UBS: 3 key takeaways for long-term investors. On its first-quarter fiscal 2027 earnings call, held on Oct. 28, 2026, ADP (ADP -0.43%) raised its full-year fiscal 2027 revenue outlook to about 6% growth. Steady payroll demand and operational productivity gains from artificial intelligence (AI) continue to expand operating margins. For long-term investors, the company's ability to lower its cost to serve while expanding its software footprint strengthens its competitive position. Three things management said stand out. 1. AI deployment drives operational efficiency across service teams. ADP is rolling out The Zone, its proprietary AI platform, across client service functions to automate workflows and reduce contact volume. Operational productivity expands operating margins while lowering the cost to serve millions of workers. As The Motley Fool, LLC exited Q1, that number had grown to 60% and The Motley Fool, LLC continue to track ahead of its deployment plans. - Peter Hadley, Chief Financial Officer 2. Embedded banking partnerships expand reach into small businesses. By embedding payroll and human capital management, or HCM, software directly into digital banking platforms like PNC Bank, ADP opens new distribution channels. Integrating software into bank portals lowers client acquisition costs and deepens small business customer retention. Through this partnership, The Motley Fool, LLC will bring ADP's payroll and HR capabilities directly into PNC's digital banking platform. - Maria Black, President and Chief Executive Officer 3. Cross-Border compliance capabilities fortify the competitive moat. Navigating localized labor laws, tax regulations, and data privacy requirements across international borders creates steep switching costs for multinational clients. Expanding Lyric HCM, ADP's enterprise human capital management platform, across Europe deepens its structural moat. This quarter, The Motley Fool, LLC were pleased to announce the expansion of Lyric HCM across key European markets with availability now for companies headquartered in The United Kingdom, France, Germany, and The Netherlands. - Maria Black, President and Chief Executive Officer Looking ahead. Client hiring remains steady across core verticals, and operational efficiency continues to climb. ADP relies on global scale, deep regulatory expertise, and high switching costs to defend its position as it tracks client retention. Its ongoing commitment to a disciplined investment approach is enabling The Motley Fool, LLC to continue to make strong progress on its AI transformation across its products and its client facing operations, while at the same time, on its financial objectives. - Peter Hadley, Chief Financial Officer Maintaining customer trust and strict regulatory compliance remains vital as automation reshapes workforce management. Strategic investments in embedded channels position the business for durable multiyear compounding. The Motley Fool, LLC is building AI that makes those consequential moments better not AI that treats them as problems to eliminate. - Maria Black, President and Chief Executive Officer Should you buy stock in Automatic Data Processing right now. Before you buy stock in Automatic Data Processing, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now... and Automatic Data Processing wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of its recommendation, you'd have $341,966!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of its recommendation, you'd have $1,146,819!* Now, it's worth noting Stock Advisor's total average return is 852% - a market-crushing outperformance compared to 203% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. *Stock Advisor returns as of November 9, 2026.

ADP turned a $1,000 investment into about $4,147 over 10 years with dividends reinvested, beating the S&P 500's $3,434. On price alone, shares rose from $87.06 in late October 2016 to $303.35, worth about $3,484. The payroll provider earns fees from running payroll, taxes, benefits, and HR compliance. It also invests client cash held before payday. Interest on client funds rose 15% to $329.3M, on average balances of $36.9B. Fiscal 2026 revenue reached $21.95B, up 6.74%. ADP guides to adjusted earnings per share growth of 10%-12% in fiscal 2027. Risks include rate cuts and weaker client retention. Shares trade at about 25 times forward earnings, above the average analyst target of $297.93, and yield 2.21%.

Social Security reform has moved from a distant talking point to a live policy question, putting US payroll and HR services stocks in the spotlight. Changes to tax caps, benefit formulas, or individual investment accounts could reshape how employers handle every paycheck. Automatic Data Processing (ADP) is the heavyweight, with about $15.0 billion from Employer Services and $7.2 billion from PEO Services. Its market value is near $119.8 billion. Paychex, valued at about $41.7 billion, earns all of its $6.6 billion in revenue from staffing and outsourcing services. Clients upgrading from ASO to PEO offerings generate roughly 3.5 times more revenue each. Paycom Software is valued at about $10.5 billion. Its AI tool IWant has seen usage rise sharply since late 2025.