Automatic Data Processing, Inc. ADP is scheduled to release its second-quarter fiscal 2025 results on Jan. 29, before market open.

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ADP has a decent earnings surprise history, surpassing the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 3.2%.

Automatic Data Processing’s Q2 Expectations

The Zacks Consensus Estimate for the top line is pegged at $5 billion, implying a 6.4% increase on a year-over-year basis. We anticipate the top line to have been driven by business bookings, and strong client satisfaction and retention.

Our estimate for second-quarter fiscal 2025 revenues from Employer Service is $3.4 billion, suggesting 7.8% growth from the year-ago quarter’s actual. We anticipate growth in small business portfolios, mainly in retirement service offerings, and strong bookings in midmarket, enterprise and international businesses to have driven this segment’s revenues. We project PEO services’ revenues to be $1.6 billion, hinting at 2.8% year-over-year growth. The metric is expected to have been driven by an increase in average worksite employees.

Our expectation for Interest on Funds held for clients is $272.3 million, implying 20.9% growth from the year-ago quarter’s reported figure. Our estimate for Average Paid PEO Worksite Employees for the quarter is 750. Changes in Pay per control are anticipated to be 2% for the to-be-reported quarter.

The consensus estimate for earnings per share is pegged at $2.3, indicating a year-over-year rise of 6.6%. The bottom line is expected to have been fueled by a robust top-line performance.

What Our Model Says About ADP

Our model predicts an earnings beat for Automatic Data Processing this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks before they are reported with our Earnings ESP Filter.

ADP has an Earnings ESP of +1.15% and a Zacks Rank of 2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Other Stocks to Consider

Here are a few other stocks from the broader Business Services sector, which, according to our model, also have the right combination of elements to beat on earnings this season.

AppLovin Corporation APP: The Zacks Consensus Estimate for the company’s fourth-quarter 2024 revenues is pegged at $1.3 billion, indicating a year-over-year increase of 32.3%. For earnings, the consensus mark is pegged at $1.3 per share, suggesting a more than 100% surge from that reported in the year-ago quarter. The company beat the Zacks Consensus Estimate in the past four quarters, with an average surprise of 26.2%.

APP has an Earnings ESP of +1.12% and currently sports a Zacks Rank #1. The company is scheduled to declare its fourth-quarter results on Feb. 12.

S&P Global SPGI: The Zacks Consensus Estimate for the company’s fourth-quarter 2024 revenues is pegged at $3.5 billion, indicating year-over-year growth of 10%. For earnings, the consensus mark is pegged at $3.4 per share, implying 8.6% growth from the year-ago quarter’s actual. The company beat the Zacks Consensus Estimate in the past four quarters, the average surprise being 6.3%.

SPGI has an Earnings ESP of +0.94% and a Zacks Rank #2 at present. The company is scheduled to declare its fourth-quarter results on Feb. 11.

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