What changed in this filing

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Item 1. Financial Statements

2026-01-29 compared with 2025-10-31 · 226 added, 156 removed, 557 unchanged (41% of the section changed)

4 unchanged sentences

(In millions, except per share amounts)

Three Months Ended

September 30,

Three Months Ended Six Months Ended

December 31, December 31,

2025 2024 2025 2024

Revenues, other than interest on funds held

11 unchanged sentences

TOTAL EXPENSES 4,081.9 3,878.2 8,059.7 7,576.4

Other income, net ( 110.1 ) ( 101.7 )

Other (income)/loss, net ( 105.8 ) ( 91.1 ) ( 215.9 ) ( 192.8 )

EARNINGS BEFORE INCOME TAXES 1,383.2 1,261.3 2,690.7 2,497.5

5 unchanged sentences

Diluted weighted average shares outstanding 404.7 409.0 405.5 409.3

(A) Professional Employer Organization (“PEO”) revenues are net of direct pass-through costs, primarily consisting of payroll wages and payroll taxes of $ 18,534.4 million and $ 17,193.6 million for the three months ended September 30, 2025 and 2024, respectively.

(A) Professional Employer Organization (“PEO”) revenues are net of direct pass-through costs, primarily consisting of payroll wages and payroll taxes of $ 20,546.9 million and $ 19,420.8 million for the three months ended December 31, 2025 and 2024, respectively, and $ 39,081.3 million and $ 36,614.4 million for the six months ended December 31, 2025 and 2024, respectively.

See notes to the Consolidated Financial Statements.

3 unchanged sentences

(In millions)

Three Months Ended

September 30,

Three Months Ended Six Months Ended

December 31, December 31,

2025 2024 2025 2024

Net earnings $ 1,062.0 $ 963.2 $ 2,075.1 $ 1,919.5

Other comprehensive income:

Other comprehensive income/(loss):

Currency translation adjustments 3.9 ( 101.0 ) ( 11.6 ) ( 51.8 )

Unrealized net gains on available-for-sale securities 215.7 864.4

Unrealized net gains/(losses) on available-for-sale securities 107.5 ( 423.8 ) 323.2 440.5

Tax effect ( 22.7 ) 94.2 ( 71.0 ) ( 103.6 )

1 unchanged sentence

Tax effect — ( 0.1 ) 0.3 ( 0.1 )

Unrealized losses on cash flow hedging activities — ( 12.5 )

Unrealized gains/(losses) on cash flow hedging activities — — — ( 12.5 )

Tax effect — — — 3.1

Amortization of unrealized losses on cash flow hedging activities 1.5 1.1

Amortization of unrealized (gains)/losses on cash flow hedging activities 1.6 1.4 3.0 2.5

Tax effect ( 0.4 ) ( 0.3 ) ( 0.7 ) ( 0.6 )

1 unchanged sentence

Tax effect ( 0.3 ) ( 0.2 ) ( 0.6 ) ( 0.5 )

Other comprehensive income, net of tax 152.7 708.1

Comprehensive income $ 1,165.7 $ 1,664.4

Other comprehensive income/(loss), net of tax 91.0 ( 428.5 ) 243.7 279.6

Comprehensive income/(loss) $ 1,153.0 $ 534.7 $ 2,318.8 $ 2,199.1

See notes to the Consolidated Financial Statements.

3 unchanged sentences

(In millions, except per share amounts)

September 30, June 30,

December 31, June 30,

Current assets:

40 unchanged sentences

authorized, 1,000.0 shares;

issued, 638.7 shares at September 30, 2025 and June 30, 2025;

outstanding, 404.9 and 405.3 shares at September 30, 2025 and June 30, 2025, respectively

issued, 638.7 shares at December 31, 2025 and June 30, 2025;

outstanding, 403.0 and 405.3 shares at December 31, 2025 and June 30, 2025, respectively

Capital in excess of par value 2,936.8 2,788.3

1 unchanged sentence

Treasury stock - at cost:

233.8 and 233.4 shares at September 30, 2025 and June 30, 2025, respectively

235.7 and 233.4 shares at December 31, 2025 and June 30, 2025, respectively

( 21,960.6 ) ( 21,021.4 )

Accumulated other comprehensive loss ( 730.7 ) ( 883.4 )

Accumulated other comprehensive income/(loss) ( 639.7 ) ( 883.4 )

Total stockholders’ equity 6,393.0 6,188.0

Total liabilities and stockholders’ equity $ 84,639.4 $ 53,369.3

(A ) As of September 30, 2025, $ 247.4 million of short-term marketable securities have been pledged as collateral under the Company's reverse repurchase agreements.

(A ) As of December 31, 2025, $ 45.7 million of short-term marketable securities and $ 0.1 million of cash and cash equivalents have been pledged as collateral under the Company's reverse repurchase agreements.

As of June 30, 2025, $ 38.4 million of short-term marketable securities have been pledged as collateral under the Company's reverse repurchase agreements (see Note 10).

4 unchanged sentences

(In millions)

Three Months Ended

September 30,

Six Months Ended

Cash Flows from Operating Activities:

6 unchanged sentences

Bad debt expense 22.5 23.1

Net pension income ( 3.8 ) ( 4.9 )

Net pension (income)/loss ( 7.7 ) ( 9.8 )

Net accretion of discounts and amortization of premiums on available-for-sale securities ( 45.4 ) ( 31.5 )

1 unchanged sentence

Changes in operating assets and liabilities:

Decrease in accounts receivable 102.0 115.4

Decrease/(increase) in accounts receivable 145.9 ( 94.7 )

Increase in deferred contract costs ( 556.4 ) ( 565.3 )

13 unchanged sentences

Cash Flows from Financing Activities:

Net increase/(decrease) in client funds obligations 573.1 ( 10,870.5 )

Net increase in client funds obligations 36,273.1 9,090.4

Net cash distributed from the Internal Revenue Service ( 1.2 ) ( 487.6 )

5 unchanged sentences

Dividends paid ( 1,256.0 ) ( 1,145.1 )

Net proceeds related to reverse repurchase agreements 214.8 297.1

Net proceeds from issuance of commercial paper 438.5 4,375.4

Net cash flows provided by/(used in) financing activities 164.1 ( 6,491.5 )

Net (payments)/proceeds related to reverse repurchase agreements 18.5 ( 344.7 )

Net (payments)/proceeds related to commercial paper ( 4,769.5 ) —

Net cash flows provided by financing activities 29,342.6 7,482.5

Effect of exchange rate changes on cash, cash equivalents, restricted cash, and restricted cash equivalents 28.8 ( 36.7 )

53 unchanged sentences

The following tables provide details of the Company's revenues and includes a reconciliation to the Company’s reportable segments:

Three Months Ended

September 30,

Three Months Ended Six Months Ended

December 31, December 31,

Types of Revenues 2025 2024 2025 2024

5 unchanged sentences

Total Revenues $ 5,359.3 $ 5,048.4 $ 10,534.5 $ 9,881.1

Reconciliation of disaggregated revenue to our reportable segments for the three months ended September 30, 2025:

Reconciliation of disaggregated revenue to our reportable segments for the three months ended December 31, 2025:

Types of Revenues Employer Services PEO Other Total

5 unchanged sentences

Total Segment Revenues $ 3,607.4 $ 1,755.2 $ ( 3.3 ) $ 5,359.3

Reconciliation of disaggregated revenue to our reportable segments for the three months ended September 30, 2024:

Reconciliation of disaggregated revenue to our reportable segments for the three months ended December 31, 2024:

Types of Revenues Employer Services PEO Other Total

5 unchanged sentences

Total Segment Revenues $ 3,388.5 $ 1,663.3 $ ( 3.4 ) $ 5,048.4

Reconciliation of disaggregated revenue to our reportable segments for the six months ended December 31, 2025:

Types of Revenues Employer Services PEO Other Total

HCM $ 4,396.7 $ — $ ( 5.2 ) $ 4,391.5

HRO, excluding PEO zero-margin benefits pass-throughs 712.3 1,180.1 ( 1.6 ) 1,890.8

PEO zero-margin benefits pass-throughs — 2,257.2 — 2,257.2

Global 1,399.5 — — 1,399.5

Interest on funds held for clients 590.1 5.4 — 595.5

Total Segment Revenues $ 7,098.6 $ 3,442.7 $ ( 6.8 ) $ 10,534.5

Reconciliation of disaggregated revenue to our reportable segments for the six months ended December 31, 2024:

Types of Revenues Employer Services PEO Other Total

HCM $ 4,162.0 $ — $ ( 4.7 ) $ 4,157.3

HRO, excluding PEO zero-margin benefits pass-throughs 681.3 1,128.6 ( 1.5 ) 1,808.4

PEO zero-margin benefits pass-throughs — 2,104.4 — 2,104.4

Global 1,284.9 — — 1,284.9

Interest on funds held for clients 521.3 4.8 — 526.1

Total Segment Revenues $ 6,649.5 $ 3,237.8 $ ( 6.2 ) $ 9,881.1

Contract Balances

1 unchanged sentence

Therefore, the Company does not recognize a contract asset or liability resulting from the timing of revenue recognition and invoicing.

Changes in deferred revenues related to set up fees for the three months ended September 30, 2025 were as follows:

Changes in deferred revenues related to set up fees for the six months ended December 31, 2025 were as follows:

Contract Liability

3 unchanged sentences

Currency translation adjustments 1.0

Contract liability, September 30, 2025 $ 520.6

Contract liability, December 31, 2025 $ 514.6

In October 2024, the Company acquired WorkForce Software, a premier workforce management solutions provider that specializes in supporting large, global enterprises, utilizing cash on hand.

22 unchanged sentences

The useful lives for intangible assets were determined based upon the remaining useful economic lives of the intangible assets that are expected to contribute directly or indirectly to the future cash flows.

The estimated fair value of intangible assets and related useful lives as included in the estimated purchase price allocation include:

The estimated fair value of intangible assets and related useful lives as included in the purchase price allocation include:

Estimated Fair Value Estimated Useful Life

7 unchanged sentences

Shares Diluted

Three Months Ended September 30, 2025

Three Months Ended December 31, 2025

Net earnings $ 1,062.0 $ 1,062.0

1 unchanged sentence

EPS $ 2.63 $ 2.62

Three Months Ended September 30, 2024

Three Months Ended December 31, 2024

Net earnings $ 963.2 $ 963.2

1 unchanged sentence

EPS $ 2.36 $ 2.35

Shares that could potentially dilute basic EPS in the future include outstanding share-based compensation awards, discussed in Note 12.

For the three months ended September 30, 2025, there were 0.3 million shares excluded from the calculation of diluted EPS because their inclusion would have been anti-dilutive.

For the three months ended September 30, 2024, there were no shares excluded from the calculation of diluted EPS.

Six Months Ended December 31, 2025

Net earnings $ 2,075.1 $ 2,075.1

Weighted average shares (in millions) 404.4 0.4 0.7 405.5

EPS $ 5.13 $ 5.12

Six Months Ended December 31, 2024

Net earnings $ 1,919.5 $ 1,919.5

Weighted average shares (in millions) 407.7 0.7 0.9 409.3

EPS $ 4.71 $ 4.69

Shares that could potentially dilute basic EPS in the future include outstanding share-based compensation awards, which are discussed in Note 12.

For the three and six months ended December 31, 2025, there were 0.6 million and 0.4 million shares excluded from the calculation of diluted EPS, respectively, because their inclusion would have been anti-dilutive.

For the three and six months ended December 31, 2024, there were no shares excluded from the calculation of diluted EPS.

Other (Income)/Expense, Net

Three Months Ended

September 30,

Three Months Ended Six Months Ended

December 31, December 31,

2025 2024 2025 2024

Interest income on corporate funds $ ( 96.8 ) $ ( 83.9 ) $ ( 198.3 ) $ ( 175.5 )

2 unchanged sentences

Non-service components of pension income, net (see Note 12) ( 7.1 ) ( 7.8 ) ( 14.2 ) ( 15.7 )

Other income, net $ ( 110.1 ) $ ( 101.7 )

Net (gain)/loss on ADP Ventures' investments ( 2.2 ) — ( 2.2 ) —

Other (income)/loss, net $ ( 105.8 ) $ ( 91.1 ) $ ( 215.9 ) $ ( 192.8 )

Corporate Investments and Funds Held for Clients

Corporate investments and funds held for clients at September 30, 2025 and June 30, 2025 were as follows:

September 30, 2025

Corporate investments and funds held for clients at December 31, 2025 and June 30, 2025 were as follows:

December 31, 2025

Losses Fair Market Value (A)

21 unchanged sentences

Treasury securities 8,416.8 85.6 ( 43.7 ) 8,458.7

Canadian government obligations and Canadian government agency obligations

1,972.0 16.4 ( 32.4 ) 1,956.0

Canadian government obligations and

Canadian government agency obligations 1,972.0 16.4 ( 32.4 ) 1,956.0

Asset-backed securities 1,837.8 22.6 ( 15.5 ) 1,844.9

8 unchanged sentences

The Company concurred with and did not adjust the prices obtained from the independent pricing service.

The Company had no available-for-sale securities included in Level 1 or Level 3 at September 30, 2025.

The unrealized losses and fair values of available-for-sale securities that have been in an unrealized loss position for a period of less than and greater than 12 months as of September 30, 2025, are as follows:

September 30, 2025

The Company had no available-for-sale securities included in Level 1 or Level 3 at December 31, 2025.

The unrealized losses and fair values of available-for-sale securities that have been in an unrealized loss position for a period of less than and greater than 12 months as of December 31, 2025, are as follows:

December 31, 2025

Securities in Unrealized Loss Position Less Than 12 Months Securities in Unrealized Loss Position Greater Than 12 Months Total

17 unchanged sentences

Treasury securities ( 0.8 ) 732.2 ( 42.9 ) 1,801.7 ( 43.7 ) 2,533.9

Canadian government obligations and Canadian government agency obligations

( 1.4 ) 219.2 ( 31.0 ) 870.2 ( 32.4 ) 1,089.4

Canadian government obligations and

Canadian government agency obligations ( 1.4 ) 219.2 ( 31.0 ) 870.2 ( 32.4 ) 1,089.4

Asset-backed securities ( 0.2 ) 101.4 ( 15.3 ) 481.4 ( 15.5 ) 582.8

3 unchanged sentences

$ ( 10.2 ) $ 1,963.9 $ ( 672.1 ) $ 16,184.9 $ ( 682.3 ) $ 18,148.8

At September 30, 2025, Corporate bonds include investment-grade debt securities with a wide variety of issuers, industries, and sectors, primarily carrying credit ratings of A and above, and have maturities ranging from October 2025 through September 2035.

At September 30, 2025, asset-backed securities include AAA-rated senior tranches of securities with predomi nantly prime collateral of fixed-rate auto loan, credit card, and device payment plan agreement receivables with fair values of $ 936.6 million, $ 584.7 million, and $ 313.6 million, respectively.

At December 31, 2025, Corporate bonds include investment-grade debt securities with a wide variety of issuers, industries, and sectors, primarily carrying credit ratings of A and above, and have maturities ranging from January 2026 through December 2035.

At December 31, 2025, asset-backed securities include AAA-rated senior tranches of securities with predomi nantly prime collateral primarily comprised of fixed-rate auto loan, credit card, and device payment plan agreement receivables with fair values of $ 894.9 million, $ 644.3 million, and $ 313.7 million, respectively.

These securities are collateralized by the cash flow s of the underlying pools of receivables.

The primary risk associated with these securities is the collection risk of the underlying receivables.

All collateral on such asset-backed securities has performed as expected through September 30, 2025 .

At September 30, 2025, U.S.

All collateral on such asset-backed securities has performed as expected through December 31, 2025 .

At December 31, 2025, U.S.

government a gency securities primarily include debt directly issued by Federal Farm Credit Banks and Federal Home Loan Banks with fair values of $ 636.1 million and $ 137.2 million, respectively.

government agency securities represent senior, unsecured, non-callable debt that primarily carry ratings of Aa1 by Moody's, and AA+ by Standard & Poor's, with maturities ranging from November 2025 through May 2035.

At September 30, 2025, other securities primarily include AA-rated United Kingdom Gilt securities of $ 642.5 million, municipal bonds, diversified with a variety of issuers, with credit ratings of A and above with fair val ues of $ 538.6 million, commercial mortgage-backed securities of $ 418.6 million, and AAA-rated supranational bonds of $ 232.6 million.

At December 31, 2025, other securities primarily include AA-rated United Kingdom Gilt securities of $ 648.7 million, municipal bonds, diversified with a variety of issuers, with credit ratings of A and above with fair val ues of $ 549.9 million, commercial mortgage-backed securities of $ 387.0 million, and AAA-rated supranational bonds of $ 232.9 million.

Classification of corporate investments on the Consolidated Balance Sheets is as follows:

September 30, June 30,

December 31, June 30,

Corporate investments:

4 unchanged sentences

Funds held for clients have been invested in the following categories:

September 30, June 30,

December 31, June 30,

Funds held for clients:

5 unchanged sentences

The client funds obligations represent liabilities that will be repaid within one year of the balance sheet date.

The Company has reported client funds obligations as a current liability on the Consolidated Balance Sheets totalin g $ 31,845.6 million and $ 31,343.3 million at September 30, 2025 and June 30, 2025, respectively.

The Company has reported client funds obligations as a current liability on the Consolidated Balance Sheets totalin g $ 67,613.7 million and $ 31,343.3 million at December 31, 2025 and June 30, 2025, respectively.

The Company has classified funds held for clients as a current asset since these funds are held solely for the purpose of satisfying the client funds obligations.

Of the Company’s funds held for clients at September 30, 2025 and June 30, 2025, $ 28,332.9 million and $ 27,355.2 million, respectively, are held in the grantor trust.

Of the Company’s funds held for clients at December 31, 2025 and June 30, 2025, $ 61,953.0 million and $ 27,355.2 million, respectively, are held in the grantor trust.

The liabilities held within the trust are intercompany liabilities to other Company subsidiaries and eliminate in consolidation.

2 unchanged sentences

The Company has reported the cash flows related to the cash received from and paid on behalf of clients on a net basis within net increase / (decrease) in client funds obligations in the financing activities section of the Statements of Consolidated Cash Flows.

All available-for-sale securities were rated as investment grade at September 30, 2025.

Expected maturities of available-for-sale securities at September 30, 2025 are as follows:

All available-for-sale securities were rated as investment grade at December 31, 2025.

Expected maturities of available-for-sale securities at December 31, 2025 are as follows:

One year or less $ 7,630.4

9 unchanged sentences

The components of operating lease expense were as follows:

Three Months Ended

September 30,

Three Months Ended Six Months Ended

December 31, December 31,

2025 2024 2025 2024

Operating lease cost $ 31.4 $ 27.3 $ 61.9 $ 54.8

3 unchanged sentences

The following table provides supplemental cash flow information related to the Company's leases:

Three Months Ended

September 30,

Six Months Ended

Cash paid for operating lease liabilities $ 64.9 $ 59.3

1 unchanged sentence

Other information related to our operating lease liabilities is as follows:

September 30, June 30,

December 31, June 30,

Weighted-average remaining lease term (in years) 6 6

1 unchanged sentence

Current operating lease liability $ 107.0 $ 100.8

As of September 30, 2025, maturities of operating lease liabilities are as follows:

Nine months ending June 30, 2026 $ 82.9

As of December 31, 2025, maturities of operating lease liabilities are as follows:

Six months ending June 30, 2026 $ 62.6

Twelve months ending June 30, 2027 113.4

7 unchanged sentences

Goodwill and Intangible Assets, net

Changes in goodwill for the three months ended September 30, 2025 are as follows:

Changes in goodwill for the six months ended December 31, 2025 are as follows:

Services Total

2 unchanged sentences

Currency translation adjustments ( 1.5 ) — ( 1.5 )

Balance at September 30, 2025 $ 3,270.4 $ 4.8 $ 3,275.2

Balance at December 31, 2025 $ 3,289.4 $ 4.8 $ 3,294.2

Components of intangible assets, net, are as follows:

September 30, June 30,

December 31, June 30,

Intangible assets:

12 unchanged sentences

The weighted average remaining useful life of the intangible assets is 6 years ( 6 years for software and software licenses, 5 years for customer contracts and lists, and 3 years for other intangibles).

Amortization of intangible assets was $ 95.4 million and $ 89.0 million for the three months ended September 30, 2025 and 2024, respectively.

Amortization of intangible assets was $ 95.8 million and $ 100.7 million for the three months ended December 31, 2025 and 2024, respectively, and $ 191.3 million and $ 189.7 million for the six months ended December 31, 2025 and 2024, respectively.

Estimated future amortization expenses of the Company's existing intangible assets are as follows:

Nine months ending June 30, 2026 $ 327.2

Six months ending June 30, 2026 $ 220.5

Twelve months ending June 30, 2027 $ 348.3

10 unchanged sentences

The primary uses of the credit facilities are to provide liquidity to the commercial paper program and funding for general corporate purposes, if necessary.

The Company had no borrowings through September 30, 2025 under the credit agreements.

The Company had no borrowings through December 31, 2025 under the credit agreements.

The Company's U.S.

4 unchanged sentences

Maturities of commercial paper can range from overnight to up to 364 days.

As of September 30, 2025 and June 30, 2025 the Company had $ 5.2 billion and $ 4.8 billion of commercial paper outstanding, which were repaid in early October 2025 and early July 2025, respectively.

As of December 31, 2025 the company had no commercial paper outstanding.

As of June 30, 2025 the Company had $ 4.8 billion of commercial paper outstanding, which was repaid in early July 2025.

Details of the borrowings under the commercial paper program are as follows:

Three Months Ended

September 30,

Three Months Ended Six Months Ended

December 31, December 31,

2025 2024 2025 2024

Average daily borrowings (in billions) $ 4.4 $ 4.5 $ 4.5 $ 4.7

Weighted average interest rates 4.0 % 4.8 % 4.2 % 5.1 %

Weighted average maturity (approximately in days) 2 days 2 days

Weighted average maturity (approximately in days) 2 days 2 days 2 days 2 days

The Company’s U.S., Canadian and United Kingdom short-term funding requirements related to client funds obligations are sometimes obtained on a secured basis through the use of reverse repurchase agreements, which are collateralized principally by government and government agency securities, rather than liquidating previously-collected client funds that have already been invested in available-for-sale securities.

These agreements generally have terms ranging from overnight to up to five business days.

As of September 30, 2025 and June 30, 2025, the Company had $ 247.4 million and $ 38.4 million of outstanding obligations related to reverse repurchase agreements, respectively.

As of December 31, 2025 and June 30, 2025, the Company had $ 45.8 million and $ 38.4 million of outstanding obligations related to reverse repurchase agreements, respectively.

The Company has $ 7.5 billion available on a committed basis under the U.S.

1 unchanged sentence

Details of the reverse repurchase agreements are as follows:

Three Months Ended

September 30,

Three Months Ended Six Months Ended

December 31, December 31,

2025 2024 2025 2024

Average outstanding balances (in billions) $ 4.3 $ 3.7 $ 4.4 $ 3.7

2 unchanged sentences

The Notes are senior unsecured obligations, and interest is payable in arrears, semi-annually.

The principal amounts and associated effective interest rates of the Notes and other debt as of September 30, 2025 and June 30, 2025, are as follows:

Debt instrument Effective Interest Rate September 30, 2025 June 30, 2025

The principal amounts and associated effective interest rates of the Notes and other debt as of December 31, 2025 and June 30, 2025, are as follows:

Debt instrument Effective Interest Rate December 31, 2025 June 30, 2025

Fixed-rate 1.700 % notes due May 15, 2028

11 unchanged sentences

Total long-term debt $ 3,976.4 $ 3,974.7

(a) - Current portion of long-term debt as of September 30, 2025 is included within accrued expenses and other current liabilities on the Consolidated Balance Sheets.

(a) - Current portion of long-term debt as of December 31, 2025 is included within accrued expenses and other current liabilities on the Consolidated Balance Sheets.

The effective interest rates for the Notes include the interest on the Notes and amortization of the discount and debt issuance costs.

As of September 30, 2025, the fair value of the Notes, based on Level 2 inputs, was $ 3,841.6 million.

As of December 31, 2025, the fair value of the Notes, based on Level 2 inputs, was $ 3,860.7 million.

For a description of the fair value hierarchy and the Company's fair value methodologies, including the use of an independent third-party pricing service, see Note 1 “Summary of Significant Accounting Policies” in the Company's Annual Report on Form 10-K for fiscal 2025.

6 unchanged sentences

Time-based restricted stock unit awards and performance-based restricted stock unit awards granted to employees with a home country of the United States are settled in stock, and awards granted to employees with a home country outside the United States are generally settled in cash.

• Restricted Stock.

• Time-Based Restricted Stock Units.

Time-based restricted stock units generally vest ratably over 3 years.

Awards are generally forfeited if the employee ceases to be employed by the Company prior to vesting.

Time-based restricted stock unit awards granted to employees with a home country of the United States are settled in stock and cannot be transferred during the vesting period.

Time-based restricted stock unit awards granted to employees with a home country outside the United States are generally settled in cash and cannot be transferred during the vesting period.

Compensation expense relating to the issuance of share-settled units is measured based on the fair value of the award on the grant date and recognized on a straight-line basis over the vesting period.

Compensation expense relating to the issuance of cash-settled units is recorded over the vesting period and is initially based on the fair value of the award on the grant date and is subsequently remeasured at each reporting date during the vesting period based on the change in the ADP stock price.

Dividend cash equivalents are paid on share-settled units, and dividend cash equivalents are not paid on cash-settled units.

• Performance-Based Restricted Stock Units.

Performance-based restricted stock units generally vest over a one to three year performance period and a subsequent service period of up to 38 months.

Under these programs, the Company communicates “target awards” at the beginning of the performance period with possible payouts at the end of the performance period ranging from 0 % to 200 % of the “target awards.” Awards are generally forfeited if the employee ceases to be employed by the Company prior to vesting.

Performance-based restricted stock units cannot be transferred and are settled in either cash or stock, depending on the employee's home country.

Compensation expense relating to the issuance of performance-based restricted stock units settled in cash is recognized over the vesting period initially based on the fair value of the award on the grant date with subsequent adjustments to the number of units awarded during the performance period based on probable and actual performance against targets.

In addition, compensation expense is remeasured at each reporting period during the vesting period based on the change in the ADP stock price.

Compensation expense relating to the issuance of performance-based restricted stock units settled in stock is recorded over the vesting period based on the fair value of the award on the grant date with subsequent adjustments to the number of units awarded based on the probable and actual performance against targets.

Dividend equivalents are paid on awards under the performance-based restricted stock unit program.

• Employee Stock Purchase Plan.

The Company offers an employee stock purchase plan that allows eligible employees to purchase shares of common stock at a price equal to 95 % of the market value for the Company's common stock on the last day of the offering period.

This plan has been deemed non-compensatory and, therefore, no compensation expense has been recorded.

The Company currently utilizes treasury stock to satisfy stock option exercises, issuances under the Company's employee stock purchase plan, and restricted stock awards.

From time to time, the Company may repurchase shares of its common stock under its authorized share repurchase program.

The Company repurchased 1.2 million and 1.4 million shares in the three months ended September 30, 2025 and 2024, respectively.

The Company repurchased 1.9 million and 0.9 million shares in the three months ended December 31, 2025 and 2024, respectively, and repurchased 3.2 million and 2.4 million shares in the six months ended December 31, 2025 and 2024, respectively .

The Company considers several factors in determining when to execute share repurchases, including, among other things, actual and potential acquisition activity, cash balances and cash flows, issuances due to employee benefit plan activity, and market conditions.

The following table represents pre-tax stock-based compensation expense for the three months ended September 30, 2025 and 2024, respectively:

Three Months Ended

September 30,

The following table represents pre-tax stock-based compensation expense for the three and six months ended December 31, 2025 and 2024, respectively:

Three Months Ended Six Months Ended

December 31, December 31,

2025 2024 2025 2024

Operating expenses $ 8.5 $ 9.2 $ 17.1 $ 18.3

2 unchanged sentences

Total stock-based compensation expense $ 73.2 $ 79.1 $ 131.9 $ 139.7

During the three months ended September 30, 2025, the following activity occurred under the Company’s existing plans:

Stock Options:

(in thousands) Weighted

Average Price

Options outstanding at July 1, 2025 1,035 $ 164

Options exercised ( 110 ) $ 183

Options forfeited/cancelled — $ —

Options outstanding at September 30, 2025 925 $ 162

Time-Based Restricted Stock Units:

Number of Units

(in thousands)

Restricted units outstanding at July 1, 2025

Restricted units granted

Restricted units vested

Restricted units forfeited

Restricted units outstanding at September 30, 2025

Performance-Based Restricted Stock Units:

Number of Units

(in thousands)

Restricted units outstanding at July 1, 2025

Restricted units granted

Restricted units vested

Restricted units forfeited

Restricted units outstanding at September 30, 2025

Pension Plans

The components of net pension (income)/expense were as follows:

Three Months Ended

September 30,

Three Months Ended Six Months Ended

December 31, December 31,

2025 2024 2025 2024

Service cost – benefits earned during the period $ 2.0 $ 1.5 $ 4.0 $ 3.0

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Net pension (income)/expense $ ( 3.9 ) $ ( 4.9 ) $ ( 7.7 ) $ ( 9.8 )

The effective tax rate for the three months ended September 30, 2025 and 2024 was 22.5 % and 22.6 %, respectively.

The decrease in the effective tax rate is primarily due to lower reserves for uncertain tax positions primarily offset by the cost of an intercompany transfer of certain assets and a lower excess tax benefit on stock-based compensation in the three months ended September 30, 2025.

The effective tax rate for the three months ended December 31, 2025 and 2024 was 23.2 % and 23.6 %, respectively.

The decrease in the effective tax rate is primarily due to lower reserves for uncertain tax positions and a benefit for adjustments to prior year tax liabilities partially offset by a lower excess tax benefit on stock-based compensation in the three months ended December 31, 2025.

The effective tax rate for the six months ended December 31, 2025 and 2024 was 22.9 % and 23.1 %, respectively.

The decrease in the effective tax rate is primarily due to lower reserves for uncertain tax positions partially offset by the cost of an intercompany transfer of certain assets and a lower excess tax benefit on stock-based compensation in the six months ended December 31, 2025.

Commitments and Contingencies

As of December 31, 2025, the Company has purchase commitments of approximately $ 2,332.5 million, including obligations related to software license agreements, third-party software services and purchase and maintenance agreements on our software, equipment, and other assets, of which $ 194.8 million relates to the six months ending June 30, 2026, $ 1,032.7 million relates to the years ending June 30, 2027 through 2028, $ 987.0 million relates to the years ending June 30, 2029 through 2031, and the remaining relates to fiscal years thereafter.

In May 2020, a putative class action complaint was filed against ADP, TotalSource and related defendants in the U.S.

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Three Months Ended

September 30, 2025

December 31, 2025

Common Stock Capital in Excess of Par Value Retained Earnings Treasury Stock AOCI Total

Balance at June 30, 2025 $ 63.9 $ 2,788.3 $ 25,240.6 $ ( 21,021.4 ) $ ( 883.4 ) $ 6,188.0

Balance at September 30, 2025 $ 63.9 $ 2,868.0 $ 25,622.4 $ ( 21,449.8 ) $ ( 730.7 ) $ 6,373.8

Net earnings — — 1,062.0 — — 1,062.0

Other comprehensive income — — — — 152.7 152.7

Other comprehensive income/(loss) — — — — 91.0 91.0

Stock-based compensation expense — 66.3 — — — 66.3

4 unchanged sentences

— — ( 691.8 ) — — ( 691.8 )

Balance at September 30, 2025 $ 63.9 $ 2,868.0 $ 25,622.4 $ ( 21,449.8 ) $ ( 730.7 ) $ 6,373.8

Balance at December 31, 2025 $ 63.9 $ 2,936.8 $ 25,992.6 $ ( 21,960.6 ) $ ( 639.7 ) $ 6,393.0

Three Months Ended

September 30, 2024

December 31, 2024

Common Stock Capital in Excess of Par Value Retained Earnings Treasury Stock AOCI Total

Balance at September 30, 2024 $ 63.9 $ 2,528.6 $ 24,001.2 $ ( 20,144.9 ) $ ( 1,100.2 ) $ 5,348.6

Net earnings — — 963.2 — — 963.2

Other comprehensive income/(loss) — — — — ( 428.5 ) ( 428.5 )

Stock-based compensation expense — 70.2 — — — 70.2

Issuances relating to stock compensation plans — 20.8 — 6.5 — 27.3

Treasury stock acquired ( 0.9 million shares repurchased)

— — — ( 273.9 ) — ( 273.9 )

Dividends declared ($ 1.54 per share)

— — ( 628.8 ) — — ( 628.8 )

Balance at December 31, 2024 $ 63.9 $ 2,619.6 $ 24,335.6 $ ( 20,412.3 ) $ ( 1,528.7 ) $ 5,078.1

Six Months Ended

December 31, 2025

Common Stock Capital in Excess of Par Value Retained Earnings Treasury Stock AOCI Total

Balance at June 30, 2025 $ 63.9 $ 2,788.3 $ 25,240.6 $ ( 21,021.4 ) $ ( 883.4 ) $ 6,188.0

Net earnings — — 2,075.1 — — 2,075.1

Other comprehensive income — — — — 708.1 708.1

Other comprehensive income/(loss) — — — — 243.7 243.7

Stock-based compensation expense — 123.6 — — — 123.6

4 unchanged sentences

— — ( 1,323.1 ) — — ( 1,323.1 )

Balance at September 30, 2024 $ 63.9 $ 2,528.6 $ 24,001.2 $ ( 20,144.9 ) $ ( 1,100.2 ) $ 5,348.6

Balance at December 31, 2025 $ 63.9 $ 2,936.8 $ 25,992.6 $ ( 21,960.6 ) $ ( 639.7 ) $ 6,393.0

Six Months Ended

December 31, 2024

Common Stock Capital in Excess of Par Value Retained Earnings Treasury Stock AOCI Total

Balance at June 30, 2024 $ 63.9 $ 2,406.9 $ 23,622.2 $ ( 19,737.1 ) $ ( 1,808.3 ) $ 4,547.6

Net earnings — — 1,919.5 — — 1,919.5

Other comprehensive income/(loss) — — — — 279.6 279.6

Stock-based compensation expense — 125.0 — — — 125.0

Issuances relating to stock compensation plans — 87.7 — 56.2 — 143.9

Treasury stock acquired ( 2.4 million shares repurchased)

— — — ( 731.4 ) — ( 731.4 )

Dividends declared ($ 2.94 per share)

— — ( 1,206.1 ) — — ( 1,206.1 )

Balance at December 31, 2024 $ 63.9 $ 2,619.6 $ 24,335.6 $ ( 20,412.3 ) $ ( 1,528.7 ) $ 5,078.1

Reclassifications out of Accumulated Other Comprehensive Income/(Loss) (“AOCI”)

1 unchanged sentence

Three Months Ended

September 30, 2025

December 31, 2025

Currency Translation Adjustment Net Gains/Losses on Available-for-sale Securities Cash Flow Hedging Activities Pension Liability Accumulated Other Comprehensive Income/(Loss)

Balance at June 30, 2025 $ ( 289.8 ) $ ( 338.9 ) $ ( 27.7 ) $ ( 227.0 ) $ ( 883.4 )

Other comprehensive (loss)/income before reclassification adjustments ( 15.5 ) 215.7 — — 200.2

Balance at September 30, 2025 $ ( 305.3 ) $ ( 172.7 ) $ ( 26.6 ) $ ( 226.1 ) $ ( 730.7 )

Other comprehensive income/(loss) before reclassification adjustments 3.9 107.5 — — 111.4

Tax effect — ( 22.7 ) — — ( 22.7 )

1 unchanged sentence

Tax effect — — ( 0.4 ) ( 0.3 ) ( 0.7 )

Balance at September 30, 2025 $ ( 305.3 ) $ ( 172.7 ) $ ( 26.6 ) $ ( 226.1 ) $ ( 730.7 )

Balance at December 31, 2025 $ ( 301.4 ) $ ( 87.6 ) $ ( 25.4 ) $ ( 225.3 ) $ ( 639.7 )

Three Months Ended

September 30, 2024

December 31, 2024

Currency Translation Adjustment Net Gains/Losses on Available-for-sale Securities Cash Flow Hedging Activities Pension Liability Accumulated Other Comprehensive Income/(Loss)

Balance at September 30, 2024 $ ( 329.6 ) $ ( 511.3 ) $ ( 28.6 ) $ ( 230.7 ) $ ( 1,100.2 )

Other comprehensive income/(loss) before reclassification adjustments ( 101.0 ) ( 423.8 ) — — ( 524.8 )

Tax effect — 94.2 — — 94.2

Reclassification adjustments to net earnings — 0.6 (A) 1.4 (C) 0.7 (B) 2.7

Tax effect — ( 0.1 ) ( 0.3 ) ( 0.2 ) ( 0.6 )

Balance at December 31, 2024 $ ( 430.6 ) $ ( 840.4 ) $ ( 27.5 ) $ ( 230.2 ) $ ( 1,528.7 )

Six Months Ended

December 31, 2025

Currency Translation Adjustment Net Gains/Losses on Available-for-sale Securities Cash Flow Hedging Activities Pension Liability Accumulated Other Comprehensive Income/(Loss)

Balance at June 30, 2025 $ ( 289.8 ) $ ( 338.9 ) $ ( 27.7 ) $ ( 227.0 ) $ ( 883.4 )

3 unchanged sentences

Tax effect — 0.3 ( 0.7 ) ( 0.6 ) ( 1.0 )

Balance at September 30, 2024 $ ( 329.6 ) $ ( 511.3 ) $ ( 28.6 ) $ ( 230.7 ) $ ( 1,100.2 )

(A) Reclassification adjustments out of AOCI are included within Other income, net, on the Statements of Consolidated Earnings.

Balance at December 31, 2025 $ ( 301.4 ) $ ( 87.6 ) $ ( 25.4 ) $ ( 225.3 ) $ ( 639.7 )

Six Months Ended

December 31, 2024

Currency Translation Adjustment Net Gains/Losses on Available-for-sale Securities Cash Flow Hedging Activities Pension Liability Accumulated Other Comprehensive Income/(Loss)

Balance at June 30, 2024 $ ( 378.8 ) $ ( 1,178.0 ) $ ( 20.0 ) $ ( 231.5 ) $ ( 1,808.3 )

Other comprehensive income/(loss) before reclassification adjustments ( 51.8 ) 440.5 ( 12.5 ) — 376.2

Tax effect — ( 103.6 ) 3.1 — ( 100.5 )

Reclassification adjustments to net earnings — 0.8 (A) 2.5 (C) 1.8 (B) 5.1

Tax effect — ( 0.1 ) ( 0.6 ) ( 0.5 ) ( 1.2 )

Balance at December 31, 2024 $ ( 430.6 ) $ ( 840.4 ) $ ( 27.5 ) $ ( 230.2 ) $ ( 1,528.7 )

(A) Reclassification adjustments out of AOCI are included within Other (income)/loss, net, on the Statements of Consolidated Earnings.

(B) Reclassification adjustments out of AOCI are included in Net pension (income)/expense (see Note 12).

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The following tables present the Company's revenues, significant segment expenses, and earnings before income taxes by reportable segment:

Three Months Ended September 30, 2025 Employer Services PEO Services Total

Three Months Ended December 31, 2025 Employer Services PEO Services Total

Revenues from external customers $ 3,298.3 $ 1,752.4 $ 5,050.7

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Total consolidated earnings before income taxes $ 1,383.2

Three Months Ended September 30, 2024 Employer Services PEO Services Total

Three Months Ended December 31, 2024 Employer Services PEO Services Total

Revenues from external customers $ 3,114.8 $ 1,660.8 $ 4,775.6

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Total consolidated earnings before income taxes $ 1,261.3

Six Months Ended December 31, 2025 Employer Services PEO Services Total

Revenues from external customers $ 6,501.7 $ 3,437.3 $ 9,939.0

Interest on funds held for clients 590.1 5.4 595.5

Intercompany revenues 6.8 — 6.8

Total segment revenues 7,098.6 3,442.7 10,541.3

Reconciliation of revenues:

Intercompany eliminations ( 6.8 )

Total consolidated revenues $ 10,534.5

Less segment expenses:

Selling and marketing 1,130.5 195.5

Zero-margin benefits pass-through costs — 2,257.2

Worker's compensation coverage and state unemployment taxes — 293.4

Other segment expenses (b) 3,460.5 224.9

Total segment earnings before income taxes 2,507.6 471.7 2,979.3

Reconciliation of earnings before income taxes:

Other (c) ( 288.6 )

Total consolidated earnings before income taxes $ 2,690.7

Six Months Ended December 31, 2024 Employer Services PEO Services Total

Revenues from external customers $ 6,122.0 $ 3,233.0 $ 9,355.0

Interest on funds held for clients 521.3 4.8 526.1

Intercompany revenues 6.2 — 6.2

Total segment revenues 6,649.5 3,237.8 9,887.3

Reconciliation of revenues:

Intercompany eliminations ( 6.2 )

Total consolidated revenues $ 9,881.1

Less segment expenses:

Selling and marketing 1,036.9 172.1

Zero-margin benefits pass-through costs — 2,104.4

Worker's compensation coverage and state unemployment taxes — 280.4

Other segment expenses (b) 3,265.3 203.6

Total segment earnings before income taxes 2,347.3 477.3 2,824.6

Reconciliation of earnings before income taxes:

Other (c) ( 327.1 )

Total consolidated earnings before income taxes $ 2,497.5

(a) The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM.

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The following table presents the Company's depreciation and amortization included in earnings before income taxes for each reportable segment:

Three Months Ended

September 30,

Three Months Ended Six Months Ended

December 31, December 31,

2025 2024 2025 2024

Employer Services $ 130.5 $ 133.3 $ 261.6 $ 253.9

3 unchanged sentences

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-Q

Item 1. Financial Statements