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Fortune 500

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Modern Board 2022-ADP

ADP has four former CEOs and three active CEOs on its board. The actives include ADP’s own chief, Carlos Rodriguez, who is also on the board of Microsoft (No. 1 on this list); and Nazzic Keene, CEO of SAIC. ADP scored high in the Modern Board ranking for nationality dispersion, board independence, and board expertise.   
 
The HR software and services company has <a href="https://seekingalpha.com/article/4492107-12-top-stocks-bear-market">received analyst praise</a> for steady cash flow, stability of demand for its offerings, and strong dividends. William J. Ready, president of commerce at Google, and Francine Katsoudas, chief people officer at Cisco, are also ADP board members. The company <a href="https://finance.yahoo.com/news/adp-adp-1-9-since-163004806.html">projects steady (6%) revenue growth</a> for its employer services arm in 2022, along with 13% to 15% growth for its PEO (professional employer organization) division.

Fortune Modern Board 25

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GPTW New York Large 2022-ADP

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Best Large Workplaces New York 2021-ADP

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F500 2021-208-ADP

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F500-2020-227-Automatic-Data-Processing

Automatic Data Processing, more commonly known as ADP, provides HR solutions including electronic payroll systems in more than 140 countries.

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Best Large Workplaces In New York

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Automatic Data Processing, or ADP, provides cloud-based human resources products to organizations around the world. The company has two primary segments: one for employer services and the other focused on professional employer organizations. These parts of the business include platforms and services for payroll, HR management, tax compliance, benefits administration, and talent management.

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Automatic Data Processing (ADP): Company Profile, Stock Price, News, Rankings

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Good morning. My name is Michelle, and I'll be your conference operator. At this time, I would like to welcome everyone to ADP's Second Quarter 2025 Earnings Call. I would like to inform you that this conference is being recorded. After the prepared remarks, we will conduct a question and answer session.

Instructions will be given at that time. I will now turn the conference over to Matt Keating, Vice President, Investor Relations. Please go ahead.

Thank you, Michelle, and welcome everyone to ADP's Q2 fiscal 2025 earnings call. Participating today are Maria Black, our President and CEO and Don McGuire, our CFO. Earlier this morning, we released our results for the quarter. Our earnings materials are available on the SEC's website and our Investor Relations website at investors. Adp.com, where you'll also find the investor presentation that accompanies today's call.

During our call, we will reference non GAAP financial measures, which we believe to be useful to investors and that exclude the impact of certain items. A description of these items along with a reconciliation of non GAAP measures to their most comparable GAAP measures can be found in our earnings release. Today's call will also contain forward looking statements that refer to future events and involve some risks. We encourage you to review our filings with the SEC for additional information on factors that could cause actual results to differ materially from our current expectations. I'll now turn it over to Maria.

Thank you, Matt, and thank you, everyone, for joining us. Before I cover our results, I'd like to take a moment to acknowledge those impacted by the devastating wildfires in Los Angeles. Our hearts go out to our clients, associates, community members and everyone touched by this tragic situation. To begin, I'd like to highlight a significant milestone achieved during the Q2. When ADP's Board of Directors approved the 10% increase to our quarterly dividend in November, it marked the 50th consecutive year in which we raised our dividend.

We are now proud to be included among an elite group of dividend kings, a small number of publicly traded U. S. Companies with 50 or more consecutive years of dividend increases. This distinction is a testament to ADP's enduring business model and our ability to innovate over time and across economic cycles. We embrace this accomplishment and our role as a global HR technology leader and builder of a new era of workforce insight and innovation.

We look forward to sharing more about where we've been and more importantly, where we're headed at our 2025 Investor Day, which will take place on June 12. This morning, we reported strong second quarter results that included 8% revenue growth, 60 basis points of adjusted EBIT margin expansion and 10% adjusted EPS growth. These results reflected strength across our Employer Services and PEO segments. I'll begin with some additional financial highlights before providing an update on the progress made across our strategic priorities. We delivered solid Employer Services new business bookings with record volume for

Q2. Growth was notably strong across our HR outsourcing, compliance and enterprise businesses as well as our small business offerings. With a continued healthy demand backdrop and a new business pipeline that is up from this time last year, we look forward to a strong second half of the year. Employer services retention declined slightly compared to the prior year, but once again modestly exceeded our expectations. We continue to benefit from a strong overall business environment and very high client satisfaction levels.

In fact, our client satisfaction levels reached a new all time high in the second quarter through the first half of our fiscal year. Employer services pace per control increased 1% in Q2, decelerating from the 2% growth in Q1. The U. S. Labor market remains strong and our clients continue to hire, albeit at a slightly slower pace.

Finally, PEO revenue growth of 8% was driven by strong PEO new business bookings and faster 0 margin pass through growth. Now let's turn to our strategic priorities, where we delivered another quarter of considerable progress. During the Q2, we announced a strategic partnership with Fiserv that brings Fiserv's leading small business solutions, specifically Clover, its cloud based point of sale and business management platform and Cash Flow Central, its accounts payables and receivables management platform, together with Run, our industry leading small business payroll and HR solution. Helping small businesses thrive has been ADP's mission since day 1, and we are excited to partner with Fiserv to advance this goal and to support the millions of small businesses that drive the U. S.

Economy. Through this partnership, ADP and Fiserv will offer U. S.-based small businesses access to an integrated all in one solution, combining the full power of Run and the Clover Small Business Management platform. In addition, Cash Flow Central will be available to run clients, enabling our mutual customers to manage their cash flow more efficiently. These integrated solutions will make it easier than ever for small businesses to manage the flow of money into and out of their business, whether they are selling to customers, paying bills or managing payroll.

We initiated mutual client referrals to our respective offerings during the Q2 and our teams are working closely to deliver the integrated solution in the coming months. Our Workforce Software acquisition, which closed in mid October, is progressing well and in line with expectations. We are thrilled to have Workforce Software's associates join ADP and our teams are working to integrate Workforce Software's time and attendance, absence management and scheduling tools with key ADP HCM platforms. While that happens, the workforce software team is focused on maintaining its momentum and delivering best in class solutions. And in Q2, we experienced healthy new business activity across our new workforce software offering as well as our other existing workforce management solutions.

In addition, we have already started to see new business opportunities that validate the growth anticipated from the combination. For example, Workforce Software's enterprise focused industry specific solutions are a strong fit for clients, allowing us to better compete and win in a wide range of industry verticals and geographies. Similarly, we are seeing opportunities to offer ADP HR and payroll solutions to workforce software clients looking for a full suite HCM solution. With the addition of workforce software, ADP is uniquely positioned to provide clients with a global HR, payroll service and time solution, and this value proposition is generating excitement in the marketplace. We remain confident in our opportunity to accelerate our growth in the workforce management and enterprise spaces.

Following the successful introduction of ADP Lyric, our flexible, intelligent and human centric global HCM platform, the product continued to generate strong interest in the marketplace during the Q2. Lyric's new business booking volumes increased again and its new business pipeline ended the quarter up significantly compared to last year. One client that started on Lyric in Q2 is a large recreation management company in the Midwest that operates nearly 20 parks, a nationally acclaimed zoo and 9 golf courses. The client selected Lyric for a cutting edge user experience and to simplify its personnel management activities and payroll processes. It went live with a full suite, including HR, payroll time, benefits, recruiting and talent management and is very pleased with the outcome.

Since Lyric is a global platform, we remain focused on expanding its already broad international reach to capitalize on what we see as a significant global opportunity. Before I turn the call over to Don, I want to take a moment to express my gratitude to our associates for their dedication and hard work. Their unyielding commitment to our clients inspires me each and every day. It is these efforts that continue to contribute to our record client satisfaction scores. Thank you again for all that you do for ADP, for each other and for our clients.

Let's continue to build on our momentum and strive for even greater success together. Don?

Thank you, Maria, and good morning, everyone. I'll start by providing some more color on our 2nd quarter results and then update our fiscal 2025 outlook. Let me begin with our Employer Services results and outlook. ES segment revenue increased 8% on a reported and 7% on an organic constant currency basis in the Q2. As Maria mentioned, ES new business bookings growth was solid with a healthy HCM demand backdrop and higher new business pipelines compared to last year, we are maintaining our 4% to 7% full year growth guidance.

ES retention declined slightly in Q2 and we continue to forecast a modest decline of 10 to 30 basis points for fiscal 2025. ES pays per control growth of 1% came in slightly below our expectations, but we are maintaining our forecast for 1% to 2% growth for the full year. Client funds interest revenue increased by more than we anticipated, driven mainly by stronger growth in average client funds balances. For the full year, we are increasing our forecast for client funds interest revenue and the net impact from our extended investment strategy by $25,000,000 Despite recent FX headwinds more than offsetting the increase to our client funds interest revenue forecast, we are maintaining our outlook for full year ES revenue growth of 6% to 7%. Our ES margin increased 90 basis points in the 2nd quarter, reflecting operating leverage and client funds interest revenue growth.

We continue to forecast ES margin increasing 40 to 60 basis points for the full year. Moving to the PEO, revenue growth of 8% and average worksite employee growth of 3% slightly exceeded our expectations. Revenue growth benefited from strong new business bookings, accelerating 0 margin pass through growth, wage growth and the timing of state unemployment insurance revenue. With continued healthy new business activity levels, we are maintaining our full year forecasts for PEO revenue growth of 5% to 6% and average worksite employee growth of 2% to 3%. PEO pays per control growth stabilized in Q2, but we continue to expect it to grow slightly slower than ES pays per control growth for the full year.

PEO margin decreased 140 basis points in the quarter impacted by higher 0 margin benefits pass through revenue growth and an increase in workers' compensation and state unemployment insurance costs. We continue to expect PEO margin to decrease between 70 basis points and 90 basis points for the full year. Putting it all together, we are maintaining our fiscal 2025 outlook for consolidated revenue growth of 6% to 7% and adjusted EBIT margin expansion of 30 basis points to 50 basis points. We continue to expect a full year effective tax rate of around 23%. Our fiscal 2025 adjusted EPS growth forecast of 7% to 9% is also unchanged.

There are 2 cadence matters I would like to highlight. First, we mentioned the timing of PEO state unemployment insurance revenue and we likewise had some favorable revenue timing in our ES segment in Q2 related to the calendar. We expect these factors as well as the strengthening U. S. Dollar and the impact of lower short term interest rates to result in a deceleration in both ES and total revenue growth in Q3 before growth trends reaccelerate in Q4.

2nd, we expect adjusted EBIT margin expansion and adjusted EPS growth to be lower in Q3 than in Q4 to reflect the lower revenue growth as well as the timing of integration expenses associated with the Workforce Software acquisition. Thank you. And I'll now turn it back to the operator for Q and A.

Thank you. Our first question comes from Samad Samana with Jefferies. Your line is open.

Hi, good morning and thanks for taking my questions and great to see the strong end to the calendar year for last year, Maria and team. So congrats on that. I guess first question is just on the Fiserv partnership, that's obviously exciting news. Is that going to be referrals between the 2 organizations? Is there co development on the product?

And maybe just help us think about, is there any kind of revenue share associated with it? And should we see, this is the beginning of more of an ISP driven strategy? I know it's a multi partner, but there's a lot there.

Yes, sure. Good morning, Samad, and thank you for the accolades on the strong finish. Certainly excited as well about it. With respect to the Fiserv relationship, we're incredibly pleased to enter into this relationship. If you think about our 2 organization, there are 2 companies that are anchored in serving the small business market and have always believed in making things easier for that small business owner to navigate being in business.

If you imagine 2 great companies coming together, 2 great distribution arms coming together to really solve what I believe are real things for real clients in the real world, if you will. So to answer your question, we are at this point in a referral relationship back and forth. That's what we've done to date. But you're exactly right as we think about integration of the products long term. And so the Run offering will be embedded inside of Clover and vice versa.

So Clover will be embedded inside of RUN. And so that ability to really have a joint offering from a technology side is what we're working on and what is to come, if you will. But thus far, we're really encouraged by what we're seeing so far with respect to the distribution arms, passing leads back and forth between the 2 great companies. I think you also asked beginning of more relationships. And I think my answer would be, we believe in partnerships, we believe in ecosystem.

Certainly, how we go to market, specifically in the down market today is through the great strength of our distribution, but through that great strength of our channel partners, be it banks, be it the accountant channel and now be it this channel with Fiserv.

Great. And then maybe just one follow-up. On the enterprise side, I know that with the rebranding to Lyric, there's been a lot focus on that. You sounded very good about it last quarter. You called it out for bookings this quarter.

Are you seeing is this kind of a clear inflection now? Is it fair to say that? And how should we think about maybe the impact of bookings or what's built into the forecast this year from the enterprise side of the business?

Sure. So it is clear that Lyric is resonating really well in the marketplace. And just real quick for everyone, Lyric is the new name for our next gen HCM solution. And it is really anchored in flexibility, intelligence, it's human centric and design. So we believe it's a really strong product offering.

I believe the market is seeing that as well based on what we're seeing with respect to client ads, the pipeline building. I think the pipeline is incredibly strong year on year. We do expect Lyric to contribute to our growth this year from a new business bookings perspective. But again, it is still early days and so it will take some time to scale and for it to overall dent the financials of the organization. But the offering is resonating with our global enterprise clients and we're really excited in terms of the receptivity we're seeing in the market.

Great. Thank you so much for taking my questions.

Thank you. Our next question comes from Bryan Bergin with TD Cowen. Your line is open.

Hi, good morning. Thank you. The first question is on demand. So it's good to hear the continuation of a healthy backdrop here. Can you double click on how that's progressed across the client segment size?

And I'm curious as the calendar turned and just post U. S. Election, did you note any changes or anything just worth calling out in bookings specifically on what you see in the U. S. Versus international?

Sure, Brian, and good morning. So demand is strong. It's broad based. We feel good about the overall HCM demand. We also clearly benefit from having a great sales and marketing organization.

I would say across the various segments in the down market, down market companies, they're still hiring, they're still buying, they're still navigating, being small business owners, as we just talked about. There are a couple of pockets. I think we're keeping a watchful eye on things like new business formations, which seems to have a little bit of pressure this fiscal year. But it's still at an elevated level, if you will, from a pre pandemic standpoint. In the mid market, we are seeing that strength in HR outsourcing.

I mentioned that in the prepared remarks. And that's a differentiation for us in that mid market space. Really excited to see the extension there. And then we've talked over the quarters about the investments we've made into our mid market product, Workforce Now, the record MPS, the record retention. And so we have a nice mid market story to meet that demand across the mid market segment.

I think with respect to global and upmarket, I tend to say every quarter, we're always keeping in a watchful eye, just given the uncertainty in the global space and economic backdrop. But at this point, we don't see anything that would be alarming. And I think generally speaking, we feel really good and broad based about the pipeline strength heading into the back half. But as we all know, we're a back half business. We have a lot to execute against.

You asked about the new administration and anything that's changed. I think it's too early to call whether or not we're seeing a demand change as a result of the new administration. But the good news is, there seems to be a lot of activity and change is good for ADP. As companies navigate change, we're there to help them stay compliant. And so we're looking forward to helping our clients sort through, what undoubtedly seems to be quite a bit of change.

Yes, for sure. Okay. I appreciate all that detail. And then I tell me on the 25 outlook here. So Don, I appreciate the cadence clarifications.

For the full year outlook, when we think about you affirmed the range on EPS growth, just any indications on kind of comfort levels within that range as you move through the second half? How should we be thinking about the EPS here as it relates to kind of float upside potential as the curve remains elevated versus potential FX headwinds from dollar strength?

Yes, Brian. So I think you touched on it right there at the end. It's the FX headwinds that are really causing us to see some slowdown. But I'd also say that particularly in the Q3, which is by far our largest average daily balance time as the new taxes or sorry, as federal and state taxes kick in again at the start of the year, that's where we tend to have the highest balances. And all those funds or most of those funds are short and short term rates are down 100 basis points year on year.

So that's what's put more pressure on Q3 in particular before it rebounds into Q4. So I think that's the trade off. It's the FX headwinds are causing some grief. And then of course, the short nature of the investment portfolio in the Q3 as a result of the various taxes re kicking in at the start of the calendar tax year.

Okay. Okay. I appreciate that and congrats on the 50 years of dividend increases.

Thank you. Our next question comes from Ramsey El Assal with Barclays. Your line is open.

Hi, thanks for taking my question this morning. Don, would you comment a bit further on the drivers of the implied slower PEO revenue growth in the back half? I know there were some timing related issues. Can you just sort of parse that out for us and help us understand a little better why that should decelerate the way you've implied it will?

Well, we certainly have the SUI. We have talked a little bit also in the prepared remarks about the pull forward of some SUI into Q2. So that was really just the way the calendar fell with New Year's Day happening when it did in the holiday. People processed at the back end of Q2 as opposed to Q3. So that pulled some of the low margin SUI into the Q2 as opposed to letting it fall into the 3rd.

And then of course, we are in our renewals time, so we're looking at that. PACE per control continue to be, as we said, we expect pace per control growth in PEO to be a little bit slower than they were in there or they are in ES. Do you want to clarify in ES while I'm saying this though that we did round down to 1% pace for control growth in ES. We didn't round up, we rounded down. So pace per control growth was a little bit slower than expected, but it was still above the 1% rate.

So I think those are really the primary drivers of what's slowing the PEO growth in the back half.

Got it. Okay. And then a follow-up for me. In the context of the Paychex Paycor acquisition, do you see any changes in the M and A environment or in your appetite to do deals?

Yes, I guess I'd say that our views on M and A really haven't changed. I think that over the years, the things we've looked at, we really haven't thought that regulatory environment has really been an encumbrance to us doing anything. There's still credible amount of fragmentation in the industry. So I think we're going to keep to our principles. We need to make sure that things that we acquire complement our offerings and don't complement or complicate them.

But certainly, we continue to look. I mean, you should expect to see as we've done over the years, expect to see some tuck ins are very important for us and they've contributed to us getting better control over our network, etcetera. So you may see some of those going forward. But I don't think that there's going to be any changes based on potential new regulation that would result in us seeing a much different stance in M and A than we've had to date.

Thank you. Our next question comes from James Faucette with Morgan Stanley. Your line is open.

Great. Thank you very much. Appreciate all the time this morning. I want to ask quickly about retention. Last quarter you saw a little bit of retention degradation, but it wasn't really specifically attributable to an uptick in small, medium sized bankruptcies and instead kind of rather broad based off peak hiring levels.

What specifically did you see in the quarter on that latter point? Are we seeing kind of hiring levels

around at all? And what's the assumption in the back half for and is the assumption for the back half that smallmedium sized business bankruptcies will pick up again?

Yes. That is the assumption, James, in the back half and good morning. So retention, as you noticed, we did beat modestly. Again, on retention, I'm very pleased to see that because the biggest piece is if we're beating modestly on retention, that does mean that ultimately small business owners are staying in business. So that makes me even more happy for them as well as our results.

We did see a little bit of a degradation, if you will, in the down market. So we believe we're almost all the way normalized. We're not quite there. It declined. It declined modestly in the Q1, declined modestly in the Q2.

That said, we do continue to beat. So based on what we're seeing and the fact that across each one of our segments, we've really been at that record retention levels. We believe it's prudent to keep our retention guide as is, but I'm optimistic, as I'm sure we all are to hope that specifically small businesses stay in business.

Great. Appreciate that. And then I wanted to do a little bit of a status check on some of your AI and machine learning driven initiatives. You guys have always been very front footed on that. And I know that kind of ebbs and flows as a topic.

But I'm wondering if you can just give us an update on service and sales efficiency efforts with some of your Gen AI projects and if you have any examples that you could provide of how your GenAI initiatives are impacting client retention or sales productivity or any other metric you may want to touch on?

Yes, sure. So I'll start and I certainly welcome Don to chime in here with respect to the results that we're seeing. But we are laser focused on our generative AI strategy, on our overall approach. And just to kind of level set and remind everybody, the way that we've been thinking about it is really in 3, call it specific buckets, which is putting generative AI into our products. That's what we call ADP Assist.

That's making our products more usable and better for our clients. It's putting generative AI into our service organization. So think of that as agent assist, but that's part of the overall ADP assist umbrella. And that specifically, James, kind of answers your question around service and things of that nature. Some of the things we've spoken about in the past that are already making meaningful impact are with respect to things like call summarization.

So I think I cited before that we're shading off a minute per call, which may not sound that exciting to everybody than a minute per call. But when you take lots and lots of calls, it adds up pretty quickly. So we continue to make meaningful impact on some of those tools. Other things we cited in the past, digital transformation as it relates to implementation. And so the small business organization is at really record levels as it relates to end to end digitally onboarding clients using new tools that are anchored in generative AI.

So that's kind of the service side. By the way, I could go on and on about this topic. Switching gears really quickly to the go to market. We've been undergoing a sales modernization effort. I'd argue for 2 decades, we have one of the most meaningful sales modernization tech stacks that exist.

I think the likes of best in class technology to enable our sellers. Some of the things that we've talked about is opportunity prioritization. So think about putting the right lead in front of the right seller at the right time to drive value into the sales process. We're doing things like rapid pre call planning. So this takes me back to my olden days where I used to have to pull everything up on the Internet or MapQuest and try to study what I should say to a certain client.

These are all tools now that exist that are helping our sellers become more effective on their sales calls. And the way that you see that and quantify it, certainly the end game there is more sales. But it's really this balance between as we invest into sales modernization and these various pieces of technology, it's really driving productivity. So we have a natural lift right now in productivity just based on the tenure that we're seeing in our sales organization. So if you imagine as we're bringing on new associates, we're also building tenure in the existing sales force.

So new associates are able to become more productive and existing associates are also able to become more productive. Part of that is anchored in tenure. A lot of that is anchored in these tools that we're investing in. And the long term output of that is more sales and more sales productivity. So I think I've said a lot, but I'll offer Don if there was anything you wanted to add to that.

No, I'd just add that we are seeing good efficiency and good productivity, but I would say that we still have these tools in many of our associates hands, but there's still many more to get the tools. And when they get to those tools, we expect to see even more positive results. So we'll watch the productivity improvements and hopefully we see those things reflected in the margin. Of course, we have made some minor investments in these tools themselves. So the bottom line impact is going to be over the longer term and certainly not short term, but very, very positive results from everything we're seeing and everything we're doing.

Thank you. Our next question comes from Mark Marcon with Baird. Your line is open.

Hey, good morning, Maria and Don, and congratulations on the strong end of the calendar year and obviously the 50 years to for the whole organization. On the strategic side, with regards to Fiserv and Clover, it sounds really promising. How meaningful could it be? Like if we fast forward 2 or 3 years, how do you envision the partnership working? And could it be expanded above and beyond run because I think for some clients, it might also be pretty relevant on the lower end of Workforce Now.

So I'm wondering how you're thinking about that. I know it's early days, but wondering if you can just give us a feel for that.

Sure, Mark. And first and foremost, thank you for the accolades on the 50 years. You've been a big part of that over the years. I appreciate all the interest you've had to help us along and certainly this interest in our go forward strategy. I think you hit the nail on the head.

We have all sorts of plans and visions just how far we can go. Again, if you think about that down market ecosystem and how we go to market today, it is primarily through channels. I think we've cited in the past specific numbers around how we distribute through those channels, be it banks, be it CPAs, certainly through POS channels or merchant services channels such as Fiserv, this could be a meaningful channel for us. That is why we've engaged and we believe in it. So when I if I was to fast forward 5 years, I think it's a channel that we speak to very similarly to the way that we speak to the accountants and the banks today.

And I think about 2, again, great products, great companies and great distribution engines coming together to really drive that value into the overall small business space. Could it go beyond small business? I think the answer is a little bit to be determined. I think that's something that as we see the traction in the down market, we'll continue to challenge ourselves. Listen, it's very simple for me.

To me, it's the guiding principle is always about the client. And if we have an opportunity to solve real challenges for business owners, be it small, be it mid, be it up market, we're all about that and Fiservice as well. And I think that's what makes us so exciting. So anything we can do to make things easier to navigate being in business, we're here to help.

That's great. And on workforce software, it sounds like everything's going according to plan.

the next fiscal year, how well integrated will it be by for fiscal 2026, do you think? And how meaningful could that end up being with regards to the up market?

Sure, Mark. So we are actively working through that from a plan perspective right now. So I'm pleased to say everything is on track. We actually just rounded 100 days. It's amazing time flies when you're having fun.

But last week, we celebrated 100 days in. And at this juncture, what we've done is welcome the workforce software associates. We've folded them into the ADP family, really pleased to see how the milestones that we've accomplished in the 1st 100 days have come along. And in there, thus far, it's really taking a look at the go to market. So as we talked about last quarter, they have a meaningful set of clients.

And so as we look at their client base and our client base and comparing pipelines, really that ability to go to market together to ensure that we're winning consistently on the workforce, software and the time and labor management side. That's been a big piece of the focus. And then as you can imagine, working through the integration is really the next set of pieces. So I don't think we're in a spot yet to declare necessarily exactly by when, but that is a big piece of the work that is being done. And we're really excited about what this is going to mean to us from an opportunity in the workforce management space, but also in the enterprise space and the global space as we bring this product also together with the Lyric offering.

Terrific. Got tons of questions, but I'll leave it there. Congratulations again.

Thank you. Our next question comes from Bryan Keane with Deutsche Bank. Your line is open.

Hi, guys. Good morning and congrats on the solid results. Just a clarification on the Fiserv partnership. Just on the economics, how do the economics exactly work between the two companies? Is it a percentage of sales as a one time fee?

Is it a recurring fee? Just curious on how that relationship works on both sides.

Automatic Data Processing (ADP) Q2 2025 Earnings Call Transcript

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