Business Wire | Nov 1, 2021 04:15PM EDT

Insperity Announces Third Quarter Results

Nov. 01, 2021

HOUSTON--(BUSINESS WIRE)--Nov. 01, 2021--Insperity, Inc. (NYSE: NSP), a leading provider of human resources and business performance solutions for America's best businesses, today reported results for the third quarter ended Sep. 30, 2021:

* Q3 average number of WSEEs paid and revenues up 11% and 20%, respectively * Q3 net income and diluted EPS of $27.3 million and $0.70, respectively * Q3 adjusted EBITDA and adjusted EPS of $60.1 million and $0.89, respectively * YTD net income and diluted EPS of $114.4 million and $2.94, respectively * YTD adjusted EBITDA and adjusted EPS of $224.6 million and $3.62, respectively

Third Quarter Results

The average number of worksite employees ("WSEEs") paid per month in Q3 2021 increased 11% to 257,560 WSEEs. Net gains from hiring in our client base, combined with WSEEs paid from new sales and client retention at our historical high level of 99% for the quarter, drove the accelerated growth above the high end of our expectations. Revenues in Q3 2021 increased 20% to $1.2 billion on the 11% increase in paid worksite employees and an 8% increase in revenue per WSEE, which reflects a 4% increase in pricing and the non-recurrence of the 2020 FICA deferral credits instituted as part of the CARES Act.

"We are pleased with our solid financial results and our return to double-digit unit growth in Q3," said Paul J. Sarvadi, Insperity chief executive officer and chairman. "Strong demand for our services, combined with solid execution from our dedicated employees, positions Insperity to continue growth acceleration into 2022."

Gross profit increased 7.3% over Q3 2020 to $198.5 million. This higher than expected increase resulted from the higher than anticipated paid WSEEs and pricing, combined with favorable results from our workers' compensation program and payroll tax area. In Q3 2021, benefits costs continued to reflect the dynamics of the pandemic, including increased utilization of our health plan and COVID-19 related vaccination, testing and treatment costs.

Operating expenses in Q3 2021 increased only 2% over Q3 2020 and included a decrease in stock-based compensation from a change in our annual incentive plan. Cash operating expenses increased 9% and included an increase in marketing costs associated with lead generation activity and SalesForce implementation costs, combined with ongoing operating expense management.

For Q3 2021, reported net income and diluted earnings per share ("EPS") were $27.3 million and $0.70, respectively. Adjusted EBITDA increased 4% to $60.1 million and adjusted EPS decreased 2% to $0.89.

Year-to-Date Results

Revenues for the first nine months of 2021 increased 14% to $3.7 billion on a 5% increase in paid worksite employees and an 8% increase in revenue per WSEE. Gross profit for the first nine months of 2021 increased 2% to $649.5 million. Operating expenses increased 9% to $490.8 million compared to the 2020 period.

For the nine months ended September 30, 2021, reported net income and diluted EPS were $114.4 million and $2.94, respectively. Adjusted EPS decreased 13% compared to the first nine months of 2020 to $3.62 reflecting the unusually low benefits costs in the prior year due primarily to the deferral of care at the onset of the pandemic. Adjusted EBITDA decreased 10% compared to the first nine months of 2020 to $224.6 million.

Net income per WSEE per month decreased 19% from $64 in the 2020 period to $52 in the 2021 period. Adjusted EBITDA per WSEE per month decreased 15% from $120 in the 2020 period to $102 in the 2021 period.

"The acceleration to double-digit worksite employee growth ahead of our 2021 plan, combined with our management of pricing, direct cost programs and operating costs has resulted in significant outperformance in earnings through the first three quarters of this year," said Douglas S. Sharp, Insperity senior vice president of finance, chief financial officer and treasurer. "Our solid operating results, even through the pandemic, positions us to continue to provide strong shareholder return though our share repurchase and dividend programs."

Cash outlays in the first nine months of 2021 included the repurchase of approximately 544,000 shares of stock at a cost of $49.8 million, dividends totaling $50.2 million and capital expenditures of $23.6 million. Adjusted cash totaled $228 million at September 30, 2021 and $130 million remains available under our $500 million credit facility.

2021 Guidance

The company also announced its updated guidance for 2021, including the fourth quarter of 2021. Please refer to the accompanying financial tables at the end of this press release for the reconciliation of non-GAAP financial measures to the comparable GAAP financial measures.

Q4 2021 Full Year 2021



Average WSEEs paid 265,500 - 268,000 250,100 - 250,600

Year-over-year increase 11% - 12% 6.8% - 7%



Adjusted EPS $0.61 - $0.81 $4.25 - $4.46

Year-over-year increase (decrease) 24% - 65% (8)% - (4)%



Adjusted EBITDA (in millions) $45 - $56 $271 - $282

Year-over-year increase (decrease) 19% - 48% (6)% - (2)%

Definition of Key Metrics

Average WSEEs paid - Determined by calculating the company's cumulative worksite employees paid during the period divided by the number of months in the period.

Adjusted EPS - Represents diluted net income per share computed in accordance with GAAP, excluding the impact of non-cash stock-based compensation.

Adjusted EBITDA - Represents net income computed in accordance with GAAP, plus interest expense, income taxes, depreciation and amortization expense and non-cash stock-based compensation.

Conference Call and Webcast

Insperity will be hosting a conference call today at 5 p.m. ET to discuss these results, and the guidance discussed in this press release, and answer questions from investment analysts. To listen in, call 877-651-0053 and use conference i.d. number 6566878. The call will also be webcast at http://ir.insperity.com. The conference call script will be available at the same website later today. A replay of the conference call will be available at 855-859-2056, conference i.d. 6566878. The webcast will be archived for one year.

About Insperity

Since 1986, Insperity's mission has been to help businesses succeed so communities prosper. Offering the most comprehensive suite of scalable HR solutions available in the marketplace, Insperity is defined by an unrivaled breadth and depth of services and level of care. Through an optimal blend of premium HR service and technology, Insperity delivers the administrative relief, reduced liabilities and better benefit solutions that businesses need for sustained growth. With 2020 revenues of $4.3 billion and more than 80 offices throughout the U.S., Insperity is currently making a difference in thousands of businesses and communities nationwide. For more information, visit http://www.insperity.com.

Forward-Looking Statements

The statements contained herein that are not historical facts are forward-looking statements within the meaning of the 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," "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; projected or anticipated benefits or other consequences of such plans or strategies; or projections involving anticipated revenues, earnings, average number of worksite employees, benefits and workers' compensation costs, or other operating results. We base the 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; * impact of the COVID-19 pandemic, or other future pandemics, including the scope, severity and duration of the pandemic; government responses; regulatory developments; and the related disruptions and economic impact to our business and the small and medium-sized businesses that we serve; * vulnerability to regional economic factors because of our geographic market concentration; * failure to comply with covenants under our credit facility; * our liability for worksite employee payroll, payroll taxes and benefits costs; * increases in health insurance costs and workers' compensation rates and underlying claims trends, health care reform, financial solvency of workers' compensation carriers, other insurers or financial institutions, state unemployment tax rates, liabilities for employee and client actions or payroll-related claims; * cancellation of client contracts on short notice, or the inability to renew client contracts or attract new clients; * the ability 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 PEO industry, on our growth and/or profitability; * an adverse final judgment or settlement of claims against Insperity; * disruptions of our information technology systems; * 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, data centers or cloud service providers; and * our ability to integrate or realize expected returns on our acquisitions.

These factors are discussed in further detail in Insperity's filings with the U.S. Securities and Exchange Commission. 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.

Insperity, Inc.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)



(in thousands) September 30, December 31, 2021 2020



Assets

Cash and cash equivalents $ 467,921 $ 554,846

Restricted cash 47,813 45,522

Marketable securities 32,697 34,529

Accounts receivable, net 579,503 392,746

Prepaid insurance 19,657 10,164

Other current assets 53,293 39,461

Income taxes receivable 5,584 -

Total current assets 1,206,468 1,077,268

Property and equipment, net 212,322 216,256

Right of use leased assets 63,673 60,663

Prepaid health insurance 9,000 9,000

Deposits 216,136 194,231

Goodwill and other intangible assets, net 12,707 12,707

Deferred income taxes, net 1,653 9,603

Other assets 12,093 4,548

Total assets $ 1,734,052 $ 1,584,276



Liabilities and stockholders' equity

Accounts payable $ 4,250 $ 6,203

Payroll taxes and other payroll deductions 232,862 377,960 payable

Accrued worksite employee payroll cost 534,890 334,836

Accrued health insurance costs 40,366 32,685

Accrued workers' compensation costs 51,368 48,186

Accrued corporate payroll and commissions 69,621 44,277

Other accrued liabilities 70,824 60,777

Total current liabilities 1,004,181 904,924

Accrued workers' compensation cost, net of 191,193 195,239 current

Long-term debt 369,400 369,400

Operating lease liabilities, net of current 65,979 64,289

Other accrued liabilities, net of current 6,293 6,292

Total noncurrent liabilities 632,865 635,220

Stockholders' equity:

Common stock 555 555

Additional paid-in capital 104,587 95,528

Treasury stock, at cost (645,993 ) (626,984 )

Retained earnings 637,857 575,033

Total stockholders' equity 97,006 44,132

Total liabilities and stockholders' equity $ 1,734,052 $ 1,584,276

Insperity, Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(in thousands, except per share amounts)

Three Months Ended

September 30,

Nine Months Ended

September 30,

2021

2020

Change

2021

2020

Change

Operating results:

Revenues(1)

$

1,209,628

$

1,007,820

20.0

%

$

3,681,834

$

3,230,669

14.0

%

Payroll taxes, benefits and workers' compensation costs

1,011,149

822,787

22.9

%

3,032,356

2,591,365

17.0

%

Gross profit

198,479

185,033

7.3

%

649,478

639,304

1.6

%

Salaries, wages and payroll taxes

89,232

89,429

(0.2)

%

286,669

266,640

7.5

%

Stock-based compensation

10,362

20,864

(50.3)

%

35,965

38,110

(5.6)

%

Commissions

8,724

7,722

13.0

%

24,694

23,657

4.4

%

Advertising

9,507

4,781

98.8

%

23,804

15,334

55.2

%

General and administrative expenses

31,134

25,646

21.4

%

91,981

85,254

7.9

%

Depreciation and amortization

9,917

7,819

26.8

%

27,715

23,329

18.8

%

Total operating expenses

158,876

156,261

1.7

%

490,828

452,324

8.5

%

Operating income

39,603

28,772

37.6

%

158,650

186,980

(15.2)

%

Other income (expense):

Interest income

251

103

143.7

%

2,230

2,351

(5.1)

%

Interest expense

(1,963)

(1,731)

13.4

%

(5,537)

(6,312)

(12.3)

%

Income before income tax expense

37,891

27,144

39.6

%

155,343

183,019

(15.1)

%

Income tax expense

10,595

7,135

48.5

%

40,971

49,067

(16.5)

%

Net income

$

27,296

$

20,009

36.4

%

$

114,372

$

133,952

(14.6)

%

Less distributed and undistributed earnings allocated to participating securities

(39)

(104)

(62.5)

%

(219)

(792)

(72.3)

%

Net income allocated to common shares

$

27,257

$

19,905

36.9

%

$

114,153

$

133,160

(14.3)

%

Net income per share of common stock

Basic

$

0.71

$

0.52

36.5

%

$

2.97

$

3.45

(13.9)

%

Diluted

$

0.70

$

0.51

37.3

%

$

2.94

$

3.43

(14.3)

%

___________________________________

(1) Revenues are comprised of gross billings less WSEE payroll costs as follows:

Insperity, Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)



Three Months Ended Nine Months Ended(in thousands, except per September 30, September 30,share amounts) 2021 2020 Change 2021 2020 Change

Operating results:

Revenues^(1) $ 1,209,628 $ 1,007,820 20.0 % $ 3,681,834 $ 3,230,669 14.0 %

Payroll taxes,benefits andworkers' 1,011,149 822,787 22.9 % 3,032,356 2,591,365 17.0 %compensationcosts

Gross profit 198,479 185,033 7.3 % 649,478 639,304 1.6 %

Salaries,wages and 89,232 89,429 (0.2) % 286,669 266,640 7.5 %payroll taxes

Stock-based 10,362 20,864 (50.3) % 35,965 38,110 (5.6) %compensation

Commissions 8,724 7,722 13.0 % 24,694 23,657 4.4 %

Advertising 9,507 4,781 98.8 % 23,804 15,334 55.2 %

General andadministrative 31,134 25,646 21.4 % 91,981 85,254 7.9 %expenses

Depreciationand 9,917 7,819 26.8 % 27,715 23,329 18.8 %amortization

Totaloperating 158,876 156,261 1.7 % 490,828 452,324 8.5 %expenses

Operating 39,603 28,772 37.6 % 158,650 186,980 (15.2) %income

Other income (expense):

Interest 251 103 143.7 % 2,230 2,351 (5.1) %income

Interest (1,963) (1,731) 13.4 % (5,537) (6,312) (12.3) %expense

Income beforeincome tax 37,891 27,144 39.6 % 155,343 183,019 (15.1) %expense

Income tax 10,595 7,135 48.5 % 40,971 49,067 (16.5) %expense

Net income $ 27,296 $ 20,009 36.4 % $ 114,372 $ 133,952 (14.6) %

Lessdistributedandundistributed (39) (104) (62.5) % (219) (792) (72.3) %earningsallocated toparticipatingsecurities

Net incomeallocated to $ 27,257 $ 19,905 36.9 % $ 114,153 $ 133,160 (14.3) %common shares



Net income per share of common stock

Basic $ 0.71 $ 0.52 36.5 % $ 2.97 $ 3.45 (13.9) %

Diluted $ 0.70 $ 0.51 37.3 % $ 2.94 $ 3.43 (14.3) %

___________________________________

(1) Revenues are comprised of gross billings less WSEE payroll costs asfollows:

Three Months Ended

September 30,

Nine Months Ended

September 30,

(in thousands)

2021

2020

2021

2020

Gross billings

$

7,994,006

$

6,563,727

$

23,682,279

$

20,356,164

Less: WSEE payroll cost

6,784,378

5,555,907

20,000,445

17,125,495

Revenues

$

1,209,628

$

1,007,820

$

3,681,834

$

3,230,669

Three Months Ended Nine Months Ended September 30, September 30,

(in thousands) 2021 2020 2021 2020



Gross billings $ 7,994,006 $ 6,563,727 $ 23,682,279 $ 20,356,164

Less: WSEE payroll 6,784,378 5,555,907 20,000,445 17,125,495 cost

Revenues $ 1,209,628 $ 1,007,820 $ 3,681,834 $ 3,230,669

Insperity, Inc.

KEY FINANCIAL AND STATISTICAL DATA

(Unaudited)

Three Months Ended

September 30,

Nine Months Ended

September 30,

2021

2020

Change

2021

2020

Change

Average WSEEs paid

257,560

231,750

11.1

%

244,667

232,553

5.2

%

Statistical data (per WSEE per month):

Revenues(1)

$

1,565

$

1,450

7.9

%

$

1,672

$

1,544

8.3

%

Gross profit

257

266

(3.4

)

%

295

305

(3.3

)

%

Operating expenses

206

225

(8.4

)

%

223

216

3.2

%

Operating income

51

41

24.4

%

72

89

(19.1

)

%

Net income

35

29

20.7

%

52

64

(18.8

)

%

____________________________________

(1) Revenues per WSEE per month are comprised of gross billings per WSEE per month less WSEE payroll costs per WSEE per month follows:

Insperity, Inc.

KEY FINANCIAL AND STATISTICAL DATA

(Unaudited)



Three Months Ended Nine Months Ended September 30, September 30,

2021 2020 Change 2021 2020 Change



Average WSEEs paid 257,560 231,750 11.1 % 244,667 232,553 5.2 %

Statistical data(per WSEE per month):

Revenues^(1) $ 1,565 $ 1,450 7.9 % $ 1,672 $ 1,544 8.3 %

Gross profit 257 266 (3.4 ) % 295 305 (3.3 ) %

Operating expenses 206 225 (8.4 ) % 223 216 3.2 %

Operating income 51 41 24.4 % 72 89 (19.1 ) %

Net income 35 29 20.7 % 52 64 (18.8 ) %

____________________________________

(1) Revenues per WSEE per month are comprised of gross billings per WSEE permonth less WSEE payroll costs per WSEE per month follows:

Three Months Ended

September 30,

Nine Months Ended

September 30,

(per WSEE per month)

2021

2020

2021

2020

Gross billings

$

10,346

$

9,441

$

10,755

$

9,726

Less: WSEE payroll cost

8,781

7,991

9,083

8,182

Revenues

$

1,565

$

1,450

$

1,672

$

1,544

Insperity, Inc.

Non-GAAP Financial Measures

(Unaudited)

Non-GAAP financial measures are not prepared in accordance with GAAP and may be different from non-GAAP financial measures used by other companies. Non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of the non-GAAP financial measures used to their most directly comparable GAAP financial measures as provided in the tables below.

Three Months Ended Nine Months Ended September 30, September 30,

(per WSEE per month) 2021 2020 2021 2020

Gross billings $ 10,346 $ 9,441 $ 10,755 $ 9,726

Less: WSEE payroll cost 8,781 7,991 9,083 8,182

Revenues $ 1,565 $ 1,450 $ 1,672 $ 1,544

Insperity, Inc.

Non-GAAP Financial Measures

(Unaudited)

Non-GAAP financial measures are not prepared in accordance with GAAP and may be different from non-GAAP financial measures used by other companies. Non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of the non-GAAP financial measures used to their most directly comparable GAAP financial measures as provided in the tables below.

Non-GAAP Definition Benefit of Non-GAAP MeasureMeasure

Non-bonus payroll cost is a non-GAAP financial measure that Our management refers to non-bonus payroll excludes the impact of cost in analyzing, reporting and bonus payrolls paid to forecasting our workers' compensation our WSEEs. costs.

Non-bonus payroll cost Bonus payroll cost We include these non-GAAP financial varies from period to measures because we believe they are period, but has no useful to investors in allowing for direct impact to our greater transparency related to the costs ultimate workers' incurred under our current workers' compensation costs compensation program. under the current program.

Excludes funds associated with:

Adjusted ? federal and statecash, cash income taxequivalents withholdings,and marketable ? employment taxes,securities ? other payroll deductions, and

? client prepayments.



Represents operating expenses excluding the impact of theAdjusted following:operatingexpenses ? non-cash stock-based compensation, and

? depreciation and amortization expense. We believe that the exclusion of the identified items helps us reflect the fundamentals of our underlying business model and analyze results against our Represents net income expectations, against prior periods, and computed in accordance to plan for future periods by focusing on with GAAP, plus: our underlying operations. We believe that the adjusted results provide relevant and ? interest expense, useful information for investors becauseEBITDA they allow investors to view performance ? income tax expense, in a manner similar to the method used by and management and improves their ability to understand and assess our operating ? depreciation and performance. Adjusted EBITDA is used by amortization expense. our lenders to assess our leverage and ability to make interest payments.

Represents EBITDAAdjusted plus:EBITDA ? non-cash stock-based compensation.



Represents net income computed in accordanceAdjusted with GAAP, excluding:net income ? non-cash stock-based compensation.



Represents diluted net income per shareAdjusted computed in accordanceEPS with GAAP, excluding:

? non-cash stock-based compensation.

Following is a reconciliation of payroll cost (GAAP) to non-bonus payroll costs (non-GAAP):

Three Months Ended September 30,

Nine Months Ended September 30,

(in thousands, except per WSEE per month)

2021

2020

2021

2020

Per

WSEE

Per

WSEE

Per

WSEE

Per

WSEE

Payroll cost

$

6,784,378

$

8,781

$

5,555,907

$

7,991

$

20,000,445

$

9,083

$

17,125,495

$

8,182

Less: Bonus payroll cost

726,187

940

431,861

621

2,942,817

1,337

1,935,950

925

Non-bonus payroll cost

$

6,058,191

$

7,841

$

5,124,046

$

7,370

$

17,057,628

$

7,746

$

15,189,545

$

7,257

% Change period over period

18.2

%

6.4

%

0.4

%

4.4

%

12.3

%

6.7

%

3.2

%

3.4

%

Following is a reconciliation of payroll cost (GAAP) to non-bonus payroll costs(non-GAAP):



Three Months Ended September 30, Nine Months Ended September 30,

(in 2021 2020 2021 2020thousands,except per Per Per Per PerWSEE per month) WSEE WSEE WSEE WSEE



Payroll $ 6,784,378 $ 8,781 $ 5,555,907 $ 7,991 $ 20,000,445 $ 9,083 $ 17,125,495 $ 8,182 cost

Less:Bonus 726,187 940 431,861 621 2,942,817 1,337 1,935,950 925 payrollcost

Non-bonuspayroll $ 6,058,191 $ 7,841 $ 5,124,046 $ 7,370 $ 17,057,628 $ 7,746 $ 15,189,545 $ 7,257 cost

% Changeperiod 18.2 % 6.4 % 0.4 % 4.4 % 12.3 % 6.7 % 3.2 % 3.4 %overperiod

Following is a reconciliation of cash, cash equivalents and marketable securities (GAAP) to adjusted cash, cash equivalents and marketable securities (non-GAAP):

(in thousands)

September 30, 2021

December 31, 2020

Cash, cash equivalents and marketable securities

$

500,618

$

589,375

Less:

Amounts payable for withheld federal and state income taxes, employment taxes and other payroll deductions

198,405

341,988

Client prepayments

74,646

35,328

Adjusted cash, cash equivalents and marketable securities

$

227,567

$

212,059

Following is a reconciliation of cash, cash equivalents and marketablesecurities (GAAP) to adjusted cash, cash equivalents and marketable securities(non-GAAP):



(in thousands) September December 30, 2021 31, 2020



Cash, cash equivalents and marketable securities $ 500,618 $ 589,375

Less:

Amounts payable for withheld federal and state income 198,405 341,988 taxes, employment taxes and other payroll deductions

Client prepayments 74,646 35,328

Adjusted cash, cash equivalents and marketable $ 227,567 $ 212,059 securities

Following is a reconciliation of net income (GAAP) to EBITDA (non-GAAP) and adjusted EBITDA (non-GAAP):

(in thousands, except per WSEE per month)

Three Months Ended September 30,

Nine Months Ended September 30,

2021

2020

2021

2020

Per

WSEE

Per

WSEE

Per

WSEE

Per

WSEE

Net income

$

27,296

$

35

$

20,009

$

29

$

114,372

$

52

$

133,952

$

64

Income tax expense

10,595

14

7,135

10

40,971

19

49,067

23

Interest expense

1,963

3

1,731

2

5,537

3

6,312

3

Depreciation and amortization

9,917

12

7,819

12

27,715

12

23,329

12

EBITDA

49,771

64

36,694

53

188,595

86

212,660

102

Stock-based compensation

10,362

14

20,864

30

35,965

16

38,110

18

Adjusted EBITDA

$

60,133

$

78

$

57,558

$

83

$

224,560

$

102

$

250,770

$

120

% Change period over period

4.5

%

(6.0

)

%

12.5

%

16.9

%

(10.5

)

%

(15.0

)

%

19.8

%

20.0

%

Following is a reconciliation of net income (GAAP) to EBITDA (non-GAAP) andadjusted EBITDA (non-GAAP):



Three Months Ended September 30, Nine Months Ended September 30,

(in thousands, 2021 2020 2021 2020except per WSEE permonth) Per Per Per Per WSEE WSEE WSEE WSEE



Net income $ 27,296 $ 35 $ 20,009 $ 29 $ 114,372 $ 52 $ 133,952 $ 64

Income tax expense 10,595 14 7,135 10 40,971 19 49,067 23

Interest expense 1,963 3 1,731 2 5,537 3 6,312 3

Depreciation and 9,917 12 7,819 12 27,715 12 23,329 12 amortization

EBITDA 49,771 64 36,694 53 188,595 86 212,660 102

Stock-based 10,362 14 20,864 30 35,965 16 38,110 18 compensation

Adjusted EBITDA $ 60,133 $ 78 $ 57,558 $ 83 $ 224,560 $ 102 $ 250,770 $ 120

% Change period 4.5 % (6.0 ) % 12.5 % 16.9 % (10.5 ) % (15.0 ) % 19.8 % 20.0 %over period

Following is a reconciliation of net income (GAAP) to adjusted net income (non-GAAP):

Three Months Ended September 30,

Nine Months Ended September 30,

(in thousands)

2021

2020

2021

2020

Net income

$

27,296

$

20,009

$

114,372

$

133,952

Non-GAAP adjustments:

Stock-based compensation

10,362

20,864

35,965

38,110

Tax effect

(2,865

)

(5,484

)

(9,486

)

(10,134

)

Total non-GAAP adjustments, net

7,497

15,380

26,479

27,976

Adjusted net income

$

34,793

$

35,389

$

140,851

$

161,928

% Change period over period

(1.7

)

%

15.5

%

(13.0

)

%

10.4

%

Following is a reconciliation of net income (GAAP) to adjusted net income(non-GAAP):



Three Months Ended Nine Months Ended September September 30, 30,

(in thousands) 2021 2020 2021 2020



Net income $ 27,296 $ 20,009 $ 114,372 $ 133,952

Non-GAAP adjustments:

Stock-based 10,362 20,864 35,965 38,110 compensation

Tax effect (2,865 ) (5,484 ) (9,486 ) (10,134 )

Total non-GAAP 7,497 15,380 26,479 27,976 adjustments, net

Adjusted net income $ 34,793 $ 35,389 $ 140,851 $ 161,928

% Change period over (1.7 ) % 15.5 % (13.0 ) % 10.4 %period

Following is a reconciliation of diluted EPS (GAAP) to adjusted EPS(non-GAAP):

Three Months Ended September 30,

Nine Months Ended September 30,

2021

2020

2021

2020

Diluted EPS

$

0.70

$

0.51

$

2.94

$

3.43

Non-GAAP adjustments:

Stock-based compensation

0.27

0.54

0.92

0.98

Tax effect

(0.08

)

(0.14

)

(0.24

)

(0.26

)

Total non-GAAP adjustments, net

$

0.19

$

0.40

$

0.68

$

0.72

Adjusted EPS

$

0.89

$

0.91

$

3.62

$

4.15

% Change period over period

(2.2

)

%

21.3

%

(12.8

)

%

16.2

%

Following is a reconciliation of diluted EPS (GAAP) to adjusted EPS^(non-GAAP):



Three Months Ended Nine Months Ended September 30, September 30,

2021 2020 2021 2020



Diluted EPS $ 0.70 $ 0.51 $ 2.94 $ 3.43

Non-GAAP adjustments:

Stock-based compensation 0.27 0.54 0.92 0.98

Tax effect (0.08 ) (0.14 ) (0.24 ) (0.26 )

Total non-GAAP adjustments, $ 0.19 $ 0.40 $ 0.68 $ 0.72 net

Adjusted EPS $ 0.89 $ 0.91 $ 3.62 $ 4.15

% Change period over period (2.2 ) % 21.3 % (12.8 ) % 16.2 %

Following is a reconciliation of GAAP to non-GAAP financial measures for fourth quarter and full year 2021 guidance:

(in millions, except per share amounts)

Q4 2021 Guidance

Full Year 2021 Guidance

Net income

$18 - $26

$133- $141

Income tax expense

7 - 10

48 - 51

Interest expense

2

8

Depreciation and amortization

10

38

EBITDA

37 - 48

227 - 238

Stock-based compensation

8

44

Adjusted EBITDA

$45 - $56

$271 - $282

Diluted net income per share of common stock

$0.46 - $0.66

$3.42 - $3.63

Non-GAAP adjustments:

Stock-based compensation

0.21

1.13

Tax effect

(0.06)

(0.30)

Total non-GAAP adjustments, net

0.15

0.83

Adjusted EPS

$0.61 - $0.81

$4.25 - $4.46

View source version on businesswire.com: https://www.businesswire.com/news/home/20211101005795/en/

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