TriNet Group, Inc.

Good day, and welcome to the Trinet Second Quarter 2019 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your touchtone phone. To withdraw your question, please press star, then two. Please note that this event is being recorded. I would now like to turn the conference over to Alex Bauer, Investor Relations. Please go ahead.

Thank you, Operator. Good afternoon, everyone, and welcome to Trinet's 2019 Second Quarter Conference Call. Joining me today are Burton M. Goldfield, our President and CEO, and Richard Becker, our Chief Financial Officer. Our prepared remarks were pre-recorded. Burton will begin with an overview of our second quarter operating and financial performance. Richard will then review our financial results in more detail. We will then open up the call for the Q&A session. Before we begin, please note that today's discussion will include our 2019 third quarter and full year guidance and other statements that are not historical in nature, are predictive in nature, or depend upon or refer to future events or conditions Such as our expectations, estimates, predictions, strategies, beliefs, or other statements that might be considered forward looking. These forward looking statements are based on management's current expectations and assumptions and are inherently subject to risks, uncertainties, and changes in circumstances that are difficult to predict and that may cause actual results to differ materially from statements being made today or in the future. except as may be required by law, we do not undertake to update any of these statements in light of new information, future events, or otherwise. We encourage you to review our most recent public filings with the SEC including our 10-K and 10-Q filings for a more detailed discussion of the risks, uncertainties, and changes in circumstances that may affect our future results or the market price of our stock. Our discussion today will include non-GAAP financial measures, including our forward-looking guidance for non-GAAP net service revenues, adjusted EBITDA, adjusted EBITDA margin, and adjusted net income. For reconciliations of our non-GAAP financial measures to our GAAP financial results, please see our earnings release or our 10-Q filing for our second quarter of 2019, which are available on our website or through the SEC website. Reconciliation of our non-GAAP forward-looking guidance to the most directly comparable GAAP measures is also available on our website. With that, I will turn the call over to Burton for his opening remarks.

Thank you, Alex. I am pleased with our second quarter results, which puts us on track for delivering our 2019 plan. Capitalizing on our first quarter momentum, The second quarter saw the TriNet sales and services organizations successfully deliver value in the verticals we serve. In the second quarter, we grew GAAP total revenues 10% year over year to $935 million, and we grew our net service revenues by 5% year over year Thank you for joining us. from improved retention and strength in our new sales. During the second quarter, we grew insurance service revenues by 10% year-over-year to $808 million, while net insurance service revenues declined 2% year-over-year to $104 million for the quarter. Net insurance service revenues were in line with our forecast. Please recall net insurance service revenues in the second quarter of 2018 saw significant outperformance due to prior period adjustments. In the second quarter, our Q2 gap earnings per share declined 20% year over year Thank you for joining us. and many more. from our installed base. I am encouraged that the improvement in customer retention that we saw at the end of the first quarter has continued throughout the second quarter. We benefited from our improved customer engagement process, which involves leveraging our customer analytics to anticipate and respond to our customer concerns. Our ability to monitor thousands of customers for events such as renewal pricings or management changes has become increasingly beneficial. For example, during the quarter we engaged a 300 plus WSE design company which was at risk of leaving. Anticipating sensitivity to their renewal pricing We proactively engaged the customer on their upcoming renewal. We leveraged our insurance services team to propose cost containment strategies for the upcoming year. Our customer implemented the proposed strategies and based on these actions remains a customer today. Our focus on improving our customer experience is a critical component Thank you for joining us today. into the verticals we serve. We package HR expertise, benefit options, payroll services, risk mitigation, and our technology platform together so that our customers have more time to focus on their business and are in a stronger position to attract and retain top talent. Our value proposition was on full display this quarter when we won the business of a New York-based architecture firm. The process began when a new CFO joined the firm and quickly sought out a PEO partner. Trinet's comprehensive products and services proved compelling. First, the new CFO was impressed with our platform and CloudBase Products. The TriNet user interface was critical for winning over the firm's executives. Second, based in New York with a diverse employee group, the new customer valued TriNet's benefits offering. We could accommodate their employees' various benefit needs, including access to rich plans, as well as high deductible HSA eligible plans, an important advantage when competing for talent in a tight labor market. Finally, with several employees on work visas in country, the customer valued our visa service capabilities. Having TriNet streamline the visa workflow was very attractive to the customer in making the decision to purchase TriNet. This process is not atypical of the way we engage with prospects in the selling cycle. We continue to be attractive and add value in our core customer segments as this example demonstrates. Given our reported WSC performance during the second quarter, and the trend of our retention and new sales results, we now expect to grow our volume for the remainder of 2019. The evolution of our products continues with the July 16th release of TriNet Workforce Analytics, our fully integrated HR reporting and analytics tool. Workforce Analytics provides our SMB customers with rich data, enabling in-depth analysis needed for accurate reporting and forecasting. We assist our customers through our services team of industry-specific consultants to interpret this data and empower informed business decisions. Key features of the Workforce Analytics product includes Access to important workforce data such as annualized compensation, average employee tenure, and benefit selections. Integration with third-party vendors such as QuickBooks, NetSuite, Xero, and Intact to sync accounting data for more accurate reporting and the ability to create, save, and quickly access customized favorites, were recently viewed reports, as well as many other features. Additionally, during the second quarter, we launched our brand and marketing campaign, People Matter. Our campaign places at its center Trinet customers who represent a diverse cross-section of American entrepreneurialism and celebrates their many contributions to the U.S. economy, and our commitment to small and medium-sized businesses. Following our brand campaign launch featuring New York customers in April, we expanded the campaign to feature additional customers from the San Francisco Bay Area and Los Angeles. As we approach our critical selling season, these customers will play a role in our demand-focused Omnichannel Marketing Campaign. We remain committed to developing a world-class brand aligned with our powerful value proposition and in support of our sales efforts. Now let me turn the call over to Richard for a review of our financials.