NSP - Earnings call transcript Q4 2021

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Operator

Good afternoon. My name is Erica and I will be your conference operator today. I would like to welcome everyone to the Insperity Fourth Quarter 2021 Earnings Conference Call. At this time all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. advised conference be being Please Instructions] that is today’s recorded. [Operator would At introduce this Instructions] like time, [Operator I to today’s speakers.

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

Douglas Sharp

you appreciate us. joining Thank you. We

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

details and of will XXXX our long-term our the into fourth major First, quarter will guidance year I'm discuss plan. return view. going of full our financial financial fits our the then for and to context I initiatives provide five-year new recap discuss XXXX of Paul to it results. and the year the how

will call end a session. the question-and-answer then We with

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

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

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

growth net our in of The of forecast high Now sales above our growth. XX.X% in I growth let's paid increase the call. beginning We begin in high expectations further a number on of results And QX continued unit employees. XXXX. comment in improved employees levels client driven will our new the of worksite acceleration with base, sales above our was by continued levels growth XXXX expectations business hiring above paid Paul strong acceleration growth our our for and of end later and client fall worksite by note solid discussing budgeted into a efficiency sales us with our the quarter ended our on client with combined further fourth positions retention quarter book high performance our retention ending a strong the year and fourth XXXX during campaign average advisors

vaccination and difficult variant costs with the and while and areas predictability to X% in remains of gross business, each and in unprecedented an our we A growth up the in were other The our years levels. early and health couple of utilization addition also for testing health on Omicron payment environment in impacted of costs. Operating step forecasted claim experience variant of from of has worksite costs earnings last expected our three the payroll stable drove in over Delta X% contribution results the an worker's higher our impact profit in the associated quarters the effectively plan, X% costs pricing the of pandemic by employee significant total the managed associated stages from QX. and the variability given patterns. our prior clean in strong our negatively increase to than compensation up tax claims and the quarter with care was both Unfortunately Now areas. growth were near treatment COVID the

to vaccinations, higher trend XXXX COVID-related acuity and costs this some impact related a the year, X.X%. cost cost prior the of new trend, the our to that cost XXXX we a costs. the along care time trend negative largely increase care pandemic. in estimating the abatement to ever, due entered XXXX, be X% variants impacted with ongoing For the the in deferred and two experienced deferred considering booster increased care COVID of due by We X% at to first we benefit cost When of an including utilization, in utilization, experienced would onset of knowing

Given over and and costs just we term our two when the two-year has similar risen look have benefit years, we volatility our remain the pricing a at long of cost we the X.X% trend the rate. at period, on experienced focused over an annual

offering. to to growth. on our increased while manage in advantage operating improved excluding operating opportunity QX costs commission of plan. continue long-term to environment and with the take turning amortization sales we X% in Now, tied current increased operating headcount expenses, depreciation spend and our associated investing We the expenses, compensation stock-based to growth also higher costs marketing our and our market recent

service when restricted also activity to by face incurred the pandemic. efforts related QX prior to face We higher year travel to the this compared sales when more additional costs and was

of So, payroll the end fourth growth above and high worker's our operating effectively and our the employee managed quarter, for we tax, costs. compensation forecast worksite programs drove

healthcare in higher However, resulted EBITDA adjusted $XX than of adjusted expected below and forecasts with $X.XX EPS costs earnings of million.

EBITDA Now, over million acceleration The $X.XX. enterprise X%, rebounded a includes the driven course worksite $XXX quarter by of large in advisors. beginning Worksite efficiency by employees attracting of -- they of loss candidates growth EPS in adjusted labor of averaging of at pandemic X% were driver shortfall, XXXX. market. our spite performance the a a tight as growth we the of year employee from in largely over robust earnings successful our the and to beginning from increased remained impact third the increase retention of the adjusted which on improved A Client account X% clients sales and hiring full of high, by business our reported the paid the included year. at XX%, sales the the XXXX resulted of paid year fourth new

primarily that profit indirect per pricing to costs care declined gross XXXX, per our utilization employee from due key metric unusually health worksite year. expected, low the month, As in

just employee slightly tax on offset our However, by in areas payroll worker's increased X% And budget our X% and exceeding costs. operating in expenses XXXX, worksite higher $XXX, compensation favorable more as this averaged pricing metric and the results than benefit growth.

solid expenditures during to ended a investing the the total and million. a programs. with $XX share cost of strong dividend to We and while in our year capital $XX to in repurchase and our invested cash a balance at strong repurchased We continue $XXX We shareholders and returned million business shareholders. billion providing sheet return produce of the through year XXX,XXX flow

We facility. $XXX and under out dividend cash We $XXX year which December. in share also increase rate and XX.X% special in million $X paid cash $XXX of May dividend dividends XXXX million regular per the our million credit adjusted in our ended with million $XXX included of available the in a

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

Paul Sarvadi

provide call. plan for three to all topics. Today Thank I comments you, on Doug and our thank you joining

perspective term fourth my which momentum toward offer I'll and quarter growth First related short strong combination includes of on pandemic noise. term our performance an unusual long

the as the policies hopeful organization key the execution everything quarter led government the an in. it of new Instead Earlier finish provide more Clients strong pre-COVID This we issues. pandemic the company clients into soon responded I'll XXXX with included these I'll of guidance interactions nearly into see midst reactions we service a context federal results ahead. compliance capitalize a uncertainty year we and did a form in tremendous and Second Service year the request state complexity providing growth fourth plan a of across employees personnel us challenges the and employees. going our were to variants a with deeper control Year. levels. in times exceptional new help the and new outstanding New some year with we and our and the clients discussion with emerged pandemic. worksite for initiatives in were launched the supporting and in more view continuing opportunity level our dramatic engagement we on and confusion for by at five finishing for waning and recently across three have these acceleration continued challenges more through brought worksite job normal set for to and would off

created support federal individuals One inclusion. of and our requirements business an complexity information drivers top masking the regulations mandate for and all testing state and employee technology for client and immediate and solution monitor and HR of including employees management vaccination issues new the implementing gather with of at level and sophisticated organizations talent to owners the from These diversity remote and and and vaccination need creating significant many was conservative culture, were interactions on wellbeing, C-suite policies. client confusion

our excellent also crystal The bottom in is services market. meeting service new employees exceptional We tight and role recruit resulted execution supporting business of client the year staff was line a played key client importance to clear end and in of HR in very objectives and efforts retention. QX employees delivered. interaction and This communication level a retain labor in

and healthcare expected new of utilization effect and by area testing variants in disappointment treatment one on was the quarter cost. the the than higher vaccination pandemic the driven Now

in prior three stable spiked As Doug cost related quarters the COVID claims at in and to QX. mentioned of X% was X% total

at forward with represents fortunately also We're Now believe moving term and weather continues in this or position and term profit the kept We up price trends pace keep pandemic years. care aligning long still us a softens. emphasis going noise the policy to continuing cost pricing two latest health short our has the driven for on throughout our trend past the cost view gross level. allocations

fuel in level sales for base was for among Insperity we campaign fall demand the historical services clients objectives HR a client achieving effort. our adding Now services the sales. in resulted our and of to booked This substantially sales that need prospective sophisticated in evident saw also driving exceeding record

efficiency. up year's the campaign approximately employees sales of services This demand was reflecting in performance a New this were the sales booked improvement worksite over year's in dramatic business fall for our in and last number same XX% advisors accomplished sold. strong campaign by

then to new for generally sales Now signed and track paid in are as the we worksite a enrolled of to metric a and time sales agreement performance into quarter flow next sales become organization. reminder Booked who quarter given revenues. that as the sales sales clients internal the and employees their monitor clients in refers employees and with paid worksite booked at budget use us an is our book

Now period advisors the by sales this refinement business marketing performance during into investment. combination of performance driven of movement was selling of efficiency and tiers remote increased higher improvement

team market Insperity our QX, in expanding development markets. executed business in and well marketing very penetration Our all

and year for XX% last from the As marketing a sales improvement. of result, QX book up one-third in efficiency approximately accounted were leads over sales

came service results These XX%. were of with sales and XXX% the was up was The service. other Two Proposal key sales outstanding and rate Mid-Market accounts opportunities their continuing closing remote execution proposal, calls two-thirds both of XX%. result in demonstrate larger, momentum. this exceptional retention of metrics budget of selling. our sales was improvement QX sales complex were was execution QX maturation client discovery the also sales XX% the of up at in and our organization as for and and more from

Now, we sales also saw workforce employment our significant of offering. traction traditional in acceleration

optimization the important increased We traditional For results sales XXXX. acceleration employment XXX%, year our momentum and efficiency sales business. sales potential both over book and XX% respectively, workforce reflect for and full and significant believe workforce PEO these long-term

highlight driven with combined important Insperity improvements policy important clients for This to for Care the profitability worksite years. other of clients our one growth and our and our Health recognizes five XXXX. to an of cost provides renewal service renewal volume significant opportunity our for United was component reductions. Now, through the employees, and control level creates from opportunity contribute Group and This next QX renewal over service administrative cost the secures

activity important was last a occurred of very of for the last other one over five-year Insperity. Now, and year plan adoption new completion that half the

adopted company. our history we've and most Now, the work for plans five-year of of toward

three had the and have we as and struck completed pandemic years plan by downturns. five-year and interrupted was plans contrast, economic some the set years, some case aside. was when the This previous in as Over the plans COVID few

urgency drove new pandemic of to for create a the from five-year plan experience our two Now, sense reasons. a

future driving to fatigue First function dramatic a validation the lift the the emotional heads optimism. the pandemic, And need address from to secondly of and HR the is the look value company. success sophisticated with of the of was in people's any

last ahead. of adoption of out mentioned significant higher couple opportunity Now, for results the pandemic, our to rates possibility the seem recent coming in affirm of and calls, the the I've services the

of rate which leverage BPAs. model. communicated worksite We and convention identified opportunity our to to optimization The the growth plan adds in of five-year model capitalize employees. have a factors the success refinements sales Houston, at grow business five-year capability the Throughout this potential key lever a drove faster adoption the growth new rates business than to organization across the our the throughout make to the at rate the relates plan rate broadcasted of business on of completed worksite and the the optimize them detailed of We've BPAs recent to efficiency, in history, increased the higher country. our The growth employees a the model. was

optimization of a we our to company-wide on prospects initiative a effects silver BPA healthcare of profit, positive this element to converting the Another models, reducing more like potential bullet claim focus to clients workforce contributing business model, Several acceleration. make and if gross turnover risk successful. including are reducing

with record So as five-year in year retention of of first sales we QX, for the this poised growth plan are move and level into we XXXX. impressive

a % year rate indicates, full year-over-year expectation guidance strong expected, QX employees Our and XX% of XX growth mid-teens. as worksite an of expected to in

the client a leading of sales last the to net upside. our base possible to efficiency have labor into gain market level in We in conservatism some than to quarters due due hiring lower tight year and some gain built the

also have deliver HR that reward we compensation technology. underway several volume tiers initiatives profitability forward. service and BPA’s continue initiatives our highly levels continuing pricing. to the evaluating are levels for premium develop toward to completed and programs of growth key will In consistent of and and XXXX, We XXXX sales sales modified and achievement these efficiency, management. increase These for performance to reward deep competitive targeted to dive going directed We've and effort sales moving a programs drive

remote training shift of Another resulted of work and has their The faster the to develop important development tremendous BPA in sales self-paced in opportunity paradigm increase on personalized, pandemic-driven is new PPAs program. initiative the capitalizing recent likelihood our success.

Another the labor especially to tight This strong in important, specifically we very and the high on in is market recruit, the retain continues. space. corporate to our ensure throughout key pandemic of delivered focused initiative continuing train the and service culture level HR professionals with is overall we've

the also in early half on capitalize in expect This capabilities. and a live rest to to the continue enhanced We growth first go initiative organization company work toward force organization year will to data with in this the across the the sales rollout of XXXX. position analytics of important

year We development this application improve to in increasing and investment service are and technology to our our our enhancements teams also efficiency delivery to clients. continue platform of deliver

pandemic-related an but dampened acceleration this year's is So, the our ahead. plan for The We we evident. XXXX cost somewhat, built and expectations trend believe growth is is an effectively EPS have excellent start and into market growth shareholders. dramatic pleased recent succeed will and masking excellent has We're excited position very is provide tremendous we're potential EBITDA the straight profitability in plan earnings possible. we We're communities that on enhanced more helping in to the the small capitalize medium-sized our and serve. many amazing run also value lift and growth and businesses we with about the five-year to in opportunity see strong

like back to this to five-year I'd point, We the as the to At Doug. pass we have our execute opportunity create plan. call

Douglas Sharp

Paul. Thanks,

year's put the few we I'll behind the growth in by and over the the details past years. next how our noise I'll strong in years Then, our context provide outlook the five positioned profitability given are performance and created this with guidance. XXXX for Now, pandemic

the mid-teens Our and growth further full growth for coming successful strong has unit positioned in off worksite selling of year. and into employee transition for renewal acceleration with us QX season our the year-end

impacted to and enterprise tight paid quarter, in is strong advisors in worksite a We are employees pace QX the base, client worksite be the ongoing are by the hiring reflected performance production business X% this retention in QX, of solid impacted driven of last to prior the for XX% Continuing tenure during prior year, a year. our the paid loss expected a market. growth the average period slower clients at XX% improvement to year's over in by our the which assuming although of Subsequent services. of our is than employees. forecasting labor comparison by increase demand net client crime an our our number and in first Remember large of

these full to growth XX.X% when to a starting year. the XX.X% for along forecasting are with point year We the strong considering factors,

Similar the our gross in benefits continued in XXXX. our on our exception area, in the recent this expected outlook impact a thoughts for with intact remains level we area. our previous to to related and of incorporating range from provided will profit its earnings the call to year, As prior high of associated the with the the developments due of outcomes uncertainty area the level pandemic, adopt wider-than-typical pandemic

profit status expected the compensation this specifics to frequency to in some we past over area, worker's particularly is decrease upside few intend the for recent of associated effectively plan trend As safety the claims prior continue worksite the year, manage our the over Similar low employees. in in of area historically of into the of turned with cost conservatively with work and gross the budget in years year. to the many years this our claims course in

payroll the this result half a to in As payroll similar including midyear tax to in worksite prior incremental contribution $XX XXXX. of experienced in year expected XXXX. month the pricing surplus adjustments for the we tax profit XXXX is in of Non-recurring per prior items area area per refunds to employee in to suite that in latter expect decline gross and the

increased not around and budgeting was As and considerable treatment utilization include words area upside improvement still top We'll amount forward it if should assumes previously level to Also a recent our bubble. other acuity our turned elevated a on In XXXX vaccination costs in benefit for XXXX's our ongoing there of several did we believe continue COVID to out our year costs, costs. an XXXX plan either benefit factor deferred the in approach our in from leave of is that work will to overall utilization trend in in of but benefit benefits apply since of are bubble or to uncertainty testing hindsight costs over time. trend XXXX this COVID costs there be which areas to favor budget care.

employees First gender geography the client our improved demographics of with and include which have change. year dependents our end number of mix age worksite

recently UnitedHealthCare, as our number with And decline to generally has normal plan renewed us of participant of historical expected twice contract this COVID low a under with declined projected a as growth. cost level. which the cost [ph] Second our participants, much is to the administrative third,

slightly target as cost and we add will strong We benefit momentum particularly profit. is the HR sales are pricing allocations service fees, expected considering our our finally, of above mentioned, the Paul employment impact expected to gross incremental our operating our acceleration workforce inflation And traditional costs. increasing behind trend, also of when on our offering, expected recent

plan, Now, our With sales including growth, as overall far our in on growth of are force and expectation our operating as investments. in in technology. investment are the continued mid-teens improved we costs, five-year capacity, and of expecting operating leverage our these worksite investment and marketing in in step-up we service focused initiatives initiatives, employee our our a costs inclusive

in to a both the our personnel. sales targets budget efficiency average BPAs, of increase sales with a continue BPAs drive we increase our new costs incentive a service five-year along be X.X% line some X% with plan. Along increase include management in personnel number in the for business performance As and in spend, areas in advisers, program corporate specific budgeted of a with implementing will to for

level also [ph] a brand sales of additional to extend be investments by will flow. efforts marketing and lead higher our drive Our supported

corporate dynamics resources, of market internal retention evaluated given force development step a other have related our continued included levels to target and areas ongoing in sales technology of the compensation been and the as data We that's goals. investment we the up In our labor also implementation our recent recruiting staff analytics.

earnings our budgeted that a low environment to our funds interest compensation, term in discussions while of and point given only note discounting is rates increase. have worker's given expected income note our debt generally on a On when workers basis been regarding cash compensation to the XX current be lower our Now recent interest important for environment interest the and related are costs conservatively the a there have reserves rates. including rising we favorable rising compensation we using investments It's to very long rate higher level program. earn workers inflationary our

expected in over million EBITDA our $XXX employee worksite and the acceleration the a operating $XXX XX% growth conclusion with of of adjusted profit flat XXXX. million range outlook a to and into are relatively we from mid-teens for ranging costs XXXX to So gross increase forecasting in

forecasting of full range adjusted in year are $X.XX to We a EPS $X.XX.

heavily transition return impacted pandemic's as a XXXX programs The forecast, on through Now over digit to taking growth and view direct year worksite in we the by XXXX through check efforts a growth The the from XXXX term year was this earnings our during holding cost year rate our annual looking growth which achieve impacted pandemic recovering mid-teen a at worksite economic employees to are X% rate renewals, five also strong include period period by followed enabling of our over longer effect XXXX. XXXX period. to this growth the flat compounded this us employee double improved, in XX%. client the to of conditions in sales

past effect the over our over accelerated XXXX long gross compensation of we status other website worksite growth recovered a current presentation and benefit posted the of period in our areas profit of employee for Today with a when remain plan with compounded both employee this operating covered and our investor utilization demonstrates on effectively level through annual strong from our However from growth rate healthcare forecast costs, years earnings just in and our employee of and this remains worksite the our keep considering has and strategy to forecast. despite strategy having the includes is and our worker's This And significant have believe we have also remained year that XXXX incremental XXXX price which over and our we our and impact including five intact. health When a view through COVID of ending the a matching our period, combined costs mind a cost pricing growth managed X.X%. payroll tax areas costs. earnings strong. dampening five chart our period pandemic that term

we profit our normalize to gross achieve positioning earnings plan. targets us five expect results subsides pandemic to impressive in growth our the As year

at Now up open for like I'd time this the to questions. call

Operator

Instructions] Blair. [Operator Your the with question Andrew from comes of line first Nicholas William

Andrew Nicholas

know Hi my it us good questions. start all To might a effect from to just but question. but from what cost flooding ups lag impact it's better costs Thanks understand taking Is priced I there the forward know your in on afternoon. you that's headwind a trying around then carryover? the quarter? is for last could follow Is COVID the maybe I'm I about several costs. I was have what guess fourth elevated on in all help looking multipart Could start commentary through XXXX in much the specifically. different we quarters a you have just understand I quarter of this higher fourth heard And previous that quarters? few How there.

Paul Sarvadi

higher line of related than significantly were especially that's think healthcare big is quarter COVID answer And question. of good type the the know expected. you that I costs picture a fourth bottom claims the

of course as amount of began significant it omnicron ongoing vaccination hindsight the by treatment a then new and As you also then and booster testing the costs costs. back driven variants look and it's mostly on driven costs delta in

you you really can't So the we more just all have is those at it though I spike way look looks budgeting at three were year. as a that for But at in that script And fourth of done know even what like this look to forward areas like we mentioned going that in for we significant. quarter. know my look

trend as that a budgeting budgeted for and ahead said But had in just turns gone it of Doug process. as comes actually we top it upside acclaimed into higher the out not in quarter. we than we're bubble fourth us. expected If that way, considering it have on So costs our

Andrew Nicholas

utilization previous sure fourth you I know, of it know, it I throughout different this been outside lower have quarter specific and different this than quarter to So you COVID of bubble? Is was wondering, be it would as, third offset costs what wouldn't XXXX versus or... what know, much just to that the guess, was make waves? I I'm or understand, guess a you about why year

Paul Sarvadi

a driven to to that's costs it late go the the to down the through was COVID mean, were the cost third you two deferred on run X% the and able care of possible or the for to was back of year going year. program. the you come first even the happen, quarter also know, trend, even in in be nobody by us as you did knew was the were the that was not to those, deferral X% it And for I in coming tell budgeted delta of year, care out. the going big at actually care, benefit at costs, to last for acuity that early beginning potential last would if But etcetera. be how be and from in year, of yes, deferred that's look then we Yeah, history had question. know, double you looked we driven our the a by costs, would at lot good of we pandemic, variants not the so, know, beginning predict picture, actually at what But new because possible that half and time only in had, there why and

happen. know see script this of in decided this will pandemic-related. other my it that know, prior other should the well. going noise We as could related in I related. go costs. just, But costs some out So, budget have said you the we've did year's you turn that's is a care fourth We costs we could in that's you also pandemic and I that to the is down of quarter say does realized year be know deferred But have because for quarter from know I to utilization think up trend bubble acuity of you COVID it off the number. Like And prior. that utilization you probably

So we're have at gross XX% is we the just have have plan and when that ahead. because and type ahead the the year the you this in year units to this for year we growth for more year we going in see what's start we'll in quarter important picture unit the masking profit this the just to of be momentum year. type that years growth five this growth the to of for off have tremendous really conservative And profitability the of drag XX% in to is growth big with the this you XXXX mid-teens look effort

Douglas Sharp

other script XXXX, over in of as of all care had at think my the mentioned you the you outset on up I pandemic term has a you doubling we which at negative X.X% you happened in of in XXXX. in the cost a pricing ended and care pricing to year long before. has negative piece similar abatement deferred double XXXX which normal previous in going were up We still with little a average and I a the the type a had ongoing never us COVID expect more some year slight the that And was know pricing the as risen rate. into in you this trend our obviously some of some with costs. trend side XXXX But had But know of earnings at when the is we up factor. that you slight of trend X.X% call mentioned over would

is objective were at the of matching for the costs believe appropriate XXXX pricing conservative and forecast real a XXXX's term plan. price the approach you us that's top we for So an continuing on think by and the taken we elevated looking long know costs

Operator

comes of Vogel Your question next line from with Sidoti. Josh the

Josh Vogel

afternoon Good you. guys. Thank

you testing know vaccinations. know these there about thinking adding You and on offering or opportunity to for you and workplace services just safety Is your you pricing? an site ancillary provide a markup know to there

Paul Sarvadi

other by simply to really don't I five profit we significantly along do, that driver ahead growing mean which things look services to the is you this tremendous I to these with I us employment have at years. you traditional at of Well when opportunity see can some compared significant is opportunity. our of over we know the as a that add best know you next business ways gross the expected know

things So the to are we've vaccination got more a hoping cost that those or waning and sources to what the we're emphasis doing. cost adding see but reducing good know And that you in a which that plan actual be on we're of related testing starting you and for seems to know vaccination the directly testing to anyway. revenue slide is

Josh Vogel

how and out. it understood that I plays that is hopefully Now

administrative expect starting savings, extent you're to know it's quantify be with So to see you range the cost any United giving mentioned you this cost extension is you to nice annual and you wider administrative way year? you under know what understanding the your you the than there know savings usual guidance, Health a know but

Paul Sarvadi

actually it cost it that administrative the and causes growth works is levels have actually So reductions. that targeted we we it hit way

can it's depends it to harder you little term it that on set of predict. of know we've how the for a and timing and of much some those know long literally when period. deeply costs cut hitting So numbers happens the those the But over timing up you got

of rate. know be this the one cost where And the that even given though so won't a higher trending is is fact the part a but claim year direct you number that you of on know we components it at it we're

We of total that going price and us cost overall the our a up for that's kept to match cost easy to benefit have the range kind in benefit. have offsets of that

of one is factors that offset. the an is that So

Operator

from comes with Your of next question ROTH line the Jeff Martin Partners. Capital

Jeff Martin

for of financial plan give from objectives EBITDA so, out of, you metric us standpoint a in Thanks on of call. terms And with to year are your share the EPS point? are five share? could know kind if street year detail the you what you you Yeah. if know a the Hi. sense revenue at -- details you Paul going any know the could you

Paul Sarvadi

better have digit to some see what that pretty the opportunity that obviously the of involves you know growing I growth our you trade. improving year the another efficiency. know that to a We same you the our how And the unit XX unit And exciting now been we're that in digit really of know adjusted that's a to operating know when aware for that's double is XX% and through unit efficiency throughout and plan to bit about at formally produces mature even ranges like some we next of describe What's term growth have know then for we we've plan. our them to in long type always of our provided slight improvement double is term and years a EBITDA to the long support of effort. seeing for you five today little five a marketplace the go is spent this source to dynamics We've leverage we've we our with them look. how history aspirational business. to per years shooting leverage Yeah leads term long know significant better investors in growth think this you see leverage. profit sales much think and then and you demand using what drive this not the know profitability operating I numbers because and beyond team to in able gross XX% year you next side marketing way because able we on sales we're growth a our objectives that operating kind gross we're whole sales basis But be

than unit XX% to XX% maybe of instead it's So more that.

know of year acceleration of growing if significant that you you're your if longer above growth this the big this means rate rate. the leverage profit shareholders. since term? we're grow workforce Can gross as business part the well from unit plan say now when to got we've you gross plan is faster rates in substantial given do both rate that sales at the our is no, growth, especially to side guidance ready and a about we inside specific that that and in how of you've side here course the the kind the a of five that's And year know, around the level in you're not focus now for growth be but then operating historical Of adjusted for talking our mid-teens. you but add at at our that's working you're incredible service EBITDA profit coming we'll able and really So to returns

super excited that. we're about So

And our it this You factors people. this had a our X,XXX country over the know of drive we tune our across the with with workforce just plan. We have totally in annual to year in employees. aligned and entire out over broadcasted to key Houston of we five convention level success people success X,XXX

so the of really incredible we're that. this light guess And the kind are dampening But an causes plan, effect tell it. we're about issue in short term you year first I for up unfortunate up know boy off it we run. you in takes really So that that that but this on quarter of this have dead fourth could five fired year one some it's you cropped

Jeff Martin

Understandable.

question, more it’s one part have two a I Okay. question.

The cost part benefit X.X% had it a in is you first XXXX. trend of

next you're pricing a you review? model, if the could or to trend years that does X.X% thereabouts correct year secondly on side it as much not cost and a then factor of an not Does of de-risking couple basically the said acceleration and referred bubble. how impact de-risk that benefits assuming the of it's a You in you're that me mean you maybe this from how over serving in workforce quickly

Paul Sarvadi

Sure.

in different have I over increase and of there the that that amount in actually first side things total claims the the was Doug's about list of the claim think lower talk trend, that is mind keep benefit cost so a offset let's script, prior a So an year.

demographic X.X% that the think that claim component trending and X% increase off is even though range, cost significantly was , customers X.X% higher that come added the benefit things actual happened that is than trend our in I claim organization last other the year. cobra lower certain under the of So business for the cost changes also, like to in But of mix left. changes the and have cost

agreement there's a the like that talking offset have costs, UnitedHealthcare. the new components lot with So including those about we previously, were of

you by And in Then, other claim but the that those these earned not other of So course employment you costs when that know may this And on don't picture some It that risk a is year companywide what's them some of because in sales and the front, traditional progress organization is, view cost you ways. year we to any years it's improve had all acceleration in see know in, or contributor. really increase we that, acceleration are of exciting related to it's the exciting nice to it's And health continuing that you take so a plan good our five may continuing the workforce have as offset strategy. building was commitment really in this workforce WX was know caught sales year occur, we've heard is business. it little XXX%. full news and be reductions we that actually in XXX% believe can will but part on year. to the we give early you've I into script, this like over a really my

gross So kind be that future, of it it of bigger you part to know you'll in look to of is benefits that part number the we've related. employee XXX up you've if range as way will a you the have bigger not it in if goes a at the profit got which area per had know XXX

be direct on is which So the of number. profit to surplus will gross those one the that not components cost three

risk. it about have know does hard excited when and a how that. And today It's you potential little give reduce on you numbers to to the happens. So that we're the the

Operator

from Your the Mark with Marcon comes next line question Baird. of

Mark Marcon

what have you're couple to appreciate Paul and make to questions into dig because much I area Doug. saying. just want afternoon Good answered fully don't sure I a of but number just the of questions clarifying you've too a I healthcare do

building the related then and million cited much know the in COVID some first procedures in that was, cost and know the there is for release. you the typical cycle? are your elective specifically versus, part XXXX? of is are the deferred costs that pricing for of you what that that press of the coming So $XX basically the back How for the finally you healthcare you outside clients unusual have up changing of clients of how for level you visibility signing basically What's

Paul Sarvadi

Yes.

hard to a claim if driver certainly know of is what determine we types claims processed know to primary to little a listed that all the first So that the you hard are the biggest tell release to It's these because know cost. are issues still put you to -- of COVID press can big was the process cost they bit complicated There down they're you was COVID every how that claims into they process. have you they're pin it's how and related. as related COVID It's go with there's know the that really on period. of through much you have that driver another reporting

made information what's be quarter not pended the specifics and I more having processed. unpredictability the call after So claims those what to third on enough yet that's part of

fourth in. quarter So lot in you the it's did harder that been come that estimate number not back of to know information reported what And incurred but is. a

good got of this. were into this understanding had is second you the and of pricing customers term think that we've able to question part we've it long a about deeper a that And think the one we I I the your factor again very about forward. know with and better view going the

rate related the variability pandemic going We have in issues. more on the in up at spite a pricing to normalized continued move of

wage extra times up up and doing this And easier have last when about And business. highest we've in represented of so pass an it wage environment on doing of on not going the many years X% and X% different rates any phase goes the we're what or couple how in our pricing we're very payroll retention course even than been where case for to history. a you of is you know inflation see talking the percent our are in inflation this us you year as since consistently. have And even increases. of can it's our been for this any And an

with we pricing continuing that don't issue have strategy. any same And so

Operator

comes from question line Sommer with Tobey next the of Your Truist.

Tobey Sommer

your me you. couple over know could you varying here years you means you the or next clearly can you you the if for now two of trajectory sense give providing three know that? three over Thank demonstrate inform where had Could How for of pricing years what exits a next pricing we've out coming of years? performance does is that What benefit what you your care health the there. to that you think customer value you're because your about

Paul Sarvadi

workers that pandemic for kind those last based buckets, Yeah we each track matching look long-haul. with so for concept very you things of payroll the or cost. we've as price and pricing of and even we move we at those compensation, all direct know the comfortable, – allocations kept the benefit price that the how the to we taxes, of right on are of that on issue costs costs this cover just of the crazy feel And two in whole aligning the year on we or volatility of continue

that doable. add value price able roll into a few extremely picture being inflation in of some high month, in in bit – great is feel increases pricing in year. on in looking, but our inflation pricing that this a of so though, we're over pricing at so shape. period in a from Like increasing Keep and marketplace we're that We've The keep the clients comfortable continue payroll. those price mind knew service fees, there's even are time we of ago, line have we'll in said minutes Now, budgeted simply our on because to got little we the that so very move in through at just like mind period appropriately we're of dollars with in that received deal and put also this customers just and we that's increases up. and every large necessary percent the with also is we passing of to to help I

So item, up, gone it's inflation dollars an has you And burden those overhead lower percentage. actually as wage a makes will. item, a it if

So, the we're in on great pricing front. shape

Operator

Thank Mr. at over time. further you. turn closing back this There no I'll Sarvadi are questions the call for to remarks.

Paul Sarvadi

and plan the to like the look and again especially being us. participating we forward and in call and again, on ahead thank today. just for the Thank discussion growth company once for further you once excited five-year have Well, momentum of we'd to the about everyone dialogue today

Operator

conference today's Thank call. participating. for you concludes This

You may now disconnect. Goodbye.

Insperity (NSP) 11 Feb 222021 Q4 Earnings call transcript