ADP beats fourth-quarter revenue estimates on steady payroll demand

(Reuters) - Automatic Data Processing beat Wall Street expectations for fourth-quarter revenue on Wednesday, helped by robust demand for its human resource management and payroll services.

Employee management services by ADP, one of the biggest payroll processing companies in the world, have been seeing consistent demand even as the labor market cooled from its high growth levels seen at the start of the year.

Shares of the Roseland, New Jersey-based company gained nearly 4% in premarket trading.

The company reported fourth-quarter revenue of $4.77 billion, beating analysts' average estimate of $4.74 billion, according to LSEG data.

Net income per share came in at $2.02 in the three months ended June 30, versus $1.87 a year ago.

Analysts, however, pointed toward a tougher demand environment, paired with stiff competition from companies such as Workday and Paychex.

ADP has an extensive partnership with Workday to provide payroll services and counts retail giant Amazon as a customer.

Revenue for its PEO segment, which provides administration outsourcing services, rose 6% in the fourth quarter, while the employer services business grew 7%.

The company forecast its fiscal year 2025 revenue and adjusted profit largely in line with the Street expectations.

(Reporting by Zaheer Kachwala in Bengaluru; Editing by Shilpi Majumdar)