What changed in this filing

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Item 1. Business

2023-08-03 compared with 2022-08-03 · 138 added, 118 removed, 253 unchanged (50% of the section changed)

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Tailored to meet the needs of businesses of all sizes, we help them work smarter today so they can have more success tomorrow.

We serve over 990,000 clients and pay over 39 million workers in 140 countries and territories.

We serve over 1 million clients and pay over 41 million workers in 140 countries and territories.

Our common stock is listed on the NASDAQ Global Select Market® under the symbol “ADP.”

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ADP’s Mission

As data, digital technology, globalization, new business models and other significant events and disruptions reshape the way people work, our mission is to power organizations with insightful solutions that meet the changing needs of our clients and their workers.

Our mission is to power organizations with insightful Human Capital Management (HCM) solutions that meet the changing needs of our clients and their workers.

Data, digital technology, artificial intelligence, globalization, new business models and other significant events and disruptions continuously reshape the way people work.

Our HCM technology, industry and compliance expertise and data insights deliver measurable results and peace-of-mind, and contribute to an engaged, productive workforce.

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We are always designing better ways to work through cutting-edge products, premium services and exceptional experiences that enable people to reach their full potential.

ADP's Business Pillars

Our business is organized around three pillars which represent our core growth areas.

HCM Solutions :

In the United States, we provide cloud-based HCM software with supporting service and expertise that assists employers of all types and sizes in managing the entire worker spectrum and employment cycle – from full-time to freelancer and from hire to retire.

HR Outsourcing (HRO) Solutions :

In the United States, we offer comprehensive HRO solutions in which we provide complete management solutions for HR

administration, payroll administration, talent management, employee benefits, benefits administration, employer liability management, and other HCM and employee benefits functions.

Global Solutions :

We offer international HCM and HRO solutions, comprised of both local, in-country solutions and cloud-based multi-country solutions, to clients wherever they do business around the world.

ADP’s Strategy

Our Strategic Pillars.

Our business strategy is based on three strategic pillars, which are designed to position us as the global market leader in HCM technology and services:

• G row a complete suite of cloud-based HCM solutions (HCM Solutions).

We design cloud-based software and offer comprehensive solutions that assist employers of all types and sizes in managing the entire worker spectrum and employment cycle – from full-time to freelancer and from hire to retire.

• Grow and scale our market-leading HR Outsourcing solutions (HRO Solutions).

We offer comprehensive HRO solutions in which we provide complete management solutions for HR administration, payroll administration, talent management, employee benefits, benefits administration, employer liability management, and other HCM and employee benefits functions.

• Leverage our global presence to offer clients HCM solutions wherever they do business (Global Solutions).

We are expanding our international HCM and HRO businesses, comprised of our established local, in-country solutions and our market-leading, cloud-based multi-country solutions.

With a large and growing addressable market, we are executing on our strategic pillars by focusing on the following priorities:

• Investing in our world-class and next-gen platforms that are built for the future of work, and providing market-leading product and technology solutions that solve the needs of our clients today, anticipate their needs of tomorrow and provide them with valuable data insights and guidance that help them understand their workforce and how they compare to their industry peers.

• Continuing to offer the broadest suite of complete solutions, while identifying and pursuing new and additional opportunities to expand and build on our solutions to ensure that our clients and their workers can navigate the ever-changing and challenging world of work.

• Enhancing our powerful distribution with impactful data, digital technology and marketing investments.

• Accelerating our digital transformation and leveraging technology to simplify and personalize how we engage with our clients and how their workers engage with us – delivering solutions wherever they are, whether at work or on the go.

• Providing our clients with comprehensive HR and payroll capabilities that drive productivity and enable compliance globally through our world-class platforms and multi-national solutions.

Our footprint and scale in the HCM industry is unmatched.

Together with leading technology and deep in-country compliance expertise, we are strongly positioned to continue to drive sustainable long-term growth and value by delivering solutions to clients of all sizes and their workers, wherever they do business.

Our business strategy has three key priorities:

With a large and growing addressable market, we are focused on our core growth areas and further enhancing our market position by executing on our Strategy:

• Lead with Best-in-Class HCM Technology.

We design and develop world-class HCM platforms that simplify work and utilize enabling technologies like artificial intelligence and modern cloud architecture.

We aim to solve the needs of our clients and their workers today by making HCM transactions effortless and compliant, while anticipating their needs of tomorrow by incorporating valuable data insights and guidance into our solutions to help them better understand their workforce and how they compare to industry peers, and position them to make better decisions.

• Provide Unmatched Expertise and Outsourcing Solutions.

Our clients look to us as a source of expertise to understand key HR trends and best practices, employment and related legislation, and to offer thoughtful strategies to utilize HCM technology to achieve their business objectives and support their workforce.

Many of our clients also look to us to take on responsibility for a portion or all of their HCM workflow via one of our HRO solutions.

We intend to continue to build on our deep expertise and make it readily available to our clients through a variety of channels, ranging from traditional call and chat options to self-guided and AI-powered options.

We will continue to leverage our decades of experience, our significant data insights, and investments in AI and other enabling

technologies to help our clients and their workers navigate the ever-changing world of work.

• Benefit our Clients with Our Global Scale.

Our clients benefit from our unmatched global footprint and scale in the HCM industry.

We will continue to build on these strengths to further improve our client experience, and to add to our global footprint to further meet our clients where they choose to do business and address their needs for a distributed and flexible workforce.

We intend to build more relationships with partners, such as through the ADP Marketplace, in order to provide clients with seamless integrations and customizations that simplify their HR processes and help them meet their needs.

And we will grow our sales organization and continue to invest in best-in-class sales technology to not only make the purchase experience seamless but to also empower our sellers to provide the deep expertise and insights our clients, partners and influencers require to ensure they have the right HCM solutions to help them achieve their objectives and make a meaningful impact for their employees.

As we continue to invest in and execute on our Strategy, we intend to continue to exceed the expectations of our clients and enable them and their people to reach their full potential.

Innovation at ADP

Innovation is in our DNA.

For over 70 years, we have reimagined the world of work by designing cutting-edge products, robust services and exceptional experiences that touch millions of people’s lives daily.

For over 70 years, we have proven that actively listening and responding to what clients and their employees need and want keeps the world of work progressing forward.

We pioneered HCM automation, HCM in the cloud, mobile HCM and a digital HCM marketplace.

As the business, data and digital technology landscape rapidly evolves, what “work” means, how and where it gets done, and how workers are paid is changing as well.

We innovate by anticipating the future of work, the future of HCM and the future of pay in order to meet the evolving and unique needs of our clients and their workers.

Our next-gen platforms are designed for the ever-changing world of work.

Built from the ground up to be cloud-native, global, scalable and secure, our next-gen platforms provide our clients with the flexibility they need to address today’s and tomorrow’s workplace challenges.

Our award winning next-gen HCM platform enables our clients to personalize their experience based on their needs.

Built for dynamic teams, our next-gen HCM platform provides our clients with visibility into where work actually happens rather than into rigid organizational hierarchies and worker types.

This spirit of innovation remains a steady guide as we continue to listen and respond to emerging needs.

As the business, data and digital technology landscape continues to rapidly evolve, what “work” means, how and where it gets done, and how workers are paid is changing as well.

Leveraging the power of data, we innovate by anticipating the future of work, the future of HCM and the future of pay to help our clients transform their businesses, simplify work and empower their workers.

The size and breadth of ADP gives us a unique opportunity, especially in the era of data and data-driven products, to test innovative ideas, validate hypotheses and refine solutions before we bring them to the market.

This happens through our “client-zero” program, which forges a direct connection point between our internal HR practitioners and our technologists.

A key area of focus is using data and feedback from front-line practitioners to build products that improve the employee experience and make HR technology more intentional and in the moment.

By innovating with a client-centric mindset, we continue to transform work.

In today’s world of work, people-data has never been more important.

It gives companies the information they need to identify the depth and scope of people issues, anticipate and solve challenges, foster connections across their workforce and drive business outcomes.

Sitting at the center of workforce data, we leverage the unrivaled scale, breadth, and depth of our data to provide the insights businesses need to create a better world of work.

Our data is also the basis for our renowned ADP National Employment Report, which the ADP Research Institute (ADPRI) and the Stanford Digital Economy Lab recently retooled to provide a more robust, independent high-frequency view of the labor market and trajectory of economic growth in the United States.

The scale and scope of our client base provides us an unrivaled HCM dataset, and we are focused on converting our data advantage into our client’s data advantage.

We are doing this by differentiating our HCM solutions and providing our clients with insights that can help drive better decisions, and by continuing to identify and pursue new and additional data-as-a-service opportunities.

We are leading this innovation effort with ADP® DataCloud, our award-winning machine learning (ML) and workforce analytics platform which is the largest private repository of payroll information available.

DataCloud analyzes aggregated, anonymized and timely HCM and compensation data from more than 1 million organizations across the U.S., powering solutions that provide clients with in-depth workforce and business insights that enable critical HR decisions.

Artificial intelligence (AI) drives many of the key features of ADP’s data products.

In the U.S., ADP DataCloud's Skills Graph, our proprietary data structure, is based on more than 43 million employee records, 95 million resumes and 9 million job postings across more than 20 industries and 500 geographic areas, and uses large language models to extract, align and normalize key information such as skills, job titles and levels, education and qualifications from non-structured data and infers missing skills and qualifications from context.

Skills Graph powers ADP’s Candidate Profile Relevancy tool to help score, assess and predict candidates who are the best fit for a job opening and is designed to minimize the introduction of bias by, among other things, focusing on the skills, education, and experience of an applicant.

Skills Graph also powers our new Organizational Benchmarking Dashboard, which enables companies to decide how best to deploy their workers by comparing organizational metrics like headcount, labor costs and turnover against other similar businesses, as well as Talent Market Insights where organizations can explore jobs and locations to understand talent availability, skills, wages, turnover and time to fill.

ADP’s Model-Based Benchmarks, powered by Skills Graph, also extend benchmarks to include compensation for up to 160 million workers.

Model-Based Benchmarks are driven by a set of deep learning models that extract

patterns and knowledge from millions of payroll records and job profiles to provide accurate information that reflects the reality of the position being researched.

We offer similar tools to clients outside the United States, including through our ADP GlobalView® and ADP iHCM solutions.

We are also using AI to respond to the needs of HR practitioners.

ADP’s data-driven Intelligent Self-Service solution uses predictive analytics and machine learning to proactively address common employee HR challenges before the need to contact their HR departments arises, freeing HR practitioners to focus on higher value initiatives.

It was named a “Top HR Product” at the 2022 HR Technology Conference, marking the 8th consecutive year we have received this award for continued product innovation.

ADP’s Pay Equity Storyboard combines analytics and benchmarking to help employers better understand potential pay gaps and provide them with real, up-to-date, aggregated and anonymized market data to understand how their compensation for a particular job compares to other similar employers.

Insights powered by DataCloud are particularly important with respect to diversity, equity and inclusion (DEI) and, as part of our commitment to DEI, we introduced the first-of-its-kind, award-winning DEI benchmark to help companies assess DEI gaps, track their progress and achieve their goals, bolstering ADP’s suite of DEI offerings.

It also earned acclaim in Fast Company’s first-ever list of the “Next Big Things in Tech,” which

highlights tech breakthroughs that promise to define the future of their industries.

In harnessing the power of data through ML, ADP recognizes the importance of accountability, transparency, privacy, explainability and governance, and in furtherance of those goals has established an active AI & Data Ethics Committee, comprised of both industry leaders and ADP experts, which advises on emerging industry trends and concerns and provides guidance with respect to compliance with the principles that ADP should follow while developing products, systems and applications that involve AI, ML and data.

As we continue to explore the potential that new technologies like generative AI can provide as we design and develop innovative solutions, we understand the great responsibility we have to approach these innovations in a way that is ethical, secure, and compliant for our business and the clients and workers we serve around the world.

This led to our establishment of an interdisciplinary working group across ADP to determine governance for use cases and adoption of a set of principles and processes to govern the use of these newer technologies, including operational monitoring of recommendations made by AI/ML technologies.

Built to be as dynamic as the world of work today, our next-gen platforms are designed for adaptability.

Built from the ground up to be cloud-native, global, scalable and secure, our next-gen platforms are designed to provide our clients with the flexibility they need to address today’s and tomorrow’s workplace challenges, and to personalize the experience based on their needs.

Built for dynamic teams, our next-gen HCM platform provides our clients with visibility into where work happens rather than into rigid organizational hierarchies and worker types.

And, by deploying low-code applications, clients can easily tailor the solution to their needs.

Our next-gen payroll solution is a global solution that supports workers of all types and enables real-time, transparent, continuous payroll calculations.

This next-gen payroll solution also unlocks flexible pay choices for our clients so they can provide the best pay experience for their workers.

As the regulatory environment rapidly changes, making it harder for companies to navigate the complexities of payroll, our next-gen payroll solution’s built-in compliance capabilities enable our clients to focus on managing their business.

Last year, we launched the “Roll™ by ADP” mobile-first solution – reimagining how small businesses do payroll.

Our next-gen payroll platform is a global solution that supports workers of all types and enables real-time, transparent, continuous payroll calculations.

This next-gen payroll platform also unlocks flexible pay choices for our clients so they can provide the best pay experience for their workers.

As the regulatory environment rapidly changes, making it harder for companies to navigate the complexities of payroll, our next-gen payroll platform’s built-in compliance capabilities enable our clients to focus on managing their business.

Additionally, we launched the “Roll™ by ADP” mobile-first solution – reimagining how small businesses do payroll.

This groundbreaking payroll solution utilizes an AI-powered chat interface to turn traditional payroll management into an intuitive conversation that can complete payroll in under a minute.

Leveraging ADP’s long-standing payroll expertise and data security, small business owners can download and self-purchase Roll and run payroll anywhere, anytime, quickly and compliantly, with no experience or training needed.

Leveraging ADP’s long-standing payroll expertise and data security, small

business owners can download and self-purchase Roll and run payroll anywhere, anytime, quickly and compliantly, with no experience or training needed.

The conversational experience runs off simple chat prompts such as “Run my payroll,” offering a frictionless experience that also allows clients to confidently handle compliance matters like tax filing and deposits.

The size and breadth of our client base provides us an unrivaled HCM dataset, and we are focused on converting our data advantage into our client’s data advantage.

We are doing this by differentiating our HCM solutions with

ADP’s unmatched dataset that provides clients with insights that can help drive better decisions, and by continuing to identify and pursue new and additional data-as-a-service opportunities.

We are leading this innovation effort with ADP® DataCloud, our award-winning ML and workforce analytics platform which is the largest private repository of payroll information available.

DataCloud analyzes aggregated, anonymized and timely HCM and compensation data from more than 930,000 organizations across the U.S., powering solutions that provide clients with in-depth workforce and business insights that enable critical HR decisions.

ADP DataCloud's Skills Graph, our proprietary data structure, is based on more than 30 million employee records, 65 million resumes and 7 million job postings across more than 20 industries and 500 geographic areas, and extracts, aligns and normalizes key information such as skills, job titles and levels, education and qualifications from non-structured data and infers missing skills and qualifications from context.

Skills Graph powers ADP’s Candidate Profile Relevancy tool to help score, assess and predict candidates who are the best fit for a job opening, as well as our new Organizational Benchmarking Dashboard which enables companies to decide how best to deploy their workers by comparing organizational metrics like headcount, labor costs and turnover against other similar businesses.

We offer similar tools to clients outside the United States, including through our ADP GlobalView® and ADP iHCM solutions.

ADP’s Model-Based Benchmarks, powered by Skills Graph, also extend benchmarks to include compensation for up to 150 million workers.

Model-Based Benchmarks are driven by a set of deep learning models that extract patterns and knowledge from millions of payroll records and job profiles to provide accurate information that reflects the reality of the position being shown.

ADP’s Pay Equity Storyboard combines analytics and benchmarking

to help employers better understand potential pay gaps and provide them with real, up-to-date, aggregated and anonymized market data to understand how their compensation for a particular job compares to other similar employers.

Insights powered by DataCloud are particularly important with respect to diversity, equity and inclusion (DEI) and, as part of our commitment to DEI, we introduced the first-of-its-kind DEI benchmark to help companies assess DEI gaps, track their progress and achieve their goals, bolstering ADP’s suite of DEI offerings.

It was named a 2021 “Top HR Product” at the annual HR Technology Conference, marking the seventh consecutive year ADP has been honored for its innovative HCM technology.

The solution also earned acclaim in Fast Company’s first-ever list of the “Next Big Things in Tech,” which highlights tech breakthroughs that promise to define the future of their industries.

Our innovative Wisely® payment offerings support an employer’s need for flexible payment solutions in order to meet the individual needs of its workers.

Wisely® Pay is a network-branded payroll card that comes with a digital account that enables employers to pay their employees, and enables employees to access their payroll funds immediately, including via a network member bank or an ATM, make purchases or pay bills, deposit checks, load additional funds onto the card, such as tax refunds, and transfer funds to a bank account in the United States.

As we also seek to provide employee financial solutions, we offer Wisely® Direct, a network-branded general purpose reloadable card that comes with a digital account, which provides similar features and functionality as Wisely Pay but is offered directly to consumers.

Our digital card offerings are true banking alternatives that feature innovative optional services such as savings envelopes, spend-tracking, cash-back rewards and support for digital wallets.

Our innovative Wisely® payment and financial wellness offering includes a suite of personalized banking-alternative solutions designed to give employees fast and flexible choices to access their pay and other sources of income.

Wisely® Pay is a network-branded paycard with a digital account, through which employees can access their pay, make purchases online and in store, deposit checks, load additional funds onto the card, and transfer funds to a bank account in the United States.

Wisely also enables advanced capabilities and innovative features such as Earned Wage Access (EWA), automatic savings options, cash back rewards and bill pay that help employees take even more control of their finances.

Wisely® Direct, a network-branded general purpose reloadable card that comes with a digital account, provides similar features and functionality but is offered directly to consumers.

Our digital card offerings are banking alternatives that afford

financial wellness tools designed to help members realize a better financial path forward.

‘Always Designing for People’ isn’t just a tag line – innovation is also about putting our clients first by giving them and their workers a faster, smarter and easier user experience (UX) that was designed with and for them.

With a modern look and feel based on our brand new design system, our new UX is powered by data and ML and provides intuitive workflows that are available when and where our clients and their workers need it.

With a modern look and feel based on our new design system, our new UX is powered by data and ML and provides intuitive workflows that are available when and where our clients and their workers need it.

We are investing in UX alignment and simplification across our strategic products and solutions, with new UX releases for RUN Powered by ADP®, MyADP, ADP® Mobile Solutions and, most recently, ADP Workforce Now®.

In addition, our ADP Mobile app simplifies how work gets done by enabling clients to process their payroll anywhere, and giving millions of their employees worldwide convenient access to their payroll and HR information in 32 languages.

We have also given third-party developers and system integrators access to some of our platforms’ API

(application programming interface) libraries through ADP Marketplace in order to enable secure data sharing between ADP and other solutions across the HR and business ecosystem.

ADP Marketplace is a digital HR storefront where clients can discover the best-fit apps for their industry;

browse by solution-types such as learning management, financial wellness, time and attendance, and benefits administration;

or connect HR software they already use.

The pre-built integrations help clients simplify their processes, create a single system of record, and reduce data errors, freeing up time and resources to focus on growing their business and taking care of their people.

With more than 650 apps and integrations to choose from, ADP Marketplace offers clients a modern HR experience that they can tailor to their specific needs.

Helping Clients and their Employees Emerge Stronger from the COVID-19 Global Pandemic

The COVID-19 global pandemic created extremely challenging circumstances for our clients and their employees and, throughout, our priority has been to help them navigate these challenges.

As they evolved their business models and operations to address changes in the economy and workplace, we provided and continue to provide trusted solutions, data and expertise.

As COVID-19 restrictions eased, employers returned to the workplace and designed new policies reflecting the demand for remote and hybrid work models, and we supported their efforts by providing tools that helped them manage compliance confidently, achieve business continuity, and support employee wellness and engagement, including our award-winning Return to Workplace dashboard powered by ADP DataCloud.

The dashboard uses data analytics and employee surveys to allow clients to monitor workforce trends including availability, health attestation results, and worker readiness and sentiment toward returning to the workplace.

As the way people work is reshaped, our innovative technology,

data and expertise make ADP the partner that clients trust as they adapt to the new world of work and create workplaces where everyone can thrive.

We expanded employee self-service via our app by incorporating ML-based recommendations for employees to better find information, correct missing information, and complete tasks more efficiently.

Reportable Segments

Our two reportable business segments are Employer Services and Professional Employer Organization (“PEO”).

Our two reportable business segments are Employer Services and Professional Employer Organization (“PEO”), and are based on the way that management reviews the performance of, and makes decisions about, our business.

For financial data by segment and by geographic area, see Note 14 to the “Consolidated Financial Statements” contained in this Annual Report on Form 10-K.

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Our PEO business, called ADP TotalSource®, provides clients with comprehensive employment administration outsourcing solutions through a relationship in which employees who work for a client (referred to as “worksite employees”) are co-employed by us and the client.

Our reportable segments are based on the way that management reviews the performance of, and makes decisions about, our business.

Our strategic pillars represent the strategic growth areas for our business.

The results of our business related to products and solutions within the HCM Solutions pillar, the HRO Solutions pillar (other than PEO products and solutions) and the Global Solutions pillar are contained within our Employer Services segment.

The results of our business within the HRO Solutions pillar related to our PEO products and solutions are contained within our PEO segment.

PRODUCTS AND SOLUTIONS

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Our solutions provide performance, learning, succession and compensation management tools that help employers align goals to outcomes, and enable managers to identify and mitigate potential retention risks.

Our talent activation solutions include StandOut® powered by ADP, which provides team leaders with data and

insights to drive employee engagement and leadership development, which in turn help drive employee performance.

Our talent activation solutions include StandOut ® powered by ADP, which provides team leaders with data and insights to drive employee engagement and leadership development, which in turn help drive employee performance.

Workforce Management.

ADP’s Workforce Management offers a range of solutions to over 110,000 employers of all sizes, including time and attendance, absence management and scheduling tools.

ADP’s Workforce Management offers a range of solutions to over 120,000 employers of all sizes, including time and attendance, absence management

and scheduling tools.

Time and attendance solutions include time capture via online timesheets, timeclocks with badge readers, biometrics and touch-screens, telephone/interactive voice response, and mobile smartphones and tablets.

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ADP’s Compliance Solutions provides industry-leading expertise in payment compliance and employment-related tax matters that complement the payroll, HR and ERP systems of our clients.

In our fiscal year ended June 30, 2022, in the United States, we processed and delivered more than 74 million employee year-end tax statements, and moved more than $2.7 trillion in client funds to taxing and other agencies and to our clients’ employees and other payees.

In our fiscal year ended June 30, 2023, in the United States, we processed and delivered more than 79 million employee year-end tax statements and moved more than $3.1 trillion in client funds to taxing and other agencies, our clients’ employees and other payees.

• ADP SmartCompliance.

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Insurance Services.

ADP’s Insurance Services business, in conjunction with our licensed insurance agency,

Automatic Data Processing Insurance Agency, Inc., facilitates access in the United States to workers’ compensation and group health insurance for small and mid-sized clients through a variety of insurance carriers.

ADP’s Insurance Services business, in conjunction with our licensed insurance agency, Automatic Data Processing Insurance Agency, Inc., facilitates access in the United States to workers’ compensation and group health insurance for small and mid-sized clients through a variety of insurance carriers.

Our automated Pay-by-Pay® premium payment program calculates and collects workers’ compensation premium payments each pay period, simplifying this task for employers.

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ADP Comprehensive Services.

Leveraging our market-leading ADP Workforce Now platform, ADP Comprehensive Services partners with clients of all types and sizes to tackle their HR, talent, benefits administration

and pay challenges with help from our proven expertise, deep experience and best practices.

Leveraging our market-leading ADP Workforce Now platform, ADP Comprehensive Services partners with clients of all types

and sizes to tackle their HR, talent, benefits administration and pay challenges with help from our proven expertise, deep experience and best practices.

ADP Comprehensive Services is flexible – enabling clients to partner with us for managed services for one, some or all areas across HR, talent, benefits administration and pay.

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We partner with clients to help them navigate the most complex HR and payroll scenarios using tailored and scalable technology supported by our deep compliance expertise.

ADP Global Payroll is a solution for multinational organizations of all sizes, empowering them to harmonize HCM strategies in 140 countries globally.

ADP Global Payroll is a solution for multinational organizations of all sizes, empowering them to harmonize

HCM strategies in 140 countries globally.

This improves visibility, control and operational efficiency, giving organizations the insight and confidence to adapt to changing local needs, while helping to drive overall organizational agility and engagement.

We also offer comprehensive, country-specific HCM solutions that combine innovative technology with deep local expertise.

By operating a flexible service model, we help customers manage various combinations of payroll services, HR management, time and attendance management, talent management and benefits management, depending on the country in which the solution is provided.

By operating a flexible service model, we help clients manage various combinations of payroll services, HR management, time and attendance management, talent management and benefits management, depending on the country in which the solution is provided.

We pay over 15 million workers outside the United States with our in-country solutions and with ADP GlobalView, ADP Celergo/Streamline and ADP iHCM – our simplified and intuitive multi-country solutions.

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None of our major business units has a single homogeneous client base or market.

While concentrations of clients exist in specific industries, no one client, industry or industry group is material to our overall

We are a leader in each of our major service offerings and do not believe any of our major services or business units is subject to unique market risk.

While concentrations of clients exist in specific industries, no one client, industry or industry group is material to our overall revenues.

We are a leader in each of our major service

offerings and do not believe any of our major services or business units is subject to unique market risk.

The industries in which we operate are highly competitive.

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Competition for business outsourcing solutions is primarily based on product and service quality, reputation, ease of use and accessibility of technology, breadth of offerings, and price.

We believe that we are competitive in each of these areas and that our leading-edge technology, together with our commitment to service excellence, distinguishes us from our competitors.

We believe that we are competitive in each of these areas and that our leading-edge technology (together with our data) and commitment to service excellence, distinguishes us from our competitors.

INDUSTRY REGULATION

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We have, and continue to enhance, compliance programs and policies to monitor and address the legal and regulatory requirements applicable to our operations and client solutions, including dedicated compliance personnel and training programs.

As one of the world’s largest providers of HCM solutions, our systems contain a significant amount of sensitive data related to clients, employees of our clients, vendors and our employees.

We are, therefore, subject to compliance obligations under federal, state and foreign privacy, data protection and cybersecurity-related laws, including federal, state and foreign security breach notification laws with respect to both client employee data and our own employee data.

The changing nature of these comprehensive laws in the United States, Europe and elsewhere, including the European Union’s (the “EU”) General Data Protection Regulation (the “GDPR”) and the California Consumer Privacy Act (the “CCPA”), which will be replaced by the voter-approved California Privacy Rights Act of 2020 (the “CPRA”), impact our processing of personal information of our employees and on behalf of our clients.

As one of the world’s largest providers of HCM solutions, our systems contain a significant amount of sensitive data

related to clients, employees of our clients, vendors and our employees.

We are, therefore, subject to compliance obligations under federal, state and foreign privacy, data protection, artificial intelligence (AI) and cybersecurity-related laws, including federal, state and foreign security breach notification laws with respect to both client employee data and our own employee data.

The changing nature of these comprehensive laws in the United States, Europe and elsewhere, including the European Union’s (the “EU”) General Data Protection Regulation (the “GDPR”) and the California Privacy Rights Act of 2020 (the “CPRA”), impact our processing of personal information of our employees and on behalf of our clients.

The GDPR imposes strict and comprehensive requirements on us as both a data controller and a data processor.

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Compliance with our BCRs permits us to process and transfer personal data across borders in accordance with the GDPR and other data protection laws in the EU.

The CCPA and CPRA require companies to provide new data disclosure, access, deletion and opt-out rights to consumers in California.

In addition, in the United States, the Health Insurance Portability and Accountability Act of 1996 applies to our insurance services businesses and ADP TotalSource.

The CPRA requires companies to provide data disclosure, access, deletion and opt-out rights to consumers in California.

In the area of artificial intelligence, some states and localities in the U.S.

have proposed or already enacted legislation and proposals are pending in the European Union and elsewhere that would impose obligations on how we develop and market AI-based products and solutions.

Additionally, self-regulatory frameworks like the National Institute of Standards and Technology AI Risk Management Framework are being promulgated and adherence to these may become an industry standard or client expectation.

In the United States, the Health Insurance Portability and Accountability Act of 1996 applies to our insurance services businesses and ADP TotalSource.

As part of our payroll and payroll tax management services, we move client funds to taxing authorities, our clients’ employees and other payees via electronic transfer, direct deposit, prepaid access and ADPCheck.

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money movement it oversees and manages via ADP Client Trust, is subject to comprehensive ongoing oversight and regulation by the OCC.

We have surrendered all state money transmitter licenses as the activity previously managed through those licenses was moved into the ADP Client Trust managed by ADP Trust Bank, which is federally exempt from state money transmitter regulation with respect to the client money movement activity that it manages.

In addition, our U.S.

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prepaid access offering are subject to the anti-money laundering and reporting provisions of The Bank Secrecy Act of 1970, as amended by the USA PATRIOT Act of 2001 (the “BSA”).

Elements of our money

movement activities outside of the United States are subject to licensing and similar anti-money laundering and reporting laws and requirements in certain countries in which we provide such services.

Our employee screening and selection services business offers background checking services that are subject to the Fair Credit Reporting Act.

ADP TotalSource is subject to various state licensing requirements and maintains certifications with the Internal Revenue Service.

Because ADP TotalSource is a co-employer with respect to its clients’ worksite employees, we may be subject to limited obligations and responsibilities of an employer under federal and state tax, insurance and employment laws.

Our registered investment adviser provides certain investment management and advisory services to retirement plan administrators under a heightened “fiduciary” standard and is regulated by the SEC and the U.S.

of our money movement activities outside of the United States are subject to licensing and similar anti-money laundering and reporting laws and requirements in certain countries in which we provide such services.

Our employee background screening services business offers background checking services that are subject to the Fair Credit Reporting Act.

ADP TotalSource is subject to various state licensing requirements and, as a Certified PEO, maintains certifications with the Internal Revenue Service.

Because ADP TotalSource is a co-employer with respect to its clients’ worksite employees, we may be subject to certain obligations and responsibilities of an employer under federal and state tax, insurance and employment laws, including worksite employee payroll obligations and with respect to claimed employee retention and other tax credits.

ADP Strategic Plan Services, LLC, our registered investment adviser, provides certain investment management and advisory services to retirement plan administrators under a heightened “fiduciary” standard and is regulated by the SEC and the U.S.

Department of Labor.

ADP Broker-Dealer, Inc., which supports our Retirement Services business, is a registered broker-dealer regulated by the SEC and the Financial Industry Regulatory Authority (FINRA).

Our current and future offerings in the payments and/or consumer space may also subject us to additional laws and regulations, which could also require corresponding compliance programs and policies and dedicated resources.

In addition, many of our businesses offer solutions that assist our clients in complying with certain U.S.

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Similarly, the ADP Client Trust and ADP Trust Bank provide client funds with a level of protection that most competitors cannot offer.

We continue to expand our approach to compliance and are adopting “Compliance by design” as a tenet that prioritizes compliance in designing and developing new solutions to support our clients.

We continue to expand our

approach to compliance and are adopting “Compliance by design” as a tenet that prioritizes compliance in designing and developing new solutions to support our clients.

The foregoing description does not include an exhaustive list of the laws and regulations governing or impacting our business.

See the discussion contained in the “Risk Factors” section in Part I, Item 1A of this Annual Report on Form 10-K for information regarding changes in laws

and regulations that could have a materially adverse effect on our reputation, results of operations or financial condition or have other adverse consequences.

See the discussion contained in the “Risk Factors” section in Part I, Item 1A of this Annual Report on Form 10-K for information regarding changes in laws and regulations that could have a materially adverse effect on our reputation, results of operations or financial condition or have other adverse consequences.

CLIENTS AND CLIENT CONTRACTS

We provide services to more than 990,000 clients.

We provide services to more than 1 million clients.

In fiscal 2023, no single client or group of affiliated clients accounted for revenues in excess of 2% of our annual consolidated revenues.

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SYSTEMS DEVELOPMENT AND PROGRAMMING

During the fiscal years ended June 30, 2022, 2021 and 2020, we invested approximately $1.210 billion, $1.016 billion and $947 million, respectively, in systems development and programming.

During the fiscal years ended June 30, 2023, 2022 and 2021, we invested approximately $1.195 billion, $1.210 billion and $1.016 billion, respectively, in systems development and programming.

These investments include expenses for activities such as the development of new products, maintenance expenses associated with our existing technologies, purchases of new software and software licenses, and additions to software resulting from business combinations.

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Our Human Capital Management (HCM) strategy is simple, our people are one of our most valuable assets and we are committed to valuing, developing and engaging them.

Our Chief Human Resources Officer (CHRO), together with our Chief Diversity and Talent Officer, manages our HCM strategy and related programs and initiatives, as well as our talent strategy.

Our CHRO, along with our CEO, as appropriate, regularly updates and supports our Compensation and Management Development Committee of the Board (“CMDC”) as well as the Board of Directors on HCM matters, including culture, engagement, and diversity and inclusion.

Our Chief Human Resources Officer (CHRO), together with our Executive Leadership Team, manages our HCM strategy and related programs and initiatives, as well as our talent strategy.

Our CHRO, along with our CEO, as

appropriate, regularly updates and supports our Compensation and Management Development Committee of the Board (“CMDC”) as well as the Board of Directors on HCM matters, including culture, engagement, and diversity, equity, inclusion and belonging.

The CMDC is responsible for these matters, as well as our executive compensation program, management succession planning and talent development, and company-wide equity-based plans.

Our Employees and Demographics

Our Associates and Demographics

As of June 30, 2023 , our global team of associates consisted of approximately 63,000 persons.

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Along with many of our world-class clients, we leverage our innovative StandOut® powered by ADP platform, to drive talent engagement, performance management and activation.

We issue quarterly global StandOut® Engagement Pulse® and Performance Pulse® surveys to ensure that all associates can share how they feel about their work and their team, and for us to get a snapshot of engagement across the globe.

We issue quarterly global

StandOut® Engagement Pulse® and Performance Pulse® surveys to ensure that all associates can share with their leaders how they feel about their work and their colleagues, and for us to get a snapshot of engagement across the globe.

The strength of our ADP team comes from what each one of us offers each other, our clients and our community.

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Diversity, equity and inclusion are a cornerstone of our one-of-a-kind culture.

We value diverse perspectives and believe that our associates and their best ideas thrive in a

diverse and inclusive environment.

We value diverse perspectives and believe that our associates and their best ideas thrive in a diverse and inclusive environment.

We strive to reflect the diversity of the communities and clients we serve and are firmly focused on ensuring that all our associates are welcomed and enjoy a deep sense of belonging.

We have a number of initiatives to strengthen and further cultivate our diverse and inclusive culture, starting with our Talent Task Force for all of our people leaders, which includes diversity goals for our senior leaders that are tied to their compensation as an incentive to diversify our leadership ranks.

We have a number of initiatives to strengthen and further cultivate our inclusive and diverse culture, starting with our Talent Task Force for all of our people leaders, which includes diversity goals for our senior leaders that are tied to their compensation as an incentive to diversify our leadership ranks.

Our Workforce Diversity Initiative uses data analysis to identify and focus on opportunities to increase the number of underrepresented associates in our workforce to better reflect the communities we serve.

Our voluntary business resource groups (BRGs), which cover a broad array of diverse associates that share common interests and experiences, make us stronger by promoting diversity and cultural awareness, accelerating associate engagement, retention and career development, and helping build relationships with diverse markets in our communities.

During our fiscal 2022, we undertook and implemented several initiatives that underpin our culture, values and talent practices, including:

• Continuing to eliminate a college degree requirement to expand the applicant pool for non-specialized roles, such as those in our Sales organization;

• Launching ADP’s Impact Council, activating top executives to align their business unit practices and outcomes with our diversity, equity and inclusion strategy;

• Establishing partnerships with the National Black MBA Association, the United Negro College Fund and Prospanica to further diversify our talent pipeline and educate and develop their members.

Our voluntary business resource groups (BRGs), which cover a broad array of diverse associates that share common interests and experiences, make us stronger by promoting diversity and cultural awareness, accelerating associate engagement, retention and career development, helping build relationships with diverse markets in our communities, and promoting the conservation and restoration of natural resources.

We have undertaken and implemented several initiatives that underpin our culture, values and talent practices, including:

• Continuing to eliminate a college degree requirement to expand the applicant pool for non-specialized roles, such as those in our sales, service and implementation and technology organizations;

• Launching ADP’s Impact Council, activating top executives to align their business unit practices and

outcomes with our diversity, equity and inclusion strategy;

• Establishing partnerships with the National Black MBA Association, the United Negro College Fund, Prospanica, the Anita Borg Institute for Women and Technology and Disability:IN to further diversify our talent pipeline and educate and develop their members.

In addition, we are deeply committed to fair and equitable pay, which is critical to creating a diverse, inclusive and engaging culture.

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Our commitment to building a better world of work and creating a workplace where everyone can thrive has led to recognition across the globe, including Fortune’s World’s Most Admired Companies (17 consecutive years);

Best Place to Work for LGBTQ+ Equality (13th perfect score on the Human Rights Campaign Foundation’s Corporate Equality Index);

Best Place to Work for LGBTQ+ Equality (13 consecutive perfect scores on the Human Rights Campaign Foundation’s Corporate Equality Index);

DiversityInc Top 50 Companies for Diversity;

Seramount’s Best Companies.

for Multicultural Women;

Barron’s 100 Most Sustainable Companies;

Newsweek’s America’s Most Responsible Companies;

and Newsweek’s America’s Most Trustworthy Companies.

and Newsweek’s America’s Most Responsible Companies.

Our Talent Strategy

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This has allowed us to be consistently recognized by esteemed organizations as an employer of choice year after year.

We invest in our team members to ensure they have the skills necessary to succeed and grow their careers.

The ADP talent journey begins with an innovative, engaging and comprehensive onboarding process followed by extensive training and mentorship.

We invest in our team members so that they have the skills necessary to succeed and grow their careers.

The ADP talent journey begins with an innovative, engaging and comprehensive onboarding process followed by extensive

training and mentorship.

Thereafter, our associates can access a wide range of professional and functional skills training to further continue and enhance performance and career development.

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Our associates receive a competitive benefits package, intended to help them enjoy physical, emotional and financial well-being and be productive members of their teams.

While exact benefits vary by associate and region, they typically include health care coverage, a 401(k) plan with company matching contributions, life insurance, paid time off and tuition reimbursement.

While exact benefits vary by associate and region, they typically include health care coverage, a 401(k) plan with company matching contributions for U.S.

associates, life insurance, paid time off and tuition reimbursement.

We particularly emphasize benefits that support individual and family needs (parental leave, adoption/fertility benefits and caregiver support), and constantly update our programs according to our associates’ needs.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business