Insperity Inc (NSP) Q4 2025 Earnings Call Highlights: Strategic Moves and Challenges in Focus

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Wed, February 11, 2026 at 2:01 PM GMT+9 3 min read

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This article first appeared on GuruFocus.

Release Date: February 10, 2026

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Insperity Inc (NYSE:NSP) reported a significant improvement in gross profit per worksite employee, aligning with their forecast.

The company successfully renegotiated their contract with UnitedHealthcare, reducing the pooling level and implementing plan design changes effective January 2026.

Insperity Inc (NYSE:NSP) has initiated the rollout of HR Scale, a joint solution with Workday, expected to enhance their PEO solution set for mid-market companies.

The company maintained a strong client retention rate of 99% per month during Q4 2025, consistent with prior year results.

Insperity Inc (NYSE:NSP) ended the quarter with $57 million of adjusted cash and increased their borrowing capacity under the credit facility.

Negative Points

The average number of paid worksite employees was slightly below forecast due to continued weakness and volatility in client net hiring.

Insperity Inc (NYSE:NSP) experienced a significant decline in adjusted EBITDA and EPS for the year, with a 51% and 71% decrease respectively.

The company faced challenges due to elevated healthcare claim costs, impacting their gross profit margin.

Operating expenses included a $2.8 million cost related to the acceleration of sales office consolidation.

Insperity Inc (NYSE:NSP) had to right-size their organization, impacting approximately 4% of their non-sales staff.

Q & A Highlights

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Q: Can you provide more details on the HR Scale momentum and the expected number of employees on the platform by year-end? A: (Paul Servati, CEO) We are excited about launching the new product and have prioritized larger current accounts to avoid attrition. We anticipate new accounts as part of this picture, and we have visibility into the number of employees expected on the platform. However, the exact allocations are still being determined as we evaluate each account’s needs and timing.

Q: Is the 6,000 to 8,000 employee pipeline for HR Scale expected to contribute significantly to gross profit in 2026? A: (Paul Servati, CEO) The contribution to gross profit in 2026 will be limited as we are just rolling those in. The focus is more on setting up for future contributions in the following years.

Q: Can you provide insights into the expected healthcare claims dynamics and cost trends for 2026? A: (Jim Allison, CFO) We expect healthcare claims to remain at an elevated level. We have taken steps to positively influence costs through negotiations with UnitedHealthcare and plan design changes, which we estimate to be worth about 2%. The change in client mix, with terminating clients being less profitable, also impacts costs.

Story continues  

Q: How significant is the client-sponsored healthcare plan initiative, and is it a strategic move or a market trend? A: (Paul Servati, CEO) It’s both a strategic initiative and a market trend. We aim to offer the best options for each client, and this initiative allows us to grow with less risk on the benefits side. It also provides flexibility for larger customers who may want different options.

Q: What are your cash flow expectations for 2026, and how does investment shifting from operating expenses to capitalized expenses impact EBITDA? A: (Jim Allison, CFO) We expect CapEx to return to historical levels as we wind down HR Scale investments. Interest expenses may be slightly lower due to rate cuts, and we are monitoring cash flow closely. We may consider borrowing more on our line of credit if necessary.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

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