Automatic Data Processing Inc. Q2 FY2024 results: revenue $4.7 billion, up 6.3% on the year

Automatic Data Processing Inc. (ADP) reported revenue of $4.7 billion for Q2 FY2024, the quarter ended 31 December 2023, up 6.3% on the same quarter a year earlier. Net income was $878 million, up 8.0% on the year, and diluted earnings per share $2.13. The figures are the company's own, from the 10-Q it filed with the SEC on 1 February 2024.

Revenue$4.7 billionup 6.3%

Net income$878 millionup 8.0%

Diluted EPS$2.13

QuarterQ2 FY2024ended 31 December 2023

The quarter, against the one before and a year earlier

Line	Q2 FY2024	Q1 FY2024	A year earlier	Change on the year
Revenue	4,668	4,512	n/a	n/a
Cost of revenue	2,562	2,515	n/a	n/a
Gross profit	2,106	1,997	n/a	n/a
Gross margin	45.1%	44.3%	n/a
Research and development	229	236	n/a	n/a
Selling, general and administrative	922	880	n/a	n/a
Operating income	1,079	1,025	n/a	n/a
Operating margin	23.1%	22.7%	n/a
Interest expense	105	91.6	n/a	n/a
Pre-tax income	1,144	1,093	n/a	n/a
Income tax	265	233	n/a	n/a
Effective tax rate	23.2%	21.4%	n/a
Net income	878	859	n/a	n/a
Net margin	18.8%	19.0%	n/a
Diluted EPS	$2.13	$2.08	n/a	n/a

$ million except per share. Free cash flow is operating cash flow less capital expenditure; the effective tax rate is income tax over pre-tax income; margins are the line over revenue. Gross profit is revenue less cost of revenue, and operating income is revenue less the company's own total costs, where the statement does not print those lines. Those four are arithmetic on the filed numbers; everything else is as filed. Money is in $ million as the company files it, or in $ billion by the switch above the tables; per share figures and share counts are as they are.

Cash flow and capital returned

Line	Q2 FY2024	Q1 FY2024	A year earlier	Change on the year
Operating cash flow	1,032	326	n/a	n/a
Capital expenditure	54.8	39.3	n/a	n/a
Free cash flow	978	287	n/a	n/a
Free cash flow margin	20.9%	6.4%	n/a
Depreciation and amortisation	140	142	n/a	n/a
Share-based compensation	73.6	58.8	n/a	n/a
Buybacks	255	250	n/a	n/a
Dividends paid	516	516	n/a	n/a
Dividend per share	$1.40	$1.25	n/a	n/a
Diluted shares, weighted	412m	414m	n/a	n/a
Shares outstanding at period end	411m	412m	n/a	n/a

Cash flow lines for the quarter; where the company files them year to date, the quarter is the difference between two filings.

Balance sheet at quarter end

Line	Q2 FY2024	Q1 FY2024	A year earlier	Change on the year
Total assets	57,069	49,324	n/a	n/a
Cash and equivalents	1,641	1,441	n/a	n/a
Receivables	3,372	3,095	n/a	n/a
Goodwill	2,370	2,352	n/a	n/a
Long-term debt	2,990	2,990	n/a	n/a
Borrowings, as the company tags them	3,004	3,005	n/a	n/a
Operating lease liabilities	327	334	n/a	n/a
Shareholders' equity	4,320	3,473	n/a	n/a

Quarterly results, the last 12 quarters

	Q1 FY2024	Q2 FY2024	Q3 FY2024	Q4 FY2024 *	Q1 FY2025	Q2 FY2025	Q3 FY2025	Q4 FY2025 *	Q1 FY2026	Q2 FY2026	Q3 FY2026	Q4 FY2026 *
Revenue	4,512	4,668	5,254	4,768	4,833	5,048	5,553	5,127	5,175	5,359	5,939	5,474
Cost of revenue	2,515	2,562	2,768	2,632	2,634	2,742	2,904	2,817	2,836	2,890	3,072	2,962
Gross profit	1,997	2,106	2,486	2,137	2,199	2,306	2,649	2,310	2,339	2,470	2,867	2,511
Gross margin	44%	45%	47%	45%	46%	46%	48%	45%	45%	46%	48%	46%
R&D	236	229	243	248	233	240	247	269	251	258	254	266
SG&A	880	922	941	1,035	927	1,006	1,016	1,103	1,006	1,068	1,082	1,252
Operating income	1,025	1,079	1,482	1,000	1,134	1,170	1,558	1,093	1,197	1,277	1,707	1,138
Operating margin	23%	23%	28%	21%	23%	23%	28%	21%	23%	24%	29%	21%
Interest expense	91.6	105	62.7	102	138	130	74.8	114	135	124	78.7	121
Pre-tax income	1,093	1,144	1,546	1,089	1,236	1,261	1,622	1,191	1,308	1,383	1,782	1,258
Tax rate	21%	23%	23%	24%	23%	24%	23%	24%	23%	23%	24%	22%
Net income	859	878	1,185	829	956	963	1,250	911	1,013	1,062	1,360	979
Net margin	19%	19%	23%	17%	20%	19%	23%	18%	20%	20%	23%	18%
Diluted EPS	$2.08	$2.13	$2.88	$2.01	$2.34	$2.35	$3.06	$2.23	$2.49	$2.62	$3.38	$2.45
Operating cash flow	326	1,032	1,498	1,301	824	1,150	1,526	1,439	642	1,133	2,238	1,428
Capital expenditure	39.3	54.8	59.6	54.7	58.8	39.4	36.4	34.1	46.7	26.5	50.6	72.8
Free cash flow	287	978	1,438	1,246	766	1,111	1,489	1,405	596	1,106	2,187	1,355
Buybacks	250	255	292	436	373	272	312	324	366	516	581	620
Dividends paid	516	516	576	575	573	572	628	626	627	629	687	683
Shares outstanding	412m	411m	410m	408m	408m	407m	406m	405m	405m	403m	401m	398m
Filing	10-Q	10-Q	10-Q	10-K	10-Q	10-Q	10-Q	10-K	10-Q	10-Q	10-Q	10-K

* The fourth quarter is the full year less the first three quarters, because the company files the year and not the quarter on its own. Money is in $ million as the company files it, or in $ billion by the switch above the tables; per share figures and the share count are as they are. Free cash flow is operating cash flow less capital expenditure; the effective tax rate is income tax over pre-tax income; margins are the line over revenue. Gross profit is revenue less cost of revenue, and operating income is revenue less the company's own total costs, where the statement does not print those lines. Cash flow lines filed year to date are the difference between two filings. Shares outstanding are at the period end where the balance sheet tags them, otherwise the count on the filing's cover page. A derived fourth-quarter EPS is left blank when a split in the year makes the arithmetic meaningless.

Source

10-Q for the period ended 31 December 2023, filed 1 February 2024, accession 0000008670-24-000007: the filing on EDGAR. All of Automatic Data Processing Inc.'s filings: EDGAR company page.

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