ADP · 10-K · 2026A · Full report
Segment Revenue Performance
AUTOMATIC DATA PROCESSING INC · 2026-08-05 · Importance 49 · Surprise 32 · Contradicted
Employer Services revenue increased to $14,831.4 million from $13,883.1 million, supported by new business, retention, pricing, a 1% foreign-currency benefit, and $164.1 million of higher client-funds interest. Employer Services pays per control increased 1%, and its pretax margin expanded 60 basis points to 36.7%. PEO Services revenue increased $437.7 million to $7,128.1 million, but revenue excluding zero-margin benefits pass-throughs increased only $119.4 million to $2,520.8 million. PEO pretax income declined to $936.1 million from $950.5 million and its margin fell 110 basis points to 13.1% because of pass-through costs, selling and marketing, workers’ compensation, and state unemployment expenses.
Key facts
- ADP Indemnity paid a premium of $327.8 million in July 2026 to enter into a reinsurance agreement with Chubb for fiscal 2027 policy year coverage on terms substantially similar to fiscal 2026 source
- ADP Indemnity recorded a pre-tax actuarial gain of $2.8 million in fiscal 2026 versus $8.8 million in fiscal 2025 source
- Employer Services revenue for fiscal 2026: $14,831.4 million versus $13,883.1 million in fiscal 2025 source
- PEO Services revenue for fiscal 2026: $7,128.1 million versus $6,690.4 million in fiscal 2025 source
- Employer Services earnings before income taxes for fiscal 2026: $5,436.8 million versus $5,008.5 million in fiscal 2025 source
- PEO zero-margin benefits pass-throughs in fiscal 2026: $4,607.3 million versus $4,289.0 million in fiscal 2025, an increase of $318.3 million source
- PEO Services' revenues excluding zero-margin benefits pass-throughs for fiscal 2026: $2,520.8 million versus $2,401.4 million in fiscal 2025 (increase of $119.4 million) source
- PEO Services' earnings before income taxes decreased in fiscal 2026 due to increases in expenses including $318.3 million in zero-margin benefits pass-through costs, $52.8 million in selling and marketing expenses, and $37.1 million in operating costs related to worker's compensation and state unemployment insurance source
Impact estimates
| metric | direction | stage | expected | basis |
|---|---|---|---|---|
| revenue | positive | realized | +4.3% | Employer Services revenue for fiscal 2026: $14,831.4 million versus $13,883.1 million in fiscal 2025 |
| revenue | positive | realized | +2.0% | PEO Services revenue for fiscal 2026: $7,128.1 million versus $6,690.4 million in fiscal 2025 |
| operating_income | positive | realized | +1.9% | Employer Services earnings before income taxes for fiscal 2026: $5,436.8 million versus $5,008.5 million in fiscal 2025 |
| revenue | positive | realized | +1.4% | PEO zero-margin benefits pass-throughs in fiscal 2026: $4,607.3 million versus $4,289.0 million in fiscal 2025, an increase of $318.3… |
| revenue | positive | realized | +0.5% | PEO Services' revenues excluding zero-margin benefits pass-throughs for fiscal 2026: $2,520.8 million versus $2,401.4 million in fiscal… |
| cash | negative | realized | -0.5% | ADP Indemnity paid a premium of $327.8 million in July 2026 to enter into a reinsurance agreement with Chubb for fiscal 2027 policy year… |
| assets | positive | realized | +0.5% | ADP Indemnity paid a premium of $327.8 million in July 2026 to enter into a reinsurance agreement with Chubb for fiscal 2027 policy year… |
| operating_income | negative | realized | -0.0% | ADP Indemnity recorded a pre-tax actuarial gain of $2.8 million in fiscal 2026 versus $8.8 million in fiscal 2025 |