TNET TriNet Group Inc

1% Growth in Total Revenues to $1.2 Billion

5% Growth in Professional Service Revenues to $186 million

Net Income per Diluted Share of $1.20 and Adjusted Net Income per Diluted Share $1.53

DUBLIN, Calif., July 26, 2024 /PRNewswire/ -- TriNet Group, Inc. (NYSE: TNET), a leading provider of comprehensive human resources solutions for small and medium-size businesses, today announced financial results for the second quarter ended June 30, 2024. The second quarter highlights below include non-GAAP financial measures which are reconciled later in this release.

Second quarter highlights include:

• Total revenues increased 1% to $1.2 billion as compared to the same period last year.
• Professional service revenues increased 5% to $186 million as compared to the same period last year.
• Net income was $60 million, or $1.20 per diluted share, compared to net income of $83 million, or $1.38 per diluted share, in the same period last year.
• Adjusted Net Income was $78 million, or $1.53 per diluted share, compared to Adjusted Net Income of $105 million, or $1.74 per diluted share, in the same period last year.
• Adjusted EBITDA was $136 million, compared to Adjusted EBITDA of $161 million, in the same period last year.
• Average WSEs increased 7% as compared to the same period last year, to approximately 351,000 and includes 18,000 PEO Platform Users.
• Average HRIS Users for the period was approximately 191,000.
• At June 30, 2024, TriNet had unrestricted cash and cash equivalents of $177 million, unrestricted investments of $228 million and total debt of $1.1 billion.

"The strength and resiliency of TriNet's business model was once again on display with a strong second quarter," said Mike Simonds, TriNet's President and CEO. "In a challenging business environment for SMBs, our exceptional  service model and proprietary technology drove improved customer retention and encouraging sales results."

Mr. Simonds continued, "As a business whose customer base is predominantly professional SMBs, TriNet is managing through the challenges of limited customer hiring and accelerated insurance cost growth. We, however, remain focused on efficient execution and delivering financial results that our investors have come to expect. Also in the quarter, we returned a considerable amount of capital to shareholders through dividends and significant share repurchases as we believe TriNet is undervalued at current prices. Looking to the second half, the TriNet team will remain focused on our customers, maintain our expense and pricing discipline, and map the path to accelerated growth in 2025 and beyond."

Third Quarter and Full-Year 2024 Guidance

In addition to announcing our second quarter 2024 results, we provide our third quarter and full-year 2024 guidance. Non-GAAP financial measures are reconciled later in this release. Percentages reflect the increase or (decrease) from the prior year quarter and prior year end.

Quarterly Report on Form 10-Q

We anticipate filing our Quarterly Report on Form 10-Q ("Form 10-Q") for the first half of 2024 with the U.S. Securities and Exchange Commission (SEC) and making it available at http://www.trinet.com today, July 26, 2024. This press release should be read in conjunction with the Form 10-Q and the related Notes to Consolidated Financial Statements and Management's Discussion and Analysis of Financial Condition and Results of Operations contained in the Form 10-Q.

Earnings Conference Call and Audio Webcast

TriNet will host a conference call at 5:30 a.m. PT (8:30 a.m. ET) today to discuss its second quarter results for 2024 and provide third quarter and full-year financial guidance for 2024. TriNet encourages participants to pre-register for the conference call. Callers who pre-register will be given a unique PIN to gain immediate access to the call and bypass the live operator. To pre-register, go to: https://dpregister.com/sreg/10190552/fcfbde6c00. For those who would like to join the call but have not pre-registered, they can do so by dialing +1 (412) 317-5426 and requesting the "TriNet Conference Call." The live webcast of the conference call can be accessed on the Investor Relations section of TriNet's website at http://investor.trinet.com. Participants can pre-register for the webcast by going to: https://events.q4inc.com/attendee/742072839. A replay of the webcast will be available on this website for approximately one year. A telephonic replay will be available for two weeks following the conference call at +1 (412) 317-0088 conference ID: 1675204.

About TriNet

TriNet provides small and medium-size businesses (SMBs) with full-service industry-specific HR solutions, providing both professional employer organization (PEO) and human resources information system (HRIS) services. TriNet offers access to human capital expertise, benefits, risk mitigation, compliance, payroll, and R&D tax credit services, all enabled by industry-leading technology. TriNet's suite of products also includes services and software-based solutions to help streamline workflows by connecting HR, benefits, employee engagement, payroll and time & attendance. Rooted in more than 30 years of supporting entrepreneurs and adapting to the ever-changing modern workplace, TriNet empowers SMBs to focus on what matters most - growing their business and enabling their people For more information, please visit TriNet.com or follow us on Facebook, LinkedIn and Instagram.

Use of Non-GAAP Financial Measures

Reconciliations of non-GAAP financial measures to TriNet's financial results as determined in accordance with GAAP are included at the end of this press release following the accompanying financial data. For a description of these non-GAAP financial measures, including the reasons management uses each measure, please see the section titled "Non-GAAP Financial Measures."

Forward-Looking Statements

This press release contains, and statements made during the above referenced conference call will contain, statements that are not historical in nature, are predictive in nature, or that depend upon or refer to future events or conditions or otherwise contain forward-looking statements within the meaning of Section 21 of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, including, among other things, TriNet's expectations and assumptions regarding: TriNet's financial guidance for the second quarter and full-year 2024 and the underlying assumptions, the value to customers and shareholders of TriNet's product offerings, , TriNet's financial performance and long-term growth, and the extent, length and growth impact of current economic uncertainty. Forward-looking statements are often identified by the use of words such as, but not limited to, "ability," "anticipate," "believe," "can," "continue," "could," "estimate," "expect," "guidance," "impact," "intend," "may," "plan," "predict," "project," "seek," "should," "strategy," "target," "value," "will," "would" and similar expressions or variations. Examples of forward-looking statements include, among others, TriNet's expectations regarding the future impact of its product offerings and business model, continued sales growth and client retention, the ability to maintain our expense and pricing discipline, and long-term growth. These statements are not guarantees of future performance but are based on management's expectations as of the date hereof and assumptions that are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from our current expectations and any past or future results, performance or achievements. Investors are cautioned not to place undue reliance upon any forward-looking statements.

Important factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements include: our ability to manage unexpected changes in workers' compensation and health insurance claims and costs by WSEs; our ability to mitigate the unique business risks we face as a co-employer; the effects of volatility in the financial and economic environment on the businesses that make up our client base; loss of clients for reasons beyond our control and the short-term contracts we typically use with our clients; the impact of regional or industry-specific economic and health factors on our operations; the impact of failures or limitations in the business systems and centers we rely upon; the impact of discontinuing our discretionary credits on our business and client loyalty and retention; changes in our insurance coverage or our relationships with key insurance carriers; our ability to improve our services and technology to satisfy client and regulatory expectations; our ability to effectively integrate businesses we have acquired or may acquire in the future; our ability to effectively manage and improve our operational effectiveness and resiliency; our ability to attract and retain qualified personnel; the effects of increased competition and our ability to compete effectively; the impact on our business of cyber-attacks, breaches, disclosures and other data-related incidents; our ability to protect against and remediate cyber-attacks, breaches, disclosures and other data-related incidents, whether intentional or inadvertent and whether attributable to us or our service providers; our ability to comply with evolving data privacy and security laws; our ability to manage changes in, uncertainty regarding, or adverse application of the complex laws and regulations that govern our business; changing laws and regulations governing health insurance and employee benefits; our ability to be recognized as an employer of worksite employees and for our benefits plans to satisfy all requirements under federal and state regulations; changes in the laws and regulations that govern what it means to be an employer, employee or independent contractor; the impact of new and changing laws regarding remote work; our ability to comply with the licensing requirements that govern our solutions; the outcome of existing and future legal and tax proceedings; fluctuation in our results of operations and stock price due to factors outside of our control; our ability to comply with the restrictions of our credit facility and meet our debt obligations; and the impact of concentrated ownership in our stock by Atairos and other large stockholders. Any of these factors could cause our actual results to differ materially from our anticipated results.

Further information on risks that could affect TriNet's results is included in our filings with the SEC, including under the headings "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" and elsewhere in our most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, which are available on our investor relations website at https://investor.trinet.com/ and on the SEC website at https://www.sec.gov. Copies of these filings are also available by contacting TriNet Corporation's Investor Relations Department at (510) 875-7201. Except as required by law, neither we nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements in this press release, and any forward-looking statements in this press release speak only as of the date of this press release. In addition, we do not assume any obligation, and do not intend, to update any of our forward-looking statements, except as required by law.

Key Financial and Operating Metrics

We regularly review certain key financial and operating metrics to evaluate growth trends, measure our performance and make strategic decisions. These key financial and operating metrics may change over time. Our key financial and operating metrics for the periods presented were as follows:

Non-GAAP Financial Measures

In addition to the selected financial measures presented in accordance with U.S. Generally Accepted Accounting Principles (GAAP), we monitor other non-GAAP financial measures that we use to manage our business, to make planning decisions, to allocate resources and to use as performance measures in our executive compensation plan. These key financial measures provide an additional view of our operational performance over the long term and provide information that we use to maintain and grow our business.

The presentation of these non-GAAP financial measures is used to enhance the understanding of certain aspects of our financial performance. It is not meant to be considered in isolation from, superior to, or as a substitute for the directly comparable financial measures prepared in accordance with GAAP.

Reconciliation of GAAP to Non-GAAP Measures

The table below presents a reconciliation of net income to Adjusted EBITDA:

The table below presents a reconciliation of net income to Adjusted Net Income and Adjusted Net Income per share - diluted:

The table below presents a reconciliation of net cash provided by operating activities to Corporate Operating Cash flows:

Reconciliation of GAAP to Non-GAAP Measures for the third quarter and full-year 2024 guidance.

Low and high percentages represent increases (decreases) from the same periods in the previous year.

The table below presents a reconciliation of net income to Adjusted Net Income and Adjusted Net Income per share - diluted:

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SOURCE TriNet Group, Inc.