TRINET GROUP, INC.

Previous 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.

Current wording

Our consolidated results for the nine months ended September 30, 2025 reflect our continuing efforts to serve our clients, attract new clients, manage expenses and invest in our platform.

Previous wording

•continued our progress in establishing a new corporate center in Atlanta, including the execution of lease space, and

Current wording

•opened our new corporate center in Atlanta,

Previous 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.

Current wording

•paid common stock dividends of $0.275 per share in April and July, and declared common stock dividends of $0.275 per share paid in October 2025. Together with common stock repurchases of $122 million, we have returned $162 million to stockholders as of September 30, 2025.

Previous 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:

Current wording

Our results for the quarter ended September 30, 2025, and the nine months ended September 30, 2025 when compared to the same periods of 2024, are noted below:

Previous 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.

Current wording

During the third quarter of 2025, our Average WSEs and Total WSEs decreased by 6%, 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

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.

Current wording

Lower total revenue, partially offset by lower operating expenses, resulted in decreases of net income and Adjusted Net income of 24% and 7%, respectively, in the third quarter of 2025, as compared to the same period in 2024. On a year-to-date basis, higher insurance costs, partially offset by lower operating expenses, resulted in decreases in net income and Adjusted Net income of 20% and 15%, respectively.

Previous 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.

Current wording

The following table summarizes our results of operations for the third quarter and nine months ended September 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

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.

Current wording

Average WSEs decreased 6% when comparing the third 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 4% 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 7% when compared to the same period in 2024, primarily due to declines in our Technology, Professional Services, Main Street, and Life Sciences verticals. This was partially attributable to necessary repricing of our health benefits services.

Previous 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.

Current wording

ICR remained flat for the third quarter and increased for the nine months ended September 30, 2025 as compared to the same period in 2024, the increase was 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 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.

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 third quarter and nine months ended September 30, 2025 compared to the same periods in 2024.

Previous wording

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 wording

Total revenue decreased for the third quarter of 2025, primarily due to lower co-employed Average WSEs. Total revenue was flat for the nine months ended September 30, 2025 as lower co-employed Average WSEs was offset by rate increases for both professional services and insurance services revenues.

Previous 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.

Current wording

PSR for the third quarter and nine months ended September 30, 2025 decreased compared to prior periods, primarily driven by lower co-employed Average WSEs, and the discontinuance of both a client-level technology fee

Previous 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.

Current wording

ISR decreased slightly for the third quarter of 2025, primarily due to lower health plan enrollment driven by lower Co-employed Average WSEs. The increase in ISR for the nine months ended September 30, 2025 was primarily driven by rate increases, partially offset by lower co-employed Average WSEs.

Previous 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.

Current wording

Interest income for the third quarter and nine months ended September 30, 2025 was slightly higher than prior periods as higher interest received related to payroll tax refunds was partially offset by a decrease in interest earned on our cash and investments.

Previous 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.

Current wording

Insurance costs decreased for the third quarter of 2025, primarily due to lower co-employed Average WSEs partially offset by higher rates paid for services. Insurance costs increased for the nine months ended September 30, 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 co-employed Average WSEs.

Previous 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.

Current wording

We had approximately 3,300 colleagues as of September 30, 2025 primarily across the U.S. but also in India and Canada, down approximately 400 colleagues from September 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 65% of our expenses in the third quarters of 2025 and 2024, and 66% in the nine months ended 2025 and 2024.

Previous 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.

Current wording

During the third quarter and nine months ended September 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 third quarter and the nine months ended September 30, 2025 and 20% for the same periods in 2024.

Previous 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.

Current wording

Our ETR was 32% and 23% for the third quarters of 2025 and 2024, respectively and 28% and 25% for the nine months ended September 30, 2025 and 2024, respectively. The increase in the rate as compared to the same periods of 2024 was primarily attributable to decreases in tax benefits for stock based compensation, decreases in excludable income for state tax purposes, and decreases in tax credits.

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 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.

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 September 30, 2025, the balance of restricted cash in TriNet Trust was $63 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. We will continue to use this trust structure as we transition our HRIS services to ASO services.

Previous 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.

Current wording

Corporate working capital as of September 30, 2025 increased $50 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. Our decrease in corporate current liabilities is primarily driven by the pay off of our revolving credit facility in the third quarter of 2025, leaving no outstanding balance on our $700 million revolving line of credit.

Previous 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.

Current wording

As of September 30, 2025, we held approximately $1.6 billion in restricted and unrestricted cash, cash equivalents and investments, of which $321 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 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.

Current wording

During the nine months ended September 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 first half of June 30, 2025 and 2024 consisted of WSE and TriNet Trust related activities and our debt and equity-related activities.

Current wording

Net cash used in financing activities in the nine months ended September 30, 2025 and 2024 consisted of WSE and TriNet Trust related activities and our debt and equity-related activities.

Previous 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.

Current wording

During the nine months ended September 30, 2025, we repurchased 1,711,793 shares of our common stock for approximately $122 million through our existing stock repurchase program in addition to 55,136 shares acquired to satisfy tax withholding obligations related to SBC vesting. As of September 30, 2025, approximately $129 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 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.

Current wording

We paid common stock dividends of $0.25 per share in January 2025 and $0.275 per share in April and July 2025. We also declared a common stock dividend of $0.275 per share paid in October 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 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.

Current wording

Our 2021 Credit Agreement includes a $700 million revolver. In July 2025, the outstanding balance of $90 million was paid off. 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.