Insperity, Inc 8-K, filed Oct 29, 2026
Insperity, Inc. (NSP)
8-K
2026-10-29
For: 2026-10-29
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October 29, 2026
About this 8-K
Insperity, Inc filed this 8-K on October 29, 2026.
Insperity reported third-quarter results for the quarter ended September 30, 2026: Q3 revenues up 2%, net loss improved 95% to $1 million, and adjusted EBITDA up 210% to $31 million; it also announced updated guidance for 2026. AI summary
Items reported
- Item 2.02: Financial results
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): October 29, 2026
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||||||||||||
(Address of principal executive offices and zip code)
Registrant’s telephone number, including area code: (281 ) 358-8986
| Securities registered pursuant to Section 12(b) of the Act: | ||||||||
| Title of each class | Ticker symbol(s) | Name of each exchange on which registered | ||||||
NYSE Texas | ||||||||
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition.
On October 29, 2026, Insperity, Inc. issued a press release announcing the company’s financial and operating results for the quarter ended September 30, 2026. A copy of the press release is furnished as Exhibit 99.1 hereto and incorporated by reference. The information in Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1 attached hereto, is being furnished to the SEC and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section. This information shall not be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 9.01. Financial Statements and Exhibits.
(d)Exhibits
| 99.1 | — | |||||||
| 104 | — | Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document. | ||||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| INSPERITY, INC. | |||||
| By: | /s/ Christian P. Callens | ||||
| Christian P. Callens | |||||
| Senior Vice President of Legal, General Counsel & Secretary | |||||
Date: October 29, 2026
Exhibit 99.1
Insperity Announces Third Quarter Results
HOUSTON – October 29, 2026 – Insperity, Inc. (NYSE: NSP), a leading provider of human resources and business performance solutions for America’s best businesses, today reported results for the third quarter ended September 30, 2026. Insperity will be hosting a conference call today at 8:30 a.m. ET to discuss these results and our updated 2026 outlook and will be posting an accompanying presentation to our investor website at http://ir.insperity.com.
Financial highlights for the quarter reflect the company’s margin recovery improvement as follows:
•Q3 revenues up 2% on a 2% decline in average paid WSEEs to 307,265
•Q3 net loss improved 95% to $1 million; adjusted EBITDA up 210% to $31 million
•Q3 diluted EPS improved 96% to $(0.02); adjusted EPS improved 210% to $0.22
•YTD revenues up 2% on a 1% decline in average paid WSEEs to 305,359
•YTD net income up 38% to $36 million; adjusted EBITDA up 18% to $170 million
•YTD diluted EPS up 38% to $0.95; adjusted EPS up 13% to $1.85
•Repurchased 131,000 shares during the quarter at a total cost of $6 million
Third Quarter Results
“We delivered solid third-quarter financial results reflecting continued progress on our top priority of margin recovery, achieving a meaningful step towards restoring the earnings power of our business model,” said Paul J. Sarvadi, Insperity chairman and chief executive officer. “Looking forward, we believe AI has the potential to strengthen demand for Insperity’s comprehensive HR solutions as small and midsize businesses navigate this transformation. Our strategy combines the power of AI with the experience of our HR professionals to help our client businesses succeed, further strengthen our offering and deepen client relationships, which we believe will drive long-term growth and shareholder value.”
The average number of worksite employees (“WSEE”) paid per month decreased 2% from Q3 2025 to 307,265 WSEEs. Revenues in Q3 2026 increased 2% to $1.7 billion on a 4% increase in revenue per WSEE due to higher pricing, partially offset by the decrease in paid WSEEs.
Increased pricing drove a gross profit increase of 6% to $207 million in Q3 2026 and a gross profit per WSEE increase of 8% to $225. Our benefits costs per covered employee increased 4% over Q3 2025.
Operating expenses decreased 5% to $209 million in Q3 2026 over Q3 2025, primarily due to lower compensation related costs of reduced corporate staff.
Reported net loss improved 95% to $1 million and diluted EPS improved 96% to $(0.02). Adjusted EBITDA increased 210% to $31 million and adjusted EPS increased 210% to $0.22.
“We achieved a key milestone in our margin recovery plan with year-over-year growth in gross profit per worksite employee while continuing our operating expense discipline,” said James D. Allison, executive vice president of finance, chief financial officer and treasurer. “Taken together, these results produced a significant earnings rebound, further strengthening our financial position in alignment with our long-term capital allocation strategy.”
Year-to-Date Results
The average number of WSEEs paid per month decreased 1% from 2025 to 305,359 WSEEs. Revenues increased by 2% to $5.2 billion on a 3% increase in revenue per WSEE due to higher pricing, partially offset by the decrease in paid WSEEs.
Gross profit was flat at $726 million and gross profit per WSEE increased 1% to $264 as increased pricing outpaced a benefits costs per covered employee increase of 5% over YTD 2025.
Operating expenses declined 5% to $660 million as compared to the 2025 period primarily due to lower compensation related costs of reduced corporate staff.
Reported net income and diluted EPS both increased by 38% to $36 million and $0.95, respectively. Adjusted EBITDA increased 18% to $170 million and adjusted EPS increased 13% to $1.85.
Cash outlays in the first nine months of 2026 included the repurchase of approximately 302,000 shares of our common stock at a cost of $10 million, dividends totaling $69 million, and capital expenditures of $26 million. Adjusted cash at September 30, 2026 totaled $119 million and we had outstanding borrowings of $420 million under our credit facility.
2026 Guidance
The company also announced its updated guidance for 2026, including the fourth quarter of 2026. Please refer to the accompanying financial tables at the end of this press release for the reconciliation of non-GAAP financial measures to the comparable GAAP financial measures.
| Q4 2026 | Full Year 2026 | ||||||||||||||||||||||
| Average WSEEs paid | 306,000 | — | 308,000 | 305,500 | — | 306,000 | |||||||||||||||||
| Year-over-year decrease | (2.0)% | — | (1.4)% | (1.5)% | — | (1.3)% | |||||||||||||||||
Adjusted EPS1 | $0.07 | — | $0.42 | $1.93 | — | $2.28 | |||||||||||||||||
| Year-over-year increase | 112% | — | 170% | 87% | — | 121% | |||||||||||||||||
| Adjusted EBITDA (in millions) | $24 | — | $44 | $194 | — | $214 | |||||||||||||||||
| Year-over-year increase | 285% | — | 438% | 48% | — | 63% | |||||||||||||||||
____________________________________
1 Adjusted EPS reflects an effective tax rate of approximately 28% in Q4 2026 and 36% for the full year 2026 and outstanding shares of 39.0 million for Q4 2026 and 38.6 million for the full year 2026.
Definition of Key Metrics
Average WSEEs paid — Determined by calculating the company’s cumulative WSEEs paid during the period divided by the number of months in the period.
Adjusted EPS — Represents diluted net income per share computed in accordance with GAAP, excluding the impact of non-cash stock-based compensation and restructuring charge.
Adjusted EBITDA — Represents net income computed in accordance with GAAP, plus interest expense, income taxes, depreciation and amortization expense, amortization of SaaS implementation costs, non-cash stock-based compensation, and restructuring charge.
Conference Call and Webcast
Insperity will be hosting a conference call today at 8:30 a.m. ET to discuss these results and the guidance discussed in this press release, and answer questions from investment analysts. To listen in, call 877-545-0523 and use conference i.d. number 220125. The call will also be webcast at http://ir.insperity.com. The conference call script will be available at the same website later today. A replay of the conference call will be available at 877-481-4010, conference i.d. number 54622. The webcast will be archived for one year.
About Insperity
Since 1986, Insperity’s mission has been to help businesses succeed so communities prosper. Offering a suite of the most comprehensive, scalable HR solutions available in the marketplace, Insperity is defined by an unrivaled breadth and depth of services and level of care. Through an optimal blend of premium HR service and technology, Insperity delivers the administrative relief, reduced liabilities and better benefit solutions that businesses need to drive performance and growth. With 2025 revenues of $6.8 billion and sales and service operations throughout the U.S., Insperity is currently making a difference in thousands of businesses and communities nationwide. For more information, visit http://www.insperity.com.
Forward-Looking Statements
The statements contained herein that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. You can identify such forward-looking statements by the words “anticipates,” “expects,” “intends,” “plans,” “projects,” “believes,” “estimates,” “forecasts,” “likely,” “possibly,” “probably,” “could,” “goal,” “opportunity,” “objective,” “target,” “assume,” “outlook,” “guidance,” “predicts,” “appears,” “indicator” and similar expressions. Forward-looking statements involve a number of risks and uncertainties. In the normal course of business, in an effort to help keep our stockholders and the public informed about our operations, from time to time, we may issue such forward-looking statements, either orally or in writing. Generally, these statements relate to business plans or strategies, including our strategic partnership with Workday, Inc.; projected or anticipated benefits or other consequences of such plans or strategies; or projections involving anticipated revenues, earnings, average number of worksite employees, benefits and workers’ compensation costs, or other operating results. We base these forward-looking statements on our current expectations, estimates and projections. We caution you that these statements are not guarantees of future performance and involve risks, uncertainties and assumptions that we cannot predict. In addition, we have based many of these forward-looking statements on assumptions about future events that may prove to be inaccurate. Therefore, the actual results of the future events described in such forward-looking statements could differ materially from those stated in such forward-looking statements. Among the factors that could cause actual results to differ materially are:
•adverse economic conditions;
•disallowance of, or other liabilities associated with, employee retention tax credits under certain COVID-19 relief programs;
•labor shortages, increasing competition for highly skilled workers, and evolving employee expectations regarding the workplace;
•impact of inflation and changes in U.S. trade policy;
•vulnerability to regional economic factors because of our geographic market concentration;
•failure to comply with covenants under our credit facility;
•impact of a future outbreak of highly infectious or contagious disease;
•bank failures or other events affecting financial institutions;
•our liability for WSEE payroll, payroll taxes and benefits costs, or other liabilities associated with actions of our client companies or WSEEs, including if our clients fail to pay us;
•increases in health insurance costs and workers’ compensation rates and underlying claims trends;
•financial solvency of workers’ compensation carriers, other insurers or financial institutions;
•the ability to adjust service fees for increases in state and local taxes, including state unemployment tax rates;
•an adverse determination regarding our status as the employer of our WSEEs for tax and benefit purposes and an inability to offer alternative benefit plans following such a determination;
•cancellation of client contracts on short notice, or the inability to renew client contracts or attract new clients;
•disruption from healthcare reform or the inability to secure competitive replacement contracts for health insurance and workers’ compensation insurance at expiration of current contracts;
•regulatory and tax developments and possible adverse application of various federal, state and local regulations;
•failure to manage growth of our operations and the effectiveness of our sales and marketing efforts;
•the impact of the competitive environment and other developments in the human resources services industry, including the professional employer organization (or PEO) industry, on our growth and/or profitability;
•an adverse final judgment or settlement of claims against Insperity;
•disruptions of our information technology systems or failure to enhance our service and technology offerings to address new regulations or client expectations;
•our liability or damage to our reputation relating to disclosure of sensitive or private information as a result of data theft, cyberattacks or security vulnerabilities;
•failure of third-party providers, such as financial institutions, data centers or cloud service providers;
•our ability to fully realize the anticipated benefits of our strategic partnership and joint solution with Workday, Inc.; and
•our ability to integrate or realize expected returns on future product offerings, including through acquisitions, strategic partnerships, and investments.
These factors are discussed in further detail in Insperity’s filings with the U.S. Securities and Exchange Commission. Any of these factors, or a combination of such factors, could materially affect the results of our operations and whether forward-looking statements we make ultimately prove to be accurate.
Any forward-looking statements are made only as of the date hereof and, unless otherwise required by applicable securities laws, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
SUMMARY FINANCIAL INFORMATION | ||
Insperity, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
| (Unaudited) | September 30, 2026 | December 31, 2025 | ||||||
| (in millions) | ||||||||
| Assets | ||||||||
| Cash and cash equivalents | $ | 599 | $ | 642 | ||||
| Restricted cash | 84 | 82 | ||||||
| Marketable securities | — | 18 | ||||||
| Accounts receivable, net | 910 | 826 | ||||||
| Prepaid insurance and related assets | 58 | 6 | ||||||
| Income taxes receivable | 30 | 29 | ||||||
| Other current assets | 96 | 119 | ||||||
| Total current assets | 1,777 | 1,722 | ||||||
| Property and equipment, net | 172 | 177 | ||||||
| Right-of-use leased assets | 54 | 63 | ||||||
| Deposits and prepaid health insurance | 149 | 165 | ||||||
| Goodwill and other intangible assets, net | 13 | 13 | ||||||
| Deferred income taxes, net | — | 22 | ||||||
| Other assets | 59 | 41 | ||||||
| Total assets | $ | 2,224 | $ | 2,203 | ||||
| Liabilities and stockholders' equity | ||||||||
| Accounts payable | $ | 7 | $ | 6 | ||||
| Payroll taxes and other payroll deductions payable | 479 | 544 | ||||||
| Accrued worksite employee payroll cost | 801 | 764 | ||||||
| Accrued health insurance costs | 69 | 30 | ||||||
| Accrued workers’ compensation costs | 86 | 84 | ||||||
| Accrued corporate payroll and commissions | 77 | 78 | ||||||
| Other accrued liabilities | 79 | 114 | ||||||
| Total current liabilities | 1,598 | 1,620 | ||||||
| Accrued workers’ compensation costs, net of current | 99 | 102 | ||||||
| Long-term debt | 419 | 369 | ||||||
| Operating lease liabilities, net of current | 56 | 66 | ||||||
| Deferred income taxes, net | 8 | — | ||||||
| Total noncurrent liabilities | 582 | 537 | ||||||
| Stockholders’ equity: | ||||||||
| Common stock | 1 | 1 | ||||||
| Additional paid-in capital | 267 | 257 | ||||||
| Treasury stock, at cost | (829) | (850) | ||||||
| Retained earnings | 605 | 638 | ||||||
| Total stockholders' equity | 44 | 46 | ||||||
| Total liabilities and stockholders’ equity | $ | 2,224 | $ | 2,203 | ||||
SUMMARY FINANCIAL INFORMATION | ||
Insperity, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
| (Unaudited) | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||
| (in millions, except per share amounts) | 2026 | 2025 | Change | 2026 | 2025 | Change | |||||||||||||||||
| Operating results: | |||||||||||||||||||||||
Revenues(1) | $ | 1,651 | $ | 1,623 | 2 | % | $ | 5,232 | $ | 5,144 | 2 | % | |||||||||||
| Payroll taxes, benefits and workers’ compensation costs | 1,444 | 1,428 | 1 | % | 4,506 | 4,416 | 2 | % | |||||||||||||||
| Gross profit | 207 | 195 | 6 | % | 726 | 728 | — | ||||||||||||||||
| Salaries, wages and payroll taxes | 119 | 125 | (5) | % | 374 | 396 | (6) | % | |||||||||||||||
| Stock-based compensation | 12 | 16 | (25) | % | 38 | 47 | (19) | % | |||||||||||||||
| Commissions | 10 | 13 | (23) | % | 30 | 34 | (12) | % | |||||||||||||||
| Advertising | 11 | 10 | 10 | % | 36 | 28 | 29 | % | |||||||||||||||
| General and administrative expenses | 47 | 45 | 4 | % | 151 | 154 | (2) | % | |||||||||||||||
| Depreciation and amortization | 10 | 11 | (9) | % | 31 | 33 | (6) | % | |||||||||||||||
| Total operating expenses | 209 | 220 | (5) | % | 660 | 692 | (5) | % | |||||||||||||||
| Operating income (loss) | (2) | (25) | 92 | % | 66 | 36 | 83 | % | |||||||||||||||
| Other income (expense): | |||||||||||||||||||||||
| Interest income | 8 | 7 | 14 | % | 20 | 24 | (17) | % | |||||||||||||||
| Interest expense | (7) | (6) | (17) | % | (19) | (18) | (6) | % | |||||||||||||||
| Income (loss) before income tax (benefit) expense | (1) | (24) | 96 | % | 67 | 42 | 60 | % | |||||||||||||||
| Income tax (benefit) expense | — | (4) | 100 | % | 31 | 16 | 94 | % | |||||||||||||||
| Net income (loss) | $ | (1) | $ | (20) | 95 | % | $ | 36 | $ | 26 | 38 | % | |||||||||||
| Net income (loss) per share of common stock | |||||||||||||||||||||||
| Basic | $ | (0.02) | $ | (0.53) | 96 | % | $ | 0.96 | $ | 0.69 | 39 | % | |||||||||||
| Diluted | $ | (0.02) | $ | (0.53) | 96 | % | $ | 0.95 | $ | 0.69 | 38 | % | |||||||||||
____________________________________
(1)Revenues are comprised of gross billings less WSEE payroll costs as follows:
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
(in millions) | 2026 | 2025 | 2026 | 2025 | |||||||||||||
Gross billings | $ | 11,059 | $ | 10,729 | $ | 34,116 | $ | 33,431 | |||||||||
Less: WSEE payroll cost | 9,408 | 9,106 | 28,884 | 28,287 | |||||||||||||
Revenues | $ | 1,651 | $ | 1,623 | $ | 5,232 | $ | 5,144 | |||||||||
SUMMARY FINANCIAL INFORMATION | ||
Insperity, Inc.
KEY FINANCIAL AND STATISTICAL DATA
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | Change | 2026 | 2025 | Change | ||||||||||||||||||
| Average WSEEs paid | 307,265 | 312,842 | (2) | % | 305,359 | 309,327 | (1) | % | |||||||||||||||
Statistical data (per WSEE per month): | |||||||||||||||||||||||
Revenues(1) | $ | 1,791 | $ | 1,729 | 4 | % | $ | 1,904 | $ | 1,848 | 3 | % | |||||||||||
| Gross profit | 225 | 208 | 8 | % | 264 | 261 | 1 | % | |||||||||||||||
| Operating expenses | 227 | 235 | (3) | % | 240 | 248 | (3) | % | |||||||||||||||
| Operating income (loss) | (2) | (27) | 93 | % | 24 | 13 | 85 | % | |||||||||||||||
| Net income (loss) | (1) | (21) | 95 | % | 13 | 9 | 44 | % | |||||||||||||||
____________________________________
(1)Revenues per WSEE per month are comprised of gross billings per WSEE per month less WSEE payroll costs per WSEE per month as follows:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
| (per WSEE per month) | 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Gross billings | $ | 11,997 | $ | 11,432 | $ | 12,414 | $ | 12,009 | |||||||||
Less: WSEE payroll cost | 10,206 | 9,703 | 10,510 | 10,161 | |||||||||||||
| Revenues | $ | 1,791 | $ | 1,729 | $ | 1,904 | $ | 1,848 | |||||||||
NON-GAAP FINANCIAL MEASURES | ||
Insperity, Inc.
Non-GAAP FINANCIAL MEASURES
(Unaudited)
Non-GAAP financial measures are not prepared in accordance with GAAP and may be different from non-GAAP financial measures used by other companies. Non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of the non-GAAP financial measures used to their most directly comparable GAAP financial measures as provided in the tables below.
| Non-GAAP Measure | Definition | Benefit of Non-GAAP Measure | ||||||
| Non-bonus payroll cost | Non-bonus payroll cost is a non-GAAP financial measure that excludes the impact of bonus payrolls paid to our WSEEs. | Our management refers to non-bonus payroll cost in analyzing, reporting and forecasting our workers’ compensation costs. Bonus payroll cost varies from period to period, but has no direct impact to our ultimate workers’ compensation costs under the current program. We include these non-GAAP financial measures because we believe they are useful to investors in allowing for greater transparency related to the costs incurred under our current workers’ compensation program. | ||||||
| Adjusted cash, cash equivalents and marketable securities | Excludes funds associated with: • federal and state income tax withholdings, • employment taxes, • other payroll deductions, and • client prepayments. | We believe that the exclusion of the identified items helps us reflect the fundamentals of our underlying business model and analyze results against our expectations, against prior periods, and to plan for future periods by focusing on our underlying operations. We believe that the adjusted results provide relevant and useful information for investors because they allow investors to view performance in a manner similar to the method used by management and improves their ability to understand and assess our operating performance. Adjusted EBITDA is used by our lenders to assess our leverage and ability to make interest payments. | ||||||
| Adjusted operating expenses | Represents operating expenses excluding the impact of the following: • restructuring charges. | |||||||
| EBITDA | Represents net income computed in accordance with GAAP, plus: • interest expense, • income tax expense, • depreciation and amortization expense, and • amortization of SaaS implementation costs. | |||||||
| Adjusted EBITDA | Represents EBITDA plus: • non-cash stock-based compensation, and • restructuring charges. | |||||||
| Adjusted net income (loss) | Represents net income computed in accordance with GAAP, excluding: • non-cash stock-based compensation, • restructuring charges, and • non-GAAP effective tax rate.(1) | |||||||
| Adjusted EPS | Represents diluted net income per share computed in accordance with GAAP, excluding: • non-cash stock-based compensation, • restructuring charges, and • non-GAAP effective tax rate.(1) | |||||||
____________________________________ | |||||
(1)Non-GAAP effective tax rate excludes the income tax impact from stock-based compensation, restructuring charges, changes in uncertain tax positions, and nonrecurring benefits or expenses from federal legislative changes. | |||||
NON-GAAP FINANCIAL MEASURES | ||
Following is a reconciliation of payroll cost (GAAP) to non-bonus payroll costs (non-GAAP):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||
| (in millions, except per WSEE per month) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||||||||
| Per WSEE | Per WSEE | Per WSEE | Per WSEE | ||||||||||||||||||||||||||||||||
Payroll cost | $ | 9,408 | $ | 10,206 | $ | 9,106 | $ | 9,703 | $ | 28,884 | $ | 10,510 | $ | 28,287 | $ | 10,161 | |||||||||||||||||||
Less: Bonus payroll cost | 989 | 1,073 | 729 | 777 | 4,087 | 1,487 | 3,677 | 1,321 | |||||||||||||||||||||||||||
Non-bonus payroll cost | $ | 8,419 | $ | 9,133 | $ | 8,377 | $ | 8,926 | $ | 24,797 | $ | 9,023 | $ | 24,610 | $ | 8,840 | |||||||||||||||||||
Payroll cost % change period over period | 3 | % | 5 | % | 4 | % | 3 | % | 2 | % | 3 | % | 4 | % | 3 | % | |||||||||||||||||||
Non-bonus payroll cost % change period over period | 1 | % | 2 | % | 4 | % | 3 | % | 1 | % | 2 | % | 4 | % | 3 | % | |||||||||||||||||||
Following is a reconciliation of cash, cash equivalents and marketable securities (GAAP) to adjusted cash, cash equivalents and marketable securities (non-GAAP):
| (in millions) | September 30, 2026 | December 31, 2025 | |||||||||
Cash, cash equivalents and marketable securities | $ | 599 | $ | 660 | |||||||
Less: | |||||||||||
Amounts payable for withheld federal and state income taxes, employment taxes and other payroll deductions | 426 | 468 | |||||||||
| Client prepayments | 54 | 135 | |||||||||
Adjusted cash, cash equivalents and marketable securities | $ | 119 | $ | 57 | |||||||
Following is a reconciliation of operating expenses (GAAP) to adjusted operating expenses (non-GAAP):
| (in millions, except per WSEE per month) | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||||||
| Per WSEE | Per WSEE | Per WSEE | Per WSEE | ||||||||||||||||||||||||||||||||
| Operating expenses | $ | 209 | $ | 227 | $ | 220 | $ | 235 | $ | 660 | $ | 240 | $ | 692 | $ | 248 | |||||||||||||||||||
Less: Restructuring charges | — | — | — | — | 9 | 3 | — | — | |||||||||||||||||||||||||||
Adjusted operating expenses | $ | 209 | $ | 227 | $ | 220 | $ | 235 | $ | 651 | $ | 237 | $ | 692 | $ | 248 | |||||||||||||||||||
Operating expenses % change period over period | (5) | % | (3) | % | (4) | % | (4) | % | (5) | % | (3) | % | (1) | % | (2) | % | |||||||||||||||||||
Adjusted operating expenses % change period over period | (5) | % | (3) | % | (4) | % | (4) | % | (6) | % | (4) | % | (1) | % | (2) | % | |||||||||||||||||||
NON-GAAP FINANCIAL MEASURES | ||
Following is a reconciliation of net income (loss) (GAAP) to EBITDA (non-GAAP) and adjusted EBITDA (non-GAAP):
| (in millions, except per WSEE per month) | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||||||
| Per WSEE | Per WSEE | Per WSEE | Per WSEE | ||||||||||||||||||||||||||||||||
| Net income (loss) | $ | (1) | $ | (1) | $ | (20) | $ | (21) | $ | 36 | $ | 13 | $ | 26 | $ | 9 | |||||||||||||||||||
| Income tax (benefit) expense | — | — | (4) | (4) | 31 | 12 | 16 | 7 | |||||||||||||||||||||||||||
Interest expense | 7 | 8 | 6 | 6 | 19 | 7 | 18 | 6 | |||||||||||||||||||||||||||
| Amortization of SaaS implementation costs | 3 | 3 | 1 | 1 | 6 | 2 | 4 | 1 | |||||||||||||||||||||||||||
Depreciation and amortization | 10 | 11 | 11 | 12 | 31 | 11 | 33 | 12 | |||||||||||||||||||||||||||
EBITDA | 19 | 21 | (6) | (6) | 123 | 45 | 97 | 35 | |||||||||||||||||||||||||||
Stock-based compensation | 12 | 13 | 16 | 17 | 38 | 14 | 47 | 17 | |||||||||||||||||||||||||||
| Restructuring charges | — | — | — | — | 9 | 3 | — | — | |||||||||||||||||||||||||||
Adjusted EBITDA | $ | 31 | $ | 34 | $ | 10 | $ | 11 | $ | 170 | $ | 62 | $ | 144 | $ | 52 | |||||||||||||||||||
| Net income (loss) % change period over period | 95 | % | 95 | % | (767) | % | (800) | % | 38 | % | 44 | % | (74) | % | (75) | % | |||||||||||||||||||
| Adjusted EBITDA % change period over period | 210 | % | 209 | % | (74) | % | (74) | % | 18 | % | 19 | % | (42) | % | (42) | % | |||||||||||||||||||
Following is a reconciliation of net income (loss) (GAAP) to adjusted net income (loss) (non-GAAP):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
| (in millions) | 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Net income (loss) | $ | (1) | $ | (20) | $ | 36 | $ | 26 | |||||||||
| Non-GAAP adjustments: | |||||||||||||||||
| Stock-based compensation | 12 | 16 | 38 | 47 | |||||||||||||
| Restructuring charges | — | — | 9 | — | |||||||||||||
| Tax effect | (3) | (4) | (12) | (12) | |||||||||||||
| Total non-GAAP adjustments, net | 9 | 12 | 35 | 35 | |||||||||||||
| Adjusted net income (loss) | $ | 8 | $ | (8) | $ | 71 | $ | 61 | |||||||||
| Net income (loss) % change period over period | 95 | % | (767) | % | 38 | % | (74) | % | |||||||||
| Adjusted net income (loss) % change period over period | 200 | % | (153) | % | 16 | % | (54) | % | |||||||||
NON-GAAP FINANCIAL MEASURES | ||
Following is a reconciliation of diluted EPS (GAAP) to adjusted EPS (non-GAAP):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
| (amounts per share) | 2026 | 2025 | 2026 | 2025 | |||||||||||||
Diluted EPS | $ | (0.02) | $ | (0.53) | $ | 0.95 | $ | 0.69 | |||||||||
Non-GAAP adjustments: | |||||||||||||||||
| Stock-based compensation | 0.32 | 0.43 | 0.98 | 1.25 | |||||||||||||
| Restructuring charges | — | — | 0.23 | — | |||||||||||||
| Tax effect | (0.08) | (0.10) | (0.31) | (0.31) | |||||||||||||
| Total non-GAAP adjustments, net | 0.24 | 0.33 | 0.90 | 0.94 | |||||||||||||
| Adjusted EPS | $ | 0.22 | $ | (0.20) | $ | 1.85 | $ | 1.63 | |||||||||
| Diluted EPS % change period over period | 96 | % | (857) | % | 38 | % | (74) | % | |||||||||
| Adjusted EPS % change period over period | 210 | % | (151) | % | 13 | % | (54) | % | |||||||||
The following is a reconciliation of GAAP to non-GAAP financial measures for fourth quarter and full year 2026 guidance:
| Q4 2026 | Full Year 2026 | ||||||||||
| (in millions, except per share amounts) | Guidance | Guidance | |||||||||
| Net income (loss) | $(6) – $8 | $32 – $45 | |||||||||
| Income tax (benefit) expense | (2) – 4 | 28 – 35 | |||||||||
Interest expense | 7 | 26 | |||||||||
| SaaS implementation amortization | 4 | 10 | |||||||||
Depreciation and amortization | 10 | 40 | |||||||||
EBITDA | 13 – 33 | 136 – 156 | |||||||||
Stock-based compensation | 11 | 49 | |||||||||
| Restructuring charges | — | 9 | |||||||||
Adjusted EBITDA | $24 – $44 | $194 – $214 | |||||||||
Diluted EPS | $(0.14) – $0.21 | $0.81 – $1.16 | |||||||||
Non-GAAP adjustments: | |||||||||||
Stock-based compensation | 0.28 | 1.27 | |||||||||
| Restructuring charges | — | 0.23 | |||||||||
Total non-GAAP adjustments | 0.28 | 1.50 | |||||||||
| Tax effect | (0.07) | (0.38) | |||||||||
| Total non-GAAP adjustments, net | 0.21 | 1.12 | |||||||||
Adjusted EPS | $0.07 – $0.42 | $1.93 – $2.28 | |||||||||