Abstract

Insperity will report fourth-quarter results on February 10, 2026, Post Market; our preview compiles the latest quarterly actuals and management’s guidance framework to assess revenue, margins, and adjusted EPS trajectory and sets expectations for the near-term outlook based on industry conditions and recent analyst commentary.

Market Forecast

Consensus for the current quarter points to steady top-line expansion with near-term pressure on profitability: revenue is projected at $1.68 billion, implying year-over-year growth of 05.11%, with an estimated adjusted EPS of -$0.47 and an EBIT estimate of -$32.02 million. The last reported quarter’s framework implies gross profit margin near 12.01% and net profit margin around -1.23%, suggesting continued margin volatility; the forecast embeds a year-over-year revenue growth of 05.11% and an adjusted EPS decline of 26.89%. The main business is expected to support incremental revenue gains through client retention and worksite employee (WSE) trends, while margin improvement depends on benefits cost normalization and pricing. The most promising area is higher-value HR services attachment within existing PEO relationships, where cross-sell potential is expected to lift revenue quality and stabilize per-worksite profitability on a year-over-year basis.

Last Quarter Review

In the previous quarter, Insperity reported revenue of $1.62 billion, a gross profit margin of 12.01%, GAAP net income attributable to shareholders of -$20.00 million, a net profit margin of -1.23%, and adjusted EPS of -$0.20, with revenue up 03.97% year over year and adjusted EPS down 151.28% year over year. A key highlight was revenue resilience despite elevated benefits cost trends that pressured margins, which contributed to the negative EPS outcome. By business line, the core professional employer organization and HR outsourcing operations remained the primary revenue driver, aided by stable client counts and seasonal hiring patterns on a year-over-year basis.

Current Quarter Outlook (with major analytical insights)

Core PEO and HR Outsourcing

The core professional employer organization and HR outsourcing franchise should remain the centerpiece of quarterly performance, with revenue guided to approximately $1.68 billion, up 05.11% year over year. Unit economics in this segment are sensitive to worksite employee growth, benefits cost trends, and pricing on the service fee per WSE, so investors will scrutinize signals on medical claims severity and frequency. If benefits cost inflation moderates against actuarial accruals built over prior quarters, gross margin could begin to stabilize from the 12.01% baseline, even if net margin remains pressured by seasonal expenses. The balance between client retention and new sales will be important, as any acceleration in mid-market client adds can help offset per-employee benefit cost variability through scale. Management commentary around enrollment season outcomes and claims development will be crucial for assessing whether EBIT can trend back toward breakeven from the -$32.02 million estimate.

Value-Added HR Services and Cross-Sell

Higher-value HR services—such as enhanced compliance, training, and performance management tools—are positioned to improve revenue mix and reduce earnings volatility. These offerings typically carry higher contribution margins than the base administrative fee, providing a lever to cushion periods of elevated medical claims. Cross-sell penetration within the existing client base is a key driver, and incremental attachment can raise revenue per client while requiring modest incremental cost. With macro uncertainty affecting hiring in certain small and medium-sized business cohorts, deepening service relationships offers a pathway to steady revenue expansion without relying strictly on headcount growth. For the quarter, we expect modest improvement in revenue quality as these services gain traction, but the full P&L impact may be gradual given a starting gross margin level of 12.01%.

Key Stock Price Drivers: Benefits Cost, Pricing, and WSE Trends

Investors remain focused on three intertwined factors: benefits cost trends, pricing power, and the trajectory of worksite employees. Elevated medical claims can compress gross margin quickly, as seen in the prior quarter’s -1.23% net margin, so any indication of normalization could recalibrate expectations. Pricing adjustments instituted to reflect higher claims experience may support margin rebuild, though competitive dynamics in the PEO market require careful balancing to protect retention. Worksite employee counts will reflect the health of client payrolls and hiring appetite; stabilization or growth in WSEs should translate into incremental revenue and better fixed-cost absorption. The guidance midpoint for revenue growth of 05.11% suggests the company anticipates stable client activity; clarity on benefit accruals and claims development will determine whether EBIT can outperform the -$32.02 million projection.

Analyst Opinions

Recent analyst commentary skews cautiously positive, with a majority acknowledging resilient revenue and expecting gradual margin recovery provided benefits cost trends normalize; the minority remains cautious on near-term EPS given claims variability. Notably, several institutions highlight the revenue estimate of $1.68 billion and the EPS estimate of -$0.47 as reasonable anchors, suggesting upside if health claims improve and pricing sticks. The constructive view emphasizes that the prior quarter’s negative EPS (-$0.20) and -$32.02 million EBIT comparison could set a lower bar for sentiment, while stable year-over-year revenue growth near 05.11% reflects solid client retention. Overall, the bullish majority expects the quarter to demonstrate revenue continuity and early signs of margin stabilization, while acknowledging that sustained improvement depends on medical claims normalizing and disciplined pricing execution.