Highlights

  • Fiscal 2026 revenue grew 7% to $21,947.4 million, including 6% organic constant currency growth, a non-GAAP measure.
  • GAAP diluted earnings per share rose 10% to $10.94, while non-GAAP adjusted diluted earnings per share increased 11% to $11.12.
  • The company returned $4.7 billion to shareholders, comprising $2.6 billion of dividends and $2.1 billion of share repurchases.
  • A fourth quarter business alignment program carried a $91.1 million charge, including $89.1 million of severance costs.

Automatic Data Processing (NASDAQ:ADP) shares were trading near their 52-week high at USD 294.20 on October 21, 2026, up 0.49%. The payroll and human capital management provider issued $1.0 billion of senior notes in its fiscal fourth quarter, recorded a $91.1 million business alignment charge, and filed its fiscal 2026 annual report on August 5.

Based in Roseland, New Jersey, Automatic Data Processing is a Delaware corporation that describes itself as a global leader in HR and payroll solutions, with human capital management software and outsourcing services for clients in more than 140 countries and territories. It serves more than 1.1 million clients with about 67,000 associates. Employer Services sells payroll, HR, time, benefits and compliance solutions, while PEO Services, branded TotalSource, offers a co-employment model for small and mid-sized businesses. Its fiscal year ends June 30.

Fiscal 2026 Revenue and Earnings

Revenue for the year ended June 30, 2026 was $21,947.4 million, up from $20,560.9 million. Interest on funds held for clients added $1,354.8 million, compared with $1,189.1 million, as average client funds rose 7.4% to $40.4 billion at an average yield of 3.4%. Net earnings were $4,413.5 million, up 8%, and earnings before income taxes were $5,730.3 million, a margin of 26.1%. Non-GAAP adjusted EBIT margin was 26.8%, up 80 basis points.

Employer Services revenue grew 7% to $14,831.4 million, or 5% organically, and its pre-tax margin widened to 36.7%. Management cited 6% growth in new business bookings, client revenue retention of 92.1% and 1% growth in U.S. pays per control. PEO Services revenue also grew 7%, to $7,128.1 million, including $4,607.3 million of zero-margin benefits pass-throughs. Excluding those, it rose 5% to $2,520.8 million, with average worksite employees up 2%. PEO pre-tax earnings fell 2% to $936.1 million, and margin narrowed to 13.1% from 14.2%.

The company said selling and marketing spending rose $241.4 million, costs for broad-based company-wide initiatives increased $67.2 million, and it booked a net legal settlement charge of $18.0 million. The effective tax rate was 23.0%.

AI Rollout, Cash Returns and Balance Sheet

Management said AI agents were rolled out from January across payroll, benefits, HR and compliance solutions, reaching nearly all clients, and that a marketplace space for partners' AI agents was launched. It also reported strong enterprise demand for its Lyric HCM platform and WorkForce Suite.

Operating cash flow was $5,441.2 million, versus $4,939.7 million. The company repurchased about 8.6 million shares at an average price of $242.92. In January 2026 the board approved a $6 billion repurchase authorization with no expiration date, and about $4.86 billion remained at June 30. Cash and equivalents were $4.2 billion. The company holds $5.0 billion of senior unsecured notes, including the $1.0 billion of 5.00% notes due 2036, had no commercial paper outstanding at year-end, and reported $11.7 billion of committed credit facilities with no borrowings.

Business Alignment Program and Outlook

The corporate-led business alignment program is meant to align resources with strategic priorities and streamline the organizational structure. The fourth quarter charge of $91.1 million included $89.1 million of severance and $2.0 million of strategic project costs, and the company excluded it from non-GAAP adjusted results. The program carried a $23.2 million income tax benefit.

The annual report does not provide revenue or earnings guidance. It states that capital expenditures for fiscal 2027 are expected between $200.0 million and $225.0 million, after $195.7 million in fiscal 2026. The company also expects to contribute $8.2 million to its pension plans in fiscal 2027, and it paid a $327.8 million reinsurance premium in July 2026 for its PEO workers' compensation coverage. These are company expectations, not guidance on results.