Insperity, Inc. Q1 FY2026 earnings call

Paul discussed three main areas: strong Q1 earnings and margin recovery efforts, actions to regain growth momentum with HR Scale rollout, and perspective on AI landscape and opportunities. HR Scale initial clients onboarded, pipeline building, and AI impact on SMB HR solutions.

Reported adjusted EPS for Q1 2026 was $1.31 and adjusted EBITDA of $103 million. Total gross profit decreased 3% to $302 million. Average number of paid worksite employees was 303,049, a 1.0% decrease vs Q1 2025. Gross profit per worksite employee in Q1 2026 was $332 per month.

Full year 2026 adjusted EBITDA range $170M-$230M, adjusted EPS range $1.60-$2.60. Q2 2026 average paid worksite employees range 302,500-304,500, adjusted EBITDA $18M-$46M, adjusted EPS $0.02-$0.50.

Risks associated with forward-looking statements, macroeconomic uncertainties affecting small business sentiment, client retention and sales impacts from margin recovery efforts.

Q: Change in expectation for gross profit per WSEE?

A: Ahead of schedule, likely higher than original guidance.

Q: WSEE sequential cadence?

A: Midpoint of range around -1.5% growth.

Q: Competitive environment on pricing?

A: Competitive pricing due to market pressure, HR Scale as differentiation.

Q: HR scale client count and costs?

A: Near 6,000 clients in next 6 months, costs to decline in H2 2026.

Q: Health care costs?

A: Impact from client mix, plan design, and United Healthcare contract, back-end loaded.

Q: Sales counselors growth?

A: Modest increase in BPAs, built-in factor from HR scale accounts.

Q: Go-to-market adjustment for client concerns?

A: Changed messaging, fewer renewal pressures, offset by profit recovery