TriNet Group, Inc.

Good day, and welcome to the TRINET second quarter 2022 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 a touch-tone phone. To withdraw your question, please press star, then 2. Please note, this event is being recorded. I would now like to turn the conference over to Alex Bauer, Head of Investor Relations. Please go ahead.

Thank you, Operator. Good afternoon. This is Alex Bauer, Head of Investor Relations. Thank you for joining us, and welcome to TRINET's 2022 Second Quarter Conference Call. I'm joined today by our CEO, Burton M. Goldfield, and our CFO, Kelly Tuminelli. Before we begin, I would like to address our use of forward-looking statements and non-GAAP financial measures. Please note that today's discussion will include our 2022 third quarter and full-year financial outlook 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. In addition, our discussion today will include non-GAAP financial measures, including our forward-looking guidance for adjusted net income per diluted share. For reconciliations of our non-GAAP financial measures to our GAAP financial results, please see our earnings release, 10-Q filings, or 10-K filing, which are available on our website or through the SEC website. With that, I will turn the call over to Burton.

Burton? Thank you, Alex. I am pleased to report that Trinet's customers performed exceedingly well during the second quarter, which drove our ongoing strong financial performance. The current macroeconomic environment, perhaps counterintuitively, is creating opportunities for Trinet. The value of our solutions, which address regulatory complexity and geographically distributed workforces is delivered independent of the current macroeconomic trends. This is reflected in our performance for the second quarter. During the second quarter, total revenues grew 9% year over year in line with the top end of our guidance. This growth in total revenues was driven by the installed base. Our vertical go-to-market strategy is focused on dynamic SMBs. As a result of this customer selection, our installed base continued to grow and thrive in partnership with Trinet during Q2. Additionally, in the second quarter, we grew new sales double digits year over year, whether measured by ACV or WSEs. We are excited to build on this success throughout the second half. The TriNet model enables our clients to effectively scale up and down as they navigate rapid changes in the global economy. This model becomes increasingly attractive for SMBs as they look for ways to convert fixed costs into variable costs. With healthcare utilization remaining below our estimates, we created and launched our 2022 credit program. This enables us to return savings to customers who help generate them. The credit program, which is fully accounted for in our Q2 results, had the effect of lowering total revenues growth in the quarter by approximately two points. Kelly will go into more detail around this industry-leading program. In the quarter, we maintained our expense discipline even as we invested in Trinet Zenefits. As a result, we generated strong cash flow and delivered robust earnings. In the second quarter, our GAAP EPS declined 1% year-over-year to $1.35. This result outperformed our guidance by 55 cents, reflecting both better volume and stronger insurance performance. Our adjusted net income per share grew 10% to $1.72, outperforming guidance by 51 cents. We ended the second quarter with over 610,000 users across our PEO and HCM platforms. Throughout the quarter, we kept our focus on execution and delivering the best possible service to our customers. We delivered financial performance in excess of our guidance. Our 2022 credit program is the third such program in our recovery credit program series. We helped our customers navigate the increasingly difficult regulatory environment. We continued the integration of Trinet Zenefits, and importantly, we began delivering on the promise of these two complementary product offerings. Finally, we added two senior executives to broaden and deepen our leadership team, positioning Trinet to successfully execute on our strategic initiatives over the long term. For years, I have highlighted regulatory complexity as the secular trend supportive to Trinet. A decade ago, the Affordable Care Act expanded healthcare access. Trinet was there helping our customers avail themselves of the best healthcare for their employees. Trinet was also instrumental to our customers as they navigated the governmental response to the COVID-19 pandemic. Trinet help customers access PPP loans and as importantly, navigate PPP loan forgiveness. We help customers access the employee retention tax credits. And additionally, we help facilitate the complex and ongoing transition to remote work. Trinet has been there for our customers. Most recently, Last month's Supreme Court Dobbs ruling represents another opportunity for Trinet to assist and advise our customers. In the past, I have often spoke of the diverging regulatory regimes between federal, state, and local governments. Historically, I was referring to diverging employment-related law, But this latest ruling is not directly related to employment law. It extends the complexity trend to health care. By returning legislative decisions on reproductive rights to state jurisdictions, the Supreme Court has potentially created as many as 50 different regulatory environments for the governance of those rights. This shift has huge implications for SMBs and their employees as approximately 50% of Americans access healthcare through their employers. For example, SMBs will find it difficult to provide equitable medical care for their employees. This is especially the case if the companies or their employees reside in different states with divergent laws. TriNet has long understood the importance of choice and access and benefits as a fundamental driver for SMBs to attract the best talent. We are unique in the industry for offering unparalleled choice and access in benefits options for our WSEs. Currently, We have over 500 national and regional plans within our single employer plans. Throughout our industry-leading unique benefits offering, Trinet is helping our customers retain choice and access for their WSCs under diverging state regulatory regimes. But for Trinet, this isn't enough. People matter to us. Our customers, our WSEs, our employees matter to us. Similar to our efforts around COVID, TriNet remains the leader in providing advice and support to our customers and SMBs. However, advising customers is not enough for TriNet. Listening to our customers is just as important. On the heels of the Dobbs ruling, customers reached out to us for help. They articulated the challenges of managing a geographically distributed workforce with unequal access to healthcare. Regardless of your position on this ruling, Trinet has and will continue to endeavor to provide equal access to healthcare within the limits of the rapidly changing federal, state, and local laws. We have listened to our customers. Today, only a month after the regulatory construct for healthcare across America changed, I am announcing the launch of TriNet Enrich. This innovative, industry-leading product line helps our SMB customers enrich their benefit offering. Importantly, TriNet Enrich is available to purchase for new and existing PEO as well as Trinet Zenefits HCM customers. Today, we are launching two offerings under Trinet Enrich. Enrich Access and Enrich Adopt. These Trinet-developed proprietary products leverage our scale and healthcare domain expertise. Enrich Access supports WSCs who need to travel to access medical services by covering travel expenses. Enrich Adopt further supports WSC family planning by extending a second supplemental benefit for families seeking to adopt. Often, the adoption process requires significant travel and out-of-pocket expenses. EnrichAdopt will enable WSEs to cover travel needs as well as many other adoption-related expenses. The TriNet Enrich product line gives our customers a solution for providing their employees equitable access to medical care and family planning while importantly preserving anonymity for the WSE. Over time, we will further extend the TriNet Enrich product line to include additional supplemental benefit offerings that are requested by our unique customer base. I look forward to updating you on this exciting new product line. As we look forward, beyond the current cycle, we are focused on business transformation and growth. Trinet took several actions in the first half of 2022 to position us to successfully achieve both. Our acquisition of Trinet Zenefits has everything to do with driving our company forward in our product offerings and our technology. During the second quarter, we started to realize the promise of our diversified product offerings. we saw customers who outgrew the Trinet PEO migrate to our Trinet Zenefits HCM platform. And we saw customers who are experiencing increased complexity migrate from Trinet Zenefits to our Trinet PEO product. Historically, as a customer transitioned from Trinet to their in-house HCM solution of choice, Trinet supported our customers and we celebrated their success. Ultimately, however, we lost these customers. With Trinet Zenefits, this calculus is beginning to change. One such example of a customer migrating from the Trinet PEO to Trinet Zenefits is Qualified. Qualified is the pipeline generation platform for revenue teams that use Salesforce. Trinet is proud to have supported Qualified through its rapid growth. With a significant capital raise completed and strong future growth prospects, Qualified decided now was the time to in-house HR and seek an HCM solution. After evaluating multiple HCM vendors, Qualified selected Trinet Zenefits for three key reasons. First, Qualified found the Trinet Zenefits foundling leave offering the most compelling in the marketplace. Second, Trinet Zenefits third-party API integrations were the most appealing. Finally, Qualified valued the relationship and trusted Trinet to facilitate a seamless migration. With Qualified's move to Trinet Zenefits, we will be there to support this amazing company long into the future. Singularity Group is an example of a customer who migrated from Trinet Zenefits to the Trinet PEO during the second quarter. The Singularity Group is focused on building better leaders for a better tomorrow. Technology and its convergence are disrupting every part of society and commerce, creating an environment of both massive opportunity and risk. Through a global network of chapters and partners, Singularity works to connect the current and the next group of leaders to tackle these challenges. Similar to other dynamic SMBs, as Singularity continued its growth, they desired a more complete HR experience. Singularity transitioned from Trinet Zenefits HCM to Trinet PEO for the following reasons. Trinet's bundled HR solution was attractive. By bundling payroll, HR and benefits, Trinet offers attractive value for easing the HR burden. Additionally, Singularity needed more HR assistance. This is a common customer need for growing SMBs. Eventually, more human interaction is desired as complexity increases. Trinet's leading customer service and HR expertise proved appealing. We are excited to continue our relationship with Singularity and contribute to their next phase of growth. The examples of qualified and singularity demonstrate TriNet's long-term vision for positively impacting the SMB community at large. As we move through the technology integration of our PEO and HCM products, TriNet's ability to configure its product and service offerings will become more appealing and further demonstrate our industry leadership. Finally, during the second quarter, we broadened and strengthened our leadership team to help drive TriNet's long-term digital transformation and strategy. First, Jay Venkat joined as our new Chief Digital and Innovation Officer after a nearly two-decade career at Boston Consulting Group, where he led the technology, media, and telecom practice. Next, Jeff Hayward joined as our new chief technology officer. He is an award-winning global technology and engineering executive who brings to Trinet more than 25 years of experience. Most recently, Jeff was senior vice president of product engineering for airline solutions at Sabre. I am very excited to have Jeff and Jay join us. I am proud to say that they step into circumstances where their teams are talented and deep. Pairing these two leaders with existing exceptional teams will continue to drive innovation and increase capabilities across the TriNet product and platform. With that, I will pass the call over to Kelly for her financial review. Kelly?