What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2026-07-30 compared with 2026-05-01 · 167 added, 96 removed, 272 unchanged (49% of the section changed)

8 unchanged sentences

2026 Highlights

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

Second Quarter 2026 Compared to Second Quarter 2025

• Average number of WSEEs paid per month decreased 1%

• Net income and diluted earnings per share (“EPS”) increased 180% and 171% to $4 million and $0.10, respectively

• Adjusted EBITDA increased 13% to $36 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

• Adjusted net income and adjusted EPS increased 30% and 31% to $13 million and $0.34, respectively

First Six Months 2026 Compared to First Six Months 2025

• Average number of WSEEs paid per month decreased 1%

• Net income and diluted EPS both decreased 20% to $37 million and $0.97, respectively

• Adjusted EBITDA increased 4% to $139 million

• Adjusted net income and adjusted EPS decreased 9% and 10% to $63 million and $1.64, respectively

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 | 2026 First Quarter Form 10-Q

2026 Second 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 March 31,

2026 2025 % Change

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

2026 2025 % Change 2026 2025 % Change

Financial data:

4 unchanged sentences

Other income (expense), net (1) 1 (200) % — 5 (100) %

Net income 33 51 (35) %

Net income (loss) 4 (5) 180 % 37 46 (20) %

0.10 (0.14) 171 % 0.97 1.22 (20) %

8 unchanged sentences

Operating expenses

230 248 (7) % 247 256 (4) %

Operating income 7 (8) 188 % 37 33 12 %

Net income 36 56 (36) %

Net income (loss) 4 (5) 180 % 20 25 (20) %

____________________________________

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 March 31,

Three Months Ended June 30, Six Months Ended June 30,

(per WSEE per month) 2026 2025 2026 2025

2 unchanged sentences

Revenues $ 1,838 $ 1,788 $ 1,961 $ 1,908

Insperity | 2026 First Quarter Form 10-Q

2026 Second Quarter Form 10-Q

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

7 unchanged sentences

• During Q2 2026, average WSEEs paid decreased 1% compared to Q2 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.

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 to Q2 2025.

• During the first six months of 2026 (“YTD 2026”), average WSEEs paid decreased 1% compared to the first six months of 2025 (“YTD 2025”).

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

Average WSEEs Paid and

Year-over-Year Growth Percentage

Insperity | 2026 First Quarter Form 10-Q

2026 Second Quarter Form 10-Q

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Net Income and

Net Income (Loss) and

Year-over-Year Growth Percentage

3 unchanged sentences

(in millions)

Insperity | 2026 First Quarter Form 10-Q

2026 Second Quarter Form 10-Q

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

5 unchanged sentences

(amounts per share)

Insperity | 2026 First Quarter Form 10-Q

2026 Second Quarter Form 10-Q

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

5 unchanged sentences

(in millions)

First Quarter 2026 Compared to First Quarter 2025

Second Quarter 2026 Compared to Second Quarter 2025

Our revenues for Q2 2026 were $1.7 billion, an increase of 2%, primarily due to the following:

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

Insperity | 2026 First Quarter Form 10-Q

• Average WSEEs paid decreased 1%

• Revenues per WSEE per month increased 3%, or $50

First Six Months 2026 Compared to First Six Months 2025

Our revenues for YTD 2026 were $3.6 billion, an increase of 2%, primarily due to the following:

• Average WSEEs paid decreased 1%

• Revenues per WSEE per month increased 3%, or $53

2026 Second 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 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

Our average number of WSEEs per month in our middle market sector increased 10% during YTD 2026 compared to YTD 2025, representing approximately 29% and 26% of our total average paid WSEEs in YTD 2026 and YTD 2025, respectively.

2026 Second Quarter Form 10-Q

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

6 unchanged sentences

(in millions)

Gross Profit per WSEE per Month and

Year-over-Year Growth Percentage

Insperity | 2026 First Quarter Form 10-Q

2026 Second 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 per WSEE per Month and

Year-over-Year Growth Percentage

Second Quarter 2026 Compared to Second Quarter 2025

Gross profit for Q2 2026 decreased 3% to $217 million compared to $223 million in Q2 2025.

2 unchanged sentences

Our revenues per WSEE per month increased $50 due to higher average pricing of 3%.

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 net increase in direct costs between Q2 2026 and Q2 2025 attributable to the changes in cost estimates for benefits and workers’ compensation totaled $4 million as discussed below.

The $53 per WSEE per month increase in direct costs is due primarily to the direct cost component changes as follows:

2 unchanged sentences

• The percentage of WSEEs covered under our health insurance plans was 62% in Q2 2026 compared to 63% in Q2 2025.

• 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.

• Reported results include changes in estimated claims run-off related to prior periods, which was a reduction in costs of $1 million, or $1 per WSEE per month, in Q2 2026, but did not impact costs in Q2 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.

Workers’ compensation costs

• Workers’ compensation costs increased 30%, or $7 per WSEE per month, in Q1 2026 compared to Q1 2025.

• Workers’ compensation costs increased 35%, or $8 per WSEE per month, in Q2 2026 compared to Q2 2025 and has been impacted, in part, by elevated health care cost trends.

• As a percentage of non-bonus payroll cost, workers’ compensation costs were 0.32% in Q2 2026 compared to 0.23% in Q2 2025.

2026 Second Quarter Form 10-Q

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

• 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 $3 million, or 0.03% of non-bonus payroll costs in Q2 2026, compared to a reduction of $8 million, or 0.09% of non-bonus payroll costs in Q2 2025.

1 unchanged sentence

Payroll tax costs

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

• Payroll taxes increased 2% on a 4% increase in payroll costs, or $22 per WSEE per month.

• Payroll taxes as a percentage of payroll costs were 7% in both Q2 2026 and Q2 2025.

First Six Months 2026 Compared to First Six Months 2025

Gross profit for YTD 2026 decreased 3% to $519 million compared to $533 million in YTD 2025.

Gross profit per WSEE per month for YTD 2026 decreased $5 to $284 compared to $289 in YTD 2025 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 $53 due to higher average pricing of 3%.

The net decrease in direct costs between YTD 2026 and YTD 2025 attributable to the changes in cost estimates for benefits and workers’ compensation totaled $8 million as discussed below.

The $58 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 $27 per WSEE per month, or 5.2% on a cost per covered employee basis in YTD 2026 as compared to YTD 2025.

• The percentage of WSEEs covered under our health insurance plans was 62% in YTD 2026 compared to 63% in YTD 2025.

• Reported results include changes in estimated claims run-off related to prior periods, which was a decrease in costs of $4 million, or $2 per WSEE per month, in YTD 2026 compared to an increase in costs of $11 million, or $6 per WSEE per month, in YTD 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.

Workers’ compensation costs

• Workers’ compensation costs increased 33%, or $7 per WSEE per month, in YTD 2026 compared to YTD 2025.

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

• 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 $7 million, or 0.04% of non-bonus payroll costs, in YTD 2026 compared to a reduction of $14 million, or 0.09% of non-bonus payroll costs, in YTD 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 2% on a 2% increase in payroll costs, or $24 per WSEE per month.

2026 Second 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 2026 and YTD 2025.

Operating Expenses

2 unchanged sentences

• 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.

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• 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.

First Quarter 2026 Compared to First Quarter 2025

2026 Second Quarter Form 10-Q

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Second Quarter 2026 Compared to Second Quarter 2025

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

Three Months Ended March 31,

(in millions, except per WSEE)

2026 2025 % Change 2026 2025 % Change

Three Months Ended June 30,

(in millions, except per WSEE) 2026 2025 % Change 2026 2025 % Change

$ 115 $ 129 (11) % $ 125 $ 139 (10) %

Restructuring charges 9 — — 10 — —

Stock-based compensation 13 20 (35) % 14 22 (36) %

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Operating expenses for Q2 2026 decreased 8% to $211 million compared to $230 million in Q2 2025.

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

Operating expenses per WSEE per month for Q2 2026 decreased 7% to $230 compared to $248 in Q2 2025.

• Salaries of corporate and sales staff for Q2 2026 decreased 11% to $115 million, or $14 per WSEE per month, compared to Q2 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

The decrease was primarily due to a 6% decrease in BPA, service and support headcount and staff compensation levels in Q2 2026 compared to Q2 2025.

• Stock-based compensation expense for Q2 2026 decreased 35% to $13 million, or $8 per WSEE per month, compared to Q2 2025.

The decrease was primarily due to lower value time-based restricted stock unit awards granted under our incentive plan in 2026.

• Advertising expense for Q2 2026 increased 27% to $14 million, or $3 per WSEE per month, compared to Q2 2025.

The increase was primarily due to the timing of sponsorships and digital advertising.

2026 Second Quarter Form 10-Q

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

• 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.

First Six Months 2026 Compared to First Six Months 2025

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

Six Months Ended June 30,

(in millions, except per WSEE) 2026 2025 % Change 2026 2025 % Change

Salaries $ 246 $ 271 (9) % $ 135 $ 147 (8) %

Restructuring charges 9 — — 5 — —

Stock-based compensation 26 31 (16) % 14 17 (18) %

Commissions 20 21 (5) % 11 11 —

Advertising 25 18 39 % 14 10 40 %

General and administrative:

Amortization of SaaS implementation costs 3 3 — 2 2 —

Workday SaaS licensing and implementation expense 8 13 (38) % 4 7 (43) %

All other general and administrative 93 93 — 51 50 2 %

Total general and administrative 104 109 (5) % 57 59 (3) %

Depreciation and amortization 21 22 (5) % 11 12 (8) %

Total operating expenses $ 451 $ 472 (4) % $ 247 $ 256 (4) %

Operating expenses for YTD 2026 decreased 4% to $451 million compared to $472 million in YTD 2025.

Operating expenses per WSEE per month for YTD 2026 decreased 4% to $247 compared to $256 in YTD 2025.

• Salaries of corporate and sales staff for YTD 2026 decreased 9% to $246 million, or $12 per WSEE per month, compared to YTD 2025.

The decrease was primarily due to a 6% decrease in BPA, service and support headcount and staff compensation levels in YTD 2026 compared to YTD 2025.

• Stock-based compensation expense for YTD 2026 decreased 16% to $26 million, or $3 per WSEE per month, compared to YTD 2025.

The decrease was primarily due to lower value time-based restricted stock unit awards granted under our incentive plan in 2026, offset in part by an increase in LTIP awards expense.

• Advertising expense for YTD 2026 increased 39% to $25 million, or $4 per WSEE per month, compared to YTD 2025 due to a change in timing of advertising spend.

Other Income (Expense)

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.

Interest income decreased $5 million in YTD 2026 compared to YTD 2025 primarily due to lower interest rates on overnight, investment and deposit holdings.

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

Income Tax Expense

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2026 2025 2026 2025

Effective income tax rate 20% 17% 46% 30%

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

For the six months ended June 30, 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.

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

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 six months of 2026 we recognized $9 million of income tax expense related to the vesting of

2026 Second Quarter Form 10-Q

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

long-term incentive and restricted stock awards.

During the first six months of 2025, we recognized $1 million of income tax 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.

2026 Second Quarter Form 10-Q

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Non-GAAP Financial Measures

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(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

2026 Second 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 March 31,

Per WSEE Per WSEE

(in millions, except per WSEE per month) Three Months Ended June 30, Six Months Ended June 30,

2026 2025 2026 2025

Per WSEE Per WSEE Per WSEE Per WSEE

Payroll cost $ 9,225 $ 10,057 $ 8,900 $ 9,597 $ 19,476 $ 10,663 $ 19,181 $ 10,394

Bonus payroll cost 980 1,069 705 760 3,098 1,696 2,948 1,598

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

Non-bonus payroll cost

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Non-bonus payroll cost % change period over period

1 % 2 % 4 % 3 % 1 % 2 % 3 % 2 %

Following is a reconciliation of cash, cash equivalents and marketable securities (GAAP) to adjusted cash, cash equivalents and marketable securities (non-GAAP):

(in millions)

March 31, 2026 December 31, 2025

(in millions) June 30, 2026 December 31, 2025

Cash, cash equivalents and marketable securities $ 619 $ 660

3 unchanged sentences

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

(in millions, except per WSEE per month) Three Months Ended June 30, Six Months Ended June 30,

2026 2025 2026 2025

Per WSEE Per WSEE Per WSEE Per WSEE

Operating expenses

1 unchanged sentence

Restructuring charges

— — — — 9 5 — —

Adjusted operating expenses

4 unchanged sentences

(8) % (7) % (3) % (4) % (6) % (6) % — (1) %

Insperity | 2026 First Quarter Form 10-Q

2026 Second Quarter Form 10-Q

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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

Three Months Ended March 31,

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

Three Months Ended June 30, Six Months Ended June 30,

(in millions, except per WSEE per month) 2026 2025 2026 2025

Per WSEE Per WSEE

Net income $ 33 $ 36 $ 51 $ 56

Income tax expense 30 33 21 22

Per WSEE Per WSEE Per WSEE Per WSEE

Net income (loss) $ 4 $ 4 $ (5) $ (5) $ 37 $ 20 $ 46 $ 25

Income tax (benefit) expense 1 1 (1) (1) 31 17 20 10

Interest expense 6 7 6 6 12 7 12 7

1 unchanged sentence

Depreciation and amortization

10 11 11 12 21 11 22 12

EBITDA 23 25 12 13 104 57 103 56

Stock-based compensation

13 14 20 22 26 14 31 17

Restructuring charges — — — — 9 5 — —

Adjusted EBITDA $ 36 $ 39 $ 32 $ 35 $ 139 $ 76 $ 134 $ 73

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

Net income (loss) % change period over period 180 % 180 % (128) % (125) % (20) % (20) % (53) % (53) %

Adjusted EBITDA % change period over period

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

Three Months Ended March 31,

13 % 11 % (52) % (51) % 4 % 4 % (36) % (36) %

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

Three Months Ended

June 30, Six Months Ended

(in millions) 2026 2025 2026 2025

Net income $ 33 $ 51

Net income (loss) $ 4 $ (5) $ 37 $ 46

Non-GAAP adjustments:

1 unchanged sentence

Restructuring charges — — 9 —

Total non-GAAP adjustments 22 11

Tax effect (4) (5) (9) (8)

1 unchanged sentence

Adjusted net income $ 13 $ 10 $ 63 $ 69

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

Net income (loss) % change period over period 180 % (128) % (20) % (53) %

Adjusted net income % change period over period 30 % (70) % (9) % (42) %

Insperity | 2026 First Quarter Form 10-Q

2026 Second 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 March 31,

Three Months Ended

June 30, Six Months Ended

(amounts per share) 2026 2025 2026 2025

3 unchanged sentences

Restructuring charges — — 0.23 —

Total non-GAAP adjustments 0.58 0.30

Tax effect (0.08) (0.12) (0.23) (0.20)

10 unchanged sentences

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 $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 had $619 million in cash and cash equivalents at June 30, 2026, of which approximately $481 million was payable in July 2026 for withheld federal and state income taxes, employment taxes and other payroll deductions.

Approximately $43 million represented client prepayments that were invoiced in July 2026 .

During the second quarter 2026, we borrowed $50 million under the Facility for working capital purposes related to fluctuations in the timing of funding our direct cost programs.

At June 30, 2026, we had working capital of $180 million compared to $102 million at December 31, 2025.

We currently believe that our cash on hand, 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 March 31, 2026, we had outstanding letters of credit and borrowings totaling $370 million under the Facility.

As of June 30, 2026, we had outstanding letters of credit and borrowings totaling $420 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 three months of 2026 was $67 million.

Net cash used in operating activities in the first six months of 2026 was $19 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 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

In the six months ended June 30, 2026, the last business day of the reporting period was a Tuesday, client prepayments were $43 million and employment taxes and other deductions were $481 million.

In the six months ended June 30, 2025, the last business day of the reporting period was a Monday, client prepayments were $26 million and employment taxes and other deductions were $316 million.

2026 Second Quarter Form 10-Q

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

3 unchanged sentences

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 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.

As of June 30, 2026, Program Costs were less than the net premiums paid and owed to United by $40 million, which is included in prepaid insurance, a current asset, on our Consolidated Balance Sheet at June 30, 2026.

In addition, the premiums owed to United at June 30, 2026, were $55 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 15% to $50 million in the first three months of 2026, compared to $59 million in the first three months of 2025.

Our adjusted net income decreased 9% to $63 million in the first six months of 2026, compared to $69 million in the first six months of 2025.

Please read “ Results of Operations .”

Cash Flows from Investing Activities

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.

Net cash provided by investing activities was $5 million for the six months ended June 30, 2026, primarily due to proceeds from marketable securities dispositions.

Cash Flows from Financing Activities

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.

Net cash used in financing activities was $21 million for the six months ended June 30, 2026.

We borrowed $50 million under the Facility for general corporate purposes, paid $46 million in dividends, and withheld $4 million of vested shares to satisfy tax withholding obligations.

In addition, client funds liability and other financing activities decreased by $21 million.

Insperity | 2026 First Quarter Form 10-Q

2026 Second 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