Automatic Data Processing (NASDAQ:ADP) Releases Quarterly Earnings Results, Beats Estimates By $0.05 EPS

Posted by Caroline Horne on Jan 29th, 2026

Automatic Data Processing (NASDAQ:ADP – Get Free Report) issued its quarterly earnings results on Wednesday. The business services provider reported $2.62 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $2.57 by $0.05, FiscalAI reports. Automatic Data Processing had a return on equity of 70.63% and a net margin of 19.79%.The business had revenue of $5.36 billion for the quarter, compared to the consensus estimate of $5.34 billion. During the same period in the prior year, the firm posted $2.35 earnings per share. The business’s quarterly revenue was up 6.2% on a year-over-year basis. Automatic Data Processing updated its FY 2026 guidance to 10.091-11.011 EPS.

Here are the key takeaways from Automatic Data Processing’s conference call:

ADP reported a strong quarter with 6% revenue growth, 80 bps of adjusted EBIT margin expansion and 11% adjusted EPS growth, raised fiscal‑2026 revenue and EPS guidance, approved a $6 billion share buyback and increased the dividend 10%.
Product and AI momentum — Workforce Now Next Gen and ADP Lyric are gaining traction (Lyric bookings exceeded expectations with >70% new logos, including two >20k‑employee wins), the ADP Workforce Suite launched, and new ADP Assist AI agents were introduced for payroll, HR, tax and analytics.
PEO performance moderated — PEO revenue ex pass‑throughs slowed to ~3%, new business bookings came in slightly below expectations, PEO margins fell ~70 bps (driven by zero‑margin pass‑throughs and higher selling expenses), and ADP now expects ~2% average worksite employee growth for fiscal‑2026.
International growth opportunity — management highlighted a large >75,000‑employee European bank win and global payroll improvements; international is lower margin but has very high retention and attractive lifetime value, supporting long‑term expansion.

Automatic Data Processing Stock Down 1.5%

Shares of NASDAQ ADP opened at $250.69 on Thursday. The company has a quick ratio of 1.05, a current ratio of 1.05 and a debt-to-equity ratio of 0.62. The business’s 50 day moving average is $258.55 and its two-hundred day moving average is $278.55. Automatic Data Processing has a 52-week low of $247.18 and a 52-week high of $329.93. The firm has a market cap of $101.39 billion, a price-to-earnings ratio of 24.75 and a beta of 0.86.

Automatic Data Processing Dividend Announcement

The business also recently announced a quarterly dividend, which will be paid on Wednesday, April 1st. Investors of record on Friday, March 13th will be issued a $1.70 dividend. This represents a $6.80 annualized dividend and a yield of 2.7%. The ex-dividend date is Friday, March 13th. Automatic Data Processing’s dividend payout ratio (DPR) is 67.13%.

Trending Headlines about Automatic Data Processing

Here are the key news stories impacting Automatic Data Processing this week:

Positive Sentiment: Q2 results beat and management raised its outlook — ADP reported EPS of $2.62 (above consensus) and revenue up ~6.2% YoY; management updated FY guidance and issued materials/slide deck that reinforced momentum. ADP Reports Second Quarter Fiscal 2026 Results
Positive Sentiment: Company lifted annual revenue forecast and beat profit estimates, citing steady demand for payroll services — supports revenue durability. ADP lifts annual revenue forecast on demand for payroll services
Positive Sentiment: Company announced/has an active $6B share repurchase program — buybacks reduce share count and are an explicit capital‑allocation catalyst. 3 Large Cap Stocks Announce Big Buyback Boosts Amid +20% Falls
Positive Sentiment: ADP launched new AI “ADP Assist” agents to automate HR/payroll tasks — product innovation could drive efficiencies and upsell over time. ADP® Accelerates AI Leadership with Launch of New AI Agents Designed to Solve Workforce Challenges
Neutral Sentiment: Earnings call coverage and transcript are available for detail — investors can check guidance context, margin commentary and buyback timing. Automatic Data Processing, Inc. (ADP) Q2 2026 Earnings Call Transcript
Neutral Sentiment: Media summaries (Zacks/TipRanks) highlight the beat and management commentary (buyback/upbeat outlook) but add little new information beyond the release. ADP Earnings Call Highlights Upbeat Outlook and Buyback
Neutral Sentiment: Reported short‑interest data in filings looks meaningless/erroneous (zero/NaN entries) and is not a driver today.
Negative Sentiment: Analyst/market caution on valuation and macro risks — commentary argues ADP remains expensive given slowing hiring trends, which is a direct revenue headwind because ADP charges per employee. Automatic Data Processing: Still Expensive Given Macro Headwinds
Negative Sentiment: Market reminders that client headcount growth was weak in recent periods — slower hiring can cap ADP’s growth and margin leverage despite buybacks. 3 Large Cap Stocks Announce Big Buyback Boosts Amid +20% Falls

Insiders Place Their Bets

In other news, VP David Kwon sold 806 shares of the firm’s stock in a transaction that occurred on Monday, January 12th. The shares were sold at an average price of $264.80, for a total value of $213,428.80. Following the completion of the transaction, the vice president owned 11,187 shares of the company’s stock, valued at approximately $2,962,317.60. This trade represents a 6.72% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which can be accessed through the SEC website. Also, VP Christopher D’ambrosio sold 543 shares of the business’s stock in a transaction on Tuesday, January 13th. The stock was sold at an average price of $262.29, for a total transaction of $142,423.47. Following the completion of the transaction, the vice president owned 9,998 shares of the company’s stock, valued at approximately $2,622,375.42. This trade represents a 5.15% decrease in their position. The disclosure for this sale is available in the SEC filing. Insiders sold 2,249 shares of company stock valued at $589,852 over the last ninety days. Insiders own 0.20% of the company’s stock.

Hedge Funds Weigh In On Automatic Data Processing

A number of institutional investors and hedge funds have recently made changes to their positions in ADP. Brighton Jones LLC grew its stake in shares of Automatic Data Processing by 92.1% during the fourth quarter. Brighton Jones LLC now owns 10,026 shares of the business services provider’s stock worth $2,935,000 after purchasing an additional 4,808 shares in the last quarter. Bison Wealth LLC lifted its holdings in Automatic Data Processing by 22.8% during the 4th quarter. Bison Wealth LLC now owns 3,664 shares of the business services provider’s stock worth $1,073,000 after buying an additional 681 shares during the last quarter. Schnieders Capital Management LLC. boosted its position in shares of Automatic Data Processing by 21.8% during the 2nd quarter. Schnieders Capital Management LLC. now owns 1,259 shares of the business services provider’s stock worth $388,000 after acquiring an additional 225 shares in the last quarter. Osterweis Capital Management Inc. purchased a new position in shares of Automatic Data Processing in the 2nd quarter valued at about $108,000. Finally, Diversify Advisory Services LLC raised its position in shares of Automatic Data Processing by 17.5% during the 2nd quarter. Diversify Advisory Services LLC now owns 5,477 shares of the business services provider’s stock worth $1,641,000 after acquiring an additional 815 shares in the last quarter. 80.03% of the stock is owned by institutional investors and hedge funds.

Automatic Data Processing announced that its Board of Directors has initiated a share repurchase plan on Wednesday, January 14th that permits the company to repurchase $6.00 billion in outstanding shares. This repurchase authorization permits the business services provider to buy up to 5.8% of its shares through open market purchases. Shares repurchase plans are typically an indication that the company’s leadership believes its shares are undervalued.

Wall Street Analyst Weigh In

ADP has been the subject of several research analyst reports. Wells Fargo & Company decreased their price objective on shares of Automatic Data Processing from $288.00 to $272.00 and set an “underweight” rating for the company in a research report on Thursday, October 30th. Citigroup started coverage on shares of Automatic Data Processing in a report on Thursday, October 23rd. They set a “neutral” rating and a $303.00 price objective on the stock. Weiss Ratings reaffirmed a “hold (c+)” rating on shares of Automatic Data Processing in a research report on Monday, December 29th. Cantor Fitzgerald initiated coverage on Automatic Data Processing in a research note on Tuesday. They issued an “overweight” rating and a $306.00 price objective for the company. Finally, Jefferies Financial Group reissued an “underperform” rating and set a $230.00 price target (down from $245.00) on shares of Automatic Data Processing in a research report on Tuesday, December 16th. Three analysts have rated the stock with a Buy rating, nine have assigned a Hold rating and two have assigned a Sell rating to the stock. Based on data from MarketBeat.com, the stock presently has an average rating of “Hold” and a consensus target price of $306.38.

View Our Latest Report on ADP

About Automatic Data Processing

(Get Free Report)

Automatic Data Processing, Inc (ADP) is a global provider of cloud-based human capital management (HCM) and payroll solutions. Founded in 1949 and headquartered in Roseland, New Jersey, ADP began as a payroll processing company and has evolved into a diversified provider of workforce management, HR, benefits administration, tax and compliance services, and analytics for employers of all sizes.

ADP’s product portfolio includes payroll processing and tax filing, time and attendance systems, benefits administration, talent management, and HR outsourcing.