TriNet Group, Inc. — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total revenues decreased 5% year-over-year to $1.2 billion for the quarter; professional service revenues decreased 7% to $157 million.
• Net income was $31 million ($0.65 per diluted share), down from $34 million ($0.70 per diluted share) in the prior year period.
• Adjusted Net Income was $44 million ($0.94 per diluted share), compared to $55 million ($1.11 per diluted share) in the prior year.
• Adjusted EBITDA was $89 million with a margin of 7.6%, compared to $100 million and an 8.2% margin in the prior year.
• Net cash provided by operating activities increased 11% to $80 million for the quarter, generating $53 million in Free Cash Flow.
• Total Worksite Employees (WSEs) decreased 11% year-over-year to approximately 295,000.
• For the nine months ended September 30, 2026, total revenues were $3.579 billion (down 5%), net income was $173 million, and Adjusted EBITDA was $403 million.
• Balance sheet data as of September 30, 2026, showed Cash and cash equivalents of $328 million, Total assets of $3.393 billion, Debt of $896 million, and Total stockholders' equity of $133 million.

Guidance and Future Outlook:

• TriNet reaffirmed full-year 2026 guidance and expects to deliver earnings per diluted share at the high end of the range.
• Full-year 2026 guidance ranges: Total Revenues ($4.750 billion to $4.900 billion), Professional Service Revenues ($647 million to $663 million), Insurance Cost Ratio (88.5% to 89.5%), Adjusted EBITDA Margin (8.5% to 9.0%), Diluted Net Income per Share ($2.85 to $3.35), and Adjusted Net Income per Share ($4.50 to $5.10).
• Management expects to return to sustainable growth as growth initiatives gain traction.

Business Segments and Product Lines:

• Momentum is building within the broker channel.
• Investments in sales are driving improved performance during the fall selling season.
• New solutions expanding the service model include TriNet Leave powered by Cocoon, TriNet Recruit, and TriNet Spend.

Market and Competitive Landscape:

• The company serves small and medium-size businesses (SMBs) with comprehensive human capital management (HCM) solutions.
• Management noted that new sales returned to year-over-year growth.

Risks and Challenges:

• Risks include managing unexpected changes in workers' compensation and health insurance claims and costs.
• Business risks associated with co-employer status and volatility in the financial and economic environment affecting the client base.
• Potential inability to realize benefits from business realignment initiatives or sustain expected benefits.
• Risks related to client loss, short-term contracts, and regional or industry-specific economic factors.
• Operational risks include system failures, changes in insurance carrier relationships, and the ability to price services attractively.
• Regulatory and legal risks involve evolving data privacy, AI, and security laws, as well as complex laws governing health insurance and employee benefits.
• Financial risks include fluctuations in results due to factors outside control, debt obligations, and stock repurchase program continuation.

Management Commentary and Tone:

• Mike Simonds, President and CEO, stated the company delivered "solid third quarter results" and made progress against strategic priorities.
• Simonds highlighted that earnings performance exceeded forecasts, customer retention improved, and new sales returned to growth.
• Management expressed confidence that TriNet is "increasingly well-positioned to return to sustainable growth" due to gaining traction in growth initiatives.

Other Key Points:

• TriNet will host a conference call at 5:30 a.m. PT on October 29, 2026, to discuss results.
• The company filed a Form 10-Q for the nine months ended September 30, 2026, with the SEC.
• During the nine months ended September 30, 2026, the company repurchased common stock for $94 million and paid dividends of $40 million.
• Net cash used in investing activities for the nine months was $169 million, including $22 million for the acquisition of a subsidiary.
• Net cash used in financing activities for the nine months was $668 million, primarily driven by a $529 million change in WSE and TriNet Trust related assets and liabilities.