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Jun 30, 2020
ADP Q4 2020 Earnings Report
ADP's Q4 2020 financial results were announced, revealing a revenue decrease of 3% to $3.4 billion and a net earnings decrease of 13% to $412 million compared to the previous year's fourth quarter. Adjusted diluted EPS was flat at $1.14.
Key Takeaways
ADP reported a decrease in revenues by 3% to $3.4 billion for the fourth quarter, with net earnings down by 13% to $412 million. The company's adjusted diluted EPS remained flat at $1.14. Despite challenges from the COVID-19 pandemic, ADP is focusing on strategic investments and cost management.
Revenues decreased 3% to $3.4 billion; 2% organic constant currency.
Net earnings decreased 13% to $412 million.
Adjusted diluted EPS was flat at $1.14.
Employer Services revenues decreased 6% while PEO Services revenues increased 4%.
ADP
ADP
ADP Revenue by Segment
Revenue by Segment
Employer Services Revenue
CapyFin.comPEO Services Revenue
CapyFin.com Forward Guidance
ADP anticipates a revenue decline of 1% to 4% and an adjusted diluted EPS decline of 13% to 18% for fiscal year 2021, as the global economy continues to manage through the effects of COVID-19.
Positive Outlook
- Employer Services New Business Bookings growth of flat to up 10%.
- Adjusted effective tax rate of 23.1%.
- PEO Services revenue decline of 2% to growth of 2%.
- Strategic investment in product and distribution to drive sustainable long-term growth.
- Client Funds Interest Revenue $390 - $400M
Challenges Ahead
- Revenue decline of 1% to 4%.
- Adjusted EBIT margin down about 300 basis points.
- Diluted EPS decline of 12% to 17%.
- Employer Services revenue decline of 3% to 5%.
- Employer Services client revenue retention down 50 to 100 basis points.
Revenue & Expenses
Visualization of income flow from segment revenue to net income