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- **Healthcare Cost Crisis**: 9.1% YoY benefits cost trend driven by AI and utilization, requiring $20M in adjustments and 3% operating expense cuts.
- **UHC Contract Win**: 2% cost savings and reduced risk pooling to $500K, supporting 2026 margin recovery.
- **HRScale Breakthrough**: Q3 booked sales up 45% YoY, with largest account sale tied to HRScale interest. Expected to launch Q1 2026 with beta clients.
- **2026 Outlook**: Projected recovery of 2025 shortfall via pricing, UHC savings, and HRScale growth, despite macro SMB hiring challenges.

**【CFO Financial Commentary】**
- **Q3 2025 Financial Results**: Adjusted EPS was -$0.20, and adjusted EBITDA was $10 million, below forecasts due to $20 million in higher-than-expected benefits costs. Benefits cost trend was 9.1% YoY, driven by increased outpatient/inpatient utilization, pharmacy costs, and AI-driven upcoding.
- **2025 Outlook**: Full-year adjusted EPS expected in $0.84–$1.47 range, with benefits cost trend at 9% YoY. Q4 adjusted EBITDA forecasted at -$25M to $9M, with operating expenses down 3% YoY.
- **Capital Allocation**: $22M in dividends and $19M in share repurchases YTD, with $120M cash on hand.

**【CEO Strategic Initiatives】**
- **Healthcare Cost Mitigation**: New 3-year UHC contract reduces claims risk (pooling level cut to $500K) and projects 2% cost savings. Pricing adjustments for new/renewing clients to offset 9%+ trend.
- **HRScale Launch**: Beta clients go-live in Q1 2026, with booked sales success (45% Q3 YoY growth, largest account sale in history). Complementary pricing with HR360 to target mid-market clients.
- **3-Year Growth Plan**: Aims to return to double-digit unit growth and 20%+ EBITDA growth via HRScale, AI-driven efficiency (e.g., Compass tool), and cost control.

**【Q&A Highlights】**
- **Earnings Recovery**: 2026 expected to recover majority of 2025 shortfall via UHC savings, pricing, and HRScale. Client retention stable at 99% despite higher pricing.
- **HRScale Pricing**: Initial discounts for beta clients, but still higher than HR360. Long-term pricing supported by unique value proposition.
- **AI Impact**: Short-term focus on AI tools for client retention; long-term potential for SMB job creation offsets efficiency risks.

Insperity, Inc. (NSP) Q3 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

NSP

NSP fundamentals

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