Jan 29 (Reuters) -

Automatic Data Processing ( ADP ) beat second-quarter

revenue estimates on Wednesday due to increased demand for its

employee management and payroll services, driven by strong

spending from small and medium-sized businesses.

ADP, which is one of the world's largest payroll processors

globally, benefited from stable employment activity and low

layoff rates in the U.S. labor market.

Revenue at its PEO segment, which provides administration

outsourcing services, was $1.66 billion in the quarter ended

Dec. 31, compared with expectations of $1.64 billion, according

to data compiled by LSEG.

The Roseland, New Jersey-based company

acquired WorkForce Software

in October for around $1.2 billion in cash, in a bid to

stay ahead of competitors, as the industry shifts towards

mobile-friendly, cloud-based applications.

ADP reported a second-quarter revenue increase of 8% to

$5.05 billion, compared with estimates of $4.97 billion.

On an adjusted basis, it earned $2.35 per share in the

second quarter, compared with estimates of $2.29.

Shares of the payroll and human capital management company

rose 1.2% before the bell.