TriNet Announces Fourth Quarter, Fiscal Year 2023 Results, and Dividend Initiation
2% Growth in Total Revenues to $1.2 billion for the Fourth Quarter of 2023
1% Growth in Total Revenues to $4.9 billion for Fiscal Year 2023
68% Growth in Earnings per Share and 44% Growth in Adjusted Earnings per Share for the Fourth Quarter of 2023
17% Growth in Earnings per Share and 10% Growth in Adjusted Earnings per Share for Fiscal Year 2023
Initiating Inaugural Quarterly Dividend
DUBLIN, Calif., Feb. 15, 2024 /PRNewswire/ -- TriNet Group, Inc. (NYSE: TNET), a leading provider of comprehensive and flexible human capital management (HCM) solutions for small and medium-size businesses (SMBs), today announced financial results for the fourth quarter ended December 31, 2023. The fourth quarter highlights below include non-GAAP financial measures which are reconciled later in this release.
Fourth quarter highlights include:
-- Total revenues increased 2% to $1.2 billion compared to the same period
last year.
-- Professional service revenues were flat at $189 million compared to the
same period last year.
-- Net income was $67 million, or $1.31 per diluted share, compared to net
income of $49 million, or $0.78 per diluted share, in the same period
last year.
-- Adjusted Net Income was $82 million, or $1.60 per diluted share,
compared to Adjusted Net Income of $71 million, or $1.11 per diluted
share, in the same period last year.
-- Adjusted EBITDA was $140 million, representing an Adjusted EBITDA Margin
of 11.2%, compared to Adjusted EBITDA of $111 million, representing an
Adjusted EBITDA Margin of 9.0% in the same period last year.
-- Average Worksite Employees (WSEs) decreased 3% as compared to the same
period last year and increased 1% as compared to the previous quarter,
to approximately 338,000.
-- HRIS Cloud Services Revenues decreased 14% to $12 million compared to
the same period last year.
-- Average HRIS Users decreased 14% as compared to the same period last
year, to approximately 204,000.
Full year highlights include:
-- Total revenues increased 1% to $4.9 billion as compared to 2022.
-- Professional service revenues were approximately flat at $756 million as
compared to 2022.
-- Net income was $375 million or $6.56 per diluted share, compared to net
income of $355 million or $5.61 per diluted share, in 2022.
-- Adjusted Net income was $446 million or $7.81 per diluted share,
compared to net income of $448 million or $7.07 per diluted share, in
2022.
-- Adjusted EBITDA was $697 million, representing an Adjusted EBITDA Margin
of 14.2%, compared to Adjusted EBITDA of $688 million, representing an
Adjusted EBITDA Margin of 14.1% in 2022.
-- Average Worksite Employees (WSEs) decreased by 5% compared to 2022, to
approximately 331,000.
-- HRIS Cloud Services Revenues increased 16% to $52 million compared to
2022.
-- Average HRIS Users decreased 13% compared to 2022, to approximately
215,000.
Dividend:
-- TriNet announces quarterly dividend of $0.25 per share.
-- Ex-Dividend Date March 29, 2024, Dividend Record Date April 1, 2024,
Dividend Payment Date April 22, 2024.
Leadership Change (for more information, please visit investor.trinet.com):
-- Burton M. Goldfield announced his intent to retire today concluding a
successful 15-year career as President & CEO of TriNet. He will continue
as a special advisor to the company through March 31, 2025.
"Throughout 2023 in what proved to be a challenging economic environment, TriNet focused its execution on the areas within our control," said Burton M. Goldfield, TriNet's President and CEO. "Through our investment in sales, we accelerated our new sales in the fourth quarter, and we just completed our best January ever. We benefited from strong customer retention as we kept our customers at the center of everything we do. Finally, we launched our inaugural dividend completing an extraordinary year of capital allocation."
He continued, "As just announced, I am retiring and transitioning the leadership of TriNet to Mike Simonds, and I have every confidence in Mike to keep moving the company forward. I am very proud of what we created during my more than 15 years as President and CEO of TriNet. My goal was to create an enduring company, and I believe that TriNet's best days are still ahead."
"On behalf of the board, I would like to thank Burton for his incredible leadership," said TriNet Chairman, David Hodgson. "We are thrilled to have Mike join TriNet as President and CEO. We have confidence that he is the right person to lead TriNet as it continues its growth."?
"I know I speak for all TriNet colleagues when I thank Burton for his integral role in building TriNet into what it has become today," said Kelly Tuminelli, TriNet's Chief Financial Officer. "TriNet executed extraordinarily well throughout 2023 managing expenses prudently while investing in sales and service and executing against our capital plan which has culminated in our announced inaugural dividend. We look forward to our continued strong execution in 2024, ensuring we are there for our customers, colleagues, and stockholders."
Dividend Announcement
On February 12, 2024, TriNet's Board of Director's approved a dividend of $0.25 per share. TriNet's stock will have an Ex-Dividend Date of March 29, 2024, a Dividend Record Date of April 1, 2024, and a Dividend Payment Date of April 22, 2024.
First Quarter and Full-Year 2024 Guidance
In addition to announcing our fourth quarter 2023 results, we provide our first quarter and full-year 2024 guidance. Non-GAAP financial measures are reconciled later in this release. Percentages reflect the increase or (decrease) from the prior year quarter and prior year end.
Q1 2024 Full Year 2024
Low High Low High
Total Revenues - % 3 % (1) % 4 %
Professional Service Revenues 2 % 8 % 1 % 5 %
Insurance Cost Ratio 86.5 % 82.5 % 88.5 % 86.5 %
Diluted net income per share of common stock $1.82 $2.54 $4.57 $6.08
Adjusted Net Income per share - diluted $2.10 $2.85 $5.80 $7.35
Annual Report on Form 10-K
We anticipate filing our Annual Report on Form 10-K ("Form 10-K") for the year ended December 31, 2023 with the U.S. Securities and Exchange Commission (SEC) and making it available at http://www.trinet.com today, February 15, 2024. This press release should be read in conjunction with the Form 10-K and the related Notes to Consolidated Financial Statements and Management's Discussion and Analysis of Financial Condition and Results of Operations contained in the Form 10-K.
Earnings Conference Call and Audio Webcast
TriNet will host a conference call at 2:00 p.m. PT (5:00 p.m. ET) today to discuss its fourth quarter results for 2023 and provide first quarter and full-year financial guidance for 2024. TriNet encourages participants to pre-register for the conference call. Callers who pre-register will be given a unique PIN to gain immediate access to the call and bypass the live operator. To pre-register, go to: https://dpregister.com/sreg/10185965/fb77e71f5d. For those who would like to join the call but have not pre-registered, they can do so by dialing +1 (412) 317-5426 and requesting the "TriNet Conference Call." The live webcast of the conference call can be accessed on the Investor Relations section of TriNet's website at https://investor.trinet.com. Participants can pre-register for the webcast by going to: https://events.q4inc.com/attendee/789681153. A replay of the webcast will be available on this website for approximately one year. A telephonic replay will be available for one week following the conference call at +1 (412) 317-0088 conference ID: 4058379.
About TriNet
TriNet provides small and medium-size businesses (SMBs) with full-service industry-specific HR solutions, providing both professional employer organization (PEO) and human resources information system (HRIS) services. TriNet offers access to human capital expertise, benefits, risk mitigation, compliance, payroll, and R&D tax credit services, all enabled by industry-leading technology. TriNet's suite of products also includes services and software-based solutions to help streamline workflows by connecting HR, benefits, employee engagement, payroll and time & attendance. Rooted in more than 30 years of supporting entrepreneurs and adapting to the ever-changing modern workplace, TriNet empowers SMBs to focus on what matters most - growing their business and enabling their people For more information, please visit TriNet.com or follow us on Facebook, LinkedIn and Instagram.
Use of Non-GAAP Financial Measures
Reconciliations of non-GAAP financial measures to TriNet's financial results as determined in accordance with GAAP are included at the end of this press release following the accompanying financial data. For a description of these non-GAAP financial measures, including the reasons management uses each measure, please see the section titled "Non-GAAP Financial Measures."
Forward-Looking Statements
This press release contains, and statements made during the above referenced conference call will contain, statements that are not historical in nature, are predictive in nature, or that depend upon or refer to future events or conditions or otherwise contain forward-looking statements within the meaning of Section 21 of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, including, among other things, TriNet's expectations and assumptions regarding: TriNet's financial guidance for the fourth quarter and full-year 2023 and the underlying assumptions; TriNet's future financial performance and long-term growth; the continued value to customers and stockholders of TriNet's product offerings; our ability to continue to grow new client sales, client tenure and improve retention, including through product and technological innovation; and the ability of our solutions to meet all client needs throughout their business cycle. Forward-looking statements are often identified by the use of words such as, but not limited to, "ability," "anticipate," "believe," "can," "continue," "could," "estimate," "expect," "guidance," "impact," "intend," "may," "plan," "predict," "project," "seek," "should," "strategy," "target," "value," "will," "would" and similar expressions or variations intended to identify forward-looking statements. These statements are not guarantees of future performance but are based on management's expectations as of the date hereof and assumptions that are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from our current expectations and any past or future results, performance or achievements expressed or implied by the forward-looking statements. Investors are cautioned not to place undue reliance upon any forward-looking statements.
Important factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements include: our ability to manage unexpected changes in workers' compensation and health insurance claims and costs by worksite employees; our ability to mitigate the unique business risks we face as a co-employer; the effects of volatility in the financial and economic environment on the businesses that make up our client base; loss of clients for reasons beyond our control and the short-term contracts we typically use with our clients; the impact of regional or industry-specific economic and health factors on our operations; the impact of failures or limitations in the business systems and service centers we rely upon; the impact of discontinuing our discretionary credits on our business and client loyalty and retention; changes in our insurance coverage or our relationships with key insurance carriers; our ability to improve our services and technology to satisfy client and regulatory expectations; our ability to effectively integrate businesses we have acquired or may acquire in the future; our ability to effectively manage and improve our operational effectiveness and resiliency; our ability to attract and retain qualified personnel; the effects of increased competition and our ability to compete effectively; the impact on our business of cyber-attacks, breaches, disclosures and other data-related incidents; our ability to protect against and remediate cyber-attacks, breaches, disclosures and other data-related incidents, whether intentional or inadvertent and whether attributable to us or our service providers; our ability to comply with constantly evolving data privacy and security laws; our ability to manage changes in, uncertainty regarding, or adverse application of the complex laws and regulations that govern our business; changing laws and regulations governing health insurance and employee benefits; our ability to be recognized as an employer of worksite employees and for our benefits plans to satisfy all requirements under federal and state regulations; changes in the laws and regulations that govern what it means to be an employer, employee or independent contractor; the impact of new and changing laws regarding remote work; our ability to comply with the licensing requirements that govern our HCM solutions; the outcome of existing and future legal and tax proceedings; fluctuation in our results of operations and stock price due to factors outside of our control; our ability to comply with the restrictions of our credit facility and meet our debt obligations; and the impact of concentrated ownership in our stock by Atairos and other large stockholders. Any of these factors could cause our actual results to differ materially from our anticipated results.
Further information on risks that could affect TriNet's results is included in our filings with the SEC, including under the headings "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" and elsewhere in our most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, which are available on our investor relations website at http://investor.trinet.com and on the SEC website at www.sec.gov. Copies of these filings are also available by contacting TriNet Corporation's Investor Relations Department at (510) 875-7201. Except as required by law, neither we nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements in this press release, and any forward-looking statements in this press release speak only as of the date of this press release. In addition, we do not assume any obligation, and do not intend, to update any of our forward-looking statements, except as required by law.
Contacts:
Investors: Media:
Alex Bauer Renee Brotherton /Josh
Gross
TriNet
TriNet
Investorrelations
@TriNet.com Renee.Brotherton@TriNet.com
---
(510) 875-7201 Josh.Gross@
TriNet.com
(408) 646-5103
Key Financial and Operating Metrics
We regularly review certain key financial and operating metrics to evaluate growth trends, measure our performance and make strategic decisions. These key financial and operating metrics may change over time. Our key financial and operating metrics for the periods presented were as follows:
Three Months Ended December 31, Year Ended December 31,
(in millions, except per share and Operating Metrics data) 2023 2022 % Change 2023 2022 % Change
Income Statement Data:
Total revenues $1,245 $1,226 2 $4,922 $4,885 1
% %
Operating income 86 56 54 469 499 (6)
Net income 67 49 37 375 355 6
Diluted net income per share of common stock 1.31 0.78 68 6.56 5.61 17
Non-GAAP measures (1):
Adjusted EBITDA 140 111 26 697 688 1
Adjusted Net income 82 71 15 446 448
Operating Metrics:
Insurance Cost Ratio 87 % 88 % (1)
% 84 % 84 % %
Average WSEs (2) 337,924 347,671 (3) 331,423 348,543 (5)
Total WSEs at period end (2) 347,542 348,652 347,542 348,652
Average HRIS Users (3) 204,006 238,865 (15) 215,295 248,496 (13)
(1)
Refer to Non-GAAP measures definitions and reconciliations from GAAP measures under the heading "Non-GAAP Financial Measures".
(2) Total WSEs includes approximately 12,000 incremental WSEs for December 31, 2023 and Average WSEs includes approximately 4,000 incremental WSEs for the fourth
quarter of 2023 (1,000 for the full year 2023) that were charged a platform user access fee. Additionally, Total WSEs includes approximately 4,500 incremental WSEs
for December 31, 2023 and Average WSEs includes approximately 4,800 for the fourth quarter of 2023 (1,500 for the full year 2023) additional service recipients.
These were identified as a result of our ongoing effort to ensure that our billing practices best match the expectations of our customers. Please refer to Item 7
under Management Discussion & Analysis in our 2023 10-K.
(3)
For the year ended September 30, 2022, reflects HRIS Users from February 15, 2022, the date on which we acquired Zenefits, to the end of the period.
(in millions) December 31, December 31, %
2023 2022 Change
Balance Sheet Data:
Working capital 115 338 (66)
%
Total assets 3,693 3,443 7
Debt 1,093 496 120
Total stockholders' equity 78 775 (90)
Year Ended December 31,
(in millions) 2023 2022 % Change
Cash Flow Data:
Net cash provided by operating activities $545 $562 (3)
%
Net cash used in investing activities (70) (226) (69)
Net cash used in financing activities (546) (536) 2
Non-GAAP measure (1):
Corporate Operating Cash Flows $539 $497 8
(1) Refer to Non-GAAP measures definitions and reconciliations from GAAP measures under the heading "Non-GAAP
Financial Measures".
TRINET GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (Unaudited)
Three Months Ended Year Ended
December 31, December 31,
(in millions except per share data) 2023 2022 2023 2022
Professional service revenues $189 $189 $756 $754
Insurance service revenues 1,056 1,037 4,166 4,131
Total revenues 1,245 1,226 4,922 4,885
Insurance costs 919 916 3,513 3,463
Cost of providing services 77 78 307 303
Sales and marketing 71 63 285 242
General and administrative 57 76 211 241
Systems development and programming 16 19 65 73
Depreciation and amortization of intangible assets 19 18 72 64
Total costs and operating expenses 1,159 1,170 4,453 4,386
Operating income 86 56 469 499
Other income (expense):
Interest expense, bank fees and other (16) (5) (40) (39)
Interest income 16 14 72 22
Income before provision for income taxes 86 65 501 482
Income taxes 19 16 126 127
Net income $67 $49 $375 $355
Other comprehensive income (loss), net of income taxes 6 3 (4)
Comprehensive income $73 $49 $378 $351
Net income per share:
Basic $1.33 $0.79 $6.61 $5.66
Diluted $1.31 $0.78 $6.56 $5.61
Weighted average shares:
Basic 51 62 57 63
Diluted 51 62 57 64
TRINET GROUP, INC.
CONSOLIDATED BALANCE SHEETS (Unaudited)
December 31, December 31,
(in millions, except share and per share data) 2023 2022
ASSETS
Current assets:
Cash and cash equivalents $287 $354
Investments 65 76
Restricted cash, cash equivalents and investments 1,269 1,263
Accounts receivable, net 18 19
Unbilled revenue, net 447 375
Prepaid expenses, net 67 71
Other payroll assets 381 122
Other current assets 44 46
Total current assets 2,578 2,326
Restricted cash, cash equivalents and investments, noncurrent 158 153
Investments, noncurrent 143 151
Property and equipment, net 17 24
Operating lease right-of-use asset 24 31
Goodwill 462 462
Software and other intangible assets, net 172 163
Other assets 139 133
Total assets $3,693 $3,443
Liabilities and stockholders' equity
Current liabilities:
Accounts payable and other current liabilities $87 $98
Revolving credit agreement borrowings 109
Client deposits and other client liabilities 65 106
Accrued wages 515 437
Accrued health insurance costs, net 175 174
Accrued workers' compensation costs, net 50 54
Payroll tax liabilities and other payroll withholdings 1,438 1,087
Operating lease liabilities 14 15
Insurance premiums and other payables 10 17
Total current liabilities 2,463 1,988
Long-term debt, noncurrent 984 496
Accrued workers' compensation costs, noncurrent, net 120 128
Deferred taxes 13 8
Operating lease liabilities, noncurrent 30 41
Other non current liabilities 5 7
Total liabilities 3,615 2,668
Stockholders' equity:
Preferred stock
Common stock and additional paid-in capital 976 899
Accumulated deficit (896) (119)
Accumulated other comprehensive loss (2) (5)
Total stockholders' equity 78 775
Total liabilities & stockholders' equity $3,693 $3,443
TRINET GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Year Ended December 31,
(in millions) 2023 2022 2021
Operating activities
Net income $375 $355 338
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of intangible assets 72 64 54
Amortization of deferred costs 40 38 31
Amortization of ROU asset, lease modification, impairment, and abandonment 9 25 12
Stock based compensation 59 62 50
Accretion of discount rate on lease liabilities 2 2 2
Provision for doubtful accounts 3 2
Deferred income taxes 5 (22) (9)
Losses from disposition of assets 1 6
Losses and impairment on investments 1 18
Changes in operating assets and liabilities:
Accounts receivable, net (2) 3
Unbilled revenue, net (72) (51) (78)
Prepaid expenses, net 4 (2) (5)
Other payroll assets (259) (72) 10
Accounts payable and other current liabilities (8) (13) 33
Client deposits and other client liabilities (40) 9 (37)
Accrued wages 77 65 60
Accrued health insurance costs, net 1 2
Accrued workers' compensation costs, net (12) (8) (7)
Payroll taxes payable and other payroll withholdings 351 158 (166)
Operating lease liabilities (17) (17) (13)
Other assets (38) (55) (60)
Other liabilities (7) (2) (2)
Net cash provided by operating activities 545 562 218
Investing activities
Purchases of marketable securities (276) (410) (444)
Proceeds from sale and maturity of marketable securities 286 469 349
Acquisitions of property and equipment and projects in process (75) (56) (40)
Acquisitions of subsidiaries, net of cash acquired - (229)
Other Investments (5)
Net cash used in investing activities (70) (226) (135)
Financing activities
Repurchase of common stock (1,122) (523) (94)
Proceeds from issuance of common stock 15 11 11
Payment of long-term financing costs and debt issuance costs (9) (9)
Proceeds from issuance of 2031 Notes 400
Proceeds from issuance of 2029 Notes - 500
Repayment of borrowings - (370)
Proceeds from revolving credit agreement borrowings 695
Repayment of borrowings under revolving credit agreement (495)
Awards effectively repurchased for required employee withholding taxes (30) (24) (26)
Net cash provided by (used in) financing activities (546) (536) 12
Effect of exchange rate changes on cash and cash equivalents - (1)
Net increase (decrease) in cash and cash equivalents, unrestricted and restricted (71) (201) 95
Cash and cash equivalents, unrestricted and restricted:
Beginning of period 1,537 1,738 1,643
End of period $1,466 $1,537 $1,738
Supplemental disclosures of cash flow information
Interest paid $25 $18 12
Income taxes paid, net 114 128 129
Supplemental schedule of noncash investing and financing activities
Payable for purchase of property and equipment $4 $6 3
Acquisitions of subsidiaries paid in stock
$ - $17
Non-GAAP Financial Measures
In addition to the selected financial measures presented in accordance with U.S. Generally Accepted Accounting Principles (GAAP), we monitor other non-GAAP financial measures that we use to manage our business, to make planning decisions, to allocate resources and to use as performance measures in our executive compensation plan. These key financial measures provide an additional view of our operational performance over the long term and provide information that we use to maintain and grow our business.
The presentation of these non-GAAP financial measures is used to enhance the understanding of certain aspects of our financial performance. It is not meant to be considered in isolation from, superior to, or as a substitute for the directly comparable financial measures prepared in accordance with GAAP.
Non-GAAP Measure
Definition How We Use The Measure
Adjusted EBITDA -- Net income, excluding the effects -- Provides period-to-period comparisons
of: on a
- income tax provision, consistent basis and an understanding as
to
-interest expense, bank fees and
other, how our management evaluates the
- depreciation, effectiveness of our business strategies
by
-amortization of intangible assets, excluding certain non-recurring costs,
which
-stock based compensation expense, include transaction and integration
costs, as
-amortization of cloud computing well as certain non-cash charges such as
arrangements, and depreciation and amortization, and stock-
-transaction and integration costs. based compensation and certain impairment
charges recognized based on the estimated
fair values. We believe these charges are
either not directly resulting from our
core
operations or not indicative of our
ongoing
operations.
-- Enhances comparisons to prior periods
and, accordingly, facilitates the
development
of future projections and earnings growth
prospects.
-- Provides a measure, among others, used
in the determination of incentive
compensation
for management.
-- We also sometimes refer to Adjusted
EBITDA
margin, which is the ratio of Adjusted
EBITDA
to total revenues.
Adjusted Net Income -- Net income, excluding the effects -- Provides information to our
of: stockholders and
-effective income tax rate (1), board of directors to understand how our
-stock based compensation, management evaluates our business, to
monitor
-amortization of intangible assets, and evaluate our operating results, and
net, analyze
- non-cash interest expense (2), profitability of our ongoing operations
and trends
-transaction and integration costs, on a consistent basis by excluding
and certain non-
-the income tax effect (at our
effective tax
cash charges.
rate (1) of these pre-tax
adjustments.
Corporate Operating Cash Flows -- Net cash provided by (used in) -- Provides information that our
operating stockholders and
activities, excluding the effects management can use to evaluate our cash
of: flows
-Assets associated with WSEs from operations independent of the
(accounts current assets
receivable, unbilled revenue,
prepaid and liabilities associated with our WSEs.
expenses, other payroll assets and -- Enhances comparisons to prior periods
other and,
current assets) and accordingly, used as a liquidity measure
to manage
-Liabilities associated with WSEs liquidity between corporate and WSE
(client related
deposits and other client activities, and to help determine and
liabilities, accrued plan our cash
wages, payroll tax liabilities and
other payroll
flow and capital strategies.
withholdings, accrued health
insurance
costs, accrued workers' compensation
costs,
insurance premiums and other
payables, and
other current liabilities).
(1) Non-GAAP effective tax rate is 25.6% for the fourth quarter and full year of 2023 and 25.5% for the fourth quarter and full year of 2022, which excludes the income
tax impact from stock-based compensation, changes in uncertain tax positions, and nonrecurring benefits or expenses from federal legislative changes.
(2)
Non-cash interest expense represents amortization and write-off of our debt issuance costs and loss on a terminated derivative.
Reconciliation of GAAP to Non-GAAP Measures
The table below presents a reconciliation of net income to Adjusted EBITDA:
Three Months Ended Year Ended
December 31,
December 31,
(in millions) 2023 2022 2023 2022
Net income $67 $49 $375 $355
Provision for income taxes 19 16 126 127
Stock based compensation 16 16 59 62
Interest expense, bank fees and other (1) 16 5 40 39
Depreciation and amortization of intangible assets 19 18 72 64
Amortization of cloud computing arrangements 1 1 8 4
Transaction and integration costs 2 6 17 37
Adjusted EBITDA $140 $111 $697 $688
Adjusted EBITDA Margin 11.2 % 9.0 % 14.2 % 14.1 %
(1) 2022 Interest expense, bank fees and other includes $17M of realized investments losses on sales and impairments
related to AFS securities.
The table below presents a reconciliation of net income to Adjusted Net Income and Adjusted Net Income per share - diluted:
Three Months Ended Year Ended
December 31,
December 31,
(in millions, except per share data) 2023 2022 2023 2022
Net income $67 $49 $375 $355
Effective income tax rate adjustment (3) (2) 5
Stock based compensation 16 16 59 62
Amortization of intangible assets 5 5 20 18
Non-cash interest expense 1 2 1
Transaction and integration costs 2 6 17 37
Income tax impact of pre-tax adjustments (6) (6) (25) (30)
Adjusted Net Income $82 $71 $446 $448
GAAP weighted average shares of common stock - diluted 51 62 57 64
Adjusted Net Income per share - diluted $1.60 $1.11 $7.81 $7.07
The table below presents a reconciliation of net cash provided by operating activities to Corporate Operating Cash flows:
Year Ended
December 31,
(in millions) 2023 2022
Net cash provided by operating activities $545 $562
Less: Change in WSE related other current assets (329) (149)
Less: Change in WSE related liabilities 335 214
Net cash used in operating activities - WSE $6 $65
Net cash provided by operating activities - Corporate $539 $497
Reconciliation of GAAP to Non-GAAP Measures for the first quarter and full-year 2024 guidance.
Low and high percentages represent increases (decreases) from the same periods in the previous year.
The table below presents a reconciliation of net income to Adjusted Net Income and Adjusted Net Income per share - diluted:
Q1 2023 Q1 2024 Guidance FY 2023 Year 2024 Guidance
(in millions, except per share data) Actual Low High Actual Low High
Net income $131 (29) % (1) % $375 (38) % (17) %
Effective income tax rate adjustment 3 (108) (77) (2) 98 1
Stock based compensation 11 39 39 59 17 17
Amortization of intangible assets 6 (13) (13) 20 (5) (5)
Non-cash interest expense (25) (25) 2 (39) (39)
Transaction and integration costs 5 (100) (100) 17 (100) (100)
Income tax impact of pre-tax adjustments (6) (6) (6) (25) (9) (9)
Adjusted Net Income $150 (28) % (3) % $446 (34) % (16) %
GAAP weighted average shares of common stock - diluted 60 57
Adjusted Net Income per share - diluted $2.49 $2.10 $2.85 $7.81 $5.80 $7.35
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SOURCE TriNet Group, Inc.
