Automatic Data Processing Q4 Earnings & Revenues Beat Estimates

Automatic Data Processing, Inc. ADP has reported impressive fourth-quarter fiscal 2025 results, wherein earnings and revenues outpaced the Zacks Consensus Estimate.ADP’s earnings per share of $2.26 beat the consensus estimate by 1.8% and increased 8.1% from the year-ago quarter. Total revenues of $5.1 billion surpassed the consensus estimate by 1.5% and grew 7.5% on a year-over-year basis.The ADP stock has gained 5.4% in the year-to-date period compared with the industry’s 15.7% growth and the 7.5% rise of the Zacks S&P 500 Composite.Automatic Data Processing, Inc. Price, Consensus and EPS Surprise  Automatic Data Processing, Inc. price-consensus-eps-surprise-chart | Automatic Data Processing, Inc. QuoteADP’s Segmental ResultsEmployer Services’ revenues of $3.5 billion increased 8% on a reported basis and 6% on an organic constant-currency basis, missing our estimate of $3.8 billion. Pays per control increased 1% from the year-ago quarter.PEO Services’ revenues gained 9% from the year-ago quarter to $1.2 billion and missed our estimate of $1.7 billion for the fourth quarter of fiscal 2025. Average worksite employees paid by PEO Services were 761,000, rising 3% from the year-ago quarter.Interest on funds held for clients grew 11% from the year-ago quarter to $308 million and missed our estimate of $342.4 million. ADP’s average client funds balance rose 6% to $38.1 billion. The average interest yield on client funds expanded 20 basis points (bps) to 3.2%.Automatic Data Processing’s MarginsAdjusted EBIT increased 9% on a year-over-year basis to $5.3 billion. The adjusted EBIT margin rose 50 bps to 26%.The margin of Employer Services increased by 50 bps, while PEO Services decreased 20 bps from the year-ago quarter.Balance Sheet & Cash Flow of ADPAutomatic Data Processing exited fourth-quarter fiscal 2025 with cash and cash equivalents of $3.3 billion compared with $2.7 billion at the end of the preceding quarter. The long-term debt of $4 billion compared with $3 billion in the preceding quarter.The company generated $1.4 billion in cash from operating activities in the quarter.Automatic Data Processing’s FY25 OutlookFor fiscal 2025, ADP lowered the revenue growth guidance to 5-6% from the preceding quarter’s view of 6-7%. The adjusted EPS growth guidance is updated to 8-10% from the preceding quarter’s view of 8-9%. The adjusted effective tax rate is estimated to be 23%. The guidance for the adjusted EBIT margin is hiked to 50-70 bps from the previous quarter’s view of 40-50 bps.Automatic Data Processing lowered Employer Services’ revenue growth expectations to 5-6% from the 6-7% provided in the preceding quarter. The guidance for PEO Services is updated to 5-7% from the 6-7% provided in the preceding quarter.ADP carries a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Earnings SnapshotWaste Connections, Inc. WCN reported impressive second-quarter 2025 results.Waste Connections’ adjusted earnings (excluding 17 cents from non-recurring items) of $1.29 per share surpassed the Zacks Consensus Estimate by 3.2% and increased 4% year over year. Revenues of $2.4 billion beat the consensus estimate marginally and grew 7.1% from the year-ago quarter.The Interpublic Group of Companies, Inc. IPG posted impressive second-quarter 2025 results.IPG’s adjusted earnings of 75 cents per share surpassed the Zacks Consensus Estimate by 36.4% and jumped 23% from the year-ago quarter. Revenues before billable expenses (net revenues) of $2.2 billion beat the consensus estimate by a slight margin but declined 19.8% year over year. Total revenues of $2.5 billion decreased 7.2% year over year and outpaced the Zacks Consensus Estimate of $2.2 billion.#1 Semiconductor Stock to Buy (Not NVDA)The incredible demand for data is fueling the market's next digital gold rush. As data centers continue to be built and constantly upgraded, the companies that provide the hardware for these behemoths will become the NVIDIAs of tomorrow.One under-the-radar chipmaker is uniquely positioned to take advantage of the next growth stage of this market. It specializes in semiconductor products that titans like NVIDIA don't build. It's just beginning to enter the spotlight, which is exactly where you want to be.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Automatic Data Processing, Inc. (ADP): Free Stock Analysis Report Interpublic Group of Companies, Inc. (The) (IPG): Free Stock Analysis Report Waste Connections, Inc. (WCN): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks