ES Revenue Growth

FY 2026

6% to 7% "

5% to 6% "

lowered

ES New Business Bookings Growth

FY 2026

4% to 7% "

4% to 7% "

no change

ES Retention Rate

FY 2026

Decline of 20 bps to flat "

Decline of 10 to 30 bps from 92.1% "

no change

ES Pays Per Control Growth

FY 2026

1% "

0% to 1% "

lowered

ES Margin

FY 2026

50 to 60 bps "

Expected to expand driven by client funds interest revenue growth "

no change

Client Funds Interest Revenue

FY 2026

Increased by $15M at midpoint "

Increase from $1.19B to 1.29–1.31B "

raised

Average Client Funds Balance Growth

FY 2026

5% to 6% "

2% to 3% "

lowered

Client Funds Interest Revenue – Net Impact

FY 2026

no prior guidance [N/A]

Increase from $1.07B to 1.25–1.27B "

no prior guidance

Client Funds Interest Revenue – Average Yield

FY 2026

no prior guidance [N/A]

Increase from 3.2% to 3.4% "

no prior guidance

PEO Revenue Growth

FY 2026

6% to 7% "

5% to 7% "

lowered

PEO Revenue Growth Excluding ZM Pass-Through

FY 2026

5% to 6% "

3% to 5% "

lowered

Average Worksite Employee Growth

FY 2026

2% to 3% "

2% to 3% "

no change

PEO Margin

FY 2026

Decrease between 60 and 80 bps "

Expected to decrease "

no change

Consolidated Revenue Growth

FY 2026

6% to 7% "

5% to 6% "

lowered

Adjusted EBIT Margin Expansion

FY 2026

40 to 50 bps "

50 to 70 bps "

raised

Effective Tax Rate

FY 2026

Around 23% "

Around 23% "

no change

Adjusted EPS Growth

FY 2026

8% to 9% "

8% to 10% "

raised

Seasonality of Margins

FY 2026

no prior guidance [N/A]

Expected contraction in Q1 with margins ramping later "

no prior guidance

Sales Pipeline

Described in Q1 with strong, broad‐based pipeline " " ; in Q2 detailed as a healthy, year‑on‑year growth pipeline with new business activities " " " ; and in Q3 noted for robust international, mid‑market, and enterprise pipelines, despite “lumpy” international deals " " "

Q4 emphasized healthy pipeline activity with strategic investments and a focus on reaccelerating bookings growth despite an uncertain macro backdrop " " "

Consistently strong with a continued focus on strategic investments and healthy pipeline metrics, even in an uncertain economic environment.

Product Innovation

Q1 highlighted the launch and rebranding of ADP Lyric along with initial generative AI applications " " " " ; Q2 focused on early market traction for ADP Lyric and initial generative AI integration " " " ; Q3 underscored substantial growth in new business bookings, strong market reception, and integration of AI initiatives " " " "

Q4 reported significant progress with ADP Lyric’s continued growth and expanded generative AI deployments (e.g., ADP Assist with millions of interactions), underscoring enhanced client engagement and pipeline momentum " " " "

Ongoing momentum with deeper market penetration, enhanced product features, and a clear path for future growth through advanced generative AI investments.

Workforce Software Integration

In Q1, integration was introduced as a strategic fit to expand offerings for complex global enterprises with expected margin pressure " " " " " " " ; Q2 noted progress in integrating scheduling, time, and attendance tools with modest expense impacts " " " " ; Q3 discussed ongoing technical and organizational integration, including anticipated margin impacts " " "

Q4 described Workforce Software as contributing positively to bookings and the multinational narrative, with ongoing integration investments across ADP’s suite (e.g., co-selling with Lyric and GlobalView) " " "

Steady progress with continued integration challenges and associated costs, yet the strategic contribution to multinational opportunities remains a key future growth driver.

Strategic Partnerships & Global Expansion

Q2 introduced the Fiserv partnership with Clover and Cash Flow Central integration aimed at small businesses, with a revenue-sharing model " " " " ; Q3 elaborated on embedded payroll partnerships and the PEI acquisition in Mexico to bolster global presence " " "

Q4 further detailed the Fiserv/Clover collaboration (RUN payroll embedded in Clover) and expansions in global payroll capabilities, highlighting their impact as key contributors to future growth " " "

Increasing importance as partnerships evolve with deeper integration and global expansion, reinforcing ADP’s competitive positioning across local and international markets.

PEO Performance & Retention

Q1 reported strong revenue and worksite employee growth with solid retention and modest deceleration in pays per control " " " " " ; Q2 detailed robust revenue growth with modest margin declines and slight retention dips while forecasting stable pays per control " " " " " ; Q3 noted similar trends with solid bookings, strong retention, and pays per control growth at around 1% " " " " " "

Q4 showed continued strong revenue growth with high retention and stable employer services pays per control increases, although PEO margins experienced slight contraction due to increasing costs " " "

Consistent performance with steady revenue and retention metrics; however, margin pressures and moderated pays per control growth pose near-term challenges amid overall stability.

Delayed HRO Decisions / Intl Bookings Challenges

Q1 did not mention specific delays; Q2 had no notable commentary; Q3 pointed out softness in international bookings due to macro uncertainty " " "

Q4 introduced delayed HRO decisions—particularly in domestic (upper mid‑market to enterprise HRO deals)—alongside continued international softness amid macroeconomic uncertainty " " "

An emerging concern in Q4 with notable delays in complex HRO decision-making and persistent international softness, potentially impacting future deal closures.

Macro-Economic & FX Effects

Q1 had no specific mention; Q2 noted a strong underlying U.S. market but flagged FX headwinds and impacts from lower short-term interest rates on certain revenue segments " " " ; Q3 discussed heightened global uncertainty with softer international deals, while a strengthening dollar initially affected revenue but was expected to improve later " " " "

Q4 highlighted continuing macroeconomic uncertainties impacting client decision-making and a trend of FX transitioning from a slight headwind in fiscal 2025 to a modest tailwind in fiscal 2026, influencing overall revenue and EPS growth " " "

Mixed sentiment as macroeconomic headwinds increase over time, but evolving FX dynamics (moving toward a tailwind) offer some positive offset amid market uncertainties.

Price Increases Strategy

Q1 explained a pricing strategy of 100–150 basis point increases with a modest revenue contribution (about 10 basis points) in selected European markets " ; Q2 confirmed targeting 100 basis points for fiscal 2025 with strong retention supporting the approach " " ; Q3 did not specifically address pricing strategy

Q4 reiterated pricing assumptions of roughly 100 basis points for fiscal 2026 with slight moderation relative to fiscal 2025, contributing modestly to overall revenue growth " "

Stable strategy with consistent price increases; slight moderation for future periods as inflation pressures ease, with a continued but modest positive revenue impact.

Increased Competition

Q1 contained indirect references to competitive dynamics affecting small businesses and mid-market segments without explicit focus on new entrants " ; Q2 noted increased competition from SMB players as a reaffirmation of ADP’s broad-based model " ; Q3 emphasized a robust competitive offer in both downmarket and mid-market segments with strong client satisfaction and partner ecosystem support "

Q4 confirmed that, despite a recent competitor merger, the competitive landscape remains strong in the mid-market, with ADP maintaining high retention and a leading market position "

Ongoing competitive pressure in SMB and mid-market segments, with ADP confidently asserting its strong market position and customer service as key differentiators despite industry consolidation.