Automatic Data Processing, Inc.ADP
NasdaqGS•Technology•Software - Application
Automatic Data Processing, Inc. provides cloud-based human capital management (HCM) solutions worldwide. It operates in two segments, Employer Services and Professional Employer Organization (PEO). The Employer Services segment offers strategic, cloud-based platforms, and human resources (HR) outsourcing solutions. This segment's offerings include RUN Powered by ADP, a software platform for small business payroll, HR, and compliance; ADP Workforce Now, a HCM solution used across mid-sized and large businesses to manage employees; and ADP Lyric HCM, a solution for HR management, payroll, workforce management, talent, and data analytics. The PEO Services segment provides HR and employment administration outsourcing solutions under ADP TotalSource name to businesses through a co-employment model. The segment also provides guidance, user-friendly technology, comprehensive employee benefits, and a risk management, safety, and workers' compensation program. The company was founded in 1949 and is headquartered in Roseland, New Jersey.
Automatic Data Processing, Inc. (ADP) reported trailing twelve months revenue of $21.60B as of March 2026, a 6.9% increase year-over-year. Quarterly revenue reached $5.94B, reflecting continued top-line momentum.
Automatic Data Processing, Inc. generated $4.35B in TTM net income, with quarterly EBITDA of $1.93B. The operating margin expanded from 29.4% to 30.1%, suggesting improving cost efficiency and pricing discipline.
The spread between operating margin (30.1%) and net margin (22.9%) indicates moderate non-operating costs. Net margin has improved from 22.5% a year ago, signaling stronger bottom-line efficiency.
ADP trades at a P/E of 19.0x (in line with broad market averages) and a P/S of 3.8x. The price-to-book ratio of 13.0x indicates a significant premium over book value.
The company generated $2.19B in free cash flow over the trailing twelve months, a 46.9% increase year-over-year, indicating cash generation ability. The balance sheet shows $64.48B in total assets with $3.98B in long-term debt against $6.35B in stockholders equity for a debt-to-equity ratio of 0.6. Data based on the most recent quarterly reports.
Competitive analysis based on 21 quarters of fundamental data
Operating margins are stable at ~26.3%, suggesting durable pricing power and cost discipline.
Consistently high ROE averaging 70.7% suggests a durable competitive advantage and efficient capital allocation.
Free cash flow is consistently positive and growing — a hallmark of a capital-light business that can self-fund growth.
TTM revenue has grown consistently (7 of 7 quarters up), with ~12.5% growth over the period. Strong demand durability.
Data-driven red flags and warnings across 21 quarters
Margins are stable or improving at ~26.4% — no sign of cost or pricing stress.
FCF covers net income by 1.2x on average — earnings are well-supported by cash generation.
Debt-to-equity has risen 23.0% recently — increasing financial risk even if the current ratio is manageable.
Revenue is stable or growing over recent quarters — demand appears durable.
Free cash flow is consistently positive — the business self-funds without external capital reliance.
Share count is stable — no significant dilution or buyback activity.
Quarterly standardized metrics.
Stock price and market valuation
Revenue and earnings growth across quarters
Assets, cash, debt, and leverage
Price multiples and return ratios
Operating efficiency and return metrics
Free cash flow, earnings quality, and capital allocation