Insperity(NSP) - 2024 Q4 - Annual Results

Revenue and Profitability - Q4 2024 revenues increased 2% to $1.6 billion, driven by a 4% increase in revenue per WSEE[2] - Full year 2024 revenues increased by 1% to$ 6.6 billion, with a 3% increase in revenue per WSEE[5] - Revenues for Q4 2024 increased by 2% to $1,613 million compared to$ 1,580 million in Q4 2023, while annual revenues rose by 1% to $6,581 million from$ 6,486 million[21] - Gross profit for Q4 2024 decreased 2% to $218 million, with gross profit per employee consistent with the prior year[3] - Operating income for Q4 2024 was a loss of$ 15 million, a decline of 165% from an income of $23 million in Q4 2023, with annual operating income down 47% to$ 117 million from $219 million[21] - Net income for Q4 2024 was a loss of$ 9 million, a 147% decrease from a net income of $19 million in Q4 2023, with annual net income falling 47% to$ 91 million from $171 million[21] - Adjusted net income for 2024 was$ 135 million, down 36% from $212 million in 2023[25] Expenses and Costs - Operating expenses increased 17% over Q4 2023, including approximately$ 19 million related to the Workday strategic partnership[4] - Operating expenses for Q4 2024 increased by 17% to $233 million compared to$ 199 million in Q4 2023, with annual operating expenses rising 14% to $935 million from$ 818 million[21] - Stock-based compensation for Q4 2024 rose by 27% to $14 million from$ 11 million in Q4 2023, and increased by 15% for the year to $61 million from$ 53 million[21] - Non-bonus payroll costs for Q4 2024 were $8,314 million, reflecting a 2% increase from$ 8,966 million in Q4 2023, with annual non-bonus payroll costs rising 1% to $32,070 million from$ 31,677 million[24] Shareholder Returns - The company returned $152 million to shareholders in 2024 through share repurchases and cash dividends[7] Guidance and Projections - 2025 guidance includes an expected average of 319,500 WSEEs paid, representing a 4% year-over-year increase[10] - Adjusted EPS for full year 2025 is projected to be$ 3.95, reflecting a 10% year-over-year increase[10] - The company expects Q1 2025 net income guidance of $61 -$ 70 million and full year 2025 guidance of $71 -$ 102 million[27] - Adjusted EBITDA guidance for Q1 2025 is $121 -$ 135 million, with full year 2025 guidance of $240 -$ 285 million[27] - The company anticipates diluted EPS for Q1 2025 to be in the range of $1.61 -$ 1.87[27] Cash and Liquidity - Cash and cash equivalents increased to $1.039 billion as of December 31, 2024, up from$ 693 million in 2023[20] - Cash, cash equivalents, and marketable securities increased from $709 million in 2023 to$ 1,055 million in 2024[25] Employee Metrics - Average number of worksite employees (WSEEs) paid per month decreased 2% from Q4 2023 to 309,093 WSEEs[2] - Average WSEEs paid decreased by 2% to 309,093 in Q4 2024 from 315,072 in Q4 2023, and also fell by 2% for the year to 307,261 from 312,102[22] Adjusted Metrics - Adjusted EBITDA for the year 2024 was $270 million, a decrease of 24% compared to$ 354 million in 2023[25] - Total non-GAAP adjustments for adjusted EPS in 2024 amounted to $1.16, down from$ 1.05 in 2023[26] - Adjusted EBITDA and adjusted net income measures were provided to enhance transparency regarding the company's operational performance, excluding non-cash stock-based compensation[23] Earnings Per Share - Basic net income per share for Q4 2024 was $(0.22), a 142% decline from$ 0.52 in Q4 2023, while annual basic EPS decreased by 46% to $2.44 from$ 4.53[21] - Diluted EPS decreased by 142% from $0.52 in 2023 to$ (0.22) in 2024[26]