Microsoft Crushes ADP in Revenue Growth as AI Fuels Cloud Expansion

Microsoft's massive scale and revenue are not translating to rapid growth for investors. Over the past eight quarters, Automatic Data Processing has experienced a more volatile pattern with recurring peaks and dips in revenue compared to Microsoft's continuous quarter-over-quarter expansion.

In contrast, Microsoft's annual revenue hit $388 billion in its recently ended fiscal year in June, driven by a 43% increase in Azure cloud revenue. Meanwhile, Automatic Data Processing posted a 6.7% year-over-year increase in trailing-12-month revenue from cloud-based human resources software and specialized employer outsourcing services.

Microsoft's net income margin was approximately 40% for the quarter ended June 30, 2026, while Automatic Data Processing reported a net profit margin of about 18%. The gap between the two companies' revenue growth rates is significant, with Microsoft growing at a mid-teens rate compared to Automatic Data Processing's mid-single-digit rate.

Microsoft's AI-driven services platform, which includes Copilot assistant and Azure cloud infrastructure, has seen rapid adoption and client retention remains high at 92% in the recent fiscal year. However, Automatic Data Processing's AI offerings have not shown a meaningful lift to its revenue growth.