Slide 1: Investor Presentation
Investor Presentation July 2023 – October 2023 © 2023 TriNet Group, Inc. All rights reserved. All trademarks, trade names, service marks and logos referenced herein belong to their respective companies. Reproduction or distribution in whole or part without express written permission is prohibited.
Slide 2: Disclaimer
Disclaimer Cautionary Note Regarding Forward-Looking Statements and Other Financial Information This presentation contains 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 statemen
Slide 3: Disclaimer: Non-GAAP Financial Measures
Disclaimer Non-GAAP Financial Measures In addition to financial measures presented in accordance with U.S. Generally Accepted Accounting Principles (GAAP), we present other non-GAAP financial measures in this presentation that we monitor and use to manage our business, to make planning decisions, to
Slide 4: Agenda
Agenda 1 Q2 2023 Financial Highlights 2 Guidance 3 Financial Review 4 TriNet Overview 5 Growth Strategy 6 Appendix © 2023 TriNet Group, Inc. All rights reserved. 4
Slide 5: Q2 2023 Financial Highlights
Q2 2023 Financial Highlights © 2023 TriNet Group, Inc. All rights reserved. 5
Slide 6: Q2 2023 Total Revenues
Q2 2023 Total Revenues4 • In Q2 ‘23, Total Revenues increased 1% year-over- year, and Professional Service Revenues decreased 3% year-over-year, driven by lower WSE volume offset by rate growth $1,200 $1,209 $182 $177 $1,018 $1,032 Q2 '22 Q2 '23 Insurance Service Revenues Professional Service Revenu
Slide 7: Q2 2023 Insurance Cost Ratio
Q2 2023 Insurance Cost Ratio1,4 • Insurance Cost Ratio1 was largely unchanged year-over-year in Q2 ‘23 • The Q2 ‘23 Insurance Cost Ratio was impacted by increased Insurance Cost growth driven by health utilization and health cost inflation offset by positive prior period development across health an
Slide 8: Q2 2023 EPS & Adjusted EBITDA Margin
Q2 2023 EPS4 & Adjusted EBITDA Margin2,3,4 • GAAP Net Income per share-diluted grew 2% and Adjusted Net Income (ANI) per share-diluted2,3 grew 1% in Q2 ‘23 • For Q2 ’23, Adjusted EBITDA Margin2,3 contracted slightly 13.5% 13.3% $1.72 $1.74 $1.35 $1.38 Q2 '22 Q2 '23 2,3 2,3 © 2023 TriNet Group, I
Slide 9: Guidance
Guidance © 2023 TriNet Group, Inc. All rights reserved. 9
Slide 10: Guidance
Guidance* FY 2023 Δ Q3 2023 GAAP Total Revenue 1% - 2% - -1% - 0% Professional Service Revenue 0% - 2% -1% (2)% - 1% Insurance Cost Ratio1 87% - 85.5% -1.5% 89% - 87.5% GAAP Earnings per Share $4.93 - $5.71 +$0.90 $0.93 - $1.16 Adjusted Net Income per Share2,3 $6.25 - $7.05 +$0.78 $1.25 - $1.50 * Se
Slide 11: Prior Fiscal Year Financial Review
Prior Fiscal Year Financial Review © 2023 TriNet Group, Inc. All rights reserved. 11
Slide 12: Financial Model
Financial Model Revenue EPS Growth Strong Corporate Growth from Operating Operating Cash Leverage Flow* • Vertical strategy drives • Disciplined Operating Expense • Efficient Working Capital volume growth management • CAPEX light • Customer experience drives • Use scale in operations and • Profitabi
Slide 13: Consistent Total Revenues Growth
Consistent Total Revenues4 Growth $4,885 $4,540 $754 $4,034 $3,856 $639 $3,503 $544 $530 $487 $4,131 $3,901 $3,326 $3,490 $3,016 FY2018 FY2019 FY2020 FY2021 FY2022 Insurance Service Revenues Professional Service Revenues 9% Total Revenues & 12% Professional Service Revenues CAGR5 From 2018 Through 2
Slide 14: Historical Insurance Cost Ratio
Historical Insurance Cost Ratio1,4 Insurance Cost Ratio FY2018 - FY2022 95% 88.0% 86.5% 85.4% 85.6% 85% 83.8% 75% FY2018 FY2019 FY2020 FY2021 FY2022 Insurance Cost Ratio 1 Priced for Stable Insurance Cost Experience © 2023 TriNet Group, Inc. All rights reserved. 14
Slide 15: Attractive EPS Growth & Adj EBITDA Margin Expansion
Attractive EPS4 Growth & Adj EBITDA Margin2,3,4 Expansion 14.1% 12.5% 11.6% 9.9% 9.8% $7.07 $5.64 $5.61 $5.07 $4.44 $3.99 $3.02 $2.99 $3.33 $2.65 FY2018 FY2019 FY2020 FY2021 FY2022 GAAP EPS ANI per Share-Diluted Adj EBITDA Margin 21% GAAP EPS CAGR5 and 24% Adjusted EPS2,3 CAGR5 From 2018 Through 202
Slide 16: Capital Allocation
Capital Allocation 1 2 3 Reinvest in business — Potential Acquisitions — Share repurchases — drive revenue growth drive growth through intended to offset dilution and margin expansion, acquisitions of technology, and return capital build capabilities product, and services to shareholders © 2023 TriN
Slide 17: Financial Policy
Financial Policy Target - Leverage Ratio of 1.5x-2.0x, Cash Buffer - maintain (±0.5x) Leverage Ratio – target a Capital Deployment – on minimum, prudent cash buffer leverage ratio of approximately average, target deploying 75% to enable seamless business 1.5x to 2.0x Debt to Adjusted of corporate op
Slide 18: TriNet Overview
TriNet Overview © 2023 TriNet Group, Inc. All rights reserved. 18
Slide 19: Investment Highlights
Investment Highlights Innovation leader serving Differentiated PEO vertical large, under-penetrated product offerings and market HRIS software platform Increased operational scale Profitable growth and financial leverage supported by strong corporate cash generation* * See Appendix B © 2023 TriNet G
Slide 20: Large Market Opportunity
Large Market Opportunity ~61 million Underpenetrated SMB Market Number of Employees who work for companies with 500 or fewer employees6 7% ~ 61 Million Employees6 Approximate percentage of SMB Worksite Employees (WSEs) who work for SMBs using a PEO7 480+ PEO industry is made up of over 480 PEO servi
Slide 21: Challenges Facing SMBs
Challenges Facing SMBs Compliance ⦁ Significant regulatory oversight ⦁ Risks for federal, state, and local noncompliance are high Complexity ⦁ Federal, state, and local regulations continue to diverge ⦁ Managing HR across multiple jurisdictions Cost ⦁ SMBs pay multiple vendors and employees for a va
Slide 22: Leading PEO Technology Platform
Leading PEO Technology Platform • Benefits Enrollment • Workforce Analytics • Expense Management • New Hire Onboarding • Mobile App • Marketplace • Automatic Payroll • Time Tracking • Integration Center © 2023 TriNet Group, Inc. All rights reserved. 22
Slide 23: Common PEO Product and Service Capabilities
Common PEO Product and Service Capabilities HR Expertise Benefit Options Payroll Services Risk Mitigation Technology Platform • ACA compliance guidance • Medical (PPO, HMO, HDHP) • Payroll processing and • Workers’ compensation • Employee and manager self- management service platform • Employee onbo
Slide 24: Scaled Service Model
Scaled Service Model Rapid access to HR expertise: when they want, how they want Personalized strategic resource Account Manager Specialized experts On-demand HR Guidance support Benefits Payroll Platform Customer Responsive support for your employees, 24/7 Solution Center © 2023 TriNet Group, Inc.
Slide 25: Vertical Strategy
Vertical Strategy Financial Services Life Science Main Street Nonprofit Professional Technology Services Full-service HR solutions tailored to our targeted Verticals for PEO clients • Different industries have different needs • SMBs want partners who know their industries and can scale with them • V
Slide 26: Insurance Services
Insurance Services Workers’ Compensation ⦁ Provide fully insured, industry Health Insurance standard $1 million per claim deductible policies ⦁ Offer 200+ fully insured health plans, including plans in all 50 ⦁ Assist clients by providing risk states management services ⦁ Scale enables us to offer n
Slide 27: Servicing SMBs with PEO and HRIS Software
Servicing SMBs with PEO and HRIS Software + The SMB TAM is our SMB Lifecycle Configurable Model Opportunity Process of growing from An SMB may need a PEO or PEO + HRIS Software HRIS software at different ~ 61 Million small to medium to large, TriNet can now better times for different reasons. Employ
Slide 28: Leading HRIS Software Platform
Leading HRIS Software Platform People Operations Platform HR Time Payroll Benefits Talent Wellbeing Collaboration Analytics Compliance Engine Zen Assistant © 2023 TriNet Group, Inc. All rights reserved. 28
Slide 29: Clarus R&D – Enabling SMBs Easier Access to Tax Credits
Clarus R+D – Enabling SMBs Easier Access to Tax Credits Specialize in Growth Technology-First Align with CPAs Compliant and Businesses Platform and Payroll Defensible Focused on helping growth Web-based platform enables Partners with Secure software solution businesses take advantage of customers to
Slide 30: PEO Growth Strategy
PEO Growth Strategy © 2023 TriNet Group, Inc. All rights reserved. 30
Slide 31: Three Pillars of Growth
Three Pillars of Growth 1 2 3 Retention New Sales Acquisitions © 2023 TriNet Group, Inc. All rights reserved. 31
Slide 32: Retention
Retention Flexible Service Vertical Products Flexible service model Provide PEO clients with user aligned to verticals experience specific to their industry needs Efforts to Improve Client Experience Improve client experience by Retention Enterprise Pricing leveraging Client Relationship Enterprise
Slide 33: New Sales
New Sales Concentrate Expand and Keep Sellers Leverage Go-to-Market Improve Selling with Strategic Resources Top of Funnel Effective Support Partnerships where we are advantaged © 2023 TriNet Group, Inc. All rights reserved. 33
Slide 34: Acquisitions
Acquisitions ⦁ Leading cloud-based ⦁ New product offering international ⦁ National product for employee hiring, “Main Street” clients onboarding and ⦁ Expands TriNet’s retention product product offering to ⦁ Migrated to and development include leading cloud- TriNet common team based HRIS software te
Slide 35: Appendix
Appendix © 2023 TriNet Group, Inc. All rights reserved. 35
Slide 36: Appendix A
Appendix A Reconciliation of non-GAAP financial measures to GAAP financial measures © 2023 TriNet Group, Inc. All rights reserved. 36
Slide 37: Appendix A
Appendix A Reconciliation of non-GAAP financial measures to GAAP financial measures © 2023 TriNet Group, Inc. All rights reserved. 37
Slide 38: Appendix B
Appendix B Please refer to our most recent Annual Report and Quarterly Reports for a more detailed discussion of our Statement of Cash Flows © 2023 TriNet Group, Inc. All rights reserved. 38
Slide 39: Appendix C: Guidance Reconciliation
Appendix C Guidance Reconciliation © 2023 TriNet Group, Inc. All rights reserved. 39
Slide 40: Appendix D – End Notes
Appendix D – End Notes 1 Insurance costs to insurance service revenues ratio, or Insurance Cost Ratio, is a ratio obtained by dividing GAAP Insurance Costs by GAAP Insurance Service Revenues. 2 Non-GAAP financial measure. See End Note 4, Slide 2 and Appendix A and/or Appendix C for more information
Slide 41: © 2023 TriNet Group, Inc. All rights reserved.
© 2023 TriNet Group, Inc. All rights reserved.