ADP Raises Full-Year Outlook After First-Quarter Results Top Its Own Plan

ADP raised its full-year outlook on Wednesday after first-quarter results that its finance chief said beat the company's own expectations on revenue growth, margin expansion and adjusted earnings.

The payroll and HR services provider now expects fiscal 2027 adjusted diluted earnings per share to grow 10% to 12%, up from the 9% to 11% it projected in July, according to the earnings release it filed with an 8-K on Wednesday. It also lifted its revenue growth forecast to about 6%, from 5% to 6% previously.

A quarter ahead of plan

Revenue for the fiscal first quarter, which ended Sept. 30, rose 6% to $5.49 billion from $5.18 billion a year earlier, and also grew 6% on an organic constant currency basis. Net earnings increased 11% to $1.13 billion.

Diluted EPS rose 14% to $2.83, and adjusted diluted EPS climbed 13% to $2.82. Adjusted EBIT grew 12% to $1.5 billion, while adjusted EBIT margin widened 130 basis points to 26.8%.

"Our first quarter results exceeded our expectations across revenue growth, adjusted EBIT margin expansion, and adjusted EPS growth," CFO Peter Hadley said in the release. He tied the results to a "disciplined investment approach" that he said is funding the company's AI transformation.

CEO Maria Black said clients are "turning to us and our deep domain expertise" as workplace complexity grows faster than employers can manage on their own.

Inside the segments

Employer Services, ADP's largest business, grew revenue 6% to $3.69 billion, and its segment margin rose 130 basis points. U.S. pays per control, a same-store measure of how many employees are on clients' payrolls, increased 2%.

PEO Services revenue rose 7% to $1.81 billion, or 4% excluding zero-margin benefits pass-throughs. Average worksite employees paid increased 2% to about 771,000, and segment margin was flat.

Interest on funds held for clients jumped 15% to $329 million, as average client fund balances rose 6% to $36.9 billion and the average yield increased 30 basis points to 3.6%.

The updated outlook

Beyond the higher EPS and revenue targets, ADP now expects U.S. pays per control to rise about 1%, compared with 0% to 1% before. It raised its forecast for interest on client funds to $1.59 billion to $1.61 billion, from $1.54 billion to $1.56 billion, and now sees average client fund balances growing 4% to 5%.

Other targets were unchanged, including adjusted EBIT margin expansion of 70 to 90 basis points, Employer Services new business bookings growth of 4% to 7%, and PEO revenue growth of 5% to 7%.

Cash returned to shareholders

ADP repurchased $758.8 million of its common stock during the quarter, roughly double the $366.0 million a year earlier, and paid $677.0 million in dividends, according to its cash flow statement. Diluted weighted average shares outstanding fell 2% from a year ago to 397.6 million.

The company scheduled a conference call for 8:30 a.m. ET on Wednesday to discuss the results.

Sources

1. ADP Form 8-K with first-quarter fiscal 2027 earnings release (Exhibit 99), filed Oct. 28, 2026 (accession 0000008670-26-000033)

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