Automatic Data Processing, Inc.
Automatic Data Processing, Inc. Q2 FY26 Results — Earnings Call Analysis
Q2 FY26 earnings call: what management said on revenue, margins and capex.
What the Q2 FY26 call signalled
3 of 4 strong
The short version
- Full-year revenue growth guidance raised to 6% to 7% for fiscal 2026, with increased outlook due to strong Q3 performance. - Fiscal 2026 revenue growth guidance raised to 6% to 7%.
From Automatic Data Processing, Inc.'s Q2 FY26 earnings-call transcript · updated 29 May 2026.
Revenue & Sales Performance
- Full-year revenue growth guidance raised to 6% to 7% for fiscal 2026, with increased outlook due to strong Q3 performance.
- PEO revenue (excluding zero-margin pass-throughs) growth outlook increased to 4% to 5%.
- Employer Services (ES) revenue grew 7% in Q3; organic constant currency growth at 5%.
- International and compliance segments show notable strength driving bookings growth.
- Bookings remain strong, with a 50-50 mix between new logos and upsells.
- Pipeline remains healthy heading into Q4, although outcomes remain sensitive with about $20M impact per 1% variance.
- Pay per control growth in ES maintained around 1%; PEO employee growth forecasted at ~2%.
- Client funds balances growth outlook increased to about 6%, boosting client funds interest revenue forecast.
2 more points from Automatic Data Processing, Inc.'s call on revenue
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Profitability & Margins
See what Automatic Data Processing, Inc. said on profitability & margins — free account, 30 seconds.
Capital Expenditure Plans
- ADP is making disciplined investments focusing on AI transformation across products, internal tools, and service delivery while maintaining financial commitments (Page 4).
- Continued and increased investment in AI initiatives to improve product offerings, internal efficiencies, and service operations, including deployment of AI-powered tools like RAM platform and ADP Assist agents (Pages 4, 7, 13).
- Capital investments include scaling implementation capacity internally and through partnerships with system integrators (e.g., Accenture, KPMG) especially around the Lyric platform that integrates global payroll and global time solutions (Page 8).
2 more points from Automatic Data Processing, Inc.'s call on capex
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Fundraising & Capital Structure
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Order Book & Pipeline
- ADP reported solid bookings momentum in Q3, building on the first half of the year.
- Strength was seen in international, compliance, and small business portfolios (insurance, retirement services).
- The bookings mix remains balanced at approximately 50% new logos and 50% upsells/expansions.
- Pipelines going into Q4 are healthy with all sellers equipped and motivated.
- The outlook for Q4 bookings remains cautious with a wide range, reflecting typical year-end variability.
2 more points from Automatic Data Processing, Inc.'s call on order book
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Continue your research
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Potential multibaggers · Q2 FY27
This quarter's potential multibaggers
on management's own guidance
- Strong growth2
- Strong growth1
- Strong growth3
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Ranks describe management commentary on revenue and margin from the latest earnings call. Not investment advice.
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Frequently Asked Questions
What were Automatic Data Processing, Inc. Q2 FY26 results?
- Full-year revenue growth guidance raised to 6% to 7% for fiscal 2026, with increased outlook due to strong Q3 performance. - Fiscal 2026 revenue growth guidance raised to 6% to 7%.
What is Automatic Data Processing, Inc. share price analysis?
Automatic Data Processing, Inc. currently shows a neutral. The stock trades at a P/E of 20.4 with a market cap of $88,525. Investors should review the full earnings analysis for detailed insights.
Is Automatic Data Processing, Inc. planning capital expenditure?
- ADP is making disciplined investments focusing on AI transformation across products, internal tools, and service delivery while maintaining financial commitments (Page 4).
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This analysis is AI-generated based on publicly available earnings data and the company's earnings call transcript. This is not investment advice. Please consult a SEBI-registered advisor before making investment decisions.