From The Motley Fool · Motley Fool Transcribing · · 2m
ADP Q1 2027 Earnings Report Exceeds Expectations
ADP's Q1 2027 earnings beat forecasts with 6% revenue growth and 13% EPS rise.
In brief
ADP's Q1 2027 earnings beat forecasts with 6% revenue growth and 13% EPS rise. ADP reported $5.5 billion Q1 revenue with 6% year-over-year growth, 26.8% adjusted EBIT margin, and raised full-year guidance. Originally reported by The Motley Fool.
Q1 2027 Results
ADP reported $5.5 billion revenue, 6% year-over-year growth, and $2.82 adjusted diluted EPS.
Revenue Breakdown
Employer Services revenue grew 6% to $3.7 billion, PEO Services revenue rose 7% to $1.8 billion.
Client Funds Growth
Average client funds balances increased 6% to $36.9 billion with 3.6% interest yield.
AI Transformation
The Zone deployment reached 60% of service population, driving 7% reduction in client contacts.
ADP Assist Adoption
ADP Assist added 100,000 clients since fiscal 2026, moving from early to broad use.
Full Year Guidance
Full year revenue growth raised to 6%, adjusted EPS growth to 10-12%, and client funds interest to $1.59 billion.
Lyric HCM Expansion
Lyric HCM expanded to UK, France, Germany, and Netherlands for multinational clients.
PNC Partnership
ADP partnered with PNC Bank to embed payroll and HR capabilities into digital banking platforms.
AI Interviewer Performance
AI interviewer reduced interview time by 75% with 4,400 interviews completed since September.
FX Headwind
Full year employer services revenue growth includes 0.5 percentage point FX headwind.
Client Retention
Client revenue retention expected to decline 10-30 basis points for fiscal 2027.
Pays Per Control
U.S. pays per control grew 2% year-over-year, exceeding internal expectations.
Interest on Funds
Interest on client funds grew 15% to $329 million with 3.6% yield.
AI Impact
AI tools reduced service contacts by 7% year-over-year through improved operational efficiency.
Full Year Outlook
Full year revenue growth expected at 6% with 10-12% adjusted EPS growth.
AI Transformation Progress
ADP's AI platform deployment increased to 60% of service population with measurable productivity gains.
The big picture
ADP reported $5.5 billion Q1 revenue with 6% year-over-year growth, 26.8% adjusted EBIT margin, and raised full-year guidance.
