Insperity (NSP) Q2 2025 earnings summary

Executive summary

• Q2 2025 saw a 1% increase in average paid worksite employees to 309,115, but net income and EPS dropped sharply, with adjusted EBITDA down 52% to $32 million and adjusted EPS at $0.26, both below guidance due to higher benefits costs.

• Gross profit per worksite employee declined to $240/month from $282/month in Q2 2024, mainly due to unfavorable healthcare claims and higher pharmacy costs.

• Strategic partnership with Workday is progressing, with Insperity HRScale beta launch targeted for early 2026 and a multi-phase client rollout planned.

• Management remains confident in accelerated growth and improved profitability in 2026, driven by pricing, plan design changes, and expense management.

• New HR solutions portfolio launched, including Insperity HR360, HRCore, and HRScale.

Financial highlights

• Q2 2025 revenue increased 3% year-over-year to $1.66 billion, but gross profit fell 14% to $223 million due to elevated benefits costs.

• Operating expenses decreased 3% year-over-year, with $14 million invested in the Workday partnership in Q2.

• YTD adjusted EBITDA was $134 million, down 36%, and adjusted EPS was $1.83, down 42% versus prior year.

• $64 million returned to shareholders in H1 2025 via dividends ($45 million) and share repurchases ($19 million).

• Adjusted cash at June 30, 2025 was $114 million, with $280 million available under credit facility.

Outlook and guidance

• Full-year 2025 adjusted EBITDA guidance is $170–$205 million, down 37–24% year-over-year; adjusted EPS guidance is $1.81–$2.51, down 49–30% year-over-year.

• 2025 worksite employee growth forecasted at 1%-2% over 2024.

• Full-year benefits cost per employee guidance raised by 75-100 basis points due to persistent cost pressures.

• Q3 2025 guidance: 1%-2% worksite employee growth, adjusted EBITDA of $24-$44 million, and adjusted EPS of $0.06-$0.49.

• Management expects improved profitability in 2026, citing recent growth momentum and strategic initiatives.