ADP reported revenue of $5.94 billion, up 7% from $5.6 billion in fiscal Q3 2025, and adjusted earnings per share of $3.37, a 10% increase from $3.06 and a beat of $0.07–$0.08 versus analyst estimates of $3.30–$3.29.
Revenue growth was driven by a 7% rise in Employer Services and a 7% rise in PEO Services, with Employer Services margin expanding 130 basis points. The company’s adjusted EBIT margin grew 80 basis points to 12.5%, reflecting a higher mix of high‑margin AI‑enabled contracts and improved operational leverage.
ADP’s AI initiatives, including ADP Assist and Smart Actions, have accelerated productivity gains and contributed to margin expansion. The company’s client‑funds strategy, with higher average balances and a stable yield, added to interest income, supporting the margin lift.
Management raised its full‑year 2026 revenue guidance to 6%–7% growth, adjusted EPS guidance to 10%–11% growth, and adjusted EBIT margin guidance to 70–80 basis points. CEO Maria Black said, "We delivered a strong quarter, and it reflects what ADP does best – executing with precision for our clients while continuing to invest in defining the future of HCM…" CFO Peter Hadley added, "Our updated guidance demonstrates our confidence in our ability to deliver on our financial commitments…"
Investors reacted positively to the earnings beat and the upward revision of the full‑year outlook, underscoring confidence in ADP’s execution and its strategic focus on AI and client‑funds.
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