Company: ADP
Filing Date: 2025-10-31
Form Type: 10-Q
Source: 0000008670-25-000047
Chunk: 5

Company: AUTOMATIC DATA PROCESSING INC
Filing Date: 2025-10-31
Form: 10-Q
Item: Part I, Item 2
Chunk 5
---
 related to our client funds

extended investment strategy, and net charges, including certain legal settlements, in the applicable periods.

Provision for Income Taxes

The effective tax rate for the three months ended September 30, 2025 and 2024 was 22.5% and 22.6%, respectively. The decrease in the effective tax rate is primarily due to lower reserves for uncertain tax positions primarily offset by the cost of an intercompany transfer of certain assets and a lower excess tax benefit on stock-based compensation in the three months ended September 30, 2025.

Adjusted Provision for Income Taxes

The adjusted effective tax rate for the three months ended September 30, 2025 and 2024 was 22.5% and 22.6%, respectively. The drivers of the adjusted effective tax rate are the same as the drivers of the effective tax rate discussed above.

28

Net Earnings and Diluted EPS, Unadjusted and Adjusted

Three Months EndedSeptember 30,20252024YoY GrowthNet earnings  $1,013.0 $956.3 6 %Diluted EPS  $2.49 $2.34 6 %Adjusted net earnings  $1,013.0 $956.1 6 %Adjusted diluted EPS  $2.49 $2.33 7 %

In addition to the increase in net earnings, diluted EPS increased for the three months ended September 30, 2025 as a result of the impact of fewer shares outstanding resulting from the repurchase of approximately 1.2 million shares during the three months ended September 30, 2025, and 1.4 million shares during the three months ended September 30, 2024, partially offset by the issuances of shares under our employee benefit plans.

Adjusted net earnings and adjusted diluted EPS reflect the changes in the components described above for the three months ended September 30, 2025.

29

ANALYSIS OF REPORTABLE SEGMENTS

RevenuesThree Months Ended% ChangeSeptember 30, 20252024As ReportedOrganic constant currencyEmployer Services$3,491.2 $3,261.0 7 %5 %PEO Services1,687.5 1,574.5 7 %7 %Other(3.5)(2.8)n/mn/m$5,175.2 $4,832.7 7 %6 %

E