Insperity Q3 2026 Earnings Call Transcript
Insperity (NYSE:NSP) reported third-quarter financial results on Thursday. The transcript from the company’s third-quarter earnings call has been provided below.
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Summary
Insperity, Inc. reported a significant improvement in financial performance for Q3 2026, with gross profit per worksite employee increasing by 8% and adjusted EPS improving by $0.42 per share compared to Q3 2025.
The company’s margin recovery plan is progressing well, with a 6% increase in total gross profit to $207 million and a 5% decrease in operating expenses, driven by lower corporate staffing costs.
Insperity’s strategic initiatives include a focus on AI integration to enhance HR solutions, reflecting a long-term view to strengthen client relationships and drive growth.
The expected sequential growth for paid worksite employees is relatively flat for Q4 2026, with full-year 2026 adjusted EBITDA projected to increase by 48% to 63% over 2025.
Management emphasized the importance of balancing growth and profitability, with ongoing efforts in margin recovery and leveraging AI to support client businesses amidst workplace transformations.
Full Transcript
Ali (Conference Operator)
Good morning. My name is Ali, and I will be your conference operator today. I would like to welcome everyone to the Insperity third quarter 2026 earnings conference call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation, and if anyone should require operator assistance during the conference, please press 0 on your telephone keypad. Please note this conference is being recorded at this time.
I would like to introduce today’s speakers. Joining us are Paul Sarvadi, Chairman of the Board and Chief Executive Officer, and Jim Allison, Executive Vice President of Finance, Chief Financial Officer and Treasurer. At this time, I’d like to turn the call over to Jim Allison. Mr. Allison, please go ahead.
Jim Allison (Executive Vice President of Finance, Chief Financial Officer & Treasurer)
Thank you. We appreciate you joining us today. Let me begin by outlining our plan for this morning’s call. First, I’m going to discuss the details behind our third quarter 2026 financial results. Paul will then comment on the progress of our margin recovery plan, the fall selling and client renewal season, and our AI strategy and initiatives. I will return to provide financial guidance for the fourth quarter and full year 2026. We will then end the call with a question-and-answer session.
Before we begin, I would like to remind you that Paul or I may make forward-looking statements during today’s call, which are subject to risks, uncertainties, and assumptions. In addition, some of our discussion may include non-GAAP financial measures. For a more detailed discussion of the risks and uncertainties that could cause actual results to differ materially from any such forward-looking statements, and reconciliations of non-GAAP financial measures to their comparable GAAP measures, please see the company’s public filings, including the Form 8-K filed today, which are available on our website.
Our third quarter results mark a key milestone in our margin recovery plan. Gross profit per worksite employee increased 8% over Q3 2025, reversing the year-over-year declines we reported throughout 2025 and into the first half of this year, driven by the cumulative impact of our pricing and client retention strategy. That improvement, together with continued operating expense discipline, produced Q3 adjusted EPS and adjusted EBITDA above the midpoint of our forecasted ranges and significantly improved from Q3 2025.
Third quarter adjusted EPS was $0.22, a $0.42 per-share improvement over the adjusted loss per share of $0.20 in Q3 2025. Adjusted EBITDA for the quarter was $31 million, an increase of 210% from Q3 2025. The average number of paid worksite employees was 307,265 in Q3, a modest year-over-year decline of 1.8% against the backdrop of the margin recovery plan. All three of these key metrics were above the midpoint of our forecasted ranges. With regards to unit growth, the margin recovery plan continued to be a headwind for new client sales and client retention compared to Q3 2025.
While we saw some improvement in net hiring within the client base compared to last year, Paul will provide more color around sales and retention results in a few minutes. At the same time, the financial impact of the margin recovery plan has significantly outpaced the worksite employee headwind. Total gross profit in Q3 2026 increased by 6% to $207 million, in line with our forecast and expected seasonal pattern. Gross profit per worksite employee increased by 8% to $225 per month, a significant improvement over the 1% decline reported in Q2, validating the effectiveness of our margin recovery plan. This flip to a year-over-year increase in the gross profit metrics was primarily driven by the cumulative impact of our pricing and client retention strategy.
The year-over-year increase in our pricing continued to accelerate, as it has done throughout the year. Our strategy has also produced a favorable client mix change that has helped to bolster our efforts to positively impact benefits costs beyond our plan design changes and new UnitedHealth contract terms that took effect at the beginning of the year. For Q3, benefits cost per covered employee increased by 3.7% over Q3 2025, consistent with our expectations.
Within our gross profit results, the significant progress of the margin recovery plan was somewhat offset by a year-over-year increase in reported workers’ compensation costs. While we have seen relative stability in our current-period workers’ compensation costs, favorable adjustments in actuarial reserves related to prior policy years declined in Q3 2026 versus Q3 2025. This impact was similar to what we experienced in Q2 and continues to reflect a market-wide increase in claim severity, with elevated healthcare cost trends being a significant contributor.
We have taken and will continue to take appropriate pricing actions consistent with these market conditions, which we expect to persist beyond the near term. Operating expense management is another key component of our margin recovery plan. In Q3, total operating expenses decreased by 5% to $209 million versus Q3 2025, primarily due to lower corporate staffing levels and related compensation costs. Operating expenses associated with HR Scale in Q3 were generally in line with budgeted levels. During the quarter, we continued to return capital to our shareholders through our regular dividend program and share repurchases.
We paid $23 million in dividends and repurchased 131,000 shares of stock at a total cost of $6 million. We ended the quarter with $119 million of adjusted cash, compared to $95 million at the end of Q2. At this time, I’d like to turn the call over to Paul.
Paul Sarvadi (Chairman and Chief Executive Officer)
Thank you, Jim, and thanks to everyone for joining our call. We’re pleased with our solid third quarter financial results reflecting continued progress on our top priority of 2026 margin recovery and achieving a meaningful step forward in restoring the earnings power of our business model. We’re also making early progress increasing sales and client retention activities. As we launched our fall campaign, stronger sales activity has begun to fill the pipeline to improve sales. However, recent sales results continue to reflect our margin recovery priorities.
Today I’ll discuss our operating progress and then turn to AI, which we believe has the potential to strengthen demand for Insperity’s comprehensive HR solutions. As small and mid-sized businesses navigate this workplace transformation, our strategy seeks to combine the power of AI with the experience of our HR professionals to help our clients’ businesses succeed, further strengthen our offering and deepen client relationships, which we believe will drive long-term growth and shareholder value.
Coming into 2026, we established a clear sequence: recover margin, rebuild growth momentum and position the business for a better balance of growth and profitability in 2027. Our third quarter performance represents another important step in that direction. As we discussed on previous calls, our margin recovery efforts have included pricing strategy, benefit plan changes, broader benefit options and improvements in our operational processes. These actions have successfully addressed the health care cost pressure we experienced in 2025 and are expected to support a stronger economic foundation for our business going forward.
That progress has involved trade-offs. Pricing and client selection decisions that support margin recovery can also affect new sales and client retention. Those effects remain evident in our results, which include a 2% year-over-year decline in the average number of worksite employees paid per month in Q3. Our fall sales and retention campaign is our opportunity to begin to rebuild growth momentum, and activity levels are increasing. Marketing lead flow has improved and we have a solid pipeline of Mid Market, HR360 and HR Scale prospects. HR Scale remains on track to meet our previously stated targets with several thousand employees currently in implementation. Offering both options—HR360 and HR Scale—to mid-market customers continues to benefit prospects and clients and supports our long-term plan for this segment.
Some new mid-market and enterprise accounts have chosen HR360 for a faster path to onboarding, addressing HR service or benefits needs as a priority. However, they also plan to upgrade to HR Scale when implementation can be scheduled at a later date, demonstrating a long-term view of the relationship. One of our most important leading indicators of future sales is the number of business profiles, or opportunities to bid our services, we achieve each month. We are encouraged by progress in Q3 as this activity metric trended upward each month in the third quarter to a solid total for the full quarter. Achieving this volume with fewer Business Performance Advisors indicates improvement in activity per BPA. Renewals are also on schedule, and supporting messaging has been updated and communicated across the organization to reinforce client renewal decisions.
This included providing context around the healthcare trend levels and actions we have taken to moderate those effects on behalf of our clients and continue to provide comprehensive benefit plan options. We also have new AI communication and a demo video that we believe is important to emphasize the expected step up in value of our HR solutions as SMB clients face the AI challenges ahead. However, it’s still very early in the campaign and the range of possible outcomes remains wide. Ongoing margin recovery efforts, continued price sensitivity and market uncertainty, including uncertainty surrounding the election, remain challenges. It’s too soon to draw conclusions about the campaign’s ultimate sales and retention results, which factors into our starting point for paid worksite employees in January. Our objective is not simply to add volume; it’s to build durable growth on sound economics while delivering the breadth, depth and level of care clients expect from Insperity. The opportunity ahead is to preserve our margin progress while translating stronger activity into improved sales and retention as we work to balance growth and profitability in 2027.
Now, beyond our near-term operating priorities, AI is changing the way we think about the future of HR and the opportunity for Insperity. We believe AI is a technology innovation driving an extraordinary workplace transformation, rapidly increasing the need for sophistication in the HR function in the SMB marketplace. We believe this reinforces the value of our comprehensive, deeply integrated service relationship. AI is changing how work gets done for individuals, teams and company-wide, both internally with employees and externally with customers.
Business owners and managers must rethink job responsibilities, required skill, hiring needs and how teams are organized, all of which are challenges that land in the HR department. That creates a broad set of HR responsibilities: updating job descriptions, compensation and incentives, identifying skill gaps, supporting employee development, equipping managers and aligning policies and practices. AI could also change hiring patterns, workforce composition and employment growth.
We anticipate this elevated volume of HR activity, including hiring and firing, will also create additional employment-related complexity, risk and stress for employers. For an SMB with limited internal resources, the amount and speed of change can be difficult to manage alone. We believe the heightened need for HR expertise to help business owners navigate the complexity and manage the liability will increase demand for HR solutions and guidance provided by Insperity. Our offering is not simply a collection of administrative tasks or access to software. It’s an integrated combination of technology, HR expertise, personalized service and an understanding of the client’s business and people. We believe AI can make historical and real-time information more accessible to clients and service providers.
Our experienced professionals help put that information in context and provide insights and then, with the benefit of their judgment, support our clients’ efforts to take action. In that sense, AI is highlighting our highest-value attributes: trust, judgment, care and the ability to stand shoulder to shoulder with the business owner as they navigate important workforce decisions. Our ambition extends beyond using AI within Insperity. We believe we have an opportunity to help lead the small and mid-sized business community through the workforce transformation that the AI era will ultimately require. We believe that creates the possibility of a deeper strategic role with clients as they navigate change. Earning that role will require continued innovation and highlight the personal service and care that have long defined our company.
We are pursuing this AI opportunity in three connected areas: how we develop technology and services, how we work internally, and how our clients experience our solutions through AI tools we deploy. First, we’re using AI to develop technology and services more productively, deliver meaningful enhancements faster and improve quality. Beyond making existing services more efficient, we are rethinking how technology and human expertise combine to meet client needs. Second, we’re equipping our people with better access to knowledge and tools to improve productivity and service delivery. Our proprietary AI platform provides a foundation for connecting HR and payroll expertise and business workflow processes with AI capabilities across the organization.
By reducing time spent finding information and completing routine work, we aim to free our professionals to focus on where their expertise matters most to clients. Third, we’re enhancing how our clients experience our solutions. Our recently announced Insperity HR360AI agent represents an important step forward, making it easier for early-adopter clients to find answers, navigate HR responsibilities and access guidance informed by company-specific policies with reduced need for escalation.
We also announced capabilities under development for the HR360AI agent, including conversational intelligence, which is designed to allow business owners to ask questions in everyday language rather than having to know where to look and how to assemble relevant information, and receive real-time actionable insights. The planned functionality will allow users to enter simple commands such as “Show me the headcount by location” or “How have our employee engagement metrics trended over time” and receive reports, graphic visualizations and contextual insights, helping leaders access information more quickly and make better-informed workforce decisions.
Our distinctive approach combines our internal AI development capabilities, extensive historical client and employee information, client-specific policies and our HR analytics engineering. Our HR professionals remain essential in helping clients interpret those insights and acting on them. Let me be clear, our message is not simply that we’ve introduced another technology feature. We have launched a company-wide effort to help current clients and prospects understand the fundamental step up in value our distinctive approach will provide for their businesses. Easier access to company-specific insights combined with experienced HR guidance can help them make better decisions and move more quickly from information to action. We believe that combination magnifies our long-term competitive advantage and can improve the likelihood, degree and speed of success of our clients in the SMB marketplace.
In closing, our priorities remain clear: sustain margin discipline, rebuild durable growth and use AI to strengthen the value we deliver through HR360, HR Core and HR Scale. We believe progress on those priorities can support a better balance of growth and profitability in 2027 and long-term value creation for our shareholders. At this point, I’d like to pass the call back to Jim.
Jim Allison (Executive Vice President of Finance, Chief Financial Officer & Treasurer)
Thanks, Paul. Our updated outlook for 2026 reflects our Q3 results, the continued progress of our margin recovery plan, and several modest refinements to our fourth quarter assumptions. With three quarters of results behind us, we have narrowed our full-year range while maintaining the adjusted EBITDA midpoint essentially unchanged. With regards to paid worksite employees, we expect sequential growth for the fourth quarter to be relatively flat, as paid worksite employees from new client sales and client attrition are expected to largely offset each other. Net client hiring is expected to have a fairly small impact in Q4, as recent positive net hiring trends are expected to be offset by the reversion of seasonal employees in December at one of our larger clients. As a result, we are now forecasting paid worksite employees in a range of 306,000 to 308,000 for Q4 2026, which represents a decrease of 1.4% to 2.0% from Q4 2025.
For the full year, we are forecasting a range of 305,500 to 306,000, a decrease of 1.3% to 1.5% from 2025. Moving to margin recovery, our pricing and client retention strategy is expected to produce some additional Q4 improvement at the gross profit level as compared to Q4 2025. As I mentioned earlier, our pricing has continued to accelerate on a year-over-year basis as we have executed the plan throughout 2026. In addition, we continue to see that the profitability of terminating clients has been significantly lower than the profitability of those we are retaining, producing a favorable change in client mix that we expect to positively influence benefit costs in comparison to Q4 of 2025.
With regards to operating expenses, we continue to expect year-over-year reductions in Q4, driven primarily by a continuation of lower compensation-related costs. HR scale operating expenses are expected to be generally in line with budget. As a result, we are forecasting adjusted EBITDA in a range of $24 million to $44 million for Q4 2026, compared to negative $13 million in Q4 2024. For full year 2026, we are forecasting $194 million to $214 million, an increase of 48% to 63% over 2025.
We expect our full-year effective tax rate for adjusted EPS purposes to be approximately 36%. The effective tax rate for GAAP purposes could fluctuate from that based on the level of non-deductible expenses as a proportion of pre-tax income. We expect our weighted average outstanding shares to be approximately 38.6 million for the full year. As a result, adjusted EPS is forecasted in a range of $0.07 to $0.42 per share for Q4, compared to an adjusted loss per share of $0.60 in Q4 of 2025.
For the full year, we are forecasting adjusted EPS of $1.93 to $2.28 per share, an increase of 87% to 121% over 2025. At this time I’d like to open up the call for questions.
Ali (Conference Operator)
Thank you. Ladies and gentlemen, at this time we will be conducting our question and answer session. If you wish to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue, and you may press star two if you wish to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we poll for questions.
Thank you. Our first question is coming from Marc Marcon with Baird. Your line is live.
Marc Marcon (Analyst)
Good morning. Can you hear me?
Paul Sarvadi (Chairman and Chief Executive Officer)
Yes, we can. Yes, Marc.
Marc Marcon (Analyst)
Great. Well, first of all, congrats on the strong progress with regards to the increase in terms of the gross profit per worksite employee and the profit recovery plan being successfully executed. It’s really great to see. I was wondering, can you talk a little bit more, Paul, about what you were doing on the AI front? To what extent are you incorporating your own tools versus, you know, taking advantage of the partnership with Workday? I was at Workday Rising and they obviously have a whole slew of different agents and so I’m familiar with those, and I was just wondering if you would discuss to what extent you are leveraging those rather than just developing your own.
Paul Sarvadi (Chairman and Chief Executive Officer)
Yeah, thank you for that question, Marc. And we are super excited about how Workday has gone all-in and become such an AI-driven company, and that has a lot of great possibilities for us as our partnership continues to develop. But at the same time, we have extensive AI capability that we have developed and been able to leverage. So many of the investments we’ve made around our own data and extensive client historical information, our extensive history of solving HR problems with our experts, and how all that comes together affects all three of our solutions.
Because the service side is so critical for the customers in our space, small and mid-sized businesses, like I’ve said in my comments, this is way more than just a technology innovation. This is a workplace transformation that’s going on, and it’s going to be extensive in the small and mid-sized business community, and our AI capabilities, along with the data and information that we have and the experts already on standby and capable of responding much quicker and much more consistently and able to be at the right hand of our clients to help them with this transformation.
We believe this is going to be dramatic for the company. So we’re excited about our expertise in this area and how that has improved our own internal capability to respond to this transformation, but also how we’re able to deliver targeted solutions to our clients that will help them deal with this transformation as well. So it’s great to have both the Workday long-term picture and, you know, opportunity there, but we’re also excited about our own ability to deliver on this.
Marc Marcon (Analyst)
That’s great. And then can you talk a little bit about, it sounded like you had really nice progress with regards to health care benefit cost trends and it came in right in line with your expectations for this quarter. And you’ve got the new UnitedHealthcare plan in place. I know you’re not giving guidance for next year, but how do you think healthcare cost trends are going to change as we look out towards next year? Because most investors are looking to next year and beyond in terms of the investment opportunity, and I’m wondering how you’re thinking about that.
And then also, if you could just also comment on the workers’ comp, that would be great. Thank you.
Jim Allison (Executive Vice President of Finance, Chief Financial Officer & Treasurer)
Yeah, appreciate that, Marc. You know, this year we have some structural changes from plan design changes and the contract change. When we flip over into next year, there’s a little bit more of an apples-to-apples comparison there. So it’s a tailwind this year; it’s more neutral next year. Our benefits cost trends are significantly under what I would call, this year, kind of the market rate. Partly it’s that structural change; partly it’s the pricing and client renewal strategy that we’ve taken on.
When I think about the client renewal strategy, we are seeing growing impact of that as we go through 2026. There’s not a full-year impact in 2026, so there should be some continuing improvement in 2027 related to getting a full year of that. At the same time, we recognize that cost trends in the marketplace as a whole for health insurance remain high. And so we have to be vigilant with how we’re managing pricing as we go through not only year-end transition but also into next year.
I would say that concept is very similar to what we’re seeing on the workers’ compensation side. Obviously there’s multiple components to workers’ compensation costs—healthcare is only one of them. But certainly we’re starting to see that the accumulation of open periods, because you have a pretty long tail on workers’ compensation claims, we’re seeing the actuaries start to make some adjustments in the way they think about what it’s going to take to close those old claims out.
We haven’t seen a lot of change around current year—it’s been relatively stable there. But we know this is a market that is hardening to some extent. And so in those market conditions, again, you don’t want to get behind. So we are thinking about and have done some price increases on that front, and we’ll continue to monitor that and evolve that if market conditions change. But right now we’re seeing, again, the relative stability of what’s going on in the healthcare space allows us to make some assumptions, put in pricing plans, and play it out.
Marc Marcon (Analyst)
I appreciate that. Thank you.
Ali (Conference Operator)
Thank you. Our next question is coming from Jeff Martin with Roth Capital. Your line is live.
Jeff Martin (Analyst)
Thank you. Good morning. Wanted to dive into the advancement of the sales process and joint go-to-market with Workday, specifically with respect to HR scale. It sounds like the middle market is on the uptake for 360, which is great because those are future scale clients. But if you could just update us on the progress of the joint go-to-market.
Paul Sarvadi (Chairman and Chief Executive Officer)
Yeah, absolutely. We continue to be building that pipeline, as I mentioned in my script, and we’ve made good progress bringing clients on. We have several thousand in the queue for coming on as we move over into the new year, and so we’re really on track in that. The other comment I put in my script I wanted to make sure people understood is that having these two solutions for this mid-market segment is really starting to pay dividends, because rather than choosing to be with us or not, they’re able to choose which solution is right for them to start with, and quite a few are choosing to move on to 360 because of the speed of implementation and the ability to quickly address the service needs—maybe even benefit needs, et cetera.
That’s a great track. But what I love about it is they’re also seeing HR scale as their long-term solution. And so they’re starting the relationship with a commitment to the long term and both products.
Jeff Martin (Analyst)
Thank you. And then two-part question for my second. With respect to HR scale and the impact in 2027, do you expect that to be a material growth driver for EBITDA and adjusted EPS? And then second part is, are you doing anything materially different with your fall sales campaign this year versus prior years? Thank you.
Paul Sarvadi (Chairman and Chief Executive Officer)
So we certainly expect that to be a significant component, you know, as our mid-market effort has been over the last year and a half. But now with HR scale we believe that adds some real benefit there. But equally important, we are really focused on bringing up the sales effort on the smaller accounts. That’s where we were hit pretty heavily through this down period that caused the margin recovery, and we are really on the right track getting the number of opportunities to bid our services up, and we have come through great progress on how we’re working with clients through this period.
I know in Jim’s comment—almost added to his comment on his last question—because we’ve made great strides at being able to help our clients deal with this rising health insurance cost environment, offering various options, ways for them to move the cost down and to manage the cost with different plans that they get on. We’re able to communicate to them what’s happening in the broader market, so we’re just getting better and better at that. And so we think that’s a big part of next year also, seeing us get back to the right level of sales per BPA per month and have the activity levels right.
And that’s what we’re starting to see in this fall selling campaign.
Jeff Martin (Analyst)
Thank you.
Ali (Conference Operator)
Thank you. As a reminder, ladies and gentlemen, if you do have a question, please press star one on your telephone keypad. Our next question is coming from Brendan Biles with JP Morgan. Your line is live.
Brendan Biles (Analyst)
Hey gentlemen, thanks a lot for having me on the call. And reiterate the congratulations on the gross profit progress here. Six and eight percent on gross profit and gross profit per worksite employee is awesome. So congrats on that. Yeah, yeah, absolutely. I want to double click on some of this stronger sales pipeline stuff that you guys said. I think it’s really awesome about the stronger sales pipe, refilling it, activity levels, increasing sales leads. You talked about it a little already as it related to Workday. I wonder, on the clients that you mentioned that have indicated their interest in long-term partnerships, signing up for HR360 and kind of indicating that they would transition to HR Scale when the implementation timeline is right, if you could just share a little bit more color as to where your head is at as it relates to that timeline and in that sales motion.
Is there anything to call out as it relates to, like, AI needs that clients are bringing up now or in the future between HR360 and HR Scale? And I got a quick follow-up on OPEX after that. Thank you.
Paul Sarvadi (Chairman and Chief Executive Officer)
Yeah, that’s a good question. And, you know, what we’re seeing and hearing is certainly that, as I mentioned in my script, AI is really causing a lot of activity to land in the HR department. You know, it’s not just a technology innovation; it’s literally a workplace transformation. And so, you know, keep in mind, within the small and medium-sized business community, having a sophisticated HR function is a combination of technology and an incredible amount of services.
Just think of everything an HR department does for, you know, a large company. We do it for thousands and thousands of small businesses and hundreds of thousands of people. So the service need is very high and it’s, you know, we believe it’s escalating and stepping up to a degree. And it’s perfect timing because our capability has also been boosted dramatically throughout our own internal tools, our internal capabilities, and we’re ramping up on how AI can affect our service delivery. So I think that’s really important to note. And we really think that our customer base—putting them in the right solution for whatever their highest level of needs are at the time—is the right way to go. And that’s our game plan.
Brendan Biles (Analyst)
That’s awesome. Yeah, that’s terrific. Thank you for that color. My follow-up is on OPEX as it relates to compensation. Down 5% is awesome. And the profitability up obviously huge year over year. How should we think about compensation moving forward as the sales pipeline fills up and then some of these deals maybe move into implementation, and just thinking about growth on a steadier basis as we get through these margin recovery initiatives which have proven pretty successful?
How should we think about that maybe flowing into compensation and OPEX? Thank you.
Jim Allison (Executive Vice President of Finance, Chief Financial Officer & Treasurer)
So we obviously adjusted our headcount levels earlier this year in conjunction with kind of right-sizing to the size of the business that we had and our relative priorities. So you do have a little bit of a reset that happened there. We’re seeing the benefit of that as we look year over year going through this year. You know, we’re always going to keep in mind kind of where we are and the trajectory of the business from a growth perspective. But we also see the opportunity, as we get back on track with profit recovery with activity and sales, recognizing that the adjustments that we made allow for some reinvestment as we see growth reemerge from here. So we’re in this period, especially around year-end, where you know the specifics of exactly what we’re planning on for next year, but we’re trying to be extremely agile on that front.
Paul Sarvadi (Chairman and Chief Executive Officer)
We are getting the activity level right and we are making good progress there. But, you know, there’s a lot of churn at year-end, and so, you know, that’s just part of the way the model works. But as far as looking ahead, you know, we are positioned to regain growth momentum. We’re starting by regaining the sales activity levels that make that happen. And so, as we look across next year, we see growth coming back, but it’s growth on top of whatever the starting point turns out to be.
And that part, there’s a wide range of possibilities that you can’t pin down yet. So for the long term, we really feel great about what we’re doing. Just like we were focused on margin recovery, we’ve executed that plan. We know what to do to regain growth momentum, and that plan is underway. But those two things work together, and we are set up to really balance that growth and profitability for 2027.
Brendan Biles (Analyst)
Thank you so much, gentlemen.
Ali (Conference Operator)
Thank you. As we have no further questions on the lines at this time, I would like to turn the call back over to Mr. Sarvadi for any closing remarks.
Paul Sarvadi (Chairman and Chief Executive Officer)
Well, once again, we just want to thank everyone for your interest in participating today. And we are truly excited about where we stand today, how we’re set up to finish this year effectively, and how we’re ready to launch into 2027, balancing growth and profitability. So thank you again, and we will see you next time.
Ali (Conference Operator)
Thank you. Ladies and gentlemen, this concludes today’s conference. You may disconnect your lines at this time, and we thank you for your participation.
Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company’s SEC filings and official press releases. Corporate participants’ and analysts’ statements reflect their views as of the date of this call and are subject to change without notice.