Automatic Data Processing, Inc.

Good morning. My name is Michelle, and I'll be your conference operator. At this time, I would like to welcome everyone to ADP's first quarter 2025 earnings call. I would like to inform you that this conference is being recorded. After the prepared remarks, we will conduct a question and answer session. Instructions will be given at that time. I will now turn the conference over to Matt Keating, Vice President, Investor Relations. Please go ahead.

Thank you, Michelle, and welcome everyone to ADP's first quarter fiscal 2025 earnings call. Participating today are Maria Black, our president and CEO, and Don McGuire, our CFO. Earlier this morning, we released our results for the quarter. Our earnings materials are available on the SEC's website and our investor relations website at investors.adp.com, where you will also find the investor presentation that accompanies today's call. During our call, we will reference non-GAAP financial measures, which we believe to be useful to investors and that exclude the impact of certain items. A description of these items, along with a reconciliation of non-GAAP measures to their most comparable GAAP measures, can be found in our earnings release. Today's call will also contain forward-looking statements that refer to future events and involve some risk. We encourage you to review our filings with the SEC for additional information on the factors that could cause actual results to differ materially from our current expectations. I'll now turn it over to Maria.

Thank you, Matt, and thank you, everyone, for joining us. This morning, we reported strong first quarter results that included 7% revenue growth, 130 basis points of adjusted EBIT margin expansion, and 12% adjusted EPS growth. I'm excited to share the considerable progress we made across our three strategic priorities in the quarter, but let me first begin with some additional financial highlights. We had a solid start to the year from an employer services new business bookings perspective with record volume for our first quarter. This performance was broad-based as our small business portfolio benefited from our continued strength in retirement services. Our mid-market and HR outsourcing businesses also showed good growth and our international business maintained its strong momentum from last year. Overall, HCM demand remained steady and our new business pipelines were healthy at the end of the quarter. Our Q1 employer services retention rate exceeded our expectations and only declined slightly. Our overall client satisfaction score reached a new all-time high for a first quarter, driven by improvements in our mid-market, enterprise, and HR outsourcing businesses. Moving forward, we expect our record client satisfaction levels to continue to support our strong retention results. Employer services pays per control increased 2% for the first quarter, as our clients continue to hire employees at a moderate pace. Finally, PEO revenue growth of 7% and average worksite employee growth of 3% for the first quarter exceeded our expectations, as strong PEO new business bookings growth more than offset the impact of modest further deceleration in PEO pace per control growth. We are very proud of our strong first quarter financial results and equally excited by the significant progress made across our strategic business priorities. As the needs of today's global workforce continues to shift, employers require dynamic workforce management solutions that will help them maintain compliance and flexibility while engaging their employees. We continuously aim to offer solutions that will solve our clients' complex business challenges. As part of this approach, we recently acquired Workforce Software, a leading workforce management solutions provider that specializes in supporting large global enterprises. This acquisition expands our current array of time and attendance, absent management and scheduling tools, and strengthens our ability to win in a highly attractive market. Workforce Software is a leader in serving large, complex organizations and their robust solutions can adapt to the dynamic needs of today's employers by offering tools that create resiliency, help drive optimal performance, and make managing a global workforce easy. We are thrilled to bring together these capabilities as well as their trusted global support organization to broaden our suite of workforce management solutions. Based in Michigan, Workforce Software serves over 1,000 clients in more than 100 countries including many well-known global brands. I'd like to officially welcome the members of the workforce software team to ADP. Together, we will continue to drive the future of workforce management innovation, and we are looking forward to all the great things we will accomplish. Additionally, in September, we introduced ADP Lyric, our flexible, intelligent, and human-centric global HCM platform. Lyric is the new name for our next-gen HCM offering, which is designed to meet the evolving needs of the modern workforce. This is a differentiated offering combining global HR, global payroll, and global service to adapt to unique structures and workflows and to offer employers a human-centric approach to managing their people. Thanks to its integrated generative AI technology and the power of ADP's unmatched dataset, Lyric provides insights and intelligence like predictive analytics and anomaly detection to provide clients with personalized recommendations. Lyric is a global platform. It can support payroll in over 75 countries today, and we are focused on expanding its international reach moving forward. Following its successful launch at this year's HR Tech Conference, we are seeing very strong interest in Lyric, and we look forward to sharing our future progress with you. The acquisition of workforce software and the introduction of lyric position us to provide our enterprise clients with a unique global HR payroll time and service solution. We continue to invest in generative Ai capabilities to enhance the experience of our clients and empower our associates. During the first quarter we expanded access to our robust generative Ai based service tools. which are designed to bring speed to our service interactions and improve the client experience. These tools seamlessly integrate productivity-enhancing technologies like call summarization, virtual knowledge assist, and guided workflows for our associates so they can best support our clients. We expanded the use of these tools to our associates supporting our small business clients in the first quarter. Early feedback is impressive, and we look forward to continuing along this journey to drive productivity gains and even higher client satisfaction. We're also excited to share that we recently launched intelligent workflow automation technology in Workforce Now. These dynamic workflows deliver a personalized and satisfying employee experience at pivotal moments in an employee's career, like onboarding, while at the same time dramatically reducing manual work for HR practitioners. This functionality enhances the experience of mid-market clients and their employees on our Workforce Now platform, and we look forward to adding similar capabilities to our other HCM platforms over time. These meaningful steps collectively demonstrate our continued focus on our three strategic priorities, which are to lead with best-in-class HCM technology, provide unmatched expertise in outsourcing, and benefit our clients with our global scale. We remain confident in our ability to advance our strategic goals, drive our competitive differentiation, and deliver strong financial results. And with that, I'd like to take a moment to recognize our associates whose efforts and outstanding performance are positioning us to consistently deliver for our clients and our shareholders. Thank you all. And now I'll turn it over to Dawn.