TriNet Announces Second Quarter 2022 Results

9% Growth in Total Revenues to $1.2 Billion

17% Growth in Professional Service Revenues to $182 million

Net Income per Diluted Share of $1.35 and Adjusted Net Income per Diluted Share $1.72

DUBLIN, Calif., July 26, 2022 /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, 2022. The second quarter highlights below include non-GAAP financial measures which are reconciled later in this release.

Second quarter highlights include:

• Total revenues increased 9% to $1.2 billion as compared to the same period last year.
• Professional service revenues increased 17% to $182 million as compared to the same period last year.
• Net income was $85 million, or $1.35 per diluted share, compared to net income of $91 million, or $1.37 per diluted share, in the same period last year.
• Adjusted Net Income was $108 million, or $1.72 per diluted share, compared to Adjusted Net Income of $104 million, or $1.56 per diluted share, in the same period last year.
• Adjusted EBITDA was $162 million, compared to Adjusted EBITDA of $154 million, in the same period last year.
• Finished the second quarter with over 610,000 Users across our PEO and HCM products.
• Average PEO WSEs increased 6% as compared to the same period last year, to approximately 351,000.
• Average HCM Users for the period was approximately 253,000.
• At June 30, 2022, TriNet had cash and cash equivalents of $336 million and total debt of $495 million.

"TriNet's strong second quarter financial results, delivered in the context of an increasingly difficult macroeconomic environment, reflect the strength of our customer base and our operational discipline," said Burton M. Goldfield, TriNet's President and CEO.  "In the quarter, we were able to leverage three important dynamics and highlight TriNet's value to the market. First, our customers who reside in our core verticals continued to grow and add employees. Second, we started to realize the promise of the combined TriNet and TriNet Zenefits offerings as customers optimized their HR needs and moved between the two products. Finally, the Supreme Court Dobbs' ruling extended regulatory complexity to health care increasing the value of TriNet's benefits offering."

Mr. Goldfield added, "In this period of economic uncertainty and regulatory complexity, TriNet will continue to strive to act in the best interests of all of our stakeholders. We are listening to our customers, and we are leveraging our scale to create products and services that best fit their needs. We are positioned well for a strong second half, and we believe the long term secular trends remain supportive for TriNet."

Third Quarter and Full-Year 2022 Guidance

In addition to announcing our second quarter 2022 results, we provide our third quarter and full-year 2022 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 2022 with the U.S. Securities and Exchange Commission (SEC) and making it available at http://www.trinet.com today, July 26, 2022. 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 2:00 p.m. PT (5:00 p.m. ET) today to discuss its second quarter results for 2022 and provide second quarter and full-year financial guidance for 2022. 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/10169096/f3a24c8ba0. 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. 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: 7851836.

About TriNet

TriNet provides small and medium-size businesses (SMBs) with full-service HR solutions tailored by industry. To free SMBs from HR complexities, TriNet offers access to human capital expertise, benefits, risk mitigation and compliance, payroll, all enabled by industry leading technology capabilities. 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. From Main Street to Wall Street, TriNet empowers SMBs to focus on what matters most—growing their business and enabling their people. TriNet, incredible starts here. For more information, visit TriNet.com or follow us on Twitter.

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 2021 and the underlying assumptions, and the extent, length and growth impact of economic reopening efforts. 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 guidance and expectations regarding future financial performance, the potential impact of the strategic initiatives executed by TriNet during the first quarter, TriNet's expectations regarding client hiring rates, the financial impact of our tender offer, and the impact of our newly expanded product offerings on future growth in TriNet's installed base.  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: the economic, health and business disruption caused by the COVID-19 pandemic; the impact of the COVID-19 pandemic on our clients and prospects, insurance costs and operations; the impact of the COVID-19 pandemic on the laws and regulations that impact our industry and clients; our ability to manage unexpected changes in workers' compensation and health insurance claims and costs by worksite employees; our ability to mitigate the 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 and the concentration of our clients in certain geographies and industries; loss of clients for reasons beyond our control; the short-term contracts we typically use with our clients; the impact of regional or industry-specific economic an health factors on our operations; the impact of failures or limitations in the business systems we rely upon; the impact of our 2020 Recovery Credit program and 2021 Credit Program; adverse changes in our insurance coverage or our relationships with key insurance carriers; our ability to improve our services and technology to satisfy regulatory requirements and meet the expectations of our clients and manage client attrition; our ability to effectively integrate businesses we have acquired or may acquire in the future; our ability to effectively manage and improve our operational processes; 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 and security breaches; our ability to secure our information technology infrastructure and our confidential, sensitive and personal information; our ability to comply with constantly 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 under federal and state regulations; changes in the laws and regulations that govern what it means to be an employer, employee or independent contractor; our ability to comply with the laws and regulations that govern PEOs and other similar industries; the outcome of existing and future legal and tax proceedings; fluctuation in our results of operation and stock price due to factors outside of our control, such as the volume and severity of our workers' compensation and health insurance claims and the amount and timing of our insurance costs, operating expenses and capital expenditure requirements; 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. 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 http://investor.trinet.com and on the SEC website at 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.

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 (used in) operating activities to Corporate Operating Cash flows:

Reconciliation of GAAP to Non-GAAP Measures for the third quarter and full-year 2022 guidance.

Low and high percentages represent increases (decreases) from the same period in the previous year and excludes transaction and integration cost percentages as there is no comparative amount in the second quarter and full year of 2021, respectively, and no percentages can be provided. Adjusted Net Income excludes transaction and integration costs for 2022.

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

SOURCE TriNet Group, Inc.