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ADP Gears Up to Report Q1 Earnings: What's Next for Investors?

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Key Takeaways

  • ADP's Q1 revenues are projected to rise 5.6% y/y to $5.5B, while EPS is expected to grow 11.7% to $2.78.
  • ES revenues are expected to grow 5.3%, fueled by HR outsourcing demand and business bookings.
  • ADP's PEO revenues are projected to rise 5.8%, while interest on client funds is expected to grow 15.9%.

ADP (ADP - Free Report) is scheduled to release first-quarter fiscal 2027 results on Oct. 28, before market open.

ADP has a decent earnings surprise history, surpassing the Zacks Consensus Estimate in the trailing four quarters, with an average surprise of 2.1%.

ADP’s Q1 Expectations

The Zacks Consensus Estimate for the top line is set at $5.5 billion, indicating 5.6% year-over-year growth. The consensus estimate for the Employer Services (ES) segment revenues is pinned at $3.7 billion, indicating 5.3% year-over-year growth.

The ES segment is expected to have benefited from solid business bookings, persistent demand for HR outsourcing solutions, and expansion across domestic and international markets.

The segment is expected to have experienced significant growth from the growing adoption of ADP Lyric HCM, Global Payroll and WorkForce Suite. Additional support is expected from investments in AI-driven sales tools, prudent pricing contribution and healthy client retention.

The Zacks Consensus Estimate for Professional Employer Organization services revenues is pegged at $1.8 billion, indicating a 5.8% year-over-year gain. Continued business bookings growth and an expanding worksite employee base are anticipated to have supported this segment’s growth. Growth across the PEO segment is likely to have been further supported by enhanced customer satisfaction and stable retention.

The consensus mark for Interest on Funds held for clients is at $332.3 million, suggesting 15.9% year-over-year growth. Higher average investment yields and expanding client fund balances are expected to have boosted this segment’s revenue growth.

The consensus estimate for earnings per share is set at $2.78, implying year-over-year growth of 11.7%. The bottom line is anticipated to have improved on the back of AI-driven operational efficiencies and service delivery cost strip-down.

What Our Model Says About ADP

Our proven model does not conclusively predict an earnings beat for ADPthis time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here. You can uncover the best stocks before they are reported with our Earnings ESP Filter.

ADP has an Earnings ESP of 0.00% and a Zacks Rank of 2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks to Consider

Here are a few stocks from the broader Computer and Technology sector, which, according to our model, have the right combination of elements to beat on earnings this season.

Affirm (AFRM - Free Report) : The Zacks Consensus Estimate for the company’s first-quarter fiscal 2027 revenues is pinned at $1.2 billion, indicating a 30% year-over-year jump. For earnings, the consensus mark is set at 35 cents per share, suggesting 52.2% year-over-year growth. The company beat the Zacks Consensus Estimate in the past four quarters, the average surprise being 379.4%.

AFRM has an Earnings ESP of +11.03% and a Zacks Rank #2 at present.

The company is scheduled to declare first-quarter fiscal 2027 results on Nov. 5.

Amphenol (APH - Free Report) : The Zacks Consensus Estimate for the company’s third-quarter 2026 revenues is kept at $9.4 billion, implying 52.4% year-over-year growth. For earnings, the consensus mark is pinned at 73 cents per share, suggesting a 55.3% jump from that reported in the year-ago quarter. The company beat the Zacks Consensus Estimate in the past four quarters, with an average surprise of 11.8%.

APH currently has an Earnings ESP of +1.72% and a Zacks Rank #2. The company is scheduled to declare third-quarter 2026 results on Oct. 28.

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