TriNet's Q2 2025 Earnings Call: Unraveling Discrepancies in Sales Performance, Health Care Costs, and Broker Channel Dynamics

Sales performance and market conditions, health care cost trends and inflation, broker channel performance and impact, sales cycle length and pricing discipline, insurance cost ratio and cost management are the



Financial Performance and Outlook:
- TriNet Group reported total revenue was flat year-over-year in the second quarter, with insurance revenue growing 1%.
- The company's GAAP earnings per diluted share was $0.77, and adjusted earnings per diluted share was $1.15.
- This performance was supported by insurance repricing and interest income, but was offset by increased health care costs and slower sales conversion rates.

Insurance Cost Ratio and Pricing Strategy:
- TriNet achieved an average health fee increase of 9% per enrolled member compared to the prior year, improving its insurance cost ratio.
- The company maintained strong retention rates despite the increases, indicating effective pricing and customer support strategies.

Customer Hiring and WSE Volumes:
- TriNet experienced a slight improvement in customer hiring, up about 0.5 percentage point over the prior year.
- The company ended the quarter with approximately 339,000 total WSEs, down 4% year-over-year, and 309,000 co-employee WSEs, down 8%.
- The decline in WSEs was driven by reduced new sales and higher overall attrition, while customer hiring showed some improvement.

Capital Returns and Shareholder Value:
- TriNet paid a $0.275 dividend per share, representing a 10% year-over-year increase.
- The company has deployed over $117 million to shareholders through the first half, representing 87% of free cash flow.
- This focus on shareholder value is part of TriNet's ongoing strategy to support long-term growth and profitability.