ADP reported first‑quarter fiscal 2026 revenue of $5.20 billion, up 7.6% from $4.83 billion in the same period a year earlier. Adjusted earnings per share were $2.49, beating the consensus estimate of $2.44. Net income rose 6% to $1.01 billion, compared with $0.95 billion in Q1 FY2025.
Adjusted EBIT margin remained at 25.5%. The Employer Services segment pretax margin fell 50 basis points to 35.2% from 35.7% a year ago, while the PEO Services segment margin declined 140 basis points to 13.0% from 14.3%. The contraction is attributed to increased spending on generative‑AI tools and product development, which are expected to drive future revenue growth.
ADP guided next‑quarter revenue to approximately $5.33 billion and maintained its fiscal‑year revenue outlook of 5%‑6%, translating to $21.6 billion‑$21.8 billion. Adjusted EPS guidance for the year is $2.49‑$2.55, slightly below consensus estimates of $2.56.
The company emphasized its AI‑driven initiatives, including the ADP Assist platform and the newly launched ADP Lyric HCM, as key drivers of client adoption and operational efficiency. These investments position ADP to compete with rivals such as Workday, Oracle, and SAP in the human‑capital‑management market.
ADP highlighted record client‑satisfaction scores and strong retention rates, noting that the cautious hiring environment remains a headwind but that the firm’s focus on technology and client experience supports its resilient business model.
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