Company: ADP
Filing Date: 2025-05-01
Form Type: 10-Q
Source: 0000008670-25-000015
Chunk: 7

Company: AUTOMATIC DATA PROCESSING INC
Filing Date: 2025-05-01
Form: 10-Q
Item: Part I, Item 2
Chunk 7
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 activity and a higher excess tax benefit on stock-based compensation in the three months ended March 31, 2025, partially offset by the benefits of an intercompany transfer of certain assets in the three months ended March 31, 2024.

The effective tax rate for the nine months ended March 31, 2025 and 2024 was 23.1% and 22.7%, respectively. The increase in the effective tax rate is primarily due to a benefit for adjustments to prior year tax liabilities and a valuation allowance release in the nine months ended March 31, 2024.

Adjusted Provision for Income Taxes

The adjusted effective tax rate for the three months ended March 31, 2025 and 2024 was 23.0% and 23.4%, respectively. The drivers of the adjusted effective tax rate are the same as the drivers of the effective tax rate discussed above.

The adjusted effective tax rate for the nine months ended March 31, 2025 and 2024 was 23.1% and 22.7%, respectively. The drivers of the adjusted effective tax rate are the same as the drivers of the effective tax rate discussed above.

29

Net Earnings and Diluted EPS, Unadjusted and Adjusted

For the three and nine months ended March 31:

Three Months EndedNine Months EndedMarch 31,March 31,20252024YoY Growth20252024YoY GrowthNet earnings  $1,249.5 $1,184.9 5 %$3,169.0 $2,922.7 8 %Diluted EPS  $3.06 $2.88 6 %$7.75 $7.07 10 %Adjusted net earnings  $1,249.6 $1,186.0 5 %$3,168.8 $2,926.4 8 %Adjusted diluted EPS  $3.06 $2.88 6 %$7.75 $7.08 9 %

For the three and nine months ended March 31, 2025, net earnings reflect the changes described above in our earnings before income taxes and our effective tax rate. 

For the three months ended March 31, 2025, in addition to the increase in net earnings, diluted EPS increased as a result of the impact of fewer shares outstanding resulting from the repurchase of approximately 1.0 million