The Investor
29 Jul 2026, 15:36
ADP Stock Edges Higher After Strong Q4 Results and Solid Fiscal 2027 Outlook
Automatic Data Processing (NASDAQ: ADP) shares rose 5% on Wednesday after the payroll and human capital management provider reported strong fourth-quarter and full-year fiscal 2026 results, supported by healthy revenue growth, expanding margins, and a solid outlook for fiscal 2027.
For the fourth quarter, ADP reported revenue of $5.5 billion, up 7% year over year, while adjusted EBIT increased 13% to $1.4 billion. Adjusted EBIT margin expanded 140 basis points to 25.1%, reflecting continued operating leverage. Diluted EPS rose 10% to $2.45, while adjusted diluted EPS climbed 17% to $2.64.
The company also delivered another strong full year. Revenue increased 7% to $21.9 billion, adjusted EBIT rose 10% to $5.9 billion, and adjusted EBIT margin expanded 80 basis points to 26.8%. Adjusted EPS increased 11% to $11.12, while Employer Services new business bookings reached a record $2.2 billion, up 6% from the previous year.
Management highlighted strong client retention, record customer satisfaction, and growing adoption of AI-powered capabilities across its products, service operations, and sales organization. CEO Maria Black said AI is making human capital management increasingly critical and positions ADP to strengthen its role as a trusted partner for employers navigating the future of work.
Looking ahead, ADP issued a healthy fiscal 2027 outlook. The company expects revenue growth of 5% to 6%, adjusted EBIT margin expansion of 70 to 90 basis points, and adjusted EPS growth of 9% to 11%. It also expects continued growth in Employer Services bookings and higher interest income from client funds.
The gain in ADP shares reflects investor confidence in the company's consistent execution and resilient business model. While the fiscal 2027 guidance points to a normalization from this year's growth rates, expanding margins, recurring revenue, strong cash generation, and increasing AI integration continue to support ADP's long-term growth outlook.
Automatic Data Processing (NASDAQ: ADP) shares rose 5% on Wednesday after the payroll and human capital management provider reported strong fourth-quarter and full-year fiscal 2026 results, supported by healthy revenue growth, expanding margins, and a solid outlook for fiscal 2027.
For the fourth quarter, ADP reported revenue of $5.5 billion, up 7% year over year, while adjusted EBIT increased 13% to $1.4 billion. Adjusted EBIT margin expanded 140 basis points to 25.1%, reflecting continued operating leverage. Diluted EPS rose 10% to $2.45, while adjusted diluted EPS climbed 17% to $2.64.
The company also delivered another strong full year. Revenue increased 7% to $21.9 billion, adjusted EBIT rose 10% to $5.9 billion, and adjusted EBIT margin expanded 80 basis points to 26.8%. Adjusted EPS increased 11% to $11.12, while Employer Services new business bookings reached a record $2.2 billion, up 6% from the previous year.
Management highlighted strong client retention, record customer satisfaction, and growing adoption of AI-powered capabilities across its products, service operations, and sales organization. CEO Maria Black said AI is making human capital management increasingly critical and positions ADP to strengthen its role as a trusted partner for employers navigating the future of work.
Looking ahead, ADP issued a healthy fiscal 2027 outlook. The company expects revenue growth of 5% to 6%, adjusted EBIT margin expansion of 70 to 90 basis points, and adjusted EPS growth of 9% to 11%. It also expects continued growth in Employer Services bookings and higher interest income from client funds.
The gain in ADP shares reflects investor confidence in the company's consistent execution and resilient business model. While the fiscal 2027 guidance points to a normalization from this year's growth rates, expanding margins, recurring revenue, strong cash generation, and increasing AI integration continue to support ADP's long-term growth outlook.
