Automatic Data Processing Inc Stock

ADP (ADP.US) - FY2026 Annual Report

ADP appears to be in a strong financial position, with revenue reaching approximately $21.95 billion and net income of $4.41 billion for fiscal year 2026. The trajectory over the five-year horizon seems one of consistent, steady growth, with revenue expanding at a compound annual rate of roughly 7.4% and net income growing even faster at around 10.6%, which could suggest improving operational leverage.

The gross margin has continued its gradual upward creep, moving from roughly 42.7% in FY2022 to 46.4% in the current year. Similarly, the net margin has inched above 20%, a level not seen in the historical data provided. This margin expansion might be partially attributable to the growing contribution of interest on funds held for clients, which reached $1.35 billion this year—a line item that has grown significantly and likely carries high incremental profitability. The Employer Services segment continues to dominate pre-tax earnings, but the growth in PEO revenues, excluding the zero-margin benefits pass-throughs, also appears steady.