TriNet Announces Second Quarter 2024 Results
TriNet Group, Inc. (NYSE: TNET) reported its Q2 2024 financial results, showing 1% growth in total revenues to $1.2 billion and 5% growth in professional service revenues to $186 million. The company's net income was $60 million, or $1.20 per diluted share, compared to $83 million, or $1.38 per diluted share, in the same period last year. Adjusted Net Income was $78 million, or $1.53 per diluted share. TriNet's average WSEs increased by 7% to approximately 351,000, including 18,000 PEO Platform Users. The company provided guidance for Q3 and full-year 2024, projecting total revenue growth between -1% to 4% for the full year.
TriNet Group, Inc. (NYSE: TNET) ha riportato i risultati finanziari per il secondo trimestre del 2024, evidenziando una crescita dell'1% nei ricavi totali a 1,2 miliardi di dollari e una crescita del 5% nei ricavi dei servizi professionali a 186 milioni di dollari. L'utile netto dell'azienda è stato di 60 milioni di dollari, o 1,20 dollari per azione diluita, rispetto a 83 milioni di dollari, o 1,38 dollari per azione diluita, nello stesso periodo dell'anno scorso. L'utile netto rettificato è stato di 78 milioni di dollari, o 1,53 dollari per azione diluita. Il numero medio di WSE è aumentato del 7% a circa 351.000, inclusi 18.000 utenti della piattaforma PEO. L'azienda ha fornito indicazioni per il terzo trimestre e per l'intero anno 2024, prevedendo una crescita dei ricavi totali compresa tra -1% e 4% per l'anno completo.
TriNet Group, Inc. (NYSE: TNET) reportó sus resultados financieros del segundo trimestre de 2024, mostrando un crecimiento del 1% en los ingresos totales a 1.2 mil millones de dólares y un crecimiento del 5% en los ingresos de servicios profesionales a 186 millones de dólares. La ganancia neta de la empresa fue de 60 millones de dólares, o 1.20 dólares por acción diluida, en comparación con 83 millones de dólares, o 1.38 dólares por acción diluida, en el mismo periodo del año pasado. La ganancia neta ajustada fue de 78 millones de dólares, o 1.53 dólares por acción diluida. El promedio de WSE de TriNet aumentó un 7% a aproximadamente 351,000, incluyendo a 18,000 usuarios de la plataforma PEO. La empresa proporcionó orientación para el tercer trimestre y para el año completo 2024, proyectando un crecimiento de ingresos totales entre -1% y 4% para el año completo.
TriNet Group, Inc. (NYSE: TNET)는 2024년 2분기 재무 결과를 보고하며 총 수익이 12억 달러로 1% 성장하고 전문 서비스 수익이 1억 8600만 달러로 5% 성장했다고 밝혔습니다. 회사의 순이익은 6000만 달러, 또는 희석주당 1.20 달러로 작년 동일 기간의 8300만 달러, 또는 1.38 달러에 비해 감소했습니다. 조정된 순이익은 7800만 달러, 또는 희석주당 1.53 달러였습니다. TriNet의 평균 WSE는 7% 증가하여 약 351,000명에 달했으며, 이 중 18,000명이 PEO 플랫폼 사용자입니다. 회사는 2024년 3분기와 연간 가이드를 제공하며, 전체 연간 수익 성장률을 -1%에서 4% 사이로 예측했습니다.
TriNet Group, Inc. (NYSE: TNET) a publié ses résultats financiers pour le deuxième trimestre 2024, montrant une croissance des revenus totaux de 1% à 1,2 milliard de dollars et une croissance des revenus des services professionnels de 5% à 186 millions de dollars. Le bénéfice net de l'entreprise était de 60 millions de dollars, soit 1,20 dollar par action diluée, contre 83 millions de dollars, soit 1,38 dollar par action diluée, au cours de la même période l'année précédente. Le bénéfice net ajusté était de 78 millions de dollars, soit 1,53 dollar par action diluée. Le nombre moyen de WSE chez TriNet a augmenté de 7% pour atteindre environ 351 000, y compris 18 000 utilisateurs de la plateforme PEO. L'entreprise a donné des prévisions pour le troisième trimestre et l'année complète 2024, projetant une croissance des revenus totaux comprise entre -1% et 4% pour l'ensemble de l'année.
TriNet Group, Inc. (NYSE: TNET) hat die Finanzzahlen für das zweite Quartal 2024 veröffentlicht, die ein Wachstum der Gesamterlöse um 1% auf 1,2 Milliarden Dollar und ein Wachstum der Erlöse aus professionellen Dienstleistungen um 5% auf 186 Millionen Dollar zeigen. Das Nettoergebnis des Unternehmens betrug 60 Millionen Dollar, oder 1,20 Dollar pro verwässerter Aktie, im Vergleich zu 83 Millionen Dollar, oder 1,38 Dollar pro verwässerter Aktie, im gleichen Zeitraum des Vorjahres. Das bereinigte Nettoergebnis betrug 78 Millionen Dollar, oder 1,53 Dollar pro verwässerter Aktie. Die durchschnittliche Anzahl der WSEs von TriNet stieg um 7% auf etwa 351.000, einschließlich 18.000 PEO-Plattformbenutzer. Das Unternehmen gab eine Prognose für das dritte Quartal und das Gesamtjahr 2024 ab, mit einer erwarteten Gesamterlös-Wachstumsrate zwischen -1% und 4% für das gesamte Jahr.
- 1% growth in total revenues to $1.2 billion
- 5% growth in professional service revenues to $186 million
- 7% increase in average WSEs to approximately 351,000
- Unrestricted cash and cash equivalents of $177 million and unrestricted investments of $228 million
- Net income decreased from $83 million to $60 million year-over-year
- Adjusted Net Income per share decreased from $1.74 to $1.53 year-over-year
- Adjusted EBITDA decreased from $161 million to $136 million year-over-year
- Total debt of $1.1 billion
Insights
TriNet's Q2 2024 results reveal a mixed financial picture. While the company achieved modest growth, there are signs of pressure on profitability. Total revenues increased by
The company's adjusted metrics also show a decline, with Adjusted Net Income per share falling from
On a positive note, TriNet's average Worksite Employees (WSEs) increased by
The guidance for Q3 and full-year 2024 suggests cautious optimism, with projected revenue growth ranging from
Investors should closely monitor TriNet's ability to manage its insurance cost ratio, which is projected to be between
TriNet's Q2 results offer insights into the current state of the small and medium-sized business (SMB) sector. The
However, the modest
The company's focus on "professional SMBs" may provide some insulation from broader economic volatility, but the accelerated insurance cost growth mentioned by the CEO is a concern that could impact TriNet's margins and pricing strategy going forward.
The addition of 18,000 PEO Platform Users within the WSE growth is noteworthy, potentially indicating a shift towards more flexible HR solutions in the market. This trend could represent an opportunity for TriNet to expand its service offerings and capture market share.
Investors should pay attention to TriNet's customer retention rates and new customer acquisition in the coming quarters, as these will be key indicators of the company's ability to navigate the current SMB market conditions and position itself for the anticipated "accelerated growth in 2025 and beyond."
Net Income per Diluted Share of
Second quarter highlights include:
- Total revenues increased
1% to$1.2 billion - Professional service revenues increased
5% to$186 million - Net income was
$60 million $1.20 $83 million $1.38 - Adjusted Net Income was
$78 million $1.53 $105 million $1.74 - Adjusted EBITDA was
$136 million $161 million - Average WSEs increased
7% as compared to the same period last year, to approximately 351,000 and includes 18,000 PEO Platform Users. - Average HRIS Users for the period was approximately 191,000.
- At June 30, 2024, TriNet had unrestricted cash and cash equivalents of
$177 million $228 million $1.1 billion
"The strength and resiliency of TriNet's business model was once again on display with a strong second quarter," said Mike Simonds, TriNet's President and CEO. "In a challenging business environment for SMBs, our exceptional service model and proprietary technology drove improved customer retention and encouraging sales results."
Mr. Simonds continued, "As a business whose customer base is predominantly professional SMBs, TriNet is managing through the challenges of limited customer hiring and accelerated insurance cost growth. We, however, remain focused on efficient execution and delivering financial results that our investors have come to expect. Also in the quarter, we returned a considerable amount of capital to shareholders through dividends and significant share repurchases as we believe TriNet is undervalued at current prices. Looking to the second half, the TriNet team will remain focused on our customers, maintain our expense and pricing discipline, and map the path to accelerated growth in 2025 and beyond."
Third Quarter and Full-Year 2024 Guidance
In addition to announcing our second quarter 2024 results, we provide our third quarter and full-year 2024 guidance. Non-GAAP financial measures are reconciled later in this release. Percentages reflect the increase or (decrease) from the prior year quarter and prior year end.
Q3 2024 | Full Year 2024 | |||||||
Low | High | Low | High | |||||
Total Revenues | — % | 3 % | (1) % | 4 % | ||||
Professional Service Revenues | — % | 3 % | 1 % | 5 % | ||||
Insurance Cost Ratio | 91.0 % | 88.0 % | 89.5 % | 87.5 % | ||||
Diluted net income per share of common stock | $ 0.70 | $ 1.20 | $ 3.94 | $ 5.46 | ||||
Adjusted Net Income per share - diluted | $ 1.00 | $ 1.50 | $ 5.25 | $ 6.80 | ||||
Quarterly Report on Form 10-Q
We anticipate filing our Quarterly Report on Form 10-Q ("Form 10-Q") for the first half of 2024 with the
Earnings Conference Call and Audio Webcast
TriNet will host a conference call at 5:30 a.m. PT (8:30 a.m. ET) today to discuss its second quarter results for 2024 and provide third quarter and full-year financial guidance for 2024. TriNet encourages participants to pre-register for the conference call. 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://dpregister.com/sreg/10190552/fcfbde6c00. For those who would like to join the call but have not pre-registered, they can do so by dialing +1 (412) 317-5426 and requesting the "TriNet Conference Call." The live webcast of the conference call can be accessed on the Investor Relations section of TriNet's website at http://investor.trinet.com. Participants can pre-register for the webcast by going to: https://events.q4inc.com/attendee/742072839. A replay of the webcast will be available on this website for approximately one year. A telephonic replay will be available for two weeks following the conference call at +1 (412) 317-0088 conference ID: 1675204.
About TriNet
TriNet provides small and medium-size businesses (SMBs) with full-service industry-specific HR solutions, providing both professional employer organization (PEO) and human resources information system (HRIS) services. TriNet offers access to human capital expertise, benefits, risk mitigation, compliance, payroll, and R&D tax credit services, all enabled by industry-leading technology. TriNet's suite of products also includes services and software-based solutions to help streamline workflows by connecting HR, benefits, employee engagement, payroll and time & attendance. Rooted in more than 30 years of supporting entrepreneurs and adapting to the ever-changing modern workplace, TriNet empowers SMBs to focus on what matters most - growing their business and enabling their people 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 second quarter and full-year 2024 and the underlying assumptions, the value to customers and shareholders of TriNet's product offerings, , TriNet's financial performance and long-term growth, and the extent, length and growth impact of current economic uncertainty. 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. Examples of forward-looking statements include, among others, TriNet's expectations regarding the future impact of its product offerings and business model, continued sales growth and client retention, the ability to maintain our expense and pricing discipline, and long-term growth. 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. 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 WSEs; 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; 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 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 protect against and remediate cyber-attacks, breaches, disclosures and other data-related incidents, whether intentional or inadvertent and whether attributable to us or our service providers; our ability to comply with evolving data privacy 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 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 solutions; 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 credit facility and meet our debt obligations; and the impact of concentrated ownership in our stock by Atairos and other large stockholders. Any of these factors could cause our actual results to differ materially from our anticipated results.
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 https://investor.trinet.com/ and on the SEC website at https://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 |
TriNet | TriNet |
(510) 875-7201 | (925) 965-8441 |
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 June 30, | Six Months Ended June 30, | ||||||||||||
(in millions, except per share and Operating Metrics data) | 2024 | 2023 | % Change | 2024 | 2023 | % Change | |||||||
Income Statement Data: | |||||||||||||
Total revenues | $ 1,226 | $ 1,209 | 1 | % | $ 2,455 | 1 | % | ||||||
Operating income | 80 | 97 | (18) | 202 | 267 | (24) | |||||||
Net income | 60 | 83 | (28) | 152 | 214 | (29) | |||||||
Diluted net income per share of common stock | 1.20 | 1.38 | (13) | 2.98 | 3.56 | (16) | |||||||
Non-GAAP measures (1): | |||||||||||||
Adjusted EBITDA | 136 | 161 | (16) | 316 | 385 | (18) | |||||||
Adjusted Net income | 78 | 105 | (26) | 189 | 256 | (26) | |||||||
Operating Metrics: | |||||||||||||
Insurance Cost Ratio | 88 % | 84 % | 4 | % | 87 % | 83 % | 4 | ||||||
Average WSEs (2) | 351,455 | 327,376 | 7 | 349,810 | 327,242 | 7 | % | ||||||
Total WSEs at period end (2) | 354,028 | 334,046 | 6 | 354,028 | 334,046 | 6 | |||||||
Average HRIS Users (3) | 191,220 | 219,026 | (13) | 193,188 | 223,155 | (13) | |||||||
(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 in our 2024 10-Q. |
(in millions) | June 30, | December 31, | % Change | |||
Balance Sheet Data: | ||||||
Working capital | 103 | 115 | (10) | % | ||
Total assets | 3,703 | 3,693 | — | |||
Debt | 1,068 | 1,093 | (2) | |||
Total stockholders' equity | 100 | 78 | 28 |
Six Months Ended June 30, | ||||||
(in millions) | 2024 | 2023 | % Change | |||
Cash Flow Data: | ||||||
Net cash provided by (used in) operating activities | $ (245) | $ 67 | (466) | % | ||
Net cash used in investing activities | (49) | (31) | 58 | |||
Net cash used in financing activities | (178) | (100) | 78 | |||
Non-GAAP measure (1): | ||||||
Corporate Operating Cash Flows | $ 130 | $ 255 | (49) | |||
(1) | Refer to Non-GAAP measures definitions and reconciliations from GAAP measures under the heading "Non-GAAP Financial Measures". |
TRINET GROUP, INC. | |||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||
(in millions except per share data) | 2024 | 2023 | 2024 | 2023 | |
Professional service revenues | $ 186 | $ 177 | $ 400 | $ 382 | |
Insurance service revenues | 1,040 | 1,032 | 2,090 | 2,073 | |
Total revenues | 1,226 | 1,209 | 2,490 | 2,455 | |
Insurance costs | 916 | 868 | 1,823 | 1,720 | |
Cost of providing services | 75 | 79 | 154 | 156 | |
Sales and marketing | 72 | 70 | 144 | 139 | |
General and administrative | 47 | 60 | 95 | 103 | |
Systems development and programming | 17 | 17 | 35 | 34 | |
Depreciation and amortization of intangible assets | 19 | 18 | 37 | 36 | |
Total costs and operating expenses | 1,146 | 1,112 | 2,288 | 2,188 | |
Operating income | 80 | 97 | 202 | 267 | |
Other income (expense): | |||||
Interest expense, bank fees and other | (16) | (6) | (32) | (13) | |
Interest income | 17 | 20 | 35 | 38 | |
Income before provision for income taxes | 81 | 111 | 205 | 292 | |
Income taxes | 21 | 28 | 53 | 78 | |
Net income | $ 60 | $ 83 | $ 152 | $ 214 | |
Other comprehensive income (loss), net of income taxes | — | (4) | (3) | (1) | |
Comprehensive income | $ 60 | $ 79 | $ 149 | $ 213 | |
Net income per share: | |||||
Basic | $ 1.21 | $ 1.40 | $ 3.01 | $ 3.58 | |
Diluted | $ 1.20 | $ 1.38 | $ 2.98 | $ 3.56 | |
Weighted average shares: | |||||
Basic | 50 | 60 | 50 | 60 | |
Diluted | 51 | 60 | 51 | 60 | |
TRINET GROUP, INC. | ||||
June 30, | December 31, | |||
(in millions, except share and per share data) | 2024 | 2023 | ||
ASSETS | ||||
Current assets: | ||||
Cash and cash equivalents | $ 177 | $ 287 | ||
Investments | 72 | 65 | ||
Restricted cash, cash equivalents and investments | 893 | 1,269 | ||
Accounts receivable, net | 15 | 18 | ||
Unbilled revenue, net | 485 | 447 | ||
Prepaid expenses, net | 76 | 67 | ||
Other payroll assets | 800 | 381 | ||
Other current assets | 48 | 44 | ||
Total current assets | 2,566 | 2,578 | ||
Restricted cash, cash equivalents and investments, noncurrent | 163 | 158 | ||
Investments, noncurrent | 156 | 143 | ||
Property and equipment, net | 14 | 17 | ||
Operating lease right-of-use asset | 21 | 24 | ||
Goodwill | 462 | 462 | ||
Software and other intangible assets, net | 176 | 172 | ||
Other assets | 145 | 139 | ||
Total assets | $ 3,703 | $ 3,693 | ||
Liabilities and stockholders' equity | ||||
Current liabilities: | ||||
Accounts payable and other current liabilities | $ 85 | $ 87 | ||
Revolving credit agreement borrowings | 84 | 109 | ||
Client deposits and other client liabilities | 70 | 65 | ||
Accrued wages | 558 | 515 | ||
Accrued health insurance costs, net | 182 | 175 | ||
Accrued workers' compensation costs, net | 43 | 50 | ||
Payroll tax liabilities and other payroll withholdings | 1,421 | 1,438 | ||
Operating lease liabilities | 13 | 14 | ||
Insurance premiums and other payables | 7 | 10 | ||
Total current liabilities | 2,463 | 2,463 | ||
Long-term debt, noncurrent | 984 | 984 | ||
Accrued workers' compensation costs, noncurrent, net | 107 | 120 | ||
Deferred taxes | 13 | 13 | ||
Operating lease liabilities, noncurrent | 24 | 30 | ||
Other non current liabilities | 12 | 5 | ||
Total liabilities | 3,603 | 3,615 | ||
Stockholders' equity: | ||||
Preferred stock | — | — | ||
Common stock and additional paid-in capital | 1,021 | 976 | ||
Accumulated deficit | (916) | (896) | ||
Accumulated other comprehensive loss | (5) | (2) | ||
Total stockholders' equity | 100 | 78 | ||
Total liabilities & stockholders' equity | $ 3,703 | $ 3,693 | ||
TRINET GROUP, INC. | ||
Six Months Ended June 30, | ||
(in millions) | 2024 | 2023 |
Operating activities | ||
Net income | $ 152 | $ 214 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Depreciation and amortization of intangible assets | 37 | 36 |
Amortization of deferred costs | 21 | 20 |
Amortization of ROU asset, lease modification, impairment, and abandonment | 3 | 2 |
Stock based compensation | 38 | 28 |
Other | 1 | 2 |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | 3 | (1) |
Unbilled revenue, net | (38) | 12 |
Prepaid expenses, net | (9) | (24) |
Other assets | (33) | — |
Other payroll assets | (419) | 68 |
Accounts payable and other liabilities | (11) | — |
Client deposits and other client liabilities | 5 | (27) |
Accrued wages | 43 | — |
Accrued health insurance costs, net | 7 | (5) |
Accrued workers' compensation costs, net | (21) | (9) |
Payroll taxes payable and other payroll withholdings | (17) | (241) |
Operating lease liabilities | (7) | (8) |
Net cash provided by (used in) operating activities | (245) | 67 |
Investing activities | ||
Purchases of marketable securities | (139) | (170) |
Proceeds from sale and maturity of marketable securities | 125 | 173 |
Acquisitions of property and equipment and software | (35) | (34) |
Net cash used in investing activities | (49) | (31) |
Financing activities | ||
Repurchase of common stock | (135) | (98) |
Proceeds from issuance of common stock | 7 | 7 |
Revolver drawdown | — | 495 |
Revolver repayment | — | (495) |
Awards effectively repurchased for required employee withholding taxes | (12) | (9) |
Repayment of revolving credit agreement borrowings | (25) | — |
Dividends paid | (13) | — |
Net cash provided by (used in) financing activities | (178) | (100) |
Net change in cash and cash equivalents, unrestricted and restricted | (472) | (64) |
Cash and cash equivalents, unrestricted and restricted: | ||
Beginning of period | 1,466 | 1,537 |
End of period | $ 994 | $ 1,473 |
Supplemental disclosures of cash flow information | ||
Interest paid | $ 30 | $ 12 |
Income taxes paid, net | $ 62 | $ 58 |
Supplemental schedule of noncash investing and financing activities | ||
Cash dividend declared, but not yet paid | $ 12 | $ — |
Payable for purchase of property and equipment | $ 2 | $ 5 |
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 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, and - transaction and integration 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 transaction and integration 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 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, 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. |
Corporate Operating Cash Flows | • Net cash provided by (used in) operating activities, excluding the effects of: - Assets associated with WSEs and TriNet Trust (accounts receivable, unbilled revenue, prepaid expenses, other payroll assets and other current assets) and - Liabilities associated with WSEs and TriNet Trust (client deposits and other client liabilities, accrued wages, payroll tax liabilities and other payroll withholdings, accrued health insurance costs, accrued workers' compensation costs, insurance premiums and other payables, and other current liabilities). | • Provides information that our stockholders and management can use to evaluate our cash flows from operations independent of the current assets and liabilities associated with our WSEs and TriNet Trust. • Enhances comparisons to prior periods and, accordingly, used as a liquidity measure to manage liquidity between corporate and WSE and TriNet Trust related activities, and to help determine and plan our cash flow and capital strategies. |
(1) | Non-GAAP effective tax rate is |
(2) | Non-cash interest expense represents amortization and write-off of our debt issuance costs and loss on a terminated derivative. |
Reconciliation of GAAP to Non-GAAP Measures
The table below presents a reconciliation of net income to Adjusted EBITDA:
Three Months Ended | Six Months Ended June 30, | ||||
(in millions) | 2024 | 2023 | 2024 | 2023 | |
Net income | $ 60 | $ 83 | $ 152 | $ 214 | |
Provision for income taxes | 21 | 28 | 53 | 78 | |
Stock based compensation | 18 | 17 | 38 | 28 | |
Interest expense, bank fees and other | 16 | 6 | 32 | 13 | |
Depreciation and amortization of intangible assets | 19 | 18 | 37 | 36 | |
Amortization of cloud computing arrangements | 2 | 2 | 4 | 4 | |
Transaction and integration costs | — | 7 | — | 12 | |
Adjusted EBITDA | $ 136 | $ 161 | $ 316 | $ 385 | |
Adjusted EBITDA Margin | 11.1 % | 13.3 % | 12.7 % | 15.7 % | |
The table below presents a reconciliation of net income to Adjusted Net Income and Adjusted Net Income per share - diluted:
Three Months Ended | Six Months Ended June 30, | ||||
(in millions, except per share data) | 2024 | 2023 | 2024 | 2023 | |
Net income | $ 60 | $ 83 | $ 152 | $ 214 | |
Effective income tax rate adjustment | — | — | 1 | 3 | |
Stock based compensation | 18 | 17 | 38 | 28 | |
Amortization of intangible assets | 5 | 5 | 10 | 11 | |
Non-cash interest expense | 1 | 1 | 1 | 1 | |
Transaction and integration costs | — | 7 | — | 12 | |
Income tax impact of pre-tax adjustments | (6) | (8) | (13) | (13) | |
Adjusted Net Income | $ 78 | $ 105 | $ 189 | $ 256 | |
GAAP weighted average shares of common stock - diluted | 51 | 60 | 51 | 60 | |
Adjusted Net Income per share - diluted | $ 1.53 | $ 1.74 | $ 3.70 | $ 4.24 | |
The table below presents a reconciliation of net cash provided by operating activities to Corporate Operating Cash flows:
Six Months Ended June 30, | ||
(in millions) | 2024 | 2023 |
Net cash provided by (used in) operating activities | $ (245) | $ 67 |
Less: Change in WSE & TriNet Trust related other current assets | (439) | 89 |
Less: Change in WSE & TriNet Trust related current liabilities | 64 | (277) |
Net cash used in operating activities - WSE & TriNet Trust | $ (375) | $ (188) |
Net cash provided by operating activities - Corporate | $ 130 | $ 255 |
Reconciliation of GAAP to Non-GAAP Measures for the third quarter and full-year 2024 guidance.
Low and high percentages represent increases (decreases) from the same periods in the previous year.
The table below presents a reconciliation of net income to Adjusted Net Income and Adjusted Net Income per share - diluted:
Q3 2023 | Q3 2024 Guidance | FY 2023 | Year 2024 Guidance | ||||||
(in millions, except per share data) | Actual | Low | High | Actual | Low | High | |||
Net income | $ 94 | (63) % | (36) % | $ 375 | (47) % | (27) % | |||
Effective income tax rate adjustment | (2) | (4) | (10) | (2) | 153 | 41 | |||
Stock based compensation | 15 | 10 | 10 | 59 | 27 | 27 | |||
Amortization of intangible assets | 5 | 8 | 8 | 20 | (5) | (5) | |||
Non-cash interest expense | — | (100) | (100) | 2 | (47) | (47) | |||
Transaction and integration costs | 3 | (100) | (100) | 17 | (100) | (100) | |||
Income tax impact of pre-tax adjustments | (6) | (6) | (6) | (25) | (3) | (3) | |||
Adjusted Net Income | $ 109 | (55) % | (32) % | $ 446 | (41) % | (23) % | |||
GAAP weighted average shares of common stock - diluted | 58 | 57 | |||||||
Adjusted Net Income per share - diluted | $ 1.91 | $ 1.00 | $ 1.50 | $ 7.81 | $ 5.25 | $ 6.80 | |||
View original content to download multimedia:https://www.prnewswire.com/news-releases/trinet-announces-second-quarter-2024-results-302207318.html
SOURCE TriNet Group, Inc.
FAQ
What was TriNet's (TNET) revenue growth in Q2 2024?
How much did TriNet's (TNET) professional service revenues grow in Q2 2024?
What was TriNet's (TNET) net income per diluted share in Q2 2024?
How many average WSEs did TriNet (TNET) have in Q2 2024?
