TriNet(TNET) - 2025 Q1 - Quarterly Report

Financial Performance - Total revenues for Q1 2025 were $1.3 billion, reflecting a 1$85 million, with diluted EPS at $1.71, a 4$209 million in Q1 2025 from $214 million in Q1 2024[29] - Insurance service revenues increased by 1$1,065 million in Q1 2025 from $1,050 million in Q1 2024[29] - Total revenues rose by 1$1,292 million in Q1 2025 compared to $1,282 million in Q1 2024[29] - Net income declined by 7$85 million in Q1 2025 from $91 million in Q1 2024[29] - Adjusted EBITDA decreased by 10$162 million in Q1 2025 from $180 million in Q1 2024[34] - The overall performance is impacted by healthcare cost trends, with higher rates paid for services outpacing client charges[26] Employee Metrics - Average worksite employees (WSEs) decreased by 2$942 million in Q1 2025 from $907 million in Q1 2024, resulting in an Insurance Cost Ratio of 88$0.275 per share, to be paid in April 2025[25] - The company repurchased 1,210,403 shares of common stock for approximately $90 million during the three months ended March 31, 2025[100] - The company declared a common stock dividend of$0.275 per share to be paid in the second quarter of 2025, following a dividend of $0.25 per share paid in January 2025[101] - The company’s stock repurchase program resulted in a$90 million repurchase in Q1 2025, compared to $23 million in Q1 2024[124] Corporate Strategy and Restructuring - Strategic restructuring initiatives are underway to focus on core value propositions and improve operational efficiency, including the sale of TriNet Clarus R+D[25] - The company plans to establish a new corporate center in Atlanta, Georgia over the next five years[25] - Restructuring costs incurred for the three months ended March 31, 2025, amounted to$1 million, as the company focuses on its U.S. PEO business[178] Cash Flow and Assets - Net cash provided by operating activities was $95 million in Q1 2025, compared to$91 million in Q1 2024[91] - Corporate working capital increased by $12 million from December 31, 2024, primarily due to decreases in corporate current liabilities[89] - As of March 31, 2025, the company held approximately$1.5 billion in cash, cash equivalents, and investments, with $349 million being unrestricted cash[97] - Cash and cash equivalents at the end of Q1 2025 were$1,284 million, slightly up from $1,267 million at the end of Q1 2024[124] - As of March 31, 2025, total assets were$3,775 million, down from $4,119 million as of December 31, 2024[120] Debt and Financial Compliance - The company had$909 million in long-term debt as of March 31, 2025, compared to $908 million as of December 31, 2024[120] - The company was in compliance with all financial covenants under its 2021 Credit Agreement, 2029 Notes, and 2031 Notes as of March 31, 2025[104] Tax and Accounting - The effective tax rate (ETR) decreased to 26% in Q1 2025 from 27% in Q1 2024, attributed to increased tax benefits related to excludable income[80] - The company is evaluating new accounting standards that will enhance income tax disclosures, effective after December 15, 2024[147] Investment and Market Risks - The company is exposed to market risks primarily related to fluctuations in interest rates affecting its investment portfolio and outstanding borrowings[108] - The company’s investments are subject to interest rate risk due to generally including fixed interest rates[109] - The company attempts to limit exposure to interest rate risk and credit risk by investing in liquid, investment-grade securities[109]