Insperity, Inc. (NYSE:NSP) Q2 2019 Earnings Conference Call - Final Transcript

Jul 29, 2019 • 10:00 am ET

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Insperity, Inc. (NYSE:NSP) Q2 2019 Earnings Conference Call - Final Transcript

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Presentation
Executive
Paul J. Sarvadi

capitalize on our substantial market opportunity and both our flagship, co-Employment Workforce Optimization Solution and our new traditional employment workforce acceleration bundle. So in summary, we are continuing our consistent execution of our long-term strategic plan and our specific operating plan for 2019 remains on track for excellent growth and profitability.

At this time, I'd like to pass the call back to Doug.

Executive
Douglas S. Sharp

Thanks, Paul. Now, before we open up the call for questions, I'd like to provide our financial guidance for the third quarter and an update to our full year 2019 forecast. As Paul just mentioned, we are now forecasting full year 2019 growth in average paid worksite employees in a range of 13.5% to 14.5%. This forecast assumes Q3 worksite employee growth of 13% to 13.5%, and then accelerating to 14% in Q4.

Our updated earnings guidance is inline with our previous guidance with some minor tweaks as we're now half way through the year. We expect the impact of the revision to our worksite employee growth outlook and a slightly higher benefit costs trend to be offset by pricing in continued effective management of our direct cost programs and operating costs. So we are now forecasting full year 2019 adjusted EBITDA in a range of $278 million, to $286 million, an increase of 16% to 19% over 2018. This compares to our previous guidance of 15% to 21% adjusted EBITDA growth. Adjusted EBITDA per worksite employee per month, which is our measure of unit profitability is expected to remain at our historical high of $98. We are forecasting full year 2019 adjusted EPS of $4.59 to $4.74, a 22% to 26% increase over 2018, and this compares to our previous guidance of 21% to 28% growth. As for the third quarter, we are forecasting adjusted EPS of a $1 to a $1.4 and adjusted EBITDA of $67 million to $69 million.

As for the Q3 year-over-year earnings growth, please note that we had significantly lower than expected benefit costs in Q3 of 2018. So in summary, with our solid results for the first half of 2019 and our outlook for continued strong growth and profitability, we remain on track for another record year in earnings. We look forward to updating you on our progress over the remainder of the year.

Now at this time, I'd like to open up the call for questions.