Automatic Data Processing (ADP) Financials

Automatic Data Processing’s financial statements show a business that has generally expanded its revenue, earnings and cash generation over the past several years, although quarterly results can be volatile because of client-fund activity, investment flows and seasonal patterns.

• Revenue has trended higher. Quarterly revenue increased from approximately $4.22 billion in Q1 2023 to $5.47 billion in Q4 2026. Revenue reached $5.94 billion in Q3 2026, representing the highest quarterly figure in the provided data.
• Long-term earnings growth remains evident. Net income rose from $625.5 million in Q4 2022 to $978.7 million in Q4 2026. Earnings per diluted share increased from $1.49 to $2.45 over the same comparison, helped by both earnings growth and a lower share count.
• Share repurchases have reduced the share base. Weighted average diluted shares declined from about 421 million in Q4 2022 to 403 million in Q4 2026. ADP repurchased $485.7 million of common stock in Q4 2026, supporting per-share earnings.
• Operating cash flow is consistently strong. ADP generated $1.43 billion of operating cash flow in Q4 2026, compared with $1.30 billion in Q4 2024 and $1.44 billion in Q4 2025. Operating cash flow has remained positive in every period provided.
• ADP continues to return substantial capital to shareholders. Dividend payments were $683.2 million in Q4 2026, while the quarterly dividend per share rose from $1.04 in 2022 to $1.70 in 2026. The combination of growing dividends and repurchases is favorable for income-oriented investors.
• Liquidity has improved from earlier periods. Cash and equivalents increased from approximately $1.44 billion at the end of fiscal 2022 to $3.23 billion at March 31, 2026. The latest balance sheet also showed no short-term debt, although cash balances can fluctuate significantly during the year.
• Profitability remains high but varies by quarter. Q4 2026 operating income was $1.26 billion, equal to an operating margin of about 23.0%. That was below Q3 2026’s unusually strong 30.1% operating margin, but above the roughly 18% operating margins reported in several earlier periods.
• Investment activity is a major source of cash-flow volatility. ADP frequently purchases and sells billions of dollars of investments each quarter. These transactions largely explain why investing cash flow ranged from positive $423 million in Q4 2025 to negative $1.86 billion in Q1 2026 and negative $958 million in Q4 2026.
• Recent quarterly earnings softened sequentially. Q4 2026 revenue declined approximately 7.8% from Q3 2026, while net income fell about 28%. Diluted EPS declined from $3.38 to $2.45. Some of this movement may reflect seasonality and the different nature of the reported periods, but investors should monitor whether the weaker quarter persists.
• Leverage and shareholder equity require monitoring. Long-term debt was approximately $3.98 billion at March 31, 2026, compared with $2.99 billion at the end of fiscal 2022. Total equity was only $6.35 billion at the latest balance-sheet date, and treasury stock was a negative $22.5 billion because of extensive buybacks.

Overall, ADP’s multi-year trend is favorable: revenue and earnings are higher, diluted shares are lower, operating cash flow is robust, and shareholder distributions have grown. The primary risks are quarterly volatility, investment-related cash movements, rising long-term debt and the possibility that recent margin and earnings weakness could become more persistent.

Note: Several historical figures in the supplied data are marked as restated, and the latest Q4 2026 balance sheet was not provided. Comparisons should therefore be viewed as directional rather than as a substitute for reviewing ADP’s latest annual and quarterly filings.