Insperity Inc (NSP, Financial), a leading provider of human resources and business performance solutions, released its third quarter earnings report on October 31, 2023. Despite economic challenges facing many small to medium-sized businesses, the company demonstrated steady growth in its financial performance.
Financial Performance Overview
The average number of WSEEs paid per month increased by 4.0% over Q3 2022 to 315,340. Revenues in Q3 2023 increased by 7.8% to $1.6 billion, driven by the increase in paid WSEEs and a 3.7% increase in revenue per WSEE. Despite a slowdown in hiring by its client base, sales and client retention continued to drive growth in paid WSEEs.
Insperity's gross profit increased by 5.5% over Q3 2022 to $257.9 million, due to a 4.0% increase in paid WSEEs and a 1.5% increase in gross profit per WSEE per month. Benefits costs were significantly lower than forecast, contributing to a favorable outcome compared to expectations.
Year-to-Date Results and Shareholder Returns
For the nine months ended September 30, 2023, the average number of paid WSEEs increased by 7.0% over 2022 to 311,112. Revenues in 2023 increased by 10.3% to $4.9 billion, driven by the increase in paid WSEEs and a 3.1% increase in revenue per WSEE.
During the same period, Insperity returned $194.4 million to shareholders through the repurchase of approximately 1,259,000 shares at a cost of $131.4 million, and $63.0 million in cash dividends.
Company Outlook
Insperity also provided updated guidance for the remainder of 2023, including the fourth quarter. The company expects the average number of WSEEs paid to increase by 3.0% to 3.5% in Q4 2023 and by 6.0% for the full year 2023. Adjusted EPS is projected to decrease by 64% to 32% in Q4 2023 and by 7% for the full year 2023.
Insperity's CEO, Paul J. Sarvadi, expressed satisfaction with the company's robust Q3 performance and the solid execution of their operating plan year-to-date. Despite the economic challenges facing many businesses, he believes that Insperity is well-positioned to capitalize on the strong demand for comprehensive human resource services in the market.
Explore the complete 8-K earnings release (here) from Insperity Inc for further details.