Automatic Data Processing reported Q2 fiscal 2026 earnings per share of $2.62, surpassing the consensus estimate of $2.58 and representing a 11.5% increase from $2.35 in the year-ago quarter. Non-GAAP operating margin expanded by 80 basis points to 26.3%, driven by disciplined cost management and higher software subscription revenues. Net income rose 9% year-over-year to $748 million, reflecting strong control of selling, general and administrative expenses, which grew only 4% despite investments in AI development.

Total revenues increased 6.2% from the prior year to $4.85 billion. Employer Services, the company’s largest segment, delivered 5.4% growth, led by a 7% rise in subscription revenue from its cloud-based HR and payroll platform. The Professional Employer Organization (PEO) unit posted 10.3% revenue growth as new client relationships and higher average worksite employee counts drove service fees up. ADP processed payroll for 1.1 million clients worldwide and managed nearly 43 million wage earners, an increase of 4% in client headcount.

Following the quarter’s performance, ADP lifted its full-year revenue guidance to a range of 5.8%–6.4% growth, up from the prior 5.4%–6.0% projection. The company reiterated its target of at least 10% non-GAAP operating margin expansion over the next 12 months, with planned reinvestments in AI and automation technology. Management highlighted that AI-driven payroll variance detection and persona-based HR agents will roll out to 500,000 clients by Q4, positioning ADP to capture market share as enterprises seek to streamline workforce operations.