Company: ADP
Filing Date: 2025-01-30
Form Type: 10-Q
Source: 0000008670-25-000007
Chunk: 56

Company: AUTOMATIC DATA PROCESSING INC
Filing Date: 2025-01-30
Form: 10-Q
Item: Part I, Item 1
Chunk 56
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, and an increase in our average client funds balances of 6.7% to $34.0 billion for the six months ended December 31, 2024.

Total Expenses

Three Months EndedSix Months EndedDecember 31,December 31, 20242023%Change20242023%ChangeCosts of revenues:Operating expenses$2,376.1 $2,213.3 7 %$4,661.9 $4,370.9 7 %Research and development239.5 228.7 5 %472.1 465.1 2 %Depreciation and amortization126.9 119.6 6 %242.2 240.9 1 %Total costs of revenues2,742.5 2,561.6 7 %5,376.2 5,076.9 6 %Selling, general and administrative expenses1,006.1 922.5 9 %1,932.8 1,802.8 7 %Interest expense129.6 104.9 24 %267.4 196.5 36 %Total expenses$3,878.2 $3,589.0 8 %$7,576.4 $7,076.2 7 %

For the three months ended December 31, 2024, operating expenses increased due to an increase of  $84.5 million of PEO Services zero-margin benefits pass-through costs from $970.7 million to $1,055.2 million. Additionally, for the three months ended December 31, 2024 operating expenses increased by $36.1 million due to higher service and implementation costs in support of our growing revenue.

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For the six months ended December 31, 2024, operating expenses increased due to an increase of  $156.9 million of PEO Services zero-margin benefits pass-through costs from $1,947.5 million to $2,104.4 million. Additionally, for the six months ended December 31, 2024 operating expenses increased by $60.7 million due to higher service and implementation costs in support of our growing revenue.

Research and development expenses increased for the three and six months ended December 31, 2024 due to increased investments and costs to develop, support, and maintain our new and existing products and the impact from the WorkForce Software