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View All NewsADP reports PEO revenue up 15% in quarter
PEO revenue rose 15% at ADP (NASD: ADP) in the company’s fiscal second quarter ended Dec. 31, driven primarily by a 10% increase in average worksite employees for the quarter and higher than expected growth in pass-through revenues. The Roseland, NJ-based firm provides other services, including paycheck processing. Total revenue rose 8% to $3.23 billion in the second quarter; the increase was 7% on an organic basis.
| (US$ millions) | Q2 2018 | Q2 2017 | % change |
| PEO revenue | $939.9 | $818.1 | 15% |
| Revenues other than interest on funds held for clients or PEO | $2,188.8 | $2,077.4 | 5% |
| Interest on funds held for clients | $106.7 | $91.8 | 16% |
| Total company revenue (including non-PEO) | $3,235.4 | $2,987.3 | 8% |
| Net earnings | $467.5 | $510.9 | -8% |
Average worksite employees paid by PEO services were about 498,000 and ADP ended the quarter with about 504,000 worksite employees.
ADP acquired freelancer management system WorkMarket in a deal that closed Jan. 19. Founded in 2010, New York-based WorkMarket was backed by venture firms including Union Square Ventures and Spark Capital; it raised $25 million in April 2017 from Accenture and Foundry Group.
Quote
“The world of work is going through transformative changes and we are continuing to evolve our solutions to meet our clients’ dynamic needs,” President and CEO Carlos Rodriguez said. “With the recent acquisitions of Global Cash Card and WorkMarket we have further solidified our strategy of being the leading provider of HCM solutions across the entire workforce as we now comprehensively address the growing importance of freelance workers for our clients.”
Guidance
For its full 2018 fiscal year, ADP now forecasts its PEO services revenue to rise approximately 12% to 13%, compared to its prior forecast of 11% to 13%.
Share price and market cap
Shares in ADP rose 3.05% to $124.50 as of 12.45 p.m. Eastern time. The company had a market cap of $55.17 billion.