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Saturday 17 October 2026 Export ADP’s income statement to Excel — free account

Automatic Data Processing, Inc.

ADP Technology Software Application

Automatic Data Processing, Inc.’s revenue for fiscal 2026 (year ended June 2026) was $21.9 billion, up 6.74% from fiscal 2025. In the quarter to June 2026, revenue grew 6.77%, EPS grew 9.37%, free cash flow fell 5.49% and total debt rose 24.9%, each against the same quarter a year earlier. Member of the S&P 500 and Nasdaq 100; dividend growth for twenty-five consecutive years, revenue growth for ten; insiders bought in the last twelve months.

288.90 3.25 +1.14%
Market cap
$113.2B
P/E
26.3×
Fwd P/E
19.0×
Dividend yield
2.35%
F-score
6/9
Altman Z
2.24
Beneish M
−2.63
Dividend safety
84/100
Overview Business Profile Financial Analysis Income Statement Balance Sheet Cash Flow Metrics & Ratios Filings 10-Q 10-K

Automatic Data Processing, Inc. (ADP) Financial Analysis

Updated · Covers results through Q4 FY2026 · Sources · How this is made

Snapshot

Automatic Data Processing generated revenue of $21.9 billion and net income of $4.4 billion in FY2026. Diluted EPS was $10.94 in FY2026, and operating income was $5.8 billion in FY2026. Market capitalisation was $105.3 billion as of September 28, 2026.

In Q4 FY2026, revenue was $5.5 billion, gross profit was $2.5 billion, operating income was $1.3 billion, and net income was $978.6 million. Diluted EPS was $2.45 in Q4 FY2026. Q4 FY2026 gross margin was 45.9%, while Q4 FY2026 operating margin was 23.0%.

Growth

Revenue was $21.9 billion in FY2026, with growth of 6.74% in FY2026 against FY2025. Revenue compound annual growth was 6.81% in FY2023–FY2026 and 7.90% in FY2021–FY2026. Diluted EPS was $10.94 in FY2026, growing 9.62% in FY2026 against FY2025; its compound annual growth was 10.0% in FY2023–FY2026 and 12.5% in FY2021–FY2026.

Free cash flow was $4.8 billion in FY2026 and grew 8.46% in FY2026 against FY2025. Free cash flow compound annual growth was 9.52% in FY2023–FY2026 and 12.9% in FY2021–FY2026. In Q4 FY2026, revenue of $5.5 billion was 6.77% higher than Q4 FY2025, while diluted EPS of $2.45 was 9.87% higher than Q4 FY2025. Free cash flow was $1.2 billion in Q4 FY2026, down 5.49% from Q4 FY2025.

Profitability

Gross profit was $10.2 billion in FY2026, and the gross margin was 46.4% in FY2026. Gross margin increased by 4.0 percentage points in FY2021–FY2026 and by 0.4 percentage points in FY2025–FY2026. Operating income was $5.8 billion in FY2026, with an operating margin of 26.3% in FY2026; operating margin increased by 4.2 percentage points in FY2021–FY2026 and was unchanged in FY2025–FY2026.

Pre-tax income was $5.7 billion in FY2026 and the pre-tax margin was 26.1% in FY2026, up 3.7 percentage points in FY2021–FY2026. Net margin was 20.1% in FY2026, up 2.8 percentage points in FY2021–FY2026. Return on equity was 72.2%, return on assets was 7.57%, and return on invested capital was 53.4% in FY2026.

Balance sheet

Total debt was $5.0 billion in FY2026, compared with $4.0 billion in FY2025. Cash and short-term investments were $4.2 billion in FY2026, compared with $7.8 billion in FY2025. Net debt was $734.0 million in FY2026, following net cash of −$3.9 billion in FY2025.

Shareholders’ equity was $6.0 billion in FY2026, compared with $6.2 billion in FY2025. Working capital was $2.5 billion in FY2026, compared with $2.0 billion in FY2025. The current ratio was 1.1× in Q4 FY2026, and debt to equity was 0.8× in Q4 FY2026. Net debt was $734.0 million in Q4 FY2026, down $14.9 million from Q3 FY2026.

Cash flow & capital return

Operating cash flow was $5.4 billion in FY2026, growing 10.2% in FY2026 against FY2025. Capital expenditure was $665.1 million in FY2026, and free cash flow was $4.8 billion in FY2026. Free cash flow represented 108.2% of net income in FY2026.

Dividends paid were $2.6 billion in FY2026, while net share repurchases were $2.1 billion in FY2026. Capital returned to shareholders was $4.7 billion in FY2026 and $18.1 billion in FY2022–FY2026. Weighted average shares were 402.3 million shares in FY2026, compared with 407.1 million shares in FY2025; the share count changed by −5.63% in FY2021–FY2026. Management attributes the increase in operating cash flow in FY2026 to business growth and favourable timing of collections and payments.

Valuation

The P/E was 23.9× as of September 28, 2026, below the five-year median of 26.7× over the five fiscal years to FY2026 and below the ten-year median of 28.3× over the ten fiscal years to FY2026. The P/E was 24.4× for the industry median as of September 28, 2026, making the company P/E lower than the industry median.

P/S was 4.8× as of September 28, 2026, below both the five-year median of 5.0× over the five fiscal years to FY2026 and the ten-year median of 5.0× over the ten fiscal years to FY2026, but higher than the industry median of 2.5× as of September 28, 2026. P/B was 17.5× as of September 28, 2026, below its five-year median but above its ten-year median and industry median. EV/Sales was 4.9× as of September 28, 2026, below its five- and ten-year medians but higher than the industry median.

What changed since last quarter

Revenue was $5.5 billion in Q4 FY2026, down 7.84% from Q3 FY2026 and up 6.77% from Q4 FY2025. Diluted EPS was $2.45 in Q4 FY2026, down 27.5% from Q3 FY2026 and up 9.87% from Q4 FY2025. Free cash flow was $1.2 billion in Q4 FY2026, down 39.4% from Q3 FY2026 and down 5.49% from Q4 FY2025.

Gross margin was 45.9% in Q4 FY2026, down 2.4 percentage points from Q3 FY2026 and up 0.8 percentage points from Q4 FY2025. Operating margin was 23.0% in Q4 FY2026, down 7.1 percentage points from Q3 FY2026 and down 0.5 percentage points from Q4 FY2025. For FY2026, management attributes revenue growth to new business, client retention, pricing, foreign currency, benefits pass-throughs, and interest on client funds. Management attributes EPS growth in FY2026 partly to share repurchases reducing shares outstanding.

Open questions

  • How much of FY2026 revenue growth came from new business, pricing, client retention, foreign currency, client-funds interest, and benefits pass-throughs?
  • How sustainable are the contributions from interest earned on client funds and interest income on corporate funds?
  • What explains the decline in free cash flow in Q4 FY2026 relative to both the prior quarter and the year-earlier quarter?
  • How will the higher debt and lower cash balance affect future financing activity and capital returns?

Sources

This page is for information only. It is not investment advice, a recommendation or an offer to buy or sell any security. Figures come from the sources listed above and may contain errors; verify against the company's filings.