TriNet Group, Inc.

Good day and welcome to the TRINET Third Quarter 2022 Earnings Conference Call. All participants will be in a 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 the touchtone phone. To withdraw your question, please press star then two. 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.

Good afternoon. My name is Alex Bauer. I am Trinet's Head of Investor Relations. Thank you for joining us, and welcome to Trinet's 2022 Third Quarter Conference Call. I am 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 in non-GAAP financial measures. Please note that today's discussion will include our 2022 fourth 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. Acceptance 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 for diluted share. For reconciliations of our non-GAAP financial measures to our GAAP financial results, please see our earnings release, 10Q filings, or our 10K 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 very pleased with our third quarter financial results. Trinet's clients once again persevered and managed through this difficult economic environment, which drove our third quarter performance. Trinet partners with the best SMBs in America to address business complexities such as cost containment, an evolving regulatory environment, and changing workforce dynamics. This relationship provides customers with a world-class HRIS platform, access to high-quality benefits, and HR products and services generally unavailable to SMBs. As a result, we enabled this unique set of businesses to navigate the current business environment and succeed. As they succeed, Trinet in turn grows. During the third quarter, total revenues grew 8% year over year in line with the top end of our guidance. The Trinet product is particularly relevant in an unpredictable economic environment as SMBs look for ways to convert fixed costs into variable cost models. These same SMBs are asking their employees to do more with less. They recognize that their employees value the Trinet products more than ever with respect to our access to benefits and support for employees and their families. Trinet's vertical focus is unique in our industry and is a key element of our business and financial model. we are very disciplined in our customer selection by focusing on our core verticals throughout the United States. In economic environments like we are currently experiencing, we select the strongest of prospects with respect to their industries and their financial strength. As a result of this process, we believe we have the strongest cohort of customers in the SMB space. This allows us to deliver continued robust, predictable, and repeatable financial performance. We therefore remain optimistic about Trinet's future and continue to invest in our long-term growth potential. We are integrating TriNet Zenefits while improving the overall experience of both our PEO and HRIS solutions. In the third quarter, our GAAP EPS increased 5% year over year to $1.22. This result outperformed the top end of our guidance. our adjusted net income per share grew 25% to $1.64, also outperforming our guidance. Our third quarter earnings performance benefited from lower than forecasted insurance cost growth. I am pleased to announce that consistent with the value we place in our partnership with our customers, we once again anticipate launching an additional credit program in the fourth quarter. Kelly will share more information regarding this industry-leading program, which anticipates a return of capital to our customers. In response to the rapidly changing business environment, our customers are leveraging our unique trusted advisor relationship by requesting more products and services. I am pleased with the significant progress the TriNet team has made in reducing the cycle time with respect to delivering net new products to our customers. Last February, we acquired TriNet Zenefits, and I spoke about the impact of adding TriNet Zenefits to our suite of products, enabling us to offer a strong SaaS-based HRIS solution along with our PEO solution. This HRIS solution provides an upgrade path for our large PEO clients as well as a product that appeals to a broader SMB TAM. Trinet delivers a differentiated offering with the HRIS product at one end of the barbell and the PEO at the other. Trinet's Zenefits is an industry-leading, low-touch, easy-to-use software offering purpose-built for SMBs. Trinet's PEO is a knowledge-intense, comprehensive offering which leverages the co-employment legal construct. Between our two offerings and in response to customer demand, Trinet will continue to fill the gap with high-value products available to both our PEO and HRIS clients simultaneously. During the third quarter, we added two high-value product lines to address customer needs. We launched Trinet Enrich and we acquired Claris R&D. Claris R&D is an industry-leading, expertise-driven fintech solution for simplifying the R&D tax credit process for SMBs. This proprietary cloud-based software platform, coupled with deep subject matter expertise, delivers its solution in an efficient and scalable manner, providing the leading technology and service offering At scale for SMBs, both to our PEO and HRIS clients, is a core tenant of the TriNet value proposition. TriNet will be introducing Claris R&D and this tax credit opportunity to all eligible customers. Adoption of this product could have significant positive financial impact on these customers. Claris R&D and Trinet share a culture of creating value and free cash flow for our customers. Given the uncertain economic environment, we believe that Trinet and Claris Solutions will prove very attractive for customers and prospects alike. Since its founding in 2016, Clarus has secured approximately $250 million in tax credits for its customers. Combining these tax credits with our existing TriNet credit programs, nearly $500 million in savings will be returned to our customers by early next year. This does not include the approximate $1.9 billion in PPP loan forgiveness we help Trinet customers secure. It should be apparent that Trinet is more than just HR. Trinet fills a critical role in the growth and success of our customers, which further deepens our partnership. A critical role that Trinet can play in their success is to leverage our expertise, scale, and balance sheet to optimize cash flow for SMBs, which is a critical part of their growth and survival. To illustrate this, our customer Notch said, Trinet has proven to be a valuable partner for Notching. Trinet has helped ease our HR burden as our workforce has become more distributed across multiple states and countries. Beyond this, Trinet has also proven itself in the financial credit opportunities they've provided. We participated in the business recovery credit program, which helped us more easily navigate the uncertainty during the early stages of COVID. Trinet puts our customers at the center of everything we do, which makes it so pleasing to hear Notch describe the many ways Trinet has had a positive impact. We will continue to rely on our 30 plus years of working closely with SMBs. Our customers will inform our product roadmap as we add incremental value that they require. We will stay agile in this rapidly changing world. Through extensive collaboration with our customers, we were able to create Trinet Enrich, a new product. When the Supreme Court issued their Dobbs ruling, we recognized an opportunity to create an innovative product to help business owners solve the unexpected problem of access to medical services for their employees. Trinet Enrich represents the best of Trinet's thought leadership, collaboration, and innovation. Our Enrich product line enables SMBs the opportunity to offer unique benefits not typically available to SMBs. Trinet administers the benefits for customers and manages all reimbursements and compliance. Trinet Enrich was initially launched with two products, Enrich Access, which allows Trinet customers to offer tax optimized travel reimbursements for medical care, and Enrich Adopt, which offers reimbursements for expenses incurred during the adoption process. In September, we added a third product, Enrich Learn. Enrich Learn allows for tax optimized reimbursements for expenses by SMB employees to advance their education. Additionally, in response to Hurricane Ian, we launched our fourth product as part of the Enrich product line, Enrich Disaster Relief. Again, Disaster Relief allows for tax optimized reimbursements for expenses incurred by SMB employees impacted by a federally declared disaster. For example, SMB employers can now offer reimbursement for temporary living or home repair expenses as a result of a qualified event. This greatly reduces the stress and financial pressures for employees. Each of these Enrich products leverages the scale of Trinet to bring value-added offerings to SMBs which are otherwise unavailable or difficult for an SMB to administer. While it is very early in the launch of Trinet Enrich, we are encouraged by the reception from customers. We believe Trinet Enrich will be one more avenue for creating customer loyalty and improving customer retention. In early September, Trinet held our industry-leading conference, PeopleForce, where our SMB thought leadership was on full display. PeopleForce is an incredible branding event where we present relevant, topical content to our customers and prospects. This creates a forum for our Trinet team to engage and positively impact SMBs. Our brand is strong and relevant. Just this morning, Trinet was named an honoree in Fast Company's 2022 Brands That Matter Awards. PeopleForce also demonstrates the increasing role marketing plays in driving new business to Trinet. A significant portion of our new business leads in 2022 were generated and qualified by marketing. These were subsequently passed through our sales team, improving our overall sales effectiveness. We expect to further grow marketing's contribution to new business particularly as we finish the work to unify the top of our sales funnel across all of our HCM products. I look forward to discussing this further in the future. Trinet remains committed to identifying the right customers for our solutions. We will continue to innovate, creating value for our customers, and in doing so, creating value for our shareholders. With that, I will pass the call to Kelly for a review of our financial performance and outlook. Kelly. Thank you, Burton.