Insperity, Inc. reported first-quarter 2025 adjusted EPS of $1.57 and adjusted EBITDA of $102 million, both falling below the company's guidance range. The average number of paid worksite employees (WSEEs) increased by 0.7% over Q1 2024 to 306,023, which was slightly below the expected range. Client net hiring was only slightly positive for the quarter, indicating continued weakness in the macroeconomic environment.
Gross profit per WSEE in Q1 2025 decreased to $338 per month from $378 in Q1 2024, primarily due to an 8.4% year-over-year increase in benefits costs per covered employee. These costs exceeded the budget by $28 million, with $12 million related to higher-than-expected runoff of medical claims from prior periods and $16 million from claims incurred in Q1. Operating expenses increased by 2% over Q1 2024, driven by a $13 million investment in the Workday strategic partnership.
In response to the elevated benefits costs, Insperity has initiated several strategic actions, including raising pricing targets, evaluating benefit plan design changes for 2026, and accelerating contract renewal discussions with its primary carrier, UnitedHealthcare. The company also updated its full-year 2025 guidance, significantly lowering adjusted EPS to a range of $2.23 to $3.28 and adjusted EBITDA to $190 million to $245 million, reflecting the impact of the higher benefits cost trends and macroeconomic uncertainty. The corporate Workday platform was successfully launched in mid-March, providing valuable insights for the client-facing solution.
The content on BeyondSPX is for informational purposes only and should not be construed as financial or investment advice. We are not financial advisors. Consult with a qualified professional before making any investment decisions. Any actions you take based on information from this site are solely at your own risk.