Insperity Inc
Q2 2025 Earnings
Market Reaction
S&P 500 over the same 30 days: +3.54%.
Did NSP Beat Earnings? Q2 2025 Results
Insperity delivered a notably disappointing second quarter, with adjusted EPS of $0.26 falling short of the $0.41 consensus estimate by 36.27% as surging healthcare costs overwhelmed what was otherwise a steady revenue picture. The professional employer organization posted $1.66 billion in revenue, up 3.3% year-over-year and essentially in line with expectations, supported by a 1% increase in average paid worksite employees to 309,115 and a 3% lift in revenue per employee from higher pricing. The real damage, however, came from elevated pharmacy trends and large claim frequency that drove gross profit down 14% to $223 million, swinging the company to a GAAP net loss of $5 million from net income of $18 million a year ago. Management is responding with pricing adjustments and benefit plan design changes, though the pressure is expected to persist, prompting Insperity to lower its full-year 2025 adjusted EPS guidance to a range of $1.81 to $2.51 and adjusted EBITDA to $170 million to $205 million, with Q3 guidance of just $0.06 to $0.49 in adjusted EPS signaling continued near-term strain.
- Revenue growth driven by 3% increase in revenue per WSEE from higher pricing and 1% increase in paid WSEEs
- Gross profit declined 14% due to higher-than-expected benefits costs including elevated pharmacy trends and large claim frequency
- Operating expenses decreased 3% to $230 million through cost management
- Workday strategic partnership spending of $14 million in Q2 2025
“Despite our reported Q2 results and the associated lower guidance for this year, we have experienced recent growth momentum and are executing a plan over the balance of the year that we believe lays the foundation for accelerated growth and improved profitability in 2026.”
Insperity CEO, on the earnings call
Forward Guidance & Outlook
Insperity lowered its 2025 guidance. For Q3 2025, the company expects average WSEEs paid of 312,200 to 315,300 (1-2% YoY growth), adjusted EPS of $0.06 to $0.49, and adjusted EBITDA of $24 million to $44 million. For full year 2025, guidance calls for average WSEEs paid of 310,300 to 313,400 (1-2% YoY growth), adjusted EPS of $1.81 to $2.51, adjusted EBITDA of $170 million to $205 million, diluted EPS of $0.59 to $1.29, and net income of $23 million to $49 million. The company is executing pricing adjustments and benefit plan design changes to address the elevated benefits cost environment and believes these actions lay the foundation for accelerated growth and improved profitability in 2026. Insperity HRScale, the joint solution with Workday, has a targeted go-live with beta clients in early 2026.
NSP YoY Financials
Figures from SEC filings and company reports. Not investment advice.