Short answer
Automatic Data Processing (ADP) filed its fiscal 2026 10-K annual report with the SEC on Aug 5, 2026. It reported revenue of $21.9B (+6.7% year over year) and net income of $4.4B.
- Top risk flagged: Regulatory risk from evolving U.S. and foreign tax laws impacting PEO business, including IRS Certified PEO obligations and potential penalties for non-compliance
FY2026 key financial metrics · XBRL
- Revenue
- $21.9B
- +6.7% YoY
- Net income
- $4.4B
- +8.2% YoY
- EPS (diluted)
- $10.94
- +9.6% YoY
- ROE
- 73.2%
- +7.2 pp YoY
- Operating cash flow
- $5.4B
- +10.2% YoY
Source: XBRL data from the Automatic Data Processing (ADP) FY2026 10-K on SEC EDGAR. USD.
Automatic Data Processing FY2026 10-K analysis
AI summary of each section, grounded in the filing text
Business Overview
- Core business model: Global, AI-enabled Human Capital Management (HCM) solutions spanning payroll, HR, compliance, talent, benefits, and outsourcing services
- New emphasis on AI integration: AI core in HCM platforms with persona-based AI agents recognized as 2026 Data Solution of the Year for HR and Fast Company’s #1 Most Innovative HR company
- Strategic shift: Accelerated focus on AI-driven automation combined with expert human judgment; expanded global payroll with 42 million workers paid in 140+ countries, moving $3.5 trillion in FY26
- Quantitative metric: Employee count steady at ~67,000; R&D spend increased to $1.405 billion in FY26 from $1.388 billion in FY25, with investment in generative and agentic AI
- Noteworthy fact: ADP TotalSource remains largest IRS-certified PEO, serving 19,000 clients and 770,000 worksite employees exclusively in U.S. under co-employment model
Management Discussion & Analysis
- Revenue $21,947.4M, up 7% YoY; 6% organic constant currency growth; Employer Services $14,831.4M (+7%), PEO Services $7,128.1M (+7%)
- EBIT margin 26.1% vs 25.8% (+30 bps); Adjusted EBIT margin 26.8% vs 26.0% (+80 bps); Diluted EPS $10.94 vs $9.98 (+10%), adjusted diluted EPS $11.12 vs $10.01 (+11%)
- Best segment: Employer Services EBIT $5,436.8M, margin 36.7% (+60 bps); Worst segment: PEO Services EBIT $936.1M, margin 13.1% (-110 bps)
- Operating cash flow $5.44B (+$501.5M YoY); Capital expenditures $195.7M (up from $176.8M); Dividends $2.6B and share repurchases $2.1B ($242.92 average price, 8.6M shares repurchased)
- Management highlights AI expansion and strategic progress; Fiscal 2027 capex expected $200-225M; Key risks: AI impact, regulatory changes, market/economic uncertainties, liquidity risks
Risk Factors
- Regulatory risk from evolving U.S. and foreign tax laws impacting PEO business, including IRS Certified PEO obligations and potential penalties for non-compliance
- Geopolitical exposure to disruptions from potential widespread U.S. banking system stress affecting client payment remittance and fund recovery
- Operational risk from heavy reliance on third-party data centers and cloud providers, risking business disruption and increased costs if services are interrupted
- Competitive risk from rapid AI-driven technological advances that may render existing HCM solutions obsolete or less competitive
- Financial risk due to short-term funding needs for client funds managed via commercial paper and credit facilities, vulnerable to financing disruptions
Generated from the filing text; verify against the original. How to read a 10-K
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