Automatic Data Processing (ADP)

ADP Reports Second Quarter Fiscal 2021 Results
• Revenues increased 1% to $3.7 billion; raising full year guidance to up 1% to 3%
• Employer Services New Business Bookings decreased 7%; raising full year guidance to up 15% to 25%
• Net earnings decreased 1% to $648 million, and adjusted net earnings decreased 1% to $650 million
• Adjusted EBIT decreased 1% to $848 million, and adjusted EBIT margin declined 30 basis points to 22.9%
• Diluted earnings per share ("EPS") increased by 1% to $1.51 for the quarter; adjusted diluted EPS flat at $1.52
• Guidance raised on strong first half performance and improved outlook for remainder of fiscal 2021; raising full year bookings, retention, revenue, margin, and EPS guidance


ROSELAND, N.J. – January 27, 2021 – ADP (Nasdaq: ADP), a leading global technology company providing human capital management (HCM) solutions, today announced its second quarter fiscal 2021 financial results and updated its fiscal 2021 outlook.
Second Quarter Fiscal 2021 Consolidated Results
Compared to last year’s second quarter, revenues increased 1% to $3.7 billion, flat on an organic constant currency basis. Net earnings decreased 1% to $648 million, and adjusted net earnings decreased 1% to $650 million.
Adjusted EBIT decreased 1% to $848 million, representing an adjusted EBIT margin reduction of 30 basis points in the quarter to 22.9%, as transformation initiatives and disciplined operating expense management largely offset the effects of lower client funds interest revenue and higher depreciation and amortization. ADP’s effective tax rate for the quarter was 22.2% on a reported and an adjusted basis. Diluted EPS increased by 1% to $1.51, and adjusted diluted EPS were flat at $1.52 as slightly lower net earnings were offset by a net share count reduction.
“Our momentum continued to build this quarter as economic activity continued to trend positively," said Carlos Rodriguez, President and Chief Executive Officer, ADP. “Our associates have delivered excellent service to our clients throughout the pandemic, and client satisfaction driven by our innovative products and best-in-class service has contributed towards an all-time high retention level. We are again delighted to increase our full year outlook across all key business metrics, and we are enthusiastic about our growth prospects as vaccination efforts progress and the global economy recovers."
"We are very pleased to have delivered Employer Services new business bookings year to date that nearly matches the amount we achieved in the first half of last year, before the effects of the pandemic. Strong sales and record client retention supported steadily improving revenue this quarter, which, combined with continued cost control across our segments, allowed us to deliver adjusted earnings per share ahead of our expectations, even as we accelerate growth investments and overcome continued headwinds related to employment and interest rates," said
Kathleen Winters, Chief Financial Officer, ADP. “With a strong sales pipeline and coordinated product and marketing efforts in place, our confidence is high for substantial positive new business bookings growth during the second half of the year."

Adjusted EBIT, adjusted EBIT margin, adjusted net earnings, adjusted diluted earnings per share, adjusted effective tax rate and organic constant currency are all non-GAAP financial measures.