Q3 2025 Automatic Data Processing Inc Earnings Call Transcript
Key Points
- Automatic Data Processing Inc (ADP) reported a solid third-quarter with 6% revenue growth and 6% adjusted EPS growth.
- Employer Services new business bookings showed strong growth, particularly in the US across small business, mid-market, and enterprise segments.
- Client satisfaction scores reached record highs, contributing to strong retention performance.
- PEO revenue growth exceeded expectations at 7%, driven by higher wages and strong retention.
- ADP's strategic initiatives, including the integration of Workforce Software and the acquisition of PEI in Mexico, are enhancing global payroll capabilities.
- International bookings were softer due to macroeconomic uncertainty in key markets.
- Employer Services retention declined slightly compared to the prior year.
- PEO margin was flat in the quarter, impacted by higher workers' compensation and SUI costs.
- There is heightened macroeconomic uncertainty, leading to projections for slower economic growth and below-normal pays per control growth.
- The integration of Workforce Software is expected to impact margins by approximately 50 basis points for the full year.
Good morning. My name is Michelle, and I'll be your conference operator. At this time, I would like to welcome everyone to ADP's third-quarter 2025 earnings call. I would like to inform you that this conference is being recorded. (Operator Instructions)
I will now turn the conference over to Matt Keating, Vice President, Investor Relations. Please go ahead.
Thank you, Michelle, and welcome, everyone, to ADP's third-quarter fiscal 2025 earnings call. Participating today are Maria Black, our President and CEO; Don McGuire, our CFO; and Peter Hadley, our Treasurer.
Earlier this morning, we released our results for the quarter. Our earnings materials are available on the SEC's website and our Investor Relations website at investors.adp.com, where you will also find the investor presentation that accompanies today's call.
During our call, we will reference non-GAAP financial measures, which we believe to be useful to investors and that exclude the impact
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