TriNet Group, Inc. Q4 FY2025 earnings call

• 2025 was challenging with SMB landscape issues, but TriNet executed well, delivered solid financials, improved pricing processes, and made progress on initiatives. • Growth-focused investments in 2025 starting to take hold: sales up in Jan, broker channel strong, improved sales organization, simplified PEO health plan offering, ASO as core growth driver. • Achieved all-time high net promoter score in 2025, launching TriNet Assistant AI-powered HR tool and enhancing client experience through integrations. • Exiting 2025 with expenses down 7% year over year and expecting further improvement in 2026.

Total revenues declined 2% year over year in Q4 and 1% for full year 2025. Professional services revenue declined 7% in Q4 and 6% for full year. Insurance services revenues declined 1% in Q4 and were flat for full year. ASO business had strong growth. Free cash flow grew 16% in 2025. Retention dropped to ~80% in 2025. WSEs ended 2025 at ~320,000, down 10% year over year with co-employed WSEs at 294,000, down 11%.

• 2026 total revenues expected $4.75B - $4.90B. • CIE midpoint growth low single digits. • Interest income expected $25M - $30M headwind vs 2025. • Professional services revenue $625M - $645M with drivers like WSE forecast, ASO growth, legacy SaaS HRIS decline. • Insurance cost ratio 90.75% - 89.25%. • Operating expenses to reduce mid-single digits. • Adjusted EBITDA margin 7.5% - 8.7%. • GAAP EPS $2.15 - $3.05, adjusted EPS $3.70 - $4.70. • Board authorized increase in share repurchase program to $400M.

• External headwinds like health care inflation and hiring market conditions beyond control. • Uncertainty in medical cost trends and CIE growth affecting financial performance. • Dependence on exogenous factors like interest rates and tax refund timings.

Q: Discuss guidance philosophy including difference vs predecessor.

A: Based on 2025 business momentum, OpEx discipline, revenue drivers, last repricing impact, ASO growth, and focus on controllable priorities.

Q: Bookings expectations for 2026.

A: Sales improving, new sales and retention driving volume growth, senior reps and Ascend program boding well.

Q: Insurance pricing and attrition impact.

A: Need to price for cost increases and catch-up, seen improvement in Q4 ICR, encouraged by April 1 receptiveness.

Q: CIE hiring trends.

A: Hiring suppressed, terminations stable, informing CIE assumptions.

Q: Retention outside mispriced cohort.

A: Value delivered and service quality improving, reducing 'for term' reasons.

Q: ASO services growth sources.

A: Conversion of SaaS-only clients, new sales, brokerage channel opportunities.

Q: Insurance ratio guidance assumptions.

A: Continuation of trends, informed by medical and pharmaceutical inflation, tightened range.

Q: WSE month-to-month dynamics.

A: Not giving specific month-to-month color.

Q: Pricing relative to peers.

A: In line with market, favorably positioned compared to those with catch-up work.

Q: Sales improvement drivers 2026.

A: Brokerage channel, improving rep tenure, Ascend program.

Q: WSE rollover issue.

A: Confidence in improving trend as 2026 progresses with controllable efforts.