Q4 2024 Automatic Data Processing Inc Earnings Call Transcript
Key Points
- Automatic Data Processing Inc (ADP) reported strong financial results for Q4 2024, including 6% revenue growth, 80 basis points of adjusted EBIT margin expansion, and 11% adjusted EPS growth.
- The company achieved 7% revenue growth for fiscal 2024, with 70 basis points of adjusted EBIT margin expansion and 12% adjusted EPS growth.
- Employer services new business bookings grew by 7% for fiscal 2024, reaching the high end of their guidance range.
- Client satisfaction scores reached new all-time highs for both the fourth quarter and the full year, supporting strong retention rates.
- ADP's next-gen HCM solution saw strong client interest and exceeded sales expectations, indicating robust demand for their advanced offerings.
- PEO margin contracted by 240 basis points in Q4 due to higher operating expenses and unfavorable actuarial loss development in workers' compensation reserves.
- Fiscal 2024 PEO new business bookings growth rate moderated from the prior year, indicating some slowdown in this segment.
- The company expects a 10 to 30 basis point decline in employer services retention for fiscal 2025, reflecting potential pressure from higher small business out-of-business levels and slower economic growth.
- PEO revenue growth is expected to be modest at 4% to 6% for fiscal 2025, with average worksite employee growth forecasted at only 1% to 3%.
- The fiscal 2025 outlook assumes some moderation in economic activity, which could impact overall financial performance.
Good morning. My name is Michelle and I'll be your conference operator. At this time, I would like to welcome everyone to ADP's fourth quarter 2024 earnings call. I would like to inform you that this conference is being recorded.
(Operator Instructions) I will now turn the conference over to Matt Keating, Vice President of Investor Relations. Please go ahead.
Thank you, Michelle, and welcome, everyone to ADP's Fourth Quarter Fiscal 2024 Earnings Call. Participating today are Maria Black, our President and CEO; and Don McGuire, our CFO.
Earlier this morning, we released our results for the quarter. Our earnings materials are available on the SEC's website and our Investor Relations website at investors.adp.com, where you also find the Investor Presentation that accompanies today's call.
During our call, we will reference non-GAAP financial measures, which we believe to be useful to investors and that exclude the impact of certain items. The description of these
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