Automatic Data Processing Inc.

Strong Q4 + full-year performance (momentum heading into FY27): ADP reported 7% revenue growth in Q4, +140 bps adjusted EBIT margin expansion, and +17% adjusted EPS growth. For the full year (FY26), ADP delivered results at the high end of updated guidance: ~7% revenue growth, +80 bps adjusted EBIT margin expansion, and ~11% adjusted EPS growth—supported by strong client value signals like retention and satisfaction (see below).

Bookings + client metrics were top-tier (what’s “good” and somewhat “surprising”): Employer Services (ES) delivered $2.2B+ in new business bookings in FY26 (+6% YoY)—and management emphasized very strong Q4 finishing strength, particularly June (and a record-high average sales productivity). ES retention held 92.1% for the year (with record client satisfaction scores for the third consecutive year). Surprising/positive operational signal: ADP’s AI service tooling (The Zone) reached scale—service associates using The Zone rose from 10% at start of FY26 to 48% at year-end, with 96% of service work on-platform for those users and a 4% decrease in contact per client, implying fewer admin touches and more value-added interactions.

Strategy execution: AI embedded in core HCM + platform + service enablement (opportunities): - ADP Assist: rolled out since January; available to nearly all 1.1M+ clients, with 3.1M unique active users and 12M conversations in FY26. Also surfaced 45,000 compliance insights to thousands of clients since January (aim: earlier risk mitigation). - Lyric traction in enterprise + international: live client count up 94% YoY, Lyric pipeline +50% YoY, and new logos = 70% of opportunities. Management highlighted that Lyric wins conversations are increasingly anchored in AI discussions. - The Zone (AI-infused service platform): used broadly to improve service consistency and efficiency; expected to support ongoing retention/engagement and lower cost-to-serve over time.