Insperity Restores Gross Profit Growth After a Second-Quarter Drop

The Tip Desk · October 31, 2026 · 3 min read

Gross profit rose 6% to $207 million in the third quarter as pricing lifted revenue per worksite employee 4% and adjusted EBITDA reached $31 million.

Insperity, Inc. (NSP), a provider of human resources and business performance solutions, reported third-quarter gross profit of $207 million, up 6% from a year earlier, reversing a 3% decline in the second quarter.

The company said increased pricing drove the gross-profit gain and lifted gross profit per worksite employee 8% to $225. Revenue rose 2% to $1.7 billion on a 4% increase in revenue per WSEE, a faster per-employee lift than the 3% increase recorded in the second quarter. Average paid worksite employees fell 2% from the year-ago quarter to 307,265, compared with a 1% year-over-year decline to 305,764 in the second quarter.

Benefits costs per covered employee increased 4% over the third quarter of 2025, after a 5% increase over the second quarter of 2025. Operating expenses decreased 5% to $209 million, primarily due to lower compensation related to reduced corporate staff, after an 8% decline to $211 million in the second quarter.

Reported net loss improved 95% to $1 million, and diluted EPS improved 96% to $(0.02). Adjusted EBITDA increased 210% to $31 million and adjusted EPS increased 210% to $0.22. In the second quarter, reported net income was $4 million and diluted EPS was $0.10; adjusted EBITDA was $36 million and adjusted EPS was $0.34.

Chairman and chief executive Paul J. Sarvadi said the results reflected continued progress on the company’s top priority of margin recovery and a meaningful step toward restoring the earnings power of its business model. Chief financial officer James D. Allison said the company achieved a key milestone with year-over-year growth in gross profit per worksite employee while continuing operating-expense discipline.

For the nine months ended September 30, 2026, average paid WSEEs decreased 1% to 305,359. Revenues increased 2% to $5.2 billion on a 3% increase in revenue per WSEE. Gross profit was flat at $726 million and gross profit per WSEE increased 1% to $264. Operating expenses declined 5% to $660 million. Reported net income and diluted EPS both increased 38% to $36 million and $0.95. Adjusted EBITDA increased 18% to $170 million and adjusted EPS increased 13% to $1.85.

Cash outlays in the first nine months included the repurchase of approximately 302,000 shares at a cost of $10 million, dividends totaling $69 million, and capital expenditures of $26 million. During the third quarter the company repurchased 131,000 shares at a total cost of $6 million. Adjusted cash at September 30, 2026 totaled $119 million, with outstanding borrowings of $420 million under the credit facility.

Updated 2026 guidance, including the fourth quarter, calls for average WSEEs paid of 306,000 to 308,000 in the fourth quarter, a year-over-year decrease of 2.0% to 1.4%, and 305,500 to 306,000 for the full year, a decrease of 1.5% to 1.3%. Fourth-quarter adjusted EPS is guided at $0.07 to $0.42, a year-over-year increase of 112% to 170%, and adjusted EBITDA of $24 million to $44 million, an increase of 285% to 438%. Full-year adjusted EPS is $1.93 to $2.28, an increase of 87% to 121%, and adjusted EBITDA is $194 million to $214 million, an increase of 48% to 63%. Adjusted EPS guidance reflects an effective tax rate of approximately 28% in the fourth quarter and 36% for the full year.

Sarvadi said the company believes AI has the potential to strengthen demand for Insperity’s HR solutions as small and midsize businesses navigate that transformation, and that combining AI with HR professionals will help clients succeed and drive long-term growth.