The following is a summary of the Automatic Data Processing, Inc. (ADP) Q1 2025 Earnings Call Transcript:

Financial Performance:

• ADP reported a 7% revenue growth in Q1 2025, alongside adjusted EBIT margin expansion of 130 basis points and adjusted EPS growth of 12%.

• Employer Services (ES) segment revenue increased by 7%, exceeding expectations, with ES margin increasing by 260 basis points.

• PEO revenue growth was also 7%, with average worksite employee growth of 3%, topping forecasts.

Business Progress:

• ADP made significant strides in strategic initiatives, notably acquiring WorkForce Software, which expands their workforce management solutions.

• The launch of ADP Lyric, a new global HCM platform, integrates Generative AI technology and supports payroll in over 75 countries, with plans for further international expansion.

• Continued focus on improving client experience and operational efficiency, leveraging Generative AI-based service tools to enhance productivity and client service interactions.

Opportunities:

• The acquisition of WorkForce Software allows ADP to potentially grow in the high-value workforce management solutions market, serving both new and existing global enterprise clients.

• ADP Lyric's global HCM platform presents an opportunity for expansion in international markets, leveraging its AI capabilities and comprehensive service coverage.

Risks:

• The realization of future revenue synergies from the WorkForce Software acquisition projects some adjustment pressures on ADP's EBIT margin this fiscal year.

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