[Executive Summary & Business Outlook](index=1&type=section&id=Executive%20Summary%20%26%20Business%20Outlook) TriNet's Q2 2025 financial results, full-year guidance reaffirmation, and CEO commentary are presented [Second Quarter 2025 Highlights](index=1&type=section&id=Second%20Quarter%202025%20Highlights) TriNet's Q2 2025 financial results were in line with forecasts, showing declines in net income and adjusted EBITDA, flat total revenues, and a decrease in average WSEs Key Financial Metrics (Q2 2025 vs. Q2 2024) | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | % Change YoY | | :-------------------------------- | :------------------- | :------------------- | :----------- | | Total revenues | $1,200 | $1,200 | 0% | | Professional service revenues | $172 | $187 | -8% | | Net income | $37 | $60 | -38% | | Adjusted Net Income | $55 | $78 | -29% | | Adjusted EBITDA | $105 | $136 | -23% | | Adjusted EBITDA Margin | 8.5% | 10.9% | -2.4 pp | | Diluted net income per share | $0.77 | $1.20 | -36% | | Adjusted Net Income per share - diluted | $1.15 | $1.53 | -25% | - Average WSEs decreased **4%** year-over-year to approximately **336,000**[5](index=5&type=chunk) - Returned **$117 million** to shareholders through share repurchases and dividends during the first half of 2025[5](index=5&type=chunk) [Full-Year 2025 Guidance Reaffirmation](index=1&type=section&id=Full-Year%202025%20Guidance%20Reaffirmation) TriNet reaffirmed its full-year 2025 financial guidance, maintaining its outlook for total revenues, professional service revenues, insurance cost ratio, adjusted EBITDA margin, and diluted and adjusted net income per share Full-Year 2025 Guidance | Metric | Full Year 2025 Low | Full Year 2025 High | | :-------------------------------- | :----------------- | :------------------ | | Total Revenues | $4,950 million | $5,140 million | | Professional Service Revenues | $700 million | $730 million | | Insurance Cost Ratio | 92% | 90% | | Adjusted EBITDA Margin | 7% | 9% | | Diluted net income per share | $1.90 | $3.40 | | Adjusted Net Income per share - diluted | $3.25 | $4.75 | [CEO Commentary](index=1&type=section&id=CEO%20Commentary) CEO Mike Simonds stated that Q2 financial performance aligned with forecasts, keeping the company on track for full-year guidance. He highlighted strategic execution, prudent repricing of benefits, maintaining customer retention above historical averages, and upcoming growth initiatives for the fall - Second quarter financial performance was in-line with forecast, on track for full-year guidance[2](index=2&type=chunk) - Continued execution of strategy while supporting SMB customers through a volatile business environment[2](index=2&type=chunk) - Prudently repriced benefits offering while maintaining customer retention above historical average[2](index=2&type=chunk) - Several growth initiatives are on track for the fall, aiming to drive new sales with an expanded go-to-market approach and improved offerings[2](index=2&type=chunk) [Company Overview & Investor Information](index=2&type=section&id=Company%20Overview%20%26%20Investor%20Information) This section provides an overview of TriNet's business, regulatory filing details, forward-looking statements, and investor contacts [About TriNet](index=2&type=section&id=About%20TriNet) TriNet Group, Inc. is a leading provider of HR solutions for SMBs, offering technology-enabled services like benefits, payroll, and compliance, aiming to be the premier HR services provider - TriNet is a leading provider of Human Resources solutions for small and medium-size businesses (SMBs)[8](index=8&type=chunk) - Services include human capital expertise, employee benefits (health insurance, retirement plans), payroll and payroll tax administration, risk mitigation, and compliance consulting[8](index=8&type=chunk) - Long-term objective is to be the premier provider of HR services for SMBs through industry-leading benefits, sales distribution excellence, and a world-class service delivery model[8](index=8&type=chunk) [Regulatory Filings and Conference Call Details](index=2&type=section&id=Regulatory%20Filings%20and%20Conference%20Call%20Details) TriNet anticipates filing its Quarterly Report on Form 10-Q for the first half of 2025 on July 25, 2025. The company also hosted an earnings conference call and webcast to discuss Q2 results and reaffirm full-year guidance, with replay options available - Anticipates filing Quarterly Report on Form 10-Q for the first half of 2025 with the SEC on **July 25, 2025**[6](index=6&type=chunk) - Hosted a conference call and webcast on **July 25, 2025**, to discuss Q2 2025 results and reaffirm full-year guidance[7](index=7&type=chunk) - Webcast replay available on the Investor Relations section of TriNet's website for approximately one year; telephonic replay available for two weeks[7](index=7&type=chunk) [Forward-Looking Statements and Risk Factors](index=2&type=section&id=Forward-Looking%20Statements%20and%20Risk%20Factors) The press release contains forward-looking statements regarding future performance, growth initiatives, and financial guidance, which are subject to inherent uncertainties and risks. These risks include managing insurance claims and costs, economic volatility, client retention, operational failures, competition, cyber-attacks, and compliance with complex regulations - Statements in the press release and conference call that are not historical are considered forward-looking, identified by words like 'expect,' 'guidance,' 'plan,' and 'will'[9](index=9&type=chunk) - Forward-looking statements are based on management's expectations and assumptions, subject to uncertainties, risks, and changes in circumstances that could cause actual results to differ materially[9](index=9&type=chunk) - Important risk factors include managing workers' compensation and health insurance claims, effects of economic volatility, client loss, impact of business system failures, changes in insurance coverage, ability to improve services and technology, increased competition, cyber-attacks, and compliance with evolving laws and regulations[10](index=10&type=chunk) [Investor and Media Contacts](index=3&type=section&id=Investor%20and%20Media%20Contacts) Contact information for investor relations and media inquiries is provided for TriNet Group, Inc. - Investor Contact: Alex Bauer, **(510) 875-7201**, Alex.Bauer@TriNet.com[12](index=12&type=chunk) - Media Contact: Renee Brotherton, **(925) 965-8441**, Renee.Brotherton@TriNet.com[12](index=12&type=chunk) [Detailed Financial Statements](index=4&type=section&id=Detailed%20Financial%20Statements) This section provides detailed financial statements, including key metrics, consolidated statements of income, balance sheets, and cash flows [Key Financial and Operating Metrics](index=4&type=section&id=Key%20Financial%20and%20Operating%20Metrics) TriNet's Q2 2025 metrics show flat total revenues but declining net income and Adjusted EBITDA, while H1 2025 saw increased Free Cash Flow and cash equivalents Key Financial and Operating Metrics (Q2 & H1 2025 vs. 2024) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | % Change (QoQ) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | % Change (YoY) | | :-------------------------------- | :------------------------------- | :------------------------------- | :------------- | :----------------------------- | :----------------------------- | :------------- | | Total revenues | $1,238 | $1,243 | — % | $2,530 | $2,525 | — % | | Net income | $37 | $60 | (38)% | $122 | $152 | (20)% | | Diluted net income per share | $0.77 | $1.20 | (36)% | $2.48 | $2.98 | (17)% | | Adjusted EBITDA | $105 | $136 | (23)% | $268 | $316 | (15)% | | Adjusted Net income | $55 | $78 | (29)% | $154 | $189 | (19)% | | Free Cash Flow | N/A | N/A | N/A | $136 | $95 | 43% | | Insurance Cost Ratio | 90% | 88% | 2 pp | 89% | 87% | 2 pp | | Average WSEs | 336,010 | 351,455 | (4)% | 338,377 | 349,810 | (3)% | Balance Sheet Data (June 30, 2025 vs. December 31, 2024) | Metric | June 30, 2025 (Millions) | December 31, 2024 (Millions) | % Change | | :------------------------ | :----------------------- | :--------------------------- | :------- | | Cash and cash equivalents | $407 | $360 | 13% | | Working capital | $254 | $199 | 28% | | Total assets | $3,688 | $4,119 | (10)% | | Total stockholders' equity | $107 | $69 | 55% | Cash Flow Data (Six Months Ended June 30, 2025 vs. 2024) | Metric | Six Months Ended June 30, 2025 (Millions) | Six Months Ended June 30, 2024 (Millions) | % Change | | :-------------------------------- | :---------------------------------------- | :---------------------------------------- | :------- | | Net cash provided by operating activities | $170 | $130 | 31% | | Net cash used in investing activities | $(7) | $(47) | (85)% | | Net cash used in financing activities | $(428) | $(555) | (23)% | [Consolidated Statements of Income and Comprehensive Income](index=5&type=section&id=Consolidated%20Statements%20of%20Income%20and%20Comprehensive%20Income) TriNet's Q2 2025 income statement shows flat total revenues but decreased net income and diluted EPS, driven by declining professional service revenues and increased operating expenses Consolidated Statements of Income (Three Months Ended June 30) | Metric | 2025 (Millions) | 2024 (Millions) | | :-------------------------------- | :-------------- | :-------------- | | Professional service revenues | $172 | $186 | | Insurance service revenues | $1,048 | $1,040 | | Total revenues | $1,238 | $1,243 | | Total costs and operating expenses | $1,187 | $1,162 | | Income before tax | $51 | $81 | | Net income | $37 | $60 | | Diluted net income per share | $0.77 | $1.20 | Consolidated Statements of Income (Six Months Ended June 30) | Metric | 2025 (Millions) | 2024 (Millions) | | :-------------------------------- | :-------------- | :-------------- | | Professional service revenues | $381 | $400 | | Insurance service revenues | $2,113 | $2,090 | | Total revenues | $2,530 | $2,525 | | Total costs and operating expenses | $2,364 | $2,320 | | Income before tax | $166 | $205 | | Net income | $122 | $152 | | Diluted net income per share | $2.48 | $2.98 | [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2025, TriNet's total assets decreased by 10% compared to December 31, 2024, primarily due to a reduction in restricted cash, cash equivalents, and investments. Total liabilities also decreased, while total stockholders' equity increased significantly by 55% Consolidated Balance Sheet Highlights (June 30, 2025 vs. December 31, 2024) | Metric | June 30, 2025 (Millions) | December 31, 2024 (Millions) | | :---------------------------------------- | :----------------------- | :--------------------------- | | Cash and cash equivalents | $407 | $360 | | Restricted cash, cash equivalents and investments | $1,101 | $1,413 | | Total current assets | $2,762 | $3,180 | | Total assets | $3,688 | $4,119 | | Total current liabilities | $2,508 | $2,981 | | Total liabilities | $3,581 | $4,050 | | Total stockholders' equity | $107 | $69 | - Total assets decreased by **10%** from **$4,119 million** at December 31, 2024, to **$3,688 million** at June 30, 2025[16](index=16&type=chunk) - Total stockholders' equity increased by **55%** from **$69 million** at December 31, 2024, to **$107 million** at June 30, 2025[16](index=16&type=chunk) [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) H1 2025 cash flow shows a 31% increase in operating activities, a significant decrease in investing activities, and reduced financing activities due to lower WSE-related changes and share repurchases Consolidated Statements of Cash Flows (Six Months Ended June 30) | Activity | 2025 (Millions) | 2024 (Millions) | | :---------------------------------------- | :-------------- | :-------------- | | Net cash provided by operating activities | $170 | $130 | | Net cash used in investing activities | $(7) | $(47) | | Net cash used in financing activities | $(428) | $(560) | | Net change in cash and cash equivalents, unrestricted and restricted | $(265) | $(477) | | End of period cash and cash equivalents, unrestricted and restricted | $1,426 | $989 | - Net cash provided by operating activities increased by **$40 million**, or **31%**, to **$170 million** in the first half of 2025[17](index=17&type=chunk) - Net cash used in investing activities decreased by **85%** to **$(7) million**, driven by lower purchases of marketable securities[17](index=17&type=chunk) - Net cash used in financing activities decreased by **23%** to **$(428) million**, primarily due to a smaller change in WSE and TriNet Trust related assets and liabilities and reduced share repurchases[17](index=17&type=chunk) [Non-GAAP Financial Measures and Reconciliations](index=8&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Reconciliations) This section defines TriNet's non-GAAP financial measures and provides detailed reconciliations to their most directly comparable GAAP measures [Definition and Use of Non-GAAP Measures](index=8&type=section&id=Definition%20and%20Use%20of%20Non-GAAP%20Measures) TriNet utilizes non-GAAP measures like Adjusted EBITDA, Adjusted Net Income, and Free Cash Flow for business management, planning, resource allocation, and performance evaluation, excluding non-recurring or non-cash charges - Non-GAAP measures are used to manage the business, make planning decisions, allocate resources, and as performance measures in executive compensation[18](index=18&type=chunk) - Adjusted EBITDA excludes income tax, interest expense, depreciation, amortization, stock-based compensation, cloud computing arrangements, and restructuring costs to provide a consistent view of core operations[20](index=20&type=chunk) - Adjusted Net Income excludes effective income tax rate adjustments, stock-based compensation, amortization of intangible assets, non-cash interest expense, and restructuring costs to analyze ongoing profitability[20](index=20&type=chunk) - Free Cash Flow, defined as net cash provided by operating activities reduced by capital expenditures, indicates liquidity strength and aids in planning and resource allocation[20](index=20&type=chunk) [Reconciliation of GAAP to Non-GAAP Measures (Q2 & H1 2025)](index=9&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Measures%20(Q2%20%26%20H1%202025)) TriNet provides reconciliations of GAAP net income to Adjusted EBITDA and Adjusted Net Income, and net cash provided by operating activities to Free Cash Flow for the three and six months ended June 30, 2025 and 2024. These reconciliations show the adjustments made for non-cash and non-recurring items Reconciliation of Net Income to Adjusted EBITDA | Metric | Three Months Ended June 30, 2025 (Millions) | Three Months Ended June 30, 2024 (Millions) | Six Months Ended June 30, 2025 (Millions) | Six Months Ended June 30, 2024 (Millions) | | :---------------------------------------- | :---------------------------------------- | :---------------------------------------- | :---------------------------------------- | :---------------------------------------- | | Net income | $37 | $60 | $122 | $152 | | Provision for income taxes | $14 | $21 | $44 | $53 | | Stock based compensation | $18 | $18 | $31 | $38 | | Interest expense, bank fees and other | $15 | $16 | $29 | $32 | | Depreciation and amortization of intangible assets | $17 | $19 | $34 | $37 | | Amortization of cloud computing arrangements | $2 | $2 | $5 | $4 | | Restructuring costs | $2 | — | $3 | — | | **Adjusted EBITDA** | **$105** | **$136** | **$268** | **$316** | | Adjusted EBITDA Margin | 8.5% | 10.9% | 10.6% | 12.5% | Reconciliation of Net Income to Adjusted Net Income | Metric | Three Months Ended June 30, 2025 (Millions) | Three Months Ended June 30, 2024 (Millions) | Six Months Ended June 30, 2025 (Millions) | Six Months Ended June 30, 2024 (Millions) | | :---------------------------------------- | :---------------------------------------- | :---------------------------------------- | :---------------------------------------- | :---------------------------------------- | | Net income | $37 | $60 | $122 | $152 | | Effective income tax rate adjustment | $1 | — | $2 | $1 | | Stock based compensation | $18 | $18 | $31 | $38 | | Amortization of intangible assets | $3 | $5 | $5 | $10 | | Non-cash interest expense | — | $1 | $1 | $1 | | Restructuring costs | $2 | — | $3 | — | | Income tax impact of pre-tax adjustments | $(6) | $(6) | $(10) | $(13) | | **Adjusted Net Income** | **$55** | **$78** | **$154** | **$189** | | GAAP weighted average shares of common stock - diluted | 49 | 51 | 49 | 51 | | Adjusted Net Income per share - diluted | $1.15 | $1.53 | $3.15 | $3.70 | Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow | Metric | Six Months Ended June 30, 2025 (Millions) | Six Months Ended June 30, 2024 (Millions) | | :---------------------------------------- | :---------------------------------------- | :---------------------------------------- | | Net cash provided by operating activities | $170 | $130 | | Acquisitions of property and equipment and projects in process | $(34) | $(35) | | **Free Cash Flow** | **$136** | **$95** | | Adjusted EBITDA | $268 | $316 | | Free Cash Flow Conversion Ratio | 51% | 30% | [Reconciliation of GAAP to Non-GAAP Measures (Full-Year 2025 Guidance)](index=10&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Measures%20(Full-Year%202025%20Guidance)) TriNet provided a reconciliation of GAAP net income to Adjusted Net Income and Adjusted Net Income per share - diluted for its full-year 2025 guidance, showing the impact of various adjustments on the projected non-GAAP profitability Reconciliation of Net Income to Adjusted Net Income (Full-Year 2025 Guidance) | Metric | FY 2024 Actual (Millions) | FY 2025 Guidance Low (Millions) | FY 2025 Guidance High (Millions) | | :---------------------------------------- | :------------------------ | :------------------------------ | :------------------------------- | | Net income | $173 | (46)% | (3)% | | Effective income tax rate adjustment | $(5) | (83) | (105) | | Stock based compensation | $65 | 11 | 11 | | Amortization of intangible assets | $19 | (49) | (49) | | Non-cash interest expense | $3 | (100) | (100) | | Restructuring costs | $49 | (80) | (80) | | Income tax impact of pre-tax adjustments | $(35) | (32) | (32) | | **Adjusted Net Income** | **$269** | **(40)%** | **(12)%** | | GAAP weighted average shares of common stock - diluted | 50 | N/A | N/A | | **Adjusted Net Income per share - diluted** | **$5.32** | **$3.25** | **$4.75** |

Core Viewpoint - TriNet Group, Inc. reported its second quarter financial results for 2025, indicating stable performance in line with forecasts and reaffirming full-year guidance despite a challenging business environment [2][3]. Financial Performance - Total revenues for the second quarter were $1.2 billion, remaining flat compared to the same period last year [7]. - Professional service revenues decreased by 8% to $172 million year-over-year [7]. - Net income was $37 million, or $0.77 per diluted share, down from $60 million, or $1.20 per diluted share, in the same period last year [7]. - Adjusted Net Income was $55 million, or $1.15 per diluted share, compared to $78 million, or $1.53 per diluted share, in the same period last year [7]. - Adjusted EBITDA was $105 million, representing an Adjusted EBITDA Margin of 8.5%, down from $136 million and 10.9% in the same period last year [7]. Full-Year 2025 Guidance - The company reiterated its full-year 2025 guidance, projecting total revenues between $4.95 billion and $5.14 billion [4]. - Professional service revenues are expected to be between $700 million and $730 million [4]. - The Insurance Cost Ratio is projected to be between 90% and 92% [4]. - Adjusted EBITDA Margin is expected to range from 7% to 9% [4]. - Diluted net income per share is forecasted to be between $1.90 and $3.40, while Adjusted Net Income per share is expected to be between $3.25 and $4.75 [4]. Shareholder Returns - The company returned $117 million to shareholders through share repurchases and dividends during the first half of 2025 [7]. Key Financial Metrics - Average Worksite Employees (WSEs) decreased by 4% year-over-year to approximately 336,000 [7]. - Cash and cash equivalents increased by 13% to $407 million compared to the previous year [13]. - Total assets decreased by 10% to $3.688 billion [13]. Conference Call - TriNet will host a conference call to discuss its second quarter results and reaffirm its full-year financial guidance [6].

Core Viewpoint - TriNet, a leading provider of HR solutions for small and medium-sized businesses, is set to release its financial results for Q2 2025 on July 25, 2025, before U.S. market hours [1]. Group 1: Financial Results Announcement - TriNet will announce its financial results for the second quarter ended June 30, 2025, before U.S. market hours on July 25, 2025 [1]. - A conference call to discuss the financial results will be held at 5:30 a.m. PT (8:30 a.m. ET) on the same day [2]. Group 2: Conference Call Details - Participants can pre-register for the conference call to receive a unique PIN for instant access [3]. - Those who do not pre-register can still join the call by dialing +1 (412) 317-5426 [3]. - A replay of the webcast will be available on TriNet's website for approximately one year [3]. Group 3: Company Overview - TriNet provides comprehensive HR solutions, technology, expertise, and access to world-class benefits, enabling SMBs to attract and develop top-tier talent [4]. - The company has over 30 years of experience supporting entrepreneurs and adapting to the modern workplace [4].

Core Insights - TriNet has launched the "TriNet Ascend" program aimed at developing aspiring sales professionals through comprehensive training and real-world experience [1][2][3] - The program is designed to provide structured onboarding, expert mentorship, and hands-on selling experience, focusing on small and medium-sized business (SMB) challenges [2][3] - Applications for the inaugural cohort based in Atlanta are now open, targeting college graduates from diverse academic backgrounds [3] Company Overview - TriNet is a leading provider of human resources solutions for small and medium-sized businesses, offering services such as employee benefits, payroll administration, and compliance consulting [4] - The company's long-term goal is to become the premier provider of HR services for a wide range of SMBs through industry-leading benefits and service delivery [4]

Core Viewpoint - TriNet has been recognized as one of the 2025-2026 Best Companies to Work For by U.S. News & World Report, highlighting its commitment to employee satisfaction and workplace culture [1][2][3]. Company Overview - TriNet is a leading provider of comprehensive human resources solutions specifically designed for small and medium-sized businesses (SMBs) [1][4]. - The company offers a range of services including human capital expertise, employee benefits (health insurance and retirement plans), payroll administration, risk mitigation, and compliance consulting [4]. Recognition Details - The recognition by U.S. News & World Report involved an evaluation of over 5,000 publicly traded companies, assessing factors such as pay and benefits, work-life balance, stability, workplace safety, belonging, and career development [3]. - Catherine Wragg, TriNet's Chief People Officer, emphasized that this recognition reflects the dedication of the company's employees and their commitment to serving SMB customers [3]. Long-term Objectives - TriNet aims to be the premier provider of HR services for a diverse range of SMBs, focusing on industry-leading benefits, sales distribution excellence, and a world-class service delivery model [4].

Core Message - TriNet has launched a new brand campaign titled "Your Path, Our Purpose," which celebrates the journeys of small and medium-sized businesses (SMBs) and their positive impact on communities and employees [1][2]. Group 1: Campaign Overview - The campaign features stunning portraits captured by renowned photographer Annie Leibovitz, showcasing the stories of SMBs [3]. - It employs a dynamic visual style and special effects by Emmy® award-winning Garson Yu, along with soundscapes created by composer Piers Baron, to immerse viewers in the narratives [3]. - The campaign aims to highlight the significant contributions of SMBs and TriNet's commitment to supporting them [5]. Group 2: Featured Businesses - The campaign follows four TriNet customers: - **Zap Surgical Systems**: Innovating in advanced surgical robotics with its ZAP-X platform, enhancing radiosurgery accessibility [6]. - **Van Leeuwen Ice Cream**: Evolved from a food truck in NYC to a national brand known for its unique dairy and vegan flavors [6]. - **Zymo Research**: A leader in biotechnology since 1994, focusing on epigenetics and Next-Gen Sequencing [6]. - **Good Culture**: Transforming the dairy market with organic, pasture-raised cultured foods, particularly cottage cheese [6]. Group 3: Marketing Strategy - The campaign will be broadcast nationwide across various platforms, including television, radio, digital media, and out-of-home advertising, targeting major markets like New York City, San Francisco, Los Angeles, Boston, and Atlanta [5].

Core Insights - TriNet has launched new HR products and enhancements aimed at helping small and medium-size businesses (SMBs) navigate economic uncertainty and AI-driven disruption [1][2] Product Solutions - The new offerings include an AI-powered Personal Health Assistant by Healthee, providing employees with real-time healthcare answers, available to TriNet customers in late 2025 [6] - Enhanced New Hire Onboarding features an upgraded PEO mobile app for administrators to submit new hire information on-the-go, along with secure e-signature functionality for document management [6] - An improved learning management system in collaboration with 360Learning includes an AI-powered content creation tool for custom training programs and a premium content bundle with over 1,000 training courses [6] - New wellbeing solutions in TriNet's Marketplace include My Secure Advantage for financial wellbeing coaching and Wellhub for holistic wellbeing benefits, supporting the overall wellbeing of employees [6] Company Commitment - TriNet emphasizes its commitment to delivering innovative HR solutions that empower SMBs to focus on growth and better HR decision-making [3][4]

Financial Data and Key Metrics Changes - Total revenue grew by 1% year over year in the first quarter, driven by insurance repricing and stronger than expected interest income [21][24] - First quarter GAAP earnings per diluted share was $1.71, and adjusted earnings per diluted share was $1.99, with adjusted EBITDA margin at 12.6% [26] - Operating expenses decreased by 6% year over year, contributing to strong cash generation [25][26] Business Line Data and Key Metrics Changes - Professional services revenue declined by 2% due to reduced volume and the discontinuation of a specific client-level technology fee [23] - Insurance revenue grew by 1% in the first quarter, with insurance costs increasing by 4% [24][25] - Customer hiring was slightly below forecast, with approximately 340,000 total worksite employees (WSCs), down 3% year over year [21] Market Data and Key Metrics Changes - Net customer hiring is expected to remain low throughout 2025, reflecting a decline in SMB business confidence [6][9] - The decline in co-employed worksite employees was driven by reduced new sales compared to the prior year [21][22] - The company is seeing a shift in customer dynamics, with a focus on retaining clients through ASO offerings as it exits the SaaS-only business [34] Company Strategy and Development Direction - The company aims to achieve a compounded annual revenue growth rate of 4% to 6% and expand adjusted EBITDA margins to 10% to 11% [8] - New product innovations, including benefit plan bundles, are expected to simplify offerings and enhance sales processes [11][80] - The company is focusing on scaling its benefits brokerage channel and improving customer experience through proprietary technology [12][13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving annual guidance despite economic uncertainties, citing strong customer retention and execution pace [6][18] - The company anticipates a strong second half of 2025, with expectations for improved sales results as strategic initiatives take effect [14][45] - Management noted that healthcare cost trends have stabilized, which supports pricing adequacy and future margin improvements [16][52] Other Important Information - The company announced a 10% increase in its dividend and repurchased approximately 1.2 million shares, reflecting confidence in its momentum [17][26] - The insurance cost ratio for the first quarter was 88.4%, aligning with expectations and indicating effective management of healthcare costs [25] Q&A Session Summary Question: Demand environment and sales conversions - Management acknowledged that macroeconomic uncertainty impacted sales conversions but expressed confidence in pipeline strength and upcoming initiatives [30][33] Question: Update on ASO offering and client retention - Management reported positive conversion rates into ASO products and maintained original assumptions regarding headwinds for FY 2025 [34][36] Question: Guidance and performance tracking - Management indicated that overall guidance remains on track, with slight adjustments in specific areas like expenses and attrition [41][42] Question: Healthcare utilization trends - Management confirmed that healthcare cost trends have stabilized, with low double-digit increases persisting [52][54] Question: Context of quarter-over-quarter changes - Management noted that the first quarter typically experiences normal churn, with some additional attrition due to healthcare pricing adjustments [62][64] Question: Importance of scaling broker channel - Management emphasized that both scaling the broker channel and maturing the sales force are critical for future growth [66][68] Question: Repricing strategy for healthcare book - Management indicated that the repricing strategy remains on track, with potential for quicker recovery if cost trends improve [74][76] Question: Introduction of benefit bundles - Management outlined plans to introduce simpler benefit bundles to streamline the sales process and enhance customer experience [78][80]

Core Insights - TriNet Group (TNET) reported $350 million in revenue for Q1 2025, a year-over-year decline of 2% [1] - The EPS for the same period was $1.99, down from $2.16 a year ago, but exceeded the consensus estimate of $1.67 by 19.16% [1] - The reported revenue surpassed the Zacks Consensus Estimate of $329.8 million by 6.13% [1] Revenue Breakdown - Professional service revenues were $209 million, slightly above the estimated $205.66 million, reflecting a year-over-year decline of 2.3% [4] - Insurance service revenues totaled $1.07 billion, matching the two-analyst average estimate, with a year-over-year increase of 1.4% [4] - Interest income reached $18 million, significantly higher than the average estimate of $11.50 million [4] Stock Performance - Over the past month, TriNet's shares returned -4.1%, compared to the Zacks S&P 500 composite's -4.8% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market [3]

Core Viewpoint - TriNet Group (TNET) reported quarterly earnings of $1.99 per share, exceeding the Zacks Consensus Estimate of $1.67 per share, but down from $2.16 per share a year ago, indicating a 19.16% earnings surprise [1] Financial Performance - The company posted revenues of $350 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 6.13%, although this is a decrease from year-ago revenues of $357 million [2] - Over the last four quarters, TriNet has surpassed consensus EPS estimates three times and topped consensus revenue estimates three times [2] Stock Performance - TriNet shares have declined approximately 14.5% since the beginning of the year, compared to a decline of 6.8% for the S&P 500 [3] - The current Zacks Rank for TriNet is 3 (Hold), indicating expected performance in line with the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $1.05 on revenues of $286.56 million, and for the current fiscal year, it is $4.05 on revenues of $1.14 billion [7] - The estimate revisions trend for TriNet is mixed, and changes in estimates for the coming quarters and fiscal year are anticipated following the recent earnings report [6][7] Industry Context - The Outsourcing industry, to which TriNet belongs, is currently ranked in the top 37% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8]