Insperity (NYSE: NSP) reported Q3 EPS of $0.96, $0.14 better than the analyst estimate of $0.82. Revenue for the quarter came in at $925.13 million versus the consensus estimate of $935.63 million.

• Q3 WSEE growth accelerates to 15%, driving 19% gross profit increase
• Q3 net income and EPS up 89% and 87%, to $36 million and $0.86, respectively
• Q3 adjusted EPS up 68% to $0.96
• Q3 adjusted EBITDA up 43% to $62 million
• YTD EPS and adjusted EPS up 60% and 61%, respectively

“Our refined business model is continuing to generate outstanding growth and profitability as demonstrated by the recent quarter and year-to-date results,” said Paul J. Sarvadi, Insperity chairman and chief executive officer. “We are in an excellent position to continue double-digit growth and profitability as we look forward to 2019.”

Revenues increased 16% over the third quarter of 2017 to $925.1 million on a 15% increase in the average number of worksite employees (“WSEEs”) paid per month. An acceleration of WSEE growth throughout 2018 has been the result of increased new client sales in both our core and midmarket client segments, a continued high level of client retention and an improvement in net hiring of WSEEs by our client base.

Gross profit increased 19% over the third quarter of 2017 to $166.1 million. This increase was driven by the 15% WSEE growth and the effective pricing and management of our direct cost programs. Operating expenses increased 7% over the third quarter of 2017 to $117.9 million, as we leveraged various areas of the business while continuing to invest in our growth, technology and product and service offerings. Our growth investment has included the opening of six new sales offices in 2018, along with a 16% increase in the average number of Business Performance Advisors over the third quarter of 2017.

“Our year-to-date results, combined with our outlook for the fourth quarter, results in 33% adjusted EBITDA growth for 2018,” said Douglas S. Sharp, senior vice president of finance, chief financial officer and treasurer. “This would be our fourth year in a row with adjusted EBITDA growth in excess of 25% demonstrating strong execution of our long-term business plan.”

GUIDANCE:

Insperity sees FY2018 EPS of $3.69-$3.73, versus the consensus of $3.52.

For earnings history and earnings-related data on Insperity (NSP) click here.