Automatic Data Processing Inc (ADP)
Profitability ratios
Return on sales
| Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Gross profit margin | 50.48% | 50.30% | 50.20% | 50.12% | 49.95% | 49.81% | 47.19% | 44.84% | 42.62% | 42.00% | 42.01% | 43.54% | 45.11% | 44.78% | 46.55% | 46.65% | 46.48% | 45.89% | 45.90% | 45.95% |
| Operating profit margin | 26.32% | 26.25% | 26.20% | 26.11% | 25.74% | 25.82% | 23.97% | 22.77% | 22.84% | 22.11% | 23.16% | 23.69% | 23.19% | 22.91% | 22.58% | 22.51% | 22.16% | 21.70% | 21.72% | 21.77% |
| Pretax margin | 25.83% | 25.78% | 25.79% | 25.69% | 25.37% | 25.32% | 24.78% | 24.69% | 24.64% | 23.98% | 23.55% | 23.18% | 23.06% | 22.96% | 22.77% | 22.75% | 22.40% | 21.82% | 21.97% | 22.03% |
| Net profit margin | 19.84% | 19.79% | 19.76% | 19.71% | 19.54% | 19.56% | 19.14% | 19.07% | 18.94% | 18.46% | 18.24% | 17.93% | 17.87% | 17.77% | 17.48% | 17.55% | 17.32% | 16.88% | 17.01% | 17.07% |
The provided data delineates the profitability ratios for Automatic Data Processing Inc over multiple fiscal periods, facilitating an analysis of its profit generation efficiency and trend patterns.
Gross Profit Margin demonstrates a generally upward trajectory, especially notable from the second quarter of 2024 onwards. Starting at approximately 45.95% in September 2020, the margin experienced some fluctuations but showed a significant and consistent increase beginning in late 2023, reaching approximately 50.48% by June 2025. This suggests an enhancement in cost management or a favorable shift in revenue composition, allowing the company to retain a larger proportion of revenue as gross profit.
Operating Profit Margin exhibits relative stability with modest growth, ascending from around 21.77% in September 2020 to approximately 26.32% by June 2025. The period between March 2024 and June 2025 marks a notable increase in operating profitability, indicating improved operational efficiency and effective control over operating expenses.
Pretax Margin similarly reflects a gradual upward trend, rising from approximately 22.03% in September 2020 to about 25.83% in June 2025. The steady increase indicates that the company’s core operations are generating higher profit before tax, which could be attributed to improved revenue streams or optimized expense management.
Net Profit Margin follows a consistent upward pattern, starting at roughly 17.07% in September 2020 and reaching approximately 19.84% by June 2025. The incremental growth indicates that, after accounting for taxes and other expenses, the company retains a higher proportion of revenue as net profit, further emphasizing improved efficiency and profitability.
Overall, the profitability ratios of Automatic Data Processing Inc reveal sustained improvements over the analyzed periods. The steady increases in gross, operating, pretax, and net profit margins suggest effective cost control, operational efficiency, and possibly favorable revenue growth. The recent and consistent upward trends in all these ratios denote an enhanced profitability profile, reflecting positively on the company’s financial health and management effectiveness.
Return on investment
| Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 10.14% | 9.39% | 8.13% | 10.30% | 9.09% | 7.61% | 7.81% | 8.45% | 8.07% | 6.52% | 7.34% | 8.63% | 6.07% | 5.12% | 6.00% | 5.77% | 6.82% | 5.84% | 6.42% | 7.48% |
| Return on assets (ROA) | 7.64% | 7.08% | 6.14% | 7.77% | 6.90% | 5.76% | 6.23% | 7.08% | 6.69% | 5.45% | 5.78% | 6.53% | 4.68% | 3.97% | 4.64% | 4.50% | 5.33% | 4.54% | 5.03% | 5.86% |
| Return on total capital | 93.03% | 96.50% | 109.55% | 101.39% | 115.13% | 111.46% | 114.64% | 139.05% | 134.12% | 119.76% | 141.54% | 156.38% | 120.47% | 89.89% | 72.12% | 66.53% | 60.33% | 57.34% | 55.43% | 56.65% |
| Return on equity (ROE) | 65.93% | 68.29% | 77.46% | 71.96% | 82.51% | 79.96% | 82.36% | 100.56% | 97.23% | 88.27% | 105.33% | 117.50% | 91.43% | 68.25% | 54.34% | 50.40% | 45.83% | 43.56% | 42.07% | 42.80% |
The profitability ratios of Automatic Data Processing Inc. from September 2020 through June 2025 demonstrate both fluctuations and an overall upward trend in key efficiency and return metrics.
Operating Return on Assets (Operating ROA):
The Operating ROA exhibits variability over the analyzed period, with values ranging from a low of approximately 5.12% in March 2022 to a high of 10.30% in September 2024. The initial period shows a decline from 7.48% in September 2020 to a nadir of 5.77% in September 2021, followed by a consistent recovery. Notably, the ratio reaches its apex in September 2024, indicating improved efficiency in generating operating income relative to assets. The subsequent slight declines post-September 2024 suggest minor fluctuations but maintain levels above 7.5% into mid-2025, reflecting a strengthening operational efficiency.
Return on Assets (ROA):
ROA reflects the firm’s ability to generate net income from its assets. After an initial decline from 5.86% in September 2020 to 4.50% in September 2021, the ratio recovers gradually, reaching 7.08% by September 2023. The trend demonstrates a notable recovery beginning in mid-2022, peaking at 7.77% in September 2024 before settling at approximately 7.08% in June 2025. This pattern indicates an overall improvement in the company's efficiency in converting assets into net income, despite some short-term fluctuations.
Return on Total Capital:
This ratio shows a strong upward trend, reflecting enhanced profitability relative to the total capital employed. Starting at 56.65% in September 2020, the ratio increases significantly, reaching a peak of 156.38% in September 2022. The very high values suggest highly effective utilization of capital, possibly driven by operational leverage or capital structure. After the peak, a gradual decline is observed, with the ratio stabilizing around 93% to 111% in late 2024 and into mid-2025, continuing to indicate high capital efficiency despite some reduction from earlier peaks.
Return on Equity (ROE):
ROE exhibits considerable growth from 42.80% in September 2020 to a peak of 117.50% in September 2022, reflecting robust profitability relative to shareholders’ equity. Following this peak, ROE declines somewhat but remains above 65% into mid-2025, indicating sustained strong equity returns. The high volatility in ROE, especially during the 2021–2023 period, may be attributable to variations in net income, leverage, or changes in shareholders’ equity.
Overall Analysis:
The trend across all profitability ratios implies that Automatic Data Processing Inc. has experienced periods of operational and financial efficiency improvements, especially evident from mid-2022 onward. The peak in Return on Total Capital and ROE in 2022 indicates highly effective capital deployment and shareholder value creation during this period. The ratios further suggest that while some short-term fluctuations occur, the company maintains a strong profitability profile, underpinned by efficient asset utilization and effective leverage. The consistent high levels of ROE and Return on Total Capital in recent periods denote a resilient and profitable operation, aligning with the company's established market position.
See also:
Automatic Data Processing Inc Profitability Ratios (Quarterly Data)