nsp-20260630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒			Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended June 30, 2026



or
☐			Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

			For the transition period from _______________ to _______________

Commission File No. 1-13998

Insperity, Inc.

(Exact name of registrant as specified in its charter)


Delaware						76-0479645
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)


19001 Crescent Springs Drive
Kingwood,	Texas	77339
(Address of principal executive offices)

(Registrant’s Telephone Number, Including Area Code): (281) 358-8986


Securities registered pursuant to Section 12(b) of the Act:
Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value per share	NSP	New York Stock Exchange
		NYSE Texas

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Emerging growth company	☐
Smaller reporting company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

As of July 22, 2026, 38,195,270 shares of the registrant’s common stock, par value $0.01 per share, were outstanding.


TABLE OF CONTENTS


		Page

	Forward Looking Statements	4
Part I, Item 1.	Financial Statements	6
	Consolidated Balance Sheets	6
	Consolidated Statements of Operations	7
	Consolidated Statements of Stockholders’ Equity	9
	Consolidated Statements of Cash Flows	10
	Notes to Consolidated Financial Statements	11
Part I, Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Part I, Item 3.	Quantitative and Qualitative Disclosures about Market Risk	39
Part I, Item 4.	Controls and Procedures	39
Part II, Item 1.	Legal Proceedings	40
Part II, Item 1A.	Risk Factors	40
Part II, Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	40
Part II, Item 5.	Other Information	40
Part II, Item 6.	Exhibits	41


FORWARD LOOKING STATEMENTS

The statements contained herein that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. You can identify such forward-looking statements by the words “anticipates,” “expects,” “intends,” “plans,” “projects,” “believes,” “estimates,” “forecasts,” “likely,” “possibly,” “probably,” “could,” “goal,” “opportunity,” “objective,” “target,” “assume,” “outlook,” “guidance,” “predicts,” “appears,” “indicator” and similar expressions. Forward-looking statements involve a number of risks and uncertainties. In the normal course of business, in an effort to help keep our stockholders and the public informed about our operations, from time to time, we may issue such forward-looking statements, either orally or in writing. Generally, these statements relate to business plans or strategies; including our strategic partnership with Workday, Inc.; projected or anticipated benefits or other consequences of such plans or strategies; or projections involving anticipated revenues, earnings, average number of worksite employees (“WSEEs”), benefits and workers’ compensation costs, or other operating results. We base these forward-looking statements on our current expectations, estimates and projections. We caution you that these statements are not guarantees of future performance and involve risks, uncertainties and assumptions that we cannot predict. In addition, we have based many of these forward-looking statements on assumptions about future events that may prove to be inaccurate. Therefore, the actual results of the future events described in such forward-looking statements could differ materially from those stated in such forward-looking statements. Among the factors that could cause actual results to differ materially are:

•adverse economic conditions;

•disallowance of, or other liabilities associated with, employee retention tax credits under certain COVID-19 relief programs;

•labor shortages, increasing competition for highly skilled workers, and evolving employee expectations regarding the workplace;

•impact of inflation and changes in U.S. trade policy;

•vulnerability to regional economic factors because of our geographic market concentration;

•failure to comply with covenants under our credit facility;

•impact of a future outbreak of highly infectious or contagious disease;

•bank failures or other events affecting financial institutions;

•our liability for WSEE payroll, payroll taxes and benefits costs, or other liabilities associated with actions of our client companies or WSEEs, including if our clients fail to pay us;

•increases in health insurance costs and workers’ compensation rates and underlying claims trends;

•financial solvency of workers’ compensation carriers, other insurers or financial institutions;

•the ability to adjust service fees for increases in state and local taxes, including state unemployment tax rates;

•an adverse determination regarding our status as the employer of our WSEEs for tax and benefit purposes and an inability to offer alternative benefit plans following such a determination;

•cancellation of client contracts on short notice, or the inability to renew client contracts or attract new clients;

•disruption from healthcare reform or the inability to secure competitive replacement contracts for health insurance and workers’ compensation insurance at expiration of current contracts;

•regulatory and tax developments and possible adverse application of various federal, state and local regulations;

•failure to manage growth of our operations and the effectiveness of our sales and marketing efforts;

•the impact of the competitive environment and other developments in the human resources services industry, including the professional employer organization (or PEO) industry, on our growth and/or profitability;

•an adverse final judgment or settlement of claims against Insperity;


			2026 Second Quarter Form 10-Q			4


FORWARD LOOKING STATEMENTS

•disruptions of our information technology systems or failure to enhance our service and technology offerings to address new regulations or client expectations;

•our liability or damage to our reputation relating to disclosure of sensitive or private information as a result of data theft, cyberattacks or security vulnerabilities;

•failure of third-party providers, such as financial institutions, data centers or cloud service providers;

•our ability to fully realize the anticipated benefits of our strategic partnership and joint solution with Workday, Inc.; and

•our ability to integrate or realize expected returns on future product offerings, including through acquisitions, strategic partnerships, and investments.

These factors are discussed in further detail in our Annual Report on Form 10-K for the year ended December 31, 2025 under “Item 1A. Risk Factors” in Part I and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, and elsewhere in this report. Any of these factors, or a combination of such factors, could materially affect the results of our operations and whether forward-looking statements we make ultimately prove to be accurate.

Any forward-looking statements are made only as of the date hereof and, unless otherwise required by applicable securities laws, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.


			2026 Second Quarter Form 10-Q			5


FINANCIAL STATEMENTS (Unaudited)

PART I

Item 1. Financial Statements

CONSOLIDATED BALANCE SHEETS


(in millions)	June 30, 2026		December 31, 2025
Assets
Cash and cash equivalents	$	619	$	642
Restricted cash	81		82
Marketable securities	—		18
Accounts receivable, net	878		826
Prepaid insurance and related assets	57		6

Income taxes receivable	26		29
Funds held for clients and other current assets	106		119
Total current assets	1,767		1,722
Property and equipment, net of accumulated depreciation	170		177
Right-of-use (“ROU”) leased assets	57		63
Prepaid health insurance	9		9
Deposits – health insurance	8		8
Deposits – workers’ compensation	160		148
Goodwill and other intangible assets, net	13		13
Deferred income taxes, net	—		22
Other assets	50		41
Total assets	$	2,234	$	2,203

Liabilities and stockholders' equity
Accounts payable	$	10	$	6
Payroll taxes and other payroll deductions payable	534		544
Accrued worksite employee payroll costs	760		764
Accrued health insurance costs	61		30
Accrued workers’ compensation costs	83		84
Accrued corporate payroll and commissions	54		78

Client funds liability and other accrued liabilities	85		114
Total current liabilities	1,587		1,620
Accrued workers’ compensation costs, net of current	103		102
Long-term debt	419		369
Operating lease liabilities, net of current	59		66
Deferred income taxes, net	5		—

Total noncurrent liabilities	586		537
Commitments and contingencies
Common stock	1		1
Additional paid-in capital	255		257
Treasury stock, at cost	(824)		(850)
Retained earnings	629		638
Total stockholders' equity	61		46
Total liabilities and stockholders’ equity	$	2,234	$	2,203

See accompanying notes.


			2026 Second Quarter Form 10-Q			6


FINANCIAL STATEMENTS (Unaudited)

CONSOLIDATED STATEMENTS OF OPERATIONS


	Three Months Ended June 30,				Six Months Ended June 30,
(in millions, except per share amounts)	2026		2025		2026		2025

Revenues	$	1,686	$	1,658	$	3,581	$	3,521
Payroll taxes, benefits and workers’ compensation costs	1,469		1,435		3,062		2,988
Gross profit	217		223		519		533
Salaries, wages and payroll taxes	115		129		255		271
Stock-based compensation	13		20		26		31
Commissions	10		10		20		21
Advertising	14		11		25		18
General and administrative expenses	49		49		104		109
Depreciation and amortization	10		11		21		22
Total operating expenses	211		230		451		472
Operating income (loss)	6		(7)		68		61
Other income (expense):
Interest income	5		7		12		17
Interest expense	(6)		(6)		(12)		(12)
Income (loss) before income tax (benefit) expense	5		(6)		68		66
Income tax (benefit) expense	1		(1)		31		20
Net income (loss)	$	4	$	(5)	$	37	$	46

Net income (loss) per share of common stock
Basic	$	0.10	$	(0.14)	$	0.98	$	1.22
Diluted	$	0.10	$	(0.14)	$	0.97	$	1.22

See accompanying notes.


			2026 Second Quarter Form 10-Q			7


FINANCIAL STATEMENTS (Unaudited)

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

For the Six Months Ended June 30, 2026 and 2025


	Common Stock Issued			Additional Paid-In Capital		Treasury Stock		Retained Earnings and AOCI		Total
(in millions)	Shares	Amount

Balance at December 31, 2025	55	$	1	$	257	$	(850)	$	638	$	46
Purchase of treasury stock, at cost	—	—		—		(4)		—		(4)
Issuance of equity-based incentive awards and dividend equivalents	—	—		(26)		27		(1)		—
Stock-based compensation expense	—	—		26		—		—		26
Other	—	—		(2)		3		1		2
Dividends paid	—	—		—		—		(46)		(46)

Net income	—	—		—		—		37		37
Balance at June 30, 2026	55	$	1	$	255	$	(824)	$	629	$	61

Balance at December 31, 2024	55	$	1	$	222	$	(864)	$	738	$	97
Purchase of treasury stock, at cost	—	—		—		(19)		—		(19)
Issuance of equity-based incentive awards and dividend equivalents	—	—		(25)		28		(3)		—
Stock-based compensation expense	—	—		30		1		—		31
Other	—	—		1		1		—		2
Dividends paid	—	—		—		—		(45)		(45)

Net income	—	—		—		—		46		46
Balance at June 30, 2025	55	$	1	$	228	$	(853)	$	736	$	112


			2026 Second Quarter Form 10-Q			8


FINANCIAL STATEMENTS (Unaudited)

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Continued)

For the Three Months Ended June 30, 2026 and 2025


	Common Stock Issued			Additional Paid-In Capital		Treasury Stock		Retained Earnings and AOCI		Total
(in millions)	Shares	Amount

Balance at March 31, 2026	55	$	1	$	244	$	(826)	$	648	$	67


Stock-based compensation expense	—	—		13		—		—		13
Other	—	—		(2)		2		—		—
Dividends paid	—	—		—		—		(23)		(23)

Net income	—	—		—		—		4		4
Balance at June 30, 2026	55	$	1	$	255	$	(824)	$	629	$	61

Balance at March 31, 2025	55	$	1	$	209	$	(855)	$	764	$	119

Issuance of equity-based incentive awards and dividend equivalents	—	—		—		1		(1)		—
Stock-based compensation expense	—	—		19		1		—		20

Dividends paid	—	—		—		—		(22)		(22)

Net loss	—	—		—		—		(5)		(5)
Balance at June 30, 2025	55	$	1	$	228	$	(853)	$	736	$	112

See accompanying notes.


			2026 Second Quarter Form 10-Q			9


FINANCIAL STATEMENTS (Unaudited)

CONSOLIDATED STATEMENTS OF CASH FLOWS


	Six Months Ended June 30,
(in millions)	2026		2025

Cash flows from operating activities
Net income	$	37	$	46
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization	21		22
Stock-based compensation	26		31
Deferred income taxes	27		12
Changes in operating assets and liabilities:
Accounts receivable	(52)		(14)
Prepaid insurance and related assets	(51)		(16)
Other current assets	(13)		1
Other assets and ROU assets	—		(6)
Accounts payable	4		(4)
Payroll taxes and other payroll deductions payable	(10)		(535)
Accrued worksite employee payroll costs	(4)		(14)
Accrued health insurance costs	31		38
Accrued workers’ compensation costs	—		(14)
Accrued corporate payroll, commissions and other accrued liabilities	(38)		(40)
Income taxes payable/receivable	3		(29)
Total adjustments	(56)		(568)
Net cash used in operating activities	(19)		(522)
Cash flows from investing activities
Marketable securities:
Purchases	(10)		(10)
Proceeds from maturities	6		12
Proceeds from dispositions	22		—
Property and equipment purchases	(13)		(13)
Net cash provided by (used in) investing activities	5		(11)
Cash flows from financing activities
Purchase of treasury stock	(4)		(19)
Dividends paid	(46)		(45)
Borrowings under revolving line of credit	50		—
Client funds liability and other	(21)		(14)
Net cash used in financing activities	(21)		(78)
Net decrease in cash, cash equivalents, restricted cash, funds held for clients, and deposits – workers’ compensation	(35)		(611)
Cash, cash equivalents, restricted cash, funds held for clients, and deposits - workers’ compensation beginning of period	945		1,344
Cash, cash equivalents, restricted cash, funds held for clients, and deposits - workers’ compensation end of period	$	910	$	733
Supplemental cash flow information:
ROU assets obtained in exchange for lease obligations	$	3	$	10

See accompanying notes.


			2026 Second Quarter Form 10-Q			10


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.			Basis of Presentation

Insperity, Inc., a Delaware corporation (“Insperity,” “we,” “our,” and “us”), provides an array of human resources (“HR”) and business solutions designed to help improve business performance. Our comprehensive HR services offerings are provided through our professional employer organization (“PEO”) services, known as our Insperity® HR360 solution, our Insperity® HR360 Select Edition, and our Insperity HRScaleTM solution (together, our “PEO HR Solutions”), which we provide by entering into a co-employment relationship with our clients. Our PEO HR Solutions encompass a broad range of HR functions, including payroll and employment administration, employee benefits, workers’ compensation, government compliance, performance management, and training and development services. Our Insperity HR360 solution and Insperity HR360 Select Edition provide access to our web-based human capital management platform, the Insperity PremierTM platform, while our Insperity HRScale solution provides access to the Workday Human Capital Management platform.

In addition to our PEO HR Solutions, we offer a comprehensive traditional payroll and human capital management solution, known as our Insperity HRCore™ solution, which we refer to as our “Traditional HR Solution.” We also offer a number of other business performance solutions, including Talent Acquisition Services, Retirement Services, Insurance Services, Contractor Management, and Perks+. These other products and services are generally offered only with our other solutions.

The Consolidated Financial Statements include the accounts of Insperity, Inc. and its wholly owned subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

The accompanying Consolidated Financial Statements should be read in conjunction with our audited Consolidated Financial Statements at and for the year ended December 31, 2025. Our Consolidated Balance Sheet at December 31, 2025 has been derived from the audited financial statements at that date, but does not include all of the information or footnotes required by GAAP for complete financial statements. Our Consolidated Balance Sheet at June 30, 2026 and our Consolidated Statements of Operations for the three and six month periods ended June 30, 2026 and 2025, our Consolidated Statements of Cash Flows for the six month periods ended June 30, 2026 and 2025 and our Consolidated Statements of Stockholders' Equity for each of the three and six month periods ended June 30, 2026 and 2025, have been prepared by us without audit. In the opinion of management, all adjustments necessary to present fairly the consolidated financial position, results of operations and cash flows have been made, and all such adjustments are of a normal recurring nature.

The results of operations for the interim periods are not necessarily indicative of the operating results for a full year or of future operations.


2.			Accounting Policies

Health Insurance Costs

We provide group health insurance coverage under a single-employer plan that covers both our WSEEs in our PEO HR Solutions and our corporate employees and utilizes a national network of carriers, including UnitedHealthcare (“United”), UnitedHealthcare of California, Kaiser Permanente, Blue Shield of California, HMSA BlueCross BlueShield of Hawaii, and Harvard Pilgrim Health Care, all of which provide fully insured policies or service contracts.

Approximately 85% of our costs related to health insurance coverage are incurred under our policy with United. While the policy with United is a fully insured plan, as a result of certain contractual terms, we have accounted for this plan since its inception using a partially self-funded insurance accounting model. Effective January 1, 2020 through December 31, 2025, our financial responsibility for a participant’s annual claim costs was limited to $1 million (“Individual Claims Limit”). Beginning January 1, 2026, we have the option to annually elect to limit our responsibility for each participant’s claim costs to $500,000, $750,000, or $1,000,000 per year, which we elect based on the cost of the limit (“Selected Claims Limit”) and


			2026 Second Quarter Form 10-Q			11


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

our estimate of the benefit to us at that level of limit. The cost of the Selected Claims Limit is recognized evenly over the year, whereas, the claims recovery benefit on the Selected Claims Limit is expected to increase throughout the year, with the expected increase being more impactful at a lower Selected Claims Limit. For 2026, the Selected Claims Limit we have elected is the first $500,000 of paid claims per claimant per year. Accordingly, we record the cost of the United plan, including an estimate of the incurred claims, taxes and administrative fees (collectively the “Program Costs”), as benefits expense, which is a component of direct costs, in our Consolidated Statements of Operations. The estimated incurred but not reported claims are based upon: (1) the level of claims processed during each quarter; (2) estimated completion rates based upon recent claim development patterns under the plan; and (3) the number of participants in the program, including both active and COBRA enrollees. Each reporting period, changes in the estimated ultimate costs resulting from claim trends, plan design and migration, participant demographics, and other factors are incorporated into the benefits costs, which requires a significant level of judgment.

Additionally, since the plan’s inception, under the terms of the contract, United establishes cash funding rates 90 days in advance of the beginning of a reporting quarter. If the Program Costs for a reporting quarter are greater than the premiums paid and owed to United, a deficit in the plan would be incurred and a liability for the excess costs would be accrued in our Consolidated Balance Sheets. On the other hand, if the Program Costs for the reporting quarter are less than the premiums paid and owed to United, a surplus in the plan would be incurred and we would record an asset for the excess premiums in our Consolidated Balance Sheets. The terms of the arrangement require us to maintain an accumulated cash surplus in the plan of $9 million, which is reported as long-term prepaid health insurance on our Consolidated Balance Sheets. In addition, United requires a deposit equal to approximately one day of claims funding activity, which was $7 million at June 30, 2026, and is included in deposits - health insurance as a long-term asset on our Consolidated Balance Sheets. As of June 30, 2026, Program Costs were less than the net premiums paid and owed to United by $40 million, which is included in prepaid insurance, a current asset, on our Consolidated Balance Sheets at June 30, 2026. In addition, the premiums owed to United at June 30, 2026, were $55 million, which is included in accrued health insurance costs, a current liability, on our Consolidated Balance Sheets. Our benefits costs incurred in the first six months of 2026 included a decrease of $4 million for changes in estimated run-off related to prior periods. Our benefits costs incurred in the first six months of 2025 included an increase of $11 million for changes in estimated run-off related to prior periods, net of Individual Claims Limit.

Workers’ Compensation Costs

Our workers’ compensation coverage for our WSEEs in our PEO HR Solutions has been provided through arrangements with the Chubb Group of Insurance Companies or its predecessors (the “Chubb Program”) since 2007. The Chubb Program is fully insured in that Chubb has the responsibility to pay all claims incurred under the policy regardless of whether we satisfy our responsibilities. Under the Chubb Program, for claims incurred on or before September 30, 2019, we have financial responsibility to Chubb for the first $1 million layer of claims per occurrence and, for claims over $1 million, up to a maximum aggregate amount of $6 million per policy year for claims that exceed $1 million. Chubb bears the financial responsibility for all claims in excess of these levels. Effective for claims incurred on or after October 1, 2019, we have financial responsibility to Chubb for the first $1.5 million layer of claims per occurrence and, for claims over $1.5 million, up to a maximum aggregate amount of $6 million per policy year for claims that exceed $1.5 million.

Because we bear the financial responsibility for claims up to the levels noted above, such claims, which are the primary component of our workers’ compensation costs, are recorded in the period incurred. Workers’ compensation insurance includes ongoing health care and indemnity coverage whereby claims are paid over numerous years following the date of injury. Accordingly, the accrual of related incurred costs in each reporting period includes estimates, which take into account the ongoing development of claims and therefore requires a significant level of judgment.

We utilize a third-party actuary to estimate our loss development rate, which is primarily based upon the nature of WSEEs’ job responsibilities, the location of WSEEs, the historical frequency and severity of workers’ compensation claims, and an estimate of future cost trends. Each reporting period, changes in the actuarial assumptions resulting from changes in actual claims experience and other trends are incorporated into our workers’ compensation claims cost estimates. During the six months ended June 30, 2026 and 2025, we reduced accrued workers’ compensation costs by $7 million and $14 million, respectively, for changes in estimated losses related to prior periods. Workers’ compensation cost estimates are discounted to present value at a rate based upon the U.S. Treasury rates that correspond with the weighted average estimated claim payout period (the average discount rate utilized was 3.8% in the 2026 period and 4.0% in the 2025 period) and are accreted over the estimated claim payment period and included as a component of direct costs in our Consolidated Statements of Operations.


			2026 Second Quarter Form 10-Q			12


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table provides the activity and balances related to incurred but not paid workers’ compensation claims:


	Six Months Ended June 30,
(in millions)	2026		2025

Beginning balance, January 1,	$	184	$	204
Accrued claims, net	44		32
Present value discount, net of accretion	(5)		(6)
Paid claims	(39)		(41)
Ending balance	$	184	$	189

Current portion of accrued claims	$	81	$	76
Long-term portion of accrued claims	103		113
Total accrued claims	$	184	$	189

The current portion of accrued workers’ compensation costs on our Consolidated Balance Sheets at June 30, 2026 and 2025 includes $2 million and $3 million, respectively, of workers’ compensation administrative fees.

The undiscounted accrued workers’ compensation costs were $228 million as of June 30, 2026 and 2025.

At the beginning of each policy period, the workers’ compensation insurance carrier establishes monthly funding requirements comprised of premium costs and funds to be set aside for payment of future claims (“claim funds”). The level of claim funds is primarily based upon anticipated WSEE payroll levels and expected workers’ compensation loss rates, as determined by the insurance carrier. Monies funded into the program for incurred claims expected to be paid within one year are primarily held as cash and money market funds (cash equivalents) and are recorded as restricted cash, a short-term asset, while the remainder of claim funds are included in deposits – workers’ compensation, a long-term asset in our Consolidated Balance Sheets. At June 30, 2026, we had restricted cash of $81 million and deposits – workers’ compensation of $160 million, of which $236 million was held in trust bank accounts.

Our estimate of incurred claim costs expected to be paid within one year is included in short-term liabilities, while our estimate of incurred claim costs expected to be paid beyond one year is included in long-term liabilities on our Consolidated Balance Sheets.

Revenue and Direct Cost Recognition

We enter into contracts with our PEO HR Solutions customers for human resources services based on the rate and price stated in the contract. Our contracts generally establish pricing for a period of 12 months and are generally cancellable at any time by either party with 30-days’ notice. Our performance obligations are satisfied as services are rendered each month. The term between invoicing and when our performance obligations are satisfied is not significant. Our payment terms typically require payment concurrently with the invoicing of our PEO services. We do not have significant financing components or significant payment terms.

Our revenue is generally recognized ratably over the payroll period as WSEEs perform their service at the client worksite in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers. Customers are invoiced concurrently with each periodic payroll of its WSEEs. Revenues that have been recognized but not invoiced represent unbilled accounts receivable of $867 million at June 30, 2026 and $810 million at December 31, 2025, and are included in accounts receivable, net on our Consolidated Balance Sheets.

Pursuant to the “practical expedients” provided under ASC 340-40, Other Assets and Deferred Costs - Contracts with Customers, we expense sales commissions when incurred because the terms of our contracts are cancellable by either party with a 30-day notice. These costs are recorded in commissions in our Consolidated Statements of Operations.


			2026 Second Quarter Form 10-Q			13


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Our revenue for our PEO HR Solutions by geographic region and for our other products and services offerings are as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
(in millions)	2026		2025	% Change	2026	2025	% Change

Northeast	$	446