Automatic Data Processing earnings: first quarter of fiscal 2027

In the first quarter of its 2027 financial year, Automatic Data Processing, which runs payroll and HR for employers, grew sales 6% to $5.5 billion and earnings per share 14% to $2.83. Interest earned on money it holds for clients grew fastest. It raised its forecasts for the year's sales and profit, but cash from running the business barely grew. ¹

Against what analysts expected

Earnings per share of $2.83, or $2.82 leaving out a small investment gain, were above the $2.78 average of four analysts' forecasts listed by Nasdaq's earnings calendar. ¹²

The strong points

• Profit grew more than twice as fast as sales, with earnings per share up 14% to $2.83, helped by fewer shares in issue. ¹
• Sales rose 6% to $5.5 billion, and all of that growth came from the business itself, not from currency moves or purchases. ¹
• Interest earned on the payroll money it holds for clients was the fastest-growing part of sales, up 15%. ¹

The weak points

• Profit did not turn into cash this quarter: cash from running the business was almost flat, at about 58% of net income. ¹
• The company's own cash, not counting client money, fell by nearly a quarter in three months, to $3.3 billion. ¹

What the company expects

• Automatic Data Processing raised its forecast for growth in its adjusted earnings per share this year to 10% to 12%, from 9% to 11% in July. ¹
• It now expects sales to grow about 6% this year, the top of the 5% to 6% range it gave before. ¹

Our verdict on the quarter

A strong report. A quarter with profit per share up 14% and above analysts' forecasts, plus raised forecasts for the year, make this a strong report, held back from the top grade by weak cash generation and by a raise that leans on interest earned on client money.

The results as published

• The results release itself
• The filing it came with (SEC)

Notes

1. Automatic Data Processing's results release, 28 October 2026: sec.gov. ↩
2. Nasdaq's earnings calendar, 29 October 2026. ↩