European Investor
28 Jan 2026, 16:48
ADP reported solid second-quarter fiscal 2026 results and raised its full-year outlook, citing strong execution, new business momentum, and resilient demand for its HR and payroll solutions.
For the quarter ended December 31, 2025, ADP’s revenues rose 6% year over year to $5.4 billion, or 5% on an organic constant-currency basis. Net earnings increased 10% to $1.1 billion, while adjusted EBIT climbed 10% to $1.4 billion, lifting the adjusted EBIT margin by 80 basis points to 26.0%. Diluted and adjusted diluted EPS both rose 11% to $2.62.
Employer Services revenues increased 6% year over year, supported by steady client activity, with segment margins expanding 50 basis points. PEO Services revenues also grew 6%, with average worksite employees up 2% to about 758,000, though segment margin declined 70 basis points. Interest on funds held for clients rose 13% to $309 million, driven by higher balances and yields.
Management raised fiscal 2026 guidance, now expecting revenue growth of about 6%, adjusted EBIT margin expansion of 50–70 basis points, and adjusted diluted EPS growth of 9%–10%. ADP also reaffirmed expectations for strong contributions from its client funds investment strategy, reflecting higher average yields and growing client balances.
For the quarter ended December 31, 2025, ADP’s revenues rose 6% year over year to $5.4 billion, or 5% on an organic constant-currency basis. Net earnings increased 10% to $1.1 billion, while adjusted EBIT climbed 10% to $1.4 billion, lifting the adjusted EBIT margin by 80 basis points to 26.0%. Diluted and adjusted diluted EPS both rose 11% to $2.62.
Employer Services revenues increased 6% year over year, supported by steady client activity, with segment margins expanding 50 basis points. PEO Services revenues also grew 6%, with average worksite employees up 2% to about 758,000, though segment margin declined 70 basis points. Interest on funds held for clients rose 13% to $309 million, driven by higher balances and yields.
Management raised fiscal 2026 guidance, now expecting revenue growth of about 6%, adjusted EBIT margin expansion of 50–70 basis points, and adjusted diluted EPS growth of 9%–10%. ADP also reaffirmed expectations for strong contributions from its client funds investment strategy, reflecting higher average yields and growing client balances.
