What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2026-05-01 compared with 2025-11-04 · 132 added, 172 removed, 236 unchanged (56% of the section changed)

4 unchanged sentences

(“Insperity,” “we,” “our,” and “us”) provides an array of human resources (“HR”) and business solutions designed to help improve business performance.

Our most comprehensive HR services offerings are provided through our professional employer organization (“PEO”) services, known as our Insperity ® HR 360 solution (formerly our Workforce Optimization ® solution) and Insperity ® HR 360 Select Edition (formerly our Workforce Synchronization TM solution) (together, our “PEO HR Solutions”), which we provide by entering into a co-employment relationship with our clients.

Our PEO HR Solutions encompass a broad range of HR functions, including payroll and employment administration, employee benefits, workers’ compensation, government compliance, performance management, and training and development services, along with our cloud-based human capital management solution, the Insperity Premier TM platform.

Our comprehensive HR services offerings are provided through our professional employer organization (“PEO”) services, known as our Insperity ® HR 360 solution, our Insperity ® HR 360 Select Edition, and our Insperity HR Scale TM solution (together, our “PEO HR Solutions”), which we provide by entering into a co-employment relationship with our clients.

Our Insperity HR 360 solution and Insperity HR 360 Select Edition provide access to our web-based human capital management platform, the Insperity Premier TM platform, while our Insperity HR Scale solution provides access to the Workday Human Capital Management platform.

2026 Highlights

Third Quarter 2025 Compared to Third Quarter 2024

• Average number of WSEEs paid per month increased 1%

• Net income (loss) and diluted earnings per share (“EPS”) decreased to $(20) million and $(0.53), respectively

• Adjusted net income (loss) and adjusted EPS decreased 153% and 151% to $(8) million and $(0.20), respectively

• Adjusted EBITDA decreased 74% to $10 million

First Nine Months 2025 Compared to First Nine Months 2024

• Average number of WSEEs paid per month increased 1%

• Net income and diluted EPS both decreased 74% to $26 million and $0.69, respectively

• Adjusted net income and adjusted EPS both decreased 54% to $61 million and $1.63, respectively

• Adjusted EBITDA decreased 42% to $144 million

First Quarter 2026 Compared to First Quarter 2025

• Average number of WSEEs paid per month decreased 1%, which was partially impacted by our margin recovery efforts

• Net income and diluted earnings per share (“EPS”) both decreased 35% to $33 million and $0.88, respectively

• Adjusted EBITDA increased 1% to $103 million

• Adjusted net income and adjusted EPS decreased 15% and 17% to $50 million and $1.31, respectively, due in part to a higher effective tax rate associated with vesting of stock awards below the grant date value

Please read “ Non-GAAP Financial Measures ” for a reconciliation of adjusted EBITDA, adjusted net income, and adjusted EPS to their most directly comparable financial measures calculated and presented in accordance with accounting principles generally accepted in the United States (“GAAP”).

Insperity | 2025 Third Quarter Form 10-Q

Insperity | 2026 First Quarter Form 10-Q

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

2 unchanged sentences

Key Financial and Statistical Data

(in millions, except per share, WSEE and statistical data) Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 % Change 2025 2024 % Change

(in millions, except per share, WSEE and statistical data)

Three Months Ended March 31,

2026 2025 % Change

Financial data:

2 unchanged sentences

Operating expenses 240 242 (1) %

Operating income (loss) (25) 1 — 36 132 (73) %

Other income 1 2 (50) % 6 7 (14) %

Net income (loss) (20) 3 (767) % 26 100 (74) %

Operating income 62 68 (9) %

Other income (expense), net 1 4 (75) %

Net income 33 51 (35) %

0.88 1.35 (35) %

Non-GAAP financial measures (1) :

Adjusted net income (loss)

$ (8) $ 15 (153) % $ 61 $ 134 (54) %

Adjusted net income $ 50 $ 59 (15) %

Adjusted EBITDA 103 102 1 %

5 unchanged sentences

Operating expenses

235 246 (4) % 248 254 (2) %

Operating income (loss) (27) 1 — 13 48 (73) %

Net income (loss) (21) 3 (800) % 9 36 (75) %

Operating income

Net income 36 56 (36) %

____________________________________

1 unchanged sentence

(2) 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,

Three Months Ended March 31,

(per WSEE per month) 2026 2025

2 unchanged sentences

Revenues $ 2,084 $ 2,029

Insperity | 2025 Third Quarter Form 10-Q

Insperity | 2026 First Quarter Form 10-Q

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

6 unchanged sentences

new client sales, client retention and the net change in WSEEs paid at existing clients through new hires and employee terminations.

• During Q3 2025, average WSEEs paid increased 1% compared to Q3 2024.

The number of WSEEs paid from new client sales and the net change in our client base slightly decreased compared with Q3 2024, while client retention remained consistent with Q3 2024.

• During the first nine months of 2025 (“YTD 2025”), average WSEEs paid increased 1% compared to the first nine months of 2024 (“YTD 2024”).

The number of WSEEs paid from new client sales, client retention and the net change in our client base increased when compared to YTD 2024.

• During Q1 2026, average WSEEs paid decreased 1% compared to Q1 2025.

The number of WSEEs paid from new client sales and client retention decreased due in part to our margin recovery efforts, while the net change in our client base increased compared with Q1 2025.

Average WSEEs Paid and

Year-over-Year Growth Percentage

Insperity | 2025 Third Quarter Form 10-Q

Insperity | 2026 First Quarter Form 10-Q

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Net Income (Loss) and

Net Income and

Year-over-Year Growth Percentage

3 unchanged sentences

(in millions)

Insperity | 2025 Third Quarter Form 10-Q

Insperity | 2026 First Quarter Form 10-Q

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

5 unchanged sentences

(amounts per share)

Insperity | 2025 Third Quarter Form 10-Q

Insperity | 2026 First Quarter Form 10-Q

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

5 unchanged sentences

(in millions)

Third Quarter 2025 Compared to Third Quarter 2024

First Quarter 2026 Compared to First Quarter 2025

Our revenues for Q1 2026 were $1.9 billion, an increase of 2%, primarily due to the following:

• Average WSEEs paid increased 1%.

• Revenues per WSEE per month increased 3%, or $46.

First Nine Months 2025 Compared to First Nine Months 2024

Our revenues for YTD 2025 were $5.1 billion, an increase of 4%, primarily due to the following:

• Average WSEEs paid increased 1%.

• Revenues per WSEE per month increased 3%, or $48.

Insperity | 2025 Third Quarter Form 10-Q

• Revenues per WSEE per month increased 3%, or $55, while the average WSEEs paid declined 1%

Insperity | 2026 First Quarter Form 10-Q

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

10 unchanged sentences

Currently, we have a dedicated sales management, service personnel, and consulting staff who concentrate solely on the middle market sector.

Our average number of WSEEs per month in our middle market sector increased 3% during YTD 2025 compared to YTD 2024, representing approximately 26% of our total average paid WSEEs in both YTD 2025 and YTD 2024.

Insperity | 2025 Third Quarter Form 10-Q

Our average number of WSEEs per month in our middle market sector increased 9% during Q1 2026 compared to Q1 2025, representing approximately 29% and 26% of our total average paid WSEEs in Q1 2026 and Q1 2025, respectively.

Insperity | 2026 First Quarter Form 10-Q

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

6 unchanged sentences

(in millions)

Insperity | 2025 Third Quarter Form 10-Q

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Gross Profit per WSEE per Month and

Year-over-Year Growth Percentage

Third Quarter 2025 Compared to Third Quarter 2024

Insperity | 2026 First Quarter Form 10-Q

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

First Quarter 2026 Compared to First Quarter 2025

Gross profit for Q1 2026 decreased 3% to $302 million compared to $310 million in Q1 2025.

2 unchanged sentences

Our revenues per WSEE per month increased $55 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 net decrease in direct costs between Q1 2026 and Q1 2025 attributable to the changes in cost estimates for benefits and workers’ compensation totaled $12 million as discussed below.

The $61 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 cost of group health insurance and related employee benefits increased $28 per WSEE per month and increased 5.2% on a cost per covered employee basis in Q1 2026 as compared to Q1 2025.

• The percentage of WSEEs covered under our health insurance plans was 63% in Q1 2026 compared to 64% in Q1 2025.

• 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.

• Reported results include changes in estimated claims run-off related to prior periods, which was a reduction in costs of $2 million, or $2 per WSEE per month, in Q1 2026 compared to an increase in costs of $12 million, or $13 per WSEE per month, in Q1 2025.

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

2 unchanged sentences

• As a percentage of non-bonus payroll cost, workers’ compensation costs were 0.31% in Q1 2026 compared to 0.24% in Q1 2025.

Insperity | 2025 Third Quarter Form 10-Q

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.

• Our continued discipline around our client selection, workplace safety 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 Q1 2026, compared to a reduction of $7 million, or 0.08% of non-bonus payroll costs in Q1 2025.

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 increased 2% on a 0.3% decrease in payroll costs, or $27 per WSEE per month.

• Payroll taxes as a percentage of payroll costs were 8% in both Q1 2026 and Q1 2025.

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 compared to YTD 2024.

• The percentage of WSEEs covered under our health insurance plans was 63% in YTD 2025 compared to 64% in YTD 2024.

• Reported results include changes in estimated claims run-off related to prior periods, which was an increase in costs of $9 million, or $3 per WSEE per month, in YTD 2025 compared to a decrease in costs of $32 million, or $12 per WSEE per month, in YTD 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 11%, or $2 per WSEE per month, in YTD 2025 compared to YTD 2024.

• As a percentage of non-bonus payroll cost, workers’ compensation costs were 0.25% in YTD 2025 compared to 0.23% in YTD 2024.

• 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 $20 million, or 0.08% of non-bonus payroll costs, in YTD 2025 compared to a reduction of $25 million, or 0.11% of non-bonus payroll costs, in YTD 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 $26 per WSEE per month.

Insperity | 2025 Third Quarter Form 10-Q

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

• Payroll taxes as a percentage of payroll costs were 7% in both YTD 2025 and YTD 2024.

Operating Expenses

• Salaries, wages and payroll taxes — Salaries, wages and payroll taxes (“Salaries”) are primarily a function of the number of corporate employees, their associated average pay and any additional cash incentive compensation.

• Restructuring charges - Primarily due to severance costs, which were related to a reduction in our non-sales headcount.

• Stock-based compensation — Our stock-based compensation relates to the recognition of non-cash compensation expense over the requisite service period of time-based and performance-based awards.

Insperity | 2026 First Quarter Form 10-Q

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

• Commissions — Commissions expense consists primarily of amounts paid to sales managers and other sales personnel, including business performance advisors (“BPAs”), as well as channel referral fees.

9 unchanged sentences

• Depreciation and amortization — Depreciation and amortization expense is primarily a function of our capital investments in corporate facilities, service centers, sales offices, software development, and technology infrastructure.

Insperity | 2025 Third Quarter Form 10-Q

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Third Quarter 2025 Compared to Third Quarter 2024

First Quarter 2026 Compared to First Quarter 2025

The following table presents certain information related to our operating expenses:

Three Months Ended September 30,

Three Months Ended March 31,

(in millions, except per WSEE)

2026 2025 % Change 2026 2025 % Change

Salaries $ 125 $ 127 (2) % $ 133 $ 137 (3) %

$ 131 $ 142 (8) % $ 144 $ 155 (7) %

Restructuring charges 9 — — 10 — —

Stock-based compensation 13 11 18 % 14 12 17 %

3 unchanged sentences

Amortization of SaaS implementation costs

1 2 (50) % 1 2 (50) %

Workday SaaS licensing and implementation expense

7 unchanged sentences

Operating expenses for Q1 2026 decreased 1% to $240 million compared to $242 million in Q1 2025.

Operating expenses per WSEE per month for Q3 2025 decreased 4% to $235 compared to $246 in Q3 2024.

• General and administrative expenses for Q3 2025 decreased 15% to $45 million, or $9 per WSEE per month, compared to Q3 2024.

The decrease was primarily due to decreased professional services fees, which includes expenses related to the implementation of our Workday strategic partnership, travel and training expenses, partially offset by increases in software licensing and maintenance costs.

First Nine Months 2025 Compared to First Nine Months 2024

The following table presents certain information related to our operating expenses:

Nine Months Ended September 30,

(in millions, except per WSEE) 2025 2024 % Change 2025 2024 % Change

Salaries $ 396 $ 393 1 % $ 142 $ 142 —

Stock-based compensation 47 47 — 17 17 —

Commissions 34 34 — 12 12 —

Advertising 28 28 — 10 10 —

General and administrative:

Amortization of SaaS implementation costs 4 7 (43) % 1 3 (67) %

Workday SaaS licensing and implementation expense 17 21 (19) % 6 8 (25) %

All other general and administrative 133 139 (4) % 48 50 (4) %

Total general and administrative 154 167 (8) % 55 61 (10) %

Depreciation and amortization 33 33 — 12 12 —

Total operating expenses $ 692 $ 702 (1) % $ 248 $ 254 (2) %

Operating expenses for YTD 2025 decreased 1% to $692 million compared to $702 million in YTD 2024.

Operating expenses per WSEE per month for YTD 2025 decreased 2% to $248 compared to $254 in YTD 2024.

Insperity | 2025 Third Quarter Form 10-Q

Operating expenses per WSEE per month for Q1 2026 remained flat compared to Q1 2025.

• Salaries of corporate and sales staff for Q1 2026 decreased 8% to $131 million, or $11 per WSEE per month, compared to Q1 2025.

The decrease was primarily due to an 8% decrease in BPA, service and support headcount in Q1 2026 compared to Q1 2025.

Insperity | 2026 First Quarter Form 10-Q

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

• General and administrative expenses for YTD 2025 decreased 8% to $154 million, or $6 per WSEE per month, compared to YTD 2024.

The decrease was primarily due to decreased professional services fees, which includes expenses related to the implementation of our Workday strategic partnership, travel and training, and amortization of SaaS implementation costs, partially offset by increases in software licensing and maintenance costs.

• Restructuring charges for Q1 2026 were $9 million, or $10 per WSEE per month, primarily due to severance costs, which were related to a workforce realignment.

• Stock-based compensation expense for Q1 2026 increased 18% to $13 million, or $2 per WSEE per month, compared to Q1 2025.

The increase was primarily due to additional compensation expense related to performance-based restricted stock unit awards, partially offset by lower compensation expense related to time-based restricted stock unit awards.

• Commissions expense for Q1 2026 decreased 9% to $10 million, or $1 per WSEE per month, compared to Q1 2025.

The decrease was primarily due to lower channel commissions.

• Advertising expense for Q1 2026 increased 57% to $11 million, or $4 per WSEE per month, compared to Q1 2025.

The increase was primarily due to increased sponsorships and digital advertising.

• General and administrative expenses for Q1 2026 decreased 8% to $55 million, or $4 per WSEE per month, compared to Q1 2025.

The decrease was primarily due to a decrease in professional services fees and travel and training expenses.

Other Income (Expense)

Interest income decreased $4 million in YTD 2025 compared to YTD 2024 due to interest rate decreases on overnight, investment and deposit holdings.

Interest expense decreased $3 million in YTD 2025 compared to YTD 2024 due to decreases in interest rates charged on borrowings under our credit facility.

Interest income decreased $3 million in Q1 2026 compared to Q1 2025 due to lower interest rates on overnight, investment and deposit holdings.

Interest expense was flat in Q1 2026 compared to Q1 2025.

Income Tax Expense

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

Three Months Ended March 31,

Effective income tax rate 48% 29%

For the nine months ended September 30, 2025, our provision for income taxes differed from the U.S.

For the three months ended March 31, 2026, our provision for income taxes differed from the U.S.

statutory rate primarily due to state income taxes, non-deductible expenses and vesting of restricted and long-term incentive stock awards.

The decrease in net income without a corresponding change in non-deductible expenses resulted in a higher effective tax rate for the period.

During the first nine months of 2025 we recognized a $1 million income tax expense related to the vesting of long-term incentive and restricted stock awards.

During the first nine months of 2024 we did not recognize an income tax benefit or expense related to the vesting of long-term incentive and restricted stock awards.

On July 4, 2025, H.R.1, which is known as the “One Big Beautiful Bill Act,” was signed into federal law.

This law includes significant changes to federal tax law and other regulatory provisions that may impact us.

ASC 740, “Income Taxes”, requires the effect of changes in tax rates and laws on deferred tax balances to be recognized in the period in which the legislation is enacted.

We have evaluated the provisions of H.R.1 and the potential effects on our financial position, results of operations, and cash flows.

Although there is no impact to our effective tax rate, we are accelerating tax deductions for unamortized software development costs.

Insperity | 2025 Third Quarter Form 10-Q

During the first three months of 2026, we recognized additional income tax of $10 million related to the vesting of long-term incentive and restricted stock awards, primarily due to the vesting date price being below the grant date price.

Insperity | 2026 First Quarter Form 10-Q

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

17 unchanged sentences

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:

4 unchanged sentences

Adjusted EBITDA Represents EBITDA plus:

• non-cash stock-based compensation.

• non-cash stock-based compensation, and

• restructuring charges.

Adjusted net income Represents net income computed in accordance with GAAP, excluding:

• non-cash stock-based compensation,

• restructuring charges, and

• the income tax effect at our effective tax rate of these pre-tax adjustments.

Adjusted EPS Represents diluted net income per share computed in accordance with GAAP, excluding:

• non-cash stock-based compensation,

Insperity | 2025 Third Quarter Form 10-Q

• restructuring charges, and

• the income tax effect at our effective tax rate of these pre-tax adjustments.

____________________________________

(1) Non-GAAP effective tax rate excludes the income tax impact from stock-based compensation, restructuring charges, and changes in uncertain tax positions, and nonrecurring benefits or expenses from federal legislative changes.

Insperity | 2026 First Quarter Form 10-Q

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

1 unchanged sentence

Following is a reconciliation of payroll cost (GAAP) to non-bonus payroll costs (non-GAAP):

(in millions, except per WSEE per month) Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

Per WSEE Per WSEE Per WSEE Per WSEE

(in millions, except per WSEE per month)

Three Months Ended March 31,

Per WSEE Per WSEE

Payroll cost $ 10,251 $ 11,276 $ 10,281 $ 11,199

Bonus payroll cost

2,118 2,330 2,243 2,444

Non-bonus payroll cost

3 unchanged sentences

Non-bonus payroll cost % change period over period 1 % 2 % 3 % 2 %

4 % 3 % — 3 % 4 % 3 % 1 % 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, 2025 December 31, 2024

March 31, 2026 December 31, 2025

Cash, cash equivalents and marketable securities $ 555 $ 660

2 unchanged sentences

Adjusted cash, cash equivalents and marketable securities $ 36 $ 57

Insperity | 2025 Third Quarter Form 10-Q

Following is a reconciliation of operating expenses (GAAP) to adjusted operating expenses (non-GAAP):

(in millions, except per WSEE per month) Three Months Ended March 31,

Per WSEE Per WSEE

Operating expenses

$ 240 $ 264 $ 242 $ 264

Restructuring charges

Adjusted operating expenses

$ 231 $ 254 $ 242 $ 264

Operating expenses % change period over period

(1) % — 2 % 2 %

Adjusted operating expenses % change period over period

(5) % (4) % 2 % 2 %

Insperity | 2026 First Quarter Form 10-Q

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Following is a reconciliation of net income (loss) (GAAP) to EBITDA (non-GAAP) and adjusted EBITDA (non-GAAP):

Three Months Ended September 30, Nine Months Ended September 30,

Following is a reconciliation of net income (GAAP) to EBITDA (non-GAAP) and adjusted EBITDA (non-GAAP):

Three Months Ended March 31,

(in millions, except per WSEE per month)

Per WSEE Per WSEE Per WSEE Per WSEE

Net income (loss) $ (20) $ (21) $ 3 $ 3 $ 26 $ 9 $ 100 $ 36

Income tax (benefit) expense (4) (4) — — 16 7 39 13

Per WSEE Per WSEE

Net income $ 33 $ 36 $ 51 $ 56

Income tax expense 30 33 21 22

Interest expense 6 7 6 7

1 unchanged sentence

Depreciation and amortization

11 12 11 12 33 12 33 12

EBITDA 81 89 91 99

Stock-based compensation

16 17 17 18 47 17 47 17

Restructuring charges 9 10 — —

Adjusted EBITDA $ 103 $ 113 $ 102 $ 111

Net income (loss) % change period over period (767) % (800) % (93) % (94) % (74) % (75) % (34) % (33) %

Net income % change period over period (35) % (36) % (35) % (36) %

Adjusted EBITDA % change period over period 1 % 2 % (28) % (29) %

(74) % (74) % (59) % (58) % (42) % (42) % (17) % (16) %

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,

Following is a reconciliation of net income (GAAP) to adjusted net income (non-GAAP):

Three Months Ended March 31,

(in millions)

Net income (loss) $ (20) $ 3 $ 26 $ 100

Net income $ 33 $ 51

Non-GAAP adjustments:

Stock-based compensation 13 11

Restructuring charges 9 —

Total non-GAAP adjustments 22 11

Tax effect (5) (3)

Total non-GAAP adjustments, net 17 8

Adjusted net income (loss)

$ (8) $ 15 $ 61 $ 134

Net income (loss) % change period over period (767) % (93) % (74) % (34) %

Adjusted net income (loss) % change period over period

(153) % (73) % (54) % (27) %

Insperity | 2025 Third Quarter Form 10-Q

Adjusted net income $ 50 $ 59

Net income % change period over period (35) % (35) %

Adjusted net income % change period over period (15) % (31) %

Insperity | 2026 First Quarter Form 10-Q

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

1 unchanged sentence

Following is a reconciliation of diluted EPS (GAAP) to adjusted EPS (non-GAAP):

Three Months Ended

September 30, Nine Months Ended

September 30,

Three Months Ended March 31,

(amounts per share) 2026 2025

2 unchanged sentences

Stock-based compensation 0.35 0.30

Restructuring charges 0.23 —

Total non-GAAP adjustments 0.58 0.30

Tax effect (0.15) (0.08)

7 unchanged sentences

Longer-term projects, large stock repurchases or significant acquisitions may be financed with public or private debt or equity.

We have a revolving credit facility (“Facility”) with a syndicate of financial institutions with a current borrowing capacity of $650 million.

We have a revolving credit facility (“Facility”) with a syndicate of financial institutions with a revolving credit commitment of $750 million.

The Facility is available for working capital and general corporate purposes, including acquisitions and stock repurchases.

We have in the past sought, and may in the future seek, to raise additional capital or take other steps to increase or manage our liquidity and capital resources.

We had $440 million in cash, cash equivalents and marketable securities at September 30, 2025, of which approximately $284 million was payable in October 2025 for withheld federal and state income taxes, employment taxes and other payroll deductions.

Approximately $36 million represented client prepayments that were invoiced in October 2025.

At September 30, 2025, we had working capital of $172 million compared to $155 million at December 31, 2024.

We had $555 million in cash, cash equivalents and marketable securities at March 31, 2026, of which approximately $415 million was payable in April 2026 for withheld federal and state income taxes, employment taxes and other payroll deductions.

Approximately $104 million represented client prepayments that were invoiced in April 2026.

At March 31, 2026, we had working capital of $142 million compared to $102 million at December 31, 2025.

We currently believe that our cash on hand, marketable securities, cash flows from operations, and availability under the Facility will be adequate to meet our liquidity requirements for the remainder of 2026.

We intend to rely on these same sources, as well as public and private debt or equity financing, to meet our longer-term liquidity and capital needs.

As of September 30, 2025, we had outstanding letters of credit and borrowings totaling $370 million under the Facility.

As of March 31, 2026, we had outstanding letters of credit and borrowings totaling $370 million under the Facility.

Please read Note 5 to the Consolidated Financial Statements, “ Long-Term Debt ,” for additional information.

Cash Flows from Operating Activities

Net cash used in operating activities in the first nine months of 2025 was $533 million.

Net cash used in operating activities in the first three months of 2026 was $67 million.

Our primary source of cash from operations is the comprehensive service fee and payroll funding we collect from our clients.

5 unchanged sentences

therefore, operating cash flows decrease in the reporting periods that end on a Friday or a Monday.

In the nine months ended September 30, 2025, the last business day of the reporting period was a Tuesday, client prepayments were $36 million and employment taxes and other deductions were $284 million.

In the nine months ended September 30, 2024, the last business day of the reporting period was a Monday, client prepayments were $19 million and employment taxes and other deductions were $255 million.

In addition, $440 million of client employee retention tax credits received on their behalf from the Internal Revenue Service during the fourth quarter of 2024 were distributed to clients in early 2025.

Insperity | 2025 Third Quarter Form 10-Q

In the three months ended March 31, 2026, the last business day of the reporting period was a Tuesday, client prepayments were $104 million and employment taxes and other deductions were $415 million.

In the three months ended March 31, 2025, the last business day of the reporting period was a Monday, client prepayments were $40 million and employment taxes and other deductions were $404 million.

Insperity | 2026 First Quarter Form 10-Q

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

• Workers’ compensation plan funding — During YTD 2025 and YTD 2024, we received $28 million and $38 million, respectively, for the return of excess claim funds related to the workers’ compensation program, which resulted in an increase in working capital.

• Medical plan funding — Our health care contract with United establishes participant cash funding rates 90 days in advance of the beginning of a reporting quarter.

1 unchanged sentence

In addition, changes to the funding rates, which are solely determined by United based primarily upon recent claim history and anticipated cost trends, also have a significant impact on our operating cash flows.

As of September 30, 2025, Plan Costs were less than the net premiums paid and owed to United by $19 million, which is $10 million in excess of our agreed-upon $9 million surplus maintenance level.

The $10 million difference is therefore reflected as a current asset and $9 million is reflected as a long-term asset on our Condensed Consolidated Balance Sheets at September 30, 2025.

In addition, the premiums owed to United at September 30, 2025, were $26 million, which is included in accrued health insurance costs, a current liability, on our Condensed Consolidated Balance Sheets.

As of March 31, 2026, Program Costs were less than the net premiums paid and owed to United by $41 million, which is included in prepaid insurance, a current asset, on our Consolidated Balance Sheet at March 31, 2026.

In addition, the premiums owed to United at March 31, 2026, were $62 million, which is included in accrued health insurance costs, a current liability, on our Consolidated Balance Sheet.

• Operating results — Our adjusted net income has a significant impact on our operating cash flows.

Our adjusted net income decreased 54% to $61 million in the first nine months of 2025, compared to $134 million in the first nine months of 2024.

Our adjusted net income decreased 15% to $50 million in the first three months of 2026, compared to $59 million in the first three months of 2025.

Please read “ Results of Operations .”

Cash Flows from Investing Activities

Net cash flows used in investing activities were $22 million for the nine months ended September 30, 2025, primarily due to property and equipment purchases.

Net cash flows used in investing activities were $6 million for the three months ended March 31, 2026, primarily due to property and equipment purchases.

Cash Flows from Financing Activities

Net cash flows used in financing activities were $101 million for the nine months ended September 30, 2025.

Net cash flows used in financing activities were $46 million for the three months ended March 31, 2026.

We paid $23 million in dividends and repurchased or withheld $4 million in stock.

In addition, client funds liability and other financing activities decreased by $19 million.

Insperity | 2025 Third Quarter Form 10-Q

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK AND CONTROLS

AND PROCEDURES

Insperity | 2026 First Quarter Form 10-Q

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK AND CONTROLS AND PROCEDURES

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis