HOUSTON--(BUSINESS WIRE)--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 |
|
|
|
Net income |
$60 - $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 |
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):
(in millions, except per WSEE per month) |
Three Months Ended December 31, |
|
Year Ended December 31, |
||||||||||
|
2024 |
|
2023 |
||||||||||
Net income (loss) |
$ |
(9 |
) |
$ |
19 |
||||||||
Contacts
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