Analysis for ADP

📈 Growth & Financial Trajectory

Across eight quarters, ADP's revenue hovered around $5.25B–$5.56B, finishing at about $5.359B in the latest quarter, a modest gain from the start. Net income rose from roughly $956.3M to $1.062B, an ~11% increase. There was a mid-period dip in 2025 Q4, but the longer trajectory remains stable-to-up with solid profitability.

💰 Margins & Cash Flow

• Gross Margin fluctuated roughly 45%–52%, averaging around the mid-40s to high-40s.
• Operating Margin consistently around 23% in recent quarters.
• Net Margin near 19–20%.
• Operating cash flow remains solid around $1.0–$1.4B per quarter; net cash flow is affected by financing activity in some periods, with a large financing inflow in the latest quarter.

🛡️ Balance Sheet & Liquidity

Total assets generally in the mid-to-high $50B range; liabilities near $50–$60B and equity around $4–$6B, yielding a modest liquidity buffer as current assets roughly equal current liabilities. Leverage is elevated but cash generation is steady.

⚠️ Key Drivers & Risks

• Drivers: Recurring payroll/data processing services; broad client base and scale advantages.
• Risks: Regulatory/macro shifts and reliance on financing activity in some periods, creating sensitivity to funding costs and leverage.