Insperity, Inc. (NYSE:NSP) Q3 2022 Results Earnings Conference Call October 31, 2022 10:00 AM ET

Company Participants

Douglas Sharp - Executive Vice President, Finance, Chief Financial Officer and Treasurer

Paul Sarvadi - Management Director, Chairman and Chief Executive Officer

Conference Call Participants

Andrew Nicholas - William Blair

Mark Marcon - Robert W. Baird & Co., Inc.

Tobey Sommer - Truist Securities

Jeff Martin - ROTH Capital Partners, LLC

Operator

Good morning. My name is Jenny and I will be your conference operator today. I would like to welcome everyone to the Insperity Third Quarter 2022 Earnings Conference Call. All participants have been placed on a listen-only mode and the floor will be open for questions and comments after the presentation.

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

At this time, I'd like to turn the call over to Douglas Sharp. Doug, 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 third quarter 2022 financial results. I will then comment on the key drivers behind our Q3 results and our plan over the remainder of the year. I will return to provide our financial guidance for the fourth quarter and an update to the full-year guidance and some high-level thoughts on 2023. 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 strong third quarter results in which we achieved a 38% increase in adjusted EPS and a 33% increase in adjusted EBITDA over Q3 of 2021 on 18% growth in the average number of paid worksite employees. Paid worksite employee growth was at the high end of our forecasted range and was driven by an improvement in both work site employees paid from new client sales and client retention coming in improved also compared to Q3 of the prior year. Net hiring in our client base continued, although as expected at lower levels than the prior year when many clients were rehiring employees as pandemic conditions improved.