Insperity, Inc. (NYSE:NSP) Q4 2022 Earnings Conference Call February 9, 2023 9:00 AM ET

Company Participants

Douglas Sharp - EVP, Finance & CFO

Paul Sarvadi - Chairman & CEO

Conference Call Participants

Daniel Maxwell - William Blair

Tobey Sommer - Truist Securities

Mark Marcon - Robert W. Baird

Jeff Martin - ROTH Capital Partners

Operator

Good morning. My name is Matthew, and I'll be your conference operator today. I would like to welcome everyone to the Insperity Fourth Quarter 2022 Earnings Conference Call. At this time, all participants have been placed on a listen-only mode and we will open the floor for your question and comments after the presentation.

At this time, I'd like to introduce today's speakers. Joining us today 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 of our fourth quarter and full year 2022 financial results. Paul will then recap the year and discuss our initiatives and outlook for 2023. I will return to provide our financial 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 a more detailed discussion 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 available on our website.

Now let's discuss our fourth quarter results in which we achieved $1.21 in adjusted EPS and $79 million of adjusted EBITDA, significantly above both our expectations in Q4 of 2021, a quarter which was negatively impacted by higher COVID costs. Paid worksite employee growth of 14.3% in Q4, which is slightly below the low end of our forecasted range as we experienced a greater than expected slowdown in hiring by our client base.

As for the other two growth drivers, worksite employees paid from new client sales and client retention came in near our Q4 forecasted levels. In a few minutes, Paul and I will comment further on the outcome of our recent fall sales campaign and heavy client renewal period, leading to our 2023 outlook.