ADP Reports Strong Q2 Results, Raises Full-Year Revenue and EPS Guidance
Summary
Automatic Data Processing, Inc. announced strong second-quarter fiscal 2026 financial results, with significant growth in revenues, net earnings, and EPS, leading to an upward revision of its full-year guidance.
Key Events
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Strong Q2 Financial Performance
Revenues increased 6% to $5.4 billion (5% organic constant currency), net earnings rose 10% to $1.1 billion, and diluted EPS grew 11% to $2.62 for the second quarter ended December 31, 2025.
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Full-Year Guidance Raised
ADP raised its fiscal 2026 outlook, now expecting total revenue growth of approximately 6% (previously 5-6%) and adjusted diluted EPS growth of 9% to 10% (previously 8-10%).
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Segment Growth and Client Funds Performance
Employer Services revenues increased 6% (5% organic constant currency), PEO Services revenues grew 6%, and interest on funds held for clients increased 13% to $309 million, driven by a 6% rise in average client funds balances.
Analysis
Automatic Data Processing, Inc. delivered robust second-quarter fiscal 2026 financial results, surpassing expectations with double-digit growth in net earnings and diluted EPS. The company's decision to raise its full-year guidance for both revenue and adjusted diluted EPS signals strong operational momentum and management confidence in future performance. This positive update, particularly as the stock has been trading near its 52-week low, could serve as a significant catalyst for investor sentiment and a re-evaluation of the company's outlook.
At the time of this filing, ADP was trading at $253.94 on NASDAQ in the Technology sector, with a market capitalization of approximately $102.9B. The 52-week trading range was $247.18 to $329.93. This filing was assessed with positive market sentiment and an importance score of 8 out of 10.