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 fiscal 2027 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'll 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 2027 earnings call. Participating today are Maria Black, our President and CEO, and Peter Hadley, 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'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 to differ materially from our current expectations. I'll now turn it over to Maria.

Thank you, Matt. This morning, we reported strong first quarter results with revenue growth, adjusted EBIT margin expansion, and adjusted EPS growth, all exceeding our expectations. These results reflect the critical role of ADP in an evolving world of work. Employers today are redesigning how work gets done. They are navigating a wave of AI-related change and making workforce decisions that carry real consequences for real people. What has not changed, however, is what they need from ADP, a trusted partner. For the last few quarters, I've spoken about the five structural advantages that make us purpose-built for this challenge. These advantages are core to our strategic priorities and serve as key differentiators for how we will continue to win in the market. Going forward, I will share our updates tied to these longstanding structural advantages. First is our industry-leading data. We know that AI is only as good as the data it's trained on. With 1.1 million clients supporting over 42 million workers across roles, industries, and geographies, we have one of the largest sources of real-time workforce data in the world. providing unparalleled insights into the workforce and its emerging trends. This unique perspective means we have a new responsibility in the AI era, not only to design HR and payroll solutions for people, but to help design the best possible future of work with people at the center. We are also using our data to fuel best-in-class innovation. Our massive global workforce data platform and decades of expertise have been optimized into an intelligence foundation that powers our AI capabilities at scale with security, privacy, and compliance built in from the ground up. Bringing me to our next structural advantage, our brand trust and responsible approach to AI. ADP is actively building across the full lifecycle of AI and HCM from AI that assists people with tasks to AI that facilitates an entire function end-to-end with human oversight, to AI that orchestrates work across domains and systems to support enterprise transformation. ADP is advancing and embedding each AI use case in our products and in how our teams operate. A perfect example of this is ADP Assist, which has crossed from early adoption into broad use, becoming more deeply embedded into workflows and driving measurable impact. Since the fourth quarter alone, we have added 100,000 more clients on ADP Assist, Most importantly, that scale is translating into real outcomes. The recently launched Recruiting AI Interviewer Agent in ADP Lyric runs call handling, scheduling, and note-taking so recruiters can stay focused on their strongest candidates. More than 4,400 AI interviews have been completed since the start of September with a 75% reduction in interview-related time spent, and more than half of those interviews were captured after hours ensuring businesses don't miss out on strong candidates regardless of when they apply. Candidates themselves are responding well, with the recruiting agent earning high satisfaction scores. We are also offering new tools that enable our clients to build secure, intelligent, and integrated workflows with their preferred AI agents. We've made a significant expansion to ADP API Central, which allows our clients' developers to access New Model Context Protocol, or MCP, servers and AI tools in addition to standard-based APIs. This enhanced offering addresses a growing challenge for organizations adopting AI, connecting AI agents and applications to trusted workforce data securely and at scale. Through API Central, developers and business teams can now connect workforce data with the AI experiences that employees and managers use every day enabling organizations to work in a more connected manner, innovate faster, and act more efficiently with less risk. These examples are evidence of how AI is removing friction from the most consequential moments in the payroll and HR cycle while enhancing rather than replacing the role that people play. Our third structural advantage is our trusted service model. Our clients are being exposed to more tools, more AI, and more regulation, and with all of it, more complexity. Every new platform, AI tool, and regulatory requirement creates another decision, another integration, another risk. Our clients want innovation, not the implementation headaches that come with fragmented solutions. Through all of the change, they need a partner they can trust to help them deliver on their promises to their people, and that is exactly what we show up to do every day. This impact is clearly reflected in how our clients are deploying ADP Lyric HCM across their organizations. For example, one of the largest education management companies in the United States was experiencing rapid growth, operational complexity, and a national teacher shortage. They needed to quickly modernize their people infrastructure, and they chose to implement ADP Lyric HCM. Through a comprehensive optimization of the recruiting and HR workflows, We help this client simplify requisitions, digitize approvals, and standardize offer processes, resulting in a 35% reduction in time to fill positions. ADP Lyric HCM is also helping further expand our global scale and reach, another one of our key structural advantages. This quarter, we were pleased to announce the expansion of ADP Lyric HCM across key European markets, with availability now for companies headquartered in the United Kingdom, France, Germany, and the Netherlands. This is much more than a product release. As AI evolves work, managing people across countries has become even more demanding, and building a platform that genuinely works across borders with localized payroll compliance, local labor law, local tax treatment, local data privacy requirements, all embedded at the infrastructure level, that takes decades of investment and local presence. You can't replicate it from the outside. ADP has been building it for 77 years. and we are fortunate to work with a diverse and highly integrated ecosystem of partners who make it possible, many of whom I got to speak with last week at our 21st Annual Global Partner Convention. These partners help bridge the final mile and create a consistent global experience combining on the ground local knowledge and specialized expertise with ADP's technology to deliver solutions that meet our clients exactly where they are. But this scale doesn't only support our multinational clients. It also helps Main Street. As small businesses increasingly seek integrated technology experiences, we continue to expand our ability to help them manage essential financial and employee operations through a single digital approach. Today, I am proud to announce that we have expanded our embedded payroll offering through a new partnership with PNC Bank, one of the largest financial services institutions in the United States. Through this partnership, we will bring ADP's payroll and HR capabilities directly into PNC's digital banking platform. This new offering, PNC Payroll by ADP, will give small business banking customers access to payroll, HR, time tracking, insurance, and retirement solutions directly through their digital banking platform. This will help reduce operational complexity, making it easier for small businesses to manage critical needs like cash flow, payments, compliance, and payroll. The offering is designed to support businesses as they grow from startups and one-person operations to more established companies looking to scale. Our final structural advantage is the 77 years of deep domain expertise that only we can provide to our clients. As the compliance landscape grows more complex, we are helping our clients stay ahead with our earned expertise that AI cannot replicate. For example, a long-standing aviation and aerospace client was struggling to manage complex ACA requirements with their internal resources. This gap resulted in numerous compliance-related errors. Our team identified the underlying issue and brought on ADP's health compliance managed services offering to help. By transitioning ACA administration to ADP's compliance specialists, the client gained dedicated expertise reduced its risk exposure and established a more reliable and scalable compliance model. This is a strong example of how ADP's deep expertise can identify risk, solve business challenges, and expand the value of a client relationship that has lasted more than three decades. What we are sharing today is a journey that's gaining momentum. Adoption is growing and client value is becoming more tangible. That value is the foundation of the financial story we're building. And as we continue to scale our AI tools across the business, we expect that story to come into sharper focus. There is a lot of conversation right now about what AI means for work. Some of it is speculative. But what we know from serving more than a million businesses and tens of millions of people they employ is that managing a workforce is far more complex than it appears from the outside. Payroll must be right every time for every person, and getting it right requires more than following a process. It requires understanding an ever-changing regulatory environment, managing situations that no process can fully anticipate and knowing the consequences when something goes wrong. Compliance can't be approximate. The moments where employers make decisions about people's livelihoods require judgment, trust and accountability, not just automation. That is precisely why clients come to ADP and why they stay. We are building AI that makes those consequential moments better, not AI that treats them as problems to eliminate. That distinction matters deeply, and we believe the market will continue to recognize it. Before I turn it over to Peter, I want to take a moment to recognize our associates across ADP who serve our clients every day. Every capability we build, every partnership we form, every metric we report, it only matters because of the people who bring it to life in real moments Their expertise and their commitment is what makes everything else possible, and I could not be prouder of this team. With that, I'll turn the call over to Peter.