Insperity, Inc. (NYSE:NSP) Q2 2017 Earnings Conference Call - Preliminary Transcript
Aug 01, 2017 • 10:00 am ET
Good morning. My name is Heidi, and I will be your conference operator today. I would like to welcome everyone to the Insperity Second Quarter 2017 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. (Operator Instructions)
At this time, I would like to introduce today's speakers. Joining us are Paul Sarvadi, Chairman of the Board and Chief Executive Officer, Richard Rawson, President and Douglas Sharp, Senior Vice President of Finance, Chief Financial Officer and Treasurer. At this time, I would like to turn the call over to Douglas Sharp. Mr. Sharp, please go ahead.
Thank you. We appreciate you joining us this morning. Let me begin by outlining our plan for this morning's call. First, I'm going to discuss the details of our second quarter 2017 financial results. Paul will then comment on our strong recent results and our strategic plan for long-term growth and profitability. I will return to provide our financial guidance for the third quarter and an update to the full year 2017 guidance. We will then end the call with a question-and-answer session, where Paul, Richard and I will be available.
Now before I begin, I would like to remind you that Mr. Sarvadi, Mr. Rawson or myself may make forward-looking statements during today's call which is subject to risks, uncertainties and assumptions. In addition, some of our discussion may include non-GAAP financial measures. For more detailed discussion of the risks and uncertainties that cause actual results to differ materially from any forward-looking statements and reconciliations of non-GAAP financial measures, please see the Company's public filings, including the Form 8-K filed today which are available on our website.Now let me begin today's call by discussing our strong second quarter results. Adjusted EPS increased 37% over Q2 of 2016 to $0.82 and adjusted EBITDA increased 30% to $33.3 million, both significantly above the high end of our forecasted ranges.
Through the first six months of 2017 we're ahead of our initial budget having generated a 19% increase in adjusted EPS over 2016 to $2.65 and $96 million of adjusted EBITDA. As for the details average paid worksite employees increased 10% over Q2 of 2016 as all three drivers to growth produced positive results. Worksite employees paid from new client sales increased 26% over Q2 of 2016 on a 13% increase in the average number of trained business performance advisors and the enrollment of recent mid-market sales. Secondly, client attrition improved 32% from Q2 of 2016 averaging only half of 1% during the quarter. And net gain in our client base which had been week in recent quarters turned positive; this net gain included the typical difficult seasonal summer help along with modest growth of full-time employees at existing clients.
In addition to achieving double-digit worksite employee growth we successfully managed gross profit to an increase of 15% over Q2 2016. Our pricing allocations were in-line with budgeted levels while each of