Q2 2025 Financial Performance - Average paid worksite employees increased by 1%[10] - Worksite employees paid from new client sales increased by 2% compared to Q2 2024[10] - Adjusted EBITDA decreased by 52%[14] - Adjusted EPS decreased by 70%[14] - Operating expenses decreased by 3% compared to Q2 2024[14] YTD June 2025 Financial Performance - Average paid worksite employees increased by 1%[17] - Worksite employees paid from new client sales increased by 2% compared to 2024[17] - Adjusted EBITDA decreased by 36%[20] - Adjusted EPS decreased by 42%[20] 2025 Outlook - The company expects average WSEEs paid to be between 310,300 and 313,400, representing a year-over-year increase of 1% to 2%[25] - The company expects adjusted EPS to be between $181 and $251, representing a year-over-year decrease of 49% to 30%[25] - The company expects adjusted EBITDA to be between $170 million and $205 million, representing a year-over-year decrease of 37% to 24%[25]

[Financial & Operational Highlights](index=1&type=section&id=Financial%20%26%20Operational%20Highlights) Insperity's Q2 2025 revenue grew 3% to $1.7 billion, but higher benefits costs led to a 14% gross profit decrease and a $5 million net loss, with year-to-date net income down 53% Q2 2025 Key Metrics vs. Q2 2024 (in millions, except WSEEs and EPS) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Average Paid WSEEs | 309,115 | 306,958 | +1% | | Revenues | $1.7 billion | $1.605 billion | +3% | | Gross Profit | $223 million | $260 million | -14% | | Net Income (Loss) | ($5 million) | $18 million | -128% | | Diluted EPS | ($0.14) | $0.48 | -129% | | Adjusted EBITDA | $32 million | $66 million | -52% | | Adjusted EPS | $0.26 | $0.86 | -70% | Year-to-Date (YTD) 2025 Key Metrics vs. YTD 2024 (in millions, except WSEEs and EPS) | Metric | YTD 2025 | YTD 2024 | Change | | :--- | :--- | :--- | :--- | | Average Paid WSEEs | 307,569 | 305,431 | +1% | | Revenues | $3.5 billion | $3.407 billion | +3% | | Gross Profit | $533 million | $605 million | -12% | | Net Income | $46 million | $97 million | -53% | | Diluted EPS | $1.22 | $2.56 | -52% | | Adjusted EBITDA | $134 million | $208 million | -36% | | Adjusted EPS | $1.83 | $3.13 | -42% | - The primary reason for the **14% decrease** in Q2 gross profit was higher-than-expected benefits costs, driven by elevated pharmacy trends and a high frequency of large healthcare claims[4](index=4&type=chunk) - During the first six months of 2025, Insperity returned **$64 million** to shareholders, consisting of **$19 million** in share repurchases (225,000 shares) and **$45 million** in cash dividends[8](index=8&type=chunk)[10](index=10&type=chunk) [Business Outlook & Strategy](index=1&type=section&id=Business%20Outlook%20%26%20Strategy) Management is implementing pricing and benefit plan changes to address rising costs and drive accelerated growth in 2026, with a Workday partnership beta launch planned for early next year, despite reduced 2025 guidance - Management is executing a plan focused on pricing adjustments and benefit plan design changes to address the elevated benefits cost trend and lay the foundation for **accelerated growth in 2026**[4](index=4&type=chunk)[6](index=6&type=chunk) - The strategic partnership with Workday, named "**Insperity HRScale**," has a targeted go-live date with beta clients early next year, and sales and marketing efforts have already commenced[4](index=4&type=chunk) Updated 2025 Guidance | Metric | Q3 2025 Guidance | Full Year 2025 Guidance | | :--- | :--- | :--- | | Avg. WSEEs Paid (YoY Growth) | 312,200 - 315,300 (1% - 2%) | 310,300 - 313,400 (1% - 2%) | | Adjusted EPS (YoY Change) | $0.06 - $0.49 ( (85)% - 26% ) | $1.81 - $2.51 ( (49)% - (30)% ) | | Adjusted EBITDA (YoY Change) | $24M - $44M ( (38)% - 13% ) | $170M - $205M ( (37)% - (24)% ) | [Consolidated Financial Statements](index=7&type=section&id=Consolidated%20Financial%20Statements) This section presents Insperity's unaudited consolidated financial statements as of June 30, 2025, reflecting revenue growth offset by increased costs and lower profitability [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets decreased to $2.02 billion due to lower cash, while total liabilities also fell to $1.91 billion, and stockholders' equity rose to $112 million Balance Sheet Summary (in millions) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $441 | $1,039 | | Total current assets | $1,517 | $2,085 | | **Total assets** | **$2,018** | **$2,597** | | **Liabilities & Equity** | | | | Total current liabilities | $1,357 | $1,930 | | Long-term debt | $369 | $369 | | **Total liabilities** | **$1,906** | **$2,500** | | **Total stockholders' equity** | **$112** | **$97** | [Consolidated Statements of Operations](index=8&type=section&id=Consolidated%20Statements%20of%20Operations) Q2 2025 revenues rose 3% to $1.66 billion, but a 7% cost increase led to a 14% gross profit decline, resulting in a $7 million operating loss and a $5 million net loss for the quarter Statement of Operations Summary (in millions) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenues | $1,658 | $1,605 | $3,521 | $3,407 | | Gross Profit | $223 | $260 | $533 | $605 | | Operating Income (Loss) | ($7) | $23 | $61 | $131 | | Net Income (Loss) | ($5) | $18 | $46 | $97 | [Key Financial and Statistical Data](index=9&type=section&id=Key%20Financial%20and%20Statistical%20Data) Q2 2025 per WSEE per month, revenues increased 3% to $1,788, but gross profit declined 15% to $240, and operating income shifted to an $8 loss, indicating significant margin compression Key Metrics Per WSEE Per Month | Metric | Q2 2025 ($) | Q2 2024 ($) | Change (%) | | :--- | :--- | :--- | :--- | | Revenues | $1,788 | $1,743 | +3% | | Gross profit | $240 | $282 | -15% | | Operating income (loss) | ($8) | $25 | -132% | [Non-GAAP Financial Measures & Reconciliations](index=10&type=section&id=Non-GAAP%20Financial%20Measures%20%26%20Reconciliations) This section defines and reconciles non-GAAP financial measures like Adjusted EBITDA and Adjusted EPS, providing greater transparency into core operational performance by excluding non-cash items - The company uses non-GAAP measures like **Adjusted EBITDA** and **Adjusted EPS** to provide investors with a view of performance similar to that used by management, primarily by excluding non-cash stock-based compensation[24](index=24&type=chunk)[25](index=25&type=chunk) Reconciliation of Net Income (Loss) to Adjusted EBITDA (in millions) | Line Item | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | **Net income (loss) (GAAP)** | **($5)** | **$18** | **$46** | **$97** | | Adjustments (Taxes, Interest, D&A, etc.) | $17 | $28 | $57 | $81 | | **EBITDA** | **$12** | **$46** | **$103** | **$178** | | Stock-based compensation | $20 | $20 | $31 | $30 | | **Adjusted EBITDA (Non-GAAP)** | **$32** | **$66** | **$134** | **$208** | Reconciliation of Diluted EPS to Adjusted EPS | Line Item | Q2 2025 ($) | Q2 2024 ($) | YTD 2025 ($) | YTD 2024 ($) | | :--- | :--- | :--- | :--- | :--- | | **Diluted EPS (GAAP)** | **($0.14)** | **$0.48** | **$1.22** | **$2.56** | | Non-GAAP adjustments, net | $0.40 | $0.38 | $0.61 | $0.57 | | **Adjusted EPS (Non-GAAP)** | **$0.26** | **$0.86** | **$1.83** | **$3.13** | Reconciliation of 2025 Guidance (GAAP to Non-GAAP) | Metric | Q3 2025 Guidance ($) | Full Year 2025 Guidance ($) | | :--- | :--- | :--- | | **Diluted EPS (GAAP)** | **$(0.25) - $0.18** | **$0.59 - $1.29** | | Total non-GAAP adjustments, net | $0.31 | $1.22 | | **Adjusted EPS (Non-GAAP)** | **$0.06 - $0.49** | **$1.81 - $2.51** | [Other Information](index=3&type=section&id=Other%20Information) This section provides administrative and legal information, including conference call details, a corporate overview, and a safe harbor statement regarding forward-looking statements and associated risks [Conference Call and Webcast](index=3&type=section&id=Conference%20Call%20and%20Webcast) Insperity held a conference call and webcast on August 1, 2025, at 8:30 a.m. ET to discuss Q2 results and updated 2025 guidance, with replay options available - A conference call was held at 8:30 a.m. ET on the day of the release to discuss results and guidance, with details provided for live access and replay[15](index=15&type=chunk) [About Insperity](index=3&type=section&id=About%20Insperity) Insperity offers comprehensive HR solutions, combining service and technology to provide administrative relief and improved benefits, generating $6.6 billion in 2024 revenues with over 100 U.S. sales offices - Insperity offers comprehensive HR solutions to businesses, focusing on driving performance and growth. The company had 2024 revenues of **$6.6 billion** and operates over 100 sales offices in the U.S[16](index=16&type=chunk) [Forward-Looking Statements](index=5&type=section&id=Forward-Looking%20Statements) This standard disclaimer cautions that forward-looking statements are subject to various risks, including economic conditions, healthcare costs, competition, and the Workday partnership, which could cause actual results to differ materially - The report contains forward-looking statements that are subject to risks and uncertainties. Key risk factors include: - Adverse economic conditions - Increases in health insurance and workers' compensation costs - Competition in the HR services industry - Ability to realize benefits from the strategic partnership with Workday, Inc - Disruptions of IT systems or data security breaches[17](index=17&type=chunk)[20](index=20&type=chunk)

Insperity Contractor Management powered by Wingspan automates the entire contractor engagement lifecycle NEW YORK, July 22, 2025 /PRNewswire/ -- Wingspan, the first modern payments platform purpose-built for independent contractors, today announced a new strategic partnership with Insperity, Inc. (NYSE: NSP), a leading national provider of human resources and business performance solutions. The new solution, Insperity Contractor Management powered by Wingspan, is an all-in-one contractor management platform ...

Insperity, Inc. (NSP) Q1 2025 Results Summary Core Viewpoint - Insperity, Inc. reported lower-than-expected first-quarter 2025 results, leading to a 17% decline in stock price since the earnings release on April 29 due to disappointing earnings and weak EPS guidance [1] Financial Performance - Adjusted earnings per share (EPS) were 1.57 cents, missing the consensus estimate by 21.9% and decreasing 30.8% year over year [2] - Revenues totaled $1.9 billion, slightly missing the Zacks Consensus Estimate but increasing 3.4% from the previous year [2] - Gross profit declined 10% year over year to $310 million, with a gross margin of 16.6%, down 250 basis points from Q1 2024 [4] - Operating income fell 37% year over year to $68 million, with operating income per worksite employee (WSEE) per month at $74 compared to $118 in the prior year [5] Employee Metrics - The average number of worksite employees paid per month increased by 1% year over year to 306,023 [3] - Revenue per worksite employee (WSEE) per month rose 3% from the year-ago quarter to $2,029 [3] Guidance and Outlook - For 2025, the adjusted EPS guidance was lowered to $2.23-$3.28 from the previous range of $3.10-$3.95, with the mid-point of $2.76 exceeding the Zacks Consensus Estimate of $2.48 [1] - Q2 guidance for EPS is set at 29-67 cents per share, with the mid-point of 48 cents above the Zacks Consensus Estimate of 41 cents [7] - Adjusted EBITDA guidance for 2025 was reduced to $190-$245 million from $240-$285 million [7] Balance Sheet and Cash Flow - As of the end of Q1 2025, cash and cash equivalents stood at $551 million, down from $1 billion in the previous quarter [6] - Long-term debt remained flat at $369 million, and the company distributed $23 million in cash dividends during the quarter [6]

Financial Performance - Revenues for Q1 2025 were $1,863 million, a 3.4% increase from $1,802 million in Q1 2024[12] - Gross profit decreased to $310 million in Q1 2025, down 10.1% from $345 million in Q1 2024[12] - Operating income fell to $68 million in Q1 2025, a decline of 37.0% compared to $108 million in Q1 2024[12] - Net income for Q1 2025 was $51 million, down 35.4% from $79 million in Q1 2024[12] - Basic net income per share decreased to $1.37 in Q1 2025 from $2.11 in Q1 2024, a decline of 35.0%[12] - Total revenue for Q1 2025 was $1,863 million, a 3% increase from $1,802 million in Q1 2024[34] - Revenues from the Northeast region increased by 3% to $526 million in Q1 2025 compared to $509 million in Q1 2024[34] - Basic earnings per share (EPS) for Q1 2025 was $1.34, compared to $2.14 in Q1 2024[57] Cash Flow and Liquidity - Cash flows from operating activities showed a net cash used of $443 million in Q1 2025, compared to $31 million provided in Q1 2024[13] - The company reported a decrease in cash, cash equivalents, and restricted cash to $846 million at the end of Q1 2025, down from $978 million at the end of Q1 2024[13] - Cash and cash equivalents totaled $1,039 million as of March 31, 2025, compared to $693 million in 2024, indicating a significant increase[43] - The outstanding balance on the revolving credit facility was $369 million as of March 31, 2025, with an available borrowing capacity of $280 million[48] - As of March 31, 2025, the company had outstanding borrowings totaling $370 million under its Facility, which bears interest at a variable market rate[115] - The average interest rate for the three-month period ended March 31, 2025, was 6.2%[50] Operating Expenses - Total operating expenses increased to $242 million in Q1 2025, up from $237 million in Q1 2024[12] - Accrued workers' compensation costs were reduced by $7 million in Q1 2025 and $9 million in Q1 2024 due to changes in estimated losses related to prior periods[26] - The ending balance for incurred but not paid workers' compensation claims was $196 million as of March 31, 2025, down from $215 million in 2024, representing an 8.8% decrease[27] - The average discount rate for workers' compensation cost estimates was 4.0% in Q1 2025, down from 4.5% in Q1 2024[26] Shareholder Returns - The company declared and paid dividends totaling $23 million in Q1 2025, up from $21 million in Q1 2024, with a dividend per share of $0.60 compared to $0.57[55] - The company repurchased 45,000 shares under its Repurchase Program during the three months ended March 31, 2025, with an additional 1,407,764 shares authorized for repurchase[53] - The company withheld 179,065 shares to satisfy tax withholding obligations for long-term incentive and restricted stock unit awards during Q1 2025[54] Strategic Initiatives and Risks - The company plans to develop a joint solution with Workday, Inc., which may enhance future product offerings[10] - The company has faced challenges related to data security and third-party provider failures, which could impact future operations[10] - The company believes that the outcome of ongoing litigation will not have a material adverse effect on its financial position or results of operations[58] Accounts Receivable - The company reported unbilled accounts receivable of $819 million as of March 31, 2025, compared to $810 million at the end of 2024[32]

Financial Data and Key Metrics Changes - The company reported Q1 2025 adjusted EPS of $1.57 and adjusted EBITDA of $102 million, which fell below guidance due to higher than expected benefits costs [5][6] - The average number of paid worksite employees increased by 0.7% year-over-year to 306,023, but growth was slightly below guidance due to delays and cancellations in new client starts [5][6] - Gross profit per worksite employee decreased to $338 per month from $378 in Q1 2024, attributed to an 8.4% increase in benefits costs per covered employee [6][9] Business Line Data and Key Metrics Changes - Client retention improved to 91% in Q1 2025 from 88% in Q1 2024, indicating strong client loyalty despite market challenges [20] - Client net hiring was slightly positive but significantly weaker compared to historical norms [6][20] - The company experienced a 3% increase in worksite employees paid from new client sales compared to Q1 2024, despite overall hiring challenges [5][6] Market Data and Key Metrics Changes - A client survey indicated that 66% of respondents expect the economic climate to negatively affect their business, up from 29% in January [16] - The percentage of clients expecting to add employees in the coming quarter decreased to 34% from 43% [16] - The Northeast region showed better results compared to other areas, but overall trends were consistent across the nation [70] Company Strategy and Development Direction - The company is focusing on mitigating benefits cost challenges through pricing adjustments and plan design changes, with a forecasted benefits cost per covered employee range of 6.5% to 7.5% for the full year [10][35] - The strategic partnership with Workday is a key focus, with a go-to-market plan established to target mid-market businesses, which is expected to significantly drive growth starting in 2026 [30][31] - The company aims to leverage the Workday partnership to enhance service offerings and client engagement, particularly for businesses with 150 to 5,000 employees [88] Management's Comments on Operating Environment and Future Outlook - Management expressed disappointment over the unexpected rise in benefits costs but remains optimistic about future profitability improvements in 2026 [10][64] - The company anticipates a modest improvement in worksite employee growth throughout the year, barring significant changes in the macroeconomic environment [36] - Management noted that the current period of uncertainty is less likely to be a temporary spike, suggesting a more cautious approach to forecasting [86] Other Important Information - Operating expenses were managed slightly below budget, with a 2% increase year-over-year, primarily due to investments in the Workday partnership [11][12] - The company returned $23 million in cash dividends and repurchased 224,000 shares at a cost of $19 million in Q1 [12] - The effective tax rate for the quarter was 29%, consistent with the previous year [12] Q&A Session Summary Question: Can you elaborate on the onboarding pauses mentioned in Q1? - Management noted a dramatic reversal in small business optimism due to government actions, leading to delays and cancellations in onboarding new clients [40][41] Question: What is the expected cadence of spending for the Workday partnership? - The company anticipates stable spending throughout the year, with costs expected to decrease in subsequent years as the project matures [45][48] Question: What actions from Washington could improve customer sentiment? - Management believes that stabilizing the tax system and regulatory environment could significantly boost confidence among clients [53][54] Question: How quickly can pricing adjustments be made in response to healthcare costs? - Pricing changes are already being implemented, with expectations for improved margins as the year progresses [63][64] Question: Are there regional or industry differences in healthcare costs and hiring hesitancy? - The company has observed better results in the Northeast, but overall trends are consistent across the nation [70] Question: What is the expected profitability from the Workday partnership? - Management anticipates higher upfront pricing and ongoing revenue contributions from the new joint solution, though specific figures are still being analyzed [78][79]

Earnings Call and Webcast Q1 2025 Q1 results reflecting macroeconomic turbulence and healthcare cost volatility in stark contrast with the solid execution of our game plan for building the foundation for future growth acceleration Three initiatives expected to mitigate the recent healthcare trend effects in 2026 include recently implemented pricing plan, 2026 health plan design changes, and early contract renewal negotiations with UnitedHealthcare. Continued focus on the Insperity/Workday strategic partners ...

分组1 - Insperity, Inc. reported quarterly earnings of $1.57 per share, missing the Zacks Consensus Estimate of $2.01 per share, and down from $2.27 per share a year ago, representing an earnings surprise of -21.89% [1] - The company posted revenues of $1.86 billion for the quarter ended March 2025, missing the Zacks Consensus Estimate by 0.43%, compared to year-ago revenues of $1.8 billion [2] - Insperity has surpassed consensus EPS estimates three times over the last four quarters, but has topped consensus revenue estimates only once in the same period [2] 分组2 - The stock's immediate price movement will depend on management's commentary during the earnings call, with Insperity shares having added about 1.4% since the beginning of the year, contrasting with the S&P 500's decline of -6% [3] - The current consensus EPS estimate for the coming quarter is $0.71 on $1.68 billion in revenues, and for the current fiscal year, it is $3.46 on $6.91 billion in revenues [7] - The Staffing Firms industry, to which Insperity belongs, is currently in the bottom 7% of the Zacks Industry Rank, indicating potential underperformance compared to higher-ranked industries [8]

Financial Data and Key Metrics Changes - The company reported first quarter adjusted EPS of $1.57 and adjusted EBITDA of $102 million, which fell below guidance due to higher than expected benefits costs [5][6] - The average number of paid worksite employees increased by 0.7% year-over-year to 306,023, but growth was slightly below guidance due to delays and cancellations in new client starts [5][6] - Gross profit per worksite employee decreased to $338 per month from $378 in the prior year, attributed to an 8.4% increase in benefits costs per covered employee [6][10] Business Line Data and Key Metrics Changes - Client retention improved to 91% in Q1, a significant increase from 88% in the previous year, indicating strong client loyalty [18] - Client net hiring was slightly positive but remained weak compared to historical norms [6][33] Market Data and Key Metrics Changes - A client survey indicated that 66% of respondents expect the economic climate to negatively affect their business, up from 29% in January [15] - The percentage of clients expecting to add employees decreased to 34% from 43% [15] Company Strategy and Development Direction - The company is focusing on mitigating the impact of rising benefits costs through pricing adjustments and plan design changes, with a forecasted benefits cost per covered employee of 6.5% to 7.5% for the full year [9][34] - The strategic partnership with Workday is seen as a significant growth driver, with plans to launch a joint solution targeting mid-market businesses [25][29] Management's Comments on Operating Environment and Future Outlook - Management expressed disappointment over the unexpected rise in benefits costs but remains optimistic about future profitability improvements as pricing adjustments are implemented [10][36] - The company has reduced its worksite employee growth forecast for the year to 0.5% to 3% due to macroeconomic uncertainties [33][34] Other Important Information - Operating expenses increased slightly by 2% year-over-year, primarily due to investments in the Workday partnership [10][11] - The company returned $23 million in cash dividends and repurchased 224,000 shares at a cost of $19 million during the quarter [11] Q&A Session Summary Question: Can you elaborate on the onboarding pauses mentioned? - Management noted that optimism in the small business community reversed dramatically due to government actions, leading to delays and cancellations in onboarding new clients [40][41] Question: What is the expected cadence of spending for the Workday partnership? - The company anticipates stable spending throughout the year, with a gradual decrease in costs expected in years three to five of the partnership [45][48] Question: What actions from Washington could improve customer confidence? - Management believes that minor changes in tax policy or regulatory environments could significantly boost confidence among clients [54] Question: How quickly can pricing adjustments be made in response to healthcare costs? - Pricing changes are already being implemented, with expectations for improvements in gross margins as the year progresses [63][64] Question: Are there regional differences in healthcare costs or hiring hesitancy? - The company has seen better results in the Northeast, but overall trends appear to be consistent across the nation [70]

[Executive Summary & Q1 2025 Results](index=1&type=section&id=Executive%20Summary%20%26%20Q1%202025%20Results) Insperity's Q1 2025 results show revenue growth offset by declining gross profit and net income due to higher healthcare costs, with management initiating pricing adjustments and progressing on strategic partnerships [First Quarter 2025 Financial Highlights](index=1&type=section&id=First%20Quarter%202025%20Financial%20Highlights) Insperity reported a 1% increase in average worksite employees (WSEEs) and a 3% rise in revenues for Q1 2025, reaching $1.9 billion, but gross profit decreased by 10% to $310 million due to higher healthcare costs, leading to significant declines in net income and diluted EPS Q1 2025 Key Financial Highlights | Metric | Q1 2025 | Q1 2024 | Change | | :-------------------------------- | :------ | :------ | :----- | | Average WSEEs paid | 306,023 | 303,904 | 1% | | Revenues | $1.9 billion | $1.8 billion | 3% | | Gross profit | $310 million | $345 million | (10)% | | Operating expenses | $242 million | $237 million | 2% | | Net income | $51 million | $79 million | (35)% | | Diluted EPS | $1.35 | $2.08 | (35)% | | Adjusted EBITDA | $102 million | $142 million | (28)% | | Adjusted EPS | $1.57 | $2.27 | (31)% | - Gross profit decrease was primarily due to higher-than-expected benefits costs, specifically an acceleration in inpatient, outpatient, and pharmacy costs, and increased frequency of large claim activity, with healthcare costs including approximately **$12 million** of higher-than-expected runoff from claims related to prior periods[4](index=4&type=chunk) - Operating expenses included **$13 million** for the Workday strategic partnership in Q1 2025, up from **$5 million** in Q1 2024[5](index=5&type=chunk) [Management Commentary](index=1&type=section&id=Management%20Commentary) Management acknowledged the impact of macro-economic turbulence and healthcare cost volatility on Q1 financial results but emphasized solid execution on building a foundation for future growth, noting progress on the Workday strategic partnership and the initiation of a pricing plan to address rising healthcare costs - CEO Paul J. Sarvadi noted that Q1 financial results, reflecting macro-economic turbulence and healthcare cost volatility, contrasted with solid execution of the game plan for future growth acceleration[4](index=4&type=chunk) - Excellent progress was made on the Workday strategic partnership milestones, including an agreed-upon go-to-market plan anticipated to add a new growth driver in **2026** and beyond[4](index=4&type=chunk) - CFO James D. Allison stated that the company has made good progress with its operating plan, focusing on operating expense management and accelerating growth[6](index=6&type=chunk) - A pricing plan has been initiated to address the projected higher healthcare cost trend, and other options are under evaluation to contain or reduce costs and improve profitability in **2026**[6](index=6&type=chunk) [Shareholder Returns and Liquidity](index=1&type=section&id=Shareholder%20Returns%20and%20Liquidity) During the first three months of 2025, Insperity returned $42 million to shareholders through share repurchases and cash dividends, while maintaining a healthy liquidity position with $124 million in adjusted cash and $280 million available under its credit facility Q1 2025 Shareholder Returns & Liquidity | Metric | Amount | | :-------------------------------- | :----- | | Shares repurchased | 224,000 | | Cost of share repurchases | $19 million | | Dividends paid | $23 million | | Total return to shareholders | $42 million | | Adjusted cash (as of March 31, 2025) | $124 million | | Available under credit facility | $280 million | | Total credit facility | $650 million | [2025 Financial Guidance](index=2&type=section&id=2025%20Financial%20Guidance) The company's 2025 financial guidance projects modest WSEE growth but anticipates significant declines in Adjusted EPS and Adjusted EBITDA for Q2 and the full year, alongside definitions of key non-GAAP metrics [Q2 and Full Year 2025 Outlook](index=2&type=section&id=Q2%20and%20Full%20Year%202025%20Outlook) Insperity provided updated guidance for Q2 and the full year 2025, projecting modest WSEE growth but a significant year-over-year decrease in Adjusted EPS and Adjusted EBITDA for both periods, reflecting the challenges faced in Q1 2025 Financial Guidance | Metric | Q2 2025 Guidance | YoY Change (Q2) | Full Year 2025 Guidance | YoY Change (FY) | | :---------------------- | :--------------- | :-------------- | :---------------------- | :-------------- | | Average WSEEs paid | 308,000 - 311,000 | 0.3% - 1.3% | 308,800 - 316,400 | 0.5% - 3.0% | | Adjusted EPS | $0.29 - $0.67 | (66)% - (22)% | $2.23 - $3.28 | (38)% - (8)% | | Adjusted EBITDA (in millions) | $33 - $53 | (50)% - (20)% | $190 - $245 | (30)% - (9)% | [Definition of Key Metrics](index=2&type=section&id=Definition%20of%20Key%20Metrics) This section defines the key non-GAAP financial metrics used in the company's reporting and guidance, including Average WSEEs paid, Adjusted EPS, and Adjusted EBITDA, to provide clarity on how these figures are calculated - Average WSEEs paid is determined by calculating the company's cumulative WSEEs paid during the period divided by the number of months in the period[10](index=10&type=chunk) - Adjusted EPS represents diluted net income per share computed in accordance with GAAP, excluding the impact of non-cash stock-based compensation[10](index=10&type=chunk) - Adjusted EBITDA represents net income computed in accordance with GAAP, plus interest expense, income taxes, depreciation and amortization expense, amortization of SaaS implementation costs, and non-cash stock-based compensation[11](index=11&type=chunk) [Company Information](index=2&type=section&id=Company%20Information) This section provides an overview of Insperity's mission and comprehensive HR solutions, including its 2024 revenues, and details regarding the Q1 2025 earnings conference call and webcast [About Insperity](index=2&type=section&id=About%20Insperity) Insperity, founded in 1986, is a leading provider of human resources and business performance solutions, offering a comprehensive suite of scalable HR solutions to help businesses succeed through premium HR service and technology, reporting $6.6 billion in revenues in 2024 - Insperity's mission since **1986** has been to help businesses succeed so communities prosper, offering a comprehensive suite of scalable HR solutions[13](index=13&type=chunk) - The company delivers administrative relief, reduced liabilities, and better benefit solutions through an optimal blend of premium HR service and technology[13](index=13&type=chunk) Insperity 2024 Revenues | Metric | Amount | | :------- | :----------- | | Revenues | $6.6 billion | [Conference Call and Webcast](index=2&type=section&id=Conference%20Call%20and%20Webcast) Insperity hosted a conference call and webcast on April 29, 2025, to discuss the first quarter results and updated 2025 guidance, with replay and archived webcast available - A conference call was hosted on **April 29, 2025**, at **8:30 a.m. ET** to discuss results and guidance, with a webcast available at http://ir.insperity.com[12](index=12&type=chunk) - A replay of the conference call is available at **877-481-4010**, conference i.d. number **52321**, and the webcast will be archived for one year[12](index=12&type=chunk) [Forward-Looking Statements & Risk Factors](index=3&type=section&id=Forward-Looking%20Statements%20%26%20Risk%20Factors) This section outlines the disclaimer for forward-looking statements, emphasizing inherent risks and uncertainties, and details various factors that could materially impact Insperity's financial performance and operations [Forward-Looking Statements Disclaimer](index=3&type=section&id=Forward-Looking%20Statements%20Disclaimer) This section provides a disclaimer regarding forward-looking statements, identifying them by specific terminology and cautioning that they are not guarantees of future performance, highlighting that actual results could differ materially due to various risks and uncertainties - Statements not historical facts are forward-looking statements, identifiable by words like 'anticipates,' 'expects,' 'intends,' 'plans,' 'projects,' 'believes,' 'estimates,' 'forecasts,' 'likely,' 'possibly,' 'probably,' 'could,' 'goal,' 'opportunity,' 'objective,' 'target,' 'assume,' 'outlook,' 'guidance,' 'predicts,' 'appears,' 'indicator' and similar expressions[14](index=14&type=chunk) - Forward-looking statements are not guarantees of future performance and involve risks, uncertainties, and assumptions that cannot be predicted, with actual results potentially differing materially from those stated[14](index=14&type=chunk) - The company undertakes no obligation to update or revise any forward-looking statements unless required by applicable securities laws[16](index=16&type=chunk) [Risk Factors](index=3&type=section&id=Risk%20Factors) The report outlines numerous risk factors that could materially affect Insperity's operations and financial results, including adverse economic conditions, volatility in healthcare and workers' compensation costs, regulatory changes, competitive pressures, and the ability to execute strategic partnerships - Key risk factors include adverse economic conditions, labor shortages, increasing competition for skilled workers, and the impact of inflation[14](index=14&type=chunk) - Increases in health insurance costs and workers' compensation rates, underlying claims trends, and health care reform pose significant risks[14](index=14&type=chunk) - The impact of the competitive environment and other developments in the human resources services industry, including the PEO industry, could affect growth and profitability[14](index=14&type=chunk) - Risks also include disruptions of information technology systems, failure to enhance service and technology offerings, and liability or damage to reputation from data theft or cyberattacks[14](index=14&type=chunk)[17](index=17&type=chunk) - The ability to fully realize the anticipated benefits of the strategic partnership and plans to develop a joint solution with Workday, Inc. is also a risk factor[17](index=17&type=chunk) [Financial Statements](index=5&type=section&id=Financial%20Statements) This section presents Insperity's condensed consolidated balance sheets, statements of operations, and key financial data per WSEE, detailing asset and liability changes, revenue composition, and profitability metrics [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet shows a decrease in total assets from $2,597 million at December 31, 2024, to $2,143 million at March 31, 2025, primarily driven by a reduction in cash and cash equivalents, with total liabilities also decreasing while stockholders' equity saw a modest increase Condensed Consolidated Balance Sheets (in millions) | Metric | March 31, 2025 | December 31, 2024 | | :-------------------------------- | :------------- | :---------------- | | Total assets | $2,143 | $2,597 | | Cash and cash equivalents | $551 | $1,039 | | Accounts receivable, net | $834 | $829 | | Total current assets | $1,654 | $2,085 | | Total liabilities | $2,024 | $2,500 | | Payroll taxes and other payroll deductions payable | $457 | $901 | | Accrued health insurance costs | $68 | $19 | | Total current liabilities | $1,466 | $1,930 | | Total stockholders' equity | $119 | $97 | [Consolidated Statements of Operations](index=6&type=section&id=Consolidated%20Statements%20of%20Operations) For the three months ended March 31, 2025, revenues increased by 3% year-over-year, but gross profit declined by 10% due to a 7% increase in payroll taxes, benefits, and workers' compensation costs, resulting in significant decreases in operating income and net income Consolidated Statements of Operations (Three Months Ended March 31, in millions) | Metric | 2025 | 2024 | Change | | :------------------------------------------ | :--- | :--- | :----- | | Revenues | $1,863 | $1,802 | 3% | | Payroll taxes, benefits and workers' compensation costs | $1,553 | $1,457 | 7% | | Gross profit | $310 | $345 | (10)% | | Total operating expenses | $242 | $237 | 2% | | Operating income | $68 | $108 | (37)% | | Net income | $51 | $79 | (35)% | | Diluted EPS | $1.35 | $2.08 | (35)% | Revenue Composition (Three Months Ended March 31, in millions) | Metric | 2025 | 2024 | | :------------------ | :----- | :----- | | Gross billings | $12,144 | $11,483 | | Less: WSEE payroll cost | $10,281 | $9,681 | | Revenues | $1,863 | $1,802 | [Key Financial and Statistical Data (Per WSEE)](index=7&type=section&id=Key%20Financial%20and%20Statistical%20Data%20%28Per%20WSEE%29) Per WSEE per month data for Q1 2025 shows a 3% increase in revenues but an 11% decrease in gross profit, reflecting the higher benefits costs, with operating income and net income per WSEE also experiencing significant declines of 37% and 36%, respectively Key Financial and Statistical Data (Per WSEE per month, Three Months Ended March 31) | Metric | 2025 | 2024 | Change | | :---------------------- | :----- | :----- | :----- | | Average WSEEs paid | 306,023 | 303,904 | 1% | | Revenues | $2,029 | $1,977 | 3% | | Gross profit | $338 | $378 | (11)% | | Operating expenses | $264 | $260 | 2% | | Operating income | $74 | $118 | (37)% | | Net income | $56 | $87 | (36)% | Revenues per WSEE per month composition (Three Months Ended March 31) | Metric | 2025 | 2024 | | :---------------------- | :----- | :----- | | Gross billings | $13,228 | $12,595 | | Less: WSEE payroll cost | $11,199 | $10,618 | | Revenues | $2,029 | $1,977 | [Non-GAAP Financial Measures & Reconciliations](index=8&type=section&id=Non-GAAP%20Financial%20Measures%20%26%20Reconciliations) This section defines Insperity's non-GAAP financial measures and provides detailed reconciliations from GAAP to non-GAAP figures for Q1 2025 results and 2025 guidance [Non-GAAP Measures Overview and Definitions](index=8&type=section&id=Non-GAAP%20Measures%20Overview%20and%20Definitions) This section provides an overview of Insperity's non-GAAP financial measures, emphasizing that they are not GAAP-compliant and should not be considered substitutes, including definitions for non-bonus payroll cost, adjusted cash, EBITDA, adjusted EBITDA, adjusted net income, and adjusted EPS, explaining their utility for investors and management - Non-GAAP financial measures are not prepared in accordance with GAAP and should not be considered as a substitute for, or superior to, GAAP measures[21](index=21&type=chunk) - Non-bonus payroll cost excludes bonus payrolls paid to WSEEs, used by management for analyzing, reporting, and forecasting workers' compensation costs[22](index=22&type=chunk) - Adjusted cash, cash equivalents, and marketable securities exclude funds associated with federal and state income tax withholdings, employment taxes, other payroll deductions, and client prepayments[22](index=22&type=chunk) - Adjusted EBITDA represents GAAP net income plus interest expense, income taxes, depreciation and amortization expense, amortization of SaaS implementation costs, and non-cash stock-based compensation, used by management and lenders to assess performance and leverage[22](index=22&type=chunk) - Adjusted EPS represents diluted net income per share computed in accordance with GAAP, excluding non-cash stock-based compensation[22](index=22&type=chunk) [Reconciliations of Q1 2025 Non-GAAP Measures](index=9&type=section&id=Reconciliations%20of%20Q1%202025%20Non-GAAP%20Measures) This section provides detailed reconciliations of GAAP to non-GAAP financial measures for the first quarter of 2025 and 2024, showing the adjustments made to payroll cost, cash, net income, and diluted EPS to arrive at their respective non-GAAP counterparts, highlighting the impact of items like bonus payroll and stock-based compensation Reconciliation of Payroll Cost (GAAP) to Non-bonus Payroll Costs (non-GAAP) (in millions) | Metric | 2025 | 2024 | | :-------------------- | :----- | :----- | | Payroll cost | $10,281 | $9,681 | | Less: Bonus payroll cost | $2,243 | $1,862 | | Non-bonus payroll cost | $8,038 | $7,819 | | Payroll cost % change YoY | 6% | — | | Non-bonus payroll cost % change YoY | 3% | 2% | Reconciliation of Cash, Cash Equivalents and Marketable Securities (GAAP) to Adjusted Cash (non-GAAP) (in millions) | Metric | March 31, 2025 | December 31, 2024 | | :------------------------------------------ | :------------- | :---------------- | | Cash, cash equivalents and marketable securities | $568 | $1,055 | | Less: Amounts payable for withheld taxes & deductions | $404 | $830 | | Less: Client prepayments | $40 | $91 | | Adjusted cash, cash equivalents and marketable securities | $124 | $134 | Reconciliation of Net Income (GAAP) to Adjusted EBITDA (non-GAAP) (in millions) | Metric | 2025 | 2024 | | :-------------------------- | :--- | :--- | | Net income | $51 | $79 | | EBITDA | $91 | $132 | | Stock-based compensation | $11 | $10 | | Adjusted EBITDA | $102 | $142 | | Net income % change YoY | (35)% | (17)% | | Adjusted EBITDA % change YoY | (28)% | (7)% | Reconciliation of Diluted EPS (GAAP) to Adjusted EPS (non-GAAP) | Metric | 2025 | 2024 | | :-------------------------- | :----- | :----- | | Diluted EPS | $1.35 | $2.08 | | Non-GAAP adjustments, net | $0.22 | $0.19 | | Adjusted EPS | $1.57 | $2.27 | | Diluted EPS % change YoY | (35)% | (15)% | | Adjusted EPS % change YoY | (31)% | (15)% | [Reconciliations of 2025 Guidance Non-GAAP Measures](index=11&type=section&id=Reconciliations%20of%202025%20Guidance%20Non-GAAP%20Measures) This section provides the reconciliation of GAAP to non-GAAP financial measures specifically for the second quarter and full year 2025 guidance, detailing the adjustments made to projected net income and diluted EPS to arrive at the adjusted EBITDA and adjusted EPS guidance figures Reconciliation of GAAP to Non-GAAP Financial Measures for Q2 and Full Year 2025 Guidance (in millions, except per share amounts) | Metric | Q2 2025 Guidance | Full Year 2025 Guidance | | :-------------------------- | :--------------- | :---------------------- | | Net income (loss) | $(3) - $11 | $42 - $81 | | EBITDA | $14 - $34 | $130 - $185 | | Stock-based compensation | $19 | $60 | | Adjusted EBITDA | $33 - $53 | $190 - $245 | | Diluted EPS | $(0.07) - $0.31 | $1.10 - $2.15 | | Non-GAAP adjustments, net | $0.36 | $1.13 | | Adjusted EPS | $0.29 - $0.67 | $2.23 - $3.28 |