Automatic Data Processing Inc.

Solid Q3 Performance and Growth Figures: ADP reported a 6% revenue growth in Q3 2025, with adjusted EBIT margin expansion of 10 basis points and a 6% increase in adjusted EPS. Employer Services revenue increased by 5%, underpinned by strong new business bookings in the U.S. market, particularly among small, mid-market, and enterprise clients, while international bookings experienced softness due to macroeconomic uncertainties.

Cautious Outlook for International Business: The expectation of continued macroeconomic uncertainty could lead to a softer performance in international bookings. While the overall pipeline remains strong, ADP acknowledges that large deals across multiple countries may face delays due to apprehension from clients. This creates a risk of lower-than-expected growth in the international segment.

PEO Growth and Strategic Enhancements: PEO revenue grew by 7%, supported by strong retention rates, higher wages, and ongoing growth in zero-margin pass-throughs. The forecast for full-year PEO revenue growth has been increased to 6-7%, reflecting favorable market dynamics for ADP's client base.