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View All NewsADP reports PEO revenue up 18%, drops Zenefits lawsuit
PEO revenue rose 18% at ADP (NASD: ADP) in the company’s 2016 fiscal first quarter ended Sept. 30. Average worksite employees paid by PEO services rose 13% for the quarter to approximately 389,000.
The PEO services segment margin increased approximately 130 basis points compared to the same period in the prior year, primarily driven by lower selling expenses and operational efficiencies, according to the company.
The Roseland, N.J.-based company provides other services, including paycheck processing. Despite continued headwinds from foreign currency translation, total revenue rose 6% to $2.7 billion and net earnings rose 14%.
In other ADP news, TechCrunch reports ADP on Tuesday dropped its defamation lawsuit against its quickly growing competitor, Zenefits.
| Q1 2016 (USD millions) | Q1 2015 (USD millions) | % growth | |
| PEO revenue | $697.5 | $591.5 | 18% |
| Revenues other than interest on funds held for clients or PEO | $1,928.7 | $1,884.4 | 2% |
| Interest on funds held for clients | $87.8 | $90.2 | -3% |
| Total company revenue (including non PEO) | $2,714.0 | $2,566.1 | 6% |
| Net earnings | $336.6 | $295.2 | 14% |
Quote
“ADP had a good start to fiscal 2016, and we continue to experience very good momentum in new business bookings,” said President and CEO Carlos Rodriguez. “Our new business bookings performance for the quarter reflects the confidence our clients have in ADP’s ability to assist them with their HCM needs, including compliance with the Affordable Care Act. As a result of this solid start, we now expect new business bookings growth of at least 10% for fiscal 2016.”
Guidance
ADP continues to forecast PEO services revenue to rise approximately 15% to 17% in its 2016 fiscal year.
Share price and market cap
Shares in ADP fell 1.41% in early afternoon trading today to $89.06. The company had a market cap of $41.44 billion, according to Yahoo!