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Investing.com -- ADP reported second quarter fiscal 2025 results that exceeded analyst expectations, with revenue and earnings growth driven by strong demand for human capital management solutions and higher client funds interest revenue.
The company posted adjusted earnings per share of $2.35, beating the analyst consensus of $2.30. Revenue for the quarter rose 8% YoY to $5.05 billion, surpassing estimates of $4.97 billion. The company also reported an 8% increase in revenue on an organic constant currency basis.
ADP’s net earnings increased 10% to $963 million, while adjusted EBIT grew 11% to $1.3 billion. The adjusted EBIT margin expanded by 60 basis points to 25.2%.
The company’s stock was down 0.1% following the earnings release.
"Our momentum continued into the second quarter with strong revenue and earnings growth," said Maria Black, President and CEO of ADP. "With a healthy HCM demand backdrop and all-time record client satisfaction, we are focused on continuing to deliver for our shareholders in the second half of our fiscal year."
ADP maintained its fiscal 2025 outlook, projecting revenue growth of 6% to 7%, adjusted EBIT margin expansion of 30 to 50 basis points, and adjusted diluted EPS growth of 7% to 9%.
The Employer Services segment, which offers global HCM and HR outsourcing solutions, saw revenues increase by 8% on a reported basis and 7% on an organic constant currency basis. The PEO Services segment, providing employment administration outsourcing solutions, reported an 8% revenue increase.
Interest on funds held for clients rose 21% to $273 million, with average client funds balances increasing 8% to $35.3 billion.