NSP - Earnings call transcript Q1 2018

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Operator

Good morning. My name is Beth, and I will be your conference operator today. I would like to welcome everyone to the Insperity First Quarter 2018 Earnings Conference Call. [Operator Instructions]. At this time, I would like to introduce today's speakers.

Officer Sarvadi, Rawson, the Senior President; of Chief Paul Executive and Vice are Finance, Richard Officer; and Financial us Chairman Board of Chief President Joining Treasurer. and Douglas Sharp, Douglas I time, turn over like At Sharp. this would the to call to Mr. Sharp, ahead. please go

Douglas Sharp

We you appreciate you. us this Thank morning. joining

plan by call. this Let me for begin outlining our morning's

our our I'm to update XXXX guidance. discuss year on first for results. financial XXXX then of going I the comment record the and guidance and full First, will provide Paul key the the QX the remainder behind return an drivers quarter quarter the second plans our details behind results for will year. to our financial to

Richard will and will available. I a We call the Paul, then be end with where question-and-answer session

remind uncertainties begin, Mr. forward-looking statements we I that Rawson myself are to which and risks, call, like would subject may you or before to assumptions. during make Mr. Sarvadi, Now, today's

non-GAAP of some addition, In measures. our may include financial discussion

discussion website. detailed non-GAAP financial and materially company's statements available filed of reconciliations more today, results Form uncertainties and the from please our any which a see differ including actual cause of on public measures, the to For XK could forward-looking that risks filings, are the

and our XX.X% by Now, EBITDA QX forecasted were of in Average and in results in record of XXXX, first highs worksite over of the the adjusted driven worksite profit outperformance paid above increase behind high of $XX of an EPS, quarter XX%. over better-than-expected These increased increase let's adjusted growth. discuss gross range. both XXXX, which end our employees employee of strong QX $X.XX details million, results, we achieved a XX%

totaled lower client XX% in QX increased our average quarter now X% substantially XXXX trained trend XX%. by during Business our the of year quarter first growth Advisors. has than attrition a level sales quarter our to previous an come prior the fourth high employees QX renewal of on increase retention row and the Client by year of in first strong was XX% over client in number quarter's the both and new continuing where period the attrition Worksite improvement from and This only over XX% during historical sales. heavy a driven of Performance of paid

Additionally, improved recent of areas, covered gross net trends. in budgeted of benefits increase approximately XX% in of profit our and in XXXX results costs XXXX by hiring QX was over achieved cost per compared growth our from employee declined QX particularly to client the by over slightly base historical driven direct X%. the worksite each of in employee favorable a XX% which area of An increase

expenses, continued Performance number in per our and sales development. these additional costs to and investments managed the G&A budgeted onetime to Business reform we employees out first offices; including technology infrastructure, and As incentive levels. new our of quarter investments We accrued growth, the security offering; We make outperformance. growth our paid below additionally high-tech our high-touch, to service for tied tax compensation bonuses in and operating our planned Advisors other and

the our full Our year in Tax stock of with typically XX% keep due divesting recent Reform tax expected, awards. Act. long-term rate the in is as associated was mind impacted in favorably our than came effective incentive benefit lower at tax and, by that Also, tax QX rate QX to rate

rate of a For a XX%. full XX%, we the equates tax then estimating are which remaining year rate of to quarters,

our cash and have line ended sheet balance the million $XX.X quarter our of available flow, for we credit. million $XXX of and adjusted with under As cash

a million cash dividends. in XXX,XXX of stock repurchased and cost paid shares at we million of quarter, $X.X $X.X the During

Paul. like this at to I'd turn the to Now, call over time,

Paul Sarvadi

topics, X Today, our five-year growth our number and and three, confidence balance of two, Doug. you, drivers one, initiatives on our for year; our the key strong of acceleration, the our including, some strategic commentary us number we've substantial number to the momentum plan. Thank new I'd forming established; in giving like QX the outperformance in provide plan

nearly quarter This business the all key positive. was metrics exceptional as were model our in

QX tremendous XX% quarter XXXX, year way of in our momentum. for This of paves client guidance to EBITDA and year-end rates. at business sales, 'XX, 'XX and of new grew respectively, perform increase market this company every first and foundation was was a very in result clearly transition dynamic This adjusted successful with full retention sets year on to growth high-growth year and XX%, incredibly impressive metric. the renewing for year the consistently our in and of our income EBITDA consecutive as XX% model. and Adjusted fourth very now our opportunity. a year cumulative this an a new to at a and quarter in XX% accounts. evident for on the strong allowed capitalize The the in us the This residual demonstrates start This XXXX range strong is strength XX% in to pricing capability

pipeline trained in sales of same Business accelerating the our growth and in marketing over of in efficiency of management for Sales number actually is paid year, to This ahead Performance credit the period. XX% first at came efforts. slightly last New Advisors of sales and filling rate our the to XXX% quarter spite sales QX. training, certainly worksite budget in growth XX% in increased the a employee

track period retention number the last of attrition, through This the excellent Doug As renewal puts year's X.X%. of us of exceptional year years to full in for was the in XX% client mentioned, level we on another retention X% range below last few XX%. as QX at came heavy

the X stability expectation. and gross other for pricing, solid all coming direct of of gross The with profit. a management first these management programs cost to provides was profit contributing The costs due highlight in clients Insperity's outperformance quarter major coupled the primary to below ongoing fee

benefit engine model, of end have expect we BPAs. strong growth rate division. expect or per continued the this So confidence year. minus quarter we a through acceleration within the month the balance ship growth us our follows into to worksite of year is acceleration attrition finished with well. front or the trained the sales the total growth Advisors to from the is very which typically recent rates from over Performance the over than so, and rates in rate April period. core the Historically, Since momentum, first In number growth likely mid-market efficiency We less activity are continue in and subject trained would a BPAs to X% we of give levels of the year-end, perform that sales Business translate employees the our to plus XXX

clients division the model the our large loss on mid-market of a but the flip an also Our drag considered opportunity is for in rate, on growth side, growth be premium a our can to rate.

had traction XXXX. company growth acquired eliminating a for the You a that as service, we some are midyear, for real X.X% in our expect need of drag on year, our larger largest client last may effort. our the recall approximately we This and opposite we effect mid-market rate by sales year our this seeing caused

employee in layer in over queue, expect in sold half growth already When QX accounts additions, and, XX% paid year. mid-market of of these the we XX% pipeline be to rates worksite you to the the or QX is Our of last strong. very

of growth the previous the to XX% for range. bracketing we're So raising of employee XX%, our year, our for guidance full to end high range comfortable XX.X% worksite a from XX.X% to

Insperity Another and win received reason for the prospects, have our platform helping clients retain our the introduction clients to technology business. technology co-employment very well market been to of relationship. has current is receptivity we confidence designed Premier, the in This facilitate by new and industry-leading HCM seen

bar to Now that new our set is our model. outcomes platform that the in software features expertise to desired with functionality drives and be when we'll providing with combined in technology releasing HR and service continue the the place,

while of highlight roadmap flexibility. the industry-leading power HCM our will co-employment solution delivering XXXX Our

responsibilities, tasks home a bringing a to we series collecting to Soon, forward the including default usability faster important like most approvals, notifications box, dashboard. easier task workflow and and will it introduce accomplish and making improvements, the urgent key of

our the a preferred selecting provide an mobile adding number and preferences also we of such to profile personnel fingerprint page. rolled addition will out expanded as in and app, In the on landing log facial recognition a to recently photo

investments over only in the our get cementing role array will and client not clients relationships. introduce technology time, benefits our are employee payroll configuration also better also customer but an client experience strategic but This data is with efforts attendance HCM only combined These in customer that key and with experience, interactions, play to a collaborative information. an will our the capability, our our will improve and development better clients The is advancements a from year. formulated within over to completed time last plan 'XX new We three from gain a organization worksite information performance platform, years to engine technology. Last OrgPlus an five-year amazing of to Premier and late a and serving view Insperity capabilities already self-service and point I mentioned controlling interactive visualization operating directory, powerful wide and efficiency and managers expenses. quarter, and leveraging we XXXX employee chart allow plan data

our one we are have Insperity. leadership of company plan this and This quarter, to we communicated the around across aligned theme

desired our excellence, over major development. Our period, results operational acceleration, leadership, are which to this optimization drive technology expect initiatives, growth risk and talent five we

growth co-employment believe intend offering most employment our Insperity. apparent space. the plan comprehensive a Workforce and sales for our progress underway our have on is upfront especially the accomplished priorities, major we can the mirroring We as traditional and What's making in are Administration the in in acceleration, Optimization we quarter these development. traditional employment what into solution with in right marketplace, initiatives. are two side-by-side We our As less five-year growth expansion space. will tell from be technology the last element Workforce stated operational excellence you offer the and well solution our results guidance, accelerator to is Administration we first process on A revised the offering Workforce

to up we client will business we including retention. enhanced to greater higher be this and ways, contribution As our in our sales ramp profit gross in increased model efforts continue area, efficiency, believe several

co-employment offering. will plan five-year plan. development risk employment growth. five-year the and The addition, to is to and critical support traditional same In optimization our retention This talent within central in continue as top substantial not our type risk our our initiative is strategy come of level most solution of our to with recruiting, sales the

to strong drives our our leveraging have dynamic resiliency continue the We overcome we years. to focus on culture, execution obstacles, recent seen will corporate and which over

peer our nearly group is years, shareholders repurchases ranking dividends million returned $XXX total Over return three we've our to share through and the among one. in number last shareholder and

in objective back this like primary is an to five-year Our plan returns. pass the I'd pattern call outstanding period continue of to and exceptional this into total results success extended to At our new of Doug. shareholder time,

Douglas Sharp

Thanks, Paul.

Now, open full our the year questions, forecast, the before growth we for an our budget. line and and provide I'd like our to to top significantly up second initial bottom quarter includes guidance for update XXXX which financial call above

are strong forecasting mentioned, just in of start employees worksite of continuing XX.X% and we our XXXX initial XX%. Paul momentum. to sales As paid a year full is due XX.X% XX% the average to now to up range from This to growth guidance of

and year QX based in Performance success in the mid-market and XX% to remainder XX% and efficiency a continued on acceleration over the forecasting trained number continued are employee worksite range growth of our our the area. Business Advisors of of sales We

We employee by outlook in driven our the the an in guidance and remainder over XXXX worksite earnings growth based QX outperformance the our are rate. increasing improvement higher upon of

compensation intend from approach While remainder cost typical included the our of year. some trends, the conservatively our costs quarter's forecasting first and results benefit workers' to to the we take upside over favorable direct

higher expenses along Performance a Our higher Business more forecasted our Advisors, and paid tied with include compensation operating to costs ahead include of employees on costs tied higher operating with our outperformance. our commissions worksite sales initial to plan, costs number incentive being which plan, incremental those associated XXXX of

up full in EBITDA million of and adjusted guidance. XX% million, now XXXX $XX to million initial to approximately of year range forecasting XXXX our $XXX XX% $XXX an over are increase We a over

which, $XX As due is as the to EBITDA QX, of are million gross $XX adjusted expected, in to our profit. from seasonality sequentially typical million, we for QX down forecasting

to start conclusion, by our look we to a of prior We $X.XX, XXXX over year. forward on In are XX% forecasting year $X.XX our XX% EPS throughout full QX strong increase updating XXXX. of to are adjusted year. EPS an adjusted is of progress to $X.XX very QX in the $X.XX, to encouraged increase year the projected XX% a a to XX% and we of over range you

at time, Now, this up call to open would questions. the like for I

Operator

Instructions]. [Operator

comes Jim of question first the Analysis. from Our line MacDonald, First

James MacDonald

just assuming the feel. the Doug, like, rate your trying continue So get not is did in a programs quarter? the sounded mostly that hiring, that will they It the first at to related increased direct to guidance in strength cost

Douglas Sharp

mentioned I -- in increase worksite remainder yes, by the my year remarks budget updated initial our and guidance the Yes. driven just correct. the That's for of the prepared the over is employee growth. some

back typical the forecasting the conservatively benefits our to workers' of We comp approach have gone in areas.

James MacDonald

the to to, rest assuming growth the is you go then for that of benefits cost and... going X% are So year back like,

Paul Sarvadi

Yes.

Douglas Sharp

Yes, Yes. speaking. generally Correct.

James MacDonald

first the comp And more initiatives. helpful. in Maybe on little the could release will talked pricing you then, areas, your be about And that in a give those quarter? you what was us workers' X

Richard Rawson

Yes.

So compensation. million of in this were the they to -- where quarter. lower everything $X.X forecasted recorded reserves be, the settlement case, really good it ends quarter our relates actuary. picks experience quarter the through our claims And it are than the our up and it claims particular The was a had as always we And actually was when claims the obviously up. to actually what -- workers' about for

James MacDonald

the And initiatives? pricing

Richard Rawson

Yes.

in strong for our our gross Also, the we -- component our our allocations benefits and On pricing were markup saw well. profit. side, obviously, of as strength allocations

James MacDonald

off one me. more here. I'll I get for guess, And, Great.

of are about already wins You ones Any mid-market in some the the the coming bigger that feathered be going timing online. view are of -- when some of talked coming to in?

Paul Sarvadi

Yes.

smaller of the coming in, have QX. ones to expect quarter of in which in early bulk We but now here, a the in be queue in -- the coming the few mid-market we second

Operator

of Martin, Capital line next Roth the Your question comes Jeff from Partners.

Jeffrey Martin

little you role you like road. give that's prominent seems if couple today and curious years taking a is on bit Workforce the where was I where Maybe on versus historically. the perspective elaborate down this some a could It side. Administration more us it see

Paul Sarvadi

and exciting next of really It's five-year for element plan. is central it our Yes. us a

engine implementing because that's in this have anything place don't However, you carefully upset we cart. are to very in apple growth want [indiscernible] you do this fabulous to and that

actual the improve within infrastructure Administration. to continuing are Workforce we So

version, quarter, X improved the research that's next we the out result the Sometime testing roll of kind past will, the over over this we've of market months. and all and will been new the if you done to X

without sales bringing pressing it's the honing we that's we'll -- that's a both like in get co-employment and really a the in us really pushing And discussion had side-by-side, really once it XXX% we down, number its already of the out accelerator So nicely. we are of that increase yet. the present of on Workforce there, the hammer got Administration there, at BPAs Since ability team we but sales kind start the have own. out has the life to

we're to even that, our the right will point co-employment the And recommend really opens to on solutions starting our we larger the all to of nice is business. get of go the And a implementation. point think that hope that's either target accelerate that that the moving where two market be there would So for we for the we up but the is one are Other that to bundles. option, customer going customer, sales that raises given giving we're up. kind accelerator whichever forward, water, about added gingerly ships and

Jeffrey Martin

give front? talk you it Will that model elaboration it or to How do break with out? and or investors to shape it about there you will that be you Is analysts? metrics? how on it going disclose evolves, And as plan

Paul Sarvadi

remains to Yes. It right be seen this second.

have We on we page the metrics can that always we so be you the can that now to talking same about and and are. provide like are sure your build right you models make we exactly we that guys

becomes quarter another that or new in to as that. significant the hone we'll And more on be we need some as we on before go it model. we really So front introducing forward two things

Jeffrey Martin

Okay. in I And Because just make couple understanding further hires I accelerating been the of sure you've correctly question then, Performance accelerating the my frame are Am for that want around there? it Advisors. Business this ramp past that you is other I years. correctly. to perspective the

Paul Sarvadi

out And for rate not Yes. -- it? doing turnover Again, et didn't the more Are a up And year. I've year, decision a we're team are Advisors. -- -- making of but fall Business a there, modulating, Performance they than the for kind in of job convention would cetera? the of bit at ahead quarter -- coming lot sales And much as not off this rest -- now -- it we're year been much make as BPAs you little people you have and biggest sales -- in It's they of the you have first to of quarter. couple breeds management's for momentum. Success time this was first of in just do times, the are you and the the success. to in we turnover just first we of or we optimize convention, talking normally in But quarter, of kind BPAs the are trained so is have year-end, succeeding. about have were fabulous a people, the about the a a they the when this years we typically only came you trying and moving growth when our that

is turnover number the accelerating when It can moves the up the that sales moving. It's us then efficiency efficiency for you're growth in BPAs. again, sales -- keep of your amazing. you're your lower when growing, that, So gives always reasons, the right

So the moving to place. marketing we're little up that The all programs. little, going really that are profitable sure other that elements by number in keep make that making

You have all enough and sales and having kind the managers offices marketing of team that going on number right to and support open of the stuff.

a drivers it's lot within of model. So lot of a items, growth that

And along so like up little of just, them move we're kind to a just I and bit. continuing tweaking said,

Richard Rawson

Advisors really programs demonstrates seeing going of for able over was sales several have starts being we say refined improved and on that having fruit to that And Business the some been said, successful last actually the it's with as become I the training that's And development Performance all Paul years. Yes. it effort going we're earlier to work. more programs and those that time. quite training on --

Operator

Your next R.W. Marcon, Baird. the of question comes from line Mark

Mark Marcon

a I Administration -- bit PEO that to terms that Workforce of relative if Optimization it them model. is to Would being was BPAs and envision wondering side-by-side? to little just be say, the full more as could an you about envision Workforce you would lead with? sold working talk it you do How the you in Are how going present you what the relates alternative? going to,

Paul Sarvadi

-- are intend are, to We out our now, Right. there. we right BPAs

call -- first first brochure brochure call has in side-by-side. we discovery or our the call what Our graphic bundles both

upfront. do we So right the introduce options

an and they solutions to bundle However, once customize our that make go better recommendation, that that fit one provide bundle, back business gather individual and a other even going Advisor, we performance it then with client. for Performance make one Business they're further information,

the recommendation the that right is back for go they feel will with they So customer.

what growing support them stage talk be with. in them is those. or migrating think right of doing advantages do that coming and what over need Optimization. And Workforce And model Administration a I've we -- working then then discuss one in at channel they time, put and been on now is start And will to a Workforce to what able when people and time, the you're there of we of you between like and it, to for us company will level the that while and to with be are other what both saying, side-by-side over the so,

see, you'll it next think only time, over X Workforce we increase that out will you'll hoping get sales not So we're into but or of maybe it also every sales get X that Administration Optimization XX optimization. will -- we -- in roll Workforce year

game So that's plan. the

Mark Marcon

the we the becoming perspective, margin great. then, from implications mix? bigger That's And about should of a portion of how think Workforce Administration a

Paul Sarvadi

doing a the wanted deal position into two, and the Sure. in Sure. is to how sell then make we've we've sale deal. work, the the solution example, The we've of the is it for valuable We a so co-employment demand the way a traditional in the business compared bundle Workforce But employment most way of to that market space. in we've we Optimization it a them. based tried their to to offering price it's kind in based XX% same, put approximately strategically the Insperity Optimization, where Workforce to of And on it we're the we terms marketplace on compares commission, be Workforce the positioned between BPA it benefit designed like, of what the to the to in tried mirrors what it model. value comprehensive what how WA to Administration for it

Workforce Workforce We also emphasis to up that but XX% going so be on remains Administration to pass Optimization, around sale. not a you're wanted the

volume see and do pinned enough it think And you while need come now. enough that down. We to be got a will to that. little that out I all how we more be about have repetitions and we've that's telling right before So why going that's we'll

Mark Marcon

like... sounds it But

Richard Rawson

was to perspective, no risk from with there Sorry. margin. good associated going a the just news with is -- that's that, I that those -- say risk is

Mark Marcon

you if from assumption? margin it be you imagine if then, I a a should sales workflow correctly, a and mean, Yes. I it just neutral. Is sounds like, commission hearing perspective I'm that -- also from would perspective, And correct

Paul Sarvadi

tell. too it's early think I to

Richard Rawson

Yes.

Paul Sarvadi

silver but roll model, along. really looking think different together, a in a a additive. in but to early lot at I'm right sales everything well changes to things, tell, at and it profitability we can how worksite things employee we your how -- we'll -- ways. but all bullet, a we help lot a initiative one it those that look There's of not it's too call of the numbers retention. that be as of as we're that it's is it lot it affects If -- going now, It's your per move just basis as significant efficiency,

Mark Marcon

Great. And efficiency, to terms about with the little emphasis in pretty then, you've a that for of should bit regards that just good to up to you to it's can sales talk how add end significant a the extent that a increased the on feel it Workforce arrow Because got quiver. changing with the Administration?

Paul Sarvadi

question. a you you other if going It's Right. factors we're weren't trying do growth normally the your implementing new. that high of organization, on And efficiency good on is drag And a why with sales to is carefully which this here. something have

year about that. prior, higher. QX number only though up careful had get year, it Then faster, of of here even the you efficiency as sales being your we first but we the we efficiency we a we're ramped you And level same not So little slightly for reported the and was -- last maintained the ramped did quarter, BPAs. to for sales up

with those really their the the time having be district their good really that's serving people DMs, just the are using Richard pieces other thing is way sales equipping a leads more that that then and like managers along well; up we're sign that successful, happen, make and training, doing marketing --- the that to that about are are So was really which programs the all BPAs efficient. so talking the qualified also earlier, faster;

those all So a part of factors' it.

how and the Now, for in and is BPA with. the as to bundle option customer offering this in have which you start new the will one, another weigh to brought start which we both to creating

It So to will little yet. we out efficiency really now, How much it? that's sales hard be like we more will just predict. of time. the a going Not get take way it's but sure

Operator

of next comes question from Your Sommer, the Tobey SunTrust. line

Tobey Sommer

the with the going you've IRS little sales double time respect was if throughout could a sales the the about the expected any size, changes I part with at line quarters the wondering of context In payroll. talk cadence kind that to to I'm of the they're of you to of mid-market pushing now them wondering growth. live those bit of taxation influential Paul, changes year. had of finish if of in across these accelerate mid were

Paul Sarvadi

where cases had but have as say, we've the Yes. around I about in I -- can We've here, don't the We like just the of was just campaign. district had that got several here. year really -- and the campaign strong In been yes, talked selling from it fall meeting we've it I into like managers' the tell season. new campaign difference, always to made cadence had a specific we you, looking feels discussions, you rolled fall fall always sales. still

there out of that the specific behind the that of some really because over mid-market made where accounts difference. no may be So of I it, the taxation, double see even don't this does this but year have issue we

Tobey Sommer

Okay.

do course, for In terms you BPAs sticking you're And in the at that success have at of growth what point? acceleration, to this part of kind targeting rate keep what be it, in you the the of because year-over-year BPA fall in of having and, selling of season around September? might

Paul Sarvadi

this Yes. total -- than up that, it Trained little BPAs as were as it up and XX% for a tweak just is like just at can we it's XX%. opportunistic creeping And know up an retention. by such -- -- you just We has XX% more time, whatever. in not be when fashion. quarter saying or like and the that higher of it's to because it We're

not and efficiency nice run up as reach We're service got in There's have about them pieces -- right a trying provide long benefit makes really grow we're as modulate XX%. bottom enough your not in to sense. rate to lot have on we all can and of we'll we trained you get the you and up we -- that then capacity, are on to really continue now be line. can have close And a where BPAs, so hiring Well, that. them attention bit also bring well, anywhere really you to it as near saying We fit. can we're know, a everybody, well, make frame you paying of but just a the for little can that. leads a that those we time the We're level range to because balance at

glows when This -- the everything comes if the an quarter end across metrics, of all the at it bottom. range, -- in you -- is was out really higher how the the of example near have numbers

but that So nicely work way, they done. always don't

Tobey Sommer

one Richard Right. then last I to the wanted to I'll thing say ask question.

Just on career. they heck so important is luck Richard, of most a shuffling a with good one, yours. And the off next the say congratulations

Richard Rawson

I'll miss Tobey. Thanks, this part.

Tobey Sommer

love increasing rates in -- addressable get comments or think where I the put to means And you you based of what share in color that are it? on total Workforce would And in do terms the you're share, thoughts on of gaining the the you of expansion of these market on market could company's on Administration any terms terms in your growth?

Paul Sarvadi

more with we're employees. earlier for than would think maybe employees just otherwise you option companies XX look to in out X at total million market point And of employees up worksite creating from market a Workforce about and basically another be or have. doing We size our about XX may addressable entry couple what X,XXX, Right. X,XXX to of there Administration that is when I they come

a serve well we're larger really addressable the of can approach market we taking. that much think that portion with I

to addressable doesn't it's -- that so be the responsive it both market make us. And will

it increases think I really that.

are profitability. range growth it so We've a range and of above a model. a little of our and little the kind growth. pace of always your end balanced the that to on But -- on you flows adds or can top growth, at be And into growing really a lot when little growth extra the

Operator

Your the comes line next Raymond question of Michael James. from Baker,

Michael Baker

I wondering. was

Paul. please for the workers' quantified And one? then, the quarter. Could the follow-on care You benefit a comp had health I in you quantify

Paul Sarvadi

Yes.

at with million? So -- this it -- our quarter, about, up ended we about was we're guess $XX actually -- I

Douglas Sharp

area. care benefits increase was gross had a that area a I'd way the mean, decline so. or health as we is again, X% the in of in And of I we X.X% the It larger the Right. trend. piece came our about budgeted answer upside as had profit -- about the in

the was area. of growth contribution The And so the gross that area. outside within the worksite benefits employees of in biggest profit out was the

Michael Baker

how when to speak? of be notion That's the helpful. you some a that, bit maybe And perspective ultimately talking used you've why? that at on terms recently so they change deliver how an us that's take top going to employee I that's little employers, thinking a of see have And underlying think model about interest the of and still Or this that larger see out benefits Workforce been for a in us responsibility you Paul, potentially still give you're you size, on Administration? certain can historical size, mean, that by bit give increased little then, X,XXX some changes way X,XXX, comfort a and of that can so your to there the you've employer go? seen do maybe feel size where of do co-employment to for or

Paul Sarvadi

and if and in concept though of chasm, that, think the we really great have taking I receptivity, will, kind just adoption this think of That's receptivity the kind in a do if we're question. a chasm. the the I that being the and the a to passed adoption believe of law familiar industry, it's that combination definitely growth long point, time get just you're I curve, the if big you you market even across of that the with but market to Yes. federal picture of crossed will, of

and think the I it's and real where how we're businesses start you on. changed. when to look productive have also is preference able folks business from equity to at at look do -- a receptivity place channels think good getting to firms I awareness actual private to away like mid-market some you're to bring

is This fun lot we a that think, the about, I talking can now. So what working about have help to gets really really I'm of things It be there, that. momentum. and we're momentum with

more of large to pretty have or folks prefer traditional, feel we co-employment model used On they provide And have ways restricted customers customers our whether the or and large we in but model, used to is found great unique service to. a a very flexibility issue our than they're constrained customer, customized, know co-employment that very a we -- really the The we we they've fit now, model. They unique. and as done job to customer on mid-market feeling know know -- as they're model service the them. have help

customers have we large choosing so co-employment. And

dialogue. it's So of same the kind of kind

you us numbers -- what as you less it don't co-employment. the the likely choose the are, That's I bigger at today. it's will not look So tell not

Operator

R.W. Our comes Mark from Baird. Marcon, the last question of line

Mark Marcon

a gross employee. couple for had regards with the the and quick follow-ups cost to benefits just I of profit worksite

occurred? In drove gross per year of we X.X%, a it costs lesser of as for declining about the employee how terms lower relates why health then, incidents, think by guidance? should can Just secondly, severity? of that? about talk little actually worksite the Is specifically number you just balance to the the that bit the care what profit And benefits it

Richard Rawson

to of all, lot flu discussion rather care, talking go dialogue back primary a if expecting a we of of first year, about Well, difficult and our were the Okay. fall was that season. they there with UnitedHealthcare, last

that into for experience ago, And guide, forecast reported happen some their And our to quarter. taking the a so to so first lead it week they try or for we, didn't as of them.

have in so obviously, that didn't boat the and So utilization. kind were we of near same we

their was was well. pharmacy we side, lower the look The trend at negative medical this detailed when seeing, are metrics utilization forecasted what as actually plan, quarter. in the had our we We actually than

like of good. we forecasting, stays -- When all to hospital positive. kind that help it's we of detailed both which own that look all all and the use stuff, metrics fronts days what were all the our those and at So --

it's so to going because you out. a the bake play don't is know it going you And utilization And future that just into can't just it necessarily across think about quarter But is. you the is board. how that -- forward, you what when

gross forecasting if it we great. So our budget, year. at levels balance for the previously. maintained a we those we in the by conservative left of that approach, turns had the profit the that And When out as at this place Doug we line better, just year's started then forecast for said,

Douglas Sharp

Yes.

expect negative You the wouldn't for whole trend year. a

Richard Rawson

no. -- would That No. No.

bake can't in. You that

Operator

Mr. will turn Sarvadi I to call for closing back now the remarks.

Paul Sarvadi

again, exceptional the to everybody Thank a just joining to day. some much. today And us out for And you we very thank look forward Once Have results. to on want hopefully, you continuing we'll and road. great interest. appreciate see we your produce

Operator

conference call. today's concludes This

you. You disconnect. Thank may now

Insperity (NSP) 30 Apr 182018 Q1 Earnings call transcript