Insperity (NSP) Q1 2026 earnings summary

Executive summary

• Q1 2026 Adjusted EPS was $1.31, down 17% year-over-year, while Adjusted EBITDA rose 1% to $103 million, both exceeding guidance midpoints.

• Net income and diluted EPS both decreased 35% year-over-year to $33 million and $0.88, respectively, primarily due to a higher effective tax rate and margin recovery efforts.

• Average paid worksite employees fell 1% to 303,049, at the low end of guidance, due to lower new client sales and higher attrition.

• Margin recovery initiatives are ahead of schedule, with strategic focus on regaining growth momentum and leveraging AI and HRScale rollouts.

• HRScale beta clients onboarded in March; nearly 6,000 worksite employees expected on HRScale within six months.

Financial highlights

• Revenues rose 2% year-over-year to $1.9 billion, driven by a 3% increase in revenues per WSEE per month, offset by a 1% decline in average WSEEs paid.

• Gross profit decreased 3% to $302 million, but margin recovery efforts showed progress versus a 21% decline in Q4 2025.

• Gross profit per worksite employee was $332/month, slightly above forecast, aided by lower benefit costs.

• Operating expenses decreased 1% to $240 million, including a $9 million restructuring charge; excluding this, expenses fell 5%.

• Adjusted cash ended at $36 million, with $370 million in outstanding borrowings and $380 million in unused credit facility capacity.

Outlook and guidance

• Full-year 2026 Adjusted EBITDA guidance remains $170–$230 million; Adjusted EPS guidance is $1.60–$2.60.

• Worksite employee count forecast revised to 303,000–307,000, a 1%–2.3% decline from 2025.

• Q2 2026 guidance: 302,500–304,500 worksite employees (down 1.5%–2.1% YoY), Adjusted EBITDA $18–$46 million, Adjusted EPS $0.02–$0.50.

• Effective tax rate for Adjusted EPS expected at 36% for the year.

• Adjusted operating expenses for 2026 expected to be about 5% below 2025, reflecting cost structure alignment.