Company: NSP
Filing Date: 2025-11-04
Form Type: 10-Q
Source: 0001000753-25-000107
Chunk: 20

Company: INSPERITY, INC.
Filing Date: 2025-11-04
Form: 10-Q
Item: Item 8
Chunk 20
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 the gross profit level.

Gross Profit andYear-over-Year Growth Percentage(in millions)

Insperity | 2025 Third Quarter Form 10-Q27

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

Gross Profit per WSEE per Month andYear-over-Year Growth Percentage

Third Quarter 2025 Compared to Third Quarter 2024

Gross profit for Q3 2025 decreased 15% to $195 million compared to $229 million in Q3 2024. Gross profit per WSEE per month for Q3 2025 decreased $39 to $208 compared to $247 in Q3 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 $46 due to higher average pricing of 3%. 

The net increase in direct costs between Q3 2025 and Q3 2024 attributable to the changes in cost estimates for benefits and workers’ compensation totaled $15 million as discussed below. The $85 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 and increased 9.1% on a cost per covered employee basis driven by elevated inpatient, outpatient and pharmacy trends and frequency of large claim activity in Q3 2025 as compared to Q3 2024.

•The percentage of WSEEs covered under our health insurance plans was 62% in Q3 2025 compared to 63% in Q3 2024.

•Reported results include changes in estimated claims run-off related to prior periods, which did not impact costs in Q3 2025 compared to a decrease in costs of $12 million, or $13 per WSEE per month, in Q3 2024.

Please read Note 2 to the Consolidated Financial Statements, “Accounting Policies – Health Insurance Costs,” for a discussion of our accounting for health insurance costs.

Workers’ compensation costs

•Workers’ compensation costs increased 15%, or $3 per WSEE per month, in Q3 2025 compared to Q3 2024.

•As a percentage of non-bonus payroll cost, workers’ compensation costs