Company: ADP
Filing Date: 2025-05-01
Form Type: 10-Q
Source: 0000008670-25-000015
Chunk: 124

Company: AUTOMATIC DATA PROCESSING INC
Filing Date: 2025-05-01
Form: 10-Q
Item: Part I, Item 8
Chunk 124
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 expenses.

Employer Services' margin increased for the nine months ended March 31, 2025, due to contributions from operating efficiencies for costs of servicing and implementing our clients on growing revenue, and client funds interest revenues discussed above, partially offset by acquisition related expenses.

PEO Services

Revenues

PEO RevenuesThree Months EndedChangeNine Months EndedChangeMarch 31,March 31, 20252024$%20252024$%PEO Services' revenues$1,788.5 $1,665.6 $122.9 7 %$5,026.3 $4,681.2 $345.1 7 %Less: PEO zero-margin benefits pass-throughs1,090.0 1,016.3 73.7 7 %3,194.4 2,963.7 230.7 8 %PEO Services' revenues excluding zero-margin benefits pass-throughs$698.5 $649.3 $49.2 8 %$1,831.9 $1,717.5 $114.4 7 %

PEO Services' revenue increased for the three and nine months ended March 31, 2025, due to the increase in zero-margin benefits pass-throughs, and an increase in average worksite employees of 2% and 3%, respectively, as compared to the three and nine months ended March 31, 2024.

Earnings before Income Taxes

PEO Services' earnings before income taxes increased 7% and 2% for the three and nine months ended March 31, 2025, respectively, due to increased revenues discussed above, partially offset by increases in zero-margin benefits pass-through costs, operating costs related to workers' compensation and state unemployment insurance, and selling and marketing expenses, as compared to the three and nine months ended March 31, 2024.

Margin 

PEO Services' margin remained flat for the three months ended March 31, 2025, due to an increase in the pre-tax benefit from ADP Indemnity and operating efficiencies for costs of servicing and implementing our clients on growing revenue, offset by an increase in zero-margin benefits pass-through costs, operating costs related to workers' compensation and state unemployment insurance, and selling and marketing expenses.

PEO Services' margin decreased for the nine months ended March 31, 2025, due to increases in zero-margin benefits pass