ADP Posts Strong Q4 Revenue Growth but Shares Retreat Amid Fading Momentum
Automatic Data Processing (ADP) delivered a robust fourth-quarter performance, with revenue climbing 6.2% year-over-year to $5.36 billion, surpassing analyst expectations. Adjusted earnings of $2.62 per share also edged past forecasts, underscoring the payroll giant's resilience in a stable demand environment.
Operational efficiency remained steady, with adjusted EBITDA reaching $1.52 billion and margins holding firm at 28.4%. Yet, a slight contraction in free cash Flow margins to 20.6% hinted at tighter liquidity conditions compared to prior periods.
The market response proved tepid despite the beat. Shares initially rallied toward $255 before reversing to close at $249.88, down 1.82%. The pullback reflects broader investor caution rather than fundamental weakness—ADP's recurring revenue model continues to demonstrate reliable execution in HR outsourcing.
