Automatic Data Processing Q3 2025 Earnings Report

Automatic Data Processing EPS Results

• Actual EPS: $3.06
• Consensus EPS: $2.97
• Beat/Miss: Beat by +$0.09
• One Year Ago EPS: $2.88

Automatic Data Processing Revenue Results

• Actual Revenue: $5.55 billion
• Expected Revenue: $5.49 billion
• Beat/Miss: Beat by +$61.90 million
• YoY Revenue Growth: +5.70%

Automatic Data Processing Announcement Details

• Quarter: Q3 2025
• Date: 4/30/2025
• Time: Before Market Opens
• Conference Call Date: Wednesday, April 30, 2025
• Conference Call Time: 8:30AM ET

Automatic Data Processing (NASDAQ:ADP) provides cloud-based human capital management solutions worldwide. It operates in two segments, Employer Services and Professional Employer Organization (PEO). The Employer Services segment offers strategic, cloud-based platforms, and human resources (HR) outsourcing solutions. Its offerings include payroll services, benefits administration, talent management, HR management, workforce management, insurance, retirement, and compliance services, as well as integrated HCM solutions. The PEO Services segment provides HR outsourcing solution to businesses through a co-employment model. This segment offers employee benefits, protection and compliance, talent engagement, expertise, comprehensive outsourcing, and recruitment process outsourcing services. Automatic Data Processing, Inc. was founded in 1949 and is headquartered in Roseland, New Jersey.

Automatic Data Processing Q3 2025 Earnings Call Transcript

Presentation

[Operator]

Good morning. My name is Michelle, and I'll be your conference operator. At this time, I would like to welcome everyone to ADP's Third Quarter twenty twenty five Earnings Call. I would like to inform you that this conference is being recorded. After the prepared remarks, we will conduct a question and answer session.

[Operator]

Instructions will be given at that time. I will now turn the conference over to Matt Keating, Vice President, Investor Relations. Please go ahead.

[Matthew Keating, Vice President - IR at Automatic Data Processing]

Thank you, Michelle, and welcome everyone to ADP's third quarter fiscal twenty twenty five earnings call. Participating today are Maria Black, our President and CEO Don McGuire, our CFO and Peter Hadley, our Treasurer. Earlier this morning, we released our results for the quarter. Our earnings materials are available on the SEC's website and our Investor Relations website at investors.adp.com, where you'll also find the investor presentation that accompanies today's call. During our call, we will reference non GAAP financial measures, which we believe to be useful to investors and that exclude the impact of certain items.

[Matthew Keating, Vice President - IR at Automatic Data Processing]

A description of these items, along with a reconciliation of non GAAP measures to their most comparable GAAP measures, can be found in our earnings release. Today's call will also contain forward looking statements that refer to future events and involve some risk. We encourage you to review our filings with the SEC for additional information on factors that could cause actual results to differ materially from our current expectations. I'll now turn it over to Maria.

[Maria Black, President, CEO & Director at Automatic Data Processing]

Thank you, Matt, and thank you everyone for joining us. Before discussing our third quarter results, I want to take a few moments to acknowledge this morning's press release announcing our CFO transition. Don McGuire has enjoyed a remarkable career at ADP, initially joining ADP Canada in 1998 as vice president of finance. He would go on to profoundly shape our international business, serving in a number of key leadership roles around the world, including his 02/2018 appointment to the position of president, employer services international. In 2021, Don returned to his finance roots, taking on the role of ADP's CFO, where he has provided strong financial stewardship and valued strategic counsel, in particular as I transitioned into my role as ADP's CEO.

[Maria Black, President, CEO & Director at Automatic Data Processing]

I am honored to call him a colleague and more importantly, a friend. Dawn, thank you from the bottom of my heart for your countless contributions to ADP. And with that, as part of our orderly succession planning, I'm excited to share that Peter Hadley will succeed Don as CFO effective July 1, with Don assisting with this transition through the September. Many of you already know Peter through his participation in various investor meetings and calls over the course of the last year. He joined ADP in 02/2002 and is also a global citizen, having held roles in both finance and operations for ADP in Europe, Asia, and The United States, including as CFO of our international and enterprise business units, president of Asia Pacific, and most recently as corporate treasurer.

[Maria Black, President, CEO & Director at Automatic Data Processing]

Peter brings deep financial expertise, extensive knowledge of ADP and our industry, and strong leadership and strategic skills to the position. You will have the opportunity to hear more from Peter at our Investor Day on June 12. In the meantime, I hope you will all join me in wishing Don well and in welcoming Peter to the CFO role. Now on to our results. This morning, we reported solid third quarter results that included 6% revenue growth, 10 basis points of adjusted EBIT margin expansion and 6% adjusted EPS growth.

[Maria Black, President, CEO & Director at Automatic Data Processing]

I'm excited to share the progress we continue to make against our strategic priorities, but let's first review some additional financial highlights from the quarter. We delivered another solid quarter of Employer Services new business bookings growth. In particular, we were pleased with the results across our U. S. Offerings with our small business, mid market and enterprise as well as compliance solutions offerings all performing well.

[Maria Black, President, CEO & Director at Automatic Data Processing]

We meanwhile experienced a softer quarter for international bookings as a result of macroeconomic uncertainty in some of our key international markets. With healthy new business pipelines, we remain focused on delivering overall bookings growth within our guidance range. Employer services retention again modestly exceeded our expectations, declining slightly compared to the prior year. This continued strong retention performance reflects client satisfaction scores reaching record highs for a third quarter and on a fiscal year to date basis, with the most meaningful improvements coming from our enterprise, international and HRO businesses. Our US clients continue to hire in the third quarter as our employer services pays per control growth remained at 1%.

[Maria Black, President, CEO & Director at Automatic Data Processing]

And last, PEO revenue growth of 7% exceeded our expectations, helped by higher wages, strong retention, and continued growth in zero margin pass throughs. Now let's turn to our continued execution on our strategic priorities, which include leading with best in class HCM technology, providing unmatched expertise in outsourcing and benefiting our clients with our global scale. Our momentum with enterprise clients continued in the third quarter. New business bookings for ADP Lyric HCM increased substantially and our pipeline for new Lyric business doubled compared to last year. Among the new clients to start on Lyric during the third quarter was a leading provider of home health care services with more than 36,000 employees.

[Maria Black, President, CEO & Director at Automatic Data Processing]

This client is now live with HR payroll and time and plans to add recruiting and talent this quarter. We were also pleased with Workforce Software's new business bookings with ongoing strong interest for its time and attendance, absence management, and scheduling tools from organizations across a variety of industry verticals and geographies. We continue to make progress in our work to tightly integrate the acquired workforce software business with key ADP HCM platforms. We further strengthened our global payroll capabilities with our acquisition of PEI in Mexico in the third quarter. Based in Mexico City, PEI has provided robust payroll solutions, HCM expertise, and technology to local and multinational clients for thirty years and has been a valued ADP global payroll partner since 02/2009.

[Maria Black, President, CEO & Director at Automatic Data Processing]

By integrating PEI's payroll expertise Mexico with ADP's global reach and comprehensive HCM solutions, we enhance the experience we can provide to our local and global clients. In addition to PEI's products and solutions, the acquisition added nearly 300 experienced associates who bring deep local expertise as we continue to pursue growth opportunities across the Latin America region. We supported our clients and partners by hosting a number of signature events during the third quarter. At the ADP Rethink event in Zurich, leaders from the world's largest organizations came together to share insights and lessons learned from their global transformations and to discuss challenges and opportunities in a rapidly changing HCM landscape. At the ADP Meeting of the Minds event in Las Vegas, we hosted enterprise clients from across all industries, sizes, locations together with industry experts to focus on one important mission, making work better.

[Maria Black, President, CEO & Director at Automatic Data Processing]

And at our Accountant Connect Summit, we provided more than 10,000 partner attendees with access to thought leaders who are shaping the future of the accounting profession. During the third quarter, we also continued to advance our embedded payroll partnership with Fiserv. We are actively referring our clients and prospects to Fiserv's Clover point of sale solution, while Fiserv is referring its merchant clients to ADP's run payroll. We expect our sales to accelerate as we complete our product integration work this year, enabling us to offer a differentiated integrated solution. We are excited by this relationship as well as the broader opportunities we see to grow our embedded payroll solution over time.

[Maria Black, President, CEO & Director at Automatic Data Processing]

Finally, our focus on best in class HCM technology led to several recent awards, including RUN being named number one on g two's best software products for small business, ADP Lyric HCM being named Data Solution of the Year for Human Resources in the 2025 Data Breakthrough Awards, and ADP Assist being named a winner in the 2025 Artificial Intelligence Excellence Awards presented by Business Intelligence Group, earning recognition for driving innovation and possibilities in AI. We look forward to sharing more details around the strength of our product portfolio as well as our innovation roadmap at our upcoming Investor Day on June 12. Overall, we were pleased with our strong financial and strategic outcomes in Q3. I'd like to thank our associates who continue to deliver exceptional products and service to our clients and whose efforts drive our client wins, industry recognition and record client satisfaction levels. Thank you again for all that you do for ADP and for our clients.

[Maria Black, President, CEO & Director at Automatic Data Processing]

Don?

[Don Mcguire, CFO at Automatic Data Processing]

Thanks, Maria, and good morning to everyone on the call. Before I start, I would just like to thank you, Maria, for the kind words. It has truly been a privilege to contribute to ADP's success over the years and to work alongside so many talented and committed colleagues. I am also happy to see ADP's CFO position being assumed by such a capable and innovative leader, and I look forward to working with Peter to ensure a seamless transition in the coming months. Now for some color on our results for the quarter and our updated fiscal twenty twenty five guidance.

[Don Mcguire, CFO at Automatic Data Processing]

Overall, we reported a solid third quarter with our consolidated revenue growth and adjusted EBIT margin coming in above our expectations. We are adjusting our full year guidance to reflect our better than expected Q3 results, as well as making a few other changes, which I'll detail. Let me begin with our Employer Services results and guidance. ES segment revenue increased 5% on a reported and organic constant currency basis in the third quarter. As Maria mentioned, ES new business bookings growth was solid.

[Don Mcguire, CFO at Automatic Data Processing]

Given the current macroeconomic uncertainty, our recent softer international bookings and the importance of the fourth quarter, a range of new business bookings outcomes remains for fiscal twenty twenty five, and we are reiterating our 4% to 7% growth guidance. With ES retention again coming in better than expected in Q3, we now forecast a decline of 20 basis points to flat for the year, which is better than our prior guidance. ES pays per control growth was 1% in Q3, and we now expect 1% growth for the full year. Client funds interest revenue increased by more than we anticipated in Q3, driven by stronger average client funds balance growth. We are raising our full year average client funds balance growth expectation to 5% to 6%.

[Don Mcguire, CFO at Automatic Data Processing]

Our fiscal twenty twenty five forecast ranges for client funds interest revenue and the net impact from our extended investment strategy each increase by $15,000,000 at the midpoint. In total, there is no change to our fiscal twenty twenty five ES revenue growth forecast of 6% to 7%. Our ES margin increased 20 basis points in the third quarter, and we are narrowing our fiscal twenty twenty five ES margin guidance to now expect growth of 50 to 60 basis points. Moving on to the PEO, we had 7% revenue growth and 2% average worksite employee growth. PEO revenue excluding zero margin pass through growth of 8% was supported by higher wages and strong retention.

[Don Mcguire, CFO at Automatic Data Processing]

PEO pays per control growth decelerated modestly from the second quarter. To reflect our Q3 results, as well as the ongoing benefits anticipated from higher wages, we are increasing our full year PEO revenue growth forecast to 6% to 7%, and PEO revenue excluding zero margin pass through growth to 5% to 6%. We are maintaining our 2% to 3% average worksite employee growth guidance for the year. PEO margin was flat in the quarter, as strong revenue growth and favorable actuarial loss development in workers' compensation reserves were offset by higher workers' compensation and SUI costs. We now expect PEO margin to decrease between sixty and eighty basis points for the full year, which is slightly better than our prior forecast.

[Don Mcguire, CFO at Automatic Data Processing]

Putting it all together, we are maintaining our fiscal twenty twenty five guidance for consolidated revenue growth of 6% to 7% and now expect to come in towards the high end of this range. We are updating our adjusted EBIT margin expansion guidance to 40 to 50 basis points. We continue to anticipate a full year effective tax rate of around 23 and now expect fiscal twenty twenty five adjusted EPS growth of 8% to 9%. As we look ahead to fiscal twenty twenty six, we wanted to share a few early thoughts. First, heightened levels of macro uncertainty are leading to projections for slower economic growth.

[Don Mcguire, CFO at Automatic Data Processing]

With this in mind, we expect our pays per control growth to continue at below normal levels next year. We will also continue to monitor any impacts from the uncertainty in the global macro environment on international sales, particularly our larger multi country deal activity. As a result of our laddering strategy, we remain positioned for continued tailwinds from our client funds portfolio as anticipated reinvestment rates remain above the average yield of our maturing securities, driving overall yields expected on the portfolio above fiscal twenty twenty five levels. As always, we will remain focused on driving growth in our new business bookings, maintaining strong client satisfaction and retention levels and investing in our products and people to deliver sustainable revenue growth and margin expansion over time. Thank you.

[Don Mcguire, CFO at Automatic Data Processing]

And I'll now turn it back to the operator for Q and A.

[Operator]

Thank you. Thank you. Please ask one question with a brief follow-up. We will take our first question from the line of Ramsey El Assal with Barclays. Your line is open.

[Ramsey El Assal, Analyst at Barclays Capital]

Hi, thank you for taking my question and it's been great working with you Don. Best of luck in the future and also congratulations to Peter. Maybe I could ask about the softer international bookings that you called out a little more color there. Is it sort of a particular regions, products, any other color that you could give us there would be helpful.

[Maria Black, President, CEO & Director at Automatic Data Processing]

Yeah, sure. So good morning, Ramzi, and thanks for joining us today. So I'll comment on the international bookings. So overall, the international space had executed and we had several quarters of consistent strength. And what we saw in Q3 was a bit of softness.

[Maria Black, President, CEO & Director at Automatic Data Processing]

And undoubtedly, we think the softness is anchored in the uncertainty in the macro environment. That said though, the international space in general, these are large deals, they tend to be lumpy. We have strong pipelines. So from a broad based perspective, the pipelines are strong both in country as well as the global view offers and things of that nature, the multi country deals. However, we have a lot to get done, I guess, in the fourth quarter, so it is a little bit of a lumpy environment out there.

[Maria Black, President, CEO & Director at Automatic Data Processing]

These are lumpy deals, but the pipeline supports a solid finish to the year.

[Ramsey El Assal, Analyst at Barclays Capital]

Got it. Okay. Thank you. Also, the you called it the Fiserv relationship. I guess just more broadly on that embedded offering, what do you think of the growth opportunity there in the addressable market?

[Ramsey El Assal, Analyst at Barclays Capital]

Is there a large opportunity for embedded across potentially other distribution channels and partners?

[Maria Black, President, CEO & Director at Automatic Data Processing]

Sure. So, we are very, very excited about the Fiserv relationship. It is progressing well. This year, we are going to roll out the integration. I think that'll be a leapfrog stage for both of us.

[Maria Black, President, CEO & Director at Automatic Data Processing]

So thus far, we're sharing referrals back and forth. We are perfecting the model from a distribution. So you imagine our distribution being folded together with their distribution across our go to market, but also across our bases in terms of the over a million clients that we have and run. And I think they're shy of a million, but nonetheless, the overlap is not 100%. So there's a tremendous amount of opportunity for us to address each other's bases.

[Maria Black, President, CEO & Director at Automatic Data Processing]

And so we do think the game changer, though, will be when RUN is embedded into the Clover offer and Cash Flow Central is embedded into the RUN offer. And that's forthcoming, so we're really excited about that. We do think that's big. That said, we also believe that there might be an opportunity to extend that reach across multiple additional ADP platforms. So think taking it into potentially the mid market, into other countries.

[Maria Black, President, CEO & Director at Automatic Data Processing]

We're both global businesses. So we think the reach just even within Fiserv is meaningful for us. But to your question, beyond that, we're very excited about our embedded offer. We have it across a couple other places. And in my mind, this is the proof point of really seeing how the integration can work from a technology perspective.

[Maria Black, President, CEO & Director at Automatic Data Processing]

But certainly, we are looking at other places that we have the ability to extend our reach through our embedded offering to really extend the total addressable market, if you will.

[Ramsey El Assal, Analyst at Barclays Capital]

Thank you.

[Operator]

Thank you. Our next question comes from Dan Dolev with Mizuho. Your line is open.

[Dan Dolev, Managing Director - Senior Analyst at Mizuho Financial Group]

Hey, guys. Great results and it was you know, a pleasure working with you working with you, Don. You know, it's it's I feel like everyone is a little bit confused. Results are great. You're talking about uncertainty.

[Dan Dolev, Managing Director - Senior Analyst at Mizuho Financial Group]

You know, some of the payment companies out there are still saying things are good. Can you maybe tell us a little bit more in terms of when when you say uncertainty, how much is it, you know, holding back on on on on hiring, or is it just people are worried? Maybe just like concerns, maybe you could parse out concerns versus actual actions, I would say, from your clients. That would, I think, really be helpful for investors.

[Don Mcguire, CFO at Automatic Data Processing]

Jan, thanks for the comments, and thanks for the question. What we're seeing, we're seeing a lot of stability in our base. Mean, the underlying economic factors are still pretty strong for us in terms of unemployment's low, and yes, we are still rounding down to 1% PPC growth, so people still are hiring. There's some of that happening. I think the uncertainty that we're seeing though, as Maria mentioned earlier in the bookings comments, is these very large deals that perhaps span multiple countries.

[Don Mcguire, CFO at Automatic Data Processing]

I think there's some apprehension there, if you will, to make decisions, although the pipelines are very strong and these deals are always a long time in the making because they are complicated and complex and they do reach into several corners of globe. But, you know, in in having said that, we're we're not terribly far off what we saw pre pandemic where it was always hard to find people to get signatures, etcetera. So we're still optimistic. And as we said, we our own base, things are still going well. We watch bankruptcies.

[Don Mcguire, CFO at Automatic Data Processing]

We watch clients who are are active but not not billing. So things seem to be pretty calm for us, but we can't deny what we're hearing and what you're reading, we're all hearing. So hopefully these things settle down, but in our own base and day to day business, things are still pretty strong.

[Dan Dolev, Managing Director - Senior Analyst at Mizuho Financial Group]

That's great. Thank you. I think this definitely helped clarify what's out there. Really appreciate it.

[Operator]

Thank you. Our next question comes from Mark Marcon with Baird. Your line is open.

[Mark Marcon, Senior Research Analyst at Baird]

First, Don, it's been a pleasure working with you. Hope you have all the best enjoy your retirement. And Peter, welcome. Maria, you mentioned international and we just talked a little bit about the uncertainty, but I'm just wondering if you could delve a little bit more with regards to what you're seeing in terms of mid market companies, the smaller companies that would typically use run. Are you hearing anything or is your sale or your sales folks hearing anything about any sort of uncertainty pushing out delays or how is that impacting the PEO business?

[Mark Marcon, Senior Research Analyst at Baird]

We heard from a different player yesterday that ended up indicating that they were seeing a slowdown with regards to potential hires in their PEO business. So wondering about that, and then I've got a follow-up.

[Maria Black, President, CEO & Director at Automatic Data Processing]

Sure, so I'll start. I think we talked a little bit about international and Don shared that broadly speaking, feel solid about the pipelines, we feel solid about the execution. I think it's really about we have a lot to get done as we always do in the fourth quarter. So I think with respect to the mid market, the down market and the PEO and the rest of your question mark, broadly speaking, we're very pleased with our results this quarter. They're solid.

[Maria Black, President, CEO & Director at Automatic Data Processing]

And so I think from a distribution standpoint, we continue to execute, we continue to see that clients are investing in their people. So if you think about our industry versus what was shared earlier from Dan around, call it the payments business, if you will, HCM is not discretionary as it relates to companies are investing in their people, they're investing in hiring, they're investing in talent, and candidly, they have to pay people. And so we're not seeing from a distribution and HCM demand perspective. Demand feels okay. It feels as it relates to pipelines in the down market and PEO, we measure that more with respect to activity in terms of how many appointments our sellers are going on, how many RFPs are going through the PEO model.

[Maria Black, President, CEO & Director at Automatic Data Processing]

PEO bookings, there was growth in the third quarter. It was a little bit less than the second quarter, but at the same time, we have line of sight of good solid growth in the PEO to round out fiscal 'twenty five. We also see good strength in the PEO and retention. So I think all things being equal, we feel good about the demand. It feels okay out there in the down market, mid market, up market PEO.

[Maria Black, President, CEO & Director at Automatic Data Processing]

Even international has pipelines to support the broad range of bookings guidance that we have.

[Don Mcguire, CFO at Automatic Data Processing]

Yeah, maybe Maria, just to add on the PEO question, Mark, that you asked. Our PEO bookings were good in the quarter. We were happy with them, and we did have 2% worksite employee growth. So our pays per control were also little bit better than we expected. So, we were happy with PO in the quarter for sure.

[Mark Marcon, Senior Research Analyst at Baird]

That's great. And then, ADP has been doing a great job in terms of modernizing. Can you give us an update with regards to workforce software in terms of that being integrated and maybe even a little bit more color with regards to Lyric? Sounds like things are going really well from that perspective.

[Maria Black, President, CEO & Director at Automatic Data Processing]

They are, Mark. Things are going incredibly well. So just a reminder for everyone, we closed on that integration in October. We've been very busy since then. So part of that busyness was the overlap of the pipelines and really seeing the go to market come together.

[Maria Black, President, CEO & Director at Automatic Data Processing]

It's also the integration of the overall offer and call it the organization into ADP. So we are still working on the technology integration, and that's coming along incredibly well. We're really excited to see the sales forces come together. And from a go to market perspective, I know I mentioned our Rethink events, mentioned our Meeting of the Minds event. I think the thing that I wouldn't say has surprised us, but has really pleased us since October, is how well this offer is resonating with our large clients in the enterprise and in the global space.

[Maria Black, President, CEO & Director at Automatic Data Processing]

So we're really excited. In fact, we have a few wins that we were excited to see come through this quarter that candidly wouldn't have been wins without this offer in portfolio, if you will. So we're really excited about the progress we've made. We're excited to see the integration come together. And I think it's going to continue to drive tremendous opportunity for us going forward.

[Mark Marcon, Senior Research Analyst at Baird]

Great, thank you very much. Look forward to seeing you June 12.

[Mark Marcon, Senior Research Analyst at Baird]

Yes.

[Operator]

Thank you. Our next question comes from Tien Tsin Huang with JPMorgan. Your line is open.

[Tien Tsin Huang, Managing Director at JP Morgan]

Hey, thanks so much and all the best to Don, of course. I want to ask on ES. It decelerated a couple of points and is running below the full year range. I know you reiterated for the full year and you're running on the higher side in the first half, but just wanted to make sure I understood what the factors were there for the change.

[Don Mcguire, CFO at Automatic Data Processing]

Yeah, Tien Tsin, thank you. So on the revenue side, I think as we set up the third quarter, we mentioned that we had some poor calendar for us, so we had a bit of a stronger Q2 than Q3, so we expected that softness. There was a strengthening dollar at that time that was causing us some grief, we also expected that we were going to have some impact from declining short term rates. So we positioned Q3 to be a bit softer, And then we actually did better in Q3 on the revenue side than we had anticipated because those things didn't come to fruition, but there was less impact. As we look forward to Q4, we do expect a little bit of reacceleration.

[Don Mcguire, CFO at Automatic Data Processing]

There's no anomalies in in the calendars. FX is a little bit more favorable and of course, fund balances are really making an impact. They're growing based on higher wages more positively than we had expected. But then, know, if we look at the second half, we look at ES and we think about margins, the real story on the margin side is that we would have had better acceleration in our margins. Certainly, we're getting some some benefit from the higher rates.

[Don Mcguire, CFO at Automatic Data Processing]

We are getting an offset to that though. We said workforce software integration was going to cost us about 50 bps, and we continue to think that's about the number for the full year, so that's having an impact. So that's other aspect, and FX should be a little bit less unfavorable on the compare in the fourth quarter. So I think those are really the drivers for ES.

[Tien Tsin Huang, Managing Director at JP Morgan]

Okay. Yeah, thanks for the complete answer. I knew we had to leap year thing in there, but I just, yeah, I want to make sure we caught all that. Just my quick follow-up just on the PEI, the Mexico acquisition, can you roughly size that for us? And I'm curious, can that be extended or pushed into other parts of the region, Latin America, etcetera?

[Don Mcguire, CFO at Automatic Data Processing]

So PEI has been a long time partner of ours since I think 02/2009. So it's been with us for quite some time. This is really a domestic Mexico company. It's important for us to yeah. So it's important for us to get in the ground.

[Don Mcguire, CFO at Automatic Data Processing]

It's I didn't don't even think it shows up in the cash flow statement. It it was a sub $10,000,000 acquisition. So company we've working with for a very, very long time. And but it's very much domestic Mexico, but certainly we're enthusiastic and hopeful that we can grow in the domestic Mexican market and use it, continue to use it as a Salergo partner as we have for many, many years now.

[Maria Black, President, CEO & Director at Automatic Data Processing]

Yeah, think the only comment I would make is we're really excited about their deep expertise and obviously the local contribution that it will make from a Mexico perspective, but we are also incredibly focused on our global expansion. And we have a big business in Brazil, big business in Chile. I was there actually just a couple weeks ago. So we continue to remain focused on overall international expansion, but specifically Latin America.

[Tien Tsin Huang, Managing Director at JP Morgan]

Good. Thank you both.

[Operator]

Thank you. Our next question comes from Brian Bergen with C. D. Cowen. Your line is open.

[Bryan Bergin, Managing Director at TD Cowen]

Hi, good morning. Thank you. And Don, congrats on best wishes. And Peter, we're looking forward to working with you. My first question is on '26.

[Bryan Bergin, Managing Director at TD Cowen]

So I appreciate the comments on PPC. Was hoping you just dig in a little bit more on early twenty twenty six thoughts. Any important considerations on implied 4Q twenty twenty five exit rates across the business that may be stickier versus those that may be at more risk? And can you remind us just how to think about relative insulation in the business model in the face of a potential macro slowdown?

[Don Mcguire, CFO at Automatic Data Processing]

Okay. I'll say a little bit about '26 beyond what we said in the prepared remarks. I mean, I think we wanted to make sure everyone understood the float impact and how our laddering strategy is going to work. If you have more detailed questions like that, can certainly ask Peter. He's in the room here with us, he can answer that question if we want him to do that.

[Don Mcguire, CFO at Automatic Data Processing]

But I think I also don't want to ruin Investor Day coming up on June, so not too much to to say on twenty sixth beyond what we shared in in the prepared comments. But I I would say that, when we think about the potential of a slowdown, ADP has weathered these types of storms many, many times, and our business is well insulated. So, it took several quarters for the slowdown to the prior slowdown to show itself in our results. So answered the question earlier, the business activity continues to be good. And so if things were to start to materialize or manifest themselves in a kind of a less positive economy, we would certainly see things in the pipeline, etcetera, the sales pipeline.

[Don Mcguire, CFO at Automatic Data Processing]

But generally speaking, it takes quite a while for that to work its way through the ADP business model, which is very resilient. As Maria said just a few minutes ago, we're not discretionary. So so that works well for us. And then, of course, we have the levers that we've had in the past, and we can use them. There's some naturally self correcting items like sales commissions, etcetera.

[Don Mcguire, CFO at Automatic Data Processing]

If things were to progress or continue, there's implementations would be slower, etcetera. A number of things changing our focus on some of our R and D initiatives. So there's many things and many levers we can pull to soften any potential blows and I think our history has shown that we've been able to do that on a pretty successful basis many times before.

[Bryan Bergin, Managing Director at TD Cowen]

Okay. Okay. Understood. And on follow-up on client hiring. So can you comment on what you saw as you move through the third quarter kind of month to month through 3Q and through April?

[Bryan Bergin, Managing Director at TD Cowen]

Is there any notable variation by industries that may be more directly exposed to tariff versus not?

[Don Mcguire, CFO at Automatic Data Processing]

No, I think generally, and I think I made the comment on the last call last quarter that we rounded down to 1%. We're still rounding down to 1% and yes, so things are softer. In normal years, we go back 'sixteen to 'nineteen and we look at pays per control growth, they're in the two percent to 3% range. So at 1%, we're at the lower end. But there was nothing specific, no specific industries that kind of jumped out at us.

[Don Mcguire, CFO at Automatic Data Processing]

So we would prefer to have higher PPC growth, of course, but it's still positive and rounding down to one.

[Bryan Bergin, Managing Director at TD Cowen]

Okay. Thank you for the detail.

[Operator]

Thank you. Our next question comes from Samad Samana with Jefferies. Your line is open.

[Samad Samana, Managing Director at Jefferies Financial Group]

Hi, good morning. And I will echo the comments of many congrats Don and look forward to working with you as well. Peter and Maria, just maybe a question for you. When I think about the Lyric bookings pipeline, again, I think for the last several quarters, you sounded much more optimistic about trends upmarket, specifically with Lyric plus rebrand. How much of that's from existing customers that are converting over to it versus gaining share from competitors as you've now kind of established a beachhead with some core customers there?

[Maria Black, President, CEO & Director at Automatic Data Processing]

Yeah. So it's a great question. So I should reiterate my incredible excitement and optimism for Lyric as a whole, not just the rebrand, which by the way, it is an incredible brand. And certainly, we love the name Lyric. But that offer is resonating really well.

[Maria Black, President, CEO & Director at Automatic Data Processing]

So we talked about the pipelines building. We don't delineate necessarily. We obviously know, but we don't disclose how much of the pipeline is upgrades and or new business bookings or net new logos, if you will. But the answer is both. It is resonating really well with CHROs in the market.

[Maria Black, President, CEO & Director at Automatic Data Processing]

I would say at these events, be it rethink and meeting of the minds that I mentioned, the excitement was there around workforce software, but it was also there around Lyric and the combination of the two. And what I would say to you is CHROs are liking this modern offer because it is arguably the most modern technology that's out there at this point. It's human centric in its design, it's adaptable. We consider it groundbreaking. It appears based on the response we're seeing in the market and in the pipelines that the market agrees with that sentiment.

[Maria Black, President, CEO & Director at Automatic Data Processing]

So yeah, we're really, really optimistic about what we're seeing with the market receptivity and how that is resulting in the pipelines and the new business bookings that we've seen with Lyric and expect to continue through this year.

[Samad Samana, Managing Director at Jefferies Financial Group]

Understood. And then maybe a follow-up, Don. Just as I think about the commentary between what's going on with the core business and maybe some of the international softness that you've seen and then the kind of the macro side that you called out. If I take all that together, how should we think about maybe ADP's own hiring plans? Are you guys going to still track to maybe what you anticipated in terms of headcount growth for fiscal 'twenty five?

[Samad Samana, Managing Director at Jefferies Financial Group]

Or should we think about a change in either direction in terms of hiring more or less than you originally anticipated, especially as we contextualize it with what's happened maybe over the last several weeks?

[Don Mcguire, CFO at Automatic Data Processing]

Yes, Samana. I think that we're not expecting to make any changes at this time. Things are going pretty well. The business is solid. So we have no changes to our plans.

[Don Mcguire, CFO at Automatic Data Processing]

Of course, you know, just building off the prior question from Brian, should something come up, then we'll do it definitely slow hiring, etcetera. But as we sit here today, things are solid, and we have no changes to our plans as we actually go into our budgeting cycle next week. So we're full speed ahead and still optimistic.

[Samad Samana, Managing Director at Jefferies Financial Group]

Great. Look forward to seeing you all in a few

[Samad Samana, Managing Director at Jefferies Financial Group]

weeks at the Analyst Day.

[Operator]

Thank you. Our next question comes from James Faucette with Morgan Stanley. Your line is open.

[James Faucette, Managing Director at Morgan Stanley]

Great, thank you so much, and offer my congratulations to Don and Peter as well. I wanted to ask quickly on PEO. Just wondering how client behavior in the PEO segment has evolved regarding benefits enrollments, and are you seeing any shifts in preference towards lower cost benefit plans, particularly as there's a little bit of macro pressure, perceived macro pressure?

[Don Mcguire, CFO at Automatic Data Processing]

Go ahead, I

[Maria Black, President, CEO & Director at Automatic Data Processing]

was gonna say, yeah, so I guess we can both answer that, but I'll start. From a PEO perspective, listen, there's always some of that. We actually just completed our renewal cycle, And so we're really pleased with what we've seen with respect to our execution through that. The team's done an incredible job moving through the motions of that. But moreover, PEO retention was strong in the third quarter.

[Maria Black, President, CEO & Director at Automatic Data Processing]

We do anticipate a very modest tailwind contributing, if you will, to the overall PEO results for 'twenty five. There was a modest tailwind in 'twenty four. So I think the retention of the PEO business speaks directly to the value of the value proposition within there, which is benefits, right? And so I think as it stands, we see stability, if not minor tick ups, if you will, in benefits attached, which are all good signs that the value proposition is resonating. Benefits is an important piece of that.

[Maria Black, President, CEO & Director at Automatic Data Processing]

A lot of that has to do with the cohorts, the industries that we sell our PEO offer to. So I think in general, the PEO, we're very pleased with the results on retention. We're pleased with how we've moved through the renewal cycles. Every cycle has some nuances, James, as it relates to what clients choose. But overall, what they're choosing is to stay with the PEO, and that's good news for us.

[James Faucette, Managing Director at Morgan Stanley]

Got it. And maybe just like a more nuanced question or deeper dive. Mean, you're executing well, etcetera. But is there anything that you can point to? I guess I'm just a little surprised because it seems like you guys are driving even better growth off of a higher base than a lot of your peers.

[James Faucette, Managing Director at Morgan Stanley]

And so just trying to get a sense whether that's go to market, cross sell, specific offerings where you think you're differentiated, just a little more color Thank you.

[Maria Black, President, CEO & Director at Automatic Data Processing]

Yeah, so I think one of the things I always like to remind everyone of is that all PEOs are not created equal. I'd like to think we have the best one, of course, but moreover, it's the fact that our constructs are different. So we don't entirely all target the exact same industries. Some tend to skew more to white collar companies, some tend to skew to less professional type of companies, if you will. So I think we address different industries.

[Maria Black, President, CEO & Director at Automatic Data Processing]

We're not always all in the same exact states, if you will. And I think the other piece is we're constructed different. One of the big differentiators, especially in, call it volatile health benefit cycles, is that we have a fully insured model. And so I think our model lends itself to more predictability, more stability, and that's a home run-in times like this. So I think we see some of that in our results.

[Maria Black, President, CEO & Director at Automatic Data Processing]

I also think the other piece, you touched on, is distribution. Not every PEO has the luxury of having an additional sales distribution engine, which is the rest of the payroll sellers that, as you know, 50% of the business that the PEO onboards comes from existing ADP clients. The upsell, cross sell, the go to market together with payroll sellers, just the way that we distribute, I think is again a home run. So I think our model is different and I think it lends itself to better results.

[James Faucette, Managing Director at Morgan Stanley]

That's great. Thank you so much.

[Operator]

Thank you. Our next question comes from Caroline Latta with Bank of America. Your line is open.

[Jason Kupferberg, Senior Equity Research Analyst at Bank of America Merrill Lynch]

Hi, this is actually Jason Kupferberg from Bank of America. Congrats to everybody. I wanted to maybe just start with a question, might be more for Maria, but coming back to this topic of just bookings and sales cycles and the macro, the intersection of all that, obviously you talked about some of what you're seeing on the international side. Maybe just talk a little bit more about The U. S.

[Jason Kupferberg, Senior Equity Research Analyst at Bank of America Merrill Lynch]

Are you seeing any client hesitancy, particularly upmarket? Any changes just in the last month or two as the tariff uncertainty has skyrocketed? And to the extent The U. S. Customers seem to be behaving differently than international, would just be curious to get your perspective on why that might be the case?

[Jason Kupferberg, Senior Equity Research Analyst at Bank of America Merrill Lynch]

Thank you.

[Maria Black, President, CEO & Director at Automatic Data Processing]

Yes, sure. So I think broadly speaking, Jason, we're really pleased with our results. From a U. S. Perspective, kind of moving through the motions of the down market we talked about.

[Maria Black, President, CEO & Director at Automatic Data Processing]

Clients are still investing in talent. The mid market doesn't get any easier. It's still complex. So I think we see strength in the results. We see strength in the activities and the down market, mid market.

[Maria Black, President, CEO & Director at Automatic Data Processing]

As we get into the enterprise space, pipelines are up year on year. We feel good about the enterprise clients in terms of the overall results and the pipelines, and we expect growth. What I will say is those very large clients in the enterprise space often do have that international reach. So as you get more global in the enterprise space, the multinational clients, I would say again, there is a tiny bit of pipeline aging that we're seeing. Again, the pipeline substantiates the results.

[Maria Black, President, CEO & Director at Automatic Data Processing]

It's always lumpy. Q4 is big for us in that space. It always is. And so I think from a standpoint of where we are, we're executing against a very strong pipeline, both in the international space as well as in the enterprise space. We have an incredible offer with Lyric.

[Maria Black, President, CEO & Director at Automatic Data Processing]

We have an incredible offer combined with workforce software. So I think we have a good story. We have good pipelines. We got a lot to get done, but we haven't seen necessarily huge elongations of sales cycles. I think we talked a lot about the sales cycles being back to kind of pre pandemic days.

[Maria Black, President, CEO & Director at Automatic Data Processing]

We're seeing, Dom mentioned it earlier, more signatures, maybe a tiny bit of additional timelines, but all eyes on Q4 is the way we think about it. We have the pipeline and we need to execute against it.

[Jason Kupferberg, Senior Equity Research Analyst at Bank of America Merrill Lynch]

Understood. I wanted to also get your latest views just on the competitive landscape, particularly down market. I mean, we've been hearing a little more from some of the privately held cloud based providers. So curious what you guys might be seeing on that front just in terms of win rates, pricing, etcetera.

[Maria Black, President, CEO & Director at Automatic Data Processing]

Yeah, I would say there's nothing new to call out. It's always competitive. Q4 is always competitive. There's always a lot happening in the down market with respect to the run platform, in the mid market, with respect to the Workforce Now platform. In the down market, we have an incredible story.

[Maria Black, President, CEO & Director at Automatic Data Processing]

We have almost a million clients on our RUN platform. We're extending our reach through our partner ecosystem. This partnership with Fiserv is, you know, it's a big bet, but we're also we believe it's a meaningful bet that's going to extend our distribution strength with theirs. So I think that's really exciting for us. We have a winning offer.

[Maria Black, President, CEO & Director at Automatic Data Processing]

We have good results on client satisfaction. I think I mentioned that during the prepared remarks that's lending itself to a strong retention. So the down market story is there. I think in the mid market, we have an incredible offer there in Workforce Now. We've made meaningful investments.

[Maria Black, President, CEO & Director at Automatic Data Processing]

We have strong NPS. We have strong retention. We have a winning offer in mid market. So I think it's always competitive, but I think we have best in class platforms, best in class execution, best in class service, and we see that through the results and retention and NPS.

[Jason Kupferberg, Senior Equity Research Analyst at Bank of America Merrill Lynch]

Thank you. We'll see you next month.

[Maria Black, President, CEO & Director at Automatic Data Processing]

Yes.

[Operator]

Thank you. Our next question comes from Brian Keane with Deutsche Bank. Your line is open.

[Bryan Keane, Managing Director, Senior Equity Analyst - Payments, Processors, and IT Services at Deutsche Bank]

Hi, good morning. I wanted to ask, what percentage of bookings come from international?

[Maria Black, President, CEO & Director at Automatic Data Processing]

Yeah. It's a great question. It really marries our revenue, and I think the last disclosure we had, it's 88% of the revenue is in the domestic US, and the rest is outside of The US. And so a think of it as a close correlation to that.

[Bryan Keane, Managing Director, Senior Equity Analyst - Payments, Processors, and IT Services at Deutsche Bank]

Got it. No. That's helpful. And then just thinking about the enterprise moving more to Lyric and workforce software solutions, you talked a little bit about the drag on margins. I think it's 50 basis points this year.

[Bryan Keane, Managing Director, Senior Equity Analyst - Payments, Processors, and IT Services at Deutsche Bank]

Just how do we think about margins in general going forward? Do we get that 50 basis points back into fiscal year twenty twenty six and then the overall kind of margin profile Lyric and Workforce Solutions?

[Don Mcguire, CFO at Automatic Data Processing]

Yes, it's a good question, Brian. We don't get it all back. Certainly, intangible amortization and the financing costs, which we've included in that 50 basis point number we give you, those don't go away. We do get some back certainly on the integration and deal expenses. So wouldn't model too much into that because it's in the grand scheme of things, it's not an enormous number across the ES the ES margin.

[Bryan Keane, Managing Director, Senior Equity Analyst - Payments, Processors, and IT Services at Deutsche Bank]

Got it. Okay. And congrats, Don. Amazing career. And and Peter, welcome.

[Don Mcguire, CFO at Automatic Data Processing]

Thank you.

[Operator]

Thank you. Our next question comes from Kevin McVeigh with UBS. Your line is open.

[Kevin McVeigh, Managing Director at UBS Group]

Great, thanks. And again, congratulations. Been a pleasure, Don. I guess, can we talk maybe just reconcile the improving retention with the lower pays per control? Is that a function of the client mix?

[Kevin McVeigh, Managing Director at UBS Group]

Or what's driving that?

[Maria Black, President, CEO & Director at Automatic Data Processing]

From the overall retention results and the pays per control, I think the overall results as it relates to how we're feeling with the retention guide. And so I think we've been executing well on retention. We continue to see kind of the improvements, and so we thought it was prudent to bring up the retention guide. And as it relates to the PPC side of it, I'll let Don kind of

[Don Mcguire, CFO at Automatic Data Processing]

take think the big story on retention is a couple things. One, we're very proud of the progress we've made in NPS scores. They've been very, very strong for us, we continue to either hit records or very close to records, and most of our business units are kind of at all time highs and that's across the board. So we think that's important. We also of course, we're seeing a little bit less switching.

[Don Mcguire, CFO at Automatic Data Processing]

Think things are a bit quieter in that regard. So people are hanging around because they like the service. The NPS is good. And as we look to the balance of the year, we think that perhaps not all of the normalization and other businesses, etcetera, have has settled in, but we think substantially all of it has. So, we continue to beat our retention guide quarter after quarter and there's only a quarter left.

[Don Mcguire, CFO at Automatic Data Processing]

So, I think we're a little bit more comfortable with the guide that we've given you, the improved guide we've given you for the balance of the year.

[Kevin McVeigh, Managing Director at UBS Group]

Helpful. And then just real quick on the client funds. It looks like you increased it was a similar amount for kind of client funds and then the extended strategy as well. But obviously, the balances are a lot different in terms of average balances. Anything that kind of explains just because again, increased it by the same amount, but it's like seven to one.

[Kevin McVeigh, Managing Director at UBS Group]

Anything that explains that?

[Don Mcguire, CFO at Automatic Data Processing]

I think I'm going to give Peter an opportunity to speak here and answer that question as a treasurer.

[Peter Hadley, Corporate Vice President & Treasurer at Automatic Data Processing]

Thanks, Kevin. I mean, the balance increase is really driven by higher wage levels. We had a strong bonus season in Q3. That's the time of year where we do pick that up, so we hold a lot more short money, if you like. Our client's short portfolio.

[Peter Hadley, Corporate Vice President & Treasurer at Automatic Data Processing]

We have less borrowing. So that's really what drove the balances. The rate position hasn't really moved, and you can see from our schedules that from a short term rate perspective we're relatively well hedged across the year, not so much by quarter but certainly across the year for short rates. So we're quite insulated from fluctuations in short term rates between our clients short and our borrowing levels. So I would say it's a balance of story, mainly driven by wages, and as a result, the balances have gone up.

[Peter Hadley, Corporate Vice President & Treasurer at Automatic Data Processing]

Point of balances is around 11,000,000 or $12,000,000 of revenue on a full year basis, and the revenue guide went up, and also we narrowed the range given there's only one quarter to go.

[Kevin McVeigh, Managing Director at UBS Group]

Helpful. Congratulations, Peter.

[Peter Hadley, Corporate Vice President & Treasurer at Automatic Data Processing]

Thank you. Appreciate it.

[Operator]

Thank you. Our next question comes from Kartik Mehta with Northcoast Research. Your line is open.

[Kartik Mehta, Executive MD & Director of Research at Northcoast Research]

Thank you. I know there's a ton of questions asked on international bookings, so I apologize for asking one more. But I want to get a sense, have you seen any pushback from ADP being an American company and maybe companies holding off a little bit until things settle down, or is this just an issue of uncertainty?

[Maria Black, President, CEO & Director at Automatic Data Processing]

Yeah. So we're not. Right? So from a standpoint of the conversations with respect to international, they're not about pushback on American companies. One reminder is that we have from a client or from an ADP perspective, we have ADP'ers on the ground in in close to 50 countries.

[Maria Black, President, CEO & Director at Automatic Data Processing]

And our offers also are in country and in many of the 140 countries that we serve. So from the standpoint of how we serve our clients, we serve them sometimes from a global perspective, but we also serve them from a local perspective. I think Don, and he can here in a minute, talk to you about kind of the final mile and how all of that works. So that's certainly not the conversation in international. It's really about the large deals and how they move through the motions toward closure through the fourth quarter.

[Maria Black, President, CEO & Director at Automatic Data Processing]

The pipelines are there, but it's not reflective of us being a US company by any stretch. Don't know, Don, if you want to add anything?

[Don Mcguire, CFO at Automatic Data Processing]

No, I think it's just important to comment that we're on the ground and we serve our customers very, very locally and, you know, we're part of the fabric in the social security ecosystem, income tax ecosystem in many, many countries. So I don't think there's any pushback just based on the, you know, the so called nationality of the company, but I think it's more just the overall uncertainty that's driving any apprehension, if you will. And then just a follow-up on the PPC on the PEO business. I know that there has been a difference between the ESPP and the PEO PVC.

[Kartik Mehta, Executive MD & Director of Research at Northcoast Research]

This quarter, did that come a little bit closer?

[Kartik Mehta, Executive MD & Director of Research at Northcoast Research]

It sounds like they're both kind of getting close to 1% or just matter of rounding?

[Don Mcguire, CFO at Automatic Data Processing]

No, it's a good observation Kartik. The PPCs did come quite close as a matter of fact, to be candid, the PPC and PEO was a little bit stronger than it was in Employer Services. But you're right, they're both trending down to one.

[Kartik Mehta, Executive MD & Director of Research at Northcoast Research]

Okay.

[Kartik Mehta, Executive MD & Director of Research at Northcoast Research]

And Don, it's been a pleasure working with you. Good luck with everything. And Peter, forward to working with you.

[Peter Hadley, Corporate Vice President & Treasurer at Automatic Data Processing]

Thank you.

[Don Mcguire, CFO at Automatic Data Processing]

Thank you.

[Operator]

Thank you. We have time for one last question. And our last question comes from Ashish Sabadra with RBC. Your line is open.

[Ashish Sabadra, Information & Business Services Analyst at RBC Capital Markets]

Thanks for taking my question. Just on POX pass through revenue growth, there was like, it grew 7%, six % and eight % in the first three quarter. The 5% to 6% guidance for the full year implies like a material slowdown. Is that just conservatism, or are there some puts and takes as we get into the fourth quarter?

[Don Mcguire, CFO at Automatic Data Processing]

Yeah. I think there are some puts and takes. I mean, the the revenue in the third quarter was better than we expected because we did have higher zero margin pass throughs, higher SUI, and of course, the retention was also a little bit better than we expected in the third quarter. So we do expect the fourth quarter to be a good and valuable contributor to us, but there's no major signals there.

[Ashish Sabadra, Information & Business Services Analyst at RBC Capital Markets]

That's very helpful color. And maybe just on the broader theme of Gen AI, I was wondering if you could share any additional progress on that front. Thanks.

[Maria Black, President, CEO & Director at Automatic Data Processing]

I'm so excited that you asked. It's amazing. We almost made it all the way through without a Gen AI question. But listen, we're incredibly excited about the progress we're making with respect to ADP Assist and the overall portfolio of generative AI offers that we're putting into the market. I mentioned during the prepared remarks the award that we won, and we're excited about that.

[Maria Black, President, CEO & Director at Automatic Data Processing]

But we're also excited about the entire strategy as we think about putting generative AI into our product for our clients to use, for our service associates to use, for our sellers to use to actually help build products. So I think we have an incredible plan. It's still very early days, right? So the results that we see, the awards that we're winning are fantastic. But I really look forward to how this evolves for us over the coming months and the coming years as we continue to unveil more and more functionality and continue to drive more and more efficiency in how we serve our clients.

[Ashish Sabadra, Information & Business Services Analyst at RBC Capital Markets]

That's great color. And congrats to both Don and Peter. Thank you.

[Don Mcguire, CFO at Automatic Data Processing]

Thank you.

[Operator]

Thank you. This concludes our question and answer portion for today. I'm pleased to hand the program over to Maria Black for closing remarks.

[Maria Black, President, CEO & Director at Automatic Data Processing]

Thank you, and thank you everyone for joining us. I will echo the sentiments I heard across all of the financial analysts this morning, which is a giant thank you to Don again, and a congratulations to Peter. And of course, to our associates, I am so grateful for all that you do to support our clients, to support each other. As we did a little bit of a brand refresh over the last quarter and leans more heavily into our brand colors, I have to tell you, all of our associates, all of you each and every day, you make me incredibly proud to be ADP Red. Thank you.

[Operator]

Thank you for your participation. This does conclude the program and you may now disconnect. Everyone, have a great day.

Participants

Executives

• Matthew Keating, Vice President - IR
• Maria Black, President, CEO & Director
• Don Mcguire, CFO
• Peter Hadley, Corporate Vice President & Treasurer

Analysts

• Ramsey El Assal, Analyst at Barclays Capital
• Dan Dolev, Managing Director - Senior Analyst at Mizuho Financial Group
• Mark Marcon, Senior Research Analyst at Baird
• Tien Tsin Huang, Managing Director at JP Morgan
• Bryan Bergin, Managing Director at TD Cowen
• Samad Samana, Managing Director at Jefferies Financial Group
• James Faucette, Managing Director at Morgan Stanley
• Jason Kupferberg, Senior Equity Research Analyst at Bank of America Merrill Lynch
• Bryan Keane, Managing Director, Senior Equity Analyst - Payments, Processors, and IT Services at Deutsche Bank
• Kevin McVeigh, Managing Director at UBS Group
• Kartik Mehta, Executive MD & Director of Research at Northcoast Research
• Ashish Sabadra, Information & Business Services Analyst at RBC Capital Markets