Automatic Data Processing Inc. (NASDAQ:ADP) reported second-quarter fiscal 2026 results on Wednesday.
The company reported quarterly revenues of $5.36 billion, beating the analyst consensus estimate of $5.34 billion.
Revenues increased 6% year-over-year.
The human resources management software company reported quarterly adjusted EPS of $2.62, beating the analyst consensus estimate of $2.58.
Segmental Performance
ADP primarily earns revenue by charging service fees in its Employer Services and PEO segments, with pricing based on the scope of services each client uses.
Employer Services revenues increased 6% to $3.61 billion. PEO Services revenues rose 6% to $1.76 billion.
Profits And Margins
Adjusted EBIT increased 10% to $1.4 billion, and adjusted EBIT margin rose 80 bps at 26.0%.
Net earnings increased 10% Y/Y to $1.1 billion. ADP held $2.42 billion in cash and equivalents as of December 31.
The company generated $1.13 billion in operating cash flow during the quarter.
ADP CEO Maria Black said the company's strong second-quarter performance reflects the strength of its product portfolio, differentiated service model, and the consistent client experience it delivers.
FY26 Outlook
ADP now expects a revenue growth outlook of 6% (compared to prior guidance of 5%-6%) or $21.8 billion (against prior guidance of $21.6 billion-$21.8 billion), versus the analyst consensus estimate of $21.8 billion.
The company now expects an adjusted diluted EPS growth of 9%-10% (compared to prior guidance of 8%-10%), or $10.91–$11.01 (against prior guidance of $10.81-$11.01), versus the analyst consensus estimate of $10.91.
ADP Price Action: Automatic Data Processing shares were down 0.28% at $253.79 at the time of publication on Wednesday, according to Benzinga Pro data.
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