TriNet(US:TNET)2025-10-29 11:22Financial Performance - Total revenues for Q3 2025 were $1.2 billion, a 2% decrease compared to Q3 2024[22] - Net income for Q3 2025 was $34 million, representing a 24% decrease year-over-year[22] - Adjusted net income for Q3 2025 was $55 million, a 7% decrease from Q3 2024[22] - Year-to-date total revenues for 2025 reached $3.8 billion, with a flat growth rate compared to the previous year[27] - Year-to-date net income was $156 million, down 20% from the same period in 2024[27] - Professional service revenues decreased by 8% to $169 million for Q3 2025 compared to $184 million in Q3 2024[29] - Total revenues for Q3 2025 were $1,232 million, a 2% decline from $1,252 million in Q3 2024[29] - Net income for Q3 2025 was $34 million, down 24% from $45 million in Q3 2024[29] - Adjusted EBITDA for Q3 2025 was $100 million, an 8% decrease from $109 million in Q3 2024[34] - Professional service revenues decreased by 8.2% year-over-year to $169 million for Q3 2025, while total revenues decreased by 1.6% to $1,232 million[128] - Net income for Q3 2025 was $34 million, down 24.4% from $45 million in Q3 2024, resulting in a diluted net income per share of $0.70[128] - Net income for the nine months ended September 30, 2025, was $156 million, compared to $196 million in the same period of 2024, a decrease of 20.4%[200] - Professional service revenues for the nine months ended September 30, 2025, were $550 million, down from $584 million in the same period of 2024, a decrease of 5.8%[200] Employee Metrics - Average Worksite Employees (WSEs) decreased by 6% in Q3 2025, with total WSEs at 335,235[22] - Average Worksite Employees (WSEs) decreased by 6% to 335,235 in Q3 2025 compared to 355,948 in Q3 2024[39] - Total WSEs also fell by 7% to 331,973 in Q3 2025 from 356,137 in Q3 2024[40] - Monthly revenues per co-employed Average WSE increased by 8% during Q3 2025 compared to Q3 2024[51] Insurance Costs - The insurance cost ratio (ICR) remained flat at 90% in Q3 2025 compared to the same period in 2024[22] - The company experienced a 2% increase in ICR year-to-date, driven by rising insurance costs[25] - Insurance costs for Q3 2025 were $943 million, slightly down from $949 million in Q3 2024, while total insurance service revenues were $1,046 million compared to $1,053 million in the same period[48] - The insurance cost ratio remained flat at 90% for Q3 2025, but increased to 90% for the nine months ended September 30, 2025, compared to 88% for the same period in 2024[48] - The company reported a decrease in insurance costs to $943 million for Q3 2025, down from $949 million in Q3 2024[128] Cash and Assets - Cash and cash equivalents decreased by 11% to $321 million as of September 30, 2025, compared to $360 million at the end of 2024[30] - Total assets decreased by 17% to $3,425 million as of September 30, 2025, down from $4,119 million at the end of 2024[30] - Total current assets decreased to $2,498 million as of September 30, 2025, down from $3,180 million at the end of 2024[129] - Total liabilities decreased to $3,315 million as of September 30, 2025, compared to $4,050 million at the end of 2024[129] - Total cash, cash equivalents, and investments as of September 30, 2025, were $1,554 million, compared to $1,918 million as of December 31, 2024[164] - As of September 30, 2025, the company held approximately $1.6 billion in restricted and unrestricted cash, cash equivalents, and investments, with $321 million classified as unrestricted cash and cash equivalents[106] Shareholder Returns - The company returned $162 million to stockholders through dividends and stock repurchases as of September 30, 2025[23] - The company repurchased 1,711,793 shares of common stock for approximately $122 million during the nine months ended September 30, 2025[110] - The company paid common stock dividends of $0.25 per share in January 2025 and $0.275 per share in April and July 2025[111] - The company declared common stock dividends of $0.275 per share in October 2025, consistent with previous payments in 2025[188] - The company repurchased 481,649 shares during Q3 2025, with a total remaining authorization for future stock repurchases of $129 million as of September 30, 2025[187][204] Tax and Compliance - The effective tax rate increased to 32% for Q3 2025 from 23% in Q3 2024, mainly due to decreases in tax benefits and credits[87] - The effective tax rate (ETR) for Q3 2025 was 32%, up from 23% in Q3 2024, primarily due to decreases in tax benefits for stock-based compensation[189] - The company maintains compliance with all financial covenants under its credit agreements as of September 30, 2025[114] Corporate Developments - The company opened a new corporate center in Atlanta as part of its strategic restructuring initiatives[23] - The company incurred $2 million in restructuring costs for Q3 2025, as part of a strategy to focus on its U.S. PEO business[195] - The establishment of a new corporate center in Atlanta added $40 million to future minimum lease payments and $19 million to operating lease ROU asset[157] Cash Flow Activities - Net cash provided by operating activities for the nine months ended September 30, 2025, was $242 million, compared to $214 million for the same period in 2024[99] - Cash used in investing activities for the nine months ended September 30, 2025, was $(27) million, slightly higher than $(25) million in 2024[102] - Net cash used in financing activities for the nine months ended September 30, 2025, was $(560) million, compared to $(707) million in 2024, primarily driven by timing of client payments and payroll-related activities[109] Investments and Securities - The gross proceeds from sales of AFS securities for the three months ended September 30, 2025, were $14 million, compared to $31 million for the same period in 2024[170] - The total fair value of cash equivalents and AFS investments was $385 million, with cash equivalents at $179 million and AFS investments at $206 million[165] - The fair value of the 2029 Notes and 2031 Notes as of September 30, 2025, was $469 million and $413 million, respectively, reflecting an increase from $453 million and $408 million at the end of 2024[171] Stock-Based Compensation - Stock-based compensation expense for Q3 2025 was $17 million, compared to $15 million in Q3 2024, representing a 13.3% increase[184] - The total stock-based compensation expense for the nine months ended September 30, 2025, was $48 million, down from $53 million in the same period of 2024, a decrease of 9.4%[184] - The total number of time-based RSUs nonvested at September 30, 2025, was 1,216,219 shares, with a weighted-average grant date fair value of $88.61[179] - The total fair value of stock options granted in the nine months ended September 30, 2025, was estimated at $9 million, with a weighted-average grant date fair value of $31.65[183] Miscellaneous - The company has reclassified certain prior year amounts in its financial statements to enhance clarity, impacting operating activities and financing activities[146][147] - The company is evaluating new accounting standards that will affect income tax disclosures and internal-use software costs in future reporting periods[158][159][160] - TriNet Trust is consolidated into the company's financial statements, reflecting its status as a variable interest entity[143] - As of September 30, 2025, total ERTC receivables were $389 million, down from $831 million as of December 31, 2024, with $20 million distributed to clients[156] - The company incurred $11 million in total workers' compensation costs during the three months ended September 30, 2025, compared to $14 million for the same period in 2024[173] - The total accrued workers' compensation costs at the end of September 2025 were $159 million, slightly up from $158 million at the end of December 2024[173]