Revenue Breakdown
Composition ()
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Revenue Streams
Automatic Data Processing Inc (ADP) generates its revenue through a diversified portfolio of business segments. Currently, the largest contributor to its top-line growth is HCM, accounting for 41.4% of total sales, equivalent to $2.12B. Other significant revenue streams include PEO zero-margin benefits pass-throughs and HRO, excluding PEO zero-margin benefits pass-throughs. Understanding this composition is critical for investors evaluating how ADP navigates market cycles within the IT Services & Consulting industry.
Profitability & Margins
Evaluating the bottom line, Automatic Data Processing Inc maintains a gross margin of 50.89%. This metric reflects the company's pricing power and manufacturing efficiency. Further down the income statement, the operating margin stands at 26.13%, while the net margin is 19.82%. These profitability ratios, combined with a Return on Equity (ROE) of 73.84%, provide a clear picture of how effectively ADP converts its operational activities into shareholder value.
Comparative Benchmarking
In the context of the broader market, ADP competes directly with industry leaders such as CDNS and BILI. With a market capitalization of $86.31B, it holds a leading position in the sector. When comparing efficiency, ADP's gross margin of 50.89% stands against CDNS's 86.09% and BILI's 36.67%. Such benchmarking helps identify whether Automatic Data Processing Inc is trading at a premium or discount relative to its financial performance.
