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Insperity Announces Third Quarter Results

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Insperity (NYSE: NSP) reported Q3 2024 results with net income of $3 million and diluted EPS of $0.07. The company saw a 2% year-over-year decrease in average worksite employees (WSEEs) to 309,088, while revenues increased 1% to $1.6 billion. Gross profit decreased 11% to $229 million, impacted by higher benefits costs. Year-to-date performance showed revenues up 1% to $5.0 billion despite a 1% decrease in WSEEs. The company returned $119 million to shareholders through share repurchases and dividends. For full-year 2024, Insperity expects WSEEs to decrease 1.3-1.5% and projects adjusted EPS of $3.42-$3.66.

Insperity (NYSE: NSP) ha riportato i risultati del terzo trimestre 2024 con un reddito netto di 3 milioni di dollari e un utile per azione diluito di 0,07 dollari. L'azienda ha registrato un calo del 2% anno su anno nel numero medio di dipendenti in cantiere (WSEE) scendendo a 309.088, mentre i ricavi sono aumentati dell'1% a 1,6 miliardi di dollari. Il profitto lordo è diminuito dell'11% a 229 milioni di dollari, influenzato dall'aumento dei costi dei benefici. Le performance da inizio anno hanno mostrato ricavi in aumento dell'1% a 5,0 miliardi di dollari nonostante una diminuzione dell'1% nei WSEE. L'azienda ha restituito 119 milioni di dollari agli azionisti attraverso riacquisti di azioni e dividendi. Per l'intero anno 2024, Insperity prevede una diminuzione degli WSEE dell'1,3-1,5% e stima un EPS rettificato di 3,42-3,66 dollari.

Insperity (NYSE: NSP) reportó resultados del tercer trimestre de 2024 con un ingreso neto de 3 millones de dólares y un EPS diluido de 0,07 dólares. La compañía vio una disminución del 2% interanual en el promedio de empleados en el lugar de trabajo (WSEE) a 309,088, mientras que los ingresos aumentaron un 1% a 1.6 mil millones de dólares. La ganancia bruta disminuyó un 11% a 229 millones de dólares, afectada por el aumento en los costos de beneficios. El rendimiento del año hasta la fecha mostró ingresos en aumento del 1% a 5.0 mil millones de dólares a pesar de una disminución del 1% en WSEE. La empresa devolvió 119 millones de dólares a los accionistas a través de recompra de acciones y dividendos. Para el año completo de 2024, Insperity espera que WSEE disminuyan del 1.3 al 1.5% y proyecta un EPS ajustado de 3.42-3.66 dólares.

Insperity (NYSE: NSP)는 2024년 3분기 결과를 보고하였으며, 순이익은 300만 달러, 희석 주당순이익은 0.07 달러입니다. 회사는 평균 근무장소 직원(WSEE)이 309,088명으로 전년 동기 대비 2% 감소했으며, 수익은 1% 증가하여 16억 달러에 달했습니다. 총 이익은 2억 2900만 달러로 11% 감소했으며, 이는 증가한 복리후생 비용에 영향을 받았습니다. 올해 누적 실적은 WSEE가 1% 감소했음에도 불구하고 수익이 50억 달러로 1% 증가했습니다. 회사는 주식 매입 및 배당금을 통해 주주에게 1억 1900만 달러를 환원했습니다. 2024년 전체 연도에 대해 Insperity는 WSEE가 1.3-1.5% 감소할 것으로 예상하며 조정된 EPS는 3.42-3.66 달러로 전망합니다.

Insperity (NYSE: NSP) a annoncé des résultats pour le troisième trimestre 2024 avec un revenu net de 3 millions de dollars et un BPA dilué de 0,07 dollar. L'entreprise a observé une diminution de 2% d'une année sur l'autre dans le nombre moyen d'employés en site de travail (WSEE), atteignant 309.088, tandis que les revenus ont augmenté de 1% à 1,6 milliard de dollars. Le bénéfice brut a baissé de 11% pour atteindre 229 millions de dollars, en raison de la hausse des coûts des avantages. Les performances depuis le début de l'année montrent que les revenus ont augmenté de 1% à 5,0 milliards de dollars malgré une déclin de 1% dans les WSEE. L'entreprise a restitué 119 millions de dollars aux actionnaires par le biais de rachats d’actions et de dividendes. Pour l'année complète 2024, Insperity s'attend à une diminution des WSEE de 1,3 à 1,5% et prévoit un BPA ajusté de 3,42 à 3,66 dollars.

Insperity (NYSE: NSP) berichtete über die Ergebnisse des dritten Quartals 2024 mit einem Nettoergebnis von 3 Millionen Dollar und einem verwässerten Gewinn pro Aktie von 0,07 Dollar. Das Unternehmen verzeichnete einen Rückgang von 2% im Jahresvergleich bei den durchschnittlichen Arbeitsstättenmitarbeitern (WSEE) auf 309.088, während die Umsätze um 1% auf 1,6 Milliarden Dollar stiegen. Der Bruttogewinn ging um 11% auf 229 Millionen Dollar zurück, beeinflusst durch höhere Sozialkosten. Die Performance seit Jahresbeginn zeigte, dass die Umsätze trotz eines Rückgangs der WSEE um 1% um 1% auf 5,0 Milliarden Dollar gestiegen sind. Das Unternehmen gab 119 Millionen Dollar an die Aktionäre zurück, durch Aktienrückkäufe und Dividenden. Für das Gesamtjahr 2024 erwartet Insperity einen Rückgang der WSEE um 1,3-1,5% und prognostiziert einen angepassten EPS von 3,42-3,66 Dollar.

Positive
  • Revenue increased 1% to $1.6 billion in Q3 2024
  • Year-to-date revenue up 1% to $5.0 billion
  • Returned $119 million to shareholders through buybacks and dividends
  • $212 million in adjusted cash as of September 30, 2024
  • $280 million available under credit facility
Negative
  • Q3 net income dropped to $3 million with diluted EPS of just $0.07
  • Average WSEEs decreased 2% year-over-year in Q3
  • Gross profit declined 11% from Q3 2023
  • Operating expenses increased 15% over Q3 2023
  • Forecasting year-over-year adjusted EBITDA decrease of 23-26% for full year 2024

Insights

Insperity's Q3 results reveal concerning trends with 2% decline in worksite employees and significantly compressed margins. Q3 net income dropped to just $3 million ($0.07 EPS), while operating expenses surged 15%, largely due to Workday partnership implementation costs. The 11% decrease in gross profit signals pressure on core operations.

The guidance for Q4 2024 projects continued weakness with an expected 1-2% decline in WSEEs and adjusted EPS ranging from -$0.10 to $0.12, representing a dramatic year-over-year decrease of 84-113%. While the company maintains strong cash position of $212 million, the declining operational metrics and rising costs pose significant challenges for near-term performance.

The small-to-medium business market uncertainty is materially impacting Insperity's growth trajectory. The loss of several midmarket accounts and continued weak hiring trends among existing clients suggest broader economic pressures affecting the HR solutions sector. While the company's strategic Workday partnership and AI initiatives could provide future growth catalysts, the immediate outlook remains challenging with forecasted declines in key metrics.

The company's pricing strategy and benefits cost management will be important factors to watch, as the full-year cost trend is expected at 4.5-6%. The significant return to shareholders ($119 million in buybacks and dividends) might need reassessment given the operational headwinds and increasing strategic investment requirements.

HOUSTON--(BUSINESS WIRE)-- Insperity, Inc. (NYSE: NSP), a leading provider of human resources and business performance solutions for America’s best businesses, today reported results for the third quarter ended September 30, 2024. Insperity will be hosting a conference call today at 8:30 a.m. ET to discuss these results and our updated 2024 outlook and will be posting an accompanying presentation to its investor website at http://ir.insperity.com.

  • Q3 average number of WSEEs paid within our expected range, down 2% year-over-year
  • Q3 net income of $3 million; diluted EPS of $0.07
  • Q3 adjusted EPS of $0.39; adjusted EBITDA of $39 million
  • YTD average number of paid WSEEs down 1%, while revenues up 1%
  • YTD net income and diluted EPS of $100 million and $2.63, respectively
  • YTD adjusted EBITDA and adjusted EPS of $247 million and $3.53, respectively
  • Return to shareholders of $119 million during the first nine months of 2024 through the repurchase of 551,000 shares at a cost of $52 million and $67 million in cash dividends

Third Quarter Results

As forecasted, the average number of worksite employees (“WSEE”) paid per month decreased 2% from Q3 2023 to 309,088 WSEEs. The continued softness in hiring by our client base and the loss of several midmarket accounts at the beginning of the year contributed to this year over year decline. Revenues in Q3 2024 increased 1% to $1.6 billion on a 3% increase in revenue per WSEE on higher pricing, offset by the 2% decrease in paid WSEEs.

“We are pleased with our Q3 financial results, especially with a measurable headwind of uncertainty in the small to medium sized business marketplace,” said Paul J. Sarvadi, Insperity chairman and chief executive officer. “We are focused on a successful fall selling and retention season to achieve a solid starting point in 2025. We see an opportunity for growth acceleration next year with sales and service improvements as we leverage our data infrastructure with AI and our Workday strategic partnership.”

An 11% decrease in gross profit from Q3 2023 to $229 million included a difficult comparison to the prior year’s quarter that was positively impacted by favorable development of healthcare claims activity. Q3 2024 benefits costs were slightly above expectations, while other areas of gross profit, including pricing, payroll taxes and workers’ compensation, were generally in line.

“Our guidance includes a continued higher cost trend in Q4 compared to the favorable cost trend in the first half of 2024. We continue to expect the full year cost trend to be at the low end of our initial budgeted range of 4.5% to 6%,” said James D. Allison, Insperity executive vice president. “We have maintained our long-term pricing strategy and believe we are well positioned relative to our goal of matching price and cost going forward.”

Operating expenses increased 15% over Q3 2023, with the majority of the increase associated with the implementation of our Workday strategic partnership. We managed other expenses, including various G&A costs, below forecast.

Reported net income and diluted earnings per share (“EPS”) were $3 million and $0.07, respectively. Adjusted EPS and adjusted EBITDA were $0.39 and $39 million, respectively.

Third quarter’s effective tax rate was positively impacted by research and development credits and contributed $0.02 per share in earnings above our Q3 2024 forecast. We continue to forecast a full year 2024 effective tax rate of 28%.

Year-to-Date Results

The average number of WSEEs paid per month decreased 1% from 2023 to 306,650 WSEEs. Revenues increased by 1% to $5.0 billion on a 3% increase in revenue per WSEE, offset in part by the 1% decrease in paid WSEEs.

“Our year-to-date earnings have exceeded our initial budget as pricing, effective management of our direct cost areas and operating expense savings have more than offset lower paid worksite employees,” said Douglas S. Sharp, executive vice president of finance, chief financial officer and treasurer. “Our recent results have allowed us to continue to invest in our strategic objectives, which we believe positions us for long-term growth.”

Gross profit increased 2% on a 4% increase in gross profit per WSEE per month, primarily due to increased pricing and more favorable results from our benefits costs program.

Operating expenses increased 13% over the 2023 period. This increase included approximately $40 million associated with the implementation of our Workday strategic partnership. Operating expenses have also included ongoing investments in our sales, service and technology areas, and the impact of the recent inflationary environment.

Reported net income and diluted EPS were $100 million and $2.63, respectively. Adjusted EPS and adjusted EBITDA were $3.53 and $247 million, respectively.

Cash outlays in the first nine months of 2024 included the repurchase of approximately 551,000 shares of our common stock at a cost of $52 million, dividends totaling $67 million, and capital expenditures of $25 million. Adjusted cash at September 30, 2024 totaled $212 million and $280 million remains available under our $650 million credit facility.

2024 Guidance

The company also announced its updated guidance for 2024, including the fourth quarter of 2024. Please refer to the accompanying financial tables at the end of this press release for the reconciliation of non-GAAP financial measures to the comparable GAAP financial measures.

 

Q4 2024

 

Full Year 2024

 

 

 

 

 

 

 

 

Average WSEEs paid

308,800

311,900

 

307,400

308,100

Year-over-year decrease

(2.0)%

(1.0)%

 

(1.5)%

(1.3)%

 

 

 

 

 

 

 

 

Adjusted EPS

$(0.10)

$0.12

 

$3.42

$3.66

Year-over-year decrease

(113)%

(84)%

 

(38)%

(34)%

 

 

 

 

 

 

 

 

Adjusted EBITDA (in millions)

$15

$27

 

$262

$274

Year-over-year decrease

(73)%

(52)%

 

(26)%

(23)%

Definition of Key Metrics

Average WSEEs paid — Determined by calculating the company’s cumulative WSEEs paid during the period divided by the number of months in the period.

Adjusted EPS — Represents diluted net income per share computed in accordance with GAAP, excluding the impact of non-cash stock-based compensation.

Adjusted EBITDA — Represents net income computed in accordance with GAAP, plus interest expense, income taxes, depreciation and amortization expense, amortization of SaaS implementation costs and non-cash stock-based compensation.

Conference Call and Webcast

Insperity will be hosting a conference call today at 8:30 a.m. ET to discuss these results and the guidance discussed in this press release, and answer questions from investment analysts. To listen in, call 877-545-0320 and use conference i.d. number 557065. The call will also be webcast at http://ir.insperity.com. The conference call script will be available at the same website later today. A replay of the conference call will be available at 877-481-4010, conference i.d. number 51466. The webcast will be archived for one year.

About Insperity

Since 1986, Insperity’s mission has been to help businesses succeed so communities prosper. Offering the most comprehensive suite of scalable HR solutions available in the marketplace, Insperity is defined by an unrivaled breadth and depth of services and level of care. Through an optimal blend of premium HR service and technology, Insperity delivers the administrative relief, reduced liabilities and better benefit solutions that businesses need for sustained growth. With 2023 revenues of $6.5 billion and more than 100 sales offices throughout the U.S., Insperity is currently making a difference in thousands of businesses and communities nationwide. For more information, visit http://www.insperity.com.

Forward-Looking Statements

The statements contained herein that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. You can identify such forward-looking statements by the words “anticipates,” “expects,” “intends,” “plans,” “projects,” “believes,” “estimates,” “forecasts,” “likely,” “possibly,” “probably,” “could,” “goal,” “opportunity,” “objective,” “target,” “assume,” “outlook,” “guidance,” “predicts,” “appears,” “indicator” and similar expressions. Forward-looking statements involve a number of risks and uncertainties. In the normal course of business, in an effort to help keep our stockholders and the public informed about our operations, from time to time, we may issue such forward-looking statements, either orally or in writing. Generally, these statements relate to business plans or strategies, including our strategic partnership with Workday, Inc.; projected or anticipated benefits or other consequences of such plans or strategies; or projections involving anticipated revenues, earnings, average number of worksite employees, benefits and workers’ compensation costs, or other operating results. We base these forward-looking statements on our current expectations, estimates and projections. We caution you that these statements are not guarantees of future performance and involve risks, uncertainties and assumptions that we cannot predict. In addition, we have based many of these forward-looking statements on assumptions about future events that may prove to be inaccurate. Therefore, the actual results of the future events described in such forward-looking statements could differ materially from those stated in such forward-looking statements. Among the factors that could cause actual results to differ materially are:

  • adverse economic conditions;
  • failure to comply with or meet client expectations regarding certain COVID-19 relief programs;
  • bank failures or other events affecting financial institutions; labor shortages, increasing competition for highly skilled workers, and evolving employee expectations regarding the workplace;
  • impact of inflation;
  • vulnerability to regional economic factors because of our geographic market concentration;
  • failure to comply with covenants under our credit facility;
  • impact of a future outbreak of highly infectious or contagious disease;
  • our liability for WSEE payroll, payroll taxes and benefits costs, or other liabilities associated with actions of our client companies or WSEEs, including if our clients fail to pay us;
  • increases in health insurance costs and workers’ compensation rates and underlying claims trends, health care reform, financial solvency of workers’ compensation carriers, other insurers or financial institutions, state unemployment tax rates, liabilities for employee and client actions or payroll-related claims;
  • an adverse determination regarding our status as the employer of our WSEEs for tax and benefit purposes and an inability to offer alternative benefit plans following such a determination;
  • cancellation of client contracts on short notice, or the inability to renew client contracts or attract new clients;
  • the ability to secure competitive replacement contracts for health insurance and workers’ compensation insurance at expiration of current contracts;
  • regulatory and tax developments and possible adverse application of various federal, state and local regulations;
  • failure to manage growth of our operations and the effectiveness of our sales and marketing efforts;
  • the impact of the competitive environment and other developments in the human resources services industry, including the PEO industry, on our growth and/or profitability;
  • an adverse final judgment or settlement of claims against Insperity;
  • disruptions of our information technology systems or failure to enhance our service and technology offerings to address new regulations or client expectations;
  • our liability or damage to our reputation relating to disclosure of sensitive or private information as a result of data theft, cyberattacks or security vulnerabilities;
  • failure of third-party providers, such as financial institutions, data centers or cloud service providers;
  • our ability to fully realize the anticipated benefits of our strategic partnership and plans to develop a joint solution with Workday, Inc.; and
  • our ability to integrate or realize expected returns on future product offerings, including through acquisitions, strategic partnerships, and investments.

These factors are discussed in further detail in Insperity’s filings with the U.S. Securities and Exchange Commission. Any of these factors, or a combination of such factors, could materially affect the results of our operations and whether forward-looking statements we make ultimately prove to be accurate.

Any forward-looking statements are made only as of the date hereof and, unless otherwise required by applicable securities laws, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Insperity, Inc.

CONDENSED CONSOLIDATED BALANCE SHEETS

 

(Unaudited)

 

 

(in millions)

September 30, 2024

December 31, 2023

 

 

 

Assets

 

 

Cash and cash equivalents

$

470

 

$

693

 

Restricted cash

 

67

 

 

57

 

Marketable securities

 

16

 

 

16

 

Accounts receivable, net

 

765

 

 

694

 

Prepaid insurance and related assets

 

31

 

 

7

 

Other current assets

 

84

 

 

128

 

Total current assets

 

1,433

 

 

1,595

 

Property and equipment, net

 

190

 

 

197

 

Right-of-use leased assets

 

66

 

 

57

 

Deposits and prepaid health insurance

 

192

 

 

215

 

Goodwill and other intangible assets, net

 

13

 

 

13

 

Deferred income taxes, net

 

19

 

 

20

 

Other assets

 

20

 

 

23

 

Total assets

$

1,933

 

$

2,120

 

 

 

 

Liabilities and stockholders' equity

 

 

Accounts payable

$

6

 

$

11

 

Payroll taxes and other payroll deductions payable

 

297

 

 

566

 

Accrued worksite employee payroll cost

 

650

 

 

559

 

Accrued health insurance costs

 

46

 

 

46

 

Accrued workers’ compensation costs

 

70

 

 

60

 

Accrued corporate payroll and commissions

 

79

 

 

64

 

Other accrued liabilities

 

85

 

 

130

 

Total current liabilities

 

1,233

 

 

1,436

 

Accrued workers’ compensation costs, net of current

 

140

 

 

163

 

Long-term debt

 

369

 

 

369

 

Operating lease liabilities, net of current

 

66

 

 

58

 

Total noncurrent liabilities

 

575

 

 

590

 

Stockholders’ equity:

 

 

Common stock

 

1

 

 

1

 

Additional paid-in capital

 

208

 

 

185

 

Treasury stock, at cost

 

(853

)

 

(831

)

Retained earnings

 

769

 

 

739

 

Total stockholders' equity

 

125

 

 

94

 

Total liabilities and stockholders’ equity

$

1,933

 

$

2,120

 

Insperity, Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS

 

(Unaudited)

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

(in millions, except per share amounts)

2024

2023

Change

 

2024

2023

Change

 

 

 

 

 

 

 

 

Operating results:

 

 

 

 

 

 

 

Revenues(1)

$

1,561

 

$

1,551

 

1

%

 

$

4,968

 

$

4,906

 

1

%

Payroll taxes, benefits and workers’ compensation costs

 

1,332

 

 

1,293

 

3

%

 

 

4,134

 

 

4,091

 

1

%

Gross profit

 

229

 

 

258

 

(11

)%

 

 

834

 

 

815

 

2

%

Salaries, wages and payroll taxes

 

127

 

 

114

 

11

%

 

 

393

 

 

349

 

13

%

Stock-based compensation

 

17

 

 

16

 

6

%

 

 

47

 

 

42

 

12

%

Commissions

 

11

 

 

11

 

 

 

 

34

 

 

34

 

 

Advertising

 

9

 

 

7

 

29

%

 

 

28

 

 

30

 

(7

)%

General and administrative expenses

 

53

 

 

40

 

33

%

 

 

167

 

 

132

 

27

%

Depreciation and amortization

 

11

 

 

11

 

 

 

 

33

 

 

32

 

3

%

Total operating expenses

 

228

 

 

199

 

15

%

 

 

702

 

 

619

 

13

%

Operating income

 

1

 

 

59

 

(98

)%

 

 

132

 

 

196

 

(33

)%

Other income (expense):

 

 

 

 

 

 

 

Interest income

 

9

 

 

9

 

 

 

 

28

 

 

25

 

12

%

Interest expense

 

(7

)

 

(7

)

 

 

 

(21

)

 

(20

)

5

%

Income before income tax expense

 

3

 

 

61

 

(95

)%

 

 

139

 

 

201

 

(31

)%

Income tax expense

 

 

 

16

 

(100

)%

 

 

39

 

 

49

 

(20

)%

Net income

$

3

 

$

45

 

(93

)%

 

$

100

 

$

152

 

(34

)%

 

 

 

 

 

 

 

 

Net income per share of common stock

 

 

 

 

 

 

 

Basic

$

0.07

 

$

1.17

 

(94

)%

 

$

2.65

 

$

4.00

 

(34

)%

Diluted

$

0.07

 

$

1.16

 

(94

)%

 

$

2.63

 

$

3.94

 

(33

)%

____________________________________

(1) Revenues are comprised of gross billings less WSEE payroll costs as follows:

 

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

(in millions)

2024

2023

 

2024

2023

 

 

 

 

 

 

Gross billings

$

10,291

$

10,067

 

$

32,135

$

31,763

Less: WSEE payroll cost

 

8,730

 

8,516

 

 

27,167

 

26,857

Revenues

$

1,561

$

1,551

 

$

4,968

$

4,906

Insperity, Inc.

KEY FINANCIAL AND STATISTICAL DATA

 

 

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

 

2024

2023

Change

 

2024

2023

Change

 

 

 

 

 

 

 

 

Average WSEEs paid

 

309,088

 

315,340

(2

)%

 

 

306,650

 

311,112

(1

)%

 

 

 

 

 

 

 

 

Statistical data (per WSEE per month):

 

 

 

 

 

 

 

Revenues(1)

$

1,683

$

1,639

3

%

 

$

1,800

$

1,752

3

%

Gross profit

 

247

 

273

(10

)%

 

 

302

 

291

4

%

Operating expenses

 

246

 

210

17

%

 

 

254

 

221

15

%

Operating income

 

1

 

63

(98

)%

 

 

48

 

70

(31

)%

Net income

 

3

 

47

(94

)%

 

 

36

 

54

(33

)%

____________________________________

(1) Revenues per WSEE per month are comprised of gross billings per WSEE per month less WSEE payroll costs per WSEE per month follows:

 

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

(per WSEE per month)

2024

2023

 

2024

2023

 

 

 

 

 

 

Gross billings

$

11,098

$

10,642

 

$

11,644

$

11,344

Less: WSEE payroll cost

 

9,415

 

9,003

 

 

9,844

 

9,592

Revenues

$

1,683

$

1,639

 

$

1,800

$

1,752

Insperity, Inc.
Non-GAAP FINANCIAL MEASURES
(Unaudited)

Non-GAAP financial measures are not prepared in accordance with GAAP and may be different from non-GAAP financial measures used by other companies. Non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of the non-GAAP financial measures used to their most directly comparable GAAP financial measures as provided in the tables below.

Non-GAAP Measure

Definition

Benefit of Non-GAAP Measure

Non-bonus payroll cost

Non-bonus payroll cost is a non-GAAP financial measure that excludes the impact of bonus payrolls paid to our WSEEs.

 

Bonus payroll cost varies from period to period, but has no direct impact to our ultimate workers’ compensation costs under the current program.

Our management refers to non-bonus payroll cost in analyzing, reporting and forecasting our workers’ compensation costs.

 

We include these non-GAAP financial measures because we believe they are useful to investors in allowing for greater transparency related to the costs incurred under our current workers’ compensation program.

Adjusted cash, cash equivalents and marketable securities

Excludes funds associated with:

• federal and state income tax withholdings,

• employment taxes,

• other payroll deductions, and

• client prepayments.

We believe that the exclusion of the identified items helps us reflect the fundamentals of our underlying business model and analyze results against our expectations, against prior periods, and to plan for future periods by focusing on our underlying operations. We believe that the adjusted results provide relevant and useful information for investors because they allow investors to view performance in a manner similar to the method used by management and improves their ability to understand and assess our operating performance. Adjusted EBITDA is used by our lenders to assess our leverage and ability to make interest payments.

 

 

EBITDA

Represents net income computed in accordance with GAAP, plus:

• interest expense,

• income tax expense,

• depreciation and amortization expense, and

• amortization of SaaS implementation costs.

 

 

Adjusted EBITDA

Represents EBITDA plus:

• non-cash stock-based compensation.

 

 

Adjusted net income

Represents net income computed in accordance with GAAP, excluding:

• non-cash stock-based compensation.

 

 

Adjusted EPS

Represents diluted net income per share computed in accordance with GAAP, excluding:

• non-cash stock-based compensation.

Following is a reconciliation of payroll cost (GAAP) to non-bonus payroll costs (non-GAAP):

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

(in millions, except per WSEE per month)

2024

 

2023

 

2024

 

2023

 

Per WSEE

 

 

Per WSEE

 

 

Per WSEE

 

 

Per WSEE

 

 

 

 

 

 

 

 

 

 

 

 

Payroll cost

$

8,730

 

$

9,415

 

 

$

8,516

 

$

9,003

 

 

$

27,167

 

$

9,844

 

 

$

26,857

 

$

9,592

 

Less: Bonus payroll cost

 

704

 

 

759

 

 

 

529

 

 

560

 

 

 

3,411

 

 

1,236

 

 

 

3,344

 

 

1,195

 

Non-bonus payroll cost

$

8,026

 

$

8,656

 

 

$

7,987

 

$

8,443

 

 

$

23,756

 

$

8,608

 

 

$

23,513

 

$

8,397

 

Payroll cost % change period over period

 

3

%

 

5

%

 

 

5

%

 

1

%

 

 

1

%

 

3

%

 

 

9

%

 

2

%

Non-bonus payroll cost % change period over period

 

 

 

3

%

 

 

6

%

 

2

%

 

 

1

%

 

3

%

 

 

10

%

 

3

%

Following is a reconciliation of cash, cash equivalents and marketable securities (GAAP) to adjusted cash, cash equivalents and marketable securities (non-GAAP):

(in millions)

September 30,
2024

 

December 31,
2023

 

 

Cash, cash equivalents and marketable securities

$

486

 

$

709

Less:

 

 

 

Amounts payable for withheld federal and state income taxes, employment taxes and other payroll deductions

 

255

 

 

510

Client prepayments

 

19

 

 

28

Adjusted cash, cash equivalents and marketable securities

$

212

 

$

171

Following is a reconciliation of net income (GAAP) to EBITDA (non-GAAP) and adjusted EBITDA (non-GAAP):

(in millions, except per WSEE per month)

Three Months Ended September 30,

 

Nine Months Ended September 30,

2024

 

2023

 

2024

 

2023

 

Per WSEE

 

 

Per WSEE

 

 

Per WSEE

 

 

Per WSEE

 

 

 

 

 

 

 

 

 

 

 

 

Net income

$

3

 

$

3

 

 

$

45

 

$

47

 

 

$

100

 

$

36

 

 

$

152

 

$

54

 

Income tax expense

 

 

 

 

 

 

16

 

 

19

 

 

 

39

 

 

13

 

 

 

49

 

 

18

 

Interest expense

 

7

 

 

8

 

 

 

7

 

 

7

 

 

 

21

 

 

8

 

 

 

20

 

 

7

 

Amortization of SaaS implementation costs

 

1

 

 

1

 

 

 

 

 

 

 

 

7

 

 

3

 

 

 

3

 

 

1

 

Depreciation and amortization

 

11

 

 

12

 

 

 

11

 

 

11

 

 

 

33

 

 

12

 

 

 

32

 

 

11

 

EBITDA

 

22

 

 

24

 

 

 

79

 

 

84

 

 

 

200

 

 

72

 

 

 

256

 

 

91

 

Stock-based compensation

 

17

 

 

18

 

 

 

16

 

 

16

 

 

 

47

 

 

17

 

 

 

42

 

 

15

 

Adjusted EBITDA

$

39

 

$

42

 

 

$

95

 

$

100

 

 

$

247

 

$

89

 

 

$

298

 

$

106

 

Net income % change period over period

 

(93

)%

 

(94

)%

 

 

18

%

 

15

%

 

 

(34

)%

 

(33

)%

 

 

8

%

 

 

Adjusted EBITDA % change period over period

 

(59

)%

 

(58

)%

 

 

18

%

 

14

%

 

 

(17

)%

 

(16

)%

 

 

9

%

 

2

%

Following is a reconciliation of net income (GAAP) to adjusted net income (non-GAAP):

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

(in millions)

2024

2023

 

2024

2023

 

 

 

 

 

 

Net income

$

3

 

$

45

 

 

$

100

 

$

152

 

Non-GAAP adjustments:

 

 

 

 

 

Stock-based compensation

 

17

 

 

16

 

 

 

47

 

 

42

 

Tax effect

 

(5

)

 

(6

)

 

 

(13

)

 

(11

)

Total non-GAAP adjustments, net

 

12

 

 

10

 

 

 

34

 

 

31

 

Adjusted net income

$

15

 

$

55

 

 

$

134

 

$

183

 

Net income % change period over period

 

(93

)%

 

18

%

 

 

(34

)%

 

8

%

Adjusted net income % change period over period

 

(73

)%

 

17

%

 

 

(27

)%

 

8

%

Following is a reconciliation of diluted EPS (GAAP) to adjusted EPS (non-GAAP):

 

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

 

2024

2023

 

2024

2023

 

 

 

 

 

 

Diluted EPS

$

0.07

 

$

1.16

 

 

$

2.63

 

$

3.94

 

Non-GAAP adjustments:

 

 

 

 

 

Stock-based compensation

 

0.45

 

 

0.40

 

 

 

1.24

 

 

1.08

 

Tax effect

 

(0.13

)

 

(0.10

)

 

 

(0.34

)

 

(0.26

)

Total non-GAAP adjustments, net

 

0.32

 

 

0.30

 

 

 

0.90

 

 

0.82

 

Adjusted EPS

$

0.39

 

$

1.46

 

 

$

3.53

 

$

4.76

 

Diluted EPS % change period over period

 

(94

)%

 

18

%

 

 

(33

)%

 

8

%

Adjusted EPS % change period over period

 

(73

)%

 

19

%

 

 

(26

)%

 

9

%

The following is a reconciliation of GAAP to non-GAAP financial measures for fourth quarter and full year 2024 guidance:

 

Q4 2024

 

Full Year 2024

(in millions, except per share amounts)

Guidance

 

Guidance

 

 

 

 

Net income

$(13) - $(5

)

 

$86 - $95

Income tax expense

(6) - (2

)

 

33 - 36

 

Interest expense

7

 

 

28

 

SaaS implementation amortization

3

 

 

11

 

Depreciation and amortization

10

 

 

43

 

EBITDA

1 - 13

 

 

201 - 213

 

Stock-based compensation

14

 

 

61

 

Adjusted EBITDA

$15 - $27

 

$262 - $274

 

 

 

 

Diluted EPS

$(0.36) - $(0.14

)

 

$2.26 - $2.50

Non-GAAP adjustments:

 

 

 

Stock-based compensation

0.37

 

 

1.61

 

Tax effect

(0.11

)

 

(0.45

)

Total non-GAAP adjustments, net

0.26

 

 

1.16

 

Adjusted EPS

$(0.10) - $0.12

 

$3.42 - $3.66

 

Investor Relations Contact:

Douglas S. Sharp

Executive Vice President of Finance,

Chief Financial Officer and Treasurer

281-348-3232

Investor.Relations@Insperity.com

News Media Contact:

Cynthia Murga

Director, Public Relations

713-324-1414

Media@insperity.com

Source: Insperity, Inc.

FAQ

What was Insperity's (NSP) revenue growth in Q3 2024?

Insperity's revenue grew 1% to $1.6 billion in Q3 2024 compared to Q3 2023.

How much did Insperity (NSP) return to shareholders in 2024?

Insperity returned $119 million to shareholders in the first nine months of 2024, consisting of $52 million in share repurchases and $67 million in dividends.

What is Insperity's (NSP) adjusted EPS guidance for 2024?

Insperity expects adjusted EPS of $3.42 to $3.66 for full-year 2024, representing a 34-38% year-over-year decrease.

How many worksite employees (WSEEs) did Insperity (NSP) have in Q3 2024?

Insperity had an average of 309,088 paid worksite employees in Q3 2024, representing a 2% decrease from Q3 2023.

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