Insperity Q2 Results: Net profit surges 180% YoY
Insperity, Inc. delivered strong second-quarter 2026 results with net income rising 180% to $4 million, driven by an 8% cut in operating expenses and pricing gains that offset a 1% drop in worksite employees. Revenues grew 2% to $1.7 billion, while adjusted EBITDA increased 13% to $36 million. The company also raised its full-year 2026 adjusted EBITDA outlook to $185–$225 million.
*this image is generated using AI for illustrative purposes only.
Insperity, Inc., a provider of human resources and business performance solutions, reported a 180% year-over-year surge in net income to $4 million for the second quarter ended June 30, 2026. The profitability turnaround was driven by an 8% reduction in operating expenses to $211 million and a 3% increase in revenue per worksite employee due to higher pricing. This margin recovery offsets a 1% decline in average paid worksite employees (WSEEs) to 305,764, signaling that Insperity is successfully decoupling profitability from headcount volume through its pricing and client retention strategies.
Revenues for the quarter increased 2% to $1.7 billion ($1,686 million), while gross profit decreased 3% to $217 million as benefits costs per covered employee rose 5%. Adjusted EBITDA grew 13% to $36 million, and adjusted earnings per share (EPS) rose 31% to $0.34. Diluted EPS jumped 171% to $0.10 compared to a loss of $0.14 in the prior-year period. Operating expenses included $8 million related to the company’s strategic partnership with Workday, Inc., down from $14 million in the same quarter last year.
For the first half of 2026, revenues rose 2% to $3.6 billion ($3,581 million), but net income declined 20% to $37 million due to restructuring charges recorded earlier in the year. Year-to-date adjusted EBITDA increased 4% to $139 million. Cash outlays during the first six months included $46 million in dividends, $4 million for share repurchases of approximately 172,000 shares, and $13 million in capital expenditures. Adjusted cash at June 30, 2026, stood at $95 million, while outstanding borrowings under the credit facility reached $420 million after a $50 million draw for working capital purposes.
Financial Performance Table
| Metric | Q2 2026 | Q2 2025 | Change |
|---|---|---|---|
| Revenues | $1,686 million | $1,658 million | 2% |
| Gross Profit | $217 million | $223 million | (3)% |
| Operating Expenses | $211 million | $230 million | (8)% |
| Net Income | $4 million | $(5) million | 180% |
| Diluted EPS | $0.10 | $(0.14) | 171% |
| Adjusted EBITDA | $36 million | $32 million | 13% |
| Adjusted EPS | $0.34 | $0.26 | 31% |
Updated Guidance
Insperity updated its guidance for the third quarter and full year 2026, reflecting continued execution of its margin recovery plan. For Q3 2026, the company expects average WSEEs to range between 305,500 and 307,500, representing a year-over-year decrease of 1.7% to 2.3%. Adjusted EBITDA is projected between $14 million and $41 million, a potential increase of 40% to 310% year-over-year. Full-year 2026 adjusted EBITDA guidance stands at $185 million to $225 million, up 41% to 72% from the prior year.
"All three components of our margin recovery plan contributed to our second quarter results, including our pricing and client retention strategy, benefit plan and policy changes, and operating expense management," said James D. Allison, executive vice president of finance, chief financial officer and treasurer. "As we continue to execute this plan over the remainder of the year, the cumulative impact of these efforts is expected to produce a significant profit recovery in 2026 and provide a solid foundation heading into 2027."
What the Numbers Show
The divergence between revenue growth and gross profit decline highlights the pressure from rising benefits costs, which increased 5% per covered employee. However, the 8% drop in operating expenses demonstrates effective cost control, particularly in reducing Workday partnership costs from $14 million to $8 million. This operational efficiency allowed Insperity to turn profitable on a net income basis despite a shrinking workforce base, validating the shift toward pricing-led margin expansion rather than volume-driven growth.
How sustainable is Insperity's pricing-led margin expansion strategy if competitor responses lead to increased price sensitivity among small and mid-sized businesses?
What specific operational changes or renegotiations drove the 43% reduction in Workday partnership costs, and will this efficiency persist as the integration matures?
Given the 5% rise in benefits costs per employee, what long-term structural adjustments is Insperity implementing to mitigate future healthcare inflation impacts on gross profit?
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