Thu, May 1, 6:49 PM (21 days ago)
**Automatic Data Processing, Inc. (ADP) - Q1 2025 Financial Summary** **Financial Health and Performance:** - **Revenue:** ADP reported total revenues of $5,553.0 million for Q1 2025, a 6% year-over-year (YoY) increase. This growth was driven by new business bookings, strong client retention, increased pricing, and the impact of the WorkForce Software acquisition, partially offset by foreign currency impacts. - **Profit Margins:** Earnings before income taxes (EBIT) increased by 5% YoY to $1,621.9 million. The EBIT margin was 29.2%, a slight decrease from 29.4% in Q1 2024. Net earnings rose by 5% YoY to $1,249.5 million, with a diluted earnings per share (EPS) of $3.06. - **Cash Flow:** Net cash flows provided by operating activities increased to $3,500.5 million, driven by business growth and timing on collections of accounts receivables. Net cash flows used in investing activities changed primarily due to the acquisition of WorkForce Software. **Segment Performance:** - **Employer Services:** Revenues increased by 5% YoY due to new business, client retention, and pricing increases. Earnings before income taxes grew by 6% YoY, with a margin of 39.8%. - **PEO Services:** Revenues increased by 7% YoY, driven by zero-margin benefits pass-throughs and an increase in average worksite employees. Earnings before income taxes grew by 7% YoY, with a margin of 14.2%. **Trends and Uncertainties:** - **Acquisitions:** ADP completed the acquisition of WorkForce Software in October 2024, integrating it into their global HCM ecosystem. They also acquired PEI in Mexico to enhance global payroll capabilities. - **Market Risks:** ADP is exposed to interest rate risk and credit risk but manages these through investment in highly liquid, investment-grade securities. They also face liquidity risk, which is mitigated by access to corporate liquidity and short-term financing arrangements. - **Future Operations:** ADP expects to continue investing in research and development, driving meaningful transformation, and maintaining a strong financial condition to support clients and associates. **Ticker:** ADP **Conclusion:** ADP demonstrated solid financial performance in Q1 2025, with revenue growth driven by strategic acquisitions and operational efficiencies. The company remains focused on its strategic priorities and is well-positioned to navigate market uncertainties.