CEO Commentary These strong results were against a backdrop of a changing dynamic in the marketplace due to persistent inflation, rising borrowing costs, a weakening economy, and an elevated uncertainty in the small and medium-size business community. Average Paid Worksite Employees 152,413 118,573 Q1 23 Q1 22 28.5% Non-GAAP Financial Measures This presentation contains non-GAAP financial measures, such as Adjusted EBITDA and Adjusted EPS. Please see the Appendix for a further discussion. Q1 2023 earnings a ...

Business Operations - As of December 31, 2022, the company serviced an average of 307,506 worksite employees (WSEEs) per month in the fourth quarter[14] - The company operates 74 physical office locations across 43 markets, with multiple sales offices sharing physical locations to enhance economic efficiencies[14] - The company aims to serve approximately 10% of the overall small and medium-sized business community in terms of WSEEs[48] - As of December 31, 2022, the company operated 92 sales offices across 43 markets, employing a systematic market evaluation and selection process[54] - The company has a corporate headquarters in Kingwood, Texas, with a 33-acre campus that includes 700,000 square feet of office space[146] Services Offered - The PEO HR Outsourcing Solutions are designed to improve productivity and profitability for small and medium-sized businesses, relieving them of many employer-related administrative burdens[11] - The comprehensive service fee charged by the company consists of the payroll of WSEEs plus an additional percentage of the payroll cost[12] - The company’s Insperity Premier platform provides cloud-based human capital management solutions, offering role-based access to various HR functions[25] - The company offers a range of employee benefits, including health insurance, retirement plans, and employee well-being programs, which are typically not available to small and medium-sized businesses[24] - The company’s Workforce Optimization solution includes services such as payroll administration, employee performance management, and compliance assistance[20] Industry Context - The PEO industry is driven by the need for small and medium-sized businesses to focus on growth and productivity while managing complex regulatory environments[17] - The PEO industry is highly fragmented, with significant competition from traditional in-house HR services and other PEOs, but the company is one of the largest PEO service providers in the U.S.[60] - The company is subject to numerous federal, state, and local laws affecting its PEO HR Outsourcing Solutions, with 42 states having passed laws recognizing PEOs[68] - The company faces competition from large business services companies and national PEOs, which may offer lower-priced services, impacting growth and profitability[128] Financial Performance - Revenues for 2022 were $5.9 billion, an increase of 19.4% compared to $4.97 billion in 2021[204] - Net income rose 44.5% to $179.4 million, while diluted earnings per share increased 45.9% to $4.64[173] - Adjusted net income increased by 40.2% to $215.9 million in 2022[180] - Gross profit increased 23.3% to $1.0 billion, driven by the 17.7% growth in average WSEEs paid per month and a 4.8% increase in gross profit per WSEE[173] - Operating income for 2022 was $250.2 million, a 44.4% increase from $173.3 million in 2021[204] Client Retention and Growth - The client retention rate improved to approximately 85% in 2022 from 82% in 2021, with an average annual retention rate of 84% over the last five years[53] - The average number of clients with over 1,000 paid WSEEs increased from 1.9% in 2021 to 5.4% in 2022[31] - Average number of WSEEs paid from new client sales increased by 16.4% in 2022, with average client retention improving from 82% in 2021 to 85% in 2022[207] Regulatory and Compliance - The Small Business Efficiency Act (SBEA) established a federal regulatory framework for PEOs, clarifying employer responsibilities for payroll tax reporting[19] - The company has actively supported regulatory efforts that promote the PEO industry and protect clients and employees, with 42 states enacting relevant legislation[18] - The company assumes responsibility for federal and state employment taxes for wages paid to WSEEs, which includes obligations under various tax codes[72] - The company is subject to covenants under its credit facility that may restrict business activities, with potential adverse effects on liquidity if covenants are not met[98] Economic and Market Conditions - The company’s operations are significantly impacted by economic conditions, with potential adverse effects on demand for outsourced HR services during economic downturns[85] - Labor shortages and increased competition for skilled workers have led to higher turnover rates and could adversely affect the company's growth plans and client service delivery[95] - Inflationary pressures have increased operating costs, which may not be fully offset by price increases due to fixed client agreements, potentially reducing profitability[96] - The COVID-19 pandemic has created significant volatility and uncertainty, with ongoing risks to business operations and financial results[86] Insurance and Liability - The company maintains employment practice liability insurance to manage exposure to employee-related claims, with historically insignificant incurred costs exceeding annual premiums[45] - The company has a financial responsibility to Chubb for the first $1 million layer of claims per occurrence and for claims over $1 million, up to a maximum aggregate amount of $6 million per policy year for claims that exceed the first $1 million[114] - The company assumes liability for WSEE payroll and related costs, which could materially impact financial condition if clients fail to pay[101] - Health insurance costs are a significant portion of direct costs, and unexpected increases in claims could adversely affect profitability[104] Strategic Initiatives - The company has implemented a dual channel sales process, allowing BPAs to offer both PEO HR Outsourcing Solutions and Workforce Acceleration, increasing client acquisition opportunities[57] - The company has adopted a strategy to market and sell additional solutions, which involves risks such as entering highly regulated markets and potential over-valuation of targeted businesses[141] - The company is currently working on a multi-year project to replace its sales force automation and CRM systems, which is critical for maintaining service quality[132] Employee Metrics - The average number of trained BPAs increased to 601 in 2022 from 596 in 2021, indicating a slight improvement in training effectiveness[80] - The staff support ratio averaged 55% higher than the PEO industry average from 2019 to 2021, with gross profit per WSEE exceeding industry averages by 144% and operating income per WSEE by 223% during the same period[58] Future Outlook - The company expects the average number of paid WSEEs per month to be between 317,000 and 326,000 for the full year 2023, representing a growth of 7.5% to 10.5%[173] - The company is unable to determine the effect of the repeal of pending excise taxes on its business, which could impact client attraction and retention[109]

Financial Data and Key Metrics Changes - The company achieved $1.21 in adjusted EPS and $79 million of adjusted EBITDA in Q4 2022, significantly above expectations and prior year results [7][10] - Full year 2022 adjusted EBITDA increased by 38% to $352 million, and adjusted EPS rose by 42% to $5.59, driven by growth in paid worksite employees and effective cost management [10][11] - Paid worksite employee growth was 14.3% in Q4, slightly below forecasts due to a slowdown in client hiring [7][11] - Gross profit per worksite employee improved from $273 in 2021 to $286 in 2022, reflecting effective pricing and lower benefit costs [12][10] Business Line Data and Key Metrics Changes - The company reported a 41% increase in gross profit in Q4, driven by a 14% growth in paid worksite employees and a 24% improvement in gross profit per worksite employee [8] - Operating expenses increased by 22% in Q4 compared to the prior year, reflecting investments in service personnel and sales commissions [9][13] - Client retention improved from 82% in 2021 to 85% in 2022, contributing to overall growth [11] Market Data and Key Metrics Changes - The company experienced a slowdown in net hiring among clients in Q4, with only a slight increase compared to the previous quarter [24][25] - Client sentiment improved, with over 70% expecting 2023 to be better than 2022, indicating potential for future growth [26][84] Company Strategy and Development Direction - The company is focused on a five-year plan with ten key success factors aimed at improving sales efficiency and client retention [28][40] - Continued investment in technology and marketing is planned to support growth objectives and enhance service offerings [48][94] - The company aims to achieve a compound annual growth rate in paid worksite employees of 12.5% and adjusted EBITDA growth of over 24% during the five-year plan [37][39] Management's Comments on Operating Environment and Future Outlook - Management acknowledged economic uncertainty and a recent slowdown in client hiring, leading to a wider range for worksite employee growth projections for 2023 [42][36] - Despite challenges, management remains optimistic about client retention and sales efficiency improvements, projecting adjusted EBITDA growth for 2023 [50][44] - The company expects to maintain strong pricing performance and manage direct costs effectively in the current economic environment [46][34] Other Important Information - The company returned $150 million to shareholders through dividends and share repurchase programs in 2022 [15][16] - The company ended 2022 with $224 million in adjusted cash, up from $163 million at the end of 2021 [16] Q&A Session Summary Question: What is assumed in guidance regarding gross profit per worksite employee per month? - The company does not provide specific guidance on this metric but expects to realize administrative cost savings in their UnitedHealthcare plan [55][56] Question: Are there any unique trends in healthcare activity or claims for 2023? - The company anticipates a more normalized year for benefit utilization, with no significant pent-up demand expected [58][60] Question: Is there any noticeable change in competitor pricing aggressiveness? - Management has not observed significant changes in competitor pricing strategies, maintaining a strong pricing approach [61][62] Question: Can you provide insights on Workforce Acceleration growth trends? - The company reported a 40% increase in Workforce Acceleration sales in 2022 and plans to enhance customer awareness of service options [65][66] Question: What is the expected benefit cost increase for this year? - The company expects benefit cost growth of around 4% to 5% for the year, influenced by demographic changes [80][81] Question: What was the client retention rate for the full year? - Client retention improved to 85% in 2022, benefiting from a strong year-end transition [82][83]

Appendix – Non-GAAP Financial Measures | --- | --- | --- | |-----------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------- ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended September 30, 2022 or ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from _______________ to _______________ Commission File No. 1-13998 Insperity, Inc. (Exact name of registrant as specified in its charter) Delaware 76-0479645 ...

Insperity, Inc. (NYSE:NSP) Q3 2022 Results Earnings Conference Call October 31, 2022 10:00 AM ET Company Participants Douglas Sharp - Executive Vice President, Finance, Chief Financial Officer and Treasurer Paul Sarvadi - Management Director, Chairman and Chief Executive Officer Conference Call Participants Andrew Nicholas - William Blair Mark Marcon - Robert W. Baird & Co., Inc. Tobey Sommer - Truist Securities Jeff Martin - ROTH Capital Partners, LLC Operator Good morning. My name is Jenny and I will be y ...

| --- | --- | |---------------------------|-------| | | | | | | | | | | | | | Earnings Call and Webcast | | | Q3 2022 October 31, 2022 | | Safe Harbor Statement The statements contained herein that are not historical facts are forward-looking statements within the meaning of the Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. You can identify such forward-looking statements by the words "anticipates," "expects," "intends," "plans," "projects," "believes," "e ...

Insperity, Inc. (NYSE:NSP) Q2 2022 Earnings Conference Call August 1, 2022 5:00 PM ET Company Participants Paul Sarvadi - Chairman and CEO Douglas Sharp - SVP, Finance and CFO Conference Call Participants Andrew Nicholas - William Blair Tobey Sommer - Truist Securities Jeff Martin - Roth Capital Andre Childress - Baird Operator Good afternoon. My name is Matthew and I will be your conference operator today. I would like to welcome everyone to the Insperity Second Quarter 2022 Earnings Conference Call. [Oper ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended June 30, 2022 or Insperity, Inc. (Exact name of registrant as specified in its charter) | Delaware 76-0479645 | | --- | | (State or other jurisdiction of incorporation or (I.R.S. Employer Identification No.) | | organization) | 19001 Crescent Springs Drive Kingwood, Texas 77339 (Address of princip ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | Delaware | 76-0479645 | | --- | --- | | (State or other jurisdiction of incorporation or | (I.R.S. Employer Identification No.) | | organization) | | | 19001 Crescent Springs Drive | | | Kingwood, Texas 77339 | | | (Address of principal executive offices) | | | (Registrant's Telephone Number, Including Area Code): (281) 358-8 ...