Automatic Data Processing Inc. (NASDAQ:ADP) reported third-quarter fiscal 2026 results on Wednesday.

The company reported quarterly revenues of $5.94 billion, beating the analyst consensus estimate of $5.85 billion.

Revenues increased 7% year-over-year. 

The human resources management software company reported quarterly adjusted EPS of $3.37, beating the analyst consensus estimate of $3.29.

Segment Performance

ADP primarily earns revenue by charging service fees in its Employer Services and PEO segments, with pricing based on the scope of services each client uses.

Employer Services revenues increased 7% to $4.04 billion. PEO Services revenues rose 7% to $1.91 billion.

Interest on funds held for clients increased by 14% to $404 million. Average client funds balances increased 9% to $48.3 billion, and the average interest yield on client funds increased 10 basis points to 3.3%.

Profits And Margins

Adjusted EBIT increased 10% to $1.79 billion, and adjusted EBIT margin rose 80 bps at 30.2%.

Net earnings increased 9% Y/Y to $1.4 billion. ADP held $3.23 billion in cash and equivalents as of March 31.

The company generated $2.24 billion in operating cash flow during the quarter.

Executive Commentary

ADP CEO Maria Black said the company delivered a strong quarter driven by disciplined execution for clients while continuing to invest in the future of human capital management.

She said organizations rely on ADP for critical workforce functions due to its data and expertise, adding that the company is building capabilities to address the added complexity AI brings to the workplace and is well-positioned to capture long-term growth opportunities in the HCM industry.

CFO Peter Hadley said third-quarter results exceeded expectations across revenue, adjusted EBIT margin, and adjusted EPS.

He said ADP's financial strength enables continued investment in AI across products, services, and sales while maintaining financial commitments. He noted that updated fiscal 2026 guidance reflects stronger revenue and earnings growth.

Outlook

ADP now expects a revenue growth outlook of 6%-7% (compared to prior guidance of 6%), translating to a range of $21.795billion to $22 billion, versus the analyst consensus estimate of $21.8 billion.

The company now expects an adjusted diluted EPS growth of 10%-11% (up from the prior outlook of 9%-10%), translating to $11.01 to $11.11, versus the analyst consensus estimate of $10.97.

ADP Price Action: Automatic Data Processing shares were up 5.43% at $209.99 at the time of publication on Wednesday, according to Benzinga Pro data.

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