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ADP · FQ4 2026
Archived report (FQ4 2026). Latest deep dive →
The quarter in brief
A steady-compounder quarter closing the year at the high end of guidance — revenue up 7% and EPS up 10%, powered by rising interest on the $41B client-fund float and Employer Services margin gains, with PEO margin compression the only soft spot.
Net Earnings
$979M
up 7% y/y
Total Revenue
$5,474M
up 7% y/y
Operating Expenses
$2,574M
up 6% y/y
All figures in $M.
| Line item | Amount and change |
|---|---|
| HCM Revenues (ex-float) | $3,342 · +6% |
| PEO Revenues | $1,776 · +7% |
| Interest on Client Funds | $355 · +15% · Avg balances $41.0B · yield 3.5% |
| Total Revenue | $5,474 · +7% · +6% organic constant currency |
| Other Income, net | $120 · +23% · Mostly interest on corporate funds $109 |
| Operating Expenses | $2,574 · +6% |
| SG&A | $1,252 · +14% · Incl. business alignment charges |
| R&D | $266 · -1% |
| D&A* | $123 · +1% |
| Interest Expense | $121 · +6% |
| Pretax Earnings | $1,258 · +6% · 23.0% pretax margin |
| Income Taxes | $279 · ETR 22.2% |
| Net Earnings | $979 · +7% · Diluted EPS $2.45 · +10% |
Verdict: a steady-compounder quarter closing the year at the high end of guidance — revenue up 7% and EPS up 10%, powered by rising interest on the $41B client-fund float and Employer Services margin gains, with PEO margin compression the only soft spot.
FY2026: revenue $21.9B (+7%) · adjusted EBIT margin 26.8% (+80 bp) · diluted EPS $10.94 (+10%) · ES new bookings $2.2B (+6%) · ES retention 92.1% · avg client funds $40.4B at 3.4% yield.
Source and notation
* marks non-cash / ≈ estimated. Source: ADP press release, 8-K EX-99 (SEC EDGAR).
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<figure> <a href="https://whoreportstoday.com/t/adp/fq4-2026"><img src="https://whoreportstoday.com/t/adp/fq4-2026/sankey.png" alt="ADP FQ4 2026: where the revenue went" loading="lazy" style="max-width:100%;height:auto"></a> <figcaption>Source: <a href="https://whoreportstoday.com/t/adp/fq4-2026">Who Reports Today</a>, licensed under <a href="https://creativecommons.org/licenses/by/4.0/">CC BY 4.0</a></figcaption> </figure>
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- Interest on funds held for clients rose 15% to $355M: average client balances reached $41.0B (+8%) at a 3.5% yield (+20 bp) — the payroll float remains a quiet profit engine on top of fee revenue.
- SG&A jumped 14%, absorbing charges from the business alignment program (≈$91M pre-tax for the year) and a legal settlement — the reason GAAP net earnings grew 7% while adjusted net earnings grew 14% and adjusted EPS 17%.
- Segment split: Employer Services margin expanded 90 bp to 34.4%, while PEO Services margin fell 100 bp to 12.2% on zero-margin benefits pass-throughs; PEO worksite employees grew 2% to ≈775,000.
- U.S. pays per control grew only 1% — employment growth at existing clients is modest; revenue growth is driven by bookings, pricing and retention rather than headcount.
- EPS growth (+10%) outpaces net earnings growth (+7%) because buybacks cut diluted shares 2% to 399.7M.
- Fiscal 2027 outlook: revenue +5–6%, adjusted EBIT margin +70–90 bp, diluted EPS +11–13% (adjusted +9–11%), assuming no change from ongoing AI-driven productivity investments.
- Other income of $120M (+23%) is mostly interest on ADP's own corporate funds ($109M) — higher rates help both sides of the balance sheet.
What distorts the picture in this report and what to watch beyond the headlines.
ADP — Automatic Data Processing provides human capital management solutions, including payroll, talent management, and HR services.
The company is headquartered in Roseland, New Jersey, and serves clients globally.
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