TRINET GROUP, INC.
For the period ended Jun 30, 2026. Filed Jul 30, 2026.
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, 2026 · Filed Jul 30, 2026
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 2026-03-31; filed 2026-04-30.
0000937098-26-000034
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCritical Accounting Judgments and EstimatesCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-07-30.
0000937098-26-000050
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsNon-GAAP Financial MeasuresThe 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 133 previous paragraphs and 139 current paragraphs.
94 unchanged; 37 reworded; 8 added; 2 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 49 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 (8)
Current report
Our consolidated results for the first half of 2026 reflect our continuing efforts to enhance our client experience, improve our sales performance, and manage client attrition, through product development and investments in our platform, as well as operational and process improvements.
Current report
•made enhancements to our ASO services, including new tools to enable benefits administration and automated support for common employee requests,
Current report
•continued to invest in our sales resources, including expanding our partnership with brokers,
Current report
•continued to demonstrate disciplined expense management while making investments into our growth and efficiency efforts, and
Current report
YTD 2026
Current report
The following charts provide a view of our Average WSEs and Total WSEs by quarter from the second quarter of 2025 to the second quarter of 2026.
Current report
While Average WSEs and Total WSEs have declined year over year, both metrics were approximately flat sequentially during the second quarter of 2026.
Current report
In the second quarter of 2026, we added $6 million of unrestricted cash to the TriNet Trust to support the efficient flow of client funds during the quarter.
Removed paragraphs (2)
Previous report
Our consolidated results for the three months ended March 31, 2026 reflect our continuing efforts to serve our existing clients, attract new clients, manage expenses and invest in our platform.
Previous report
•have sought to demonstrate disciplined expense management in line with our expectations,
Reworded paragraphs (37)
Previous wording
TriNet is a leading provider of HR solutions for SMBs. We offer technology-enabled services through our PEO and ASO models that include human capital expertise, employee benefits such as health insurance and retirement plans, payroll and payroll tax administration, risk mitigation, and compliance consulting.
Current wording
TriNet is a leading provider of HR solutions for SMBs. We offer a comprehensive suite of technology-enabled services through our PEO and ASO models including human capital expertise, employee benefits such as health insurance and retirement plans, payroll and payroll tax administration, risk mitigation, and compliance consulting.
Previous 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.
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 technology platform and benefits and compliance expertise.
Previous wording
We deliver our services primarily through our PEO services that we provide via our co-employment model and through our ASO services, which provide payroll processing, HR administration and compliance management solutions.
Current wording
We deliver our services primarily through our PEO services, which comprise our most complete HCM solution within our co-employment model.
Previous wording
Our ASO services, which includes our “HR Plus” product, consist of a SaaS solution with a significant service component. ASO services include payroll processing, benefits management, HR administration and compliance management to provide HCM solutions that our clients can tailor dynamically over time based on their specific needs. Unlike our PEO services, ASO services do not include co-employment.
Current wording
In addition, our ASO services, which include our “HR Plus” product, consist of a SaaS solution with a significant service component, including payroll processing, benefits management, HR administration and compliance management to provide HCM solutions that our clients can tailor dynamically over time based on their specific needs. Unlike our PEO services, ASO services do not include co-employment.
Previous wording
•continued to execute on our medium-term strategy, including substantive progress in our efforts to reset the rates of our health benefits services,
Current wording
•continued to execute on our medium-term strategy, reflecting significant progress in our efforts to reset the rates of our health benefits services,
Previous wording
•launched tools to assist our clients with IT automation, global workforce management and retirement plan connectivity to TriNet’s platform,
Current wording
•through initiative with key partners, launched tools to assist our clients with IT automation, global workforce management and retirement plan connectivity to TriNet’s platform,
Previous wording
•in April of 2026, announced the purchase of Cocoon, a leading provider of leave management technology that we plan to integrate into TriNet’s platform.
Current wording
•completed the purchase of Cocoon, a leading provider of leave management technology that we are integrating into TriNet’s platform.
Previous wording
We paid a common stock dividend of $0.275 per share in January 2026. We also declared common stock dividends of $0.29 per share to be paid in the second quarter of 2026.
Current wording
•paid common stock dividends of $0.275 per share in January and $0.29 per share in April and July.
Previous wording
Our total revenue decreased in the first quarter of 2026, compared to the same period in 2025, primarily driven by lower co-employed Average WSEs partially offset by higher rates charged for our services.
Current wording
Our total revenue decreased in the second quarter of 2026, compared to the same period in 2025, primarily driven by lower co-employed Average WSEs partially offset by higher rates charged for our services.
Previous wording
During the first quarter of 2026, our Average WSEs and Total WSEs decreased by 12%, compared to the same period in 2025, primarily due to WSE decreases in our Technology, Professional Services, and Main Street verticals, which were partially attributable to repricing of our health benefits services.
Current wording
During the second quarter of 2026, our Average WSEs decreased by 11% and Total WSEs decreased by 12% compared to the same period in 2025, primarily due to WSE decreases in our Technology, Professional Services, and Main Street verticals, which were partially attributable to repricing of our health benefits services.
Previous wording
Our results are highly influenced by health care cost and utilization trends. Our ICR in the first quarter of 2026 decreased compared to the same period in 2025, primarily driven by the cumulative results of our repricing efforts over the past year to align our insurance services rates with the current insurance cost trends and lower claims development from the prior year.
Current wording
Our results are highly influenced by health care cost and utilization trends. Our ICR in the second quarter of 2026 decreased compared to the same period in 2025, primarily driven by lower claims development and one time recovery of costs of $21 million from prior years. It also reflects the cumulative results of our repricing efforts over the past year to align our insurance services rates with the current insurance cost trend.
Previous wording
Lower revenue, offset by lower insurance costs, resulted in increases of net income and Adjusted Net Income of 5% and 17%, respectively, in the first quarter of 2026, as compared to the same period in 2025.
Current wording
Lower insurance costs, partially offset by lower revenue, resulted in increases of net income and Adjusted Net Income of 43% and 31%, respectively, in the second quarter of 2026, as compared to the same period in 2025.
Previous wording
The following table summarizes our results of operations for the first quarter ended March 31, 2026, when compared to the same period of 2025. 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 2025 Form 10-K.
Current wording
The following table summarizes our results of operations for the second quarter ended June 30, 2026, when compared to the same period of 2025. 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 2025 Form 10-K.
Previous wording
(1)Non-GAAP effective tax rate is 25.5% and 25% for the first quarters of 2026 and 2025, 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 25.5% and 25% of 2026 and 2025, 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.
Previous wording
Average WSEs decreased 12% when comparing the first quarter of 2026 to the same period in 2025, driven by client attrition outpacing new client additions which was partially offset by modest additional hiring of WSEs by our clients over the past twelve months. These declines were primarily in our Technology, Professional Services, and Main Street verticals. Client attrition has been higher than our historical rates in the past twelve months primarily due to the repricing increases of our health benefits services driven by increasing health care costs.
Current wording
Average WSEs decreased 11% when comparing the second quarter of 2026 to the same period in 2025, driven by client attrition outpacing new client additions which was partially offset by modest additional hiring of WSEs by our clients over the past twelve months. These declines were primarily in our Technology, Professional Services, and Main Street verticals. Client attrition has been higher than our historical rates in the past twelve months primarily due to the repricing increases of our health benefits services driven by increasing health care costs.
Previous wording
ASO Users grew from approximately 39,700 users as of December 31, 2025 to approximately 40,800 users as of March 31, 2026. This increase is primarily related to the addition of new clients as we continue to migrate from our former HRIS product to our ASO product.
Current wording
ASO Users grew from approximately 39,700 users as of December 31, 2025 to approximately 40,400 users as of June 30, 2026. This increase is primarily related to the addition of new clients as we continue to migrate from our former HRIS product to our ASO product.
Previous wording
ICR decreased for the first quarter as compared to the same period in 2025, primarily driven by rate increases in our insurance services revenue for health benefits outpacing the corresponding increase in insurance costs due to our repricing efforts. The overall decrease in insurance costs and insurance services revenue was primarily due to lower co-employed Average WSEs.
Current wording
ICR decreased for the second quarter and first half of 2026, respectively, as compared to the same periods in 2025, primarily driven by lower than expected claims development and a one-time recovery of costs of $21 million from prior years. Our ICR also decreased due to rate increases in our insurance services revenue for health benefits outpacing the corresponding increase in insurance costs due to our repricing efforts. The overall decrease in insurance costs and insurance services revenue was primarily due to lower co-employed Average WSEs.
Previous wording
Monthly revenues per co-employed Average WSE is a measure we use to monitor our PEO pricing strategies. This measure increased by 9% during the three months ended March 31, 2026 compared to the same period in 2025.
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 2026 compared to the same period in 2025 and increased by 9% during the first half of 2026 when compared to same period in 2025.
Previous wording
•Mix -the change in composition of co-employed Average WSEs within our verticals combined with the composition of our enrolled co-employed WSEs within our insurance service offerings and the composition of products and services our clients receive, such as PEO Platform Users,
Current wording
•Mix -the change in composition of co-employed Average WSEs within our verticals combined with the composition of our enrolled co-employed WSEs within our insurance service offerings and the composition of products and services our clients receive, such as PEO Platform Users and revenue we earn specific to our new Cocoon product,
Previous wording
Total revenue decreased for the first quarter of 2026, as lower co-employed Average WSEs was partially offset by rate increases for both professional services and insurance services revenues.
Current wording
Total revenue decreased for the second quarter and first half of 2026, as lower co-employed Average WSEs was partially offset by rate increases for both professional services and insurance services revenues.
Previous wording
•Mix - the change in composition of co-employed Average WSEs across our verticals and the composition of products and services our clients receive, including PEO Platform Users, and
Current wording
•Mix - the change in composition of co-employed Average WSEs across our verticals and the composition of products and services our clients receive, including PEO Platform Users and revenue we earn specific to our new Cocoon product, and
Previous wording
PSR for the first quarter decreased compared to prior period, primarily driven by lower co-employed Average WSEs. PSR from ASO services has decreased as we continue to wind down our former HRIS services product and migrate clients to our ASO services.
Current wording
PSR for the second quarter and first half of 2026 decreased compared to prior periods, primarily driven by lower co-employed Average WSEs and lower ASO revenue, partially offset by rate increases. PSR from ASO services has decreased as we continue to wind down our former HRIS services product and migrate clients to our ASO services.
Previous wording
ISR decreased for the first quarter of 2026, primarily due to lower health plan enrollment driven by lower co-employed Average WSEs. This decrease was partially offset by higher rates.
Current wording
ISR decreased for the second quarter and first half of 2026, primarily due to lower health plan enrollment driven by lower co-employed Average WSEs. This decrease was partially offset by higher rates.
Previous wording
Interest income for the first quarter was lower than the prior period, primarily driven by lower interest received related to payroll tax refunds.
Current wording
Interest income for the second quarter and first half of 2026 was lower than the prior period, primarily driven by lower interest received related to payroll tax refunds.
Previous wording
Insurance costs for the first quarter of 2026 decreased, primarily due to lower co-employed Average WSEs and better than expected claims development from the prior year. This decrease was partially offset by higher rates paid for professional services, increased outpatient utilization, and continued growth in the use of high-cost drugs, particularly for specialty medications and on-specialty drugs for diabetes and obesity.
Current wording
Insurance costs for the second quarter and first half of 2026 decreased, primarily due to lower co-employed Average WSEs, lower than expected claims development from the prior year and one-time recovery of costs of $21 million from prior years. This decrease was partially offset by higher rates paid for professional services, increased outpatient utilization, and continued growth in the use of high-cost drugs, particularly for specialty medications and non-specialty drugs for diabetes and obesity.
Previous wording
We had approximately 3,400 colleagues as of March 31, 2026 primarily across the U.S. and India, approximately the same as in March 31, 2025. Compensation costs for our colleagues include payroll, payroll taxes, SBC, bonuses, commissions and other payroll- and benefits-related costs. Compensation-related expenses represented approximately 69% and 68% of our expenses in the first quarters of 2026 and 2025.
Current wording
We had approximately 3,300 colleagues as of June 30, 2026 primarily across the U.S. and India, approximately the same as in June 30, 2025. Compensation costs for our colleagues include payroll, payroll taxes, SBC, bonuses, commissions and other payroll- and benefits-related costs. Compensation-related expenses represented approximately 64% and 66% of our expenses in the second quarters of 2026 and 2025 respectively, and 67% in each of the six months ended 2026 and 2025.
Previous wording
During the first quarter expenses increased 5%, when compared to the same period in 2025. This increase was driven largely by higher expenses related to severance charges incurred in the first quarter of 2026 as part of our efforts to rebalance our workforce in line with our medium term strategy. The ratio of expenses to total revenues was 20% for the first quarter and 18% for the same period in 2025.
Current wording
During the second quarter of 2026 expenses decreased 1% when compared to the same period in 2025, largely driven by lower compensation expenses. During the six months ended June 30, 2026, expenses increased 2% when compared to the same period in 2025. The increase is largely driven by higher expenses related to severance charges incurred in the first quarter of 2026 as part of our efforts to rebalance our workforce in line with our medium term strategy. The ratio of expenses to total revenues was 20% for the second quarter and 20% for the six months ended June 30, 2026 and 19% for the same respective periods in 2025.
Previous wording
Our ETR was 28% and 26% for the first quarters of 2026 and 2025, respectively. The increase in the rate was primarily attributable to decreases in tax benefits for stock-based compensation and increases in nondeductible compensation.
Current wording
Our ETR was 28% for the second quarters of 2026 and 2025, and 28% and 26% for the first half of 2026 and 2025, respectively. The increase in the rate for the first half of 2026 compared to the same period in 2025 was primarily attributable to decreases in tax benefits for stock-based compensation and decreases in excludable income for state tax purposes.
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 March 31, 2026, the balance of restricted cash in TriNet Trust was $54 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 continue to use this trust structure as we complete the transition of 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, 2026, the balance of restricted cash in TriNet Trust was $44 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 continue to use this trust structure as we complete the transition of our HRIS services to ASO services.
Previous wording
Corporate working capital as of March 31, 2026 increased $27 million from December 31, 2025, primarily due to the increases in our corporate cash and cash equivalents. This increase was driven by earnings during the first quarter partially offset by share repurchases and dividends paid.
Current wording
Corporate working capital as of June 30, 2026 increased $38 million from December 31, 2025, primarily due to the increases in our corporate cash and cash equivalents. This increase was driven by earnings during the first half of 2026 partially offset by share repurchases and dividends paid.
Previous 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.
Current wording
The year-over-year change in net cash provided by operating activities was primarily driven by higher net income coupled with the timing collections of receivables and our payments of corporate obligations.
Previous wording
We also invest funds held as collateral to satisfy our long-term obligation towards workers' compensation liabilities. These investments are classified on our balance sheets as restricted cash, cash equivalents and investments. We review the amount and the anticipated holding period of these investments regularly in conjunction with our estimated long-term workers' compensation liabilities and anticipated claims payment trend. At March 31, 2026, our investments had a weighted average duration of three-year and an average S&P credit rating of AA+.
Current wording
We also invest funds held as collateral to satisfy our long-term obligation towards workers' compensation liabilities. These investments are classified on our balance sheets as restricted cash, cash equivalents and investments. We review the amount and the anticipated holding period of these investments regularly in conjunction with our estimated long-term workers' compensation liabilities and anticipated claims payment trend. At June 30, 2026, our investments had a weighted average duration of two-year and an average S&P credit rating of AA+.
Previous wording
As of March 31, 2026, we held approximately $1.6 billion in restricted and unrestricted cash, cash equivalents and investments, of which $340 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, 2026, we held approximately $1.5 billion in restricted and unrestricted cash, cash equivalents and investments, of which $358 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, 2026 and 2025, we continued to make investments in software and hardware as we enhanced our existing service offerings and technology platform. We also made significant investments in furniture and fixtures for our recently leased space in Atlanta during the quarter. We expect capital investments in our software and hardware to continue in the future.
Current wording
During the first half of 2026 and 2025, we continued to make investments in software and hardware as we enhanced our existing service offerings and technology platform. In the second quarter of 2026 we acquired Cocoon in an all cash transaction. We also made significant investments in furniture and fixtures for our recently leased space in Atlanta during the first half of 2026. 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, 2026 and 2025 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 first half of 2026 and 2025 consisted of WSE and TriNet Trust related activities and our debt and equity-related activities.
Previous wording
During the three months ended March 31, 2026, we repurchased 1,348,513 shares of our common stock for approximately $58 million through our existing stock repurchase program in addition to 57,484 shares acquired to satisfy tax withholding obligations related to SBC vesting. As of March 31, 2026, approximately $347 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 2026, we repurchased 1,789,100 shares of our common stock for approximately $76 million through our existing stock repurchase program in addition to 63,119 shares acquired to satisfy tax withholding obligations related to SBC vesting. As of June 30, 2026, approximately $329 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
•paid a common stock dividend of $0.275 per share in January 2026. We also declared common stock dividends of $0.29 per share to be paid in the second quarter of 2026, and
Current wording
We paid a common stock dividend of $0.275 per share in January 2026 and $0.29 per share in April 2026. We also declared common stock dividend of $0.29 per share paid in July 2026.