Financial Analysis

ACQUISITIONS In October 2024, the Company acquired WorkForce Software, a premier workforce management solutions provider that specializes in supporting large, global enterprises, utilizing cash on hand. The results of WorkForce Software are reported within the Companys Employer Services segment. Pro forma information has not been presented because the effect of the acquisition is not material to the Company's consolidated financial results. The following table reconciles the purchase price to the cash paid for the acquisition, net of cash acquired: Purchase price $ 1,170.8 Less: cash acquired (12.5) Cash paid for acquisition of business, net of cash acquired $ 1,158.3 The acquisition was accounted for using the acquisition method of accounting. The Company recognized assets acquired and liabilities assumed at their fair value as of the date of acquisition, with the excess recorded to goodwill. The purchase price allocation for WorkForce Software is as follows: Cash $ 12.5 Accounts receivable, net of allowance for doubtful accounts 20.0 Identifiable intangible assets (1) 292.0 Goodwill 885.8 Deferred income taxes, net of valuation allowance 45.9 All other assets 14.8 Total assets acquired $ 1,271.0 Deferred revenue $ 39.6 All other liabilities 60.6 Total liabilities assumed $ 100.2 Total net assets acquired $ 1,170.8 (1) Intangible assets are recorded at estimated fair value, as determined by management based on available information which includes an estimated valuation by an …

BusinessCombinationDisclosureTextBlock · excerpt; the full note is in the filing

COMMITMENTS AND CONTINGENCIES As of June 30, 2026, the Company has purchase commitments of approximately $2,850.5 million, including a reinsurance premium with Chubb for the fiscal 2026 policy year, as well as obligations related to software license agreements, third-party software services and purchase and maintenance agreements on our software, equipment, and other assets, of which $604.6 million relates to the year ending June 30, 2027, $1,095.9 million relates to the years ending June 30, 2028 through 2029, $694.1 million relates to the years ending June 30, 2030 through 2031, and the remaining relates to fiscal years thereafter. In May 2020, a putative class action complaint was filed against ADP, TotalSource and related defendants in the U.S. District Court, District of New Jersey. The complaint asserts violations of the Employee Retirement Income Security Act of 1974 (ERISA) in connection with the ADP TotalSource Retirement Savings Plans fiduciary administrative and investment decision-making. The Company reached a settlement of all outstanding claims for $48 million, subject to the court's approval. Accordingly, as of June 30, 2026, the Company recorded a $48 million accrual within accrued expenses and other current liabilities on the Consolidated Balance Sheet. Additionally, the Company recorded insurance receivables of $30 million within accounts receivable on the Consolidated Balance Sheet, which represents recoveries considered probable from purchased insurance. T …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

EMPLOYEE BENEFIT PLANS A. Stock-based Compensation Plans The Company's share-based compensation plan consists of stock options, time-based restricted stock, time-based restricted stock units, performance-based restricted stock, performance-based restricted stock units, and other stock awards. The Company also offers an employee stock purchase plan for eligible employees. Beginning in September 2022, the Company discontinued granting stock options, time-based restricted stock and performance-based restricted stock. Awards granted September 2022 and after have been grants of time-based restricted stock units and/or performance-based restricted stock units, depending on employee eligibility. Time-based restricted stock units and performance-based restricted stock units granted to employees with a home country of the United States are settled in stock, and those units granted to employees with a home country outside the United States are generally settled in cash. As of June 30, 2026, approximately 18.4 million registered shares were available for future grants, excluding the impact of performance-based restricted stock units outstanding as of June 30, 2026, from the 26.6 million shares previously authorized for issuance under the share-based compensation plan. Restricted Stock. Time-Based Restricted Stock Units. Time-based restricted stock units generally vest ratably over 3 years. Awards are generally forfeited if the employee ceases to be employed by the Company prior to vesti …

CompensationAndEmployeeBenefitPlansTextBlock · excerpt; the full note is in the filing

"DEBT The Company issued five series of fixed-rate notes with staggered maturities of 7 and 10-years totaling $5.0 billion (collectively the Notes). The Notes are senior unsecured obligations, and interest is payable in arrears, semi-annually. During the fourth quarter ended June 30, 2026, the Company issued $1.0 billion of senior notes due in 2036 bearing a fixed interest rate of 5.00%. In connection with the senior notes issuance, the Company also terminated several derivative contracts in place to hedge exposure in changes in benchmark interest rates for the senior notes issued with an aggregate notional amount totaling $1.0 billion ($300.0 million were entered into during the fourth quarter ended June 30, 2026, and $700.0 million were entered into on the day of issuance). Since these derivative contracts were classified as cash flow hedges, the unamortized gain of $3.7 million was deferred in accumulated other comprehensive (loss)/income and will be amortized to earnings over the life of the respective issued Note as the interest payments are made. The principal amounts and associated effective interest rates of the Notes and other debt as of June 30, 2026 and 2025 are as follows: Debt instrument Effective Interest Rate June 30, 2026 June 30, 2025 Fixed-rate 1.70% notes due May 15, 2028 1.85% 1,000.0 1,000.0 Fixed-rate 1.25% notes due September 1, 2030 1.83% 1,000.0 1,000.0 Fixed-rate 4.75% notes due May 8, 2032 4.95% 1,000.0 1,000.0 Fixed-rate 4.45% notes due September 9 …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

The following tables provide details of the Company's revenues and includes a reconciliation to the Companys reportable segments: Years Ended June 30, Types of Revenues 2026 2025 2024 HCM $ 9,110.6 $ 8,674.5 $ 8,155.7 HRO, excluding PEO zero-margin benefits pass-throughs 3,973.5 3,782.3 3,544.2 PEO zero-margin benefits pass-throughs 4,607.3 4,289.0 3,975.9 Global 2,901.2 2,626.0 2,502.1 Interest on funds held for clients 1,354.8 1,189.1 1,024.7 Total revenues $ 21,947.4 $ 20,560.9 $ 19,202.6 Reconciliation of disaggregated revenue to our reportable segments for the year ended June 30, 2026: Types of Revenues Employer Services PEO Total HCM $ 9,120.4 $ $ 9,120.4 HRO, excluding PEO zero-margin benefits pass-throughs 1,467.4 2,508.4 3,975.8 PEO zero-margin benefits pass-throughs 4,607.3 4,607.3 Global 2,901.2 2,901.2 Interest on funds held for clients 1,342.4 12.4 1,354.8 Total segment revenues 14,831.4 7,128.1 21,959.5 Intercompany eliminations (12.1) Total consolidated revenues $ 21,947.4 Reconciliation of disaggregated revenue to our reportable segments for the year ended June 30, 2025: Types of Revenues Employer Services PEO Total HCM $ 8,684.5 $ $ 8,684.5 HRO, excluding PEO zero-margin benefits pass-throughs 1,394.3 2,390.6 3,784.9 PEO zero-margin benefits pass-throughs 4,289.0 4,289.0 Global 2,626.0 2,626.0 Interest on funds held for clients 1,178.3 10.8 1,189.1 Total segment revenues 13,883.1 6,690.4 20,573.5 Intercompany eliminations (12.6) Total consolidated revenues $ …

DisaggregationOfRevenueTableTextBlock · excerpt; the full note is in the filing

GOODWILL AND INTANGIBLE ASSETS, NET Changes in goodwill for the years ended June 30, 2026 and 2025 are as follows: Employer Services PEO Services Total Balance at June 30, 2024 $ 2,348.8 $ 4.8 $ 2,353.6 Additions and other adjustments 887.0 887.0 Currency translation adjustments 32.9 32.9 Balance at June 30, 2025 $ 3,268.7 $ 4.8 $ 3,273.5 Additions and other adjustments 21.3 21.3 Currency translation adjustments (10.4) (10.4) Balance at June 30, 2026 $ 3,279.6 $ 4.8 $ 3,284.4 Components of intangible assets, net, are as follows: June 30, 2026 2025 Intangible assets: Software and software licenses $ 4,369.7 $ 4,103.6 Customer contracts and lists 1,487.0 1,429.4 Other intangibles 250.1 249.8 6,106.8 5,782.8 Less accumulated amortization: Software and software licenses (3,023.4) (2,830.3) Customer contracts and lists (1,184.4) (1,105.6) Other intangibles (245.7) (243.9) (4,453.5) (4,179.8) Intangible assets, net $ 1,653.3 $ 1,603.0 Other intangibles consist primarily of purchased rights, purchased content, trademarks and trade names (acquired directly or through acquisitions). All intangible assets have finite lives and, as such, are subject to amortization. The weighted average remaining useful life of the intangible assets is 6 years (6 years for software and software licenses, 5 years for customer contracts and lists, and 2 years for other intangibles). Amortization of intangible assets was $384.8 million, $380.6 million, and $371.6 million for fiscal 2026, 2025, and 2024, re …

GoodwillAndIntangibleAssetsDisclosureTextBlock · excerpt; the full note is in the filing

INCOME TAXES Earnings before income taxes shown below are based on the geographic location to which such earnings are attributable. Years ended June 30, 2026 2025 2024 Earnings before income taxes: United States $ 5,198.7 $ 4,825.6 $ 4,408.0 Foreign 531.6 484.5 464.3 $ 5,730.3 $ 5,310.1 $ 4,872.3 The provision (benefit) for income taxes consists of the following components: Years ended June 30, 2026 2025 2024 Current: Federal $ 785.4 $ 880.5 $ 847.4 Foreign 217.2 136.0 132.8 State 157.9 176.9 177.5 Total current 1,160.5 1,193.4 1,157.7 Deferred: Federal 160.1 0.7 (18.7) Foreign (14.2) 19.4 (6.6) State 10.4 16.9 (12.1) Total deferred 156.3 37.0 (37.4) Total provision for income taxes $ 1,316.8 $ 1,230.4 $ 1,120.3 A reconciliation between the Company's effective tax rate and the U.S. federal statutory rate is as follows: Years ended June 30, 2026 % U.S. Federal Statutory Tax Rate 1,203.4 21.0 Increase/(decrease) in provision from: State and local income taxes, net of federal income tax effect (a) 151.0 2.6 Foreign tax effects 82.8 1.5 Effect of cross-border tax laws (50.7) (0.9) Tax credits (43.5) (0.7) Nontaxable or nondeductible items 2.0 Changes in unrecognized tax benefits (12.7) (0.2) Other (15.5) (0.3) $ 1,316.8 23.0 (a) State taxes in California, New York, New Jersey, and Illinois, made up the majority (greater than 50 percent) of the tax effect in this category. Differences between the U.S. statutory federal rate and the Company's effective income tax rate for periods p …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

LEASES The Company records leases on the Consolidated Balance Sheets as operating lease ROU assets, records the current portion of operating lease liabilities within accrued expenses and other current liabilities and, separately, records long-term operating lease liabilities. The difference between total ROU assets and total lease liabilities are primarily attributable to prepayments of our obligations and the recognition of various lease incentives. The Company has entered into operating lease agreements for facilities and equipment. The Company's leases have remaining lease terms of up to approximately eleven years. The components of operating lease expense were as follows: Year ended June 30, 2026 2025 2024 Operating lease cost $ 124.7 $ 111.8 $ 125.0 Short-term lease cost 1.2 1.2 1.4 Variable lease cost 22.0 20.3 18.3 Total operating lease cost $ 147.9 $ 133.3 $ 144.7 The following table provides supplemental cash flow information related to the Company's leases: Year ended June 30, 2026 2025 2024 Cash paid for operating lease liabilities $ 157.5 $ 127.5 $ 125.5 Operating lease ROU assets obtained in exchange for new operating lease liabilities $ 133.9 $ 100.7 $ 97.4 Other information related to our operating lease liabilities is as follows: June 30, June 30, 2026 2025 Weighted-average remaining lease term (in years) 6 6 Weighted-average discount rate 3.9 % 3.6 % Current operating lease liability $ 103.6 $ 100.8 As of June 30, 2026, maturities of operating lease liabiliti …

LesseeOperatingLeasesTextBlock · excerpt; the full note is in the filing

"Recently Issued Accounting Pronouncements. Recently Adopted Accounting Pronouncements Effective June 30, 2026, the Company adopted Accounting Standard Update (""ASU"") No. 2023-09, ""Income Taxes (Topic 740): Improvements to Income Tax Disclosures"", applying the new requirements prospectively. This update enhanced the transparency and decision usefulness of income tax disclosures. The adoption of ASU 2023-09 did not impact the Company's consolidated results of operations, financial condition, or cash flows. Refer to Note 12 for further details. Recently Issued Accounting Pronouncements Standard Description Effective Date Effect on Financial Statements or Other Significant Matters ASU 2025-06 Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software This update modernizes the accounting guidance for internal-use software costs and requires capitalization of software costs to begin when (1) management has authorized and committed to funding the software project and (2) it is probable that the project will be completed and the software will be used to perform the function intended. July 1, 2028 (fiscal 2029) The Company is assessing this guidance and has not yet determined the impact of ASU 2025-06 on its consolidated results of operations, financial condition, or cash flows. ASU 2024-03 Disaggregation of Income Statement Expenses (Subtopic 220-40) This update improves financial reporting by re …

NewAccountingPronouncementsPolicyPolicyTextBlock · excerpt; the full note is in the filing

REVENUE Based upon similar operational and economic characteristics, the Companys revenues are disaggregated as follows: Human Capital Management (HCM), HR Outsourcing (HRO), and Global Solutions (Global), with separate disaggregation for PEO zero-margin benefits pass-through revenues and client fund interest revenues. The Company believes these revenue categories depict how the nature, amount, timing, and uncertainty of its revenue and cash flows are affected by economic factors. HCM provides a suite of product offerings that assist employers of all types and sizes in all stages of the employment cycle, from recruitment to retirement. Global is generally consistent with the types of services provided within HCM but represent geographies outside of the United States and includes our multinational offerings. HCM and Global revenues are primarily attributable to fees for providing payroll services, benefits administration, talent management, workforce management solutions, compliance solutions, retirement services and HR management and fees charged to implement the Company's solutions for clients. HRO provides a comprehensive human resources outsourcing solution, including offering benefits, providing workers compensation insurance, and administering state unemployment insurance, among other human resources functions. This revenue is primarily driven by PEO. The Company has further disaggregated HRO to separate out its PEO zero-margin benefits pass-through revenues. The Company …

RevenueFromContractWithCustomerTextBlock · excerpt; the full note is in the filing

"FINANCIAL DATA BY SEGMENT AND GEOGRAPHIC AREA Based upon similar economic and operational characteristics, the Companys strategic business units have been aggregated into the following two reportable segments: Employer Services and PEO Services. Certain revenues and expenses are charged to the reportable segments at a standard rate for management reasons. Other costs are recorded based on management responsibility. The Company's Chief Operating Decision Maker (""CODM"") is the Chief Executive Officer. For each reportable segment, the CODM uses earnings before income taxes, including plan-to-actual and forecast-to-actual results, to assess segment performance and allocate resources (including personnel and capital resources) amongst its strategic business units. The CODM does not review assets at the reportable segment level, hence segment disclosure relating to total assets has not been provided. The following tables present the Company's revenues, significant segment expenses, and earnings before income taxes by reportable segment: Year ended June 30, 2026 Employer Services PEO Services Total Revenues from external customers $ 13,476.9 $ 7,115.7 $ 20,592.6 Interest on funds held for clients 1,342.4 12.4 1,354.8 Intercompany revenues 12.1 12.1 Total segment revenues 14,831.4 7,128.1 21,959.5 Reconciliation of revenues: Intercompany eliminations (12.1) Total consolidated revenues $ 21,947.4 Less segment expenses: (a) Selling and marketing 2,365.7 415.6 Zero-margin benefits pa …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

"SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Basis of Preparation. The accompanying Consolidated Financial Statements and footnotes thereto of Automatic Data Processing, Inc., its subsidiaries and variable interest entity (ADP or the Company) have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). Intercompany balances and transactions have been eliminated in consolidation. The Company has a grantor trust, which holds the majority of the funds provided by its clients pending remittance to employees of those clients, tax authorities, and other payees. The Company is the sole beneficial owner of the trust. The trust meets the criteria in Accounting Standards Codification (ASC) 810, Consolidation to be characterized as a variable interest entity (VIE). The Company has determined that it has a controlling financial interest in the trust because it has both (1) the power to direct the activities that most significantly impact the economic performance of the trust (including the power to make all investment decisions for the trust) and (2) the right to receive benefits that could potentially be significant to the trust (in the form of investment returns) and therefore, consolidates the trust. Further information on these funds and the Companys obligations to remit to its clients employees, tax authorities, and other payees is provided in Note 5, Corporate Investments and Funds Held for Clients. The preparation of …

SignificantAccountingPoliciesTextBlock · excerpt; the full note is in the filing

Acquisition In October 2024, the Company acquired WorkForce Software, a premier workforce management solutions provider that specializes in supporting large, global enterprises, utilizing cash on hand. The results of WorkForce Software are reported within the Companys Employer Services segment. Pro forma information has not been presented because the effect of the acquisition is not material to the Company's consolidated financial results. The following table reconciles the purchase price to the cash paid for the acquisition, net of cash acquired: Purchase price $ 1,170.8 Less: cash acquired (12.5) Cash paid for acquisition of business, net of cash acquired $ 1,158.3 The acquisition was accounted for using the acquisition method of accounting. The Company recognized assets acquired and liabilities assumed at their fair value as of the date of acquisition, with the excess recorded to goodwill. The purchase price allocation for WorkForce Software is as follows: Cash $ 12.5 Accounts receivable, net of allowance for doubtful accounts 20.0 Identifiable intangible assets (1) 292.0 Goodwill 885.8 Deferred income taxes, net of valuation allowance 45.9 All other assets 14.8 Total assets acquired $ 1,271.0 Deferred revenue $ 39.6 All other liabilities 60.6 Total liabilities assumed $ 100.2 Total net assets acquired $ 1,170.8 (1) Intangible assets are recorded at estimated fair value, as determined by management based on available information which includes an estimated valuation by an …

BusinessCombinationDisclosureTextBlock · excerpt; the full note is in the filing

Commitments and Contingencies As of March 31, 2026, the Company has purchase commitments of approximately $2,226.8 million, including obligations related to software license agreements, third-party software services and purchase and maintenance agreements on our software, equipment, and other assets, of which $67.9 million relates to the three months ending June 30, 2026, $1,042.7 million relates to the years ending June 30, 2027 through 2028, $998.1 million relates to the years ending June 30, 2029 through 2031, and the remaining relates to fiscal years thereafter. In May 2020, a putative class action complaint was filed against ADP, TotalSource and related defendants in the U.S. District Court, District of New Jersey. The complaint asserts violations of the Employee Retirement Income Security Act of 1974 (ERISA) in connection with the ADP TotalSource Retirement Savings Plans fiduciary administrative and investment decision-making. The complaint seeks unspecified monetary relief, injunctive relief and attorneys fees. The Company is unable to estimate any reasonably possible loss, or range of loss, with respect to this matter. The Company is vigorously defending against this lawsuit. The Company is subject to various claims, litigation, and regulatory compliance matters in the normal course of business. When a loss is considered probable and reasonably estimable, the Company records a liability in the amount of its best estimate for the ultimate loss. Management currently bel …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

Employee Benefit Plans A. Stock-based Compensation Plans The Company's share-based compensation plan consists of stock options, time-based restricted stock, time-based restricted stock units, performance-based restricted stock, and performance-based restricted stock units. The Company also offers an employee stock purchase plan for eligible employees . Beginning in September 2022, the Company discontinued granting stock options, time-based restricted stock and performance-based restricted stock. Any such future awards granted September 2022 and after will be grants of time-based restricted stock units and/or performance-based restricted stock units, depending on employee eligibility. Time-based restricted stock unit awards and performance-based restricted stock unit awards granted to employees with a home country of the United States are settled in stock, and awards granted to employees with a home country outside the United States are generally settled in cash. The Company currently utilizes treasury stock to satisfy stock option exercises, issuances under the Company's employee stock purchase plan, and restricted stock awards. From time to time, the Company may repurchase shares of its common stock under its authorized share repurchase program. The Company repurchased 2.6 million and 1.0 million shares in the three months ended March 31, 2026 and 2025, respectively, and repurchased 5.7 million and 3.4 million shares in the nine months ended March 31, 2026 and 2025, respecti …

CompensationAndEmployeeBenefitPlansTextBlock · excerpt; the full note is in the filing

Debt The Company issued four series of fixed-rate notes with staggered maturities of 7 and 10 years at the time of issuance totaling $4.0 billion (collectively the Notes). The Notes are senior unsecured obligations, and interest is payable in arrears, semi-annually. The principal amounts and associated effective interest rates of the Notes and other debt as of March 31, 2026 and June 30, 2025, are as follows: Debt instrument Effective Interest Rate March 31, 2026 June 30, 2025 Fixed-rate 1.700% notes due May 15, 2028 1.85% 1,000.0 1,000.0 Fixed-rate 1.250% notes due September 1, 2030 1.83% 1,000.0 1,000.0 Fixed-rate 4.750% notes due May 8, 2032 4.95% 1,000.0 1,000.0 Fixed-rate 4.450% notes due September 9, 2034 4.75% 1,000.0 1,000.0 Other 2.1 2.9 4,002.1 4,002.9 Less: current portion (a) (1.1) (1.0) Less: unamortized discount and debt issuance costs (23.7) (27.2) Total long-term debt $ 3,977.3 $ 3,974.7 (a) - Current portion of long-term debt as of March 31, 2026 is included within accrued expenses and other current liabilities on the Consolidated Balance Sheets. The effective interest rates for the Notes include the interest on the Notes and amortization of the discount and debt issuance costs. As of March 31, 2026, the fair value of the Notes, based on Level 2 inputs, was $3,821.8 million. For a description of the fair value hierarchy and the Company's fair value methodologies, including the use of an independent third-party pricing service, see Note 1 Summary of Significan …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

The following tables provide details of the Company's revenues and includes a reconciliation to the Companys reportable segments: Three Months Ended Nine Months Ended March 31, March 31, Types of Revenues 2026 2025 2026 2025 HCM $ 2,492.6 $ 2,392.3 $ 6,884.1 $ 6,549.6 HRO, excluding PEO zero-margin benefits pass-throughs 1,120.8 1,063.6 3,011.5 2,872.1 PEO zero-margin benefits pass-throughs 1,170.0 1,090.0 3,427.2 3,194.4 Global 751.9 651.9 2,151.4 1,936.7 Interest on funds held for clients 403.9 355.2 999.4 881.3 Total Revenues $ 5,939.2 $ 5,553.0 $ 16,473.6 $ 15,434.1 Reconciliation of disaggregated revenue to our reportable segments for the three months ended March 31, 2026: Types of Revenues Employer Services PEO Other Total HCM $ 2,495.2 $ $ (2.6) $ 2,492.6 HRO, excluding PEO zero-margin benefits pass-throughs 388.8 732.3 (0.3) 1,120.8 PEO zero-margin benefits pass-throughs 1,170.0 1,170.0 Global 751.9 751.9 Interest on funds held for clients 400.2 3.7 403.9 Total Segment Revenues $ 4,036.1 $ 1,906.0 $ (2.9) $ 5,939.2 Reconciliation of disaggregated revenue to our reportable segments for the three months ended March 31, 2025: Types of Revenues Employer Services PEO Other Total HCM $ 2,395.1 $ $ (2.8) $ 2,392.3 HRO, excluding PEO zero-margin benefits pass-throughs 369.0 695.2 (0.6) 1,063.6 PEO zero-margin benefits pass-throughs 1,090.0 1,090.0 Global 651.9 651.9 Interest on funds held for clients 351.9 3.3 355.2 Total Segment Revenues $ 3,767.9 $ 1,788.5 $ (3.4) $ 5,553.0 …

DisaggregationOfRevenueTableTextBlock · excerpt; the full note is in the filing

Goodwill and Intangible Assets, net Changes in goodwill for the nine months ended March 31, 2026 are as follows: Employer Services PEO Services Total Balance at June 30, 2025 $ 3,268.7 $ 4.8 $ 3,273.5 Additions and other adjustments 21.7 21.7 Currency translation adjustments (6.1) (6.1) Balance at March 31, 2026 $ 3,284.3 $ 4.8 $ 3,289.1 Components of intangible assets, net, are as follows: March 31, June 30, 2026 2025 Intangible assets: Software and software licenses $ 4,310.1 $ 4,103.6 Customer contracts and lists 1,468.1 1,429.4 Other intangibles 250.0 249.8 6,028.2 5,782.8 Less accumulated amortization: Software and software licenses (2,977.9) (2,830.3) Customer contracts and lists (1,164.3) (1,105.6) Other intangibles (245.4) (243.9) (4,387.6) (4,179.8) Intangible assets, net $ 1,640.6 $ 1,603.0 Other intangibles consist primarily of purchased rights, purchased content, trademarks and trade names (acquired directly or through acquisitions). All intangible assets have finite lives and, as such, are subject to amortization. The weighted average remaining useful life of the intangible assets is 6 years (6 years for software and software licenses, 5 years for customer contracts and lists, and 3 years for other intangibles). Amortization of intangible assets was $96.8 million and $96.3 million for the three months ended March 31, 2026 and 2025, respectively, and $288.0 million and $286.0 million for the nine months ended March 31, 2026 and 2025, respectively. Estimated future …

GoodwillAndIntangibleAssetsDisclosureTextBlock · excerpt; the full note is in the filing

Income Taxes The effective tax rate for the three months ended March 31, 2026 and 2025 was 23.7% and 23.0%, respectively. The increase in the effective tax rate is primarily due to an increase in uncertain tax positions and a lower excess tax benefit on stock-based compensation in the three months ended March 31, 2026 as compared to the three months ended March 31, 2025. The effective tax rate for the nine months ended March 31, 2026 and 2025 was 23.2% and 23.1%, respectively. The increase in the effective tax rate is primarily due to a lower excess tax benefit on stock-based compensation offset by a decrease in uncertain tax positions for the nine months ended March 31, 2026 as compared to the nine months ended March 31, 2025.

IncomeTaxDisclosureTextBlock

"Leases The Company records leases on the Consolidated Balance Sheets as operating lease right-of-use (""ROU"") assets, records the current portion of operating lease liabilities within accrued expenses and other current liabilities and, separately, records long-term operating lease liabilities. The difference between total ROU assets and total lease liabilities is primarily attributable to prepayments of our obligations and the recognition of various lease incentives. The Company has entered into operating lease agreements for facilities and equipment. The Company's leases have remaining lease terms of up to approximately eleven years. The components of operating lease expense were as follows: Three Months Ended Nine Months Ended March 31, March 31, 2026 2025 2026 2025 Operating lease cost $ 30.7 $ 27.4 $ 92.7 $ 82.3 Short-term lease cost 0.3 0.3 1.0 0.8 Variable lease cost 5.8 4.6 17.3 15.8 Total operating lease cost $ 36.8 $ 32.3 $ 111.0 $ 98.9 The following table provides supplemental cash flow information related to the Company's leases: Nine Months Ended March 31, 2026 2025 Cash paid for operating lease liabilities $ 125.9 $ 95.4 Operating lease ROU assets obtained in exchange for new operating lease liabilities $ 116.4 $ 44.5 Other information related to our operating lease liabilities is as follows: March 31, June 30, 2026 2025 Weighted-average remaining lease term (in years) 6 6 Weighted-average discount rate 3.8 % 3.6 % Current operating lease liability $ 101.4 $ 10 …

LesseeOperatingLeasesTextBlock · excerpt; the full note is in the filing

New Accounting Pronouncements Recently Adopted Accounting Pronouncements None. Recently Issued Accounting Pronouncements Standard Description Effective Date Effect on Financial Statements or Other Significant Matters ASU 2025-06 Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software This update modernizes the accounting guidance for internal-use software costs and requires capitalization of software costs to begin when (1) management has authorized and committed to funding the software project and (2) it is probable that the project will be completed and the software will be used to perform the function intended. July 1, 2028 (fiscal 2029) The Company is assessing this guidance and has not yet determined the impact of ASU 2025-06 on its consolidated results of operations, financial condition, or cash flows. ASU 2024-03 Income StatementReporting Comprehensive IncomeExpense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses This update improves financial reporting by requiring enhanced disclosures of the expense captions in the Income Statement within the Notes to the financial statements. June 30, 2028 (fiscal 2028) The Company is assessing this guidance. The adoption will modify disclosures but will not have an impact on the Company's consolidated results of operations, financial condition, or cash flows. ASU 2023-09 Income Taxes (Topic 740): Improveme …

NewAccountingPronouncementsPolicyPolicyTextBlock · excerpt; the full note is in the filing

Revenue Based upon similar operational and economic characteristics, the Companys revenues are disaggregated as follows: Human Capital Management (HCM), HR Outsourcing (HRO), and Global Solutions (Global), with separate disaggregation for PEO zero-margin benefits pass-through revenues and client fund interest revenues. The Company believes these revenue categories depict how the nature, amount, timing, and uncertainty of its revenue and cash flows are affected by economic factors. The following tables provide details of the Company's revenues and includes a reconciliation to the Companys reportable segments: Three Months Ended Nine Months Ended March 31, March 31, Types of Revenues 2026 2025 2026 2025 HCM $ 2,492.6 $ 2,392.3 $ 6,884.1 $ 6,549.6 HRO, excluding PEO zero-margin benefits pass-throughs 1,120.8 1,063.6 3,011.5 2,872.1 PEO zero-margin benefits pass-throughs 1,170.0 1,090.0 3,427.2 3,194.4 Global 751.9 651.9 2,151.4 1,936.7 Interest on funds held for clients 403.9 355.2 999.4 881.3 Total Revenues $ 5,939.2 $ 5,553.0 $ 16,473.6 $ 15,434.1 Reconciliation of disaggregated revenue to our reportable segments for the three months ended March 31, 2026: Types of Revenues Employer Services PEO Other Total HCM $ 2,495.2 $ $ (2.6) $ 2,492.6 HRO, excluding PEO zero-margin benefits pass-throughs 388.8 732.3 (0.3) 1,120.8 PEO zero-margin benefits pass-throughs 1,170.0 1,170.0 Global 751.9 751.9 Interest on funds held for clients 400.2 3.7 403.9 Total Segment Revenues $ 4,036.1 $ 1 …

RevenueFromContractWithCustomerTextBlock · excerpt; the full note is in the filing

"Interim Financial Data by Segment Based upon similar economic and operational characteristics, the Companys strategic business units have been aggregated into the following two reportable segments: Employer Services and PEO Services. Certain revenues and expenses are charged to the reportable segments at a standard rate for management reasons. Other costs are recorded based on management responsibility. The Company's Chief Operating Decision Maker (""CODM"") is the Chief Executive Officer. For each reportable segment, the CODM uses earnings before income taxes, including plan-to-actual and forecast-to-actual results, to assess segment performance and allocate resources (including personnel and capital resources) amongst its strategic business units. The CODM does not review assets at the reportable segment level, hence segment disclosure relating to total assets has not been provided. The following tables present the Company's revenues, significant segment expenses, and earnings before income taxes by reportable segment: Three Months Ended March 31, 2026 Employer Services PEO Services Total Revenues from external customers $ 3,633.0 $ 1,902.3 $ 5,535.3 Interest on funds held for clients 400.2 3.7 403.9 Intercompany revenues 2.9 2.9 Total segment revenues 4,036.1 1,906.0 5,942.1 Reconciliation of revenues: Intercompany eliminations (2.9) Total consolidated revenues $ 5,939.2 Less segment expenses: (a) Selling and marketing 603.0 109.5 Zero-margin benefits pass-through costs 1 …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

Stockholders' Equity Changes in stockholders' equity by component are as follows: Three Months Ended March 31, 2026 Common Stock Capital in Excess of Par Value Retained Earnings Treasury Stock AOCI Total Balance at December 31, 2025 $ 63.9 $ 2,936.8 $ 25,992.6 $ (21,960.6) $ (639.7) $ 6,393.0 Net earnings 1,359.8 1,359.8 Other comprehensive income/(loss) (213.4) (213.4) Stock-based compensation expense 47.6 47.6 Issuances relating to stock compensation plans 28.3 2.1 30.4 Treasury stock acquired (2.6 million shares repurchased) (583.0) (583.0) Dividends declared ($1.70 per share) (684.3) (684.3) Balance at March 31, 2026 $ 63.9 $ 3,012.7 $ 26,668.1 $ (22,541.5) $ (853.1) $ 6,350.1 Three Months Ended March 31, 2025 Common Stock Capital in Excess of Par Value Retained Earnings Treasury Stock AOCI Total Balance at December 31, 2024 $ 63.9 $ 2,619.6 $ 24,335.6 $ (20,412.3) $ (1,528.7) $ 5,078.1 Net earnings 1,249.5 1,249.5 Other comprehensive income/(loss) 342.7 342.7 Stock-based compensation expense 54.3 54.3 Issuances relating to stock compensation plans 46.9 13.6 60.5 Treasury stock acquired (1.0 million shares repurchased) (301.3) (301.3) Dividends declared ($1.54 per share) (628.5) (628.5) Balance at March 31, 2025 $ 63.9 $ 2,720.8 $ 24,956.6 $ (20,700.0) $ (1,186.0) $ 5,855.3 Nine Months Ended March 31, 2026 Common Stock Capital in Excess of Par Value Retained Earnings Treasury Stock AOCI Total Balance at June 30, 2025 $ 63.9 $ 2,788.3 $ 25,240.6 $ (21,021.4) $ (883.4) $ 6, …

StockholdersEquityNoteDisclosureTextBlock · excerpt; the full note is in the filing