Automatic Data Processing vs Paychex
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KIRA’s take AI analyst
I put Automatic Data Processing and Paychex side by side, using each one’s latest annual report. Here is what stands out:
- Automatic Data Processing is the larger business, with $21.9B of revenue in fiscal 2026 against $6.5B for Paychex, about 3.4 times as much.
- Paychex grew revenue faster (16.9%, against 6.7%).
- Paychex turned more of its sales into free cash flow (35.7% FCF margin, against 23.9%).
- Automatic Data Processing earned a higher return on the capital invested in it (68.8%, against 26.2%).
Who comes out ahead
Of the 10 measures where higher (or lower) is clearly better, how many each company leads.
Automatic Data Processing
ADP
5/10
Return on capitalReturn on equityPiotroski F-scoreNet debt / EBITDAShare count change
Paychex
PAYX
5/10
Revenue growth5-year growthGross marginNet marginFCF margin
Side by side
Best in the row
| Latest fiscal year | ADP FY26 | PAYX FY26 |
|---|---|---|
| Size | ||
| Market cap | $121.4B | $41.3B |
| Revenue | $21.9B | $6.5B |
| Free cash flow | $5.2B | $2.3B |
| Net income | $4.4B | $1.8B |
| Growth | ||
| Revenue growth | 6.7% | 16.9% |
| 5-year growth | 7.9% | 9.9% |
| Share count change | −1.3% | −0.6% |
| Profitability | ||
| Gross margin | 46.4% | 74.3% |
| Operating margin | — | 38.6% |
| Net margin | 20.1% | 27.0% |
| FCF margin | 23.9% | 35.7% |
| Return on capital | 68.8% | 26.2% |
| Return on equity | 72.2% | 44.8% |
| Balance sheet | ||
| Net debt | $734M | $3.4B |
| Net debt / EBITDA | 0.1x | 1.2x |
| Dividends and buybacks | $4.7B | $2.2B |
| Valuation & quality | ||
| P/E | — | 22.9x |
| Piotroski F-score | 9 | 6 |
Ten years
Revenue
Operating margin
Free cash flow
Return on capital
Each company's latest fiscal year; fiscal years end in different months. The best value in each row is highlighted where higher (or lower) is clearly better. Not investment advice.