Automatic Data Processing, Inc.

Strong FY2026 performance; AI-led strategy is gaining traction (good/surprising) - Q4: Revenue +7%, Adj. EBIT margin +140 bps, Adj. EPS +17%. - FY2026: Revenue +7%; Adj. EBIT margin expansion +80 bps; Adj. EPS +11% (at high end of prior guidance). - Strategic message: ADP argues AI is reshaping work, not eliminating jobs at scale, and positions ADP as the “trusted” infrastructure for payroll/HR accuracy and compliance.

Bookings + client retention remain strong; new platform momentum (good) - Employer Services (ES): $2.2B+ new business bookings in FY2026 (+6% YoY); Q4 strong and near/top of guidance. - Retention: ES retention 92.1% (still strong; company expects a modest decline into FY2027). - Client satisfaction: 3rd straight year of record highs. - Sales execution: CFO/CEO cited record-high seller productivity and that late-quarter strength was particularly notable (June).

AI product integration and service efficiency are translating into outcomes (good/opportunity) - ADP Assist: rolled out since Jan; now available to nearly all of 1.1M+ clients; FY2026: 3.1M unique active users, 12M conversations. - Compliance impact: 45,000 compliance insights surfaced since Jan to help clients address tax/regulatory issues early. - Lyric HCM: live clients +94% YoY; pipeline +50% YoY; new logos represent ~70% of opportunities. - The Zone (AI-infused service platform): service associate adoption rose from 10% at start of FY26 to 48% by year-end; for users, 96% of service work on-platform; company linked it to 4% decrease in contact per client (efficiency + value creation).