ADP Raises Fiscal 2027 Revenue and Adjusted EPS Outlook

The Tip Desk · October 28, 2026 · 3 min read

First-quarter revenue reached $5.5 billion as the company lifted full-year revenue growth to about 6% and adjusted diluted EPS growth to 10% to 12%.

Automatic Data Processing, Inc. (ADP) raised its fiscal 2027 revenue and adjusted diluted earnings-per-share outlook after a first quarter in which revenue growth slowed to 6% from 7% in the two preceding quarters.

The global HR and payroll solutions company reported first-quarter fiscal 2027 revenue of $5.5 billion, up 6% from a year earlier and 6% on an organic constant-currency basis. Net earnings rose 11% to $1.1 billion, and adjusted net earnings rose 11% to $1.1 billion. Diluted earnings were $2.83 a share, up 14%, and adjusted diluted earnings were $2.82 a share, up 13%.

Adjusted EBIT increased 12% to $1.5 billion. Adjusted EBIT margin expanded 130 basis points year over year to 26.8%, after 140 basis points of expansion in the fourth quarter and 80 basis points in the third. Chief Financial Officer Peter Hadley said first-quarter results exceeded the company’s expectations across revenue growth, adjusted EBIT margin expansion, and adjusted EPS growth.

Employer Services, which offers global HCM and human-resources outsourcing, generated $3.7 billion of revenue, up 6% on both a reported and an organic constant-currency basis. U.S. pays per control increased 2%, faster than the 1% rise in the third quarter. Employer Services segment margin increased 130 basis points. Segment earnings were $1.3 billion.

PEO Services revenue rose 7% to $1.8 billion. Revenue excluding zero-margin benefits pass-throughs increased 4%, slower than the 5% rise in the third quarter. Average worksite employees paid by PEO Services increased 2% to about 771,000. PEO Services segment margin was flat year over year after a 120 basis-point decrease in the third quarter. Segment earnings were $234 million.

Interest on funds held for clients increased 15% to $329 million. Average client funds balances rose 6% to $36.9 billion, and the average interest yield on client funds increased 30 basis points to 3.6%. The net impact from the Client Funds Strategy was $333 million.

President and Chief Executive Officer Maria Black said the quarter reflected the resilience of the business model and that the company enters the rest of fiscal 2027 positioned to build on current momentum. Hadley said a disciplined investment approach is enabling the company to drive its AI transformation while delivering financial results.

ADP now expects fiscal 2027 revenue growth of about 6%, up from a prior range of 5% to 6%. Adjusted diluted EPS growth is now expected at 10% to 12%, from 9% to 11%. Diluted EPS growth is expected at 12% to 14%. Adjusted EBIT margin expansion remains 70 to 90 basis points, and the adjusted effective tax rate is expected at approximately 23%.

Employer Services revenue growth is expected at about 6%, with new business bookings growth of 4% to 7%, a client revenue retention decrease of 10 to 30 basis points, and an increase in U.S. pays per control of about 1%. PEO Services revenue growth is expected at 5% to 7%, with revenue excluding zero-margin benefits pass-throughs growth of 3% to 5% and average worksite employee count growth of about 2%.

Interest on funds held for clients is expected at $1.59 billion to $1.61 billion, based on anticipated growth in client funds balances of 4% to 5% and an average yield anticipated to increase to approximately 3.8%. The outlook contemplates the anticipated impact of foreign currency in revenue and operating results.