ADP Delivers Q2 Earnings Beat, Lifts 2026 Guidance

Automatic Data Processing, Inc. (Nasdaq: ADP) has reported its financial results for the second quarter of fiscal 2026, surpassing expectations with a notable increase in both earnings per share and revenue. The company continues to demonstrate robust growth, driven by strategic initiatives and a commitment to innovation.

Q2 Earnings Beat Driven by Employer and PEO Growth

Automatic Data Processing, Inc. (Nasdaq: ADP) has released its financial results for the second quarter of fiscal 2026, showcasing a robust performance that exceeded market expectations. The company’s revenue increased by 6% compared to the previous year, reaching $5.4 billion, surpassing the anticipated $5.34 billion. This growth was driven by both Employer Services and PEO Services segments, each reporting a 6% increase in revenue.

In terms of earnings, ADP reported a diluted earnings per share (EPS) of $2.62, an 11% increase from the previous year and above the expected EPS of $2.57. This performance highlights the company’s effective execution of its strategic initiatives and its ability to leverage its comprehensive range of HR and payroll solutions to drive growth.

Maria Black, President and CEO of ADP, attributed the strong results to the company’s innovative products and differentiated service offerings. She emphasized the role of ADP’s extensive HCM dataset and advanced automation in addressing workforce challenges and creating a more efficient world of work. The company’s focus on expanding its client base and increasing new business bookings has been pivotal in achieving these impressive financial outcomes.

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ADP Raises Full-Year Guidance Reflecting Continued Confidence

Following its strong second-quarter performance, ADP has updated its fiscal 2026 outlook, raising its full-year guidance for both revenue and adjusted diluted EPS growth. The company now anticipates revenue growth of approximately 6% for the fiscal year, with adjusted diluted EPS expected to increase by 9% to 10%. This revised guidance underscores ADP’s confidence in its strategic direction and ability to maintain growth momentum.

In the Employer Services segment, ADP projects a revenue growth of about 6%, supported by new business bookings growth of 4% to 7%. Despite a slight anticipated decrease in client revenue retention, the company remains optimistic about its ability to sustain its market position through continued innovation and client engagement.

For the PEO Services segment, ADP expects revenue growth of 5% to 7%, with an average worksite employee count growth of approximately 2%. The company also anticipates interest on funds held for clients to range between $1.310 billion and $1.330 billion, based on projected growth in client funds balances and an increase in average yield. Overall, ADP’s updated guidance reflects its commitment to delivering on financial commitments while investing strategically for sustainable long-term growth.

Disclaimer: The author does not hold or have a position in any securities discussed in the article. All stock prices were quoted at the time of writing.