ADP reported a solid start to FY2026QQ1, delivering 7% revenue growth and 7% adjusted EPS growth, with momentum across its three strategic priorities: best-in-class HCM technology, AI-enabled client solutions, and global scale. Employer Services (ES) revenue grew 7% and PEO revenue grew 7%, reflecting stable HCM demand and continued strength in Lyric HCM and embedded payroll initiatives. Management highlighted robust new business bookings, a higher velocity in mid-market deployments via Next-Gen, and meaningful AI progress (ADP Assist) aimed at automating payroll, compliance, and routine tasks. The quarter featured notable investments (WorkForce Software integration costs) that pressured GAAP operating income, while the company reaffirmed its full-year guidance of 5-6% consolidated revenue growth and 8-10% adjusted EPS growth, supported by anticipated share repurchases and improved client fund strategies. Management underscored a disciplined path to margin expansion (50-70 bps adjusted EBIT) for fiscal 2026, despite ongoing integration costs and one-time items. ADP also announced strategic acquisitions (Pequity) to enhance compensation management capabilities and reaffirmed its leadership position in multi-country payroll and AI-enabled outsourcing. Investors should note the strong free cash flow generation ($595.6m in FCF) and a robust liquidity position, balanced by a sizable debt load largely tied to strategic acquisitions. The quarterly results reinforce ADP’s long-term growth thesis: leverage scale, expand in high‑growth HCM segments (Lyric, Next Gen, Embedded Payroll), and harness AI to lift productivity across sales, implementation, and service.”,