(Reuters) – Payroll and human capital management firm Automatic Data Processing raised its forecast for fiscal 2025 revenue growth on Wednesday, citing expected benefits from its recent acquisition of management services provider WorkForce Software.
The Roseland, New Jersey-based company acquired WorkForce Software earlier this month for around $1.2 billion in cash.
ADP’s results reflect that payroll and human resource spending remain healthy, supported by a stable labor market and a decline in layoffs.
Layoffs fell by 105,000 to 1.608 million, with decreases observed in retail trade, healthcare, and hospitality sectors, among others.
ADP raised its full-year revenue growth forecast to between 6% and 7% from its earlier growth expectations of between 5% to 6%.
First-quarter revenue reached $4.83 billion, beating analysts’ estimates of $4.77 billion, according to LSEG data.
“Our first quarter revenue and margin performance exceeded our expectations, as we benefited from solid new business bookings growth, strong client revenue retention, and higher client funds interest revenue,” said Don McGuire, ADP’s CFO.
Revenue for its PEO segment, which provides administration outsourcing services, rose 7% to $1.57 billion in the quarter ended Sept. 30, compared to estimates of $1.55 billion.
On an adjusted basis, the company earned $2.33 per share in the first quarter, compared with estimates of $2.21 per share.
(Reporting by Zaheer Kachwala in Bengaluru; Editing by Tasim Zahid)
