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Research Alert: Adp Q3 Fy 26: Client Funds Strategy Leads To 10% Eps Growth

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-- CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:

Automatic Data Processing (ADP) delivered strong Q3 FY 26 (Jun.) results with adjusted EPS of $3.37 (+10% Y/Y, +2% vs. consensus) and total revenues of $5.9B (+7% Y/Y), beating expectations by $90M. The outperformance was supported by effective operational execution and growing higher-yielding client fund investment contributions. The client funds strategy emerged as the dominant earnings catalyst, with interest on funds surging 14% to $404M, owing to 9% growth in average balances to $48.3B and 10 bps yield improvement to 3.3%. Consolidated adjusted EBIT increased 10% to $1.8B with margin expansion of 80 bps to 30.2%, though segment performance varied with Employer Services achieving strong margin gains. U.S. pays per control growth held steady at +1%, reflecting persistent corporate hiring restraint amid macroeconomic uncertainty. We believe ADP's diversified client base of over 1.1M companies provides meaningful protection against concentrated exposure risks.

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