TriNet Group (TNET) investor relations material

Executive summary

• Q1 2026 delivered strong adjusted EPS growth of 25% and GAAP EPS growth of 11% year-over-year, driven by disciplined health fee repricing, expense management, and AI initiatives.

• Total revenues declined 5% year-over-year to $1.2 billion, mainly due to a 12% drop in average worksite employees (WSEs), partially offset by higher service rates.

• Net income increased 5% to $89 million, and adjusted net income rose 17% to $116 million, reflecting lower insurance costs and disciplined expense management.

• AI initiatives, including TriNet Assistant, improved service productivity and reduced inbound contacts during peak periods.

• Acquisition of Cocoon, a leave management platform, and new partnerships (Multiplier, Electric AI) enhance product offerings and client retention.

Financial highlights

• Adjusted EBITDA was $186 million (15.2% margin), up 15% year-over-year, with GAAP EPS at $1.90 and adjusted EPS at $2.48.

• Insurance services revenue declined 4% year-over-year, but per WSE revenue grew 9.6% due to repricing.

• Insurance costs declined 9% year-over-year, with an insurance cost ratio (ICR) of 84%, a 4-point improvement.

• Free cash flow was $123 million, up from $79 million year-over-year, benefiting from tax law changes and lower cash tax payments.

• Cash and cash equivalents rose to $340 million as of March 31, 2026.

Outlook and guidance

• Full-year 2026 revenue guidance reiterated at $4.75–$4.9 billion; professional services revenue expected at $625–$645 million.

• Adjusted EBITDA margin guidance is 7.5%–8.7%; adjusted EPS guidance is $3.70–$4.70.

• ICR guidance remains at 90.75%–89.25%, with Q1 outperformance attributed to prior period favorability.

• Retention is forecasted to improve year-over-year from Q2 through Q4, with WSE count expected to stabilize.

• Management expects continued focus on client retention, pricing strategies, and operational efficiency.