ADP lifts 2026 forecast as new business bookings drive earnings beat

Automatic Data Processing (NASDAQ:ADP) raised its full-year financial targets on Wednesday after posting second-quarter profits that topped Wall Street estimates.

The Roseland, New Jersey-based human resources leader reported net income of $1.06 billion for the quarter ended Dec. 31, 2025, a 10% increase over the same period last year.

On a per-share basis, ADP earned $2.62, comfortably exceeding the $2.58 consensus estimate from analysts surveyed by Zacks Investment Research.

The earnings beat was primarily driven by the Employer Services segment, where a 1% increase in U.S. pays per control and strong new business bookings helped expand adjusted EBIT margins by 80 basis points to 26%.

While earnings were robust, revenue of $5.36 billion fell slightly short of the $5.38 billion anticipated by the Street.

Despite the minor top-line miss, revenue still grew 6% year-over-year, supported by steady growth in both its core payroll processing and Professional Employer Organization (PEO) services.

Fuelled by the quarter's momentum, ADP management upgraded its fiscal 2026 guidance.

The company now expects revenue growth to reach the high end of its previous 5% to 6% range, while adjusted diluted EPS is now projected to grow 9% to 10%, up from the prior forecast of 8% to 10%.