Trinet Group, Inc. · NYSE:TNET
Trinet — Q3 2020 Earnings Presentation
38 slides from Trinet's earnings presentation, October 2020
Slide 1: HR solutions for the people that matter.
HR solutions for the people that matter. TriNet Group Inc. Investor Presentation October 2020 – February 2021 © 2020 TriNet Group, Inc. All rights reserved. All trademarks, trade names, service marks and logos referenced herein belong to their respective companies. Reproduction or distribution in wh
Slide 2: Disclaimer: Forward-Looking Statements
Disclaimer Cautionary Note Regarding Forward-Looking Statements and Other Financial Information This presentation contains 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 statemen
Slide 3: Disclaimer: Non-GAAP Financial Measures
Disclaimer Non-GAAP Financial Measures In addition to financial measures presented in accordance with U.S. Generally Accepted Accounting Principles (GAAP), we present other non-GAAP © 2020 TriNet Group, Inc. All rights reserved. All trademarks, trade names, service marks and logos referenced herein
Slide 4: Agenda
© 2020 TriNet Group, Inc. All rights reserved. All trademarks, trade names, service marks and logos referenced herein belong to their respective companies. Reproduction or distribution in whole or part without express written permission is prohibited. 4 Agenda Appendix Guidance TriNet Overview Finan
Slide 5: Q3 & YTD Financial Review
© 2020 TriNet Group, Inc. All rights reserved. All trademarks, trade names, service marks and logos referenced herein belong to their respective companies. Reproduction or distribution in whole or part without express written permission is prohibited. 5 Q3 & YTD Financial Review
Slide 6: Q3 & YTD GAAP Revenue
Q3 & YTD GAAP Revenue • Q3 ‘20 Total Revenues © 2020 TriNet Group, Inc. All rights reserved. All trademarks, trade names, service marks and logos referenced herein belong to their increased5%1% year-over-year -4% • YTD ‘20 Total Revenues respective companies. Reproduction or distribution in whole or
Slide 7: Q3 & YTD Net Insurance Margin
© 2020 TriNet Group, Inc. All rights reserved. All trademarks, trade names, service marks and logos referenced herein belong to their respective companies. Reproduction or distribution in whole or part without express written permission is prohibited. 7 11% Q3 '19 unchanged year-over-year expanded b
Slide 8: Q3 & YTD Net Service Revenues
Q3 & YTD Net Service Revenues3,4,6 • Q3 ‘20 Net Service Revenues © 2020 TriNet Group, Inc. All rights reserved. All trademarks, trade names, service marks and logos referenced herein belong to their declined 1% year-over-year • YTD ‘20 Net Service respective companies. Reproduction or distribution i
Slide 9: Q3 & YTD 2020 EPS & Adjusted EBITDA Margin
Q3 & YTD 2020 EPS6 & Adjusted EBITDA Margin3,4,6 50% © 2020 TriNet Group, Inc. All rights reserved. All trademarks, trade names, service marks and logos referenced herein belong to their 42% 41% • Q3 ‘20 GAAP and Adjusted respective companies. Reproduction or distribution in whole or part withou
Slide 10: Guidance
© 2020 TriNet Group, Inc. All rights reserved. All trademarks, trade names, service marks and logos referenced herein belong to their respective companies. Reproduction or distribution in whole or part without express written permission is prohibited. 10 Guidance
Slide 11: Guidance
Guidance FY 2020 Q4 2020 ∆ © 2020 TriNet Group, Inc. All rights reserved. All trademarks, trade names, service marks and logos referenced herein belong to their GAAP Total Revenue 3% - 4% +3% 0% - 2% respective companies. Reproduction or distribution in whole or part without express written permissi
Slide 12: Financial Review
© 2020 TriNet Group, Inc. All rights reserved. All trademarks, trade names, service marks and logos referenced herein belong to their respective companies. Reproduction or distribution in whole or part without express written permission is prohibited. 12 Financial Review
Slide 13: Financial Model
Financial Model Revenue Growth • Vertical strategy drives volume growth © 2020 TriNet Group, Inc. All rights reserved. All trademarks, trade names, service marks and logos referenced herein belong to their • Vertical products increase value received respective companies. Reproduction or distribution
Slide 14: Revenue Model
Revenue Model Net Service Revenues FY20193,4 Professional Service Revenues © 2020 TriNet Group, Inc. All rights reserved. All trademarks, trade names, service marks and logos referenced herein belong to their (in millions) Fees charged to clients for processing payroll- related transactions, access
Slide 15: Consistent GAAP Revenue Growth
© 2020 TriNet Group, Inc. All rights reserved. All trademarks, trade names, service marks and logos referenced herein belong to their respective companies. Reproduction or distribution in whole or part without express written permission is prohibited. 15 $447 $2,613 $3,060 FY2016 $458 $2,817 $3,275
Slide 16: Net Insurance Margin FY2016-FY2019
Net Insurance Margin3,4,6 Net Insurance Margin3,4 © 2020 TriNet Group, Inc. All rights reserved. All trademarks, trade names, service marks and logos referenced herein belong to their FY2016 - FY2019 In millions respective companies. Reproduction or distribution in whole or part without express writ
Slide 17: Strong Net Service Revenues Growth
Strong Net Service Revenues3,4,6 Growth $3,856 $3,503 © 2020 TriNet Group, Inc. All rights reserved. All trademarks, trade names, service marks and logos referenced herein belong to their $3,275 $3,060 $929 $893 respective companies. Reproduction or distribution in whole or part without express writ
Slide 18: Attractive EPS Growth
© 2020 TriNet Group, Inc. All rights reserved. All trademarks, trade names, service marks and logos referenced herein belong to their respective companies. Reproduction or distribution in whole or part without express written permission is prohibited. 18 $0.85 29% FY2016 $1.20 GAAP EPS $2.49 Attract
Slide 19: Capital Allocation
Capital Allocation © 2020 TriNet Group, Inc. All rights reserved. All trademarks, trade names, service marks and logos referenced herein belong to their respective companies. Reproduction or distribution in whole or part without express written permission is prohibited. 1 Reinvest in business — driv
Slide 20: TriNet Overview
© 2020 TriNet Group, Inc. All rights reserved. All trademarks, trade names, service marks and logos referenced herein belong to their respective companies. Reproduction or distribution in whole or part without express written permission is prohibited. 20 TriNet Overview
Slide 21: Investment Highlights
Investment Highlights © 2020 TriNet Group, Inc. All rights reserved. All trademarks, trade names, service marks and logos referenced herein belong to their Innovation leader serving large, under-penetrated market respective companies. Reproduction or distribution in whole or part without express wri
Slide 22: Large Market Opportunity
Large Market Opportunity ~60 million Underpenetrated SMB Market © 2020 TriNet Group, Inc. All rights reserved. All trademarks, trade names, service marks and logos referenced herein belong to their Number of Employees who work respective companies. Reproduction or distribution in whole or part witho
Slide 23: Challenges Facing SMBs
Challenges Facing SMBs Compliance © 2020 TriNet Group, Inc. All rights reserved. All trademarks, trade names, service marks and logos referenced herein belong to their ⦁ Significant regulatory oversight ⦁ Risks for federal, state, and local respective companies. Reproduction or distribution in whole
Slide 24: Technology Enabled Business Services Company
© 2020 TriNet Group, Inc. All rights reserved. All trademarks, trade names, service marks and logos referenced herein belong to their respective companies. Reproduction or distribution in whole or part without express written permission is prohibited. 24 • Automatic Payroll • Benefits Enrollment • N
Slide 25: Common Product and Service Capabilities
Common Product and Service Capabilities © 2020 TriNet Group, Inc. All rights reserved. All trademarks, trade names, service marks and logos referenced herein belong to their respective companies. Reproduction or distribution in whole or part without express written permission is prohibited. HR Exper
Slide 26: Vertical Strategy
Vertical Strategy © 2020 TriNet Group, Inc. All rights reserved. All trademarks, trade names, service marks and logos referenced herein belong to their respective companies. Reproduction or distribution in whole or part without express written permission is prohibited. Financial Life Science Main St
Slide 27: Insurance Services
Insurance Services © 2020 TriNet Group, Inc. All rights reserved. All trademarks, trade names, service marks and logos referenced herein belong to their Workers’ Compensation respective companies. Reproduction or distribution in whole or part without express written permission is prohibited. ⦁ Provi
Slide 28: Growth Strategy
© 2019 TriNet Group, Inc. All rights reserved. All trademarks, trade names, service marks and logos referenced herein belong to their respective companies. Reproduction or distribution in whole or part without express written permission is prohibited. 1 2 3 Retention New Sales Potential Acquisitions
Slide 29: Retention
Retention FLEXIBLE SERVICE Flexible service model © 2020 TriNet Group, Inc. All rights reserved. All trademarks, trade names, service marks and logos referenced herein belong to their aligned to verticals respective companies. Reproduction or distribution in whole or part without express written per
Slide 30: New Sales
New Sales • Align sales force by geography and industry vertical © 2020 TriNet Group, Inc. All rights reserved. All trademarks, trade names, service marks and logos referenced herein belong to their respective companies. Reproduction or distribution in whole or part without express written permissio
Slide 31: Potential Acquisitions
Potential Acquisitions 2009 2013 2020 ⦁ Infrastructure investment • New product offering • Expands TriNet Non-Profit © 2020 TriNet Group, Inc. All rights reserved. All trademarks, trade names, service marks and logos referenced herein belong to their ⦁ East Coast processing center • High-touch servi
Slide 32: Appendix
© 2020 TriNet Group, Inc. All rights reserved. All trademarks, trade names, service marks and logos referenced herein belong to their respective companies. Reproduction or distribution in whole or part without express written permission is prohibited. 32 Appendix
Slide 33: Appendix A: Reconciliation of non-GAAP financial measures to GAAP
© 2020 TriNet Group, Inc. All rights reserved. All trademarks, trade names, service marks and logos referenced herein belong to their respective companies. Reproduction or distribution in whole or part without express written permission is prohibited. 33 financial measures Appendix A Reconciliation
Slide 34: Appendix A: Reconciliation of non-GAAP financial measures to GAAP
© 2020 TriNet Group, Inc. All rights reserved. All trademarks, trade names, service marks and logos referenced herein belong to their respective companies. Reproduction or distribution in whole or part without express written permission is prohibited. 34 financial measures Appendix A Reconciliation
Slide 35: Appendix B: Statement of Cash Flows
© 2020 TriNet Group, Inc. All rights reserved. All trademarks, trade names, service marks and logos referenced herein belong to their respective companies. Reproduction or distribution in whole or part without express written permission is prohibited. 35 Appendix B discussion of our Statement of Cas
Slide 36: Appendix C – Guidance Reconciliation
© 2020 TriNet Group, Inc. All rights reserved. All trademarks, trade names, service marks and logos referenced herein belong to their respective companies. Reproduction or distribution in whole or part without express written permission is prohibited. 36 Appendix C – Guidance Reconciliation
Slide 37: Appendix C – Guidance Reconciliation
© 2020 TriNet Group, Inc. All rights reserved. All trademarks, trade names, service marks and logos referenced herein belong to their respective companies. Reproduction or distribution in whole or part without express written permission is prohibited. 37 Appendix C – Guidance Reconciliation
Slide 38: Appendix D – End Notes
Appendix D – End Notes © 2020 TriNet Group, Inc. All rights reserved. All trademarks, trade names, service marks and logos referenced herein belong to their 1 US Small Business Administration, Office of Advocacy, 2019 Small Business Profile; the total number of employees employed by firms with 500 o