Automatic Data Processing (ADP) 53rd Annual Nasdaq Investor Conference summary

Key messages from Investor Day and strategic focus

• Emphasized scale, dependability, and global reach, serving clients in 140 countries and processing millions of paychecks.

• Highlighted a $180 billion total addressable market with significant growth runway ahead.

• Showcased innovation through new platforms and products, including ADP Lyric and Workforce Now Next Gen.

• Stressed the importance of a modern, tech-enabled distribution ecosystem with 8,500 sellers and diverse channels.

• Demonstrated ongoing investment in sales force productivity and best-in-class technology.

Labor market trends and macroeconomic insights

• Employment data is tracked via 26 million U.S. wage earners, with insights shared through the National Employment Report and NER Pulse.

• Recent data shows moderation in small business employment and sector-specific pressures, especially in leisure and hospitality.

• Early research suggests AI may impact certain job categories, but effects are still emerging.

• Within the client base, layoffs are at multi-year lows and employment remains resilient compared to broader macro trends.

• Wage growth remains elevated, supporting both client fund interest revenue and PEO revenue.

Business segment performance and outlook

• Demand for HCM solutions is stable, with healthy pipelines across all segments and confidence in achieving 4%–7% new bookings growth.

• Product innovation, global reach, and AI integration are key differentiators driving growth.

• PEO segment reported 7% revenue growth in Q1, with expectations for medium-term acceleration despite healthcare cost pressures.

• Fully insured health insurance model helps manage healthcare inflation impacts, mainly affecting bookings and retention rather than margins.