Insperity (NSP) Q1 2026 earnings summary

Executive summary

• Q1 2026 Adjusted EPS was $1.31, down 17% year-over-year, while Adjusted EBITDA rose 1% to $103 million, both exceeding guidance midpoints.

• Net income and diluted EPS both decreased 35% year-over-year to $33 million and $0.88, respectively, primarily due to a higher effective tax rate and margin recovery efforts.

• Average paid worksite employees (WSEEs) declined 1% year-over-year to 303,049, reflecting margin recovery initiatives.

• Margin recovery efforts drove improved gross profit trends, offsetting lower worksite employee volume and higher attrition.

• Strategic focus remains on margin recovery, regaining growth momentum, and leveraging AI and HRScale as growth catalysts.

Financial highlights

• Revenues rose 2% year-over-year to $1.9 billion, driven by a 3% increase in revenues per WSEE per month, offset by a 1% decline in average WSEEs paid.

• Gross profit in Q1 2026 decreased 3% to $302 million, a significant improvement from the 21% decline in Q4 2025.

• Gross profit per WSEE per month was $332, slightly above forecast but down 2% year-over-year.

• Operating expenses fell 1% to $240 million, including a $9 million restructuring charge; excluding this, expenses dropped 5%.

• Adjusted cash at March 31, 2026, was $36 million, with $370 million in outstanding borrowings.

Outlook and guidance

• Full-year 2026 Adjusted EBITDA guidance reiterated at $170–$230 million.

• Adjusted EPS guidance for 2026 is $1.60–$2.60; effective tax rate expected at 36%.

• Worksite employee count forecasted at 303,000–307,000 for 2026, a 1%–2.3% decline from 2025.

• Q2 2026 guidance: 302,500–304,500 worksite employees, Adjusted EBITDA $18–$46 million, Adjusted EPS $0.02–$0.50.

• Margin recovery expected to continue, with more pronounced impacts later in the year due to UnitedHealthcare contract changes.