AUTOMATIC DATA PROCESSING INC
For the period ended Mar 31, 2026. Filed Apr 30, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed Apr 30, 2026
ADP$303.35-1.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-12-31; filed 2026-01-29.
0000008670-26-000011
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-04-30.
0000008670-26-000022
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 117 previous paragraphs and 119 current paragraphs.
65 unchanged; 46 reworded; 5 added; 5 removed; 1 previous and 3 current paragraphs rearranged.
Tables are not compared: 17 previous and 17 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (5)
Current report
During the third quarter, we made meaningful progress on our Strategic Priorities. We continued to leverage our data advantages, domain expertise, and trusted brand to lead the HCM industry through its AI transformation. Our ADP Assist agents are applying advanced intelligence to real workforce challenges across payroll and HR, and since their launch in January, our clients have seen meaningful time savings for each payroll processed. ADP Lyric HCM is also saving time for our clients, with one company replacing a dozen disparate systems to achieve a leaner payroll operations model. Additionally, we expanded our AI ecosystem by launching a dedicated space within ADP Marketplace for our partner companies’ AI agents. On the service front, we scaled our GenAI capabilities across our service operations, transforming how our client-facing teams engage, serve, and support our clients across the full lifecycle. Finally, we remained focused on benefiting our clients through our global scale by delivering compliant HCM solutions, local expertise, and trusted relationships wherever they operate.
Current report
Highlights from the nine months ended March 31, 2026 include:
Current report
Interest income on corporate funds increased for the three months ended March 31, 2026 due to higher average investment balances of $7.3 billion as compared to $6.3 billion for the three months ended March 31, 2025, offset by a decrease in average interest rates of 10 basis points, as compared to the three months ended March 31, 2025.
Current report
EBIT Margin increased for the three months ended March 31, 2026 due to contributions from client funds interest revenues, lower amortization of client contracts and lists, and operating efficiencies related to research and development, service, and implementation expenses, partially offset by increased selling and marketing expenses.
Current report
PEO Services' margin decreased for the nine months ended March 31, 2026, due to increased selling and marketing expenses, increases in zero-margin benefit pass through costs, increased operating costs related to state unemployment insurance, and a decrease in the pre-tax benefit from ADP Indemnity, partially offset by increased revenues discussed above.
Removed paragraphs (5)
Previous report
During the second quarter, we made meaningful progress on our Strategic Priorities. We experienced continued new business momentum for our Next Gen solutions, including Workforce Now Next Gen and ADP Lyric HCM. We launched the ADP WorkForce Suite, our integrated workforce management solution, across our leading payroll and HCM platforms. We also introduced our first Pooled Employer Plan in our Retirement Services business, enabling employers to offer robust retirement plan benefits without adding administrative burden. Finally, we continue to enhance ADP Assist with additional persona-based agents.
Previous report
Highlights from the six months ended December 31, 2025 include:
Previous report
EBIT Margin increased for the six months ended December 31, 2025 due to contributions from client funds interest revenues discussed above, decreased interest expense, the impact of foreign currency, and increased interest income on corporate funds, partially offset by increased selling and marketing expenses.
Previous report
PEO Services' earnings before income taxes increased for the three months ended December 31, 2025 due to increased revenues discussed above, partially offset by increases in zero-margin benefits pass-through costs and selling and marketing expenses.
Previous report
PEO Services' earnings before income taxes decreased for the six months ended December 31, 2025 due to increases in zero-margin benefits pass-through costs and selling and marketing expenses, partially offset by increased revenues discussed above.
Reworded paragraphs (46)
Previous wording
This document and other written or oral statements made from time to time by Automatic Data Processing, Inc., its subsidiaries and variable interest entity (“ADP” or the “Company”) may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Statements that are not historical in nature and which may be identified by the use of words like “outlook,” “expects,” “assumes,” “projects,” “anticipates,” “estimates,” “we believe,” “could,” “is designed to” and other words of similar meaning, are forward-looking statements. These statements are based on management’s expectations and assumptions and depend upon or refer to future events or conditions and are subject to risks and uncertainties that may cause actual results to differ materially from those expressed. Factors that could cause actual results to differ materially from those contemplated by the forward-looking statements or that could contribute to such difference include: ADP's success in obtaining and retaining clients, and selling additional services to clients; the pricing of products and services; the success of our new solutions; our ability to respond successfully to changes in technology, including artificial intelligence; compliance with existing or new legislation or regulations; changes in, or interpretations of, existing legislation or regulations; overall market, political and economic conditions, including interest rate and foreign currency trends and inflation; competitive conditions; our ability to maintain our current credit ratings and the impact on our funding costs and profitability; security or cyber breaches, fraudulent acts, and system interruptions and failures; employment and wage levels; availability of skilled associates; the impact of new acquisitions and divestitures; the impact of any uncertainties related to major natural disasters or catastrophic events; and supply-chain disruptions. ADP disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law. These risks and uncertainties, along with the risk factors discussed under “Item 1A. - Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended June 30, 2025 (“fiscal 2025”), and in other written or oral statements made from time to time by ADP, should be considered in evaluating any forward-looking statements contained herein.
Current wording
This document and other written or oral statements made from time to time by Automatic Data Processing, Inc., its subsidiaries and variable interest entity (“ADP” or the “Company”) may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Statements that are not historical in nature and which may be identified by the use of words like “outlook,” “expects,” “assumes,” “projects,” “anticipates,” “estimates,” “we believe,” “could,” “is designed to” and other words of similar meaning, are forward-looking statements. These statements are based on management’s expectations and assumptions and depend upon or refer to future events or conditions and are subject to risks and uncertainties that may cause actual results to differ materially from those expressed. Factors that could cause actual results to differ materially from those contemplated by the forward-looking statements or that could contribute to such difference include: ADP's success in obtaining and retaining clients, and selling additional services to clients; the pricing of products and services; the success of our new solutions; our ability to respond successfully to changes in technology, including artificial intelligence; compliance with existing or new legislation or regulations; changes in, or interpretations of, existing legislation or regulations; overall market, political and economic conditions, including interest rate and foreign currency trends and inflation; competitive conditions; our ability to maintain our current credit ratings and the impact on our funding costs and profitability; security or cyber breaches including as a result of artificial intelligence, fraudulent acts, and system interruptions and failures; employment and wage levels; availability of skilled associates; the impact of new acquisitions and divestitures; the impact of any uncertainties related to major natural disasters or catastrophic events; and supply-chain disruptions. ADP disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law. These risks and uncertainties, along with the risk factors discussed under “Item 1A. - Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended June 30, 2025 (“fiscal 2025”), and in other written or oral statements made from time to time by ADP, should be considered in evaluating any forward-looking statements contained herein.
Previous wording
•Revenue growth of 7% to $10,534.5 million; 6% growth on an organic constant currency basis
Current wording
•Revenue growth of 7% to $16,473.6 million; 6% growth on an organic constant currency basis
Previous wording
•Earnings before income taxes margin expansion of 30 bps, and adjusted EBIT margin expansion of 40 bps
Current wording
•Earnings before income taxes margin expansion of 50 bps, and adjusted EBIT margin expansion of 50 bps
Previous wording
•Diluted and adjusted diluted earnings per share ("EPS") growth of 9%, to $5.12 and $5.11, respectively
Current wording
•Diluted and adjusted diluted earnings per share ("EPS") growth of 10% and 9%, to $8.49 and $8.48, respectively
Previous wording
•Cash returned via shareholder friendly actions of $2.1B, including $1.3B of dividends and $0.9B of share repurchases
Current wording
•Cash returned via shareholder friendly actions of $3.4B, including $1.9B of dividends and $1.5B of share repurchases
Previous wording
For the six months ended December 31, 2025, we delivered strong revenue growth of 7%, 6% growth on an organic constant currency basis. Our pays per control metric, which represents the number of employees on ADP clients' payrolls in the United States when measured on a same-store-sales basis for a subset of Employer Services clients ranging from small to large businesses, grew 1% for the six months ended December 31, 2025 as compared to the six months ended December 31, 2024. PEO average worksite employees increased 2% for the six months ended December 31, 2025, as compared to the six months ended December 31, 2024.
Current wording
For the nine months ended March 31, 2026, we delivered strong revenue growth of 7%, 6% growth on an organic constant currency basis. Our pays per control metric, which represents the number of employees on ADP clients' payrolls in the United States when measured on a same-store-sales basis for a subset of Employer Services clients ranging from small to large businesses, grew 1% for the nine months ended March 31, 2026 as compared to the nine months ended March 31, 2025. PEO average worksite employees increased 2% for the nine months ended March 31, 2026, as compared to the nine months ended March 31, 2025.
Previous wording
Total revenues increased for the three and six months ended December 31, 2025 due to new business started from new business bookings, strong client retention, an increase in zero-margin benefits pass-throughs, an increase in pricing, the impact of foreign currency, and an increase in interest on funds held for clients.
Current wording
Total revenues increased for the three and nine months ended March 31, 2026 due to new business started from new business bookings, strong client retention, an increase in zero-margin benefits pass-throughs, the impact of foreign currency, an increase in pricing, and an increase in interest on funds held for clients.
Previous wording
Total revenues for the three months ended December 31, 2025 include interest on funds held for clients of $308.6 million, as compared to $272.8 million for the three months ended December 31, 2024. The increase in interest earned on funds held for clients resulted from an increase in our average client funds balances of 6.5% to $37.6 billion for the three months ended December 31, 2025 as compared to the three months ended December 31, 2024, coupled with an increase in our average interest rate earned to 3.3% for the three months ended December 31, 2025, as compared to 3.1% for the three months ended December 31, 2024.
Current wording
Total revenues for the three months ended March 31, 2026 include interest on funds held for clients of $403.9 million, as compared to $355.2 million for the three months ended March 31, 2025. The increase in interest earned on funds held for clients resulted from an increase in our average client funds balances of 8.5% to $48.3 billion for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025, coupled with an increase in our average interest rate earned to 3.3% for the three months ended March 31, 2026, as compared to 3.2% for the three months ended March 31, 2025.
Previous wording
Total revenues for the six months ended December 31, 2025 include interest on funds held for clients of $595.5 million, as compared to $526.1 million for the six months ended December 31, 2024. The increase in interest earned on funds held for clients resulted from an increase in our average client funds balances of 6.5% to $36.2 billion for the six months ended December 31, 2025 as compared to the six months ended December 31, 2024, coupled with an increase in our average interest rate earned to 3.3% for the six months ended December 31, 2025, as compared to 3.1% for the six months ended December 31, 2024.
Current wording
Total revenues for the nine months ended March 31, 2026 include interest on funds held for clients of $999.4 million, as compared to $881.3 million for the nine months ended March 31, 2025. The increase in interest earned on funds held for clients resulted from an increase in our average client funds balances of 7.3% to $40.2 billion for the nine months ended March 31, 2026 as compared to the nine months ended March 31, 2025, coupled with an increase in our average interest rate earned to 3.3% for the nine months ended March 31, 2026, as compared to 3.1% for the nine months ended March 31, 2025.
Previous wording
Operating expenses increased for the six months ended December 31, 2025 due to an increase of $152.8 million of PEO Services zero-margin benefits pass-through costs to $2,257.2 million from $2,104.4 million for the six months ended December 31, 2024. Additionally, for the six months ended December 31, 2025 operating expenses increased by $109.4 million due to higher service and implementation costs in support of our growing revenue and by $13.0 million due to an increase in costs related to workers' compensation coverage and state unemployment taxes for worksite employees.
Current wording
Operating expenses increased for the three months ended March 31, 2026 due to an increase of $80.0 million of PEO Services zero-margin benefits pass-through costs to $1,170.0 million from $1,090.0 million for the three months ended March 31, 2025. Additionally, for the three months ended March 31, 2026, operating expenses increased by $50.4 million due to higher service and implementation costs in support of our growing revenue and by $18.9 million due to an increase in costs related to workers' compensation coverage and state unemployment taxes for worksite employees.
Previous wording
Operating expenses increased for the three months ended December 31, 2025 due to an increase of $71.0 million of PEO Services zero-margin benefits pass-through costs to $1,126.2 million from $1,055.2 million for the three months ended December 31, 2024. Additionally, for the three months ended December 31, 2025 operating expenses increased by $42.3 million due to higher service and implementation costs in support of our growing revenue.
Current wording
Operating expenses increased for the nine months ended March 31, 2026 due to an increase of $232.8 million of PEO Services zero-margin benefits pass-through costs to $3,427.2 million from $3,194.4 million for the nine months ended March 31, 2025. Additionally, for the nine months ended March 31, 2026, operating expenses increased by $159.9 million due to higher service and implementation costs in support of our growing revenue and by $31.9 million due to an increase in costs related to workers' compensation coverage and state unemployment taxes for worksite employees.
Previous wording
Research and development expenses increased for the six months ended December 31, 2025 due to increased costs to develop, support, and maintain our new and existing products, including the integration costs associated with the WorkForce Software acquisition.
Current wording
Research and development expenses increased for the nine months ended March 31, 2026 due to increased costs to develop, support, and maintain our new and existing products, including the integration costs associated with the WorkForce Software acquisition.
Previous wording
Depreciation and amortization expenses increased for the six months ended December 31, 2025 due to the amortization of intangible assets acquired in the WorkForce Software acquisition and investments in internally developed software primarily for our next-gen products and purchased software, partially offset by lower amortization of customer contracts and lists.
Current wording
Depreciation and amortization expenses increased for the nine months ended March 31, 2026 due to the amortization of intangible assets acquired in the WorkForce Software acquisition and investments in internally developed software primarily for our next-gen products, and purchased software, partially offset by lower amortization of customer contracts and lists.
Previous wording
Selling, general and administrative expenses increased for the three and six months ended December 31, 2025 primarily due to increases in selling and marketing expenses of $59.6 million and $117.0 million, respectively, as a result of investments in our sales organization.
Current wording
Selling, general and administrative expenses increased for the three and nine months ended March 31, 2026 primarily due to increases in selling and marketing expenses of $63.5 million and $180.4 million, respectively, as a result of investments in our sales organization.
Previous wording
Interest expense decreased for the three months ended December 31, 2025 primarily due to a decrease of $8.7 million related to commercial paper and reverse repurchase borrowings as a result of a decrease in average interest rates on commercial paper issuances and reverse repurchases of 70 and 60 basis points, respectively, coupled with a decrease in average daily commercial paper borrowings of $0.1 billion, offset by an increase in average reverse repurchase outstanding balances of $0.6 billion, as compared to the three months ended December 31, 2024. This decrease was partially offset by net increases in interest expense of $3.7 million related to the senior notes issued and redeemed during the year ended June 30, 2025.
Current wording
Interest expense increased for the three months ended March 31, 2026 primarily due to net increases in interest expense of $3.7 million related to the senior notes issued and redeemed during the year ended June 30, 2025, coupled with an increase of $0.5 million related to commercial paper and reverse repurchase borrowings as a result of increases in average daily commercial paper borrowings and average reverse repurchase outstanding balances of $0.5 billion and $0.2 billion, respectively. This increase was offset by decreases in average interest rates on commercial paper issuances and reverse repurchases of 70 and 30 basis points, respectively, as compared to the three months ended March 31, 2025.
Previous wording
Interest expense decreased for the six months ended December 31, 2025 primarily due to a decrease of $24.2 million related to commercial paper and reverse repurchase borrowings as a result of a decrease in average interest rates on commercial paper issuances and reverse repurchases of 80 basis points, coupled with a decrease in average daily commercial paper borrowings of $0.2 billion, offset by an increase in average reverse repurchase outstanding balances of $0.7 billion, as compared to the six months ended December 31, 2024. This decrease was partially offset by net increases in interest expense of $16.3 million related to the senior notes issued and redeemed during the year ended June 30, 2025.
Current wording
Interest expense decreased for the nine months ended March 31, 2026 primarily due to a decrease of $23.6 million related to commercial paper and reverse repurchase borrowings as a result of decreases in average interest rates on commercial paper issuances and reverse repurchases of 80 and 70 basis points, respectively, offset by an increase in average reverse repurchase outstanding balances of $0.5 billion, as compared to the nine months ended March 31, 2025. This decrease was partially offset by net increases in interest expense of $20.0 million related to the senior notes issued and redeemed during the year ended June 30, 2025.
Previous wording
Interest income on corporate funds increased for the three and six months ended December 31, 2025 due to higher average investment balances of $11.0 billion and $11.2 billion, respectively, as compared to $10.0 billion and $10.3 billion for the three and six months ended December 31, 2024, coupled with an increase in average interest rates of 20 and 10 basis points for the three and six months ended December 31, 2025, respectively, as compared to the three and six months ended December 31, 2024.
Current wording
Interest income on corporate funds increased for the nine months ended March 31, 2026 due to higher average investment balances of $9.9 billion as compared to $9.0 billion for the nine months ended March 31, 2025, coupled with an increase in average interest rates of 10 basis points, as compared to the nine months ended March 31, 2025.
Previous wording
During the three and six months ended December 31, 2025, the Company recognized a gain of $2.2 million related to investments made through our Corporate Venture Capital arm, ADP Ventures.
Current wording
During the three and nine months ended March 31, 2026, the Company recognized a net gain of $2.1 million and $4.3 million, respectively, related to investments made through our Corporate Venture Capital arm, ADP Ventures.
Previous wording
Earnings before income taxes increased for the three and six months ended December 31, 2025 due to the increase in total revenues, partially offset by the increase in total expenses discussed above.
Current wording
Earnings before income taxes increased for the three and nine months ended March 31, 2026 due to the increase in total revenues, partially offset by the increase in total expenses discussed above.
Previous wording
EBIT Margin increased for the three months ended December 31, 2025 due to contributions from client funds interest revenues discussed above, decreased interest expense, the impact of foreign currency, decreased amortization and depreciation expenses, and increased interest income on corporate funds, partially offset by increased selling and marketing expenses.
Current wording
EBIT Margin increased for the nine months ended March 31, 2026 due to contributions from client funds interest revenues, lower interest expense related to commercial paper and reverse repurchase borrowings, lower amortization of client contracts and lists, and increased interest income on corporate funds, partially offset by increased selling and marketing expenses.
Previous wording
The effective tax rate for the six months ended December 31, 2025 and 2024 was 22.9% and 23.1%, respectively. The decrease in the effective tax rate is primarily due to lower reserves for uncertain tax positions partially offset by the cost of an intercompany transfer of certain assets and a lower excess tax benefit on stock-based compensation in the six months ended December 31, 2025.
Current wording
The effective tax rate for the three months ended March 31, 2026 and 2025 was 23.7% and 23.0%, respectively. The increase in the effective tax rate is primarily due to an increase in uncertain tax positions and a lower excess tax benefit on stock-based compensation in the three months ended March 31, 2026 as compared to the three months ended March 31, 2025.
Previous wording
The effective tax rate for the three months ended December 31, 2025 and 2024 was 23.2% and 23.6%, respectively. The decrease in the effective tax rate is primarily due to lower reserves for uncertain tax positions and a benefit for adjustments to prior year tax liabilities partially offset by a lower excess tax benefit on stock-based compensation in the three months ended December 31, 2025.
Current wording
The effective tax rate for the nine months ended March 31, 2026 and 2025 was 23.2% and 23.1%, respectively. The increase in the effective tax rate is primarily due to a lower excess tax benefit on stock-based compensation offset by a decrease in uncertain tax positions for the nine months ended March 31, 2026 as compared to the nine months ended March 31, 2025.
Previous wording
The adjusted effective tax rate for the three months ended December 31, 2025 and 2024 was 23.2% and 23.6%, respectively. The drivers of the adjusted effective tax rate are the same as the drivers of the effective tax rate discussed above.
Current wording
The adjusted effective tax rate for the three months ended March 31, 2026 and 2025 was 23.7% and 23.0%, respectively. The drivers of the adjusted effective tax rate are the same as the drivers of the effective tax rate discussed above.
Previous wording
The adjusted effective tax rate for the six months ended December 31, 2025 and 2024 was 22.9% and 23.1%, respectively. The drivers of the adjusted effective tax rate are the same as the drivers of the effective tax rate discussed above.
Current wording
The adjusted effective tax rate for the nine months ended March 31, 2026 and 2025 was 23.2% and 23.1%, respectively. The drivers of the adjusted effective tax rate are the same as the drivers of the effective tax rate discussed above.
Previous wording
In addition to the increase in net earnings, diluted EPS increased for the three months ended December 31, 2025 as a result of the impact of fewer shares outstanding resulting from the repurchase of approximately 1.9 million shares during the three months ended December 31, 2025, and 0.9 million shares during the three months ended December 31, 2024, partially offset by the issuances of shares under our employee benefit plans.
Current wording
In addition to the increase in net earnings, diluted EPS increased for the three and nine months ended ended March 31, 2026 as a result of the impact of fewer shares outstanding resulting from share repurchases under our authorized share repurchase program, partially offset by the issuances of shares under our employee benefit plans. The Company repurchased 2.6 million and 1.0 million shares in the three months ended March 31, 2026 and 2025, respectively, and repurchased 5.7 million and 3.4 million shares in thenine months ended March 31, 2026 and 2025, respectively.
Previous wording
Adjusted net earnings and adjusted diluted EPS reflect the changes in the components described above for the three and six months ended December 31, 2025.
Current wording
Adjusted net earnings and adjusted diluted EPS reflect the changes in the components described above for the three and nine months ended March 31, 2026.
Previous wording
Employer Services' revenues increased for the three and six months ended December 31, 2025 due to new business started from new business bookings, strong client retention, an increase in pricing, the impact of foreign currency, an increase in interest earned on funds held for clients, and an increase in our pays per control of 1%.
Current wording
Employer Services' revenues increased for the three months ended March 31, 2026 due to new business started from new business bookings, strong client retention, the impact of foreign currency, an increase in pricing, an increase in interest earned on funds held for clients, and an increase in our pays per control when measured on a same-store-sales basis of 1%.
Previous wording
Employer Services' earnings before income taxes increased for the three and six months ended December 31, 2025 due to increased revenues, including contributions from client funds interest, discussed above, partially offset by increased costs of servicing and implementing our clients on growing revenue, selling and marketing expenses, and costs to develop, support, and maintain our new and existing products.
Current wording
Employer Services' earnings before income taxes increased for the three and nine months ended March 31, 2026 due to increased revenues, including contributions from client funds interest, discussed above, partially offset by increased costs of servicing and implementing our clients on growing revenue, and increased selling and marketing expenses.
Previous wording
Employer Services' margin increased for the three months ended December 31, 2025 due to contributions from client funds interest revenues discussed above, decreased amortization and depreciation expenses, and operating efficiencies for costs of servicing and implementing our clients on growing revenue, partially offset by increased selling and marketing expenses.
Current wording
Employer Services' margin increased for the three months ended March 31, 2026 due to contributions from client funds interest revenues, lower amortization of client contracts and lists, and operating efficiencies related to research and development, service, and implementation expenses, partially offset by increased selling and marketing expenses.
Previous wording
Employer Services' margin remained flat for the six months ended December 31, 2025, due to contributions from client funds interest revenues discussed above, partially offset by increased selling and marketing expenses and the impact from the WorkForce Software acquisition.
Current wording
Employer Services' margin increased for the nine months ended March 31, 2026 due to contributions from client funds interest revenues, and lower amortization of client contracts and lists, partially offset by increased selling and marketing expenses and the impact from the WorkForce Software acquisition in October 2024.
Previous wording
PEO Services' revenues increased for the three and six months ended December 31, 2025 due to the increase in zero-margin benefits pass-throughs, and an increase in average worksite employees of 2% for each period, as compared to the three and six months ended December 31, 2024.
Current wording
PEO Services' revenues increased for the three months ended March 31, 2026 due to the increase in zero-margin benefits pass-throughs, and an increase in average worksite employees of 2%, as compared to the three months ended March 31, 2025.
Previous wording
PEO Services' margin decreased for the six months ended December 31, 2025, due to increased selling and marketing expenses and zero-margin benefits pass-through costs, and increased operating costs related to state unemployment insurance, partially offset by increased revenues discussed above.
Current wording
PEO Services' earnings before income taxes decreased for the three and nine months ended March 31, 2026 due to increased selling and marketing expenses, increases in zero-margin benefits pass-through costs, and increased operating costs related to state unemployment insurance, partially offset by increased revenues discussed above.
Previous wording
PEO Services' margin decreased for the three months ended December 31, 2025, due to increased selling and marketing expenses and zero-margin benefits pass-through costs, partially offset by increased revenues discussed above.
Current wording
PEO Services' margin decreased for the three months ended March 31, 2026, due to increased selling and marketing expenses, increased operating costs related to state unemployment insurance, a decrease in the pre-tax benefit from ADP Indemnity, and increases in zero-margin benefits pass-through costs, partially offset by increased revenues discussed above.
Previous wording
Additionally, starting in fiscal year 2013, ADP Indemnity paid premiums to enter into reinsurance arrangements with ACE American Insurance Company, a wholly-owned subsidiary of Chubb Limited (“Chubb”), to cover substantially all losses incurred by the Company up to the$1 million per occurrence related to the workers’ compensation and employer's liability deductible reimbursement insurance protection for PEO Services' worksite employees. Each of these reinsurance arrangements limits our overall exposure incurred up to a certain limit. The Company believes the likelihood of ultimate losses exceeding this limit is remote. ADP Indemnity recorded a pre-tax (loss)/benefit of approximately $(2.7) million and $1.9 million for the three and six months ended December 31, 2025, respectively, as compared to approximately $(0.8) million and $4.1 million for the three and six months ended December 31, 2024, respectively, which were primarily the results of less favorable actuarial loss development in workers’ compensation reserves. ADP Indemnity paid a premium of $278 million in July 2025, to enter into a reinsurance agreement with Chubb to cover substantially all losses incurred by ADP Indemnity for fiscal 2026 policy year on terms substantially similar to the fiscal 2025 reinsurance policy.
Current wording
Additionally, starting in fiscal year 2013, ADP Indemnity paid premiums to enter into reinsurance arrangements with ACE American Insurance Company, a wholly-owned subsidiary of Chubb Limited (“Chubb”), to cover substantially all losses incurred by the Company up to the$1 million per occurrence related to the workers’ compensation and employer's liability deductible reimbursement insurance protection for PEO Services' worksite employees. Each of these reinsurance arrangements limits our overall exposure incurred up to a certain limit. The Company believes the likelihood of ultimate losses exceeding this limit is remote. ADP Indemnity recorded a pre-tax benefit of approximately $2.4 million and $4.4 million for the three and nine months ended March 31, 2026, respectively, as compared to approximately $5.6 million and $9.7 million for the three and nine months ended March 31, 2025, respectively, which were primarily the results of less favorable actuarial loss development in workers’ compensation reserves. ADP Indemnity paid a premium of $278 million in July 2025, to enter into a reinsurance agreement with Chubb to cover substantially all losses incurred by ADP Indemnity for fiscal 2026 policy year on terms substantially similar to the fiscal 2025 reinsurance policy.
Previous wording
The primary components of “Other” are certain corporate overhead charges and expenses that have not been allocated to the reportable segments, including corporate functions, severance costs, non-recurring gains and losses, the elimination of intercompany transactions, and all other interest income and expense.
Current wording
The primary components of “Other” are certain corporate overhead charges and expenses that have not been allocated to the reportable segments, including corporate functions, legal settlements, company-wide severance initiatives, non-recurring gains and losses, the elimination of intercompany transactions, and all other interest income and expense.
Previous wording
(c) Represents (gains)/losses on investments made through our Corporate Venture Capital arm, ADP Ventures. (Gains)/losses on these investments may result from observable price changes, changes in ownership interest, and impairment charges. These adjustments may be highly variable, are predominantly non-cash, are outside our control, and are not fundamental to the underlying operations of our business model.
Current wording
(c) Represents (gains)/losses on investments made through our Corporate Venture Capital arm, ADP Ventures. (Gains)/losses on these investments may result from observable price changes, changes in ownership interest, accrued interest income, and impairment charges. These adjustments may be highly variable, are predominantly non-cash, are outside our control, and are not fundamental to the underlying operations of our business model.
Previous wording
(d) In the six months ended December 31, 2024, this represents a reversal of a legal reserve recorded during the year ended June 30, 2023.
Current wording
(d) In the nine months ended March 31, 2025, this represents a reversal of a legal reserve recorded during the year ended June 30, 2023.
Previous wording
As of December 31, 2025, cash and cash equivalents were $2.4 billion, which were primarily invested in time deposits and money market funds.
Current wording
As of March 31, 2026, cash and cash equivalents were $3.2 billion, which were primarily invested in time deposits and money market funds.
Previous wording
Our cash flows from operating, investing, and financing activities, as reflected in the Statements of Consolidated Cash Flows for the six months ended December 31, 2025 and 2024, respectively, are summarized as follows:
Current wording
Our cash flows from operating, investing, and financing activities, as reflected in the Statements of Consolidated Cash Flows for the nine months ended March 31, 2026 and 2025, respectively, are summarized as follows:
Previous wording
Net cash flows provided by operating activities decreased primarily due to a net unfavorable change in the components of operating assets and liabilities primarily due to timing of payments partially offset by growth in our business, as compared to the six months ended December 31, 2024.
Current wording
Net cash flows provided by operating activities increased due to growth in our business and a net favorable change in the components of operating assets and liabilities primarily due to timing of collections and payments, as compared to the nine months ended March 31, 2025.
Showing the first 40 of 46 pairs. Open the source sections for the rest.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
Employer Services' revenues increased for the nine months ended March 31, 2026 due to new business started from new business bookings, strong client retention, an increase in pricing, the impact of foreign currency, an increase in interest earned on funds held for clients, and an increase in our pays per control when measured on a same-store-sales basis of 1%.
Current report — wording carried from elsewhere
PEO Services' revenues increased for the nine months ended March 31, 2026 due to the increase in zero-margin benefits pass-throughs, and an increase in average worksite employees of 2%, as compared to the nine months ended March 31, 2025.
Current report — wording carried from elsewhere
Note: Numbers may not foot due to rounding.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
In addition to the increase in net earnings, diluted EPS increased for the six months ended December 31, 2025 as a result of the impact of fewer shares outstanding resulting from the repurchase of approximately 3.2 million shares during the six months ended December 31, 2025, and 2.4 million shares during the six months ended December 31, 2024, partially offset by the issuances of shares under our employee benefit plans.