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 2026 earnings call. I would like to inform you that this conference is being recorded. After the prepared remarks, we will conduct the question and answer session. Instructions will be given at that time. I will now turn the conference over to Matt Keating, Vice President of Investor Relations. Please go ahead.

Thank you, Michelle, and welcome everyone to ADP's first quarter fiscal 2026 earnings call. Participating today are Maria Black, our President and CEO, and Peter Hadley, our CFO. Earlier this morning, we released our financial 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'll 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 factors that could cause actual results different 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 solid first quarter results that included 7% revenue growth and 7% adjusted EPS growth. We achieved these financial results while also making meaningful progress across our strategic priorities. I will briefly review some additional highlights from our results before discussing our strategic progress. We delivered solid employer services new business bookings with growth accelerating from our fourth quarter last year, resulting in a record sales volume for a first quarter. Growth was healthy in our small business portfolio, which includes our retirement and insurance services businesses. We were also happy to see growth re-accelerate in our employer services HR outsourcing business after a softer finish to last year. Overall HCM demand remained relatively stable and we experienced specific strength in ADP Lyric HCM. Our employer services retention rate continued to exceed our expectations and only declined slightly. Our overall client satisfaction score reached a new all-time high for our first quarter, reflecting improvements in each of our business units. Employer services pay-per-control growth continued to moderate and rounded down to 0% for the first quarter, with clients remaining cautious around adding headcount in the current environment. And last, our PEO revenue growth of 7% exceeded our expectations, helped by growth in zero-margin pass-throughs and higher wages. We are proud of our first quarter financial results and excited by the progress made across our three strategic business priorities. I will start with what we are doing to lead with best in class HCM technology. In the small business space, we continue to scale our embedded payroll solution. Embedded payroll saves small business owners time by bringing payroll directly into the software platforms they are already using to run their businesses. We are pleased with our early embedded payroll sales collaboration and look forward to adding more partners over time to further extend the reach of our small business distribution network. We also continue to add functionality to our existing small business offerings. For example, earlier this month, we launched a benefits recommendation tool designed to help guide small business clients on the most suitable benefits options. Today, these recommendations cover group health and individual coverage health reimbursement arrangement, or ICRA, and they will expand in the future to include our PEO. Our insurance services business also recently launched a digital option that enables small businesses to purchase ICRA plans directly on our run platform through our partner, SACCH. This opens up more choice for employees by allowing every team member to pick the plan that is right for them health, dental, vision, all in one place. In the mid-market, we accelerated the deployment of Workforce Now NextGen. We reached an important milestone in the first quarter when more than 80% of our new mid-market clients in the 50 to 150 employee space were sold on this NextGen version of Workforce Now. Moving forward, we will continue to extend this solution to larger mid-market prospects to enable them to also benefit from its modern tech stack and enhanced functionality. In the enterprise space, ADP Lyric HCM continues to experience strong momentum. Lyric's new business bookings exceeded our expectations for the first quarter and its new business pipeline continues to grow. Among the many enterprise clients that started on Lyric during the first quarter was a large travel management company. This client selected Lyric for its AI-driven automation and flexible architecture. They are using ADP for payroll, HR time, benefits, and talent, in both the US and Canada. Highlighting its positive reception in the market, Lyric was recently recognized by HR Executive as a Top HR Product of 2025 and honored at the HR Tech Conference in September. With respect to our workforce software acquisition, we continue to make meaningful progress by unifying workforce management, HR, and payroll we help our clients to gain better visibility, simplify their operations, and lower overall costs. Our differentiated approach helped us win the time and attendance business of an existing payroll client in the student transportation business with thousands of employees. And just this morning, we announced the acquisition of Pequity, an innovative compensation management software provider. This acquisition will broaden ADP's capabilities to support the complex compensation planning needs of our clients who are looking for insight-driven compensation solutions that help them make informed pay decisions. Underscoring our commitment to leading with best-in-class HSAM technology, we also continue to advance our AI initiatives. We deliver purpose-built AI to solve real world problems for HR teams. Our latest enhancements to ADP Assist use the power of generative AI to analyze and resolve things like payroll anomalies, by automatically identifying inconsistencies or deviations in the data, analytics requests that can take days to fulfill, and routine compliance tasks which pull teams away from strategic work. Utilization of ADP Assist is also increasing, with more than 5.5 million client conversations over the last year. This helps reduce the need for clients to contact us as their questions are answered proactively within our products. As we look ahead, our vision for ADP Assist includes simple agents to handle everyday tasks, advanced agents to execute multi-step processes, autonomous agents to go further managing workflows from start to finish, being sure to keep humans in the loop where it matters. What makes our approach different from others is the scale of the data we use to power our agents and how we train them to work together. A single action sets off the right follow-ups for employees, managers, and HR practitioners. It is in these connections where the real value is produced. We have an opportunity to use AI not just to speed up the client workflows, but rather fundamentally shift how work gets done. It's the difference between using AI to do things better and faster than before and using AI to do things better and faster than anyone else. Our new AI capabilities empower our associates to deliver on our second strategic priority, providing clients with unmatched expertise and outsourcing solutions. These internal AI tools provide our sales, implementation, and service teams with client-specific insights to address market shifts, resolve unique challenges, and ultimately deepen client engagement. Additionally, all of our developers are now equipped with coding co-pilot tools that are leading to measurable productivity gains. We also continue to expand our use of digital implementation for both small business and PEO clients. These AI initiatives create additional time for our associates to engage in higher value added activities that support our clients' growth. Finally, we continue to execute on our third strategic priority, benefiting our clients with our global scale. We bring value to our clients through our unmatched footprint in over 140 countries and continue to add to our global capabilities. During the first quarter, we also went live with our first GlobalView client in Costa Rica, where we now serve one of the world's largest employers. Further underscoring the quality of our global products, ADP was recently positioned as a leader in multi-country payroll by Nelson Hall in its Payroll Reimagined 2025 Meet And as an overall leader in multi-country payroll solutions by Everest in its 2025 peak matrix, we remain confident in our ability to advance our strategic goals, drive our competitive differentiation, and deliver strong financial results. And with that, I would like to take a moment to recognize our associates whose efforts and outstanding performance help us consistently deliver for our clients and maintain our record high client satisfaction levels. Thank you all. And now I'll turn the call over to Peter.