Insperity's Q2 2025: Navigating Contradictions in Workday Costs, Healthcare Pricing, and Mid-Market Hiring Trends

Workday partnership costs and timeline, healthcare cost trends and pricing adjustments, Workday expenses and budgeting, mid-market hiring and economic recovery are the key contradictions discussed in Insperity's latest 2025Q2 earnings call.



Financial Performance and Benefits Cost Trends:
- Insperity reported second quarter EPS of $0.26 and adjusted EBITDA of $32 million, slightly under their forecasted range.
- Gross profit per worksite employee in Q2 2025 was $240 per month, down from $282 in Q2 2024.
- The decline was primarily due to higher-than-expected benefits costs, particularly pharmacy expenses and increased claim frequency, which exceeded forecasted amounts by $12 million.

Sales and Client Retention:
- The average number of paid worksite employees increased by 0.7% over Q2 of 2024 to 309,115.
- Worksite employees paid from new sales increased by 2% over Q2 of 2024, indicating improved sales efficiency despite a smaller and more tenured sales team.
- Client retention remained strong at 99% per month, aligning with prior year results.

Strategic Partnership with Workday:
- Insperity's partnership with Workday is progressing, with a detailed work and testing plan establishing a target go-live date for Insperity HRScale beta clients early next year.
- The partnership is focused on creating a comprehensive HR service and technology platform to expand Insperity's market reach and enhance client offerings.
- A comprehensive pricing strategy has been developed, supporting premium pricing potential for new clients adopting the Insperity HRScale solution.

Operating Expense Management:
- Operating expenses decreased by 3% on a year-over-year basis, with significant reductions in travel, professional fees, and other G&A costs.
- Despite increased investment in the Workday partnership, Insperity returned capital to shareholders through a regular dividend program and share repurchases.
- The company remains focused on maintaining operational efficiency and returning to profitability in 2026 through strategic pricing and plan design changes.