Insperity (NSP) investor relations material

Executive summary

• Q2 2026 delivered strong results: adjusted EPS rose 31% to $0.34, adjusted EBITDA increased 13% to $36M, and net income surged 180% to $4M, all above guidance midpoints, despite a 1% YoY decline in average paid worksite employees to 305,764.

• Margin recovery initiatives, including pricing, benefits plan design, client retention, and expense management, drove profit improvements and offset lower employee counts.

• Launched Insperity HRScale, targeting mid-market clients, with nearly 8,000 sold accounts and over 5,000 employees live on the platform.

• AI initiatives and expanded insurance agency operations are supporting sales, retention, and operational efficiency.

• Year-to-date, net income declined 20% to $37M, while adjusted EBITDA rose 4% to $139M and adjusted EPS fell 10% to $1.64 due to a higher effective tax rate from Q1 stock award vesting.

Financial highlights

• Q2 adjusted EPS: $0.34 (up 31% YoY); adjusted EBITDA: $36M (up 13% YoY); net income: $4M (up 180% YoY); revenues: $1.7B (up 2% YoY).

• Q2 gross profit: $217M (down 3% YoY); gross profit per worksite employee: $237/month (down 1% YoY).

• Q2 operating expenses fell 8% YoY to $211M, including $8M related to the Workday partnership.

• Adjusted cash at June 30, 2026: $95M; total debt: $419M; working capital: $180M.

• Year-to-date revenues: $3.6B (up 2% YoY); gross profit: $519M (down 3% YoY); operating expenses: $451M (down 4% YoY).

Outlook and guidance

• Full-year 2026 guidance: average paid worksite employees to decrease 1.0–1.7% YoY; adjusted EPS: $1.88–$2.43 (up 83–136% YoY); adjusted EBITDA: $185M–$225M (up 41–72% YoY).

• Q3 2026 guidance: average paid worksite employees to decrease 2.3% YoY; adjusted EPS: -$0.09 to $0.41 (up 55–305% YoY); adjusted EBITDA: $14M–$41M (up 40–310% YoY).

• Seasonality of earnings expected to be less pronounced due to UnitedHealthcare pooling changes.

• FY 2026 outlook narrowed for both growth and profitability, with midpoints raised based on year-to-date results.