ADP Shares Drop 9% Despite Outperforming Q1 Profit Estimates, Revenue Falls Short of Expectations

ADP Sees Increase in Revenue despite Revenue Shortfall, Continues Progress in Strategic Priorities as Q1 Profit Rises 12% Year on Year

ADP's shares fell over 9% even though the company reported earnings per share (EPS) of $2.08, exceeding expectations of $2.03.
Despite the EPS beat, the company's Q1 revenue of $4.5 billion fell slightly short of consensus expectations, which led to investor disappointment and impacted the share price.
The company showed growth in their fiscal first quarter, with record bookings in the employer services segment and increased client retention rates. Strategic initiatives included a focus on AI integration and international expansion.
ADP's revenue increased by 9% in its mainstay employer services business, and interest on funds held for clients also rose by 43% to $202 million.
The firm maintained its full-year revenue and profit outlook, forecasting revenue growth of 6% to 7% and an EPS growth between 10% and 12% for the full year.