TriNet Group, Inc.

Good day, and welcome to the Chinette First Quarter 2023 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 telephone keypad. To withdraw your question, please press star then two. Please note, this event is being recorded. All right, now I'd like to turn the conference over to Alex Bauer, Head of Investor Relations. Please go ahead.

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 Fourth Quarter Conference Call. I am joined today by our current President and CEO, Burton M. Goldfield, our CFO, Kelly Tuminelli, and our future President and CEO, effective tomorrow, Mike Simons. 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 2024 first 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, 10Q filings, or 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. Fiscal year 2023, including the fourth quarter, was highlighted by strong and accelerating new sales growth near record customer retention, and prudent expense management. I am particularly pleased with these results given we successfully executed in the areas that are under our direct control. By emphasizing our value proposition, expanding our sales force, and improving our go-to-market efforts, fourth quarter new sales growth exceeded our forecast and my high expectations. We successfully executed on our plan to enhance customer service, which resulted in near record customer and WSC retention rates across all customer sizes. With a difficult 2023 economic environment, we responded by managing our expenses prudently and made every dollar of investment count. Given our strong execution across all facets of our business, we believe our stock in 2023 represented significant long-term value. We bought back over $1.1 billion in Trinet stock. As you know by now, today I announce my retirement as CEO of Trinet, effective midnight tonight. As CEO of Trinet for over 15 years, my overarching vision is was to build an enduring company, one that thrives for decades, and one that is fundamentally different. I view this as a very high standard, but more importantly, it is actionable by every colleague at TriNet. This standard impacts who we hire, how we train and invest in our colleagues' growth and development, the balance of short-term versus long-term investment to achieve our strategic plans for the future, and most importantly, how we treat our customers and partners, providing them unparalleled value and a vision for a long-term relationship. Trinet introduced to the PEO industry a vertical go-to-market strategy where we focused our sales and services on six core dynamic industries. technology, financial services, professional services, life sciences, nonprofits, and Main Street. This remains a hugely successful approach to the market and has given Trinet a customer base consisting of the most dynamic SMBs in the U.S. economy. Because of this approach and the effectiveness of our execution, we have been able to attract dynamic salespeople keep them longer, and ultimately grow our team. During the fourth quarter, we leveraged our go-to-market approach, benefited from our larger, more mature sales force, and we delivered new sales ACV growth up 55% year over year. I am pleased to report that this drove 2023 full year new sales ACV growth to 32% year over year. More importantly, our sales momentum continued into January 2024, where we realized the best new ACV performance in our company's history. New sales in the month of January grew by 56% when compared to the previous year. I look forward to continued new sales momentum, which is not only driven by strong sales execution, but also exceptional service and a very strong brand. Enduring companies are associated with strong brands, and at Trinet, we have built the strongest brand in the PEO industry. In recent Harris polling, Trinet aided awareness with 82%, the highest in our company's history. But for me, it is not enough to have brand awareness. I have always wanted Trinet to be viewed as a trusted advisor for our customers. I was pleased to find that in the same Harris polling, Trinet's reputation is the strongest in our industry. Trinet brand triggered the highest positive emotional response of all the key players in the PEO industry. Said differently, our strategy is working. and I am very proud. We have come a long way with our brand, and Trinet is in an excellent position to leverage this brand now and in the future. Just this week, we were informed by Newsweek that we were ranked number one in the Excellent 1000 Index for 2024. The global companies listed in this index exhibited a firm commitment to best practices in business and financial growth. Newsweek partnered with the Best Practice Institute to conduct this index. I am particularly proud of this recognition, and it highlights Trinet's success in balancing employee satisfaction, R&D investment, ethical impact, and customer excellence, among other factors. Trinet will always work to keep our customers at the center of everything we do. We are continually evolving and enhancing our service model, striving to ensure that our customers are being served in a fashion that exceeds their expectations. As I discussed on our last earnings call, our net promoter score saw a significant year-over-year improvement. And for 2023, we realized the second highest customer retention rate in company history across all customer sizes. Throughout my years at Trinet, I have stressed the importance of technology innovation and the importance of owning our own technology. This is strategically important so that Trinet is in control of our future as the market continues to evolve. There are few examples of organizations in any industry that have fallen behind the technology curve and have been able to maintain predictable growth and profitability. At Trinet, technology is the bedrock that provides scale in service of our exceptional customer base. It enhances the accuracy, expediency, and breadth of value our service team delivers. With the acquisition of Zenefits, we accelerated our commitment to technology innovation specifically around API integration, benefits administration, and advanced payroll constructs that are flexible and easy to adopt. Trinet is well on the path to developing a unified platform with an advanced data model that can serve our customers throughout their business lifecycle, including PEO and HRIS. I am proud of the many acquisitions over the years and particularly proud of the colleagues from these acquisitions who still today are an integral part of Trinet's value. This trend started with Jevity in 2009, and many of our current senior leaders came from this acquisition 15 years ago. This is the embodiment of an enduring company where colleagues can grow and prosper personally and professionally by committing to our missions. Trinet is exceptionally well-positioned as a tech-enabled business services company with growth, predictability, profitability, and strong free cash flow. This can only be provided by a company with dynamic technology complemented by extraordinary service delivered by an incredible team. All of this is to say I am confident that Trinet's best days are ahead. I feel the company is in an excellent position with strong momentum to facilitate my retirement. With today's announcement of Mike Simons as Trinet's next CEO, Trinet took another extraordinary step on our journey as an enduring company. Mike brings extensive SMB market and insurance experience, as well as strong credentials across all facets of management. I'm confident Mike is the right leader for Trinet as we enter into the next phase of our growth. I will still be here working with the company through the end of March 2025 to ensure a smooth transition. With that, I will pass the call to Mike so he can share a few words with you. Mike?