Automatic Data Processing Inc (ADP)

Return on equity (ROE)

		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
Net income (ttm)	US$ in thousands	4,079,600	3,998,300	3,933,700	3,848,900	3,752,000	3,699,400	3,557,600	3,492,300	3,411,900	3,260,600	3,146,000	3,027,300	2,948,800	2,861,600	2,743,800	2,696,900	2,598,500	2,471,800	2,482,000	2,486,100
Total stockholders’ equity	US$ in thousands	6,188,000	5,855,300	5,078,100	5,348,600	4,547,600	4,626,700	4,319,600	3,472,800	3,509,100	3,693,800	2,986,700	2,576,500	3,225,300	4,192,900	5,049,600	5,350,700	5,670,100	5,673,900	5,900,000	5,808,900
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%

June 30, 2025 calculation

ROE = Net income (ttm) ÷ Total stockholders’ equity
= $4,079,600K ÷ $6,188,000K
= 65.93%

The analysis of Automatic Data Processing Inc.'s return on equity (ROE) over the specified period reveals a trajectory characterized by notable fluctuations, indicating periods of both robust profitability and moderation.

Initially, the ROE demonstrated a high level of profitability, with values exceeding 40% from September 2020 through December 2020, and consistently maintaining above 42% through March 2021. The upward trend became more evident from mid-2021 onward, with ROE reaching approximately 50.40% as of September 2021, and further increasing to 54.34% by the end of 2021. This escalation suggests improving efficiency in generating earnings relative to shareholders’ equity during this period.

The remarkable surge in ROE occurred in the first quarter of 2022, where it climbed sharply to approximately 68.25%, and then escalated to an exceptional 91.43% by June 2022. The period spanning September 2022 witnessed an extraordinary peak, with the ROE surpassing 117.50%, indicative of highly effective profit generation possibly due to operational leverage, favorable market conditions, or notable enhancements in profitability.

Following this peak, the ROE exhibited signs of a moderate decline, decreasing to around 105.33% in December 2022 and further tapering to approximately 88.27% by March 2023. Nonetheless, the ROE remained elevated, signifying sustained high levels of profitability relative to equity.

In subsequent quarters, the ROE exhibited slight fluctuations, settling around 97.23% in June 2023 and slightly increasing to 100.56% in September 2023. However, a downward trend emerged thereafter, with the figure declining to approximately 82.36% by December 2023 and further reducing to roughly 79.96% in March 2024. Subsequently, the ROE experienced minor recoveries and declines, with notable figures such as 82.51% in June 2024 and 71.96% in September 2024. The latest data indicates a gradual decrease toward the 68-70% range, with the projected figures for mid-2025 suggesting a continuing decline to approximately 65.93% in June 2025.

Overall, the ROE trend reflects an initial period of exceptional profitability, possibly driven by strong operational performance, capital efficiency, or growth strategies, followed by periods of normalization and modest decline. The fluctuations likely mirror changes in operational dynamics, market conditions, or strategic adjustments within the company over time.