Insperity Inc
Q4 2025 Earnings
Market Reaction
S&P 500 over the same 30 days: −3.31%.
Did NSP Beat Earnings? Q4 2025 Results
Insperity closed out fiscal 2025 on a sour note, posting a steeper-than-expected Q4 loss as relentless benefits cost pressures overwhelmed modest top-line growth. The professional employer organization reported adjusted EPS of -$0.60 for the quarter, missing the consensus estimate of -$0.47 by 28.89%, while revenue of $1.67 billion edged 3.4% higher year over year but fell just short of the $1.68 billion Wall Street had anticipated. The core culprit was a sharp deterioration in gross profit, which tumbled 21% to $172.00 million as elevated inpatient, outpatient, and pharmacy cost trends, compounded by large-claim frequency, erased pricing gains from a 2% increase in revenue per worksite employee. Shares slipped roughly 7.6% following the report, reflecting investor frustration with the sustained benefits drag. Management is betting that restructured UnitedHealthcare contracts, tighter client selection, and new growth initiatives will drive a meaningful rebound, guiding full-year 2026 adjusted EPS of $1.69 to $2.72, representing a recovery of 64% to 164% above depressed 2025 levels.
- Elevated benefits costs driven by inpatient, outpatient, and pharmacy trends and large claim frequency
- 2% increase in revenue per WSEE per month from higher pricing
- 1% growth in average paid WSEEs to 312,377 in Q4
- 6% decrease in operating expenses to $218 million in Q4
- Reduced Workday strategic partnership costs ($10M in Q4 2025 vs $19M in Q4 2024)
“We accomplished the key objective of our year-end transition with a step up in gross profit margin, which we believe positions the company for a significant recovery in profitability this year.”
Insperity CEO, on the earnings call
Forward Guidance & Outlook
For Q1 2026, Insperity guides average WSEEs paid of 303,000–305,000 (down 0.3%–1.0% YoY), adjusted EPS of $1.03–$1.50 (down 4%–34% YoY), and adjusted EBITDA of $81–$111 million (up 9% to down 21% YoY). For full year 2026, the company expects average WSEEs paid of 305,400–314,700 (down 1.5% to up 1.5% YoY), adjusted EPS of $1.69–$2.72 (up 64%–164% YoY), and adjusted EBITDA of $170–$230 million (up 30%–76% YoY). Management expects profitability recovery through pricing and client selection actions, new contract and plan design changes with UnitedHealthcare, operating expense efficiencies, and growth from HR360 and HRScale initiatives. A restructuring charge of approximately $9 million is expected in Q1 2026. The 2026 guidance includes an effective tax rate of 39% for Q1 and 34% for the full year.
NSP YoY Financials
Figures from SEC filings and company reports. Not investment advice.