Company Overview - TriNet Group, Inc. is a human capital management firm with a market capitalization of $3.25 billion, primarily serving small and medium-sized businesses in the U.S. and globally [1]. Investment Insights - The firm offers solutions that are critical for managing human resources, which is essential for the operational efficiency of small and medium enterprises [1]. - Daniel Sereda, a chief investment analyst, emphasizes the importance of filtering vast amounts of data to identify key investment opportunities [1]. Market Position - TriNet Group operates in a competitive landscape, focusing on providing high-quality analysis and insights that are valued by institutional market participants [1].

Core Insights - TriNet Group reported a revenue of $291 million for the quarter ended June 2025, reflecting a decline of 6.1% year-over-year, while EPS decreased to $1.15 from $1.53 in the same quarter last year [1] - The revenue exceeded the Zacks Consensus Estimate of $283.73 million by 2.56%, and the EPS surpassed the consensus estimate of $1.00 by 15% [1] Financial Performance - Interest income was reported at $18 million, significantly higher than the average estimate of $11.58 million from three analysts [4] - Professional service revenues were $172 million, slightly below the estimated $172.99 million, marking a year-over-year decline of 7.5% [4] - Insurance service revenues stood at $1.05 billion, matching the average estimate and showing a year-over-year increase of 0.8% [4] Stock Performance - Over the past month, TriNet's shares have returned -10.5%, contrasting with a +4.6% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Core Viewpoint - TriNet Group (TNET) reported quarterly earnings of $1.15 per share, exceeding the Zacks Consensus Estimate of $1 per share, but down from $1.53 per share a year ago, indicating a +15.00% earnings surprise [1][2] Financial Performance - The company posted revenues of $291 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 2.56%, but down from $310 million year-over-year [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 27.6% since the beginning of the year, contrasting with the S&P 500's gain of 8.2% [3] - The stock currently holds a Zacks Rank 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 $0.69 on revenues of $264.94 million, and for the current fiscal year, it is $4.18 on revenues of $1.15 billion [7] - The estimate revisions trend for TriNet was mixed ahead of the earnings release, which could change following the recent report [6] Industry Context - The Outsourcing industry, to which TriNet belongs, is currently in the top 41% of Zacks industries, suggesting that it has a favorable outlook compared to the bottom 50% [8]

Financial Data and Key Metrics Changes - The company delivered financial performance consistent with expectations despite significant market volatility, reiterating the full year outlook [5][6] - Total revenue for Q2 was flat year over year, supported by insurance repricing and higher interest income [18][19] - Adjusted earnings per diluted share was $1.15, with GAAP earnings per diluted share at $0.77 [26][29] - Adjusted EBITDA for the quarter was $105 million, representing an adjusted EBITDA margin of 8.5% [26][29] Business Line Data and Key Metrics Changes - Professional services revenue declined 8% year over year due to lower WSE volumes and the discontinuation of a specific client-level technology fee [23][24] - Total insurance revenue grew 1% in Q2, with revenue per average enrolled member increasing by approximately 9% year over year [24][29] - Operating expenses decreased by 2% year over year, benefiting from automation and workforce strategy [25][26] Market Data and Key Metrics Changes - The company finished the quarter with approximately 339,000 total WSEs, down 4% year over year, and 309,000 co-employed WSEs, down 8% [19][20] - Customer hiring improved slightly, with a year-over-year increase of about half a percentage point [7][20] - The second quarter saw a modest three-quarter positive trend in year-over-year CIE [7][8] Company Strategy and Development Direction - The company aims for total revenues to achieve a compounded annual growth rate of 4% to 6% and adjusted EBITDA margins to expand to 10% to 11% [7][14] - Investments are being made in distribution capabilities and benefits offerings ahead of the fall selling season [5][12] - The company is focused on improving service, distribution, and offerings while managing expenses prudently [6][14] Management's Comments on Operating Environment and Future Outlook - Management noted that the challenging market environment has resulted in weaker business sentiment, impacting sales conversion rates and customer hiring [6][19] - There is confidence in new sales growth based on encouraging results from market testing with new health plan offerings [10][12] - The company is on track to achieve its historical retention rate of 80% or better despite the economic uncertainty [17][18] Other Important Information - The company paid a dividend of $0.275 per share, representing a 10% increase year over year [27][28] - The full year guidance remains unchanged, with total revenues expected to be in the range of $4.95 billion to $5.14 billion [28][29] Q&A Session Summary Question: Can you discuss how top of funnel activity and pace of prospective client decision-making has trended since Q1? - Management noted that both macro uncertainty and healthcare cost inflation have contributed to a lengthening sales cycle [32][33] Question: How is sales headcount trending through Q2? - Sales headcount is slightly lower than a year ago, but management is confident in the productivity of the remaining reps and the quality of new hires [35][36] Question: Are you seeing any actions from competitors that are different versus last year? - Management indicated that while the competitive environment is tough, TriNet has maintained a disciplined approach to pricing and has invested in its Insurance Services group [41][42] Question: Can you speak to healthcare trends in the quarter? - Management observed similar trends in healthcare costs, with slight anomalies in large complex claims, but overall trends were in line with expectations [45][46] Question: How did client hiring and CIE trend throughout the quarter? - CIE showed steady improvement throughout the quarter, particularly in technology and financial services sectors [50][52] Question: Can you review some of the major comparison dynamics for the back half of the year? - Management expects to see seasonality in insurance cost ratios and has adjusted forecasts for professional services revenue and expenses [70][71] Question: What are the expectations for the broker channel in the back half of the year? - Management expects additive contributions from both national and local brokers in the second half of the year [76][78]

Financial Data and Key Metrics Changes - Total revenue for Q2 2025 was flat year over year, with expectations for full year revenues in the range of $4.9 to $5.1 billion [8][18][29] - Adjusted earnings per diluted share was $1.15, with GAAP earnings per diluted share at $0.77 [26] - Adjusted EBITDA for the quarter was $105 million, representing an adjusted EBITDA margin of 8.5% [26] Business Line Data and Key Metrics Changes - Professional services revenue declined 8% year over year, primarily due to lower WSE volumes and the discontinuation of a specific client-level technology fee [22] - Total insurance revenue grew 1% in Q2, with an average increase in health fees per enrolled member of approximately 9% year over year [23][24] - Operating expenses decreased by 2% year over year, benefiting from automation and workforce strategy [25][26] Market Data and Key Metrics Changes - Total WSEs decreased by 4% year over year, with co-employed WSEs down 8% [19] - Customer hiring improved slightly, up about half a percentage point over the prior year, marking the first Q2 in several years with year-over-year improvement [8][21] - The company experienced a modest three-quarter positive trend in year-over-year CIE [8] Company Strategy and Development Direction - The company aims for total revenues to achieve a compounded annual growth rate of 4% to 6% and adjusted EBITDA margins to expand to 10% to 11% [7] - Investments are being made in distribution capabilities and benefits offerings ahead of the fall selling season [5][12] - The company is focused on improving service, distribution, and offerings while maintaining prudent expense management [6][16] Management's Comments on Operating Environment and Future Outlook - Management noted that the challenging market and economic environment have resulted in weaker business sentiment, impacting sales conversion rates and customer hiring [6] - The company remains confident in its ability to improve new sales in the second half of the year based on encouraging market testing results [11] - Management reiterated that they are on track to achieve their historical retention rate of 80% or better [17] Other Important Information - The company opened a new office in Atlanta to support talent development and collaboration [16] - A dividend of $0.275 per share was paid, representing a 10% increase year over year [27] - The company repaid $90 million on its credit line, moving closer to its targeted leverage ratio [28] Q&A Session Summary Question: Can you discuss how top of funnel activity and pace of prospective client decision-making has trended since Q1? - Management noted that both macro uncertainty and healthcare cost inflation have contributed to a lengthening sales cycle [32][33] Question: How is sales headcount trending through Q2? - Management indicated that while there are slightly fewer reps than a year ago, the quality and retention of tenured reps are strong, which supports capacity [35][36] Question: Are you seeing any actions or postures from competitors that are different versus last year? - Management stated that while the competitive environment is aggressive, TriNet's pricing remains competitive and aligned with market conditions [42][43] Question: Can you speak to healthcare trends in the quarter? - Management reported similar trends in healthcare costs, with slight anomalies in large complex claims, but overall trends were in line with expectations [46][47] Question: How did client hiring and CIE trend throughout the quarter? - Management observed steady CIE throughout the quarter, with notable improvements in technology and financial services sectors [51][54] Question: Can you quantify the impact of ASO transition and Clarus divestiture on professional services revenue? - Management indicated that the biggest decline in professional services revenue was due to a specific client-level technology fee, while ASO conversion was better than expected [55][56] Question: How are you thinking about guidance after two beats? - Management reaffirmed guidance, indicating that they are tracking modestly above the midpoint of their range, with expectations of seasonality in the second half [64][65]

[Glossary of Acronyms and Abbreviations](index=3&type=section&id=Glossary%20of%20Acronyms%20and%20Abbreviations) This section defines key terms and financial metrics essential for understanding TriNet's business model and financial reporting - The glossary defines key terms such as **PEO** (Professional Employer Organization), **ASO** (Administrative Services Offering), **WSE** (Worksite Employee), **Adjusted EBITDA**, and **EPS**, crucial for understanding TriNet's business model and financial reporting[9](index=9&type=chunk)[10](index=10&type=chunk) [Cautionary Note Regarding Forward-Looking Statements](index=5&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) This section outlines forward-looking statements and associated risks concerning TriNet's future performance and operational challenges - Forward-looking statements, identified by terms like "anticipate" and "expect," pertain to TriNet's future performance, client growth, insurance costs, and operational efficiency[11](index=11&type=chunk) - Key risks involve managing unexpected changes in **workers' compensation** and **health insurance claims**, mitigating co-employer business risks, navigating financial volatility, and sustaining benefits from realignment initiatives[12](index=12&type=chunk) Part I. Financial Information [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=7&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) TriNet's Q2/YTD 2025 results show flat revenues, decreased WSEs, and lower net income, amidst strategic restructuring [Executive Summary](index=7&type=section&id=Executive%20Summary) TriNet offers HR solutions for SMBs; Q2/YTD 2025 results reflect flat revenues, decreased WSEs, and lower net income, with strategic restructuring - TriNet provides comprehensive HR solutions for SMBs via its **PEO co-employment model** and **ASO-only services**, encompassing payroll, benefits, risk mitigation, and compliance[20](index=20&type=chunk)[21](index=21&type=chunk)[22](index=22&type=chunk) | Metric | Q2 2025 | % Change | | :-------------------- | :------ | :------- | | Total revenues | $1.2B | — % flat | | Income before tax | $51M | (37)% decrease | | Insurance cost ratio | 90% | 2 % increase | | Net income | $37M | (38)% decrease | | Diluted EPS | $0.77 | (36)% decrease | | Adjusted Net income | $55M | (29)% decrease | | Average WSEs | 336,010 | (4)% decrease | | Total WSEs | 338,900 | (4)% decrease | | Metric | YTD 2025 | % Change | | :-------------------- | :------- | :------- | | Total revenues | $2.5B | — % flat | | Income before tax | $166M | (19)% decrease | | Insurance cost ratio | 89% | 2 % increase | | Net income | $122M | (20)% decrease | | Diluted EPS | $2.48 | (17)% decrease | | Adjusted Net income | $154M | (19)% decrease | | Average WSEs | 338,377 | (3)% decrease | | Total WSEs | 338,900 | (4)% decrease | - Strategic initiatives for 2025 include focusing on core value propositions, **growing ASO**, improving operational efficiency, selling TriNet Clarus R+D, disciplined expense management, establishing an Atlanta corporate center, and continuing common stock dividends[24](index=24&type=chunk) [Results of Operations](index=9&type=section&id=Results%20of%20Operations) This section details TriNet's financial performance, including revenues, costs, net income, cash flows, and key operating metrics for Q2 and YTD 2025 versus 2024 | Metric (in millions, except operating metrics data) | Q2 2025 | Q2 2024 | % Change (Q2) | YTD 2025 | YTD 2024 | % Change (YTD) | | :-------------------------------- | :------ | :------ | :------------ | :------- | :------- | :------------- | | Professional service revenues | $172 | $186 | (8)% | $381 | $400 | (5)% | | Insurance service revenues | $1,048 | $1,040 | 1% | $2,113 | $2,090 | 1% | | Interest income | $18 | $17 | 6% | $36 | $35 | 3% | | **Total revenues** | **$1,238** | **$1,243** | **—%** | **$2,530** | **$2,525** | **—%** | | Insurance costs | $947 | $916 | 3% | $1,889 | $1,823 | 4% | | Operating expenses | $225 | $230 | (2)% | $446 | $465 | (4)% | | Interest expense, bank fees and other | $15 | $16 | (6)% | $29 | $32 | (9)% | | **Total costs and operating expenses** | **$1,187** | **$1,162** | **2%** | **$2,364** | **$2,320** | **2%** | | Income before tax | $51 | $81 | (37)% | $166 | $205 | (19)% | | Income taxes | $14 | $21 | (33)% | $44 | $53 | (17)% | | **Net income** | **$37** | **$60** | **(38)%** | **$122** | **$152** | **(20)%** | | Net cash provided by operating activities | N/A | N/A | N/A | $170 | $130 | 31% | | Net cash used in investing activities | N/A | N/A | N/A | $(7) | $(47) | (85)% | | Net cash used in financing activities | N/A | N/A | N/A | $(428) | $(555) | (23)% | | Adjusted EBITDA | $105 | $136 | (23)% | $268 | $316 | (15)% | | Adjusted Net income | $55 | $78 | (29)% | $154 | $189 | (19)% | | Insurance Cost Ratio | 90% | 88% | 2% | 89% | 87% | 2% | | Average WSEs | 336,010 | 351,455 | (4)% | 338,377 | 349,810 | (3)% | | Total WSEs | 338,900 | 354,028 | (4)% | 338,900 | 354,028 | (4)% | | Metric (in millions) | June 30, 2025 | December 31, 2024 | % Change | | :-------------------- | :------------ | :---------------- | :------- | | Cash and cash equivalents | $407 | $360 | 13% | | Working capital | $254 | $199 | 28% | | Total assets | $3,688 | $4,119 | (10)% | | Debt | $984 | $983 | —% | | Total stockholders' equity | $107 | $69 | 55% | [Non-GAAP Financial Measures](index=10&type=section&id=Non-GAAP%20Financial%20Measures) This section defines and reconciles TriNet's non-GAAP financial measures, Adjusted EBITDA and Adjusted Net Income, to their most comparable GAAP equivalents - Adjusted EBITDA excludes income tax provision, interest expense, depreciation, amortization of intangible assets, **stock-based compensation**, amortization of cloud computing arrangements, and restructuring costs[34](index=34&type=chunk) - Adjusted Net Income excludes effective income tax rate adjustments, **stock-based compensation**, amortization of intangible assets, non-cash interest expense, restructuring costs, and the income tax effect of these pre-tax adjustments[34](index=34&type=chunk) | (in millions) | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :-------------------------------------- | :------ | :------ | :------- | :------- | | 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 % | | (in millions) | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :-------------------------------------- | :------ | :------ | :------- | :------- | | Net income | $37 | $60 | $122 | $152 | | Effective income tax rate adjustment | 1 | — | 2 | 1 | | Stock based compensation | 18 | 18 | 31 | 38 | | Amortization of other intangible assets | 3 | 5 | 5 | 10 | | Non-cash interest expense

[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]