Automatic Data Processing, Inc. (ADP) Q4 2023 Earnings Call Transcript

For the period ending June 30, 2023

July 26, 2023 8:30 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Good morning. My name is Michelle, and I'll be your conference operator. At this time, I would like to welcome everyone to ADP's Fourth Quarter Fiscal 2023 Earnings Call. I would like to inform you that this conference is being recorded. After prepared remarks, we will conduct a question-and-answer session. Instructions will be given at that time.

I would now like to turn the conference over to Mr. Danny Hussain, Vice President, Investor Relations. Please go ahead.

Danny Hussain

Thank you, Michelle, and welcome everyone to ADP's fourth quarter fiscal 2023 earnings call. Participating today are Maria Black, our President and CEO; and Don McGuire, our CFO.

Earlier this morning, we released our results for the quarter and full year. Our earnings materials are available on the SEC's website and our Investor Relations website at investors.adp.com where you will also find the investor presentation that accompanies today's call. During our call, we will reference non-GAAP financial measures, which we believe to be useful to investors and that exclude the impact of certain items. A description of these items along with a reconciliation of non-GAAP measures to the most comparable GAAP measures can be found in our earnings release.

Today's call will also contain forward-looking statements that refer to future events and involve some risk. We encourage you to review our filings with the SEC for additional information on factors that could cause actual results to differ materially from our current expectations.

I'll now turn it over to Maria.

Maria Black

Thank you, Danny, and thank you, everyone, for joining us.

We closed out the year with a strong fourth quarter, that included 9% organic constant currency revenue growth, 270 basis points of adjusted EBIT margin expansion, and 26% adjusted EPS growth, and for a full year fiscal 2023, we delivered 10% organic constant currency revenue growth, 130 basis points of adjusted EBIT margin expansion and 17% adjusted EPS growth, representing another strong year for ADP.

I'll start with some highlights from the quarter. Our worldwide sales and marketing team delivered exceptional Q4 Employer Services new business bookings growth that was well in excess of our expectations, with strong double-digit overall growth on top of a difficult comparison. The HCM demand environment has been healthy despite a gradually slowing macroeconomic backdrop and we have been capitalizing on this steady demand. Our strong bookings results were broad-based. We had continued strength in our down-market and Employer Services HRO offerings. We also had better-than-expected results in our midmarket, as well as a great finish from our compliance and international businesses.