AUTOMATIC DATA PROCESSING INCADP

AUTOMATIC DATA PROCESSING INC Goodwill & Intangibles Disclosure

10-KFiled Aug 6, 20252 min read
GOODWILL AND INTANGIBLE ASSETS, NET
Changes in goodwill for the fiscal years ended June 30, 2025 and 2024 are as follows:
Employer
Services		PEO
Services		Total
Balance at June 30, 2023$2,334.6 $4.8 $2,339.4 
Additions and other adjustments24.4 — 24.4 
Currency translation adjustments(10.2)— (10.2)
Balance at June 30, 2024$2,348.8 $4.8 $2,353.6 
Additions and other adjustments887.0 — 887.0 
Currency translation adjustments32.9 — 32.9 
Balance at June 30, 2025$3,268.7 $4.8 $3,273.5 
Components of intangible assets, net, are as follows:
June 30,20252024
Intangible assets:  
Software and software licenses$4,103.6 $3,803.7 
Customer contracts and lists1,429.4 1,181.6 
Other intangibles249.8 242.0 
 5,782.8 5,227.3 
Less accumulated amortization:  
Software and software licenses(2,830.3)(2,642.6)
Customer contracts and lists(1,105.6)(1,007.6)
Other intangibles(243.9)(241.1)
 (4,179.8)(3,891.3)
Intangible assets, net$1,603.0 $1,336.0 

Other intangibles consist primarily of purchased rights, purchased content, trademarks and trade names (acquired directly or through acquisitions). All intangible assets have finite lives and, as such, are subject to amortization. The weighted average remaining useful life of the intangible assets is 5 years (5 years for software and software licenses, 4 years for customer contracts and lists, and 3 years for other intangibles). Amortization of intangible assets was $380.6 million, $371.6 million, and $372.8 million for fiscal 2025, 2024, and 2023, respectively.

Estimated future amortization expenses of the Company's existing intangible assets are as follows:
 Amount
Twelve months ending June 30, 2026$575.5 
Twelve months ending June 30, 2027$251.0 
Twelve months ending June 30, 2028$208.2 
Twelve months ending June 30, 2029$176.6 
Twelve months ending June 30, 2030$133.4 

Historical Timeline

Fiscal YearFiled
2025Aug 6, 2025Showing above
2024Aug 7, 2024
2023Aug 3, 2023
2022Aug 3, 2022
2021Aug 4, 2021
2020Aug 5, 2020
2019Aug 9, 2019
2018Aug 3, 2018
2017Aug 4, 2017
2016Aug 5, 2016

About Goodwill & Intangibles Disclosures

Goodwill and intangible asset disclosures reveal the premium paid in acquisitions and how management assesses whether that premium retains its value. Since goodwill is no longer amortized under US GAAP, the annual impairment test is the only mechanism that adjusts carrying values downward — making the assumptions behind that test critically important for investors.

Key signals: a history of goodwill impairments suggests management consistently overpays for acquisitions. Watch the gap between reporting unit fair value and carrying amount — when fair value exceeds carrying amount by less than 10-20%, a small decline in business performance could trigger a write-down. For finite-lived intangibles, examine useful life assumptions across customer relationships, technology, and trade names; aggressive estimates inflate near-term earnings. Compare total intangibles-to-total-assets ratios against peers to assess acquisition dependency. Rising goodwill as a percentage of equity can signal balance sheet fragility.

Other Available Disclosures

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