Q1 2025 Automatic Data Processing Inc Earnings Call Transcript
Key Points
- Automatic Data Processing Inc (ADP) reported a strong first quarter with 7% revenue growth and 12% adjusted EPS growth.
- The company achieved record volume in Employer Services new business bookings for a first quarter, indicating strong demand.
- ADP's client satisfaction scores reached an all-time high for a first quarter, driven by improvements in mid-market, enterprise, and HR outsourcing businesses.
- The acquisition of WorkForce Software expands ADP's workforce management solutions, enhancing its ability to serve large global enterprises.
- ADP introduced Lyric, a new global HCM platform, which has generated strong interest and is expected to drive future growth.
- Employer Services retention rate declined slightly, although it exceeded expectations.
- ADP anticipates a 10 to 30 basis points decline in full-year retention due to expected increases in small business losses.
- PEO margin decreased by 80 basis points in Q1, primarily due to higher workers' compensation program costs.
- The acquisition of WorkForce Software is expected to pressure ADP's adjusted EBIT margin this fiscal year.
- ADP's recent debt issuance will increase corporate interest expense by about $40 million for fiscal 2025.
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 first quarter 2025, 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, Investor Relations. Please go ahead.
Thank you, Michelle, and welcome, everyone, to ADP's first quarter fiscal 2025, 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 will 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. A description of these items, along with a
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