TRINET GROUP, INC.
For the period ended Jun 30, 2025. Filed Jul 25, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Jul 25, 2025
TNET$66.63-1.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-04-25.
0000937098-25-000073
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCritical Accounting Judgments and EstimatesCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-07-25.
0000937098-25-000131
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCritical Accounting Judgments and EstimatesThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 126 previous paragraphs and 128 current paragraphs.
89 unchanged; 33 reworded; 6 added; 4 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 47 previous and 57 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (6)
Current report
•continued our progress in establishing a new corporate center in Atlanta, including the execution of lease space, and
Current report
Our total revenue was flat in the second quarter of 2025, compared to the same period in 2024, as lower co-employed Average WSEs was offset by rate increases for both professional services and insurance services.
Current report
YTD 2025
Current report
Total revenue was flat for the second quarter and first half of 2025 as lower co-employed Average WSEs was offset by rate increases for both professional services and insurance services.
Current report
On July 4, 2025, H.R. 1 - One Big Beautiful Bill Act (“OBBBA”) was signed into law, which includes significant changes to federal tax law and other regulatory provisions that may impact the Company. ASC 740, “Income Taxes”, requires the effects of changes in tax rates and laws on deferred tax balances to be recognized in the period in which the legislation is enacted. The Company is currently evaluating the provisions of the new law and the potential effects on its financial position, results of operations and cash flows.
Current report
The year-over-year change in net cash used in financing activities for WSE and TriNet Trust purposes was primarily driven by timing of client payments, payments of payroll and payroll taxes and insurance claim activities.
Removed paragraphs (4)
Previous report
•continued to grow our total revenues, supported primarily by growth in ISR,
Previous report
•announced plans to establish a new corporate center in Atlanta, Georgia over the next five years, and
Previous report
Our total revenues increased by 1% in the first quarter of 2025, compared to the same period in 2024, driven primarily by insurance services rate increases, partially offset by lower Average co-employed WSEs.
Previous report
The increase in total revenue for the first quarter was primarily driven by rate increases, partially offset by lower co-employed Average WSEs.
Reworded paragraphs (33)
Previous wording
We deliver a comprehensive suite of HCM services that help our clients administer and manage various HR-related needs and functions, such as compensation, benefits, payroll processing, tax credit support, employee data, health insurance, workers' compensation, EPLI and other employment risk mitigation programs, employee performance management and training, on-boarding and off-boarding, and other transactional HR needs using our PEO technology platform and benefits and compliance expertise.
Current wording
We deliver a comprehensive suite of services that help our clients administer and manage various HR-related needs and functions, such as compensation, benefits, payroll processing, tax credit support, employee data, health insurance, workers' compensation, EPLI and other employment risk mitigation programs, employee performance management and training, on-boarding and off-boarding, and other transactional HR needs using our PEO technology platform and benefits and compliance expertise.
Previous wording
Our consolidated results for the quarter ended March 31, 2025 reflect our continuing efforts to serve our clients, attract new clients and invest in our platform.
Current wording
Our consolidated results for the first half of 2025 reflect our continuing efforts to serve our clients, attract new clients and invest in our platform.
Previous wording
•declared common stock dividends of $0.275 per share, up 10%, to be paid in April 2025.
Current wording
•paid common stock dividends of $0.275 per share in April and declared common stock dividends of $0.275 per share to be paid in July 2025.
Previous wording
Our results for the quarter ended March 31, 2025, when compared to the same period of 2024, are noted below:
Current wording
Our results for the quarter ended June 30, 2025, and the first half of 2025 when compared to the same period of 2024, are noted below:
Previous wording
During the first quarter of 2025, our Average WSEs and Total WSEs decreased by 2% and 3%, respectively, compared to the same period in 2024, primarily due to WSE decreases in our Technology, Professional Services, Main Street, and Life Sciences verticals.
Current wording
During the second quarter of 2025, our Average WSEs and Total WSEs decreased by 4%, compared to the same period in 2024, primarily due to WSE decreases in our Technology, Professional Services, Main Street, and Life Sciences verticals.
Previous wording
Our results are highly influenced by health care cost and utilization trends. Our ICR in the first quarter of 2025 was 2 points higher compared to the same period in 2024, driven by more severe medical service utilization, higher rates paid for services, and increasing specialty drug utilization which collectively outpaced the rates we charge our clients.
Current wording
Our results are highly influenced by health care cost and utilization trends. Our ICR in the second quarter of 2025 was 2 points higher compared to the same period in 2024, driven by higher rates paid for services and increasing specialty and weight loss drug utilization which collectively outpaced the rates we charge our clients.
Previous wording
Higher insurance costs, partially offset by higher revenues and lower expenses, resulted in decreases of net income and Adjusted Net income of 7% and 11%, respectively, in the first quarter of 2025, as compared to the same period in 2024.
Current wording
Higher insurance costs, partially offset by lower operating expenses, resulted in decreases of net income and Adjusted Net income of 38% and 29%, respectively, in the second quarter of 2025, as compared to the same period in 2024.
Previous wording
The following table summarizes our results of operations for the first quarter ended March 31, 2025, when compared to the same period of 2024. For details of the critical accounting judgments and estimates that could affect our Results of Operations, see the Critical Accounting Judgments and Estimates section within the MD&A in Item 7 of our 2024 Form 10-K.
Current wording
The following table summarizes our results of operations for the second quarter and six months ended June 30, 2025, when compared to the same periods of 2024. For details of the critical accounting judgments and estimates that could affect our Results of Operations, see the Critical Accounting Judgments and Estimates section within the MD&A in Item 7 of our 2024 Form 10-K.
Previous wording
(1)Non-GAAP effective tax rate is 25.0% and 25.6% for the first quarters of 2025 and 2024, respectively, which excludes the income tax impact from stock-based compensation, changes in uncertain tax positions, and nonrecurring benefits or expenses from federal legislative changes.
Current wording
(1)Non-GAAP effective tax rate is 25.0% for 2025 and 25.6% for 2024, which excludes the income tax impact from stock-based compensation, changes in uncertain tax positions, and nonrecurring benefits or expenses from federal legislative changes.
Previous wording
We charge a platform user access fee to clients for those users of our PEO platform that may not be co-employed by us as well as for co-employees for whom payroll may not be regularly run. In addition to co-employees for whom payroll may not be regularly run, such as partners in a partnership, this group of users also includes individuals authorized by our clients to access and use the PEO platform for functions such as bookkeeping and benefits management. We refer to these users as PEO Platform Users. Starting in 2023 and continuing through 2024, we began billing clients in groups over time, driving a large increase in PEO Platform Users over that period.
Current wording
We charge a platform user access fee to clients for those users of our PEO platform that may not be co-employed by us as well as for co-employees for whom payroll may not be regularly run. In addition to co-employees for whom payroll may not be regularly run, such as partners in a partnership, this group of users also includes individuals authorized by our clients to access and use the PEO platform for functions such as bookkeeping and benefits management. We refer to these users as PEO Platform Users. Starting in 2023 and rolled out through 2024, we began billing clients in groups over time, driving a large increase in PEO Platform Users over that period.
Previous wording
Average WSEs decreased 2% when comparing the first quarter of 2025 to the same period in 2024 driven by both client attrition outpacing new client additions and lower hiring in our installed base over the past twelve months. From a vertical perspective, declines in our Technology, Professional Services, Main Street, and Life Sciences verticals were partially offset by small increases in our Financial Services and Non-Profit verticals.
Current wording
Average WSEs decreased 4% when comparing the second quarter of 2025 to the same period in 2024 driven by both client attrition outpacing new client additions and lower hiring in our installed base over the past twelve months, primarily due to declines in our Technology, Professional Services, Main Street, and Life Sciences verticals.
Previous wording
Total WSEs can be used to estimate our beginning WSEs for the next period and, as a result, can be used as an indicator of our potential future success in generating revenue, growing our business and retaining clients. Total WSEs decreased 3% when compared to the same period in 2024, primarily due to declines in our Technology, Professional Services, Main Street, and Life Sciences verticals.
Current wording
Total WSEs can be used to estimate our beginning WSEs for the next period and, as a result, can be used as an indicator of our potential future success in generating revenue, growing our business and retaining clients. Total WSEs decreased 4% when compared to the same period in 2024, primarily due to declines in our Technology, Professional Services, Main Street, and Life Sciences verticals.
Previous wording
ICR increased for the first quarter of 2025 as compared to the same period in 2024, primarily driven by higher insurance costs that outpaced the growth in ISR. The increase in insurance costs was primarily due to more severe medical service utilization in all categories (inpatient, outpatient and professional services), higher rates paid for those services, as well as pharmacy costs including specialty drugs and other high-cost prescriptions, particularly medications for diabetes and obesity.
Current wording
ICR increased for the second quarter and first half of 2025 as compared to the same periods in 2024, primarily driven by higher insurance costs that outpaced the growth in ISR. The increase in insurance costs was primarily due to higher rates paid for inpatient and professional services, as well as pharmacy costs for increased utilization of specialty drugs and other high-cost prescriptions, particularly medications for diabetes and obesity.
Previous wording
Monthly revenues per co-employed Average WSE is a measure we use to monitor our PEO pricing strategies. This measure increased by 7% during the first quarter of 2025 compared to the same period in 2024.
Current wording
Monthly revenues per co-employed Average WSE is a measure we use to monitor our PEO pricing strategies. This measure increased by 8% during the second quarter of 2025 compared to the same period in 2024 and increased by 7% during the first half of 2025 when compared to same period in 2024.
Previous wording
Our PEO and ASO clients are primarily billed on a fee per WSE or HRIS User per month per transaction. Our vertical approach provides us the flexibility to offer our PEO clients in different industries with varied services at different prices, which we believe potentially reduces the value of solely using Average WSE and Total WSE counts as indicators of future potential revenue performance.
Current wording
Our PEO and ASO clients are primarily billed on a fee per WSE or ASO User per month per transaction. Our vertical approach provides us the flexibility to offer our PEO clients in different industries with varied services at different prices, which we believe potentially reduces the value of solely using Average WSE and Total WSE counts as indicators of future potential revenue performance.
Previous wording
PSR from PEO Services customers and HRIS and ASO services clients was as follows:
Current wording
During 2025, we began migrating our clients from our predecessor HRIS services to our ASO product. PSR from PEO Services customers and HRIS and ASO services clients was as follows:
Previous wording
PSR for the first quarter of 2025 decreased compared to prior period, primarily driven by lower co-employed Average WSEs, the discontinuance of a client-level technology fee, and less favorable vertical mix, partially offset by rate increases.
Current wording
PSR for the second quarter and first half of 2025 decreased compared to prior periods, primarily driven by lower co-employed Average WSEs, the discontinuance of both a client-level technology fee and our Clarus R+D product, and less favorable vertical mix, partially offset by rate increases.
Previous wording
The increase in ISR for the first quarter of 2025 was primarily driven by rate increases, partially offset by lower co-employed Average WSEs.
Current wording
The increase in ISR for the second quarter and first half of 2025 was primarily driven by rate increases, partially offset by lower co-employed Average WSEs.
Previous wording
Interest income primarily includes interest income earned from cash held for our PEO and ASO clients as a result of the requirement of our clients to prefund their payroll and related taxes and other withholding liabilities before payroll is processed or due for payment.
Current wording
Interest income primarily includes interest income earned from cash held for our PEO and ASO clients as a result of the requirement of our clients to prefund their payroll and related taxes and other withholding liabilities before payroll is processed or due for payment. Interest income also includes our portion of interest received from tax jurisdictions related to payroll and other tax refunds. Interest income from tax refunds is recognized when the amount and timing of the interest become determinable.
Previous wording
Interest income for the first quarter was consistent with the prior period as a decrease in interest earned on our cash and investments was offset by higher interest received related to payroll tax refunds.
Current wording
Interest income for the second quarter and first half of 2025 was slightly higher than prior periods as higher interest received related to payroll tax refunds was largely offset by a decrease in interest earned on our cash and investments.
Previous wording
Insurance costs increased for the first quarter, primarily due to more severe medical service utilization, higher rates paid for all categories of service (inpatient, outpatient and professional services) and increased specialty drugs utilization, particularly medications for diabetes and obesity.
Current wording
Insurance costs increased for the second quarter and first half of 2025, primarily due to higher rates paid for outpatient and professional services and increased utilization of high-cost drugs, particularly for specialty drugs and medications for diabetes and obesity. This increase is partially offset by lower Average WSEs.
Previous wording
We had approximately 3,400 colleagues as of March 31, 2025 primarily across the U.S. but also in India and Canada, down approximately 270 colleagues from March 31, 2024. Compensation costs for our colleagues include payroll, payroll taxes, SBC, bonuses, commissions and other payroll- and benefits-related costs. Compensation-related expense represented 68% and 67% of our expenses in the first quarters of 2025 and 2024, respectively.
Current wording
We had approximately 3,300 colleagues as of June 30, 2025 primarily across the U.S. but also in India and Canada, down approximately 400 colleagues from June 30, 2024. Compensation costs for our colleagues include payroll, payroll taxes, SBC, bonuses, commissions and other payroll- and benefits-related costs. Compensation-related expenses represented approximately 66% and 67% of our expenses in the second quarters of 2025 and 2024 respectively, and 67% in the six months ended 2025 and 2024.
Previous wording
During the first quarter, expenses decreased 6% when compared to the same period in 2024 driven largely by lower compensation expense from our reduced headcount. The ratio of expenses to total revenues was 18% and 20% for the first quarters of 2025 and 2024, respectively.
Current wording
During the second quarter and six months ended June 30, 2025, expenses decreased 2% and 4% respectively, when compared to the same periods in 2024, driven largely by lower compensation expense from our reduced headcount, partially offset by increased expenses related to the execution of our medium term strategy, which includes process optimization, further development of our product offerings, and go-to-market innovations. The ratio of expenses to total revenues was 19% for the second quarter and the six months ended June 30, 2025 and 20% for the same periods in 2024.
Previous wording
Our ETR was 26% and 27% for the first quarters of 2025 and 2024, respectively. The decrease in the rate was primarily attributable to an increase in tax benefits related to excludable income for state tax purposes and a decrease in the state tax rate, offset by a decrease in tax benefits for stock-based compensation.
Current wording
Our ETR was 28% and 25% for the second quarters of 2025 and 2024, and 26% for the first half of 2025 and 2024, respectively. The increase in the rate for the second quarter 2025 compared to the same period of 2024 was primarily attributable to adjustments to prior year tax expense and a decrease in tax benefits for stock based compensation, offset by a decrease in the state tax rate.
Previous wording
TriNet Trust, which is consolidated into our financial statements, holds funds provided by ASO clients for the remittance to ASO Users, tax authorities and other recipients. TriNet Trust also holds ownership and responsibility of certain bank accounts that hold ASO client funds. The associated cash is reflected on our Condensed consolidated balance sheets as restricted cash and the associated liabilities are classified as accrued wages, payroll tax liabilities and other payroll withholdings, and client deposits and other client liabilities and assumed related liabilities. As of March 31, 2025, the balance of restricted cash in TriNet Trust was $101 million. Beginning in the second quarter of 2024, we include the assets and liabilities related to the TriNet Trust in the "WSE & TriNet Trust" category because the underlying cash flows of TriNet Trust are related to the same type of payroll and payroll related liabilities as our WSE cash flows. This trust structure will continue to be used as we transition our HRIS services to ASO services.
Current wording
TriNet Trust, which is consolidated into our financial statements, holds funds provided by ASO clients for the remittance to ASO Users, tax authorities and other recipients. TriNet Trust also holds ownership and responsibility of certain bank accounts that hold ASO client funds. The associated cash is reflected on our Condensed consolidated balance sheets as restricted cash and the associated liabilities are classified as accrued wages, payroll tax liabilities and other payroll withholdings, and accounts payable and other current liabilities. As of June 30, 2025, the balance of restricted cash in TriNet Trust was $78 million. We include the assets and liabilities related to the TriNet Trust in the "WSE & TriNet Trust" category because the underlying cash flows of TriNet Trust are related to the same type of payroll and payroll related liabilities as our WSE cash flows. This trust structure will continue to be used as we transition our HRIS services to ASO services.
Previous wording
Corporate working capital as of March 31, 2025 increased $12 million from December 31, 2024, primarily due to the decreases in our corporate current liabilities.
Current wording
Corporate working capital as of June 30, 2025 increased $55 million from December 31, 2024, primarily due to the increases in our corporate cash and cash equivalents, together with decreases in our corporate current liabilities.
Previous wording
The year-over-year change in net cash provided by operating activities was primarily driven by the timing of our payments of corporate obligations.
Current wording
The year-over-year change in net cash provided by operating activities was primarily driven by the timing collections of receivables and our payments of corporate obligations.
Previous wording
As of March 31, 2025, we held approximately $1.5 billion in restricted and unrestricted cash, cash equivalents and investments, of which $349 million was unrestricted cash and cash equivalents. Refer to Note 2 in the condensed consolidated financial statements and related notes included in this Form 10-Q.
Current wording
As of June 30, 2025, we held approximately $1.6 billion in restricted and unrestricted cash, cash equivalents and investments, of which $407 million was unrestricted cash and cash equivalents. Refer to Note 2 in the condensed consolidated financial statements and related notes included in this Form 10-Q.
Previous wording
During the three months ended March 31, 2025 and 2024, we continued to make investments in software and hardware as we enhanced our existing service offerings and technology platform. We expect capital investments in our software and hardware to continue in the future.
Current wording
During the first half of June 30, 2025 and 2024, we continued to make investments in software and hardware as we enhanced our existing service offerings and technology platform. We expect capital investments in our software and hardware to continue in the future.
Previous wording
Net cash used in financing activities in the three months ended March 31, 2025 and 2024 consisted of our debt and equity-related activities.
Current wording
Net cash used in financing activities in the first half of June 30, 2025 and 2024 consisted of WSE and TriNet Trust related activities and our debt and equity-related activities.
Previous wording
During the three months ended March 31, 2025, we repurchased 1,210,403 shares of our common stock for approximately $90 million through our existing stock repurchase program in addition to 46,827 shares acquired to satisfy tax withholding obligations related to SBC vesting. As of March 31, 2025, approximately $162 million remained available for repurchase under all authorizations by our board of directors. We plan to use current cash and cash generated from ongoing operating activities to fund this stock repurchase program.
Current wording
During the first half of June 30, 2025, we repurchased 1,230,144 shares of our common stock for approximately $91 million through our existing stock repurchase program in addition to 55,909 shares acquired to satisfy tax withholding obligations related to SBC vesting. As of June 30, 2025, approximately $160 million remained available for repurchase under all authorizations by our board of directors. We plan to use current cash and cash generated from ongoing operating activities to fund this stock repurchase program.
Previous wording
We paid a common stock dividend of $0.25 per share in January 2025. We also declared a common stock dividend of $0.275 per share to be paid in the second quarter of 2025.
Current wording
We paid common stock dividends of $0.25 per share in January 2025 and $0.275 per share in April 2025. We also declared a common stock dividend of $0.275 per share to be paid in the third quarter of 2025.
Previous wording
Our 2021 Credit Agreement includes a $700 million revolver. In September of 2023, we drew down $200 million of this revolver to partially fund our third quarter of 2023 share repurchases. As of March 31, 2025, $90 million remains outstanding under our 2021 Revolver. The 2021 Credit Agreement includes negative covenants that limit our ability to incur indebtedness and liens, sell assets and make restricted payments, including dividends and investments, subject to certain exceptions. In addition, the 2021 Credit Agreement also contains other customary affirmative and negative covenants and customary events of default. The 2021 Credit Agreement also contains a financial covenant that requires the Company to maintain certain maximum total net leverage ratios.
Current wording
Our 2021 Credit Agreement includes a $700 million revolver. In September of 2023, we drew down $200 million of this revolver to partially fund our third quarter of 2023 share repurchases. As of June 30, 2025, $90 million remains outstanding under our 2021 Revolver. We paid off the entire outstanding balance of $90 million under our 2021 Revolver in July 2025. The 2021 Credit Agreement includes negative covenants that limit our ability to incur indebtedness and liens, sell assets and make restricted payments, including dividends and investments, subject to certain exceptions. In addition, the 2021 Credit Agreement also contains other customary affirmative and negative covenants and customary events of default. The 2021 Credit Agreement also contains a financial covenant that requires the Company to maintain certain maximum total net leverage ratios.