Total Revenue

+10% (Q4 2024: $304.8M vs Q4 2023: $276.7M)

Strong PEO growth (+12% YoY from $254.3M to $284.5M) more than offset a 9% decline in staffing revenue (from $22.33M to $20.26M). This mix improvement reflects the ongoing strategic focus on higher-margin services seen in previous quarters. " "

Professional Employer Services Revenue

+12% (Q4 2024: $284.5M vs Q4 2023: $254.3M)

Growth is driven by an increase in worksite employees and higher average billing per employee, continuing the upward trend noted in earlier periods, which has helped drive overall revenue expansion. " "

Staffing Services Revenue

-9% (Q4 2024: $20.26M vs Q4 2023: $22.33M)

The decline is attributed to strategic repricing and a shift toward PEO-focused operations amid lower demand, echoing the adjustments observed in previous periods that aimed to optimize profitability over top-line growth. " "

Income from Operations

+13% (Q4 2024: $20.62M vs Q4 2023: $18.20M)

The improvement is due to enhanced revenue growth and better cost management, which boosted the gross margin and overall operating performance, consistent with the trend of shifting towards higher-margin PEO services from prior periods. " "

Net Income

+15% (Q4 2024: $16.80M vs Q4 2023: $14.56M)

Higher net income is a result of solid revenue expansion combined with improved gross margins and expense management, building on improvements seen in previous quarters. " "

Basic Earnings per Share

-70%+ (Q4 2024: $0.65 vs Q4 2023: $2.20)

Despite improved net income, the drastic EPS decline indicates a significant increase in the share count or dilutive factors affecting per-share metrics, marking a major capital structure change relative to the previous period. " "

Gross Margin

+8.8% YoY (Q4 2024: $71.38M, 25.3% vs Q4 2023: $65.61M, 25.0%)

The increase is driven by cost efficiencies—notably a reduction in workers' compensation expenses—and a larger contribution from higher-margin PEO services, furthering the positive trends observed in earlier quarters. " "

Gross Billings Growth

FY 2025

7%–8% "

7%–9% "

raised

Average Worksite Employees (WSEs) Growth

FY 2025

4%–5% "

4%–6% "

raised

Gross Margin

FY 2025

3.03%–3.07% "

2.85%–3.10% "

lowered

Effective Annual Tax Rate

FY 2025

26%–27% "

26%–27% "

no change

Investment Income

FY 2025

no prior guidance

expected to decrease due to lower average book yields as short-term rates decline "

no prior guidance

Growth Momentum

Q1 earnings called out a strong sales pipeline and record WSE additions. " " Q2 highlighted 6% YoY gross billings growth. " " Q3 noted a 9% increase in gross billings and record WSE growth. " "

Q4 reported strong growth momentum with a 10% YoY increase in gross billings, record worksite employee additions, and robust client hiring trends. " "

Consistent positive performance – metrics have steadily improved, with Q4 showing slightly higher growth and very positive sentiment.

Record/Controllable Growth

Q1 emphasized record WSE additions and a focus on controllable growth. " " " Q2 highlighted the greatest net hiring in six quarters. " Q3 stressed “the best-ever” controllable growth driven by client additions and retention. "

Q4 demonstrated record controllable growth with significant new client additions, over 4,000 net WSEs, and outstanding client retention rates. " "

Persistent strength – the narrative remains highly positive with continued record performance and enhanced client retention.

Asset-Light Market Expansion Strategy

Q1 discussed both successes and challenges—including staffing fluctuations and profitability concerns " " " —while Q2 and Q3 underlined positive market entry results with new market development managers. " "

Q4 focused on successes in expanding into new geographies, highlighted the addition of over 500 new WSEs in January, and noted progress toward opening new branches, with no mention of earlier challenges. " "

Improved execution – earlier challenges mentioned in Q1 are no longer evident, shifting sentiment to a more uniformly positive outlook.

Health Benefits Product Evolution and Kaiser Partnership

Q1 introduced the Kaiser partnership and a growing health benefits offering with steady client numbers " " " ; Q2 and Q3 emphasized a strategic multiyear partnership and increasing plan enrollments. " "

Q4 described the health benefits product as a new profit center, with client numbers exceeding targets (575 clients vs. 275 at start of 2024) and enhanced appeal for larger, white‐collar clients. " " "

Accelerated evolution – product performance has markedly improved and profitability strengthened, boosting optimism for future growth.

Client Hiring and Retention Dynamics

Q1 noted moderate but positive hiring with strong client retention. " " Q2 and Q3 continued to report robust retention rates and steady hiring trends across most regions. " " "

Q4 reported slightly improved client hiring (though still below historical averages) and record client retention evidenced by a higher NPS (up to 69), highlighting elevated client satisfaction. " " " "

Consistently positive – retention remains strong and hiring shows modest improvement despite challenging historical benchmarks.

Workers' Compensation Pricing Pressure

Q1 highlighted favorable claim developments and minimal pricing pressure. " Q2 mentioned a competitive California market with steady performance. " " Q3 reiterated that workers’ comp has been a competitive sector for years. "

Q4 explained that workers' compensation pricing pressure continues, though the rate decreases have decelerated; favorable claim frequency trends and adjustments are helping to offset pricing pressures. " " "

Stable but cautious – the pressure persists, yet deceleration and cost savings help alleviate impact, maintaining a neutral outlook on this challenge.

Payroll Tax Rate Increases

Q1 discussed higher payroll tax rates impacting margins early in the year, with expectations for a rebound later. " " Q2 noted that higher rates were factored into pricing to boost later gross margins; Q3 did not mention this topic.

Q4 mentioned that client payroll tax rates have increased in 2025, are being incorporated into pricing strategies, and are not expected to degrade margins over a rolling 12‐month period. " "

Consistently upward pressure – the trend of rising payroll taxes continues, with the company maintaining cautious optimism regarding margin impacts.

Technology and IT Investment and Execution Risks

Q1 and Q2 did not address technology investments. Q3 briefly mentioned a well‐baked product roadmap and beta tests with limited discussion on execution risks. " "

Q4 provided extensive updates on IT investments, including new product launches (such as an applicant tracking system), planned AI initiatives, and integrated technology enhancements—all balanced by careful management of execution risks. " " "

Emerging as a major focus – increased emphasis and investment in technology indicate strategic prioritization, with a more aggressive approach likely to significantly impact future growth.

Regional Market Performance Variability

Q1 showed varied regional performance with strong growth in the East Coast and weakness in the Pacific Northwest. " Q2 and Q3 provided similar breakdowns, noting robust growth in some regions and challenges in others. " " "

Q4 reiterated the trend, with the East Coast achieving 21% growth while the Pacific Northwest declined by 4%, and moderate growth reported in Southern, Mountain, and Northern California regions. "

Consistent variability – regional differences persist, with strong markets continuing to outperform and weaker regions remaining a concern yet stable over time.

Economic Downturn Impact on Client Acquisition and Closures

Q3 discussed how tougher economic conditions led to more client closures (often due to M&A or businesses going out of business) while still maintaining a 90%+ retention rate. " " Q1 and Q2 did not focus on this topic explicitly.

Q4 did not explicitly address economic downturn impacts but emphasized record client retention and strong client acquisition, suggesting a muted or stabilized impact compared to Q3. " " "

Diminished focus – earlier concerns about economic downturn effects are less prominent in Q4, implying stabilization or less material impact on client dynamics.

Reduced Emphasis on the Differentiated Local Business Model

Q3 explicitly highlighted the strength of local service teams as a key differentiator against call centers " ; Q1 and Q2 did not mention any reduced emphasis on this model.

Q4 does not mention any reduction in emphasis; the importance of local teams remains embedded in the strategy, with executives reaffirming that “people are their core product”. "

Consistent commitment – there is no evidence of reduced emphasis; the differentiated local model continues to be a cornerstone of the company’s competitive advantage.