ADP Q3 2020 Earnings Report
Key Takeaways
ADP reported a 6% increase in revenues to $4.0 billion for Q3 fiscal year 2020. Diluted earnings per share increased by 10% to $1.90, and adjusted diluted EPS increased by 8% to $1.92. The company is revising its fiscal 2020 outlook due to the expected impact of COVID-19.
Revenues increased 6% to $4.0 billion; 6% organic constant currency.
Employer Services New Business Bookings decreased 9%.
Net earnings increased 9% to $821 million, and adjusted net earnings increased 8% to $829 million.
Diluted earnings per share increased 10% to $1.90 for the quarter, and adjusted diluted EPS increased 8% to $1.92.
ADP
ADP
ADP Revenue by Segment
Forward Guidance
ADP provided its fiscal year 2020 outlook, which includes revenue growth of about 3% and adjusted diluted EPS growth of 4 to 7%.
Positive Outlook
- Revenue growth of about 3%.
- Adjusted effective tax rate of 22.9%.
- Diluted EPS growth of 6 to 9%.
- Adjusted diluted EPS growth of 4 to 7%.
- Employer Services revenue growth of 1 to 2%.
Challenges Ahead
- Adjusted EBIT margin down 25 to up 25 basis points.
- Employer Services New Business Bookings decline of about 20%.
- Employer Services client revenue retention down 30 to 50 basis points.
- Decrease in pays per control of 2 to 2.5%.
- PEO Services margins down 100 to 125 basis points.
Revenue & Expenses
Visualization of income flow from segment revenue to net income