Company: ADP
Filing Date: 2025-05-01
Form Type: 10-Q
Source: 0000008670-25-000015
Chunk: 4

Company: AUTOMATIC DATA PROCESSING INC
Filing Date: 2025-05-01
Form: 10-Q
Item: Part I, Item 2
Chunk 4
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2 5 %8,280.4 7,845.1 6 %Selling, general and administrative expenses1,015.8 940.9 8 %2,948.6 2,743.6 7 %Interest expense74.8 62.7 19 %342.2 259.2 32 %Total expenses$3,994.8 $3,771.8 6 %$11,571.2 $10,847.9 7 %

For the three months ended March 31, 2025, operating expenses increased primarily due to an increase of  $73.7 million of PEO Services zero-margin benefits pass-through costs from $1,016.3 million to $1,090.0 million. Additionally, for the three months ended March 31, 2025 operating expenses increased by $28.8 million due to higher service and implementation costs in support 

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of our growing revenue and by $23.9 million due to an increase in costs related to workers' compensation coverage and state unemployment taxes for worksite employees.

For the nine months ended March 31, 2025, operating expenses increased primarily due to an increase of  $230.7 million of PEO Services zero-margin benefits pass-through costs from $2,963.7 million to $3,194.4 million. Additionally, for the nine months ended March 31, 2025 operating expenses increased by $89.5 million due to higher service and implementation costs in support of our growing revenue and by $54.2 million due to an increase in costs related to workers' compensation coverage and state unemployment taxes for worksite employees.

Research and development expenses increased for the three and nine months ended March 31, 2025 due to the WorkForce Software acquisition, and increased costs to develop, support, and maintain our new and existing products, partially offset by efficiencies from workforce optimization efforts initiated in the prior year and an increase in the capitalizable spend related to the integration of GenAI into our products, as compared to the prior year.  

Depreciation and amortization expenses increased for the three and nine months ended March 31, 2025 due to the WorkForce Software acquisition and amortization of new investments in internally developed software primarily for our next-gen products and purchased software, partially offset by lower amortization of customer contracts and lists.

Selling, general and administrative expenses increased for the three and nine