ADP · 8-K · 20261028PR000033

Interest Rate Environment

AUTOMATIC DATA PROCESSING INC · 2026-10-28 · Importance 48 · Surprise 24

ADP's fiscal 2027 client-funds outlook uses Fed Funds futures and forward yield curves as of October 27, 2026. A blended rate of 5.3% from forward yield curves reflecting its investment mix was used to forecast new purchase rates across client and corporate extended and client long portfolios for the rest of the fiscal year. ADP projects client-funds interest of $1.59 billion to $1.61 billion, based on anticipated client-funds balance growth of 4% to 5% and an average yield rising to approximately 3.8%.

Key facts

• ADP based its fiscal 2027 interest assumptions on Fed Funds futures contracts and various forward yield curves as of October 27, 2026. source
• ADP used a blended rate of 5.3%, based on forward yield curves reflecting its investment mix, to forecast new purchase rates across client and corporate extended and client long portfolios for the remainder of fiscal 2027. source
• For the first quarter of fiscal 2027, ADP's average corporate extended interest rate was 4.0%, compared with 3.5% a year earlier. source
• For the first quarter of fiscal 2027, ADP's average interest rate on short-term financing supporting its Client Funds Strategy was 3.7%, compared with 4.4% a year earlier. source
• For the first quarter of fiscal 2027, the average interest rate earned on ADP funds held for clients was 3.6%, compared with 3.3% a year earlier. source