AUTOMATIC DATA PROCESSING, INC. (NASDAQ: ADP): Corporate Profile & Financials
Source: Automatic Data Processing, Inc. Form 10-K Fiscal Year Ended June 30, 2026
📋 Quick Facts: Company Snapshot
| Attribute | Disclosed Detail |
|---|---|
| Official Corporate Name | Automatic Data Processing, Inc. |
| Trading Symbol | ADP |
| Stock Exchange Listing | NASDAQ Global Select Market |
| Commission File Number | 1-5397 |
| State of Incorporation | Delaware |
| IRS Employer Identification No. | 22-1467904 |
| Corporate Headquarters | One ADP Boulevard, Roseland, NJ 07068 |
| Telephone Number | (973)-974-5000 |
| Year Founded | 1949 |
| Years in Operation | 77 years |
| Global Associate Count | Approximately 67,000 persons (as of June 30, 2026) |
| President & Chief Executive Officer | Maria Black |
| Chief Financial Officer | Peter Hadley |
| Total Client Base | Over 1.1 million clients |
| Global Worker Reach | Over 42 million workers paid across 140+ countries and territories |
| U.S. Payroll Scale | Approximately 26 million workers (approximately 1 out of every 6 U.S. workers) |
| Annual Client Funds Moved (U.S.) | More than $3.5 trillion in fiscal year 2026 |
| Reportable Segments | Employer Services; Professional Employer Organization (PEO) |
| Independent Auditor | Deloitte & Touche LLP (auditor since 1968) |
| Common Shares Outstanding | 397,262,737 shares (as of July 31, 2026) |
🏢 The Corporate Identity: Who They Are & Where They Came From
The Big Picture
Automatic Data Processing, Inc. (commonly referred to as ADP) operates as a global provider of cloud-based Human Capital Management (HCM) software and services. The organization provides cloud-native platforms, technology services, and human resource outsourcing solutions to organizations spanning single-employee businesses to multinational enterprises with tens of thousands of personnel.
Through its infrastructure, ADP coordinates mission-critical human resources, payroll calculation, workforce administration, tax compliance, benefits administration, and talent management workflows across more than 140 countries and territories.
- 1.1 million+ clients depend on ADP’s integrated workforce management systems globally.
- 42 million+ workers receive compensation calculations and disbursements through ADP platforms worldwide.
- $3.5 trillion+ in client funds were transferred across the United States in fiscal year 2026 to client employees, tax authorities, and other payees.
- 1 in 6 workers throughout the United States (approximately 26 million individuals) are paid via ADP systems.
The Founders & Their Legacy
ADP was founded in 1949 around an innovative premise: to allow business managers to direct attention to operating their enterprises by taking on and resolving their complex payroll challenges. Over a 77-year operational span, the enterprise transitioned from mechanical and localized payroll preparation into an automated, cloud-based, and artificial intelligence-enabled technology partner.
Management highlights that the enterprise was the first in the HCM industry to provide automated processing, transition infrastructure to the cloud, release a native mobile application, and deploy an online enterprise marketplace. In current operations, the legacy continues through the integration of artificial intelligence into core workflow orchestration, governance, and wage execution engines.
The Journey: History & Evolution
The operational expansion of ADP encompasses several technological eras within corporate computing and workforce recordkeeping. The organization’s foundational business model centered on calculating physical payroll registers, manual checks, and governmental tax filings. As digital computing evolved, ADP developed proprietary software platforms to process complex corporate calculations at scale.
The progression moved forward through key milestones:
- Transition to Cloud Infrastructure: Migration of localized client systems into centralized multi-tenant cloud architectures, culminating in platforms such as RUN Powered by ADP and ADP Workforce Now.
- Establishment of Banking Charters: In 2019, the Office of the Comptroller of the Currency (OCC) authorized the establishment of ADP Trust Company, National Association (ADP Trust Bank) under the National Bank Act to act as sole trustee of the ADP Client Trust holding U.S. client funds.
- Targeted Strategic Acquisitions: In October 2024 (fiscal 2025), the enterprise completed the purchase of WorkForce Software for a total purchase price of $1,170.8 million ($1,158.3 million net of cash acquired) to scale enterprise-grade workforce management capabilities globally. In 2025, the acquisition of Pequity expanded compensation planning tools.
- AI Integration & Agent Deployment: In January of fiscal 2026, ADP launched operational ADP Assist AI agents across payroll, HR, benefits, and compliance modules, extending automated capabilities to clients across the ecosystem.
The Corporate Umbrella
Automatic Data Processing, Inc. is a Delaware corporation operating as the parent entity of consolidated subsidiaries and a variable interest entity. The corporation consolidates the ADP Client Trust, a grantor trust holding client money movement funds, because ADP possesses the power to direct investment decisions and retains the right to potential investment returns.
Consolidated operational subsidiaries conduct distinct activities, such as Automatic Data Processing Insurance Agency, Inc. for commercial insurance lines, ADP TotalSource, Inc. for co-employment professional employer services, ADP Canada Co. for Canadian money movement, ADP Strategic Plan Services, LLC as a registered investment adviser, and ADP Broker-Dealer, Inc. as a registered broker-dealer.
⚙️ The Business Engine: What They Do & Where They Operate
The Core Divisions
The company classifies its operations into two reportable business segments: Employer Services and Professional Employer Organization (PEO) Services.
1. Employer Services
Employer Services addresses client operational tiers ranging from micro-enterprises to multinational conglomerates. The segment supplies software suites and managed administrative workflows covering payroll processing, tax filing, HR information management, employee benefits administration, talent acquisition, time and attendance tracking, regulatory compliance, and analytics.
2. Professional Employer Organization (PEO) Services
PEO Services operates ADP TotalSource, a certified full-service co-employment solution. TotalSource enters into a contractual co-employment relationship with small to mid-sized businesses, assuming defined statutory employer responsibilities such as payroll processing, tax filing, regulatory compliance, workers’ compensation programs, and employee benefit plan sponsorships, while the client maintains day-to-day managerial oversight of worksite personnel.
| Segment Metric | Fiscal Year 2026 | Fiscal Year 2025 | Fiscal Year 2024 | Latest YoY (%) |
|---|---|---|---|---|
| Employer Services: | ||||
| External Revenues | $13,476.9 | $12,692.2 | $11,953.6 | +6.18% |
| Interest on Funds Held for Clients | $1,342.4 | $1,178.3 | $1,015.4 | +13.93% |
| Intercompany Revenues | $12.1 | $12.6 | $11.8 | -3.97% |
| Total Segment Revenues | $14,831.4 | $13,883.1 | $12,980.8 | +6.83% |
| % of Consolidated Revenues (Calculated by FirmsWorld) | 67.58% | 67.52% | 67.60% | – |
| Selling and Marketing Expenses | $2,365.7 | $2,177.1 | $2,025.0 | +8.66% |
| Other Segment Expenses | $7,028.9 | $6,697.5 | $6,400.3 | +4.95% |
| Segment Earnings Before Income Taxes | $5,436.8 | $5,008.5 | $4,555.5 | +8.55% |
| Segment Margin % | 36.7% | 36.1% | 35.1% | – |
| Depreciation and Amortization included in Earnings | $525.1 | $512.4 | $486.6 | +2.48% |
| PEO Services: | ||||
| External Revenues | $7,115.7 | $6,679.6 | $6,224.3 | +6.53% |
| Interest on Funds Held for Clients | $12.4 | $10.8 | $9.3 | +14.81% |
| Intercompany Revenues | $0.0 | $0.0 | $0.0 | N/M |
| Total Segment Revenues | $7,128.1 | $6,690.4 | $6,233.6 | +6.54% |
| % of Consolidated Revenues (Calculated by FirmsWorld) | 32.48% | 32.54% | 32.46% | – |
| Selling and Marketing Expenses | $415.6 | $362.8 | $330.5 | +14.55% |
| Zero-Margin Benefits Pass-Through Costs | $4,607.3 | $4,289.0 | $3,975.9 | +7.42% |
| Workers’ Comp & State Unemployment Taxes | $718.4 | $681.3 | $613.4 | +5.45% |
| Other Segment Expenses | $450.7 | $406.8 | $392.3 | +10.79% |
| Segment Earnings Before Income Taxes | $936.1 | $950.5 | $921.5 | -1.51% |
| Segment Margin % | 13.1% | 14.2% | 14.8% | – |
| Depreciation and Amortization included in Earnings | $2.2 | $6.7 | $6.8 | -67.16% |
| Consolidation Adjustments & Overhead: | ||||
| Intercompany Eliminations (Revenues) | $(12.1) | $(12.6) | $(11.8) | -3.97% |
| Total Consolidated Revenues | $21,947.4 | $20,560.9 | $19,202.6 | +6.74% |
| Unallocated Corporate Overhead & Charges (Other) | $(642.6) | $(648.9) | $(604.7) | -0.97% |
| Corporate Depreciation & Amortization | $58.6 | $63.3 | $68.5 | -7.42% |
| Total Consolidated Earnings Before Income Taxes | $5,730.3 | $5,310.1 | $4,872.3 | +7.91% |
The Global Product Catalog
ADP organizes its product catalog into integrated platform tiers and functional specialty solutions serving distinct enterprise categories.
| Revenue Stream | Fiscal Year 2026 | % of Total (Calculated by FirmsWorld) | Fiscal Year 2025 | Fiscal Year 2024 | Latest YoY (%) |
|---|---|---|---|---|---|
| Human Capital Management (HCM) | $9,110.6 | 41.51% | $8,674.5 | $8,155.7 | +5.03% |
| PEO Zero-Margin Benefits Pass-Throughs | $4,607.3 | 20.99% | $4,289.0 | $3,975.9 | +7.42% |
| HR Outsourcing (HRO), excluding Pass-Throughs | $3,973.5 | 18.10% | $3,782.3 | $3,544.2 | +5.06% |
| Global Solutions | $2,901.2 | 13.22% | $2,626.0 | $2,502.1 | +10.48% |
| Interest on Funds Held for Clients | $1,354.8 | 6.17% | $1,189.1 | $1,024.7 | +13.93% |
| Total Consolidated Revenues | $21,947.4 | 100.00% | $20,560.9 | $19,202.6 | +6.74% |
The operational capabilities underlying these primary revenue channels include:
- RUN Powered by ADP: Serves over 980,000 small business clients as an integrated software environment combining payroll, human resources, compliance alerts, and 24/7 specialist access.
- ADP Workforce Now: Serves over 90,000 mid-sized and large enterprises across North America, consolidating time tracking, benefit selections, compensation, and payroll on a single database.
- ADP Lyric HCM: Configured for global enterprise organizations, mirroring regional matrix hierarchies and dynamic project units while using generative AI models across payroll execution and compliance.
- ADP TotalSource: Full-service PEO co-employment framework encompassing over 19,000 corporate clients and 770,000 worksite employees across all 50 U.S. states.
- ADP SmartCompliance: Specialized cloud modules that integrate into third-party enterprise resource planning (ERP) architectures. Delivered over 79 million employee year-end tax statements in fiscal 2026.
- Workforce Management Suites: Deployed across 160,000+ employers globally for absence management, shift scheduling, and biometric time clocks across 100+ countries.
- Retirement & Insurance Offerings: Administers retirement accounts for over 210,000 employers, while Automatic Data Processing Insurance Agency, Inc. connects over 280,000 small and mid-sized businesses with commercial property, health, and casualty carriers.
The Names You Know
The company relies on established proprietary platform trademarks across commercial and institutional markets:
- ADP®, ADP TotalSource®, and ADP Workforce Now®: Core platform brands representing large-scale customer bases in corporate human resource processing.
- RUN Powered by ADP®: Dedicated small-business brand identity deployed across financial institution distribution partnerships.
- ADP Lyric™ HCM: Enterprise-class global workforce platform brand identity.
- ADP SmartCompliance® and Pay-by-Pay®: Operational brands for regulatory filings, tax credits, garnishment distribution, and automated worker compensation billing workflows.
- Wisely® by ADP: Electronic paycard and digital account brand facilitating wage disbursements to employees.
- StandOut® powered by ADP: Team engagement, talent pulse surveying, and performance platform.
Mapping the Global Reach
Revenues are attributed to geographic regions based on the location of the contracting billing entity. Outside the United States, ADP provides disbursements and forms for over 16 million workers.
| Geographic Territory | FY 2026 Revenues | % Revenue (Calculated) | FY 2026 Assets | FY 2025 Revenues | FY 2024 Revenues | Revenue YoY (%) |
|---|---|---|---|---|---|---|
| United States | $19,279.8 | 87.85% | $54,851.4 | $18,179.2 | $16,934.2 | +6.05% |
| EMEA (Europe, Middle East, Africa) | $1,733.3 | 7.90% | $3,544.3 | $1,533.5 | $1,451.4 | +13.03% |
| Canada | $523.7 | 2.39% | $4,025.8 | $489.3 | $473.7 | +7.03% |
| Other Regions | $410.6 | 1.87% | $771.8 | $358.9 | $343.3 | +14.41% |
| Total Consolidated | $21,947.4 | 100.00% | $63,193.3 | $20,560.9 | $19,202.6 | +6.74% |
The Brick & Mortar Footprint
ADP maintains both owned and leased operational facilities to support software development, print production, customer support centers, and administrative operations:
- Owned Real Estate: ADP owns 6 processing/print centers and 10 operational and sales offices, including its global corporate headquarters located in Roseland, New Jersey. These owned facilities aggregate approximately 2,561,945 square feet and are free of material encumbrances.
- Leased Facilities: The company leases space for processing centers, sales nodes, and regional administrative hubs totaling approximately 5,935,575 square feet worldwide. Leases expire at staggered intervals through calendar year 2038.
- Property, Plant and Equipment Carrying Values: As of June 30, 2026, land and buildings accounted for $648.4 million of gross cost; data processing machinery and computer equipment totaled $1,330.7 million; and furniture, leaseholds, and fixtures represented $705.3 million. Accumulated depreciation equaled $2,043.1 million, resulting in net property, plant, and equipment of $641.3 million.
📊 The Financial Health: The Global Numbers Simplified
Earnings, Expenses, & Take-Home Profits
The consolidated statements of earnings reflect financial execution across three fiscal years ended June 30, 2026, June 30, 2025, and June 30, 2024.
| Financial Metric | Year Ended June 30, 2026 | Year Ended June 30, 2025 | Year Ended June 30, 2024 | Latest YoY (%) |
|---|---|---|---|---|
| Revenues, other than interest on funds held for clients and PEO revenues | $13,476.8 | $12,692.2 | $11,953.6 | +6.18% |
| Interest on funds held for clients | $1,354.8 | $1,189.1 | $1,024.7 | +13.93% |
| PEO revenues | $7,115.8 | $6,679.6 | $6,224.3 | +6.53% |
| TOTAL REVENUES | $21,947.4 | $20,560.9 | $19,202.6 | +6.74% |
| Costs of revenues: | ||||
| Operating expenses | $10,240.6 | $9,622.7 | $9,050.1 | +6.42% |
| Research and development | $1,028.8 | $988.6 | $955.7 | +4.07% |
| Depreciation and amortization | $490.8 | $486.0 | $470.9 | +0.99% |
| TOTAL COSTS OF REVENUES | $11,760.2 | $11,097.3 | $10,476.7 | +5.97% |
| Selling, general, and administrative expenses | $4,408.2 | $4,051.7 | $3,778.9 | +8.80% |
| Interest expense | $459.3 | $455.9 | $361.4 | +0.75% |
| TOTAL EXPENSES | $16,627.7 | $15,604.9 | $14,617.0 | +6.55% |
| Other (income)/expense, net | $(410.6) | $(354.1) | $(286.7) | +15.96% |
| EARNINGS BEFORE INCOME TAXES | $5,730.3 | $5,310.1 | $4,872.3 | +7.91% |
| Provision for income taxes | $1,316.8 | $1,230.4 | $1,120.3 | +7.02% |
| NET EARNINGS | $4,413.5 | $4,079.7 | $3,752.0 | +8.18% |
| BASIC EARNINGS PER SHARE | $10.97 | $10.02 | $9.14 | +9.48% |
| DILUTED EARNINGS PER SHARE | $10.94 | $9.98 | $9.10 | +9.62% |
| Basic weighted average shares outstanding (in millions) | 402.3 | 407.1 | 410.6 | -1.18% |
| Diluted weighted average shares outstanding (in millions) | 403.3 | 408.7 | 412.2 | -1.32% |
Operating revenue growth in fiscal 2026 was shaped by the combination of new booking originations, high client revenue retention of 92.1%, selective price increases, an expansion in zero-margin pass-through items, and a higher interest environment for client fund balances.
- Client fund interest income expanded by $165.7 million (reaching $1,354.8 million), driven by an increase in average balances of 7.4% to $40.4 billion and an increase in average yield to 3.4% compared to 3.2% in fiscal 2025.
- Total expenses grew 7% to $16,627.7 million, reflecting an increase of $318.3 million in PEO zero-margin pass-through costs ($4,607.3 million total), an increase of $188.9 million in service delivery costs, and a $241.4 million expansion in selling and marketing initiatives.
- Corporate business alignment program expenses totaled $91.1 million in the fourth quarter of fiscal 2026, comprising $89.1 million in severance charges and $2.0 million in third-party advisory costs.
Assets, Debts, & Corporate Wealth
The consolidated balance sheets reflect the asset-backing and financial configuration of ADP, including the segregation of fiduciary client money movement accounts.
| Financial Balance Caption | As of June 30, 2026 | As of June 30, 2025 | Latest YoY (%) |
|---|---|---|---|
| Assets: | |||
| Cash and cash equivalents | $4,230.1 | $3,347.8 | +26.35% |
| Short-term marketable securities | $0.0 | $4,498.8 | -100.00% |
| Accounts receivable, net (allowance: $44.5 and $47.1) | $3,521.1 | $3,579.1 | -1.62% |
| Other current assets | $852.1 | $840.8 | +1.34% |
| Total current assets before funds held for clients | $8,603.3 | $12,266.5 | -29.86% |
| Funds held for clients | $43,957.8 | $30,985.7 | +41.86% |
| Total current assets | $52,561.1 | $43,252.2 | +21.52% |
| Property, plant and equipment, net | $641.3 | $655.4 | -2.15% |
| Operating lease right-of-use assets | $388.6 | $374.1 | +3.88% |
| Deferred contract costs | $3,244.1 | $3,154.1 | +2.85% |
| Other assets | $1,420.5 | $1,057.0 | +34.39% |
| Goodwill | $3,284.4 | $3,273.5 | +0.33% |
| Intangible assets, net | $1,653.3 | $1,603.0 | +3.14% |
| TOTAL ASSETS | $63,193.3 | $53,369.3 | +18.41% |
| Liabilities & Stockholders’ Equity: | |||
| Accounts payable | $162.5 | $169.1 | -3.90% |
| Accrued expenses and other current liabilities | $3,218.5 | $3,092.4 | +4.08% |
| Accrued payroll and payroll-related expenses | $1,039.4 | $973.1 | +6.81% |
| Dividends payable | $671.9 | $620.6 | +8.27% |
| Short-term deferred revenues | $267.5 | $262.8 | +1.79% |
| Obligations under reverse repurchase agreements | $139.3 | $38.4 | +262.76% |
| Obligations under commercial paper borrowings | $0.0 | $4,769.5 | -100.00% |
| Income taxes payable | $110.3 | $9.1 | +1112.09% |
| Total current liabilities before client funds obligations | $5,609.4 | $9,935.0 | -43.54% |
| Client funds obligations | $44,415.5 | $31,343.3 | +41.71% |
| Total current liabilities | $50,024.9 | $41,278.3 | +21.19% |
| Long-term debt | $4,964.1 | $3,974.7 | +24.89% |
| Operating lease liabilities | $306.7 | $321.2 | -4.51% |
| Other liabilities | $1,141.4 | $1,058.3 | +7.85% |
| Deferred income taxes | $339.1 | $163.6 | +107.27% |
| Long-term deferred revenues | $385.9 | $385.2 | +0.18% |
| TOTAL LIABILITIES | $57,162.1 | $47,181.3 | +21.15% |
| Preferred stock, $1.00 par: Authorized 0.3 shares; issued none | $0.0 | $0.0 | N/M |
| Common stock, $0.10 par: Authorized 1,000.0 shares; issued 638.7 shares | $63.9 | $63.9 | 0.00% |
| Capital in excess of par value | $3,067.9 | $2,788.3 | +10.03% |
| Retained earnings | $26,967.4 | $25,240.6 | +6.84% |
| Treasury stock, at cost: 240.9 and 233.4 shares, respectively | $(23,165.9) | $(21,021.4) | +10.20% |
| Accumulated other comprehensive income/(loss) | $(902.1) | $(883.4) | +2.12% |
| TOTAL STOCKHOLDERS’ EQUITY | $6,031.2 | $6,188.0 | -2.53% |
| TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY | $63,193.3 | $53,369.3 | +18.41% |
The balance sheet demonstrates how client money movement items balance out across the accounts:
- Current Client Obligation Dynamics: Current client funds obligations equaled $44,415.5 million as of June 30, 2026, offset by $43,957.8 million held in segregated cash, cash equivalents, and marketable securities.
- Term Debt Structure: Long-term debt stood at $4,964.1 million, reflecting five series of fixed-rate senior unsecured notes with staggered maturity dates in 2028, 2030, 2032, 2034, and 2036.
- Equity Adjustments: Stockholders’ equity concluded the year at $6,031.2 million, influenced by $23,165.9 million in cumulative treasury stock purchases over time offset by $26,967.4 million of cumulative retained earnings.
Cash Flow: Tracking the Money Movement
Statements of Consolidated Cash Flows illustrate operating conversions, liquidity deployment into fixed-income securities, and corporate capital returns.
| Cash Flow Activity | FY Ended June 30, 2026 | FY Ended June 30, 2025 | FY Ended June 30, 2024 | Latest YoY (%) |
|---|---|---|---|---|
| Operating Activities: | ||||
| Net earnings | $4,413.5 | $4,079.7 | $3,752.0 | +8.18% |
| Depreciation and amortization | $585.9 | $582.4 | $561.9 | +0.60% |
| Amortization of deferred contract costs | $1,200.5 | $1,145.3 | $1,067.6 | +4.82% |
| Deferred income taxes | $156.4 | $37.0 | $(37.4) | +322.70% |
| Stock-based compensation expense | $242.6 | $266.1 | $243.5 | -8.83% |
| Bad debt expense | $47.5 | $53.2 | $54.6 | -10.71% |
| Net pension (income)/expense | $(15.4) | $(19.7) | $(22.9) | -21.83% |
| Net accretion of discounts/amortization of premiums on AFS securities | $(88.2) | $(72.2) | $(42.6) | +22.16% |
| Other operational adjustments | $4.2 | $13.4 | $(1.7) | -68.66% |
| (Increase)/decrease in accounts receivable | $1.0 | $(146.6) | $(483.7) | N/M |
| Increase in deferred contract costs | $(1,307.9) | $(1,290.3) | $(1,271.2) | +1.36% |
| Increase in other assets | $(204.5) | $(59.8) | $(157.2) | +241.97% |
| Increase/(decrease) in accounts payable | $(4.5) | $60.6 | $1.8 | N/M |
| Increase in accrued expenses and other liabilities | $410.1 | $290.6 | $492.9 | +41.12% |
| Net cash flows provided by operating activities | $5,441.2 | $4,939.7 | $4,157.6 | +10.15% |
| Investing Activities: | ||||
| Purchases of corporate and client funds marketable securities | $(12,359.7) | $(7,857.9) | $(6,835.3) | +57.29% |
| Proceeds from sales/maturities of marketable securities | $8,344.7 | $6,539.1 | $6,039.5 | +27.61% |
| Capital expenditures | $(196.6) | $(168.7) | $(208.4) | +16.54% |
| Additions to intangibles | $(468.5) | $(378.3) | $(355.0) | +23.84% |
| Acquisitions of businesses, net of cash acquired | $(22.8) | $(1,165.1) | $(33.6) | -98.04% |
| Proceeds from sale of PP&E and other assets | $0.0 | $10.8 | $28.3 | -100.00% |
| Other investing activities | $(10.9) | $(14.9) | $(24.5) | -26.85% |
| Net cash flows used in investing activities | $(4,713.8) | $(3,035.0) | $(1,389.0) | +55.31% |
| Financing Activities: | ||||
| Net increase/(decrease) in client funds obligations | $13,242.6 | $(8,274.0) | $1,014.1 | N/M |
| Net cash (distributed)/received from Internal Revenue Service | $24.0 | $(552.2) | $602.7 | N/M |
| Payments of debt | $(1.1) | $(1,001.2) | $(0.9) | -99.89% |
| Proceeds from issuance of debt | $985.7 | $1,980.3 | $0.0 | -50.22% |
| Settlement of cash flow hedges | $3.7 | $(15.6) | $0.0 | N/M |
| Repurchases of common stock | $(2,083.3) | $(1,280.5) | $(1,231.7) | +62.69% |
| Net (repurchases)/proceeds from stock-based plans & ESPP | $(1.0) | $131.0 | $47.2 | N/M |
| Dividends paid | $(2,626.3) | $(2,398.9) | $(2,183.1) | +9.48% |
| Net (payments)/proceeds related to reverse repo agreements | $106.2 | $(331.8) | $320.0 | N/M |
| Net (payments)/proceeds from issuance of commercial paper | $(4,769.5) | $4,769.5 | $0.0 | N/M |
| Net cash flows provided by/(used in) financing activities | $4,881.0 | $(6,973.4) | $(1,431.7) | N/M |
| Effect of exchange rates on cash balances | $(37.8) | $37.3 | $(22.4) | N/M |
| Net change in cash, equivalents, & restricted cash | $5,570.6 | $(5,031.4) | $1,314.5 | N/M |
| Cash, equivalents, & restricted cash, beginning of period | $5,054.6 | $10,086.0 | $8,771.5 | -49.88% |
| Cash, equivalents, & restricted cash, end of period | $10,625.2 | $5,054.6 | $10,086.0 | +110.21% |
Funding the Future: R&D and Expansion Spending
The enterprise allocates capital toward internal technology platforms, data center systems, automation tools, and strategic asset additions.
- Total Research and Development Expenditures: During fiscal years 2026, 2025, and 2024, the company invested $1,405 million, $1,388 million, and $1,276 million, respectively, in R&D activities (including capitalized internal-use software additions, maintenance, cloud license purchases, and business combination software assets). R&D expensed directly on the income statement was $1,028.8 million in fiscal 2026, $988.6 million in fiscal 2025, and $955.7 million in fiscal 2024.
- Capital Expenditures: Physical property and processing infrastructure additions totaled $195.7 million in fiscal 2026 compared to $176.8 million in fiscal 2025. Management projects fiscal 2027 capital additions will range between $200.0 million and $225.0 million.
- Contractual Purchase Commitments: As of June 30, 2026, total operational purchase commitments equaled $2,850.5 million. Obligations include $604.6 million due within twelve months (fiscal 2027), $1,095.9 million across fiscal 2028–2029, $694.1 million across fiscal 2030–2031, and the remainder thereafter. Commitments encompass software license agreements, third-party hosting, maintenance arrangements, and the Chubb reinsurance policy premium.
🗺️ The Corporate Family Tree: Structure & Investments
Subsidiaries, Associates, & Shared Ventures
Operations are conducted through wholly-owned direct and indirect legal operating subsidiaries:
- ADP Trust Company, National Association (ADP Trust Bank): Regulated national trust bank entity chartered by the OCC. Acts as sole fiduciary trustee holding and overseeing U.S. client payroll funds via the ADP Client Trust.
- ADP TotalSource, Inc.: Primary operating entity managing the PEO co-employment organization and TotalSource benefit plan trusts, certified by the IRS as a Certified Professional Employer Organization (CPEO).
- ADP Indemnity, Inc.: Captive insurance subsidiary providing workers’ compensation deductible reimbursement coverage up to $1 million per occurrence for PEO worksite personnel. Held total assets of $824.4 million as of June 30, 2026, against actuarial estimated unpaid losses of $774.3 million. Reinsures exposure via Chubb Limited.
- Automatic Data Processing Insurance Agency, Inc.: Licensed agency entity that brokers commercial workers’ compensation, medical, and group health policies to small and mid-sized businesses.
- ADP Canada Co.: Canadian operating arm registered as a Money Services Business with FINTRAC and designated as a Payment Service Provider with the Bank of Canada under the Retail Payment Activities Act.
- ADP Strategic Plan Services, LLC: SEC-registered investment adviser entity subject to the Investment Advisers Act of 1940, providing fiduciary investment advisory programs to client 401(k) plans.
- ADP Broker-Dealer, Inc.: Broker-dealer entity registered with the SEC and FINRA supporting administrative distribution of retirement products.
- ADP Retirement Trust Services, LLC: New Hampshire-chartered trust company providing directed-fiduciary trustee oversight for retirement plan custodial assets.
Strategic Investments & Minority Stakes
The enterprise conducts early-stage investments through its corporate venture capital arm, ADP Ventures.
- ADP Ventures Investment Performance: During the fiscal year ended June 30, 2026, the company recorded a net gain of $8.4 million on portfolio investments within ADP Ventures, reported under other (income)/expense, net. In fiscal 2025 and 2024, no comparable net gain or loss was reported.
- Accounting Classification: Gains and losses stem from observable transaction pricing changes, changes in equity percentage holdings, accrued interest yields, or impairment adjustments on minority equity positions.
👥 Power & Control: Who Pulls the Strings?
The Brain Trust: Board of Directors & Executive Leadership
The executive leadership team directs product architecture, commercial go-to-market channels, compliance administration, and operational processing.
| Executive Officer | Age | Position | Employed by ADP Since |
|---|---|---|---|
| Maria Black | 52 | President and Chief Executive Officer | 1996 |
| Paul Boland | 62 | Chief Human Resources Officer | 2017 |
| Michael A. Bonarti | 60 | Chief Administrative Officer | 1997 |
| Chris D’Ambrosio | 45 | Chief Strategy Officer | 2014 |
| Joe DeSilva | 51 | Executive Vice President, North America and Chief of Operations | 2003 |
| David Foskett | 50 | President, Global Sales | 2004 |
| Peter Hadley | 53 | Chief Financial Officer | 2002 |
| Sreeni Kutam | 56 | President, Global Product and Innovation | 2014 |
| David Kwon | 56 | Chief Legal Officer / General Counsel | 2011 |
| Jonathan Lehberger | 53 | Corporate Controller and Principal Accounting Officer | 2004 |
| Virginia Magliulo | 57 | Executive Vice President, Employer Services International | 2015 |
| Brian Michaud | 58 | Executive Vice President, Smart Compliance Solutions & HRO | 1991 |
| Samantha Orihuela | 43 | Chief Marketing Officer | 2026 |
Biographical context for key executive management includes:
- Maria Black (President & CEO): Appointed Chief Executive Officer in January 2023. Served as President of ADP from January 2022 to December 2022, and President of Worldwide Sales and Marketing from March 2020 to December 2021. Joined the company in 1996.
- Peter Hadley (CFO): Appointed Chief Financial Officer in July 2025. Served as Corporate Treasurer from October 2022 to June 2025, and President of Asia Pacific from November 2017 to September 2022. Joined the company in 2002.
- Joe DeSilva (EVP, North America & Chief of Operations): Appointed January 2025. Previously served as President of Global Sales from January 2022 to December 2024, and President of Small Business Services, Retirement, and Insurance from February 2020 to December 2021. Joined ADP in 2003.
- Samantha Orihuela (Chief Marketing Officer): Appointed February 2026. Prior executive roles include Chief Marketing Officer of Gap International, Inc., Senior Director of Brand and Campaigns at Paylocity Corporation, and Vice President at Aflac Incorporated.
Who Owns the Stock?
As of July 31, 2026, Automatic Data Processing, Inc. had 397,262,737 shares of common stock ($0.10 par value) outstanding. Common equity held by non-affiliates represented an aggregate market value of approximately $103,569,897,016 as of December 31, 2025 (the last business day of the registrant’s second fiscal quarter).
The company maintains authorized share capital consisting of 1,000,000,000 shares of common stock and 300,000 shares of preferred stock ($1.00 par value, zero shares issued). Under its share repurchase program, ADP purchased 8.6 million common shares in fiscal 2026 at an average price of $242.92 per share ($2,083.3 million in cash settlement) and 4.4 million shares in fiscal 2025 at an average price of $289.11 per share.
🎯 The Strategic Outlook: Future Plans & Potential Pitfalls
Competitive Advantages & Economic Moats
Management details three structural advantages underpinning its competitive position within the human capital management industry:
- Best-in-Class HCM Technology & Scale Dataset: Processing compensation for 42 million workers across 1.1 million employers provides a proprietary dataset for training agentic AI models. ADP Assist AI agents are grounded in 77 years of institutional payroll logic and workflow rules.
- Outsourcing Solutions & Human Judgment: Combining automation with access to payroll and compliance professionals creates a hybrid delivery model for navigating unprecedented regulatory changes or operational exceptions.
- Global Final-Mile Footprint: Operating across 140+ countries with 67,000 associates and automated linkages into tens of thousands of tax authorities, regional governments, and clearing banks forms an operating network with high replacement costs.
- Client Retention Durability: In fiscal 2026, client retention reached approximately 13 years within the Employer Services segment and approximately 6 years within the PEO Services segment, supporting recurring revenue visibility.
What Could Go Wrong? Key Challenges & Business Risks
The enterprise identifies operational, regulatory, and market risks in its business filing:
- Data Security & Cyber Attacks: Because ADP systems process payroll records, health data, Social Security numbers, and direct funds transfers, the firm is targeted by unauthorized threat actors using ransomware, deceit, malware, and AI-enabled intrusion tools. System interruptions, data compromise, or payment diversion could result in litigation, fines, client loss, and reputational injury.
- Regulatory & Money Movement Compliance: Changes in tax remittance frequency, tax credit programs (such as employee retention tax credits), or withholding rules directly affect client balance yields. Money movement channels are overseen by the OCC (via the ADP Trust Bank), the Bank Secrecy Act, Regulation E, state money transmitter frameworks, FINTRAC in Canada, and the Bank of Canada.
- ERISA & PEO Co-Employment Liabilities: In PEO co-employment arrangements, ADP TotalSource shares employer responsibilities for worksite employees. If a client defaults on wage or benefit remittances, or if the PEO’s status under ERISA is contested, significant liabilities could emerge. TotalSource settled an ERISA fiduciary retirement plan lawsuit in fiscal 2026 for a gross sum of $48.0 million (offset by $30.0 million in probable insurance recoveries).
- Interest Rate & Liquidity Exposure: Lower interest rates diminish earnings from client fund investment portfolios. The enterprise extends maturities in available-for-sale portfolios out to five and ten years, managing liquidity needs through short-term credit lines and reverse repurchase agreements. In fiscal 2026, a 25 basis point change in short- and intermediate-term interest rates would affect earnings before taxes by approximately $21.0 million over twelve months.
- Cloud and Systems Disruption: Hosting transitions across third-party cloud environments introduce operational dependencies. Interruptions in external provider availability could disrupt client processing and service delivery.
The Next Chapter: Growth & Expansion Initiatives
ADP’s corporate roadmap centers on executing three core strategic priorities:
- Scaling ADP Assist and Agentic AI: Following the launch of ADP Assist agents across payroll, HR, benefits, and compliance modules in January of fiscal 2026, management is deploying agents across its 1.1 million-client ecosystem. It also established a dedicated AI space on ADP Marketplace to incorporate third-party agents.
- Enterprise Platform Upgrades: Increasing market adoption of ADP Lyric HCM for enterprise multinational businesses, combining workforce scheduling, global time, and in-country compliance engines.
- Expanding Workforce Solutions: Integrating WorkForce Software assets to support advanced absence, time tracking, and shift optimization for complex enterprise workforces across international jurisdictions.
The Verdict: Strategic Outlook & Conclusion
Automatic Data Processing, Inc. concluded fiscal year 2026 with total revenues expanding 7% to $21,947.4 million, diluted earnings per share increasing 10% to $10.94, and net operating cash flows reaching $5,441.2 million. The organization maintained its capital return strategy, directing $2.6 billion to stockholder dividends and $2.1 billion to common share repurchases.
Supported by $11.7 billion in available backup credit facilities, $4.2 billion in cash and cash equivalents, and an OCC-regulated trust structure overseeing $44.0 billion in client funds, ADP combines long-standing regulatory compliance infrastructure with cloud and AI investments to support workforce management operations globally.
Official Site: https://www.adp.com