TriNet Announces Fourth Quarter, Fiscal Year 2024 Results, and Strategy & Medium-Term Outlook
TriNet (NYSE: TNET) reported its Q4 and full-year 2024 results, showing modest growth with total revenues increasing 1% to $1.3B in Q4 and $5.1B for the full year. The company experienced a Q4 net loss of $23M ($0.46 per diluted share), compared to net income of $67M in the same period last year.
Key highlights include record worksite employee (WSE) retention in 2024, with average WSEs increasing 5% to 355,000 in Q4. The company returned over $200M to shareholders through share repurchases and dividends. For 2025, TriNet projects total revenues between $4.9B-$5.1B and adjusted EBITDA margin of 7-9%.
The company's medium-term outlook targets 4-6% revenue growth, 10-11% adjusted EBITDA margin, and 12-14% growth in adjusted net income per share.
TriNet (NYSE: TNET) ha riportato i risultati per il quarto trimestre e l'intero anno 2024, mostrando una crescita modesta con ricavi totali in aumento dell'1% a $1,3 miliardi nel Q4 e $5,1 miliardi per l'intero anno. L'azienda ha registrato una perdita netta nel Q4 di $23 milioni ($0,46 per azione diluita), rispetto a un utile netto di $67 milioni nello stesso periodo dell'anno scorso.
Tra i punti salienti ci sono il record di retention degli employee worksite (WSE) nel 2024, con una media di WSE in aumento del 5% a 355.000 nel Q4. L'azienda ha restituito oltre $200 milioni agli azionisti attraverso riacquisti di azioni e dividendi. Per il 2025, TriNet prevede ricavi totali tra $4,9 miliardi e $5,1 miliardi e un margine EBITDA rettificato del 7-9%.
Le previsioni a medio termine dell'azienda mirano a una crescita dei ricavi del 4-6%, un margine EBITDA rettificato del 10-11% e una crescita del 12-14% nell'utile netto rettificato per azione.
TriNet (NYSE: TNET) informó sus resultados del cuarto trimestre y del año completo 2024, mostrando un crecimiento modesto con ingresos totales que aumentaron un 1% a $1.3 mil millones en el Q4 y $5.1 mil millones para el año completo. La compañía experimentó una pérdida neta de $23 millones en el Q4 ($0.46 por acción diluida), en comparación con una ganancia neta de $67 millones en el mismo período del año pasado.
Los aspectos destacados incluyen una retención récord de empleados en el sitio de trabajo (WSE) en 2024, con un aumento promedio de WSE del 5% a 355,000 en el Q4. La compañía devolvió más de $200 millones a los accionistas a través de recompra de acciones y dividendos. Para 2025, TriNet proyecta ingresos totales entre $4.9 mil millones y $5.1 mil millones y un margen EBITDA ajustado del 7-9%.
Las perspectivas a medio plazo de la compañía apuntan a un crecimiento de ingresos del 4-6%, un margen EBITDA ajustado del 10-11% y un crecimiento del 12-14% en el ingreso neto ajustado por acción.
TriNet (NYSE: TNET)는 2024년 4분기 및 전체 연도 실적을 보고하며, 4분기 총 수익이 13억 달러로 1% 증가하고 전체 연도가 51억 달러로 소폭 성장했음을 보여주었습니다. 회사는 4분기에 2300만 달러의 순손실을 기록했으며(희석 주당 0.46달러), 작년 같은 기간에 비해 6700만 달러의 순이익을 기록했습니다.
주요 하이라이트로는 2024년 근무지 직원(WSE) 유지율이 기록적인 수준에 도달했으며, 4분기에 평균 WSE가 5% 증가하여 355,000명에 달했습니다. 회사는 주식 재매입과 배당금을 통해 주주에게 2억 달러 이상을 반환했습니다. 2025년을 위해 TriNet은 총 수익을 49억 달러에서 51억 달러 사이로 예상하고 조정된 EBITDA 마진을 7-9%로 전망하고 있습니다.
회사의 중기 전망은 4-6%의 수익 성장, 10-11%의 조정 EBITDA 마진, 주당 조정 순이익 12-14% 성장을 목표로 하고 있습니다.
TriNet (NYSE: TNET) a annoncé ses résultats du quatrième trimestre et de l'année entière 2024, montrant une croissance modeste avec des revenus totaux augmentant de 1% à 1,3 milliard de dollars au Q4 et à 5,1 milliards de dollars pour l'année entière. L'entreprise a enregistré une perte nette de 23 millions de dollars au Q4 (0,46 dollar par action diluée), par rapport à un bénéfice net de 67 millions de dollars au cours de la même période l'année dernière.
Les points forts incluent un taux de rétention record des employés sur site (WSE) en 2024, avec une augmentation de 5% de la moyenne des WSE à 355 000 au Q4. L'entreprise a restitué plus de 200 millions de dollars aux actionnaires par le biais de rachats d'actions et de dividendes. Pour 2025, TriNet prévoit des revenus totaux compris entre 4,9 milliards et 5,1 milliards de dollars et une marge EBITDA ajustée de 7 à 9%.
Les prévisions à moyen terme de l'entreprise visent une croissance des revenus de 4 à 6%, une marge EBITDA ajustée de 10 à 11% et une croissance de 12 à 14% du bénéfice net ajusté par action.
TriNet (NYSE: TNET) hat die Ergebnisse für das vierte Quartal und das gesamte Jahr 2024 bekannt gegeben, die ein moderates Wachstum zeigen, wobei die Gesamterlöse im Q4 um 1% auf 1,3 Milliarden Dollar und im Gesamtjahr auf 5,1 Milliarden Dollar gestiegen sind. Das Unternehmen verzeichnete im Q4 einen Nettoverlust von 23 Millionen Dollar (0,46 Dollar pro verwässerter Aktie), verglichen mit einem Nettogewinn von 67 Millionen Dollar im gleichen Zeitraum des Vorjahres.
Zu den wichtigsten Highlights gehören eine Rekordbindung der Mitarbeiter am Arbeitsplatz (WSE) im Jahr 2024, mit einem Anstieg der durchschnittlichen WSE um 5% auf 355.000 im Q4. Das Unternehmen gab über 200 Millionen Dollar an Aktionäre durch Aktienrückkäufe und Dividenden zurück. Für 2025 prognostiziert TriNet Gesamterlöse zwischen 4,9 Milliarden und 5,1 Milliarden Dollar sowie eine bereinigte EBITDA-Marge von 7-9%.
Der mittelfristige Ausblick des Unternehmens zielt auf ein Umsatzwachstum von 4-6%, eine bereinigte EBITDA-Marge von 10-11% und ein Wachstum des bereinigten Nettogewinns pro Aktie von 12-14% ab.
- Record worksite employee retention achieved in 2024
- 5% increase in average WSEs to 355,000 in Q4 2024
- $200M+ returned to shareholders through dividends and buybacks
- 1% revenue growth to $5.1B for full-year 2024
- Q4 net loss of $23M compared to $67M profit year-over-year
- Professional service revenues declined 4% in Q4
- Adjusted EBITDA margin decreased to 4.7% in Q4 from 11.2% year-over-year
- Full-year net income dropped to $173M from $375M in 2023
Insights
TriNet's Q4 and FY2024 results present a complex picture of operational resilience amid significant profitability challenges. While the 1% revenue growth to
The concerning aspect lies in the sharp profitability decline, with Q4 showing a
The 2025 guidance suggests continued near-term challenges with projected Adjusted EBITDA margins of
- Insurance book repricing initiatives
- Enhanced benefits offering development
- Go-to-market strategy refinement
- Technology-enabled service model implementation
The company's commitment to shareholder returns remains strong, evidenced by over
Delivered record WSE retention in 2024
"We closed out 2024 by delivering fourth quarter results in line with our guidance, excluding a strategic restructuring charge," said Mike Simonds, TriNet's President and CEO. "I am pleased that we drove strong retention in 2024 and returned over
Simonds continued, "As we enter 2025, we have a clear strategy in place and have begun executing on a number of actions that position TriNet for growth, margin expansion, and value creation over the medium-term. We expect momentum to build through the year as we continue to reprice our insurance book and our investments in our benefits offering, go-to-market approach, and increasingly tech-enabled service model begin to yield tangible results."
Fourth quarter highlights include:
- Total revenues increased
1% to$1.3 billion - Professional service revenues decreased
4% to$181 million - Net loss was
$23 million $0.46 $67 million $1.31 - Adjusted Net Income was
$22 million $0.44 $82 million $1.60 - Adjusted EBITDA was
$60 million 4.7% , compared to Adjusted EBITDA of$140 million 11.2% in the same period last year. - Average Worksite Employees (WSEs) increased
5% as compared to the same period last year and increased1% as compared to the previous quarter, to approximately 355,000.
Full year highlights include:
- Total revenues increased
1% to$5.1 billion - Professional service revenues increased
1% to$765 million - Net income was
$173 million $3.43 $375 million $6.56 - Adjusted Net income was
$269 million $5.32 $446 million $7.81 - Adjusted EBITDA was
$485 million 9.6% , compared to Adjusted EBITDA of$697 million 14.2% in 2023. - Average Worksite Employees (WSEs) increased by
6% compared to 2023, to approximately 353,000.
Full-Year 2025 Guidance
In addition to announcing our fourth quarter 2024 results, we provide our full-year 2025 guidance. Non-GAAP financial measures are reconciled later in this release. Percentages reflect the increase or (decrease) from the prior year end.
Full Year 2025 | |||||
(dollars in millions, except for per share amounts) | Low | High | |||
Total Revenues | $ 4,900 | $ 5,100 | |||
Professional Service Revenues | $ 700 | $ 730 | |||
Insurance Cost Ratio | 92 % | 90 % | |||
Adjusted EBITDA Margin | 7 % | 9 % | |||
Diluted net income per share of common stock | $ 1.90 | $ 3.40 | |||
Adjusted Net Income per share - diluted | $ 3.25 | $ 4.75 | |||
Medium-Term Outlook Based on Strategy
TriNet is also providing our medium-term financial performance outlook as a result of our strategy. Details of our strategy and medium-term outlook can be found on Investor Relations section of TriNet's website at https://investors.trinet.com. Percentages for Total Revenues and Adjusted Net Income per share - diluted represent our targeted compounded annual growth rates through the period. Adjusted EBITDA Margin represents our targeted margin at the end of the period. The Value Creation Opportunity represents our targeted Adjusted Net Income per share - diluted percentage return plus our expected dividends paid.
Medium-Term Outlook | |||||
Low | High | ||||
Total Revenues | 4 % | 6 % | |||
Adjusted EBITDA Margin | 10 % | 11 % | |||
Adjusted Net Income per share - diluted | 12 % | 14 % | |||
Value Creation Opportunity | 13 % | 15 % | |||
We are not able to provide a reconciliation of non-GAAP financial measures included in our medium-term outlook to the closest corresponding GAAP measure without unreasonable efforts because we are unable to predict the ultimate outcome of certain significant items including but not limited to volume growth and Insurance Cost Ratio. For the same reasons, we are unable to address the probable significance of the unavailable information, which could have a potentially unpredictable and potentially significant impact on our future GAAP financial results.
Annual Report on Form 10-K
We anticipate filing our Annual Report on Form 10-K ("Form 10-K") for the year ended December 31, 2024 with the
Earnings and Medium-Term Strategy & Outlook Conference Call and Audio Webcast
TriNet will host a conference call at 5:30 a.m. PT to 6:45 a.m. PT (8:30 a.m. to 9:45 a.m. ET) today to discuss its fourth quarter and year end results for 2024, provide full-year financial guidance for 2025, and provide its Medium-Term Strategy & Outlook. TriNet encourages participants to pre-register for the webcast. The live webcast of the conference call can be accessed on the Investor Relations section of TriNet's website at https://investor.trinet.com. Participants can pre-register for the webcast by going to: https://events.q4inc.com/attendee/533667263. Callers who pre-register will be given a unique PIN to gain immediate access to the call and bypass the live operator. To pre-register, go to: https://www.netroadshow.com/events/login?show=4dd88305&confId=77411. For those who would like to join the call but have not pre-registered, they can do so by dialing +1 (404) 975-4839 and enter the access code: 174612. A replay of the webcast will be available on this website for approximately one year.
About TriNet
TriNet is a leading provider of Human Resources solutions for small and medium size businesses, offering advanced technology-enabled services that include human capital expertise, employee benefits such as health insurance and retirement plans, payroll and payroll tax administration, risk mitigation, and compliance consulting. Our long-term objective is to be the premier provider of HR services for a broad range of SMBs through industry leading benefits, sales distribution excellence, and a world class services delivery model. For more information, please visit TriNet.com or follow us on Facebook, LinkedIn and Instagram.
Use of Non-GAAP Financial Measures
Reconciliations of non-GAAP financial measures to TriNet's financial results as determined in accordance with GAAP are included at the end of this press release following the accompanying financial data. For a description of these non-GAAP financial measures, including the reasons management uses each measure, please see the section titled "Non-GAAP Financial Measures."
Forward-Looking Statements
This press release contains, and statements made during the above referenced conference call will contain, 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 statements within the meaning of Section 21 of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, including, among other things, TriNet's expectations and assumptions regarding: TriNet's financial guidance for the full-year 2025 and the underlying assumptions; TriNet's mid-term outlook and the underlying assumptions; TriNet's ability to help our clients successfully navigate a challenging external environment, TriNet's ability to build on our improved pricing, the continuation of our strong expense management and TriNet's ability to execute on our strategy. Forward-looking statements are often identified by the use of words such as, but not limited to, "ability," "anticipate," "believe," "can," "continue," "could," "estimate," "expect," "guidance," "impact," "intend," "may," "plan," "predict," "project," "seek," "should," "strategy," "target," "value," "will," "would" and similar expressions or variations intended to identify forward-looking statements. These statements are not guarantees of future performance but are based on management's expectations as of the date hereof and assumptions that are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from our current expectations and any past or future results, performance or achievements expressed or implied by the forward-looking statements. Investors are cautioned not to place undue reliance upon any forward-looking statements.
Important factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements include: our ability to manage unexpected changes in workers' compensation and health insurance claims and costs by worksite employees; our ability to mitigate the unique business risks we face as a co-employer; the effects of volatility in the financial and economic environment on the businesses that make up our client base; our inability to realize or sustain the expected benefits from our business transformation initiatives; loss of clients for reasons beyond our control and the short-term contracts we typically use with our clients; the impact of regional or industry-specific economic and health factors on our operations; the impact of failures or limitations in the business systems and service centers we rely upon; the impact of discontinuing our discretionary credits on our business and client loyalty and retention; changes in our insurance coverage or our relationships with key insurance carriers; our ability to improve our services and technology to satisfy client and regulatory expectations; our ability to effectively integrate businesses we have acquired or may acquire in the future; our ability to effectively manage and improve our operational effectiveness and resiliency; our ability to attract and retain qualified personnel; the effects of increased competition and our ability to compete effectively; the impact on our business of cyber-attacks, breaches, disclosures and other data-related incidents; our ability to comply with constantly evolving data privacy, AI and security laws; our ability to manage changes in, uncertainty regarding, or adverse application of the complex laws and regulations that govern our business; changing laws and regulations governing health insurance and employee benefits; our ability to keep pace with changes in technology or provide timely enhancements to our solutions and support; risks associated with our international operations; our ability to operate a business subject to numerous complex laws; changing laws and regulations governing health insurance and other traditional employee benefits at the federal, state, and local levels; our ability to be recognized as an employer of worksite employees and for our benefits plans to satisfy all requirements under federal and state regulations; changes in the laws and regulations that govern what it means to be an employer, employee or independent contractor; the impact of new and changing laws regarding remote work; our ability to comply with the licensing requirements that govern our HCM solutions; the failure of third-party service providers performing their functions; the failure to comply with anti-corruption laws and regulations, economic and trade sanctions, and similar laws; the outcome of existing and future legal and tax proceedings; fluctuation in our results of operations and stock price due to factors outside of our control; our ability to comply with the restrictions of our indebtedness and meet our debt obligations; the need for additional capital or to restructure our existing debt; the continuation of our stock repurchase program; the impact of concentrated ownership in our stock by Atairos and other large stockholders and the anti-takeover provisions in our charter documents and under
Further information on risks that could affect TriNet's results is included in our filings with the SEC, including under the headings "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" and elsewhere in our most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, which are available on our investor relations website at http://investor.trinet.com and on the SEC website at www.sec.gov. Copies of these filings are also available by contacting TriNet Corporation's Investor Relations Department at (510) 875-7201. Except as required by law, neither we nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements in this press release, and any forward-looking statements in this press release speak only as of the date of this press release. In addition, we do not assume any obligation, and do not intend, to update any of our forward-looking statements, except as required by law.
Contacts: | |
Investors: | Media: |
Alex Bauer | Renee Brotherton / Josh Gross |
TriNet | TriNet |
(510) 875-7201 | |
(408) 646-5103 |
Key Financial and Operating Metrics
We regularly review certain key financial and operating metrics to evaluate growth trends, measure our performance and make strategic decisions. These key financial and operating metrics may change over time. Our key financial and operating metrics for the periods presented were as follows:
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||
(in millions, except per share and Operating Metrics data) | 2024 | 2023 | % Change | 2024 | 2023 | % Change | |||||||
Income Statement Data: | |||||||||||||
Total revenues | $ 1,277 | $ 1,261 | 1 | % | $ 5,053 | $ 4,994 | 1 | % | |||||
Income before tax | (37) | 86 | (143) | 226 | 501 | (55) | |||||||
Net (loss) income | (23) | 67 | (134) | 173 | 375 | (54) | |||||||
Diluted net (loss) income per share of common stock | (0.46) | 1.31 | (135) | 3.43 | 6.56 | (48) | |||||||
Non-GAAP measures (1): | |||||||||||||
Adjusted EBITDA | 60 | 140 | (57) | 485 | 697 | (30) | |||||||
Adjusted Net income | 22 | 82 | (73) | 269 | 446 | (40) | |||||||
Free Cash Flow | 201 | 464 | (57) | ||||||||||
Operating Metrics: | |||||||||||||
Insurance Cost Ratio | 95 % | 87 % | 8 | % | 90 % | 84 % | 6 | ||||||
Average WSEs (2) | 355,157 | 337,924 | 5 | 352,681 | 331,423 | 6 | % | ||||||
Total WSEs at period end (2) | 360,681 | 347,542 | 4 | 360,681 | 347,542 | 4 | |||||||
(1) | Refer to Non-GAAP measures definitions and reconciliations from GAAP measures under the heading "Non-GAAP Financial Measures". |
(2) | Total WSEs and Average WSEs include incremental WSEs that were charged a platform user access fee and incremental additional service recipients. These were identified as a result of our ongoing effort to ensure that our billing practices best match the expectations of our customers. Please refer to "Management Discussion & Analysis of Financial Condition and Results of Operations" in our 2024 10-K. |
(in millions) | December 31, 2024 | December 31, 2023 | % Change | |||
Balance Sheet Data: | ||||||
Cash and cash equivalents | $ 360 | $ 287 | 26 | % | ||
Working capital | 199 | 115 | 73 | % | ||
Total assets | 4,119 | 3,693 | 12 | |||
Debt | 983 | 1,093 | (10) | |||
Total stockholders' equity | 69 | 78 | (12) |
Year Ended December 31, | ||||||
(in millions) | 2024 | 2023 | % Change | |||
Cash Flow Data: | ||||||
Net cash provided by operating activities | $ 279 | $ 539 | (48) | % | ||
Net cash provided by (used in) investing activities | 153 | (70) | (319) | |||
Net cash used in financing activities | (207) | (540) | (62) | |||
TRINET GROUP, INC. | |||||
Three Months Ended | Year Ended December 31, | ||||
(in millions except per share data) | 2024 | 2023 | 2024 | 2023 | |
Professional service revenues | $ 181 | $ 189 | $ 765 | $ 756 | |
Insurance service revenues | 1,081 | 1,056 | 4,224 | 4,166 | |
Interest income | 15 | 16 | 64 | 72 | |
Total revenues | 1,277 | 1,261 | 5,053 | 4,994 | |
Insurance costs | 1,025 | 919 | 3,797 | 3,513 | |
Cost of providing services | 76 | 77 | 304 | 307 | |
Sales and marketing | 71 | 71 | 289 | 285 | |
General and administrative | 92 | 57 | 232 | 211 | |
Systems development and programming | 16 | 16 | 68 | 65 | |
Depreciation and amortization of intangible assets | 19 | 19 | 75 | 72 | |
Interest expense, bank fees and other | 15 | 16 | 62 | 40 | |
Income before tax | (37) | 86 | 226 | 501 | |
Income taxes | (14) | 19 | 53 | 126 | |
Net (loss) income | $ (23) | $ 67 | $ 173 | $ 375 | |
Other comprehensive income (loss), net of income taxes | (5) | 6 | (1) | 3 | |
Comprehensive income | $ (28) | $ 73 | $ 172 | $ 378 | |
Net (loss) income per share: | |||||
Basic | $ (0.46) | $ 1.33 | $ 3.47 | $ 6.61 | |
Diluted | $ (0.46) | $ 1.31 | $ 3.43 | $ 6.56 | |
Weighted average shares: | |||||
Basic | 50 | 51 | 50 | 57 | |
Diluted | 50 | 51 | 50 | 57 | |
TRINET GROUP, INC. | ||||
December 31, | December 31, | |||
(in millions, except share and per share data) | 2024 | 2023 | ||
ASSETS | ||||
Current assets: | ||||
Cash and cash equivalents | $ 360 | $ 287 | ||
Investments | — | 65 | ||
Restricted cash, cash equivalents and investments | 1,413 | 1,269 | ||
Accounts receivable, net | 32 | 18 | ||
Payroll funds receivable | 349 | 447 | ||
Prepaid expenses, net | 64 | 67 | ||
Other payroll assets | 916 | 381 | ||
Other current assets | 46 | 44 | ||
Total current assets | 3,180 | 2,578 | ||
Restricted cash, cash equivalents and investments, noncurrent | 145 | 158 | ||
Investments, noncurrent | — | 143 | ||
Property and equipment, net | 10 | 17 | ||
Operating lease right-of-use asset | 24 | 24 | ||
Goodwill | 461 | 462 | ||
Software and other intangible assets, net | 156 | 172 | ||
Other assets | 143 | 139 | ||
Total assets | $ 4,119 | $ 3,693 | ||
Liabilities and stockholders' equity | ||||
Current liabilities: | ||||
Accounts payable and other current liabilities | $ 89 | $ 87 | ||
Revolving credit agreement borrowings | 75 | 109 | ||
Client deposits and other client liabilities | 76 | 65 | ||
Accrued wages | 580 | 515 | ||
Accrued health insurance costs, net | 189 | 175 | ||
Accrued workers' compensation costs, net | 44 | 50 | ||
Payroll tax liabilities and other payroll withholdings | 1,906 | 1,438 | ||
Operating lease liabilities | 13 | 14 | ||
Insurance premiums and other payables | 9 | 10 | ||
Total current liabilities | 2,981 | 2,463 | ||
Long-term debt, noncurrent | 908 | 984 | ||
Accrued workers' compensation costs, noncurrent, net | 110 | 120 | ||
Deferred taxes | 11 | 13 | ||
Operating lease liabilities, noncurrent | 26 | 30 | ||
Other non current liabilities | 14 | 5 | ||
Total liabilities | 4,050 | 3,615 | ||
Stockholders' equity: | ||||
Preferred stock | — | — | ||
Common stock and additional paid-in capital | 1,056 | 976 | ||
Retained earning (Accumulated deficit) | (984) | (896) | ||
Accumulated other comprehensive loss | (3) | (2) | ||
Total stockholders' equity | 69 | 78 | ||
Total liabilities & stockholders' equity | $ 4,119 | $ 3,693 | ||
TRINET GROUP, INC. | |||
Year Ended December 31, | |||
(in millions) | 2024 | 2023 | 2022 |
Operating activities | |||
Net income | $ 173 | $ 375 | $ 355 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization of intangible assets | 75 | 72 | 64 |
Amortization of deferred costs | 44 | 40 | 38 |
Amortization of ROU asset, lease modification, impairment, and abandonment | 11 | 9 | 25 |
Stock based compensation | 65 | 59 | 62 |
Accretion of discount rate on lease liabilities | 2 | 2 | 2 |
Provision for doubtful accounts | 2 | 3 | 2 |
Deferred income taxes | (2) | 5 | (22) |
Losses from disposition of assets | — | 1 | 6 |
Losses and impairment on investments | (1) | 1 | 18 |
Impairment of intangibles | 25 | — | — |
Changes in operating assets and liabilities: | |||
Accounts receivable, net | (2) | (3) | 4 |
Prepaid expenses, net | (18) | 4 | 19 |
Other payroll assets | 3 | (3) | — |
Accounts payable and other current liabilities | (7) | (10) | (13) |
Client deposits and other client liabilities | (10) | 23 | — |
Accrued wages | (5) | 7 | 14 |
Accrued health insurance costs, net | (2) | 7 | — |
Accrued workers' compensation costs, net | (11) | (8) | (7) |
Payroll taxes payable and other payroll withholdings | (3) | 8 | 2 |
Operating lease liabilities | (15) | (17) | (17) |
Other assets | (52) | (35) | (54) |
Other liabilities | 7 | (1) | (1) |
Net cash provided by operating activities | 279 | 539 | 497 |
Investing activities | |||
Purchases of marketable securities | (190) | (276) | (410) |
Proceeds from sale and maturity of marketable securities | 421 | 286 | 469 |
Acquisitions of property and equipment and projects in process | (78) | (75) | (56) |
Acquisitions of subsidiaries, net of cash acquired | — | — | (229) |
Other Investments | — | (5) | — |
Net cash provided by (used in) investing activities | 153 | (70) | (226) |
Financing activities | |||
Change in WSE and TriNet Trust related assets and liabilities, net | 139 | 6 | 65 |
Repurchase of common stock | (183) | (1,122) | (523) |
Proceeds from issuance of common stock | 12 | 15 | 11 |
Payment of long-term financing costs and debt issuance costs | — | (9) | — |
Proceeds from issuance of 2031 Notes | — | 400 | — |
Proceeds from revolving credit agreement borrowings | — | 695 | — |
Repayment of borrowings under revolving credit agreement | (110) | (495) | — |
Awards effectively repurchased for required employee withholding taxes | (28) | (30) | (24) |
Dividends paid | (37) | — | — |
Net cash used in financing activities | (207) | (540) | (471) |
Effect of exchange rate changes on cash and cash equivalents | — | — | (1) |
Net increase (decrease) in cash and cash equivalents, unrestricted and restricted | 225 | (71) | (201) |
Cash and cash equivalents, unrestricted and restricted: | |||
Beginning of period | 1,466 | 1,537 | 1,738 |
End of period | $ 1,691 | $ 1,466 | $ 1,537 |
Supplemental disclosures of cash flow information | |||
Interest paid | $ 59 | $ 25 | $ 18 |
Income taxes paid, net | 76 | 114 | 128 |
Supplemental schedule of noncash investing and financing activities | |||
Cash dividend declared, but not yet paid | $ 12 | $ — | $ — |
Payable for purchase of property and equipment | $ 2 | $ 4 | $ 6 |
Acquisitions of subsidiaries paid in stock | $ — | $ — | $ 17 |
Non-GAAP Financial Measures
In addition to the selected financial measures presented in accordance with
The presentation of these non-GAAP financial measures is used to enhance the understanding of certain aspects of our financial performance. It is not meant to be considered in isolation from, superior to, or as a substitute for the directly comparable financial measures prepared in accordance with GAAP.
Non-GAAP Measure | Definition | How We Use The Measure |
Adjusted EBITDA | • Net (loss) income, excluding the effects of: - income tax provision, - interest expense, bank fees and other, - depreciation, - amortization of intangible assets, - stock based compensation expense, - amortization of cloud computing arrangements, - transaction and integration costs, and - restructuring costs.
| • Provides period-to-period comparisons on a consistent basis and an understanding as to how our management evaluates the effectiveness of our business strategies by excluding certain non-recurring costs, which include restructuring costs, as well as certain non-cash charges such as depreciation and amortization, and stock-based compensation and certain impairment charges recognized based on the estimated fair values. We believe these charges are either not directly resulting from our core operations or not indicative of our ongoing operations. • Enhances comparisons to the prior period and, accordingly, facilitates the development of future projections and earnings growth prospects. • Provides a measure, among others, used in the determination of incentive compensation for management. • We also sometimes refer to Adjusted EBITDA margin, which is the ratio of Adjusted EBITDA to total revenues. |
Adjusted Net Income | • Net (loss) income, excluding the effects of: - effective income tax rate (1), - stock based compensation, - amortization of intangible assets, net, - non-cash interest expense, - transaction and integration costs, - restructuring costs, and - the income tax effect (at our effective tax rate (1) of these pre-tax adjustments.) | • Provides information to our stockholders and board of directors to understand how our management evaluates our business, to monitor and evaluate our operating results, and analyze profitability of our ongoing operations and trends on a consistent basis by excluding certain non-cash charges. |
Free Cash Flow | • Net cash provided by operating activities reduced by capital expenditures | • Provides our management with a measure for capital planning, performance evaluation and resource allocation. |
(1) | Non-GAAP effective tax rate is |
In 2024, we changed our presentation method in our Consolidated Statements of Cash Flows to classify changes in WSE and TriNet Trust assets and liabilities as financing activities. As a result of this change, we will no longer use Corporate Operating Cash Flows as a non-GAAP financial measure. In 2024 we also added Free Cash Flow as part of our non-GAAP financial measures.
Reconciliation of GAAP to Non-GAAP Measures
The table below presents a reconciliation of Net (loss) income to Adjusted EBITDA:
Three Months Ended | Year Ended December 31, | ||||
(in millions) | 2024 | 2023 | 2024 | 2023 | |
Net (loss) income | $ (23) | $ 67 | $ 173 | $ 375 | |
Provision for income taxes | (14) | 19 | 53 | 126 | |
Stock based compensation | 12 | 16 | 65 | 59 | |
Interest expense, bank fees and other | 15 | 16 | 62 | 40 | |
Depreciation and amortization of intangible assets | 19 | 19 | 75 | 72 | |
Amortization of cloud computing arrangements | 2 | 1 | 8 | 8 | |
Transaction and integration costs | — | 2 | — | 17 | |
Restructuring costs | 49 | — | 49 | — | |
Adjusted EBITDA | $ 60 | $ 140 | $ 485 | $ 697 | |
Adjusted EBITDA Margin | 4.7 % | 11.2 % | 9.6 % | 14.2 % | |
The table below presents a reconciliation of Net (loss) income to Adjusted Net Income and Adjusted Net Income per share - diluted:
Three Months Ended | Year Ended December 31, | ||||
(in millions, except per share data) | 2024 | 2023 | 2024 | 2023 | |
Net (loss) income | $ (23) | $ 67 | $ 173 | $ 375 | |
Effective income tax rate adjustment | (5) | (3) | (5) | (2) | |
Stock based compensation | 12 | 16 | 65 | 59 | |
Amortization of intangible assets | 4 | 5 | 19 | 20 | |
Non-cash interest expense | 1 | 1 | 3 | 2 | |
Transaction and integration costs | — | 2 | — | 17 | |
Restructuring costs | 49 | — | 49 | — | |
Income tax impact of pre-tax adjustments | (17) | (6) | (35) | (25) | |
Adjusted Net Income | $ 22 | $ 82 | $ 269 | $ 446 | |
GAAP weighted average shares of common stock - diluted | 50 | 51 | 50 | 57 | |
Adjusted Net Income per share - diluted | $ 0.44 | $ 1.60 | $ 5.32 | $ 7.81 | |
The table below presents a reconciliation of Net cash provided by operating activities to Free Cash Flow:
Year Ended December 31, | |||
(in millions) | 2024 | 2023 | 2022 |
Net cash provided by operating activities | $ 279 | $ 539 | $ 497 |
Acquisitions of property and equipment and projects in process | (78) | (75) | (56) |
Free Cash Flow | $ 201 | $ 464 | $ 441 |
Reconciliation of GAAP to Non-GAAP Measures for the full-year 2025 guidance.
Low and high percentages represent increases (decreases) from the same period in the previous year.
The table below presents a reconciliation of net income to Adjusted EBITDA:
FY 2024 | Year 2025 Guidance | ||||
(in millions) | Actual | Low | High | ||
Net (loss) income | $ 173 | (46) % | (3) % | ||
Provision for income taxes | 53 | (41) | 10 | ||
Stock based compensation | 65 | 11 | 11 | ||
Interest expense, bank fees and other | 62 | (15) | (15) | ||
Depreciation and amortization of intangible assets | 75 | (21) | (21) | ||
Amortization of cloud computing arrangements | 8 | (7) | (7) | ||
Restructuring costs | 49 | (80) | (80) | ||
Adjusted EBITDA | $ 485 | (31) % | (10) % | ||
Total revenues | $ 5,053 | (2.0) % | 2.0 % | ||
Adjusted EBITDA Margin | 9.6 % | 6.8 % | 8.5 % | ||
The table below presents a reconciliation of net income to Adjusted Net Income and Adjusted Net Income per share - diluted:
FY 2024 | Year 2025 Guidance | ||||
(in millions, except per share data) | Actual | Low | High | ||
Net income | $ 173 | (46) % | (3) % | ||
Effective income tax rate adjustment | (5) | (83) | (105) | ||
Stock based compensation | 65 | 11 | 11 | ||
Amortization of intangible assets | 19 | (49) | (49) | ||
Non-cash interest expense | 3 | (100) | (100) | ||
Restructuring costs | 49 | (80) | (80) | ||
Income tax impact of pre-tax adjustments | (35) | (32) | (32) | ||
Adjusted Net Income | $ 269 | (40) % | (12) % | ||
GAAP weighted average shares of common stock - diluted | 50 | ||||
Adjusted Net Income per share - diluted | $ 5.32 | ||||
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SOURCE TriNet Group, Inc.
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