Insperity (NSP) Q3 2025 earnings summary

Executive summary

• Q3 2025 revenues increased 4% year-over-year to $1.62 billion, with average paid worksite employees up 1% to 312,842 and strong client retention at 99% per month.

• Net income dropped to $(20) million and adjusted EBITDA to $10 million, both down sharply year-over-year due to higher healthcare and workers' compensation costs.

• Strategic actions include repricing, cost management, and a new multi-year UnitedHealthcare contract to mitigate future claim risks.

• HRScale, developed with Workday, launched on schedule and is positioned as a major growth driver for mid-market clients.

• Profitability recovery in 2026 is expected, driven by pricing, cost controls, and the UHC contract.

Financial highlights

• Q3 2025 gross profit was $195 million, down 15% year-over-year, mainly due to $20 million in higher benefits costs.

• Q3 2025 operating expenses decreased 4% to $220 million, with notable reductions in salaries and G&A.

• YTD adjusted EBITDA was $144 million, down 42% year-over-year; adjusted EPS was $1.63.

• $87 million returned to shareholders YTD through $68 million in dividends and $19 million in share repurchases.

• Ended Q3 with $120 million in adjusted cash and $370 million outstanding borrowings on a $650 million credit facility.

Outlook and guidance

• Q4 2025 average paid worksite employees expected at 313,000–315,000, up 1.3%–1.9% year-over-year.

• Full-year 2025 adjusted EPS guidance: $0.84–$1.47; adjusted EBITDA: $119–$153 million, both down sharply year-over-year.

• Q4 adjusted EBITDA expected between -$25 million and $9 million; adjusted EPS between -$0.79 and -$0.16.

• Full-year operating expenses projected to be 3% below 2024 levels, including $48 million investment in the Workday partnership.

• UHC contract extension expected to improve financial outlook for 2026 and beyond.