Automatic Data Processing, Inc. stock research
FY2025 Q4
Automatic Data Processing (ADP) Gross Margin — Quarter Ended Jun 30, 2025
Revenue declined from the prior quarter but rose compared to the same quarter last year. Gross margin weakened sequentially and improved year-over-year, reflecting changes in the relationship between cost of revenue and revenue.
Gross margin takeaway
Quarter ended Jun 30, 2025 · FY2025 Q4
Revenue declined from the prior quarter but rose compared to the same quarter last year. Gross margin weakened sequentially and improved year-over-year, reflecting changes in the relationship between cost of revenue and revenue.
- The sequential decline in gross margin was driven by cost of revenue decreasing proportionally less than revenue, while the year-over-year improvement reflected cost of revenue increasing proportionally less than revenue.
- Compared to the immediately preceding quarter, revenue and gross profit were lower and gross margin weakened. Compared to the same quarter one year earlier, revenue and gross profit were higher and gross margin improved.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
45.1%
Gross profit
$2.3B
Revenue
$5.1B
Cost of revenue
$2.8B
Quarter-over-quarter change
-2.6 pts
Year-over-year change
+0.2 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 |
|---|---|---|---|---|
| Sep 30, 2024 | $4.8B | $2.2B | $2.6B | 45.5% |
| Dec 31, 2024 | $5.0B | $2.3B | $2.7B | 45.7% |
| Mar 31, 2025 | $5.6B | $2.6B | $2.9B | 47.7% |
| Jun 30, 2025 | $5.1B | $2.3B | $2.8B | 45.1% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Mar 31, 2025
-2.6 pts
Year-over-year change
Jun 30, 2024
+0.2 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The sequential decline in gross margin was driven by cost of revenue decreasing proportionally less than revenue, while the year-over-year improvement reflected cost of revenue increasing proportionally less than revenue.
Compared to the immediately preceding quarter, revenue and gross profit were lower and gross margin weakened. Compared to the same quarter one year earlier, revenue and gross profit were higher and gross margin improved.
Monitor the evolution of cost of revenue relative to revenue, as it directly affects gross margin direction.