Automatic Data Processing, Inc. stock research
FY2026 Q3
Automatic Data Processing (ADP) Gross Margin & Quarterly History
Explore Automatic Data Processing, Inc. (ADP) gross margin from 2023 through the latest reported quarter, using SEC-sourced revenue, gross profit, and direct costs.
Gross margin takeaway
Quarter ended Mar 31, 2026 · FY2026 Q3
Revenue and gross profit both increased from the prior quarter and from the same quarter a year earlier, while cost of revenue also rose over both periods. Gross margin improved compared with the prior quarter but weakened compared with the same quarter one year ago.
- The gross margin strengthened sequentially as gross profit grew faster than cost of revenue relative to the preceding quarter. Versus the year-ago quarter, the margin weakened because cost of revenue rose more relative to revenue and gross profit.
- Compared with the prior quarter, revenue was higher, gross profit was higher, and cost of revenue was higher, leading to an improved gross margin. Relative to the same quarter a year earlier, revenue was higher, gross profit was higher, and cost of revenue was higher, but the margin weakened.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
48.3%
Gross profit
$2.9B
Revenue
$5.9B
Cost of revenue
$3.1B
Quarter-over-quarter change
+2.2 pts
Year-over-year change
+0.6 pts
Quarterly gross margin trend
A four-quarter view of the revenue and direct-cost bridge behind gross margin.
| Period | Revenue | Gross profit | Cost of revenue | Gross margin |
|---|---|---|---|---|
| Jun 30, 2025 | $5.1B | $2.3B | $2.8B | 45.1% |
| Sep 30, 2025 | $5.2B | $2.3B | $2.8B | 45.2% |
| Dec 31, 2025 | $5.4B | $2.5B | $2.9B | 46.1% |
| Mar 31, 2026 | $5.9B | $2.9B | $3.1B | 48.3% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Dec 31, 2025
+2.2 pts
Year-over-year change
Mar 31, 2025
+0.6 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The gross margin strengthened sequentially as gross profit grew faster than cost of revenue relative to the preceding quarter. Versus the year-ago quarter, the margin weakened because cost of revenue rose more relative to revenue and gross profit.
Compared with the prior quarter, revenue was higher, gross profit was higher, and cost of revenue was higher, leading to an improved gross margin. Relative to the same quarter a year earlier, revenue was higher, gross profit was higher, and cost of revenue was higher, but the margin weakened.
Monitor the relationship between revenue and cost of revenue growth rates, as the year-over-year margin decline indicates cost pressures relative to revenue.
Peer context
Latest available gross margins for related public companies.
| Company | Gross margin |
|---|---|
| Automatic Data Processing, Inc. (ADP) | 48.3% |