Insperity, Inc. (NYSE:NSP) Q1 2023 Earnings Conference Call April 26, 2023 8:30 AM ET

Company Participants

Douglas Sharp - EVP, Finance & CFO

Paul Sarvadi - Chairman & CEO

Conference Call Participants

Jeff Martin - ROTH

Tobey Sommer - Truist Securities

Andre Childress - Baird

Andrew Nicholas - William Blair

Operator

Good morning. My name is Holly and I will be your conference operator today. I would like to welcome everyone to the Insperity First Quarter 2023 Earnings Conference Call. All participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note this conference is being recorded.

At this time, I would like to introduce today's speakers. Joining us, are Joining us are Paul Sarvadi, Chairman of the Board and Chief Executive Officer; and Douglas Sharp, Executive Vice President of Finance, Chief Financial Officer and Treasurer.

At this time, I'd like to turn the call over to Douglas Sharp. Mr. Sharp, please go ahead.

Douglas Sharp

Thank you. We appreciate you joining us. Let me begin by outlining our plan for this morning's call. First, I'm going to discuss the details behind our first quarter 2023 financial results. Paul will then comment on our recent accomplishments and our plan over the remainder of the year. I will return to provide our financial guidance for the second quarter and an update to the full year guidance. We will then end the call with a question-and-answer session.

Now before we begin, I would like to remind you that Mr. Sarvadi or I, may make forward-looking statements during today's call, which are subject to risks, uncertainties and assumptions. In addition, some of our discussion may include non-GAAP financial measures. For more detailed discussions of the risks and uncertainties that could 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 on our website.

Now let's discuss our first quarter results, in which we reported earnings above our expectations. We achieved a 29% increase in adjusted EBITDA over Q1 of 2022 to $152 million and a 34% increase in adjusted earnings per share to $2.67. These results reflect double-digit worksite employee growth, strong pricing, operating costs and operating costs in line with our forecast.

As for our growth metric, the average number of paid worksite employees increased by 10% over Q1 of 2022, which was within our guidance. This growth reflects a successful year-end transition associated with our recent sales campaign and heavy client renewal period. Both worksite employees paid from new client sales and client retention were near our forecasted levels. As expected, net hiring by our clients slowed and was about 50% of the Q1 2022 level.