Description

ADP’s Pequity Acquisition: Will The Big Bet On AI & Compensation Analytics Pay Off?

Automatic Data Processing, Inc. (ADP) reported strong financial results for the fourth quarter of fiscal 2025, characterized by a solid revenue increase and expansions in both margin and earnings per share (EPS). Revenue growth for the fourth quarter was reported at 8%, with an adjusted EBIT margin expansion of 40 basis points, while adjusted EPS increased by 8%. For the entire fiscal year, the company achieved 7% revenue growth, a 50 basis point rise in EBIT margin, and a 9% increase in adjusted EPS. Despite these positive financial metrics, certain areas of the business experienced slower growth than anticipated. Specifically, Employer Services new business bookings rose by 3%, which was below expectations due to macroeconomic uncertainties affecting the HR Outsourcing business and international operations in the latter half of fiscal 2025. While international bookings showed improvement in the fourth quarter, the growth was insufficient to counteract the earlier softness.

Our Report Structure:

⦁ Company Overview
⦁ Investment Thesis
⦁ Key Drivers
⦁ Historical Quarterly Statement Analysis – Income Statement & Cash Flows
⦁ Historical Quarterly Balance Sheet Analysis
⦁ Historical Annual Financial Statement Analysis
⦁ Analysis Of Key Financial Ratios
⦁ Financial Forecasts For 3 Years
⦁ Forecasting The Capital Structure & Net Debt
⦁ Discounted Cash Flow Valuation
⦁ Trading Multiples
⦁ Key Risks
⦁ Disclosures

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