Insperity Q2 Earnings Call Highlights

Insperity exceeded Q2 expectations: Adjusted EPS rose 31% year over year to $0.34, while adjusted EBITDA increased 13% to $36 million, reflecting progress in pricing, benefits-plan changes and expense controls. Workforce and margins remain under pressure but are improving: Average paid worksite employees declined 1.1% to 305,764, while gross profit per employee fell 1%—an improvement from Q1. Healthcare costs remained elevated, although operating expenses dropped 8%. Management raised its focus on future growth: Insperity launched its HRScale solution with Workday and entered Q3 with nearly 8,000 worksite employees in sold accounts. Full-year guidance calls for adjusted EBITDA of $185 million to $225 million and adjusted EPS of $1.88 to $2.43, despite continued uncertainty around benefits costs.

Insperity NYSE: NSP reported second-quarter 2026 adjusted earnings per share of $0.34 and adjusted EBITDA of $36 million, exceeding the midpoint of its projected ranges. Adjusted EPS rose 31% from a year earlier, while adjusted EBITDA increased 13%, as the professional employer organization continued its margin recovery plan. Chief Financial Officer Jim Allison said the company’s second-quarter performance reflected progress on pricing, benefits-plan changes and operating-expense controls. The company is maintaining its focus on recovering profitability after healthcare claims trends and related margin pressure in 2025.

“We believe these results reflect the significant progress we have made in our ongoing margin recovery plan,” Allison said.

Average paid worksite employees totaled 305,764 in the second quarter, above the high end of Insperity’s guidance range but down 1.1% from the second quarter of 2025. Allison attributed the better-than-expected result primarily to net hiring within the existing client base, which offset anticipated pressure on sales and retention from the company’s pricing actions. Client retention and worksite employees from new clients were in line with the company’s forecast, according to Allison.

Chief Executive Officer Paul Sarvadi said sales and retention landed at the lower end of Insperity’s typical ranges during the first half as the company implemented pricing and process changes. Still, Sarvadi characterized the 1% decline in paid worksite employees as evidence of the company’s resilience amid its margin-recovery efforts. He said Insperity has expanded the benefit options available to clients through its insurance agency operation. At the end of the quarter, 7% of Insperity’s client base obtained benefits outside the company’s plan, including 14% of clients added during the previous 12 months. Sarvadi said clients may choose to retain plans through third-party brokers or use plans offered through Insperity’s agency, while the company expects most clients to continue participating in the Insperity plan.

Total gross profit declined 3% year over year to $217 million. Gross profit per worksite employee fell 1% to $237 per month, an improvement from the 2% decline reported in the first quarter and in line with the company’s expectations. Allison said pricing and benefit-plan actions improved the matching of pricing and costs in the’s benefits business. However, the benefit was largely offset by a year-over-year change in workers’ compensation costs, as favorable actuarial reserve adjustments for prior policy years declined. Benefits cost per covered employee rose 5.2% from the prior-year quarter, consistent with first-quarter trends and the company’s expectations. Insperity cited favorable effects from client-mix changes, plan-design changes and modifications to its UnitedHealthcare contract that took effect at ...