc. company profile
Overview
Automatic Data Processing, Inc. (NASDAQ:ADP) is a leading provider of cloud-based human capital management solutions founded in 1949 and headquartered in Roseland, New Jersey. What began as a payroll processing company has evolved into a comprehensive human resources technology platform serving over one million clients worldwide. ADP went public in 1980 and has established itself as a dominant force in the HR services industry, maintaining 50 consecutive years of dividend increases and earning recognition as Fortune's World's Most Admired Company for 19 consecutive years.
Business
ADP operates in the human capital management (HCM) industry, providing cloud-based solutions that help businesses manage their workforce from hiring to retirement. The company's core offerings center around payroll processing, which involves calculating employee wages, withholding taxes, and ensuring compliance with complex labor regulations across multiple jurisdictions. The company operates through two primary business segments: Employer Services (ES) represents the majority of ADP's revenue, offering a comprehensive suite of HR solutions including payroll processing, benefits administration, talent management, workforce management, time and attendance tracking, and compliance services. This segment serves clients ranging from small businesses with a few employees to large multinational corporations. The ES segment includes several key platforms: RUN for small businesses, Workforce Now for mid-market companies, and ADP Lyric, their newest global HCM platform featuring generative AI capabilities that can handle payroll in over 75 countries. Professional Employer Organization (PEO) services operate under a co-employment model where ADP becomes the employer of record for client companies' workers, assuming responsibility for HR administration, regulatory compliance, and employee benefits while the client maintains day-to-day management of their workforce. This segment typically serves small to mid-sized businesses seeking to outsource their entire HR function and access enterprise-level benefits packages they couldn't obtain independently. The company also generates significant revenue from client funds interest, earning income on the funds it holds temporarily while processing payroll and tax payments for clients. Beyond core payroll, ADP offers adjacent services including retirement plan administration through its 401(k) recordkeeping business, insurance brokerage services, and workforce management solutions through its recent acquisition of WorkForce Software.
Revenue model
ADP operates on multiple revenue models that create a diversified income stream. The primary revenue source comes from subscription-based fees charged to clients for accessing ADP's HR platforms and services. These fees are typically structured as per-employee-per-month charges, creating predictable recurring revenue that scales with client workforce size and service complexity. The company also generates substantial income from client funds interest, which has become increasingly significant as interest rates have risen. When ADP processes payroll, it temporarily holds client funds before disbursing them to employees and tax authorities, earning interest on these float balances. This revenue stream increased from $1.02 billion in fiscal 2024 to an expected $1.13-1.15 billion in fiscal 2025. ADP's PEO segment operates on a co-employment model where the company charges fees for comprehensive HR outsourcing while also earning margins on benefits administration and workers' compensation insurance. The PEO model creates deeper client relationships and higher revenue per employee compared to traditional payroll services. Several factors influence ADP's profitability margins. Interest rate environments significantly impact client funds interest income, with rising rates boosting this revenue stream substantially. Employment levels and wage growth affect both the number of employees ADP processes and the fees collected, as many services are tied to payroll volume. Regulatory complexity can both challenge and benefit ADP, as increased compliance requirements may burden the company's operations but also create demand for outsourced expertise that competitors cannot easily replicate. Technology investments, particularly in artificial intelligence and automation, represent both a cost and margin expansion opportunity. While requiring significant upfront investment, these technologies can reduce service delivery costs and enable ADP to handle more complex processes with fewer human resources. Competition from smaller, specialized providers can pressure pricing, though ADP's scale advantages in compliance and multi-jurisdictional capabilities often justify premium pricing for larger clients.
Competitive moat
ADP possesses a substantial competitive moat built primarily on regulatory complexity and compliance expertise. Payroll processing involves navigating thousands of federal, state, and local tax jurisdictions, each with unique requirements that change frequently. ADP has invested decades building systems and expertise to handle this complexity, creating significant barriers for new entrants who would need to replicate this knowledge base and maintain compliance across all jurisdictions. The company's scale advantages are considerable, processing payroll for over 40 million workers globally. This scale enables ADP to spread the fixed costs of regulatory compliance, technology development, and security infrastructure across a massive client base, allowing competitive pricing while maintaining healthy margins. Smaller competitors struggle to match this cost structure, particularly for clients operating in multiple states or countries. Switching costs provide additional protection, as changing payroll providers requires significant effort to migrate employee data, reconfigure systems, and retrain staff. The mission-critical nature of payroll processing makes clients reluctant to risk disruption, leading to high retention rates around 92%. ADP's integration of multiple HR functions beyond payroll further increases switching costs, as clients would need to replace multiple systems simultaneously. However, ADP faces emerging competitive threats. Cloud-native startups like Gusto and Rippling offer more modern user interfaces and integrated platforms that appeal to younger businesses. Technology giants like Microsoft and Google could potentially leverage their cloud infrastructure and AI capabilities to enter the market, though they have shown limited interest in the compliance-heavy payroll space. The company's moat remains strong but requires continuous investment in technology modernization and AI capabilities to maintain relevance with digitally-native businesses. ADP's recent launch of the Lyric platform and generative AI features demonstrates recognition of this competitive dynamic.
Risks & safety
ADP demonstrates a strong margin of safety with robust financial metrics and conservative capital structure. • Liquidity position: $2.7 billion in cash and short-term investments with strong free cash flow generation of $1.5 billion quarterly, providing substantial financial flexibility • Debt management: Debt-to-equity ratio of 0.73 is manageable for a stable business model, with strong cash generation capability to service obligations • Profitability metrics: Return on equity of 21.3% and EBITDA margins exceeding 30% demonstrate efficient capital deployment and strong underlying business economics • Valuation considerations: Trading at 24.9x P/E ratio and 17.3x EV/EBITDA, representing reasonable valuations for a high-quality, recurring revenue business with defensive characteristics • Business model resilience: Payroll processing is non-discretionary spending that remains stable through economic cycles, with 92% client retention rates providing revenue predictability • Dividend sustainability: 50 consecutive years of dividend increases supported by consistent free cash flow generation and conservative payout ratios
Recent development
Over the past several years, ADP has undergone significant strategic transformation focused on technology modernization and artificial intelligence integration. The company launched ADP Lyric, a next-generation global HCM platform capable of handling payroll in over 75 countries, representing a major technological advancement from legacy systems. This platform incorporates generative AI capabilities and has seen substantial increases in new business bookings. ADP has aggressively invested in generative AI initiatives, launching ADP Assist across multiple platforms and implementing AI tools for service associates to improve efficiency. The company is exploring over 40 different AI work streams, focusing on enhancing product capabilities, service delivery, and sales productivity. These AI investments have earned industry recognition, including Generative AI Innovation Awards. Strategic acquisitions have expanded ADP's capabilities, most notably the WorkForce Software acquisition which added workforce management solutions for enterprise clients. The company also acquired payroll capabilities in Sweden and Mexico through smaller transactions, strengthening its global footprint. Additionally, ADP formed a strategic partnership with Fiserv, integrating small business solutions and creating mutual referral opportunities. The company has modernized its go-to-market approach, with digital onboarding increasing from one-third to half of new clients. ADP has also enhanced its PEO business model, achieving strong growth through improved sales execution and targeted industry approaches. International expansion continues with the iHCM platform now serving over 5,000 clients globally.
ADP company profile · for informational purposes only — not investment advice.
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