INSPERITY, INC.
For the period ended Sep 30, 2025. Filed Nov 4, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2025 · Filed Nov 4, 2025
NSP$49.82-2.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-06-30; filed 2025-08-01.
0001000753-25-000069
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsNon-GAAP Financial MeasuresCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-11-04.
0001000753-25-000107
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsNon-GAAP Financial MeasuresThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 148 previous paragraphs and 153 current paragraphs.
98 unchanged; 45 reworded; 9 added; 4 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 29 previous and 29 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (9)
Current report
•Adjusted net income (loss) and adjusted EPS decreased 153% and 151% to $(8) million and $(0.20), respectively
Current report
•Adjusted EBITDA decreased 74% to $10 million
Current report
•Adjusted EBITDA decreased 42% to $144 million
Current report
Year-over-Year Growth Percentage
Current report
Net Income (Loss) andYear-over-Year Growth Percentage(in millions)
Current report
Year-over-Year Growth Percentage
Current report
(in millions)
Current report
(in millions)
Current report
•Workers’ compensation plan funding — During YTD 2025 and YTD 2024, we received $28 million and $38 million, respectively, for the return of excess claim funds related to the workers’ compensation program, which resulted in an increase in working capital.
Removed paragraphs (4)
Previous report
•Adjusted EBITDA decreased 52% to $32 million
Previous report
•Adjusted net income and adjusted EPS both decreased 42% to $69 million and $1.83, respectively
Previous report
•Adjusted EBITDA decreased 36% to $134 million
Previous report
Net Income (Loss) and
Reworded paragraphs (45)
Previous wording
•Net income (loss) and diluted earnings per share (“EPS”) decreased 128% and 129% to $(5) million and $(0.14), respectively
Current wording
•Net income (loss) and diluted earnings per share (“EPS”) decreased to $(20) million and $(0.53), respectively
Previous wording
•Net income and diluted EPS decreased 53% and 52% to $46 million and $1.22, respectively
Current wording
•Net income and diluted EPS both decreased 74% to $26 million and $0.69, respectively
Previous wording
•Adjusted net income and adjusted EPS both decreased 70% to $10 million and $0.26, respectively
Current wording
•Adjusted net income and adjusted EPS both decreased 54% to $61 million and $1.63, respectively
Previous wording
•During Q2 2025, average WSEEs paid increased 1% compared to Q2 2024. The number of WSEEs paid from new client sales and the net change in our client base increased compared with Q2 2024, while client retention remained consistent with Q2 2024.
Current wording
•During Q3 2025, average WSEEs paid increased 1% compared to Q3 2024. The number of WSEEs paid from new client sales and the net change in our client base slightly decreased compared with Q3 2024, while client retention remained consistent with Q3 2024.
Previous wording
•During the first six months of 2025 (“YTD 2025”), average WSEEs paid increased 1% compared to the first six months of 2024 (“YTD 2024”). The number of WSEEs paid from new client sales, client retention, and the net change in our client base increased when compared to YTD 2024.
Current wording
•During the first nine months of 2025 (“YTD 2025”), average WSEEs paid increased 1% compared to the first nine months of 2024 (“YTD 2024”). The number of WSEEs paid from new client sales, client retention and the net change in our client base increased when compared to YTD 2024.
Previous wording
Our revenues for Q2 2025 were $1.7 billion, an increase of 3%, primarily due to the following:
Current wording
Our revenues for Q3 2025 were $1.6 billion, an increase of 4%, primarily due to the following:
Previous wording
•Revenues per WSEE per month increased 3%, or $45.
Current wording
•Revenues per WSEE per month increased 3%, or $46.
Previous wording
Our revenues for YTD 2025 were $3.5 billion, an increase of 3%, primarily due to the following:
Current wording
Our revenues for YTD 2025 were $5.1 billion, an increase of 4%, primarily due to the following:
Previous wording
•Revenues per WSEE per month increased 3%, or $49.
Current wording
•Revenues per WSEE per month increased 3%, or $48.
Previous wording
We generally define the middle market sector as those companies with approximately 150 to 5,000 WSEEs. Currently, we have a dedicated sales management, service personnel, and consulting staff who concentrate solely on the middle market sector. Our average number of WSEEs per month in our middle market sector increased 3% during YTD 2025 compared to YTD 2024, representing approximately 26% and 25% of our total average paid WSEEs in YTD 2025 and YTD 2024, respectively.
Current wording
We generally define the middle market sector as those companies with approximately 150 to 5,000 WSEEs. Currently, we have a dedicated sales management, service personnel, and consulting staff who concentrate solely on the middle market sector. Our average number of WSEEs per month in our middle market sector increased 3% during YTD 2025 compared to YTD 2024, representing approximately 26% of our total average paid WSEEs in both YTD 2025 and YTD 2024.
Previous wording
Gross profit for Q2 2025 decreased 14% to $223 million compared to $260 million in Q2 2024. Gross profit per WSEE per month for Q2 2025 decreased $42 to $240 compared to $282 in Q2 2024 due primarily to higher direct costs, offset in part by higher average pricing, as discussed below.
Current wording
Gross profit for Q3 2025 decreased 15% to $195 million compared to $229 million in Q3 2024. Gross profit per WSEE per month for Q3 2025 decreased $39 to $208 compared to $247 in Q3 2024 due primarily to higher direct costs, offset in part by higher average pricing, as discussed below.
Previous wording
Our pricing objectives attempt to achieve a level of revenue per WSEE that matches or exceeds changes in primary direct costs and operating expenses. Our revenues per WSEE per month increased $45 due to higher average pricing of 3%.
Current wording
Our pricing objectives attempt to achieve a level of revenue per WSEE that matches or exceeds changes in primary direct costs and operating expenses. Our revenues per WSEE per month increased $46 due to higher average pricing of 3%.
Previous wording
The net increase in direct costs between Q2 2025 and Q2 2024 attributable to the changes in cost estimates for benefits and workers’ compensation totaled $24 million as discussed below. The $87 per WSEE per month increase in direct costs is due primarily to the direct cost component changes as follows:
Current wording
The net increase in direct costs between Q3 2025 and Q3 2024 attributable to the changes in cost estimates for benefits and workers’ compensation totaled $15 million as discussed below. The $85 per WSEE per month increase in direct costs is due primarily to the direct cost component changes as follows:
Previous wording
•The cost of group health insurance and related employee benefits increased $65 per WSEE per month and increased 9.6% on a cost per covered employee basis driven by continued elevated pharmacy trends and frequency of large claim activity in Q2 2025 as compared to Q2 2024.
Current wording
•The cost of group health insurance and related employee benefits increased $60 per WSEE per month and increased 9.1% on a cost per covered employee basis driven by elevated inpatient, outpatient and pharmacy trends and frequency of large claim activity in Q3 2025 as compared to Q3 2024.
Previous wording
•The percentage of WSEEs covered under our health insurance plans was 63% in Q2 2025 compared to 64% in Q2 2024.
Current wording
•The percentage of WSEEs covered under our health insurance plans was 62% in Q3 2025 compared to 63% in Q3 2024.
Previous wording
•Reported results include changes in estimated claims run-off related to prior periods, which did not impact costs in Q2 2025 compared to a decrease in costs of $25 million, or $27 per WSEE per month, in Q2 2024.
Current wording
•Reported results include changes in estimated claims run-off related to prior periods, which did not impact costs in Q3 2025 compared to a decrease in costs of $12 million, or $13 per WSEE per month, in Q3 2024.
Previous wording
•Workers’ compensation costs increased 4%, or $1 per WSEE per month, in Q2 2025 compared to Q2 2024.
Current wording
•Workers’ compensation costs increased 15%, or $3 per WSEE per month, in Q3 2025 compared to Q3 2024.
Previous wording
•As a percentage of non-bonus payroll cost, workers’ compensation costs were 0.23% in both Q2 2025 and Q2 2024.
Current wording
•As a percentage of non-bonus payroll cost, workers’ compensation costs were 0.27% in Q3 2025 compared to 0.25% in Q3 2024.
Previous wording
•Our continued discipline around our client selection, workplace safely and claims management has allowed for claims to be closed out at amounts below our original cost estimates, resulting in a reduction in workers’
Current wording
•Our continued discipline around our client selection, workplace safely and claims management has allowed for claims to be closed out at amounts below our original cost estimates, resulting in a reduction in workers’ compensation costs of $5 million, or 0.05% of non-bonus payroll costs in Q3 2025, compared to a reduction of $8 million, or 0.09% of non-bonus payroll costs in Q3 2024.
Previous wording
•Payroll taxes increased 4% on a 2% increase in payroll costs, or $21 per WSEE per month.
Current wording
•Payroll taxes increased 5% on a 4% increase in payroll costs, or $24 per WSEE per month.
Previous wording
•Payroll taxes as a percentage of payroll costs were 7% in both Q2 2025 and Q2 2024.
Current wording
•Payroll taxes as a percentage of payroll costs were 6% in both Q3 2025 and Q3 2024.
Previous wording
Gross profit for YTD 2025 decreased 12% to $533 million compared to $605 million in YTD 2024. Gross profit per WSEE per month for YTD 2025 decreased $41 to $289 compared to $330 in YTD 2024 due primarily to higher direct costs, offset in part by higher average pricing, as discussed below.
Current wording
Gross profit for YTD 2025 decreased 13% to $728 million compared to $834 million in YTD 2024. Gross profit per WSEE per month for YTD 2025 decreased $41 to $261 compared to $302 in YTD 2024 due primarily to higher direct costs, offset in part by higher average pricing, as discussed below.
Previous wording
Our pricing objectives attempt to achieve a level of revenue per WSEE that matches or exceeds changes in primary direct costs and operating expenses. Our revenues per WSEE per month increased $49 due to higher average pricing of 3%.
Current wording
Our pricing objectives attempt to achieve a level of revenue per WSEE that matches or exceeds changes in primary direct costs and operating expenses. Our revenues per WSEE per month increased $48 due to higher average pricing of 3%.
Previous wording
The net increase in direct costs between YTD 2025 and YTD 2024 attributable to the changes in cost estimates for benefits and workers’ compensation totaled $40 million as discussed below. The $90 per WSEE per month increase in direct costs is due primarily to the direct cost component changes as follows:
Current wording
The net increase in direct costs between YTD 2025 and YTD 2024 attributable to the changes in cost estimates for benefits and workers’ compensation totaled $46 million as discussed below. The $89 per WSEE per month increase in direct costs is due primarily to the direct cost component changes as follows:
Previous wording
•The cost of group health insurance and related employee benefits increased $60 per WSEE per month, or 9.0% on a cost per covered employee basis driven by continued elevated inpatient, outpatient, and pharmacy trends and frequency of large claim activity in YTD 2025 as compared to YTD 2024.
Current wording
•The cost of group health insurance and related employee benefits increased $60 per WSEE per month, or 9.0% on a cost per covered employee basis driven by elevated inpatient, outpatient and pharmacy trends and frequency of large claim activity in YTD 2025 as compared to YTD 2024.
Previous wording
•Reported results include changes in estimated claims run-off related to prior periods, which was an increase in costs of $11 million, or $6 per WSEE per month, in YTD 2025 compared to a decrease in costs of $26 million, or $14 per WSEE per month, in YTD 2024.
Current wording
•Reported results include changes in estimated claims run-off related to prior periods, which was an increase in costs of $9 million, or $3 per WSEE per month, in YTD 2025 compared to a decrease in costs of $32 million, or $12 per WSEE per month, in YTD 2024.
Previous wording
•Workers’ compensation costs increased 8%, or $1 per WSEE per month, in YTD 2025 compared to YTD 2024.
Current wording
•Workers’ compensation costs increased 11%, or $2 per WSEE per month, in YTD 2025 compared to YTD 2024.
Previous wording
•As a percentage of non-bonus payroll cost, workers’ compensation costs were 0.24% in YTD 2025 and 0.23% in YTD 2024.
Current wording
•As a percentage of non-bonus payroll cost, workers’ compensation costs were 0.25% in YTD 2025 compared to 0.23% in YTD 2024.
Previous wording
•Our continued discipline around our client selection, workplace safely and claims management has allowed for claims to be closed out at amounts below our original cost estimates, resulting in a reduction in workers’ compensation costs of $14 million, or 0.09% of non-bonus payroll costs, in YTD 2025 compared to a reduction of $17 million, or 0.11% of non-bonus payroll costs, in YTD 2024.
Current wording
•Our continued discipline around our client selection, workplace safely and claims management has allowed for claims to be closed out at amounts below our original cost estimates, resulting in a reduction in workers’ compensation costs of $20 million, or 0.08% of non-bonus payroll costs, in YTD 2025 compared to a reduction of $25 million, or 0.11% of non-bonus payroll costs, in YTD 2024.
Previous wording
•Payroll taxes increased 4% on a 4% increase in payroll costs, or $27 per WSEE per month.
Current wording
•Payroll taxes increased 5% on a 4% increase in payroll costs, or $26 per WSEE per month.
Previous wording
Operating expenses for Q2 2025 decreased 3% to $230 million compared to $237 million in Q2 2024. Operating expenses per WSEE per month for Q2 2025 decreased 4% to $248 compared to $257 in Q2 2024.
Current wording
Operating expenses for Q3 2025 decreased 4% to $220 million compared to $228 million in Q3 2024. Operating expenses per WSEE per month for Q3 2025 decreased 4% to $235 compared to $246 in Q3 2024.
Previous wording
Operating expenses for YTD 2025 decreased to $472 million compared to $474 million in YTD 2024. Operating expenses per WSEE per month for YTD 2025 decreased 1% to $256 compared to $259 in YTD 2024.
Current wording
Operating expenses for YTD 2025 decreased 1% to $692 million compared to $702 million in YTD 2024. Operating expenses per WSEE per month for YTD 2025 decreased 2% to $248 compared to $254 in YTD 2024.
Previous wording
•General and administrative expenses for Q2 2025 decreased 14% to $49 million, or $9 per WSEE per month, compared to Q2 2024. The decrease was primarily due to decreased professional services fees, travel and training expenses, and amortization of SaaS implementation costs, partially offset by increases in software licensing and maintenance costs.
Current wording
•General and administrative expenses for YTD 2025 decreased 8% to $154 million, or $6 per WSEE per month, compared to YTD 2024. The decrease was primarily due to decreased professional services fees, which includes expenses related to the implementation of our Workday strategic partnership, travel and training, and amortization of SaaS implementation costs, partially offset by increases in software licensing and maintenance costs.
Previous wording
Interest income decreased $2 million in YTD 2025 compared to YTD 2024 due to interest rate decreases on overnight, investment and deposit holdings.
Current wording
Interest income decreased $4 million in YTD 2025 compared to YTD 2024 due to interest rate decreases on overnight, investment and deposit holdings.
Previous wording
Interest expense decreased $2 million in YTD 2025 compared to YTD 2024 due to decreases in interest rates charged on borrowings under our credit facility.
Current wording
Interest expense decreased $3 million in YTD 2025 compared to YTD 2024 due to decreases in interest rates charged on borrowings under our credit facility.
Previous wording
For the six months ended June 30, 2025, our provision for income taxes differed from the U.S. statutory rate primarily due to state income taxes, non-deductible expenses and vesting of restricted and long-term incentive stock awards. During the first six months of 2025 we recognized a $1 million income tax expense related to the vesting of long-term incentive and restricted stock awards. During the first six months of 2024 we did not recognize an income tax benefit or expense related to the vesting of long-term incentive and restricted stock awards.
Current wording
For the nine months ended September 30, 2025, our provision for income taxes differed from the U.S. statutory rate primarily due to state income taxes, non-deductible expenses and vesting of restricted and long-term incentive stock awards. The decrease in net income without a corresponding change in non-deductible expenses resulted in a higher effective tax rate for the period. During the first nine months of 2025 we recognized a $1 million income tax expense related to the vesting of long-term incentive and restricted stock awards. During the first nine months of 2024 we did not recognize an income tax benefit or expense related to the vesting of long-term incentive and restricted stock awards.
Previous wording
On July 4, 2025, H.R.1, which is known as the “One Big Beautiful Bill Act,” was signed into federal law. This law includes significant changes to federal tax law and other regulatory provisions that may impact us. ASC 740, “Income Taxes”, requires the effect of changes in tax rates and laws on deferred tax balances to be recognized in the period in which the legislation is enacted. We are currently evaluating the provisions of H.R.1 and the potential effects on our financial position, results of operations, and cash flows. As of the date of these financial statements, we have not completed our assessment, and therefore no adjustments have been made. Additional disclosures of any material impact will be provided in future periods as the effect of the legislation is determined.
Current wording
On July 4, 2025, H.R.1, which is known as the “One Big Beautiful Bill Act,” was signed into federal law. This law includes significant changes to federal tax law and other regulatory provisions that may impact us. ASC 740, “Income Taxes”, requires the effect of changes in tax rates and laws on deferred tax balances to be recognized in the period in which the legislation is enacted. We have evaluated the provisions of H.R.1 and the potential effects on our financial position, results of operations, and cash flows. Although there is no impact to our effective tax rate, we are accelerating tax deductions for unamortized software development costs.
Previous wording
Following is a reconciliation of net income (loss) (GAAP) to adjusted net income (non-GAAP):
Current wording
Following is a reconciliation of net income (loss) (GAAP) to adjusted net income (loss) (non-GAAP):
Previous wording
We had $456 million in cash, cash equivalents and marketable securities at June 30, 2025, of which approximately $316 million was payable in July 2025 for withheld federal and state income taxes, employment taxes and other payroll deductions. Approximately $26 million represented client prepayments that were invoiced in July 2025. At June 30, 2025, we had working capital of $160 million compared to $155 million at December 31, 2024. We currently believe that our cash on hand, marketable securities, cash flows from operations, and availability under the Facility will be adequate to meet our liquidity requirements for the remainder of 2025. We intend to rely on these same sources, as well as public and private debt or equity financing, to meet our longer-term liquidity and capital needs.
Current wording
We had $440 million in cash, cash equivalents and marketable securities at September 30, 2025, of which approximately $284 million was payable in October 2025 for withheld federal and state income taxes, employment taxes and other payroll deductions. Approximately $36 million represented client prepayments that were invoiced in October 2025. At September 30, 2025, we had working capital of $172 million compared to $155 million at December 31, 2024. We currently believe that our cash on hand, marketable securities, cash flows from operations, and availability under the Facility will be adequate to meet our liquidity requirements for the remainder of 2025. We intend to rely on these same sources, as well as public and private debt or equity financing, to meet our longer-term liquidity and capital needs.
Previous wording
Net cash used in operating activities in the first six months of 2025 was $522 million. Our primary source of cash from operations is the comprehensive service fee and payroll funding we collect from our clients. Our cash and cash equivalents, and thus our reported cash flows from operating activities, are significantly impacted by various external and internal factors, which are reflected in part by the changes in our balance sheet accounts. These include the following:
Current wording
Net cash used in operating activities in the first nine months of 2025 was $533 million. Our primary source of cash from operations is the comprehensive service fee and payroll funding we collect from our clients. Our cash and cash equivalents, and thus our reported cash flows from operating activities, are significantly impacted by various external and internal factors, which are reflected in part by the changes in our balance sheet accounts. These include the following:
Showing the first 40 of 45 pairs. Open the source sections for the rest.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
•General and administrative expenses for Q3 2025 decreased 15% to $45 million, or $9 per WSEE per month, compared to Q3 2024. The decrease was primarily due to decreased professional services fees, which includes expenses related to the implementation of our Workday strategic partnership, travel and training expenses, partially offset by increases in software licensing and maintenance costs.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
compensation costs of $8 million, or 0.09% of non-bonus payroll costs in Q2 2025, compared to a reduction of $7 million, or 0.09% of non-bonus payroll costs in Q2 2024.