Insperity, Inc. reported first‑quarter 2026 revenue of $1.895 billion, a 2% year‑over‑year increase that sits comfortably within the consensus range of $1.89 billion to $1.912 billion. Adjusted earnings per share came in at $1.31, beating the consensus estimate of $1.24 by $0.07, or roughly 5.6%. Adjusted EBITDA reached $103 million, surpassing the lower end of the consensus range of $102 million.
The company’s gross profit fell 3% to $302 million, while operating expenses were trimmed 1% to $240 million. The decline in gross profit reflects a 3% drop in the cost of services, but the 1% reduction in operating expenses indicates disciplined cost management. The net effect was a modest improvement in operating margin, driven largely by pricing actions and a shift toward higher‑margin client mix.
Average worksite employees paid declined 1% to 303,049, a trend that underscores ongoing headwinds in the small‑business market. Insperity cited lower‑than‑expected benefits costs and a new UnitedHealthcare contract, along with plan‑design changes, as key factors that helped mitigate healthcare cost pressure and support margin recovery.
Management maintained its Q2 and full‑year guidance. The company reiterated an adjusted EBITDA target of $170–$230 million and an adjusted EPS guidance of $1.60–$2.60 for 2026. However, the Q2 adjusted EPS guidance of $0.02–$0.50 falls well below the consensus estimate of $0.42, a downgrade that has weighed on investor sentiment.
"We are pleased with our Q1 financial results, which reflect the effectiveness of our efforts to overcome margin pressure experienced in 2025," said CEO Paul J. Sarvadi. "We are working to reestablish growth momentum over the balance of the year and to capitalize on the opportunity we see ahead in the evolving AI landscape for Insperity's strategic HR services, technology, and expertise." CFO James Allison noted, "Today, we reported adjusted EPS for the first quarter of $1.31 and adjusted EBITDA of $103 million." He added, "Our full year 2026 adjusted EPS guidance range is now $1.60 to $2.60." Allison also highlighted the rollout of the HRScale beta, stating, "Our initial HRScale beta clients were effectively onboarded in March and payrolls and invoices were processed in April as scheduled." He further reported, "Gross profit per worksite employee in Q1 2026 was $332 per month," and that the effective income tax rate for adjusted EPS was 41% versus 29% in Q1 2025.
Investors reacted negatively to the earnings release, citing the below‑consensus Q2 EPS guidance and the continued decline in average worksite employees as key concerns. The market’s focus on the weaker near‑term outlook tempered enthusiasm for the Q1 earnings beat, highlighting the importance of sustained growth momentum and margin stability for the company’s long‑term prospects.
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