Company: NSP
Filing Date: 2025-11-04
Form Type: 10-Q
Source: 0001000753-25-000107
Chunk: 21

Company: INSPERITY, INC.
Filing Date: 2025-11-04
Form: 10-Q
Item: Item 8
Chunk 21
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 were 0.27% in Q3 2025 compared to 0.25% in Q3 2024.

Insperity | 2025 Third Quarter Form 10-Q28

     MANAGEMENT’S DISCUSSION AND ANALYSIS OF      FINANCIAL CONDITION AND RESULTS OF OPERATIONS

•Our continued discipline around our client selection, workplace safely and claims management has allowed for claims to be closed out at amounts below our original cost estimates, resulting in a reduction in workers’ compensation costs of $5 million, or 0.05% of non-bonus payroll costs in Q3 2025, compared to a reduction of $8 million, or 0.09% of non-bonus payroll costs in Q3 2024.

Please read Note 2 to the Consolidated Financial Statements, “Accounting Policies – Workers’ Compensation Costs,” for a discussion of our accounting for workers’ compensation costs.

Payroll tax costs

•Payroll taxes increased 5% on a 4% increase in payroll costs, or $24 per WSEE per month.

•Payroll taxes as a percentage of payroll costs were 6% in both Q3 2025 and Q3 2024.

First Nine Months 2025 Compared to First Nine Months 2024

Gross profit for YTD 2025 decreased 13% to $728 million compared to $834 million in YTD 2024. Gross profit per WSEE per month for YTD 2025 decreased $41 to $261 compared to $302 in YTD 2024 due primarily to higher direct costs, offset in part by higher average pricing, as discussed below.

Our pricing objectives attempt to achieve a level of revenue per WSEE that matches or exceeds changes in primary direct costs and operating expenses. Our revenues per WSEE per month increased $48 due to higher average pricing of 3%.  

The net increase in direct costs between YTD 2025 and YTD 2024 attributable to the changes in cost estimates for benefits and workers’ compensation totaled $46 million as discussed below. The $89 per WSEE per month increase in direct costs is due primarily to the direct cost component changes as follows:

Benefits costs

•The cost of group health insurance and related employee benefits increased $60 per WSEE per month, or 9.0% on a cost per covered employee basis driven by elevated inpatient, outpatient and pharmacy trends and frequency of large claim activity in YTD 2025 as