Automatic Data Processing stock gets higher fiscal 2027 outlook
Published on 10/30/2026 at 11:03 | Editorial responsibility: Rafael Müller, Editor-in-Chief AD HOC NEWSGuidance rises after strong quarter
- ADP reported 6 percent first-quarter revenue growth, 130 basis points of adjusted EBIT margin expansion and 13 percent adjusted EPS growth.
- Management raised fiscal 2027 revenue growth guidance to about 6 percent and adjusted EPS growth guidance to 10 to 12 percent.
- Higher client-funds balances and portfolio yields supported the improved outlook, while the margin expansion forecast stayed at 70 to 90 basis points.
Automatic Data Processing, Inc. raised its fiscal 2027 outlook on Wednesday, October 28, after reporting a stronger first quarter. In the company's official results announcement, ADP said quarterly revenue rose 6 percent to 5.491 billion US dollars. Adjusted diluted earnings per share increased 13 percent to 2.82 US dollars, while adjusted EBIT margin expanded by 130 basis points.
The result exceeded the company's internal expectations and modestly topped analyst estimates, according to the ADP earnings transcript. Revenue was reported at 5,490.7 million US dollars against an estimate of 5,475.0 million US dollars, while adjusted EPS came in at 2.82 US dollars against an estimate of 2.78 US dollars.
Revenue and earnings outlook improves
Management now expects consolidated revenue growth of about 6 percent in fiscal 2027, compared with a previous range of 5 to 6 percent. Adjusted EPS growth is forecast at 10 to 12 percent, up from the earlier 9 to 11 percent range. ADP maintained its forecast for adjusted EBIT margin expansion of 70 to 90 basis points and expects an effective tax rate of about 23 percent.
Employer Services revenue grew 6 percent in the quarter on both a reported and organic constant-currency basis. New-business bookings guidance remained at 4 to 7 percent growth for the full fiscal year. The company also raised its fiscal 2027 forecast for pays per control to about 1 percent growth from a previous range of zero to 1 percent.
Client-funds interest revenue increased 15 percent in the first quarter. ADP lifted its forecast for average client-funds balance growth to 4 to 5 percent and expects an average portfolio yield of about 3.8 percent. The resulting full-year forecast for client-funds interest revenue rose by 50 million US dollars to a range of 1.59 billion to 1.61 billion US dollars.
Execution remains the next test
The PEO business posted 7 percent revenue growth, or 4 percent excluding zero-margin pass-throughs. ADP kept its fiscal 2027 PEO revenue outlook at 5 to 7 percent growth and expects average worksite employee growth of about 2 percent. Management said demand remained healthy and pointed to continued investment in products, people and artificial intelligence capabilities.
The improved outlook gives investors a clearer earnings framework, but execution on new-business bookings, retention and client-funds income remains important. ADP also expects close to half a percentage point of foreign-exchange headwind on Employer Services revenue growth in fiscal 2027, compared with a tailwind of about one percentage point in fiscal 2026.
The real-time quote of Automatic Data Processing stock was 260.23 euros on Lang & Schwarz at 10:58 CET on Friday, October 30, 0.01 percent below the Xetra close of Thursday, October 29.
Broader investor sentiment remains linked to the S&P 500, which provides the main market context for this US-listed technology and business-services company.
For more company-specific developments, see more news and analyses on Automatic Data Processing stock.
Automatic Data Processing at a glance
- Company: Automatic Data Processing, Inc.
- ISIN: US0530151036
- Ticker: ADP
- Home exchange: Nasdaq
- Lang & Schwarz quote: 260.23 euros on October 30, 2026 at 10:58 Berlin time
- Change versus Xetra close: 0.01 percent below the 260.25-euro close on October 29, 2026
