ADP (ADP) Q4 2025 Earnings Call Transcript

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Wednesday, July 30, 2025 astatine 8:30 a.m. ET

• President and Chief Executive Officer — Maria Black

• Chief Financial Officer — Peter Hadley

Maria Black: Thank you, Matt, and convey you, everyone, for joining us. We closed retired fiscal '25 with a beardown 4th fourth that included 8% gross growth, 40 ground points of adjusted EBIT borderline enlargement and 8% adjusted EPS growth. For the afloat year, we delivered 7% gross growth, 50 ground points of adjusted EBIT borderline enlargement and 9% adjusted EPS growth. We achieved these fiscal results portion besides making important strides crossed our strategical priorities. I volition concisely reappraisal immoderate further highlights from our results earlier discussing this strategical progress. We delivered astir $2.1 cardinal successful Employer Services caller concern bookings successful fiscal '25, representing 3% growth.

While this was beneath our expectations, we were capable to nutrient different twelvemonth of growth, notwithstanding the uncertainty successful the macro backdrop successful the 2nd fractional of fiscal '25. Taking a person look, our tiny concern suite successful our home endeavor offerings saw coagulated bookings maturation successful fiscal '25. We did acquisition a softer decorativeness successful our Employer Services HR Outsourcing business, wherever the uncertain macro backdrop appeared to interaction lawsuit decision-making. And portion our planetary bookings improved during the 4th quarter, it was not capable to offset the softness from earlier successful the fiscal year. Importantly, our pipelines stay healthy, and we are laser-focused connected accelerating Employer Services caller concern bookings maturation successful fiscal '26.

We were precise pleased that our Employer Services retention exceeded our expectations erstwhile again, expanding 10 ground points to 92.1% for the twelvemonth and approaching a record-high of 92.2%. Our beardown retention stems successful portion from our company-wide lawsuit restitution scores reaching caller record-high for the year. These awesome results were broad-based and are a testament to the merchandise investments we are making to amended the lawsuit experience. Employer Services pays per power accrued 1% successful some Q4 and fiscal '25. Our clients proceed to hire, albeit astatine a somewhat slower gait arsenic we determination done the year.

Finally, our PEO caller concern bookings maturation accelerated successful the 4th fourth and for the afloat year, contributing to fiscal 2025 PEO gross maturation of 7% astatine the precocious extremity of our expectations. And our fiscal '25 accomplishments extends acold beyond our beardown fiscal results. We drove meaningful momentum crossed each 3 of our strategical priorities. Leading with best-in-class HCM technology, providing unmatched expertise and outsourcing, and benefiting our clients with our planetary scale. First, it's been a large twelvemonth for innovation astatine ADP. Since its launch, ADP Lyric HCM has continued to summation momentum successful the market.