Slide 1: 2025 Q1 Investor Presentation
2025 Q1 INVESTOR PRESENTATION April 29, 2025 0
Slide 2: Safe Harbor Statement
Safe Harbor Statement 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 “an
Slide 3: Review of Insperity
%& Review of Insperity
Slide 4: Helping businesses succeed so communities prosper
Helping businesses succeed… …so communities prosper 3
Slide 5: Co-Employment and Traditional Employment
Co-Employment Traditional Employment Clients outsource entire HR function to Expands market opportunity beyond a single strategic partner core PEO model Client enters into agreement with Insperity to Address clients who are not ready for establish a relationship between themselves, co-employment and
Slide 6: A comprehensive solution
A comprehensive solution * Available for an additional fee. † All insurance products are offered and sold only through a licensed insurance broker, such as Insperity Insurance Services LLC (CA license #OE22586), or their licensed agents. 5
Slide 7: Where is the PEO industry in the adoption life cycle?
Where is the PEO industry in the adoption life cycle? Insperity’s Co-Employment model incorporating Software with a Service has jumped the chasm to Early Majority compared to the Late Majority stage of the HCM Software as a Service Solution. HCM PEO Software with a Service 6
Slide 8: What is Insperity's market opportunity?
What is Insperity’s market opportunity? Insperity competes in a large, fragmented and highly attractive market Small To Midmarket(2) Workforce(1) ~71 Million Employees 5% 34% 29% 92% 8% 32% Firms < 5 employees Firms 5 - 99 employees Traditional employment Firms 100 - 4,999 employees Firms 5,000+ emp
Slide 9: Who does Insperity target?
Who does Insperity target? Insperity is focused on being a trusted advisor to the best small-to-midmarket businesses THRIVING Insperity HR360 * BUSINESS SUCCESS Insperity HRCore ** STRUGGLING HIGH EMPLOYMENT RISK LOW * f/k/a Workforce Optimization. ** f/k/a Workforce Acceleration. 8
Slide 10: Who are Insperity's clients?
Who are Insperity’s clients? Insperity currently provides Insperity HR360* for ~12,500 clients FY 2024 Average Paid Worksite Employees (“WSEs”): 307,261 6% 2% 2% Finance, Insurance, Real Estate 8% Wholesale trade 18% Computer and information sciences Medical services 9% Manufacturing Management, adm
Slide 11: How does Insperity serve its target market?
How does Insperity serve its target market? Insperity’s solutions address a diverse set of client types and needs Small Business Core Emerging Growth MidMarket / Enterprise Typically a growing Small business Established Likely newly formed, organization struggling with less than 50 organization; req
Slide 12: How is Insperity different? Our breadth of services
How is Insperity different? Our breadth of services. Bundled Solutions Providers Point Solutions Providers Insperity Other Bundled Insurance Brokers Payroll Processors Cloud Processors Complete HR Solution for Small Business MidMarket Service Offerings High Touch / High Value Solution High Quality R
Slide 13: How is Insperity different? Our depth of services
How is Insperity different? Our depth of services. Insperity sits at the nexus of Business, Business Software and Insurance Services Services Advisory Services Software Insurance Services Services 12
Slide 14: How is Insperity different? Our level of care
How is Insperity different? Our level of care. Insperity Offers a High-Touch Service on a High-Tech Platform Payroll Specialist Recruiting Specialist Contact Center Performance Specialist Client Liaison Safety Consultant Team Manager HR Specialist Built upon Insperity’s extensive HR knowledge base,
Slide 15: How does Insperity go to market?
How does Insperity go to market? Key components of our strategy Business Performance Channel Rewards Digital Advisors Partners Program Marketing Quarterback for Partners in professional Re-engage clients Increase brand our services services, insurance awareness through and banking Build value in the
Slide 16: How does Insperity go-to-market? (cont.)
How does Insperity go-to-market? (cont.) National sales and service Bellevue infrastructure Portland Minneapolis 2024 Revenue Contribution Boston by Region Milwaukee Providence Stamford Detroit • Southeast 14% New York Chicago Pittsburg • Northeast 28% Sacramento Columbus Philadelphia Salt Lake City
Slide 17: How does Insperity price its Insperity HR360 service?
How does Insperity price its Insperity HR360* service? Total Service Fee (quoted as a % of Employee’s Wages) Separate Direct Cost Bundle Plus / Add-on Services HR Services Fee Program Allocations with discounted pricing for Insperity HR360* customers Human Resources Employee Benefits Direct Placemen
Slide 18: Financial Results
NS Financial Results
Slide 19: Key financial metrics: Average Paid Worksite Employees
Key financial metrics Average Paid Worksite Employees 350,000 312,102 307,261 312,600 295,005 300,000 250,745 250,000 234,223 200,000 150,000 100,000 50,000 0 2020 2021 2022 2023 2024 2025E* Year-Over-Year Paid Worksite Employee Growth (Decline) % (1)% 7% 18% 6% (2)% 2% * Amount represents midpoint
Slide 20: Key financial metrics: Adjusted EBITDA
Key financial metrics (in millions) Adjusted EBITDA(1) $450 $400 $352 $354 $350 $289 $300 $270 $255 $250 $218 $200 $150 $100 $50 $0 2020 2021 2022 2023 2024 (2) 2025E*(2) Year-Over-Year Growth (Decline) % 15% (12)% 38% 1% (24)% (19)% % of Gross Profit 36% 31% 35% 34% 26% 22% * Amount represents midp
Slide 21: Key financial metrics: Adjusted EBITDA per WSE per month
Key financial metrics Adjusted EBITDA(1) Per Worksite Employee Per Month $140 $120 $103 $100 $100 $94 $85 $80 $73 $60 $58 $40 $20 $0 2020 2021 2022 2023 2024(2) 2025E* (2) * Amount represents midpoint of Financial guidance issued on April 29, 2025. (1) Please see reconciliation to GAAP measure in th
Slide 22: Key financial metrics: Adjusted EPS
Key financial metrics Adjusted EPS (1) $7.00 $6.00 $5.59 $5.52 $5.00 $4.64 $3.95 $4.00 $3.58 $3.00 $2.76 $2.00 $1.00 $0.00 2020 2021 2022 2023 2024(2) 2025E*(2) Year-Over-Year Increase (Decrease) % 12% (15)% 42% (1)% (35)% (23)% * Amount represents midpoint of Financial guidance issued on April 29,
Slide 23: Return to investors from cash flow and debt
Return to investors from cash flow and debt (in millions) Adjusted EBITDA Free cash flow Dividends Share repurchases Current Dividend Yield (1) 3.6% $400 $352 $354 2024 Payout Ratio (2) 67.0% $300 $270 $242 $233 $200 $169 $131 2022-2024 Avg. ROC as % of FCF (3) 80.5% $84 $89 $100 $77 $73 $63 2022-20
Slide 24: Appendix
Appendix
Slide 25: Full year and Q2 guidance
Full year and Q2 guidance FY 2025 Guidance Q2 2025 Guidance Average paid WSEEs 308,800 – 316,400 308,000 – 311,000 Implied y-o-y increase in average paid WSEEs 0.5% – 3.0% 0.3% – 1.3% Adj. EBITDA (in millions)(1) $190 – $245 $33 – $53 Implied y-o-y decrease in Adj. EBITDA (30)% – (9)% (50)% – (20)%
Slide 26: Adjusted EBITDA reconciliation
Adjusted EBITDA reconciliation (in millions) FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 FY 2025E* Net income (GAAP) $138 $124 $179 $171 $91 $62 Interest expense 9 7 14 27 28 25 Income tax expense 51 44 66 54 35 25 Amortization of SaaS Implementation - - 2 6 11 4 costs Depreciation and amortization 31 3
Slide 27: Free cash flow reconciliation
Free cash flow reconciliation (in millions) FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 Adjusted EBITDA (1) $289 $255 $352 $354 $270 Capital expenditures (99) (33) (30) (40) (38) Income tax expense (51) (44) (66) (54) (35) Interest expense (8) (7) (14) (27) (28) Free cash flow (2) $131 $171 $242 $233 $1
Slide 28: Adjusted cash, cash equivalents and marketable securities reconciliation
Adjusted cash, cash equivalents and marketable securities reconciliation (in millions) December 31, December 31, December 31, December 31, December 31, 2020 2021 2022 2023 2024 Cash, cash equivalents and marketable $589 $608 $766 $709 $1,055 securities (GAAP) Amounts payable for withheld federal and
Slide 29: Adjusted net income reconciliation
Adjusted net income reconciliation (in millions) FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 FY 2025E* Net income (GAAP) $138 $124 $179 $171 $91 $62 Stock-based compensation 60 41 50 53 61 60 Tax effect on non-GAAP (17) (11) (13) (12) (17) (18) adjustments Total non-GAAP adjustments, net 43 30 37 41 44
Slide 30: Adjusted EPS reconciliation
Adjusted EPS reconciliation FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 FY 2025E* EPS (GAAP) $3.54 $3.18 $4.64 $4.47 $2.42 $1.63 Stock based compensation 1.54 1.04 1.30 1.38 1.61 1.59 Tax effect on non-GAAP adjustments (0.44) (0.27) (0.35) (0.33) (0.45) (0.46) Total non-GAAP adjustments, net 1.10 0.77 0
Slide 31: Insperity. HR that Makes a Difference
<3 Insperity. HR that Makes a Difference*