Automatic Data Processing, Inc. · NASDAQ:ADP
Automatic Data Processing — Investor Presentation (May 2025)
21 slides from Automatic Data Processing's investor presentation, May 2025
Slide 1: ADP Investor Overview and Corporate Governance
ADP Investor Overview and Corporate Governance May 2025 Copyright © 2025 ADP, Inc.
Slide 2: ADP Overview
ADP OVERVIEW 1.1M+ 92% clients worldwide Average client revenue retention in FY24 OVERVIEW ADP is one of the world’s leading global technology companies 42M+ 64k providing comprehensive cloud-based human capital workers paid across 140+ global ADP associates management (HCM) solutions that unite HR,
Slide 3: The HCM Market Is Large, Growing, and Evolving
THE HCM MARKET IS LARGE, GROWING, AND EVOLVING LARGE & GROWING MARKET CONTINUOUSLY EVOLVING • Emergence of dynamic teams and return to work WORK $175 B • Continued growth of gig economy • More workers paid in real-time or on tailored schedules TOTAL ADDRESSABLE PAY • Pay transparency remains a prior
Slide 4: Our Product Portfolio Spans Across Client Sizes, Needs, and Geographies
OUR PRODUCT PORTFOLIO SPANS ACROSS CLIENT SIZES, NEEDS, AND GEOGRAPHIES SMALL BUSINESSES MIDSIZED BUSINESSES LARGE BUSINESSES (49 employees and below) (50-999 employees) (1,000+ employees) RUN Powered by ADP® ADP Workforce Now® ADP Lyric ® & ADP Vantage HCM® US HCM ADP SmartCompliance® ADP TotalSour
Slide 5: Our Portfolio Is Strong and Diversified
OUR PORTFOLIO IS STRONG AND DIVERSIFIED Small Business 16% OUR HCM PORTFOLIO PEO 32% FY21 REVENUE ($15B TOTAL): $2.5B Small Business Major Accounts $2.4B Major Accounts 16% $1.1B National Accounts $2.2B International $1.0B ES HRO Complementary $1.1B Complementary Solutions Solutions 7% $4.8B PEO Nat
Slide 6: Distribution: Our Market Leadership Drives Scale Benefits
DISTRIBUTION: OUR MARKET LEADERSHIP DRIVES SCALE BENEFITS $2B+ 8.5K+ 170K+ in worldwide new sellers, all new logos business bookings virtually enabled sold annually 140+ 50%+ 800+ of new logos sold Marketplace countries with through partnership apps globally sales coverage Copyright © 2025 ADP, Inc.
Slide 7: ADP's Financial Strength
ADP’S FINANCIAL STRENGTH FY24 FINANCIAL HIGHLIGHTS FINANCIAL STRENGTHS ✓ Track record for delivering durable financial 7% 8% Employer Services revenue growth performance Revenue growth 8% to $19.2 billion 4% PEO Services revenue growth ✓ Leading credit rating including S&P (AA-), Moody’s (Aa3) and F
Slide 8: We Have Delivered Steady Revenue Growth
WE HAVE DELIVERED STEADY REVENUE GROWTH A HISTORY OF CONSISTENT REVENUE GROWTH… INCLUDING GROWING THROUGH HEADWINDS RELATED TO COVID-19 PEO Services Segment Employer Services Segment 10- Year CAGR1 FY20 FY21 FY22 FY23 FY24 through FY19 6.2B ES 6.0B 5% 1% 1% 8% 10% 8% 4.8B 5.5B Segment 4.2B 4.5B 3.9B
Slide 9: Enabled by an Attractive Financial Model
ENABLED BY AN ATTRACTIVE FINANCIAL MODEL Consistent Revenue and Strong Cash Flow Solid Balance Sheet Earnings Growth ✓Highly recurring revenue ✓Low capital requirements ✓Thoughtful approach to ✓Efficient model allows leverage ✓Leader in industry with global secular growth ample reinvestment for ✓Hig
Slide 10: We Take a Disciplined Approach to Capital Allocation
WE TAKE A DISCIPLINED APPROACH TO CAPITAL ALLOCATION • Product: $1.3B invested in Research and Development in FY24 1 Organic reinvestment to drive both revenue and margins • Go-To-Market: Sales headcount, marketing, and channel partnerships • Service: Digital transformation and AI • Thoughtful and d
Slide 11: Medium-Term Targets Issued at Our 2021 Investor Day
WE ISSUED MEDIUM-TERM TARGETS AT OUR 2021 INVESTOR DAY 7 to 8% 10 to 12% Revenue Growth Adjusted EBIT Growth Organic Constant Currency; Supported by approximately 75bps About 6% ES and 10 to 12% PEO Segment Growth annual Adj. EBIT Margin expansion 11 to 13% 13 to 15% Adjusted EPS Growth Total Shareh
Slide 12: Corporate Governance
CORPORATE GOVERNANCE Copyright © 2025 ADP, Inc.
Slide 13: Governance: Leading with Best Practices
GOVERNANCE: LEADING WITH BEST PRACTICES ADP is committed to shareholder-friendly corporate governance practices that help to drive long-term value creation ✓ Proxy access right at 3% / 3-year ownership threshold ✓ Annually elected Board; directors may be removed without (adopted August 2016) cause ✓
Slide 14: Governance: Committed to Shareholder Engagement
GOVERNANCE: COMMITTED TO SHAREHOLDER ENGAGEMENT We are committed to proactively engaging with shareholders; our Board is highly attuned to shareholder feedback, including governance & compensation best practices Monitoring & Assessment Outreach & Engagement • Board and management review: • ADP regul
Slide 15: Governance: Responsive to Shareholder Feedback
GOVERNANCE: RESPONSIVE TO SHAREHOLDER FEEDBACK Topics of Discussion ADP Actions Taken ✓ Following seamless CEO transition, returned to an independent, non-executive Board Chair • Board composition, self-assessment, and refreshment structure with Committee Chair and membership rotation (January 2024)
Slide 16: Governance: Best-in-Class Board with Balanced Skill Set
GOVERNANCE: BEST-IN-CLASS BOARD WITH BALANCED SKILL SET Deliberate Board Composition Skill Set Aligns and Evolves With Corporate Strategy ▪ Commitment to both continuity and fresh perspectives Director Skill Set2 – 4 of our 10 independent Directors have a tenure of 5 years or less1 – Average indepen
Slide 17: Compensation: Rigorous Approach
COMPENSATION: RIGOROUS APPROACH Five Guiding Principles Compensation Governance Ensures Alignment with Principles Emphasize variable, performance-based compensation 1 Robust Clawback Policy exceeding Nasdaq listing requirements to ensure that pay and performance are closely aligned ✓ applicable to c
Slide 18: Compensation: Pay Closely Aligned to Performance
COMPENSATION: PAY CLOSELY ALIGNED TO PERFORMANCE Balanced, Performance-Based Compensation Policy Transformation, Client Satisfaction and ESG Objectives • Designed to incentivize sustainable value creation • Transformation, Client Satisfaction and ESG objectives represent 20%, 10% and 10%, respective
Slide 19: Enterprise Risk Management
ENTERPRISE RISK MANAGEMENT BOARD AND KEY COMMITTEES MAINTAIN DISCIPLINED RISK ASSESSMENT PROCESS TO EFFECTIVELY PURSUE STRATEGIC GOALS COMPENSATION AND MANAGEMENT • Corporate Compliance • Acquisition Integration DEVELOPMENT COMMITTEE Competitive (including Corp • • Environmental, Social, and • 2 Ope
Slide 20: Committed to Sustainable Practices
COMMITTED TO SUSTAINABLE PRACTICES Environment Social • Commitment to Net-Zero GHG • Commitment to an inclusive Emissions by 2050 workplace • Reducing Scope 1 & 2 GHG emissions • Always Designing for 25.2% by 2025 and 50% by 2030 People – all people • Executive compensation linked to • Key HCM solut
Slide 21: Corporate Social Responsibility Report
CORPORATE SOCIAL RESPONSIBILITY REPORT MOST RECENT CSR REPORT ISSUED MAY 2024 ✓ Commitment to Strong Governance, Ethics, and Compliance ✓ Associate Inclusion, Engagement and Wellness ✓ Client Betterment Through Innovation ✓ Community Engagement and Volunteer Involvement ✓ Environmental Sustainabilit
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