Insperity is like **ADP or Paychex, but for a full-service, outsourced HR department, including PEO (Professional Employer Organization) services for small and medium-sized businesses.**

Alternatively, Insperity is like the **Amazon for human resources services for small and medium-sized businesses, offering everything from payroll to benefits to compliance in one place.**

• Workforce Optimization and Workforce Synchronization: These solutions provide comprehensive HR services including payroll, benefits, workers' compensation, compliance, performance management, and training for small and medium-sized businesses.
• Insperity Premier: A cloud-based human capital management platform that offers professional employer organization (PEO) HR outsourcing solutions, personnel record management, and employer liability management.
• Workforce Acceleration: This human capital management and payroll services solution assists clients with various HR functions including time tracking, performance management, organizational planning, recruiting, and employment screening.
• MarketPlace: An e-commerce portal offering a diverse range of products and services for businesses.

Insperity (NSP) primarily sells its human resources and business solutions to other companies, specifically **small and medium-sized businesses (SMBs)** and **middle-market companies**.

Due to the nature of its business model as a professional employer organization (PEO), Insperity serves a highly diversified client base across various industries. As a result, no single customer or a small group of customers accounts for a significant portion of Insperity's revenues (typically 10% or more). Therefore, there are no individually identifiable "major customer companies" that are publicly disclosed or represent a substantial concentration of revenue for Insperity.

It is not possible to list specific names of customer companies and their symbols, as no single client or small group of clients constitutes a major customer for Insperity in the traditional sense.

Paul J. Sarvadi, Chairman and Chief Executive Officer

Paul J. Sarvadi co-founded Insperity in 1986, pioneering the HR outsourcing industry. Prior to Insperity, he started and operated several small companies. He led Insperity to become a publicly traded company in 1997. Mr. Sarvadi served as President and a board member of the National Association of Professional Employer Organizations (NAPEO) for five years. He was honored as the 2001 National Ernst & Young Entrepreneur of the Year for service industries and inducted into the Texas Business Hall of Fame in 2007. He is also the author of "Take Care of Your People: The Enlightened CEO's Guide to Business Success."

James D. Allison, Executive Vice President of Finance, Chief Financial Officer and Treasurer

James D. Allison became Insperity's Chief Financial Officer on November 15, 2024, succeeding Douglas S. Sharp. He joined Insperity in 1997 and has held various finance roles of increasing responsibility. Mr. Allison was promoted to Senior Vice President of Pricing and Cost Analysis in 2011. Before his current appointment, he served as executive vice president of comprehensive benefits solutions and chief profitability officer starting in May 2023.

A. Steve Arizpe, President and Chief Operating Officer

A. Steve Arizpe serves as President and Chief Operating Officer for Insperity. He joined the company in 1989 as Houston sales manager and has since held various leadership positions, including regional sales manager, national sales manager, vice president of sales, and executive vice president of client services. Earlier in his career, he held sales and sales management roles at NCR Corporation and Clarke American. Mr. Arizpe has also served as a director in the Texas Chapter of the National Association of Professional Employer Organizations (NAPEO).

Christian P. Callens, Senior Vice President of Legal, General Counsel and Secretary

Christian P. Callens has been Insperity's Senior Vice President, Legal, General Counsel, and Secretary since January 2024. He began his tenure at Insperity in January 2014 as Managing Counsel and Assistant Secretary, where he led the Transactions and Corporate Law Practice Group. He was later promoted to Deputy General Counsel, Managing Counsel & Assistant Secretary in October 2022. Prior to joining Insperity, Mr. Callens was counsel in the corporate practice of Skadden, Arps, Slate, Meagher & Flom LLP and also held an executive position at a privately-held technology company.

Kathy Johnson, Executive Vice President of Strategic Development

Kathy Johnson is the Executive Vice President of Strategic Development for Insperity. Since joining the company in 2002, she has taken on various leadership roles across operations, sales, and technology. Her previous position was senior vice president of middle market operations, where she managed both sales and operations for Insperity's largest customer segments. In her current role, Ms. Johnson is responsible for developing and executing the company's long-range strategies and growth initiatives, including data and analytics.

Here are the key risks to Insperity's business:

1. Elevated and Volatile Healthcare Costs: Insperity assumes liability for client employee benefits costs, particularly health insurance. Rapid shifts in healthcare costs due to factors like new technologies (e.g., AI and GLP-1 drugs) and increased utilization can lead to significant margin compression and make accurate pricing challenging. This volatility directly impacts the company's profitability and has been cited as a primary reason for recent stock declines and earnings misses.

2. Economic Downturns and Client Hiring Sensitivity: Insperity's revenue is directly tied to the number of employees on its clients' payrolls, known as worksite employees (WSEs). Economic uncertainties, such as a recession or market downturn, can lead to layoffs or slower hiring among its small and medium-sized business (SMB) clientele, directly reducing Insperity's revenue and profitability.

3. Uncertainty in HRScale/Workday Partnership Success: Insperity is making a substantial investment in modernizing its technology platform through a partnership with Workday, specifically the HRScale project. There is a risk that this partnership may not generate the anticipated demand from mid-sized businesses, leading to inefficient capital deployment and potential margin contraction due to platform license fees. The success of this strategic initiative is crucial for enhancing client retention and long-term competitiveness.

Expected Drivers of Future Revenue Growth for Insperity (NSP)

• Growth in Worksite Employees (WSEEs) and Client Acquisition: Despite recent macroeconomic headwinds impacting net hiring in its client base, Insperity's fundamental revenue growth driver remains the increase in the number of average paid worksite employees (WSEEs) and acquiring new clients. The company exited 2025 with a 1.1% increase in average paid WSEEs in Q4 and expects a potential year-over-year change between -1.5% and +1.5% for 2026, aiming to regain growth momentum. High client retention rates, averaging 99% per month in Q3 2025, also contribute to a stable base for growth.
• Strategic Partnership with Workday and HRScale Solution: A significant future growth driver is Insperity's exclusive strategic partnership with Workday and the rollout of their joint "HRScale" solution. This offering is specifically designed to target mid-market clients, an expansion beyond its traditional small and medium-sized business (SME) focus, and is anticipated to enhance growth potential and client retention in this segment starting in 2026. Insperity views this partnership as a potential "game changer" to elevate its long-term growth trajectory.
• Pricing Strategy and Increased Revenue per WSEE: Insperity has been actively implementing and adjusting its pricing strategy to manage costs, particularly elevated healthcare benefit expenses, and to increase revenue per worksite employee (WSEE). In Q4 2025, revenue per WSEE increased by 2% due to higher pricing. This ongoing focus on pricing adjustments is a crucial component of future revenue expansion.
• Launch and Expansion of New HR Solutions (HR360, HRCore): The company is updating its HR solutions portfolio, including offerings like HR360 and HRCore, which are designed to support retention and attract new clients. These solutions align with Insperity's strategy to expand further into the mid-market and provide higher-value HR services. Solid new booked HR360 sales were reported at the end of 2025, indicating potential for these offerings to contribute to growth.

Share Repurchases

• In 2025, Insperity repurchased approximately 232,000 shares of its common stock at a cost of $19 million.
• During 2024, the company repurchased approximately 697,000 shares for $63 million. As of December 31, 2024, approximately 1.45 million shares remained authorized for repurchase under its program.
• In 2023, Insperity repurchased approximately 1,259,000 shares of common stock at a cost of $131.5 million.

Share Issuance

• In 2025, a long-term incentive plan was approved for executives, involving the potential award of 400,000 and 100,000 shares, respectively, based on Insperity's share price on June 30, 2030.
• Phantom stock performance units granted in 2023 under the Long-Term Incentive Program vested over three years, with the final performance conditions certified, leading to conversion into common stock.

Outbound Investments

• Insperity has invested in a strategic partnership with Workday for the implementation of its HRScale platform, a "significant transformation" aimed at driving growth.
• The company spent approximately $57 million in 2024 and $48 million in 2025 on this Workday strategic partnership, with these amounts primarily included in operating expenses.
• The total investment in the Workday platform over a three-year period is approximately $150 million, with expenses related to this partnership expected to decrease to $33 million in 2026.

Capital Expenditures

• Capital expenditures were $31 million in 2025.
• Capital expenditures totaled $38 million in 2024.
• In 2023, capital expenditures amounted to $40.1 million.
• Expected capital expenditures for 2026 are projected to be between $40 million and $45 million.