What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-08-05 compared with 2025-08-06 · 166 added, 157 removed, 1111 unchanged (23% of the section changed)

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Critical Audit Matter Description

The Company’s evaluation of goodwill for impairment involves the comparison of the fair value of each reporting unit to its carrying value.

The Company uses the discounted cash flow model to estimate fair value which requires management to make significant estimates and assumptions related to forecasts of future revenue and operating margin.

The Company’s assessment of goodwill for impairment involves the comparison of the fair value of each reporting unit to its carrying value.

The Company uses the discounted cash flow model to estimate fair value, which requires management to make significant estimates and assumptions related to projected revenue growth rates and profitability projections.

In addition, the discounted cash flow model requires the Company to select an appropriate weighted average cost of capital based on current market conditions as of June 30, 2026.

Changes in these assumptions could have a significant impact on either the fair value, the amount of any goodwill impairment charge, or both.

Forecasts of future revenue and operating margin from the Company’s next-gen platform, for which there is limited historical data, contribute significantly to the estimate of fair value of a reporting unit within the Employer Services reportable segment with approximately $683 million of goodwill as of June 30, 2025.

Given the limited historical data associated with the Company’s next-gen platform, significant management judgment was required to forecast future revenue and operating margin to estimate the fair value of the reporting unit.

In turn, a high degree of auditor judgment and an increased extent of audit effort were required when performing

audit procedures to evaluate the reasonableness of management’s estimates and assumptions related to the forecasts of revenue and operating margin and the selection of the weighted average cost of capital, including the involvement of our fair value specialists.

One reporting unit within the Employer Services reportable segment has limited historical data for its HCM solution, which required significant management judgment to project revenue growth rates and profitability used to estimate the reporting unit's fair value.

In turn, a high degree of auditor judgment and an increased extent of audit effort were required when performing audit procedures to evaluate the reasonableness of management’s estimates and assumptions related to the projected revenue growth rates and profitability projections and the selection of the weighted average cost of capital, including the involvement of our fair value specialists.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the forecasts of future revenue and operating margin and the selection of the weighted average cost of capital used by management to estimate the fair value contributed by the next-gen platform included the following, among others:

• We tested the effectiveness of controls over management’s goodwill impairment evaluation, including those over the determination of the fair value of the reporting unit within the Employer Services reportable segment, such as controls related to management’s forecasts of future revenue and operating margin and the selection of the weighted average cost of capital.

Our audit procedures related to the reporting unit's projected revenue growth rates and profitability projections and the selection of the weighted average cost of capital used by management to estimate the fair value contributed by the HCM solution included the following, among others:

• We tested the effectiveness of controls over management’s goodwill impairment evaluation, including those over the determination of the fair value of the reporting unit within the Employer Services reportable segment, such as controls related to management’s projected revenue growth rates and profitability projections and the selection of the weighted average cost of capital.

• With the assistance of our fair value specialists, we evaluated the reasonableness of the valuation models, methodology, and significant assumptions used by the Company, specifically the weighted average cost of capital including:

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◦ Developing a range of independent estimates and compared to the weighted average cost of capital selected by management.

• We evaluated management’s ability to accurately forecast future revenue and operating margin by comparing actual results to management’s historical forecasts.

Due to the limited historical data for the next-gen platform, we evaluated the reasonableness of management’s revenue and operating margin forecasts by comparing the forecasts to (1) the historical operating results of the Company’s similar existing platforms, (2) the limited operating results to date of the next-gen platform, (3) internal communications to management and the board of directors, and (4) external communications made by management to analysts and investors.

• We evaluated management’s ability to accurately project revenue growth rates and profitability by comparing actual results to management’s historical projections.

Due to the limited historical data for the HCM solution, we evaluated the reasonableness of management’s projected revenue growth rates and profitability projections by comparing the projections to (1) the historical operating results of the Company’s similar existing solutions, (2) the limited operating results to date of the HCM solution, (3) internal communications to management and the board of directors, and (4) external communications made by management to analysts and investors.

Client Funds Obligations - Refer to Note 5 to the financial statements

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Tax effect 8.5 ( 250.7 ) ( 162.2 )

Reclassification of realized net losses on available-for-sale securities to net earnings 1.7 5.9 14.7

Reclassification of realized net (gains)/losses on available-for-sale securities to net earnings ( 2.9 ) 1.7 5.9

Tax effect 0.7 ( 0.3 ) ( 1.3 )

Unrealized losses on cash flow hedging activities ( 15.6 ) — —

Unrealized net gains/(losses) on cash flow hedging activities 3.7 ( 15.6 ) —

Tax effect ( 0.9 ) 3.8 —

Amortization of unrealized losses on cash flow hedging activities 5.4 4.4 4.4

Amortization of unrealized net (gains)/losses on cash flow hedging activities 6.0 5.4 4.4

Tax effect ( 1.5 ) ( 1.3 ) ( 1.1 )

Pension net gains arising during the year 8.5 5.6 60.3

Pension net gains/(losses) arising during the year 63.9 8.5 5.6

Tax effect ( 15.8 ) ( 2.1 ) ( 1.1 )

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Total current assets 52,561.1 43,252.2

Long-term receivables, net of allowance for doubtful accounts of $ 0.1 and $ 0.1 , respectively

Property, plant and equipment, net 641.3 655.4

Operating lease right-of-use asset 374.1 370.6

Operating lease right-of-use assets 388.6 374.1

Deferred contract costs 3,244.1 3,154.1

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Total liabilities and stockholders’ equity $ 63,193.3 $ 53,369.3

(A) 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.

As of June 30, 2024, $ 384.0 million of short-term marketable securities and $ 1.4 million of cash and cash equivalents have been pledged as collateral under the Company's reverse repurchase agreements (see Note 9).

(A) As of June 30, 2026, $ 138.6 million of long-term marketable securities, and $ 0.7 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 9).

See notes to the Consolidated Financial Statements.

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Net earnings — — — 3,752.0 — —

Other comprehensive loss — — — — — ( 312.1 )

Other comprehensive income — — — — — 497.5

Stock-based compensation expense — — 219.3 — — —

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Net earnings — — — 4,413.5 — —

Other comprehensive income — — — — — 924.9

Other comprehensive loss — — — — — ( 18.7 )

Stock-based compensation expense — — 223.3 — — —

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Bad debt expense 47.5 53.2 54.6

Net pension income ( 19.7 ) ( 22.9 ) ( 42.6 )

Net pension (income)/expense ( 15.4 ) ( 19.7 ) ( 22.9 )

Net accretion of discounts and amortization of premiums on available-for-sale securities ( 88.2 ) ( 72.2 ) ( 42.6 )

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Cash Flows from Financing Activities:

Net (decrease)/increase in client funds obligations ( 8,274.0 ) 1,014.1 ( 12,701.6 )

Net increase/(decrease) in client funds obligations 13,242.6 ( 8,274.0 ) 1,014.1

Net cash (distributed)/received from the Internal Revenue Service 24.0 ( 552.2 ) 602.7

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Repurchases of common stock ( 2,083.3 ) ( 1,280.5 ) ( 1,231.7 )

Net proceeds from stock purchase plan and stock-based compensation plans 131.0 47.2 91.6

Net (repurchases)/proceeds from stock-based compensation plans and stock purchase plan ( 1.0 ) 131.0 47.2

Dividends paid ( 2,626.3 ) ( 2,398.9 ) ( 2,183.1 )

Net (payments)/proceeds related to reverse repurchase agreements 106.2 ( 331.8 ) 320.0

Net proceeds from issuance of commercial paper 4,769.5 — —

Net cash flows used in financing activities ( 6,973.4 ) ( 1,431.7 ) ( 15,680.7 )

Net (payments)/proceeds from issuance of commercial paper ( 4,769.5 ) 4,769.5 —

Net cash flows provided by/(used in) financing activities 4,881.0 ( 6,973.4 ) ( 1,431.7 )

Effect of exchange rate changes on cash, cash equivalents, restricted cash, and restricted cash equivalents ( 37.8 ) 37.3 ( 22.4 )

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Employer Services and Professional Employer Organization (“PEO”) Services.

The primary components of the "Other" category include certain corporate overhead charges and expenses that have not been allocated to the reportable segments, including corporate functions, legal settlements, severance costs, non-recurring gains and losses, the elimination of intercompany transactions, and interest expense.

Revenue Recognition.

Revenues are primarily attributable to fees for providing services ( e.g., Employer Services' payroll processing fees), investment income on payroll funds, payroll tax filing funds, other Employer Services' client-related funds, and fees charged to implement clients on the Company's solutions.

Revenues are primarily attributable to fees for providing services ( e.g., Employer Services' payroll processing fees), interest on funds held for clients, payroll tax filing funds, other Employer Services' client-related funds, and fees charged to implement clients on the Company's solutions.

The Company enters into agreements for a fixed fee per transaction ( e.g., number of payees).

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The Company uses the output method based on a fixed fee per employee serviced to recognize revenue, as the value to the client of the goods or services transferred to date (e.g., number of payees) appropriately depicts our performance towards complete satisfaction of the performance obligation.

The fees are typically billed in the period in which services are performed.

The timing of revenue recognition is generally consistent with client invoicing, which occurs monthly either as services are provided or in arrears.

The Company does not recognize contract assets because its right to consideration becomes unconditional at the time revenue is recognized.

PEO, a component of the HR Outsourcing (“HRO”) business, provides a comprehensive human resources outsourcing solution, including offering benefits, providing workers’ compensation insurance, and administering state unemployment insurance, among other human resources functions.

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With respect to the payroll and payroll taxes, the PEO worksite employer is primarily responsible for providing the service and has discretion in establishing wages.

The fees collected from the worksite employers for benefits (i.e., PEO zero-margin benefits pass-throughs), workers’ compensation and state unemployment taxes are presented in revenues and the associated costs of benefits, workers’ compensation and state unemployment taxes are included in operating expenses, as the Company does retain risk and acts as a principal with respect to this aspect of the arrangement.

principal with respect to this aspect of the arrangement.

With respect to these fees, the Company is primarily responsible for fulfilling the service and has discretion in establishing price.

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Cash and Cash Equivalents.

Highly liquid investment securities with a maturity of ninety days or less at the time of purchase are considered cash equivalents.

Highly liquid investment securities with a maturity of ninety days or fewer at the time of purchase are considered cash equivalents.

The fair value of our cash and cash equivalents approximates carrying value.

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Unrealized gains and losses, net of the related tax effect, are excluded from earnings and are reported as a separate component of accumulated other comprehensive income (loss) on the Consolidated Balance Sheets until realized.

Realized gains and losses from the sale of available-for-sale securities are determined on an aggregate approach basis and are included in other (income)/expense, net on the Statements of Consolidated Earnings.

Realized gains and losses from the sale of available-for-sale securities are aggregated and are included in other (income)/expense, net on the Statements of Consolidated Earnings.

If the fair value of an available-for-sale debt security is below its amortized cost, the Company assesses whether it intends to sell the security or if it is more likely than not the Company will be required to sell the security before recovery.

If either of those two conditions is met, the Company would recognize a charge in earnings equal to the entire difference between the security's amortized cost basis and its fair value.

If either of those two conditions are met, the Company would recognize a charge in earnings equal to the entire difference between the security's amortized cost basis and its fair value.

If the Company does not intend to sell a security or it is not more likely than not that it will be required to sell the security before recovery, the unrealized loss is separated into an amount representing the credit loss, which is recognized in earnings, and an amount related to all other factors, which is recognized in accumulated other comprehensive income (loss).

Premiums and discounts are amortized or accreted over the life of the related available-for-sale security as an adjustment to the yield using the effective-interest method.

Premiums and discounts are amortized or accreted over the expected life of the related available-for-sale security as an adjustment to the yield using the effective-interest method.

Dividend and interest income are recognized when earned.

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Since many fixed income securities do not trade on a daily basis, the independent pricing service applies available information, as applicable, through processes such as benchmark curves, benchmarking of like securities, sector groupings and matrix pricing to prepare valuations.

For the purposes of valuing the Company’s asset-backed securities and mortgage-backed securities (that are included within Other securities in Note 5), the independent pricing service includes additional inputs to the model such as monthly payment information, new issue data, and collateral performance.

For the purposes of valuing the Company’s mortgage-backed securities (that are included within Other securities in Note 5) and asset-backed securities, the independent pricing service includes additional inputs to the model such as monthly payment information, new issue data, and collateral performance.

For the purposes of valuing the Company’s Municipal bonds, the independent pricing service includes quoted prices for similar assets, benchmark yield curves, and market corroborated inputs.

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The Company had no available-for-sale securities included in Level 1 and Level 3 at June 30, 2026.

The Company issued four series of fixed-rate notes with staggered maturitie s of 7 and 10 -years totaling $ 4.0 billion (collectively the “Notes”).

The Company issued five series of fixed-rate notes with staggered maturitie s of 7 and 10 -years totaling $ 5.0 billion (collectively the “Notes”).

The fair value of the Notes are estimated in Note 10 utilizing a variety of inputs obtained from an independent pricing service, including benchmark yields, reported trades, non-binding broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, and reference data.

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EPS $ 9.14 $ 9.10

Shares that could potentially dilute basic EPS in the future include outstanding share-based compensation awards, discussed in Note 11.

For fiscal 2025 and 2024, there were no shares excluded from the calculation of diluted EPS, and in fiscal 2023, there were 0.2 million shares excluded from the calculation of diluted EPS because their inclusion would have been anti-dilutive.

Shares that could potentially dilute basic EPS in the future include outstanding share-based compensation awards, which are discussed in Note 11.

For fiscal 2026, there were 0.6 million shares excluded from the calculation of diluted EPS because their inclusion would have been anti-dilutive, and for fiscal 2025 and 2024, there were no shares excluded from the calculation of diluted EPS.

Stock-Based Compensation.

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The Company also expenses internal costs related to minor upgrades and enhancements, as it is impractical to separate these costs from normal maintenance activities.

Fees related to cloud-based subscriptions for which the Company has the right to take possession of the software at any time during the hosting period (without significant penalty) and can run the software on internal hardware, or through contract with a third party vendor to host the software, is recognized as an intangible asset and capitalized following the Internal Use Software guidance under ASC 350-40.

Subscriptions where the Company accesses the software through the cloud but cannot take

possession of the software during the hosting period is treated as a service contract, and as such hosting fees are treated as expense.

guidance under ASC 350-40.

Subscriptions where the Company accesses the software through the cloud but cannot take possession of the software during the hosting period is treated as a service contract, and as such hosting fees are expensed.

Acquisitions.

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Workers’ Compensation Costs.

The Company employs a third-party actuary to assist in determining the estimated claim liability related to workers’ compensation and employer's liability coverage for PEO Services worksite employees.

The Company employs a third-party actuary to assist in determining the estimated claim liability related to workers’ compensation coverage for PEO Services worksite employees.

In estimating ultimate loss rates, we utilize historical loss experience, exposure data, and actuarial judgment, together with a range of inputs which are primarily based upon the worksite employee's job responsibilities, their location, the historical frequency and severity of workers’ compensation claims, and an estimate of future cost trends.

For each reporting period, changes in the actuarial assumptions resulting from changes in actual claims experience and other trends are incorporated into our workers’ compensation claims cost estimates.

PEO Services has secured a workers’ compensation and employer’s liability insurance policy that caps the exposure for each claim at $ 1 million per occurrence and has also secured aggregate stop loss insurance that caps aggregate losses at a certain level in fiscal years 2012 and prior from an admitted and licensed insurance company of AIG.

PEO Services has secured a workers’ compensation and insurance policy that caps the exposure for each claim at $ 1 million per occurrence and has also secured aggregate stop loss insurance that caps aggregate losses at a certain level in the year ended June 30, 2012 and prior from an admitted and licensed insurance company of AIG.

The Company has obtained approximately $ 390 million of irrevocable standby letters of credit in favor of licensed insurance companies of AIG to secure TotalSource workers’ compensation obligations if ADP were to fail to reimburse AIG for workers’ compensation payments.

The Company had no drawdowns during June 30, 2026 and 2025 under the letters of credit.

Additionally, starting in fiscal 2013, ADP Indemnity paid premiums to enter into reinsurance arrangements with ACE American Insurance Company, a wholly-owned subsidiary of Chubb Limited, to cover substantially all losses incurred by the Company up to the $ 1 million per occurrence related to workers’ compensation and employer's liability deductible reimbursement insurance protection for PEO services worksite employees.

Additionally, starting in the year ended June 30, 2013, ADP Indemnity paid premiums to enter into reinsurance arrangements with ACE American Insurance Company, a wholly-owned subsidiary of Chubb Limited, to cover substantially all losses incurred by the Company up to $ 1 million per occurrence related to workers’ compensation deductible reimbursement insurance protection for PEO services worksite employees.

Each of these reinsurance arrangements limit our overall exposure incurred up to a certain limit.

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ADP Indemnity paid a premium of $ 278.0 million to enter into a reinsurance arrangement with Chubb Limited to cover substantially all losses incurred by ADP Indemnity for the fiscal 2026 policy year up to $ 1 million per occurrence.

ADP Indemnity paid a premium of $ 278 million in July 2025 to enter into a reinsurance arrangement to cover substantially all losses for the fiscal 2026 policy year on terms substantially similar to the fiscal 2025 policy.

ADP Indemnity paid a premium of $ 327.8 million in July 2026 to enter into a reinsurance arrangement to cover substantially all losses for the year ending June 30, 2027 ("fiscal 2027") policy year on terms substantially similar to the fiscal 2026 policy.

Contingencies.

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These accruals are adjusted periodically as assessments change or additional information becomes available.

The loss contingencies are included in selling, general and administrative expenses.

Loss contingencies are included in selling, general, and administrative expenses.

If no accrual is made for a loss contingency because the amount of loss cannot be reasonably estimated, the Company will disclose material contingent liabilities when there is at least a reasonable possibility that a loss or an additional loss may have been incurred.

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Recently Adopted Accounting Pronouncements

Effective June 30, 2025, the Company adopted accounting standard update ("ASU") 2023-07, " Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures." This update resulted in enhanced disclosures about the Company's reportable segments.

The adoption of ASU 2023-07 did not have a material impact on the Company's consolidated results of operations, financial condition, or cash flows.

Effective June 30, 2026, the Company adopted Accounting Standard Update ("ASU") No.

2023-09, "Income Taxes (Topic 740):

Improvements to Income Tax Disclosures", applying the new requirements prospectively.

This update enhanced the transparency and decision usefulness of income tax disclosures.

The adoption of ASU 2023-09 did not impact the Company's consolidated results of operations, financial condition, or cash flows.

Refer to Note 12 for further details.

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Standard Description Effective Date Effect on Financial Statements or Other Significant Matters

ASU 2025-06 Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for

Internal-Use Software This update modernizes the accounting guidance for internal-use software costs and requires capitalization of software costs to begin when (1) management has authorized and committed to funding the software project and (2) it is probable that the project will be completed and the software will be used to perform the function intended.

(fiscal 2029) The Company is assessing this guidance and has not yet determined the impact of ASU 2025-06 on its consolidated results of operations, financial condition, or cash flows.

ASU 2024-03 Disaggregation of Income Statement Expenses (Subtopic 220-40) This update improves financial reporting by requiring enhanced disclosures of the expense captions in the Income Statement within the Notes to the financial statements.

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The adoption will modify disclosures but will not have an impact on the Company's consolidated results of operations, financial condition, or cash flows.

ASU 2023-09 Income Taxes (Topic 740):

Improvements to Income Tax Disclosures This update enhances the transparency and decision usefulness of income tax disclosures to better assess how an entity’s operations and related tax risks, tax planning and operational opportunities affect its tax rate and prospects for future cash flows.

June 30, 2026

(fiscal 2026) The Company is assessing this guidance.

The adoption will modify disclosures but will not have an impact on the Company's consolidated results of operations, financial condition, or cash flows.

Based upon similar operational and economic characteristics, the Company’s revenues are disaggregated as follows:

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Global is generally consistent with the types of services provided within HCM but represent geographies outside of the United States and includes our multinational offerings.

HCM and Global revenues are primarily attributable to fees for providing solutions for payroll, benefits, talent, retirement services and HR processing and fees charged to implement the Company's solutions for clients.

HCM and Global revenues are primarily attributable to fees for providing payroll services, benefits administration, talent management, workforce management solutions, compliance solutions, retirement services and HR management and fees charged to implement the Company's solutions for clients.

HRO provides a comprehensive human resources outsourcing solution, including offering benefits, providing workers’ compensation insurance, and administering state unemployment insurance, among other human resources functions.

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Total revenues $ 21,947.4 $ 20,560.9 $ 19,202.6

Reconciliation of disaggregated revenue to our reportable segments for the fiscal year ended June 30, 2025:

Types of Revenues Employer Services PEO Other Total

Reconciliation of disaggregated revenue to our reportable segments for the year ended June 30, 2026:

Types of Revenues Employer Services PEO Total

HCM $ 9,120.4 $ — $ 9,120.4

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Total segment revenues 14,831.4 7,128.1 21,959.5

Reconciliation of disaggregated revenue to our reportable segments for the fiscal year ended June 30, 2024:

Types of Revenues Employer Services PEO Other Total

Intercompany eliminations ( 12.1 )

Total consolidated revenues $ 21,947.4

Reconciliation of disaggregated revenue to our reportable segments for the year ended June 30, 2025:

Types of Revenues Employer Services PEO Total

HCM $ 8,684.5 $ — $ 8,684.5

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Total segment revenues 13,883.1 6,690.4 20,573.5

Reconciliation of disaggregated revenue to our reportable segments for the fiscal year ended June 30, 2023:

Types of Revenues Employer Services PEO Other Total

Intercompany eliminations ( 12.6 )

Total consolidated revenues $ 20,560.9

Reconciliation of disaggregated revenue to our reportable segments for the year ended June 30, 2024:

Types of Revenues Employer Services PEO Total

HCM $ 8,164.2 $ — $ 8,164.2

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Total segment revenues 12,980.8 6,233.6 19,214.4

Intercompany eliminations ( 11.8 )

Total consolidated revenues $ 19,202.6

Contract Balances

The timing of revenue recognition for our HCM, HRO and Global Solutions is consistent with the invoicing of clients, as invoicing occurs in the period the services are provided.

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

Changes in deferred revenue related to set up fees for the fiscal year ended June 30, 2025 were as follows:

The timing of revenue recognition for our HCM, HRO and Global Solutions services is generally consistent with client invoicing, which occurs monthly either as services are provided or in arrears.

When invoicing occurs in arrears, our right to consideration is unconditional and arises solely from the passage of time.

Accordingly, the Company does not recognize contract assets related to the timing of revenue recognition and invoicing.

Changes in deferred revenue related to set up fees for the year ended June 30, 2026 were as follows:

Contract Liability

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Total deferred contract costs (1) $ 3,244.1 $ 3,154.1

(1) The amount of total deferred costs amortized during the fiscal years ended June 30, 2025, June 30, 2024, and June 30, 2023 were $ 1,145.3 million, $ 1,067.6 million, and $ 992.9 million, respectively.

(1) The amount of total deferred costs amortized during the years ended June 30, 2026, June 30, 2025, and June 30, 2024 were $ 1,200.5 million, $ 1,145.3 million, and $ 1,067.6 million, respectively.

Deferred costs are periodically reviewed for impairment.

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Cash paid for acquisition of business, net of cash acquired $ 1,158.3

The preliminary allocation of the purchase price is based upon estimates and assumptions that are subject to change within the measurement period, which is one year from the acquisition date.

The primary areas of the purchase price allocation that are not yet finalized relate to the measurement of certain assets and liabilities, including identifiable intangible assets.

Accordingly, the measurement period for such purchase price allocations will end when the information becomes available but will not exceed twelve months from the date of acquisition.

The acquisition was accounted for using the acquisition method of accounting.

The Company recognized assets acquired and liabilities assumed at their fair value as of the date of acquisition, with the excess recorded to goodwill.

The preliminary purchase price allocation for WorkForce Software is as follows:

The purchase price allocation for WorkForce Software is as follows:

Accounts receivable, net of allowance for doubtful accounts 20.0

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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

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OTHER (INCOME)/EXPENSE, NET

Other income, net consists of the following:

Other (income)/expense, net consists of the following:

Years ended June 30, 2026 2025 2024

Interest income on corporate funds $ ( 371.0 ) $ ( 319.5 ) $ ( 241.3 )

Realized losses on available-for-sale securities, net 1.7 5.9 14.7

Impairment of assets — — 2.1

Realized (gains)/losses on available-for-sale securities, net ( 2.9 ) 1.7 5.9

Gain on sale of assets — ( 5.0 ) ( 17.1 )

Non-service components of pension income, net ( 28.3 ) ( 31.3 ) ( 34.2 )

Other income, net $ ( 354.1 ) $ ( 286.7 ) $ ( 183.5 )

In fiscal 2025, the Company's corporate funds average investment balance was $ 9.2 billion as compared to $ 7.4 billion in fiscal 2024, and average interest rates related to corporate funds were 3.5 % in fiscal 2025 as compared to 3.3 % in fiscal 2024.

In fiscal 2025, the Company recognized a gain of $ 5.0 million, in relation to sales of buildings.

See Note 11 of our Consolidated Financial Statements for further details on non-service components of pension income, net.

Net (gain)/loss on ADP Ventures' investments ( 8.4 ) — —

Other (income)/expense, net $ ( 410.6 ) $ ( 354.1 ) $ ( 286.7 )

CORPORATE INVESTMENTS AND FUNDS HELD FOR CLIENTS

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Treasury securities 10,873.1 17.8 ( 57.4 ) 10,833.5

Asset-backed securities 2,437.3 10.4 ( 15.0 ) 2,432.7

Canadian government obligations and

Canadian government agency obligations 2,055.0 13.9 ( 22.0 ) 2,046.9

1,972.0 16.4 ( 32.4 ) 1,956.0

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

government agency securities 1,328.5 2.3 ( 80.0 ) 1,250.8

Canadian provincial bonds 1,186.2 15.3 ( 19.6 ) 1,181.9

government agency securities 930.3 1.9 ( 70.5 ) 861.7

Other securities 2,035.3 7.8 ( 47.9 ) 1,995.2

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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

government agency securities

1,328.5 2.3 ( 80.0 ) 1,250.8

Asset-backed securities 1,394.9 3.9 ( 43.0 ) 1,355.8

Canadian provincial bonds 1,155.8 13.8 ( 27.7 ) 1,141.9

Commercial mortgage-backed securities 535.9 — ( 35.1 ) 500.8

Other securities 1,977.3 7.2 ( 62.8 ) 1,921.7

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Treasury securities ( 51.8 ) 6,176.1 ( 5.6 ) 308.2 ( 57.4 ) 6,484.3

Asset-backed securities ( 8.8 ) 992.6 ( 6.2 ) 298.1 ( 15.0 ) 1,290.7

Canadian government obligations and

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( 2.2 ) 283.0 ( 19.8 ) 444.4 ( 22.0 ) 727.4

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

Canadian provincial bonds ( 1.4 ) 129.8 ( 18.2 ) 379.4 ( 19.6 ) 509.2

government agency securities

( 1.3 ) 75.0 ( 69.2 ) 659.9 ( 70.5 ) 734.9

Canadian provincial bonds ( 0.8 ) 44.3 ( 26.9 ) 588.8 ( 27.7 ) 633.1

Other securities ( 5.8 ) 834.0 ( 42.1 ) 587.5 ( 47.9 ) 1,421.5

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( 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

government agency securities

( 0.1 ) 8.0 ( 79.9 ) 1,093.8 ( 80.0 ) 1,101.8

Asset-backed securities ( 2.3 ) 351.4 ( 40.7 ) 668.0 ( 43.0 ) 1,019.4

Canadian provincial bonds ( 0.8 ) 44.3 ( 26.9 ) 588.8 ( 27.7 ) 633.1

Commercial mortgage-backed securities ( 0.5 ) 11.2 ( 34.6 ) 489.6 ( 35.1 ) 500.8

Other securities ( 1.5 ) 168.4 ( 61.3 ) 1,130.2 ( 62.8 ) 1,298.6

7 unchanged sentences

government agency securities primarily include debt directly issued by Federal Farm Credit Banks and Federal Home Loan Banks with fair values of $ 654.0 million and $ 135.4 million, respectively.

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

At June 30, 2025, other securities primarily include municipal bonds, diversified with a variety of issuers, with credit ratings of A and above, with fair values of $ 536.0 million, AA-rated United Kingdom Gilt securities of $ 550.8 million, commercial mortgage-backed securities of $ 438.6 million, and AAA-rated supranational bonds of $ 230.3 million.

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 July 2026 through January 2036.

At June 30, 2026, other securities primarily include AA-rated United Kingdom Gilt securities of $ 737.8 million, municipal bonds, diversified with a variety of issuers, with credit ratings of A and above with fair values of $ 557.7 million, commercial mortgage-backed securities of $ 320.2 million, and AAA-rated supranational bonds of $ 230.2 million.

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

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Cash and cash equivalents $ 4,230.1 $ 3,347.8

Short-term marketable securities 4,498.8 384.0

Short-term marketable securities (a) — 4,498.8

Long-term marketable securities (b) 138.6 —

Total corporate investments $ 4,368.7 $ 7,846.6

(a) - Represents short-term marketable securities related to proceeds held from short-term U.S.

commercial paper borrowings made in connection with our client funds investment strategy.

Refer to Note 9 for further details.

(b) - Long-term marketable securities are included within Other assets on the Consolidated Balance Sheets.

Funds held for clients represent assets that, based upon the Company's intent, are restricted for use solely for the purposes of satisfying the obligations to remit funds relating to the Company’s payroll and payroll tax filing services, which are classified as client funds obligations on our Consolidated Balance Sheets.

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Depreciation of property, plant and equipment was $ 201.1 million, $ 201.8 million, and $ 190.3 million for fiscal 2026, 2025 and 2024, respectively.

As of June 30, 2026, t he Company had certain assets classified as held for sale with a carrying value of approximately $ 7.0 million, which is not material for reclassification separately on the Consolidated Balance Sheet.

As of June 30, 2025, the Company did not have any assets classified as held for sale.

As of June 30, 2024, t he Company had certain assets classified as held for sale with a fair value of approximately $ 5.0 million, which is not material for reclassification separately on the Consolidated Balance Sheet.

The Company records leases on the Consolidated Balance Sheets as operating lease ROU assets, records the current portion of operating lease liabilities within accrued expenses and other current liabilities and, separately, records long-term operating lease liabilities.

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GOODWILL AND INTANGIBLE ASSETS, NET

Changes in goodwill for the fiscal years ended June 30, 2025 and 2024 are as follows:

Changes in goodwill for the years ended June 30, 2026 and 2025 are as follows:

Services Total

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short-term funding requirements related to client funds are sometimes obtained on an unsecured basis through the issuance of commercial paper, rather than liquidating previously-collected client funds that have already been invested in available-for-sale securities.

In June 2025, the Company increased its U.S.

short-term commercial paper program to provide for the issuance of up to $ 10.6 billion from $ 10.3 billion in aggregate maturity value.

This commercial paper program provides for the issuance of up to $ 11.7 billion in aggregate maturity value.

The Company’s commercial paper program is rated A-1+ by Standard & Poor’s, Prime-1 (“P-1”) by Moody’s and F1+ by Fitch .

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

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

As of June 30, 2024, the Company had no co mmercial paper borrowing outstanding.

As of June 30, 2026 the Company had no commercial paper outstanding.

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

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

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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 June 30, 2025 and 2024, the Company had $ 38.4 million and $ 385.4 million, respectively, of outstanding obligations related to the reverse repurchase agreements.

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

As of June 30, 2026 and 2025, the Company had $ 139.3 million and $ 38.4 million, respectively, of outstanding obligations related to reverse repurchase agreements.

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

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Weighted average interest rates 4.1 % 4.8 %

The Company issued four series of fixed-rate notes with staggered maturities of 7 and 10 -years totaling $ 4.0 billion (collectively the “Notes”).

The Company issued five series of fixed-rate notes with staggered maturities of 7 and 10 -years totaling $ 5.0 billion (collectively the “Notes”).

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

During the first quarter ended September 30, 2024, the Company issued $ 1.0 billion of senior notes due in 2034 bearing a fixed interest rate of 4.450 %.

In connection with the senior notes issuance, the Company terminated several derivative contracts in place to hedge exposure in changes in benchmark interest rates for the senior notes issued with an aggregate notional amount totaling $ 1.0 billion (of which $ 400.0 million were executed during the first quarter ended September 30, 2024 and $ 600.0 million were executed on the day of issuance).

Since these derivative contracts were classified as cash flow hedges, the unamortized loss of $ 12.5 million was deferred in accumulated other comprehensive (loss)/income and will be amortized to earnings over the life of the respective issued Note as the interest payments are made.

During the fourth quarter ended June 30, 2026, the Company issued $ 1.0 billion of senior notes due in 2036 bearing a fixed interest rate of 5.00 %.

In connection with the senior notes issuance, the Company also terminated several derivative contracts in place to hedge exposure in changes in benchmark interest rates for the senior notes issued with an aggregate notional amount totaling $ 1.0 billion (of which $ 300.0 million were entered into during the third quarter ended March 31, 2025, $ 100.0 million were entered into during the fourth quarter ended June 30, 2025, and $ 600.0 million were entered into on the day of issuance).

Since these derivative contracts were classified as cash flow hedges, the unamortized loss of $ 3.0 million was deferred in accumulated other comprehensive (loss)/income and will be amortized to earnings over the life of the respective issued Note as the interest payments are made.

During the fourth quarter ended June 30, 2025, the Company redeemed $ 1.0 billion of senior notes which were due to mature on September 15, 2025 and were bearing a fixed interest rate of 3.375 %.

In connection with the senior notes issuance, the Company also terminated several derivative contracts in place to hedge exposure in changes in benchmark interest rates for the senior notes issued with an aggregate notional amount totaling $ 1.0 billion ($ 300.0 million were entered into during the fourth quarter ended June 30, 2026, and $ 700.0 million were entered into on the day of issuance).

Since these derivative contracts were classified as cash flow hedges, the unamortized gain of $ 3.7 million was deferred in accumulated other comprehensive (loss)/income and will be amortized to earnings over the life of the respective issued Note as the interest payments are made.

The principal amounts and associated effective interest rates of the Notes and other debt as of June 30, 2026 and 2025 are as follows:

Debt instrument Effective Interest Rate June 30, 2026 June 30, 2025

Fixed-rate 3.375 % notes due September 15, 2025

3.47 % $ — $ 1,000.0

Fixed-rate 1.70 % notes due May 15, 2028

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4.75 % 1,000.0 1,000.0

Fixed-rate 5.00 % notes due May 7, 2036

5.14 % 1,000.0 —

Other 1.8 2.9

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Stock-based Compensation Plans

Stock-based compensation consists of the following:

The Company's share-based compensation plan consists of stock options, time-based restricted stock, time-based restricted stock units, performance-based restricted stock, and performance-based restricted stock units.

The Company also offers an employee stock purchase plan for eligible employees.

Beginning in September 2022, the Company discontinued granting stock options, time-based restricted stock and performance-based restricted stock.

Any such future awards granted September 2022 and after will be grants of time-based restricted stock units and/or performance-based restricted stock units, depending on employee eligibility.

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.

Awards granted September 2022 and after have been grants of time-based restricted stock units and/or performance-based restricted stock units, depending on employee eligibility.

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

As of June 30, 2026, approximately 18.4 million registered shares were available for future grants, excluding the impact of performance-based restricted stock units outstanding as of June 30, 2026, from the 26.6 million shares previously authorized for issuance under the share-based compensation plan.

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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.

Time-based restricted stock units 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 units 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.

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As of June 30, 2026, approximately 4.3 million shares were available for future issuances from the 70.0 million shares previously authorized for issuance under the employee stock purchase plan.

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

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

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

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Income tax benefit $ 60.0 $ 66.0 $ 60.2

As of June 30, 2025, the total remaining unrecognized compensation cost related to unvested stock options, restricted stock units, and restricted stock awards amounted to $ 0.3 million, $ 206.8 million, and $ 0.8 million, respectively, which will be amortized over the weighted-average remaining requisite service periods of 0.2 years, 1.7 years, and 0.2 years, respectively.

As of June 30, 2026, the total remaining unrecognized compensation cost related to unvested restricted stock units amounted to $ 216.1 million, which will be amortized over the weighted-average remaining requisite service period of 1.7 years.

As of June 30, 2026, there were no remaining unrecognized compensation costs related to restricted stock and stock options, as these awards were fully vested.

In fiscal 2026, the following activity occurred under the Company’s existing plans:

3 unchanged sentences

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

Options granted — $ —

Options exercised ( 199 ) $ 167

Options forfeited/cancelled ( 3 ) $ 207

Options outstanding at June 30, 2026 836 $ 163

Options exercisable at June 30, 2026 836 $ 163

The aggregate intrinsic value of outstanding stock options and exercisable stock options as of June 30, 2025 was $ 149.3 million and $ 133.7 million, respectively, of which each have remaining lives of 4 years.

The aggregate intrinsic value of outstanding and exercisable stock options as of June 30, 2026 was $ 50.5 million with a remaining life of 3 years.

The aggregate intrinsic value for stock options exercised in fiscal 2026, 2025, and 2024 was $ 20.6 million, $ 134.0 million, and $ 63.2 million, respectively.

Time-Based Restricted Stock and Time-Based Restricted Stock Units:

Number of Shares

(in thousands) Number of Units

Time-Based Restricted Stock Units:

Number of Units

(in thousands)

Restricted shares/units outstanding at July 1, 2024 124 1,053

Restricted shares/units granted — 618

Restricted shares/units vested ( 124 ) ( 435 )

Restricted shares/units forfeited — ( 62 )

Restricted shares/units outstanding at June 30, 2025 — 1,174

Performance-Based Restricted Stock and Performance-Based Restricted Stock Units:

Number of Shares

(in thousands) Number of Units

Restricted units outstanding at July 1, 2025 1,174

Restricted units granted 627

Restricted units vested ( 576 )

Restricted units forfeited ( 60 )

Restricted units outstanding at June 30, 2026 1,165

Performance-Based Restricted Stock Units:

Number of Units

(in thousands)

Restricted shares/units outstanding at July 1, 2024 88 753

Restricted shares/units granted — 305

Restricted shares/units vested ( 58 ) ( 293 )

Restricted shares/units forfeited ( 3 ) ( 14 )

Restricted shares/units outstanding at June 30, 2025 27 751

Restricted units outstanding at July 1, 2025 778

Restricted units granted 405

Restricted units vested ( 372 )

Restricted units forfeited ( 26 )

Restricted units outstanding at June 30, 2026 785

The weighted average fair values of shares/units granted were as follows:

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employees and maintains a Supplemental Officers Retirement Plan (“SORP”).

The SORP is a defined benefit plan pursuant to which the Company pays supplemental pension benefits to certain corporate officers upon retirement based upon the officers' years of service and compensation.

The SORP is a defined benefit plan pursuant to which the Company pays supplemental pension benefits to

certain corporate officers upon retirement based upon the officers' years of service and compensation.

The SORP, which is currently closed to new entrants, was frozen effective July 1, 2019, with no future accruals due to pay and/or service.

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Funded status - plan assets less benefit obligations $ 321.8 $ 219.6

(a) The actuarial loss for fiscal 2025 was primarily due to changes in the discount rate.

(a) The actuarial gain for fiscal 2026 was primarily due to changes in the discount rate.

The amounts recognized on the Consolidated Balance Sheets as of June 30, 2026 and 2025 consisted of:

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The expected long-term rate of return on assets is determined based on historical and expected future rates of return on plan assets considering the target asset mix and the long-term investment strategy.

The Company's pension plans' asset allocations at June 30, 2025 and 2024 by asset category were as follows:

The Company's pension plans' asset allocations for the U.S.

plan at June 30, 2026 and 2025 by asset category were as follows:

Cash and cash equivalents 1 % 5 %

10 unchanged sentences

plan are generally as follows:

fixed income securities 60 % - 70 %

fixed income securities and cash 70 % - 80 %

equity securities 9 % - 19 %

2 unchanged sentences

As of June 30, 2026 and 2025, the U.S.

pension plan asset allocation is within the target ranges.

pension plan asset allocations are within the target ranges.

The pension plans' fixed income portfolio is designed to match the duration and liquidity characteristics of the pension plans' liabilities.

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Years ended June 30, 2026 %

Federal Statutory Tax Rate 1,203.4 21.0

Increase/(decrease) in provision from:

State and local income taxes, net of federal income tax effect (a) 151.0 2.6

Foreign tax effects 82.8 1.5

Effect of cross-border tax laws ( 50.7 ) ( 0.9 )

Tax credits ( 43.5 ) ( 0.7 )

Nontaxable or nondeductible items 2.0 —

Changes in unrecognized tax benefits ( 12.7 ) ( 0.2 )

Other ( 15.5 ) ( 0.3 )

$ 1,316.8 23.0

(a) State taxes in California, New York, New Jersey, and Illinois, made up the majority (greater than 50 percent) of the tax effect in this category.

Differences between the U.S.

statutory federal rate and the Company's effective income tax rate for periods prior to the adoption of ASU 2023-09 are as follows:

Years ended June 30, 2025 % 2024 %

Provision for taxes at U.S.

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The effective tax rate in fiscal 2026 and 2025 was 23.0 % and 23.2 %, respectively.

The increase in the effective tax rate is primarily due to higher reserves for uncertain tax positions in fiscal 2025 and a valuation allowance release in fiscal 2024 offset by an increase in the excess tax benefit on stock-based compensation in fiscal 2025.

The decrease in the effective tax rate is primarily due to a decrease in uncertain tax positions and an increase in tax credits offset by a lower benefit for adjustments to prior year tax liabilities and a lower excess tax benefit on stock-based compensation for fiscal 2026 as compared to fiscal 2025.

The effective tax rate for fiscal 2025 and 2024 was 23.2 % and 23.0 %, respectively.

The decrease in the effective tax rate is primarily due to a valuation allowance release and an intercompany transfer of certain assets offset by a lower benefit for adjustments to prior year tax liabilities in fiscal 2024.

The significant components of deferred income tax assets and liabilities and their balance sheet classifications are as follows:

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The Company has recorded valuation allowances of $ 24.1 million and $ 23.8 million at June 30, 2026 and 2025, respectively, to reflect the estimated amount of domestic and foreign deferred tax assets that may not be realized.

Income tax payments were appr oximately $ 1,198.0 million, $ 1,185.2 million, and $ 1,080.7 million for fiscal 2025, 2024, and 2023, respectively.

Years ended June 30, 2026

Federal $ 672.5

Foreign 166.3

Total income taxes paid $ 1,006.7

Income tax payments were appr oximately $ 1,198.0 million and $ 1,185.2 million for fiscal 2025 and 2024, respectively.

As of June 30, 2026, 2025, and 2024 the Company's liabilities for unrecognized tax benefits, which include interest and penalties, we re $ 152.5 million, $ 163.0 million, and $ 126.9 million, respectively.

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Interest expense and penalties associated with uncertain tax positions have been recorded in the provision for income taxes on the Statements of Consolidated Earnings.

During the years ended June 30, 2025, 2024, and 2023, the Company recorded interest expense of $ 4.3 million, $ 5.7 million, and $ 9.1 million, respectively.

During the year ended June 30, 2026, the Company recorded interest benefit of $ 0.8 million.

During the years ended June 30, 2025, and 2024, the Company recorded interest expense of $ 4.3 million, and $ 5.7 million, respectively.

Penalties recorded during fiscal years 2026, 2025, and 2024 were not significant.

At June 30, 2026 and June 30, 2025, the Company had accrued interest of $ 27.6 million and $ 36.9 million, respectively, recorded on the Consolidated Balance Sheets within other liabilities.

At June 30, 2025 the Company had accrued penalties of $ 0.3 million recorded on the Consolidated Balance Sheets within other liabilities.

At June 30, 2024, the Company had no accrued penalties recorded on the Consolidated Balance Sheets.

At June 30, 2026 and June 30, 2025, the Company had accrued penalties of $ 0.2 million and $ 0.3 million recorded on the Consolidated Balance Sheets within other liabilities.

The Company is routinely examined by the IRS and tax authorities in foreign countries in which it conducts business, as well as tax authorities in states in which it has significant business operations.

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The resolution of tax matters is not expected to have a material effect on the consolidated financial condition of the Company, although a resolution could have a material impact on the Company's Statements of Consolidated Earnings for a particular future period and on the Company's effective tax rate.

If certain pending tax matters settle within the next twelve months, the total amount of unrecognized tax benefits may increase or decrease for all open tax years and jurisdictions.

Audit outcomes and the timing of audit settlements are subject to significant uncertainty.

We continually assess the likelihood and amount of potential adjustments and adjust the income tax provision, the current tax liability and deferred taxes in the period in which the facts that give rise to a revision become known.

COMMITMENTS AND CONTINGENCIES

As of June 30, 2025, the Company has purchase commitments of approximately $ 1,498.9 million, including a reinsurance premium with Chubb for the fiscal 2026 policy year, as well as obligations related to software license agreements, and purchase and maintenance agreements on our software, equipment, and other assets, of which $ 331.6 million relates to the year ending

June 30, 2026, $ 566.6 million relates to the years ending June 30, 2027 through 2028, $ 211.9 million relates to the years ending June 30, 2029 through 2030, and the remaining relates to fiscal years thereafter.

As of June 30, 2026, the Company has purchase commitments of approximately $ 2,850.5 million, including a reinsurance premium with Chubb for the fiscal 2026 policy year, as well as obligations related to software license agreements, third-party software services and purchase and maintenance agreements on our software, equipment, and other assets, of which $ 604.6 million relates to the year ending June 30, 2027, $ 1,095.9 million relates to the years ending June 30, 2028 through 2029, $ 694.1 million relates to the years ending June 30, 2030 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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The complaint asserts violations of the Employee Retirement Income Security Act of 1974 (“ERISA”) in connection with the ADP TotalSource Retirement Savings Plan’s fiduciary administrative and investment decision-making.

The complaint seeks statutory and other unspecified monetary damages, injunctive relief and attorney’s fees.

The Company is unable to estimate any reasonably possible loss, or range of loss, with respect to this matter.

The Company is vigorously defending against this lawsuit.

The Company reached a settlement of all outstanding claims for $ 48 million, subject to the court's approval.

Accordingly, as of June 30, 2026, the Company recorded a $ 48 million accrual within accrued expenses and other current liabilities on the Consolidated Balance Sheet.

Additionally, the Company recorded insurance receivables of $ 30 million within accounts receivable on the Consolidated Balance Sheet, which represents recoveries considered probable from purchased insurance.

The Company is subject to various claims, litigation, and regulatory compliance matters in the normal course of business.

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Zero-margin benefits pass-through costs — 4,607.3

Worker's compensation coverage and state unemployment taxes — 681.3

Workers' compensation coverage and state unemployment taxes — 718.4

Other segment expenses (b) 7,028.9 450.7

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Zero-margin benefits pass-through costs — 4,289.0

Worker's compensation coverage and state unemployment taxes — 613.4

Workers' compensation coverage and state unemployment taxes — 681.3

Other segment expenses (b) 6,697.5 406.8

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Zero-margin benefits pass-through costs — 3,975.9

Worker's compensation coverage and state unemployment taxes — 606.3

Workers' compensation coverage and state unemployment taxes — 613.4

Other segment expenses (b) 6,400.3 392.3

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(b) Other segment expenses for both reportable segments include operating, research and development, depreciation and amortization, and other general and administrative expenses.

(c) Other represents certain corporate overhead charges and expenses that have not been allocated to the reportable segments, including corporate functions, legal settlements, severance costs, non-recurring gains and losses, the elimination of intercompany transactions, and interest income and expense.

(c) Other represents certain corporate overhead charges and expenses that have not been allocated to the reportable segments, including corporate functions, legal settlements, company-wide severance initiatives, non-recurring gains and losses, the elimination of intercompany transactions, and interest income and expense.

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

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Total depreciation and amortization $ 585.9 $ 582.4 $ 561.9

The following table presents the Company's revenues and assets by geographic area:

United States Europe Canada Other Total

The following table presents the Company's revenues, which is based on the location of the billing entity, and assets by geographic area:

United States EMEA Canada Other Total

Year ended June 30, 2026

9 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-K

Item 8. Financial Statements and Supplementary Data