AUTOMATIC DATA PROCESSING INCADP
AUTOMATIC DATA PROCESSING INC Revenue Disclosure
REVENUE
Based upon similar operational and economic characteristics, the Company’s revenues are disaggregated as follows: Human Capital Management (“HCM”), HR Outsourcing (“HRO”), and Global Solutions (“Global”), with separate disaggregation for PEO zero-margin benefits pass-through revenues and client fund interest revenues. The Company believes these revenue categories depict how the nature, amount, timing, and uncertainty of its revenue and cash flows are affected by economic factors.
HCM provides a suite of product offerings that assist employers of all types and sizes in all stages of the employment cycle, from recruitment to retirement. Global is generally consistent with the types of services provided within HCM but represent geographies outside of the United States and includes our multinational offerings. HCM and Global revenues are primarily attributable to fees for providing solutions for payroll, benefits, talent, retirement services and HR processing and fees charged to implement the Company's solutions for clients.
HRO provides a comprehensive human resources outsourcing solution, including offering benefits, providing workers’ compensation insurance, and administering state unemployment insurance, among other human resources functions. This revenue is primarily driven by PEO. The Company has further disaggregated HRO to separate out its PEO zero-margin benefits pass-through revenues.
The Company recognizes client fund interest revenues on collected but not yet remitted funds held for clients in revenues as earned, as the collection, holding and remittance of these funds are critical components of providing these services.
The following tables provide details of the Company's revenues and includes a reconciliation to the Company’s reportable segments:
| Years Ended | |||||||||||||||||
| June 30, | |||||||||||||||||
| Types of Revenues | 2025 | 2024 | 2023 | ||||||||||||||
| HCM | $ | 8,674.5 | $ | 8,155.7 | $ | 7,716.1 | |||||||||||
| HRO, excluding PEO zero-margin benefits pass-throughs | 3,782.3 | 3,544.2 | 3,386.0 | ||||||||||||||
| PEO zero-margin benefits pass-throughs | 4,289.0 | 3,975.9 | 3,800.9 | ||||||||||||||
| Global | 2,626.0 | 2,502.1 | 2,295.8 | ||||||||||||||
| Interest on funds held for clients | 1,189.1 | 1,024.7 | 813.4 | ||||||||||||||
| Total Revenues | $ | 20,560.9 | $ | 19,202.6 | $ | 18,012.2 | |||||||||||
Reconciliation of disaggregated revenue to our reportable segments for the fiscal year ended June 30, 2025:
| Types of Revenues | Employer Services | PEO | Other | Total | |||||||||||||||||||
| HCM | $ | 8,684.5 | $ | — | $ | (10.0) | $ | 8,674.5 | |||||||||||||||
| HRO, excluding PEO zero-margin benefits pass-throughs | 1,394.3 | 2,390.6 | (2.6) | 3,782.3 | |||||||||||||||||||
| PEO zero-margin benefits pass-throughs | — | 4,289.0 | — | 4,289.0 | |||||||||||||||||||
| Global | 2,626.0 | — | — | 2,626.0 | |||||||||||||||||||
| Interest on funds held for clients | 1,178.3 | 10.8 | — | 1,189.1 | |||||||||||||||||||
| Total Segment Revenues | $ | 13,883.1 | $ | 6,690.4 | $ | (12.6) | $ | 20,560.9 | |||||||||||||||
Reconciliation of disaggregated revenue to our reportable segments for the fiscal year ended June 30, 2024:
| Types of Revenues | Employer Services | PEO | Other | Total | |||||||||||||||||||
| HCM | $ | 8,164.2 | $ | — | $ | (8.5) | $ | 8,155.7 | |||||||||||||||
| HRO, excluding PEO zero-margin benefits pass-throughs | 1,299.1 | 2,248.4 | (3.3) | 3,544.2 | |||||||||||||||||||
| PEO zero-margin benefits pass-throughs | — | 3,975.9 | — | 3,975.9 | |||||||||||||||||||
| Global | 2,502.1 | — | — | 2,502.1 | |||||||||||||||||||
| Interest on funds held for clients | 1,015.4 | 9.3 | — | 1,024.7 | |||||||||||||||||||
| Total Segment Revenues | $ | 12,980.8 | $ | 6,233.6 | $ | (11.8) | $ | 19,202.6 | |||||||||||||||
Reconciliation of disaggregated revenue to our reportable segments for the fiscal year ended June 30, 2023:
| Types of Revenues | Employer Services | PEO | Other | Total | |||||||||||||||||||
| HCM | $ | 7,724.7 | $ | — | $ | (8.6) | $ | 7,716.1 | |||||||||||||||
| HRO, excluding PEO zero-margin benefits pass-throughs | 1,216.1 | 2,175.9 | (6.0) | 3,386.0 | |||||||||||||||||||
| PEO zero-margin benefits pass-throughs | — | 3,800.9 | — | 3,800.9 | |||||||||||||||||||
| Global | 2,295.8 | — | — | 2,295.8 | |||||||||||||||||||
| Interest on funds held for clients | 806.0 | 7.4 | — | 813.4 | |||||||||||||||||||
| Total Segment Revenues | $ | 12,042.6 | $ | 5,984.2 | $ | (14.6) | $ | 18,012.2 | |||||||||||||||
Contract Balances
The timing of revenue recognition for our HCM, HRO and Global Solutions is consistent with the invoicing of clients, as invoicing occurs in the period the services are provided. Therefore, the Company does not recognize a contract asset or liability resulting from the timing of revenue recognition and invoicing.
Changes in deferred revenue related to set up fees for the fiscal year ended June 30, 2025 were as follows:
| Contract Liability | |||||
| Contract liability, July 1, 2024 | $ | 491.6 | |||
| Recognition of revenue included in beginning of year contract liability | (134.1) | ||||
| Contract liability, net of revenue recognized on contracts during the year | 140.4 | ||||
| Currency translation adjustments | 22.3 | ||||
| Contract liability, June 30, 2025 | $ | 520.2 | |||
Deferred costs
The balance is as follows:
| June 30, | 2025 | 2024 | ||||||||||||
| Deferred costs to obtain a contract | $ | 1,438.6 | $ | 1,353.0 | ||||||||||
| Deferred costs to fulfill a contract | 1,715.5 | 1,612.0 | ||||||||||||
| Total deferred contract costs (1) | $ | 3,154.1 | $ | 2,965.0 | ||||||||||
(1) The amount of total deferred costs amortized during the fiscal years ended June 30, 2025, June 30, 2024, and June 30, 2023 were $1,145.3 million, $1,067.6 million, and $992.9 million, respectively.
Deferred costs are periodically reviewed for impairment. There were no impairment losses incurred during the period.Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Aug 6, 2025 | Showing above |
| 2024 | Aug 7, 2024 | |
| 2023 | Aug 3, 2023 | |
| 2022 | Aug 3, 2022 | |
| 2021 | Aug 4, 2021 | |
| 2020 | Aug 5, 2020 | |
| 2019 | Aug 9, 2019 | |
About Revenue Disclosures
Revenue disclosures under ASC 606 explain how a company identifies performance obligations, allocates transaction prices, and determines when revenue is recognized. This section is essential for understanding whether reported revenue reflects genuine economic activity or aggressive accounting choices. Analysts examine the mix of point-in-time versus over-time recognition, which directly affects revenue timing and comparability.
Key signals: rising contract liabilities (deferred revenue) suggest strong future revenue visibility, while declining contract assets may indicate slowing project milestones. Watch for variable consideration estimates — rebates, returns, and performance bonuses that require management judgment. Significant changes in disaggregated revenue by geography or product line can reveal shifting business mix before it appears in headline numbers. Compare revenue growth against contract liability growth to assess sustainability, and scrutinize any changes in the timing of recognition that coincide with earnings pressure.