Q1 2026 Automatic Data Processing Inc Earnings Call Transcript
Key Points
- Automatic Data Processing Inc (ADP) reported a solid first quarter with 7% revenue growth and 7% adjusted EPS growth.
- Employer Services new business bookings showed strong growth, resulting in a record sales volume for the first quarter.
- ADP's Employer Services HR Outsourcing Business saw growth reaccelerate after a softer finish to last year.
- ADP Lyric HCM experienced strong momentum, with new business bookings exceeding expectations.
- The company continues to advance its AI initiatives, enhancing productivity and client engagement through tools like ADP Assist.
- Employer Services retention rate declined slightly, although it still exceeded expectations.
- Employer Services pays per control growth moderated to 0% for the first quarter, with clients cautious about adding headcount.
- PEO margin decreased by 140 basis points due to higher selling expenses and other costs.
- International business showed a softer performance in the first quarter, attributed to the lumpy nature of large complex deals.
- The company anticipates a 10 to 30 basis point decline in full-year retention for Employer Services.
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 first quarter 2026 earnings call. I would like to inform you that this conference is being recorded. (Operator Instructions)
I'll now send the conference over to Matt Keating, Vice President Investor Relations. Please Go. Ahead.
Thank you, Michelle, and welcome everyone to ADP's first quarter fiscal 2026 earnings call. Participating today, I'm Maria Black, our President and CEO; and Peter Hadley, our CFO. Earlier this morning, we released our financial 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 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 of certain items. A description of
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