Slide 1: Investor Presentation
Investor Presentation February 2024 – April 2024 © 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: Cautionary Note Regarding Forward-Looking Statements and Other Financial Information
Cautionary Note Regarding Forward-Looking Statements and Other Financial Information For purposes of this presentation, the terms “TriNet,” “the Company,” “we,” “us” and “our” refer to TriNet Group, Inc., and its subsidiaries. This presentation contains statements that are not historical in nature,
Slide 3: Non-GAAP Financial Measures
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 use to manage our business, to make planning decisions, to allocate resources, an
Slide 4: Agenda
Agenda 1 Q4 2023 Financial Highlights 2 Guidance 3 Historical Financial Review & Performance 4 TriNet Overview 5 PEO Growth Strategy 6 Appendix © 2023 TriNet Group, Inc. All rights reserved. 4
Slide 5: Q4 2023 Financial Highlights
Q4 2023 Financial Highlights © 2023 TriNet Group, Inc. All rights reserved. 5
Slide 6: Q4 2023 Total Revenues
Q4 2023 Total Revenues4 • In Q4 ‘23, Total Revenues increased 2% year-over- year, and Professional Service Revenues were flat year-over-year, driven by lower WSE volume due to diminished customer hiring $1,226 $1,245 $189 $189 $1,037 $1,056 Q4 '22 Q4 '23 Insurance Service Revenues Professional Servi
Slide 7: Q4 2023 Insurance Cost Ratio
Q4 2023 Insurance Cost Ratio1,4 • Insurance Cost Ratio1 declined 1% year-over-year in Q4 ‘23 • The lower Q4 ‘23 Insurance Cost Ratio was driven by higher Insurance Revenues, flat health costs growth, and favorable workers compensation performance 88% 87% Q4'22 Q4 '23 © 2023 TriNet Group, Inc. All ri
Slide 8: Q4 2023 EPS & Adjusted EBITDA Margin
Q4 2023 EPS4 & Adjusted EBITDA Margin2,3,4 • GAAP Net Income per share-diluted grew 68% and Adjusted Net Income (ANI) per share-diluted2,3,4 grew 44% in Q4 ‘23 • For Q4 ’23, Adjusted EBITDA Margin2,3,4 expanded by 2.2 points year-over-year to 11.2% 11.2% 9.0% $1.60 $1.31 $1.11 $0.78 Q4 '22 Q4 '2
Slide 9: Guidance
Guidance © 2023 TriNet Group, Inc. All rights reserved. 9
Slide 10: Guidance
Guidance* FY 2024 Q1 2024 GAAP Total Revenue -1% - +4% 0% - 3% Professional Service Revenue 1% - 5% 2% - 8% Insurance Cost Ratio1,4 88.5% - 86.5% 86.5% - 82.5% GAAP Earnings per Share $4.57 - $6.08 $1.82 - $2.54 Adjusted Net Income per Share2,3,4 $5.80 - $7.35 $2.10 - $2.85 * See Appendix C for a GA
Slide 11: Historical Financial Review & Performance
Historical Financial Review & Performance © 2023 TriNet Group, Inc. All rights reserved. 11
Slide 12: Financial Model
Financial Model Revenue EBITDA 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 • Profit
Slide 13: Consistent Total Revenues Growth
Consistent Total Revenues4 Growth $4,885 $4,922 $4,540 $754 $756 $4,034 $3,856 $639 $544 $530 $4,131 $4,166 $3,901 $3,326 $3,490 FY2019 FY2020 FY2021 FY2022 FY2023 Insurance Service Revenues Professional Service Revenues 6% Total Revenues & 9% Professional Service Revenues CAGR5 From 2019 Through 20
Slide 14: Historical Insurance Cost Ratio
Historical Insurance Cost Ratio1,4 Insurance Cost Ratio1,4 FY 2019 – FY 2023 95% 88.0% 85.4% 85.6% 83.8% 84.3% 85% 75% FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 Insurance Cost Ratio 1 1,4 See Appendix B 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% 14.2% 12.5% 11.6% 9.8% $7.81 $7.07 $6.56 $5.64 $5.61 $5.07 $4.44 $3.99 $2.99 $3.33 FY2019 FY2020 FY2021 FY2022 FY2023 GAAP EPS ANI per Share-Diluted Adj EBITDA Margin 22% GAAP EPS CAGR5 and 24% Adjusted EPS2,3 CAGR5 From 2019 Through 20
Slide 16: Capital Allocation
Capital Allocation 1 2 3 4 Reinvest in business — Potential Acquisitions — Share repurchases — Dividend — drive revenue growth drive growth through intended to offset diversify capital return and margin expansion, acquisitions of dilution and return options to shareholders build capabilities technol
Slide 17: Financial Policy
Financial Policy Prioritize Maintain Target Deploy/Return Capital Deployment Appropriate Cash Leverage Ratio of 75%, on Average, of for Organic Growth Buffer & Prudent 1.5x-2.0x Adjusted Corporate Access to Liquidity EBITDA* Operating Cash Flow* via Capital Returns/ M&A, Annually *Non-GAAP measure;
Slide 18: TriNet Overview
TriNet Overview © 2023 TriNet Group, Inc. All rights reserved. 18
Slide 19: Investment Highlights
Investment Highlights Innovation leader serving large, Differentiated PEO vertical product under-penetrated market offerings and HRIS software platform Increased operational scale and Profitable growth supported by financial leverage strong corporate cash generation © 2023 TriNet Group, Inc. All rig
Slide 20: Large Market Opportunity
Large Market Opportunity ~62 million Underpenetrated SMB Market Number of Employees who work for companies with 500 or fewer employees6 7% ~ 62 Million Employees6 Approximate percentage of SMB Worksite Employees (WSEs) who work for SMBs using a PEO7 520+ PEO industry is made up of over 520 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: A Leading PEO Technology Platform
A 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 • ACA compliance guidance • Medical (PPO, HMO, HDHP) • Payroll processing and • Workers’ compensation Technology Platform management • Employee and manager self- • Employee onboarding and • Dent
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 ⦁ Assist clients by providing risk management services ⦁ Scale enables us to offer national and regional health offeri
Slide 27: Managing Health Insurance Risk
Managing Health Insurance Risk TriNet manages a deductible layer of risk within our minimum premium health plans HEALTHCARE POOL* DISTRIBUTION OF RISK FOR EACH HEALTH PLAN MEMBER PER YEAR CARRIER $500k+ per insured PRICE TO RISK Price new and existing customers to their risk while using 72 unique TR
Slide 28: 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 ~ 62 Million small to medium to large, TriNet can now better times for different reasons. Employee
Slide 29: TriNet Clarus R&D – Easing SMBs Access to Tax Credits
TriNet Clarus R+D – Easing SMBs 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 e
Slide 30: Experienced Leadership Team
Experienced Leadership Team Mike Simonds Kelly Tuminelli Samantha Wellington President & Executive Vice President & Executive Vice President, Chief Executive Officer Chief Financial Officer Business Affairs, Chief Legal Officer and Secretary Alex Warren Michael Mendenhall Catherine Wragg Chief Reven
Slide 31: PEO Growth Strategy
PEO Growth Strategy © 2023 TriNet Group, Inc. All rights reserved. 31
Slide 32: Three Pillars of Growth
Three Pillars of Growth 1 2 3 Retention New Sales Acquisitions © 2023 TriNet Group, Inc. All rights reserved. 32
Slide 33: 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 Annual Contracts leveraging Client Relationship Provides PEO
Slide 34: 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. 34
Slide 35: 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 36: Appendix
Appendix © 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 A
Appendix A Reconciliation of non-GAAP financial measures to GAAP financial measures © 2023 TriNet Group, Inc. All rights reserved. 38
Slide 39: 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. 39
Slide 40: Appendix C – Guidance Reconciliation
Appendix C Guidance Reconciliation © 2023 TriNet Group, Inc. All rights reserved. 40
Slide 41: 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 Slide 3 and Appendix A for more information about these non-GAAP financial
Slide 42: © 2023 TriNet Group, Inc. All rights reserved.
© 2023 TriNet Group, Inc. All rights reserved.