The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: James Faucette - Morgan Stanley - Analyst
: So maybe I'll start, Maria, and we'll just kick things off really quickly and start at 30,000 feet. ADP, you guys hosted an Investor Day back in
June. Can you highlight for the audience kind of the key messages from that event?
Question: James Faucette - Morgan Stanley - Analyst
: Yeah, for sure. And I think from the investment community perspective, there was a lot that was definitely eye-opening from that day and
some of the things that I want to dig into from that, as well as things that have transpired since that time.
A few things, and we'll hit on some key ones, but one thing I know that has been top of mind for investors is just from a macro perspective.
And ADP is now sharing its latest data on the employment market through its new NER Pulse publication. Can you talk about what you're
seeing in the labor market today and maybe what your expectations are? And how concerned are you that AI may be reducing overall
employment levels?
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DECEMBER 09, 2025 / 10:00AM, ADP.OQ - Automatic Data Processing Inc at Nasdaq London Investor
Conference
Question: James Faucette - Morgan Stanley - Analyst
: Got it. So that's a little bit of the macro commentary. I want to take that to talk for a minute about some of the specific objectives that you've
set for the business for this year. And let's start on HCM, human capital management. Can you comment a little bit on the state of demand
in HCM across your various business segments?
And love to hear what kind of is inspiring the confidence in the ability that you're targeting to deliver on the 4% to 7% ES new bookings
growth outlook for this year.
Question: James Faucette - Morgan Stanley - Analyst
: Got it. So let's also talk about PEO. It's another area where you're looking for at least a medium-term acceleration. And you've set an objective
there of 6% to 8%, which is a little bit above the 5% to 7% you're looking at for fiscal year '26.
Can you talk about why PEO growth? You're expecting it to be a bit slower this year and how you're thinking about accelerating that over
the next few years? And I guess, is your PEO experiencing any impact from the continued rapid increase in healthcare costs?
Question: James Faucette - Morgan Stanley - Analyst
: Got it. So those were a couple of areas where we've had investors express questions just like, hey, what's behind the expectation for driving
acceleration? On the other hand, I want to touch on retention, because this is an area where you've continually outperformed.
There had been some expectation for normalization post-COVID. But to the extent we don't see an uptick in SMB bankruptcies, which has
kind of been the underlying assumption, could that retention outlook proved to be conservative again for you?
Question: James Faucette - Morgan Stanley - Analyst
: Got it. And here in the last few minutes, to wrap up, I want to go back to kind of where we started in the Investor Day back in June. In those
presentations, it sounded like you've seen some pretty good adoption of some of your AI features in your products. How are you planning
to monetize your AI investments? And when should we anticipate showing AI-driven productivity gains, margin expansion, increased revenue?
Like what should we be tracking as investors?
Question: James Faucette - Morgan Stanley - Analyst
: Well, that's great. Maria, Peter, thank you so much for joining us today.
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