TriNet Group, Inc.

Good afternoon, and welcome to the TRINET third quarter 2023 earnings conference call. All participants will be in a listen-only mode. And should you need any assistance during the call, 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 telephone keypad. To withdraw a question, please press star, then two. Please also note that this event is being recorded today. I would now like to hand the conference over to Alex Bauer, Head of Investor Relations. Please go ahead, sir.

Thank you, Operator. Good afternoon. My name is Alex Bauer, and I am Trinet's Head of Investor Relations. Thank you for joining us, and welcome to Trinet's 2023 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 2023 fourth quarter and full-year financial outlook and other statements that are not historical in nature or 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 a 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. During the third quarter, I am pleased that our first half positive trends accelerated into the back half of 2023. We successfully executed against a key set of corporate priorities. We delivered financial results largely in line with our guidance, outperforming in both cost control and earnings growth. GAAP earnings per share grew 34% year over year. To align with business trends, we leveraged our investment in technology and increased our service levels while reducing our overall spend. Notably in the third quarter, we realized outsize year-over-year growth in new sales. This represents a further acceleration of our sales results over Q2. Based on the existing pipeline, I expect this trend in year-over-year growth in new sales to continue into the fourth quarter. Our differentiated service model has paid off with improved retention in 2023. We are now forecasting our retention rate to be in line with our all-time best retention rate. Additionally, it should therefore come as no surprise that our NPS scores are commensurate with our higher retention rate. We achieved sequential WSE growth in Q3, and we are forecasting additional sequential growth in Q4, despite continued headwinds in customer hiring. Importantly, delivering on our key digital transformation milestones has enhanced our core capabilities. This positive impact is felt by a larger customer base due to our growing WSE count. And finally, we executed a $1 billion buyback transaction, including a tender offer, which is already proven to be accretive to EPS, and we believe this trend will continue. Despite the uncertain economic and geopolitical environment, Trinet continues to focus on execution and delivering results. This is what our investors have come to expect from Trinet. Whether we are discussing operating expenses or insurance costs, Trinet manages its costs prudently. We have sufficient flexibility in our operations to adjust our expenses consistent with the current demands from our business, and each quarter, we reprice insurance for a cohort of our customers. which enables us to react to insurance cost trend changes if and when they occur. Finally, we finished the third quarter with 336,000 WSEs representing sequential growth quarter over quarter. I am particularly pleased with the continued strength in our new sales. Historically, the third quarter has been a slower sales quarter for Trinet. Not this year, as Trinit's value proposition has resonated with the market. Third quarter, new sales ACV accelerated 42% year over year. This continued the momentum from our strong second quarter results. Our new sales growth was driven by excellent execution and the tight partnership between sales and marketing. Referrals from dedicated customers have provided significant increased leads and marketing is incubating the leads which delivers prospects ready to engage with TriNet. Our sales team is executing and we are seeing improved close rates as a result. Last quarter, I discussed our overall growth in mature sales reps while still highlighting the need to grow capacity. That need persists, but we are making progress. During the third quarter, we grew overall rep count by approximately 5% sequentially, resulting in year-to-date total Salesforce growth of approximately 19%. It is important to note that our current sales pipeline is the strongest in our company history. The visibility into both our Q4 and January 2024 new sales pipelines, along with the increased sales capacity, adds to my confidence around year-over-year acceleration in ACV growth for Q4 and the first quarter of 2024. Turning to the topic of retention, we now expect to realize a six-point increase year-over-year improvement in our retention rate, which is better than our previous expectations. We believe TriNet offers great value for SMBs in our core verticals, and our Net Promoter Score supports this belief. With our first half NPS scores in hand, we saw significant improvement when compared with the prior period. This continues a multi-year trend of NPS improvement, which reflects our delivery of the best possible service to our customers. Finally, to close out our volume discussion, customer hiring in the third quarter continued to be inconsistent amongst our verticals. This trend is similar to the last five quarters and validates the value of our deliberate and diversified targeted customer strategy. This diversification enables us to grow during challenging times. Notably, we saw hiring in Life Sciences, FinServ, and Main Street with technology still lagging. Within technology, the hiring trend on a net basis was modestly weaker than last quarter. We saw small reductions in workforces across all customer sizes with the bulk of the weakness captured in the software industry. While near-term challenges to tech growth remain in place, my long-term view of this key vertical remains optimistic and constructive. In September, in an effort to garner greater insight into the overall health of the SMB market, we analyzed the proprietary results of our commissioned Harris Poll of SMBs. In general, we saw a shift to optimism in the SMB space. 82% of leaders are more confident in their ability to weather the macroeconomic environment over the next year, a 23-point improvement from last year. SMBs in the first half of the year took the necessary actions to weather the current economic climate and are investing in future initiatives. Specific to technology, over 85% of the leaders indicated they were planning investments in products, market expansion, and or technology. However, for the same period, only 36% of tech SMB leaders indicated that they plan to hire new workers. Irrespective of that sentiment, we expect to grow our installed base by adding new customers and keeping them longer through our differentiated customer service. The economy will ultimately rebound, customers will hire, and we will benefit from this growth. I would like to pivot and discuss Trinet's technology strategy. I have always believed that owning your own technology is imperative, and we are now clearly benefiting from our long-term technology investment. Our acquisition of Zenefits was the most prominent example of this evolution. I have discussed how owning an HRIS platform enables Trinet to offer the full barbell of HCM services to SMBs. At one end of the barbell is the low-touch, low-cost HRIS, and at the other end, the PEO construct. Trinet has pursued a strategy of filling in the barbell with additional products and services to provide further value for our customers. Our ultimate goal is to serve our customers throughout their business lifecycle. During the third quarter, we accomplished three important objectives on the path to realizing this vision. First, for PEO customers, Trinet has long offered the most robust health plan offerings in the SMB market. We are acutely aware of how challenging the selection of benefits can be for WSEs. Earlier this month, we announced that Trinet entered into a strategic partnership with Healthy. Healthy is an AI-based solution that helps transform the employee benefits experience by optimizing benefits selection for the unique needs of each WSE. Second, through the acquisition of Zenefits, we gained access to an industry-leading benefits administration tool purpose-built for SMBs. Last year, we paired the BenAdmin tool with our PEO to launch Trinet IOM. This quarter, we leveraged our learnings and enhanced our IOM solution. As we refined our broker strategy, we renegotiated certain relationships which benefited Trinet Zenefits revenue this quarter. But more importantly, this strategy sets us up to broaden the market aperture to include a much larger third-party broker network. Said another way, by leveraging our advanced Ben Admin capabilities, we're launching a new broker channel which will greatly expand our sales capacity and market opportunity. Lastly, Trinet's entire product and service offering is linked to our digital transformation. During the third quarter, Trinet successfully completed the migration of 100% of our applications to the cloud. This is another example for our customers of our steadfast dedication to delivering top-tier service and unwavering reliability. The investment and focus on technological evolution, including AI, security, interoperability, and usability, will result in the following benefits to our customers. Industry-defining usability, not only for administrators and employees, but for their families. Continuous availability, including 7x24 support. enhanced business continuity and further strengthening of our data security. This is particularly exciting to me because I am seeing the many years of architectural work now resulting in concrete results. These include the next generation of exciting capabilities along with longer term cost containment. With this in mind, We believe our stock represents significant long-term value. During the third quarter, Trinet successfully executed $1 billion of share repurchase, including a public tender offer at $107 per share. I am extremely proud of the Trinet team for delivering this successful transaction, including the issuance of a bond and the share buyback. This has been a transformational quarter for Trinet, and I would be remiss not to thank every single Trinet colleague for their focus on our amazing customers. With that, I will pass the call over to Kelly for a review of our financials. Kelly?