Insperity, Inc. (NYSE: NSP), a leading provider of human
resources and business performance solutions for America’s best
businesses, today reported results for the fourth quarter and year
ended December 31, 2024. Insperity will be hosting a conference
call today at 8:30 a.m. ET to discuss these results and our 2025
outlook and will be posting an accompanying presentation to its
investor website at http://ir.insperity.com.
- Q4 average number of WSEEs paid of 309,000 within our expected
range
- Q4 net loss of $9 million; adjusted EBITDA of $23 million
- Q4 diluted EPS of $(0.22); adjusted EPS of $0.05
- 2024 average number of paid WSEEs of 307,000
- 2024 net income of $91 million; adjusted EBITDA of $270
million
- 2024 diluted EPS of $2.42; adjusted EPS of $3.58
- Return to shareholders of $152 million during 2024 through the
repurchase of 697,000 shares at a cost of $63 million and $89
million in cash dividends
Fourth Quarter Results
The average number of worksite employees (“WSEE”) paid per month
decreased 2% from Q4 2023 to 309,093 WSEEs. Revenues in Q4 2024
increased 2% to $1.6 billion on a 4% increase in revenue per WSEE
on higher pricing, offset by the 2% decrease in paid WSEEs.
“We are pleased with our fourth quarter and full year 2024
results including an exceptional year-end sales and client
retention campaign, accomplishing an important growth inflection
point entering the new year,” said Paul J. Sarvadi, Insperity
chairman and chief executive officer. “We expect to build on this
momentum with growth acceleration in 2025. We are also focused on
reaching significant milestones in our Workday strategic
partnership this year, with the goal of enhancing our growth
trajectory in 2026 and beyond.”
Gross profit decreased 2% from Q4 2023 to $218 million. Q4 2024
gross profit per employee was in line with the prior year
period.
Operating expenses increased 17% over Q4 2023, in line with our
forecast, and included approximately $19 million associated with
the implementation of our Workday strategic partnership.
Reported net loss and diluted EPS were $9 million and $(0.22),
respectively. Adjusted EBITDA and adjusted EPS were $23 million and
$0.05, respectively.
Full Year Results
The average number of WSEEs paid per month decreased 2% from
2023 to 307,261 WSEEs. Revenues increased by 1% to $6.6 billion on
a 3% increase in revenue per WSEE, offset in part by the 2%
decrease in paid WSEEs.
Gross profit increased 1% on a 3% increase in gross profit per
WSEE per month, primarily due to increased pricing and more
favorable results from our benefits costs program and payroll
taxes.
Operating expenses increased 14% over 2023. Operating expenses
for 2024 include approximately $57 million associated with the
implementation of our Workday strategic partnership as well as
ongoing investments in our sales, service and technology areas, and
the impact of the recent inflationary environment.
Reported net income and diluted EPS were $91 million and $2.42,
respectively. Adjusted EBITDA and adjusted EPS were $270 million
and $3.58, respectively.
“We are pleased with our 2024 financial results, particularly
considering the macroeconomic conditions that impacted our growth,”
said James D. Allison, executive vice president of finance, chief
financial officer and treasurer. “Our balance sheet remains strong,
as we balance investments in our long-term business strategy and
returns to shareholders through dividends and share
repurchases.”
Cash outlays in 2024 included the repurchase of approximately
697,000 shares of our common stock at a cost of $63 million,
dividends totaling $89 million, and capital expenditures of $38
million. Adjusted cash at December 31, 2024 totaled $134 million
and $280 million remains available under our $650 million credit
facility.
2025 Guidance
The company also announced its guidance for 2025, including the
first quarter of 2025. 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.
Q1 2025
Full Year 2025
Average WSEEs paid
306,500
—
309,000
313,400
—
319,500
Year-over-year increase
0.9%
—
1.7%
2.0%
—
4.0%
Adjusted EPS(1)
$1.89
—
$2.15
$3.10
—
$3.95
Year-over-year increase (decrease)
(17)%
—
(5)%
(13)%
—
10%
Adjusted EBITDA (in millions)
$121
—
$135
$240
—
$285
Year-over-year increase (decrease)
(15)%
—
(5)%
(11)%
—
6%
_______________________________
(1) Adjusted EPS includes an estimated $(0.06) for Q1 2025 and
full year 2025 related to a higher effective income tax rate.
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 888-506-0062 and use conference i.d. number 405371.
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 51901. 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 2024 revenues of $6.6 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
December 31, 2024
December 31, 2023
(in millions)
Assets
Cash and cash equivalents
$
1,039
$
693
Restricted cash
69
57
Marketable securities
16
16
Accounts receivable, net
829
694
Prepaid insurance and related assets
25
7
Other current assets
107
128
Total current assets
2,085
1,595
Property and equipment, net
192
197
Right-of-use leased assets
65
57
Deposits and prepaid health insurance
195
215
Goodwill and other intangible assets,
net
13
13
Deferred income taxes, net
34
20
Other assets
13
23
Total assets
$
2,597
$
2,120
Liabilities and stockholders'
equity
Accounts payable
$
10
$
11
Payroll taxes and other payroll deductions
payable
901
566
Accrued worksite employee payroll cost
730
559
Accrued health insurance costs
19
46
Accrued workers’ compensation costs
71
60
Accrued corporate payroll and
commissions
82
64
Other accrued liabilities
117
130
Total current liabilities
1,930
1,436
Accrued workers’ compensation costs, net
of current
135
163
Long-term debt
369
369
Operating lease liabilities, net of
current
66
58
Total noncurrent liabilities
570
590
Stockholders’ equity:
Common stock
1
1
Additional paid-in capital
222
185
Treasury stock, at cost
(864
)
(831
)
Retained earnings
738
739
Total stockholders' equity
97
94
Total liabilities and stockholders’
equity
$
2,597
$
2,120
Insperity, Inc.
CONSOLIDATED STATEMENTS OF
OPERATIONS
Three Months Ended
December 31,
Year Ended
December 31,
(in millions, except per share
amounts)
2024
2023
Change
2024
2023
Change
Operating results:
Revenues(1)
$
1,613
$
1,580
2
%
$
6,581
$
6,486
1
%
Payroll taxes, benefits and workers’
compensation costs
1,395
1,358
3
%
5,529
5,449
1
%
Gross profit
218
222
(2
)%
1,052
1,037
1
%
Salaries, wages and payroll taxes
128
112
14
%
521
461
13
%
Stock-based compensation
14
11
27
%
61
53
15
%
Commissions
13
13
—
47
47
—
Advertising
10
7
43
%
38
37
3
%
General and administrative expenses
57
45
27
%
224
177
27
%
Depreciation and amortization
11
11
—
44
43
2
%
Total operating expenses
233
199
17
%
935
818
14
%
Operating income (loss)
(15
)
23
(165
)%
117
219
(47
)%
Other income (expense):
Interest income
9
8
13
%
37
33
12
%
Interest expense
(7
)
(7
)
—
(28
)
(27
)
4
%
Income (loss) before income tax
expense
(13
)
24
(154
)%
126
225
(44
)%
Income tax (benefit) expense
(4
)
5
(180
)%
35
54
(35
)%
Net income (loss)
$
(9
)
$
19
(147
)%
$
91
$
171
(47
)%
Net income (loss) per share of common
stock
Basic
$
(0.22
)
$
0.52
(142
)%
$
2.44
$
4.53
(46
)%
Diluted
$
(0.22
)
$
0.52
(142
)%
$
2.42
$
4.47
(46
)%
____________________________________
(1) Revenues are comprised of
gross billings less WSEE payroll costs as follows:
Three Months Ended
December 31,
Year Ended
December 31,
(in millions)
2024
2023
2024
2023
Gross billings
$
11,617
$
11,378
$
43,752
$
43,141
Less: WSEE payroll cost
10,004
9,798
37,171
36,655
Revenues
$
1,613
$
1,580
$
6,581
$
6,486
Insperity, Inc.
KEY FINANCIAL AND STATISTICAL
DATA
Three Months Ended
December 31,
Year Ended
December 31,
2024
2023
Change
2024
2023
Change
Average WSEEs paid
309,093
315,072
(2
)%
307,261
312,102
(2
)%
Statistical data (per WSEE per
month):
Revenues(1)
$
1,739
$
1,672
4
%
$
1,785
$
1,732
3
%
Gross profit
235
235
—
285
277
3
%
Operating expenses
251
211
19
%
253
219
16
%
Operating income
(16
)
24
(167
)%
32
58
(45
)%
Net income
(10
)
20
(150
)%
25
46
(46
)%
____________________________________
(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
December 31,
Year Ended
December 31,
(per WSEE per month)
2024
2023
2024
2023
Gross billings
$
12,528
$
12,037
$
11,866
$
11,519
Less: WSEE payroll cost
10,789
10,365
10,081
9,787
Revenues
$
1,739
$
1,672
$
1,785
$
1,732
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 December
31,
Year Ended December
31,
(in millions, except per WSEE per
month)
2024
2023
2024
2023
Per WSEE
Per WSEE
Per WSEE
Per WSEE
Payroll cost
$
10,004
$
10,789
$
9,798
$
10,365
$
37,171
$
10,081
$
36,655
$
9,787
Less: Bonus payroll cost
1,690
1,823
1,634
1,728
5,101
1,383
4,978
1,329
Non-bonus payroll cost
$
8,314
$
8,966
$
8,164
$
8,637
$
32,070
$
8,698
$
31,677
$
8,458
Payroll cost % change period over
period
2
%
4
%
3
%
—
1
%
3
%
7
%
1
%
Non-bonus payroll cost % change period
over period
2
%
4
%
5
%
2
%
1
%
3
%
8
%
2
%
Following is a reconciliation of cash, cash equivalents and
marketable securities (GAAP) to adjusted cash, cash equivalents and
marketable securities (non-GAAP):
(in millions)
December 31,
2024
December 31,
2023
Cash, cash equivalents and marketable
securities
$
1,055
$
709
Less:
Amounts payable for withheld federal and
state income taxes, employment taxes and other payroll
deductions
830
510
Client prepayments
91
28
Adjusted cash, cash equivalents and
marketable securities
$
134
$
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 December
31,
Year Ended December
31,
2024
2023
2024
2023
Per WSEE
Per WSEE
Per WSEE
Per WSEE
Net income (loss)
$
(9
)
$
(10
)
$
19
$
20
$
91
$
25
$
171
$
46
Income tax (benefit) expense
(4
)
(4
)
5
5
35
8
54
14
Interest expense
7
8
7
7
28
8
27
7
Amortization of SaaS implementation
costs
4
4
3
3
11
3
6
2
Depreciation and amortization
11
12
11
12
44
12
43
11
EBITDA
9
10
45
47
209
56
301
80
Stock-based compensation
14
15
11
12
61
17
53
14
Adjusted EBITDA
$
23
$
25
$
56
$
59
$
270
$
73
$
354
$
94
Net income % change period over
period
(147
)%
(150
)%
(50
)%
(51
)%
(47
)%
(46
)%
(4
)%
(10
)%
Adjusted EBITDA % change period over
period
(59
)%
(58
)%
(29
)%
(31
)%
(24
)%
(22
)%
1
%
(6
)%
Following is a reconciliation of net income (GAAP) to adjusted
net income (non-GAAP):
Three Months Ended December
31,
Year Ended December
31,
(in millions)
2024
2023
2024
2023
Net income (loss)
$
(9
)
$
19
$
91
$
171
Non-GAAP adjustments:
Stock-based compensation
14
11
61
53
Tax effect
(4
)
(1
)
(17
)
(12
)
Total non-GAAP adjustments, net
10
10
44
41
Adjusted net income
$
1
$
29
$
135
$
212
Net income % change period over
period
(147
)%
(50
)%
(47
)%
(4
)%
Adjusted net income % change period
over period
(97
)%
(38
)%
(36
)%
(2
)%
Following is a reconciliation of diluted EPS (GAAP) to adjusted
EPS (non-GAAP):
Three Months Ended December
31,
Year Ended December
31,
2024
2023
2024
2023
Diluted EPS
$
(0.22
)
$
0.52
$
2.42
$
4.47
Non-GAAP adjustments:
Stock-based compensation
0.37
0.30
1.61
1.38
Tax effect
(0.10
)
(0.07
)
(0.45
)
(0.33
)
Total non-GAAP adjustments, net
0.27
0.23
1.16
1.05
Adjusted EPS
$
0.05
$
0.75
$
3.58
$
5.52
Diluted EPS % change period over
period
(142
)%
(47
)%
(46
)%
(4
)%
Adjusted EPS % change period over
period
(93
)%
(38
)%
(35
)%
(1
)%
The following is a reconciliation of GAAP to non-GAAP financial
measures for first quarter and full year 2025 guidance:
Q1 2025
Full Year 2025
(in millions, except per share
amounts)
Guidance
Guidance
Net income
$61 - $70
$71 - $102
Income tax expense
26 - 31
30 - 44
Interest expense
6
25
SaaS implementation amortization
2
4
Depreciation and amortization
11
44
EBITDA
106 - 120
174 - 219
Stock-based compensation
15
66
Adjusted EBITDA
$121 - $135
$240 - $285
Diluted EPS
$1.61 - $1.87
$1.87 - $2.72
Non-GAAP adjustments:
Stock-based compensation
0.40
1.75
Tax effect
(0.12
)
(0.52
)
Total non-GAAP adjustments, net
0.28
1.23
Adjusted EPS
$1.89 - $2.15
$3.10 - $3.95
View source
version on businesswire.com: https://www.businesswire.com/news/home/20250210607210/en/
Investor Relations Contact: James D. Allison Executive
Vice President of Finance, Chief Financial Officer and Treasurer
281-348-3140 Investor.Relations@Insperity.com
News Media Contact: Cynthia Murga Director, Public
Relations 713-324-1414 Media@insperity.com
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