TriNet Group Inc.

02/12/2026 | Press release | Distributed by Public on 02/12/2026 07:05

Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)

Management's Discussion and Analysis of Financial Condition and Results of Operations
Operational Highlights
Our consolidated results for 2025 reflect our continuing efforts to serve our clients, attract new clients and invest in our platform.
During 2025 we:
•made progress on our medium-term strategy focusing our business on our core value proposition, improving the efficiency and effectiveness of our operations, which has helped us realize all time high net promoter scores,
•continued to grow our ASO services product and completed the sale of TriNet Clarus R+D,
•achieved significant repricing of our insurance services rates in light of rising insurance costs,
•made progress in growing our sales force and broker channel partnerships,
•demonstrated disciplined expense management in line with our expectations,
•opened our new corporate center in Atlanta and made significant progress building out our India operations, and
•paid common stock dividends of $0.25 per share in January and $0.275 per share in April, July, and October. Together with common stock repurchases of $182 million, we returned $235 million to stockholders.
Performance Highlights
Our results for 2025 when compared to 2024 are noted below:
$5.0B $217M 91%
Total revenues Income before tax Insurance cost ratio
(1) % decrease (4) % decrease 1 % increase
$155M $3.20 $230M
Net income Diluted EPS Adjusted Net income *
(10) % decrease (7) % decrease (14) % decrease
333,886 323,206
Average WSE Total WSE
(5) % decrease (10) % decrease
*
Non-GAAP measure. See definitions below under the heading "Non-GAAP Financial Measures".
Our total revenues decreased 1%, primarily driven by lower co-employed Average WSEs partially offset by higher rates charged for our services. Average WSEs and Total WSEs decreased 5% and 10%, respectively, compared to the same period in 2024, primarily due to WSE decreases in our Technology, Professional Services, and Main Street verticals, which were partially attributable to repricing of our health benefits services.
Our results are highly influenced by health care cost and utilization trends. Our ICR was 1 percent higher compared to the same period in 2024, driven by insurance costs outpacing the growth in insurance services revenues.
Higher insurance costs and lower revenues, resulted in decreases of net income and Adjusted Net income of 10% and 14%, respectively, as compared to the same period in 2024.
TRINET
2025 FORM 10-K
MANAGEMENT'S DISCUSSION AND ANALYSIS
Results of Operations
The following table summarizes our results of operations for the three years ended December 31, 2025, 2024 and 2023. For details of the critical accounting judgments and estimates that could affect the Results of Operations, see the Critical Accounting Judgments and Estimatessection within MD&A.
Year Ended December 31, % Change
(in millions, except operating metrics data) 2025 2024 2023 2025 vs. 2024 2024 vs. 2023
Income Statement Data:
Professional service revenues $ 719 $ 765 $ 756 (6) % 1 %
Insurance service revenues 4,224 4,224 4,166 - 1
Interest income 67 64 72 5 (11)
Total revenues 5,010 5,053 4,994 (1) 1
Insurance costs 3,835 3,797 3,513 1 8
Operating expenses
902 968 940 (7) 3
Interest expense, bank fees and other 56 62 40 (10) 55
Total costs and expenses 4,793 4,827 4,493 (1) 7
Income before tax 217 226 501 (4) (55)
Income taxes 62 53 126 17 (58)
Net income $ 155 $ 173 $ 375 (10) % (54) %
Cash Flow Data:
Net cash provided by operating activities 303 279 539 9 % (48) %
Net cash provided by (used in) investing activities (43) 153 (70) (128) (319)
Net cash used in financing activities (49) (207) (540) (76) (62)
Non-GAAP measures (1):
Adjusted EBITDA 425 485 697 (12) % (30) %
Adjusted Net income 230 269 446 (14) (40)
Operating Metrics:
Insurance Cost Ratio 91 % 90 % 84 % 1 % 6 %
Average WSEs 333,886 352,681 331,423 (5) 6
Total WSEs 323,206 360,681 347,542 (10) 4
(1) Refer to Non-GAAP measures definitions and reconciliations from GAAP measures under the heading "Non-GAAP Financial Measures".
The following table summarizes our balance sheet data as of December 31, 2025, 2024 and 2023.
Year Ended December 31, % Change
(in millions) 2025 2024 2023 2025 vs. 2024 2024 vs. 2023
Balance Sheet Data:
Cash and cash equivalents $ 287 $ 360 $ 287 (20) % 25 %
Working capital 231 199 115 16 % 73 %
Total assets 3,797 4,119 3,693 (8) % 12 %
Debt 895 983 1,093 (9) % (10) %
Total stockholders' equity 54 69 78 (22) % (12) %
A discussion regarding our financial condition and results of operations for 2024 compared to 2023 can be found under Part II, Item 7. Management's Discussion and Analysis in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 13, 2025.
TRINET
2025 FORM 10-K
MANAGEMENT'S DISCUSSION AND ANALYSIS
Non-GAAP Financial Measures
In addition to financial measures presented in accordance with 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 of:
- income tax provision,
- interest expense, bank fees and other,
- depreciation,
- amortization of intangible assets,
- stock based compensation expense,
- amortization of cloud computing arrangements,
- transaction and integration costs, and
- restructuring costs.
 		• Provides period-to-period comparisons on a consistent basis and an understanding as to how our management evaluates the effectiveness of our business strategies by excluding certain non-recurring costs, which include restructuring costs, as well as certain non-cash charges such as depreciation and amortization, and stock-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 the prior period 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 of:
- effective income tax rate (1),
- stock based compensation expense,
- amortization of intangible assets, net,
- non-cash interest expense,
- restructuring costs, and
- the income tax effect (at our effective tax rate (1) of these pre-tax adjustments.) 		• Provides information to our stockholders and board of directors to understand how our management evaluates our business, to monitor and evaluate our operating results, and analyze profitability of our ongoing operations and trends on a consistent basis by excluding certain non-cash charges.
(1) Non-GAAP effective tax rate is 25.0% for 2025, and 25.6% for 2024, which excludes the income tax impact from stock-based compensation, changes in uncertain tax positions, and nonrecurring benefits or expenses from federal legislative changes.
TRINET
2025 FORM 10-K
MANAGEMENT'S DISCUSSION AND ANALYSIS
Reconciliation of GAAP to Non-GAAP Measures
The table below presents a reconciliation of Net income to Adjusted EBITDA:
Year Ended December 31,
(in millions) 2025 2024 2023
Net income
$ 155 $ 173 $ 375
Provision for income taxes
62 53 126
Stock based compensation
65 65 59
Interest expense, bank fees and other 56 62 40
Depreciation and amortization of intangible assets
66 75 72
Amortization of cloud computing arrangements 10 8 8
Transaction and integration costs - - 17
Restructuring costs 11 49 -
Adjusted EBITDA $ 425 $ 485 $ 697
Adjusted EBITDA Margin 8.5 % 9.6 % 14.0 %
The table below presents a reconciliation of Net income to Adjusted Net Income:
Year Ended December 31,
(in millions) 2025 2024 2023
Net income
$ 155 $ 173 $ 375
Effective income tax rate adjustment
8 (5) (2)
Stock based compensation
65 65 59
Amortization of other intangible assets, net 10 19 20
Non-cash interest expense 3 3 2
Transaction and integration costs - - 17
Restructuring costs 11 49 -
Income tax impact of pre-tax adjustments
(22) (35) (25)
Adjusted Net Income $ 230 $ 269 $ 446
TRINET
2025 FORM 10-K
MANAGEMENT'S DISCUSSION AND ANALYSIS
Operating Metrics
Worksite Employees (WSE)
Average WSE change is a volume measure we use to monitor the performance of our PEO business. Our PEO clients generally change their payroll service providers at the beginning of the payroll tax and benefits enrollment year; as a result, we have historically experienced our highest volumes of new PEO clients joining and existing clients terminating in the month of January. PEO client attrition, new PEO client additions and changes in employment levels within our installed PEO client base all impact our Average WSEs and Total WSEs as we move through a calendar year.
We support WSEs from the date on which their co-employment with TriNet commences through the end of their co-employment with TriNet and also after their co-employment period. We define WSEs to include co-employees and other individuals receiving PEO services, such as individuals who receive COBRA benefits or are subject to partnership tax reporting as well as individuals who utilize our PEO platform on behalf of TriNet PEO clients.
We charge a platform user access fee to clients for those users of our PEO platform that may not be co-employed by us as well as for co-employees for whom payroll may not be regularly run. In addition to co-employees for whom payroll may not be regularly run, such as partners in a partnership, this group of users also includes individuals authorized by our clients to access and use the PEO platform for functions such as bookkeeping and benefits management. We refer to these users as PEO Platform Users. Starting in 2023 and rolled out through 2024, we began billing clients in groups over time, driving a large increase in PEO Platform Users over that period.
The effect of this fee is that we receive revenue from two types of users on our PEO platform, those that are co-employed in our PEO business and those that are utilizing our PEO platform, albeit in a more limited capacity. The table below illustrates how those two components comprise our Total WSE and Average WSE metrics.
Year Ended December 31, % Change
2025 2024 2023 2025 vs. 2024 2024 vs. 2023
Average WSEs 333,886 352,681 331,423 (5) 6
Co-Employed 304,985 332,456 330,423 (8) 1
PEO Platform Users 28,901 20,225 1,000 43 1,923
Total WSEs 323,206 360,681 347,542 (10) 4
Co-Employed 294,025 330,104 335,543 (11) (2)
PEO Platform Users 29,181 30,577 11,999 (5) 155
Average WSEs decreased 5% when comparing 2025 to 2024, driven by client attrition outpacing new client additions partially offset by limited hiring in our installed base over the past twelve months. These declines were primarily in our Technology, Professional Services, and Main Street verticals.
Total WSEs can be used to estimate our beginning WSEs for the next period and, as a result, can be used as an indicator of our potential future revenue growth, business growth, and client retention. Total WSEs decreased 10% when compared to the same period in 2024, primarily due to declines in our Technology, Professional Services, and Main Street verticals. This was partially attributable to necessary repricing of our health benefits services.
Anticipated revenues for future periods can diverge from the revenue expectation derived from Average WSEs or Total WSEs due to pricing differences across our HCM solutions and services and the degree to which clients and WSEs elect to participate in our solutions during future periods. In addition to focusing on growing our Average WSE and Total WSE counts, we also focus on pricing strategies, benefit participation and service differentiation to expand the value we provide to our clients and our resulting revenue opportunities. We report the impact of client and WSE participation differences as a change in mix.
We continue to invest in efforts intended to enhance client experience, improve our new sales performance, and manage client attrition, through product development as well as operational and process improvements. In addition to focusing on retaining and growing our WSE base, we continue to review acquisition or other opportunities to expand our product offering and provide further scale.
TRINET
2025 FORM 10-K
MANAGEMENT'S DISCUSSION AND ANALYSIS
The following graphs show our quarterly average WSEs and Total WSEs since the first quarter of 2024.
Insurance Cost Ratio (ICR)
ICR is a performance measure calculated as the ratio of insurance costs to insurance service revenues. We believe that ICR promotes an understanding of our insurance cost trends and our ability to align our relative pricing to risk performance.
We purchase workers' compensation and health benefits coverage for our WSEs. Under the insurance policies for this coverage, we bear claims costs up to a defined deductible amount. Our insurance costs, which comprise a significant portion of our overall costs, are significantly affected by our WSEs' health and workers' compensation insurance claims experience. We set our insurance service fees for workers' compensation and health benefits in advance for fixed benefit periods. As a result, any increases in insurance costs above our projections, will be reflected as a higher ICR, and result in lower net income. Any decreases in insurance costs below our projections, will be reflected as a lower ICR and result in higher net income.
Under our fully-insured workers' compensation insurance policies, we assume the risk for losses up to $1 million per claim occurrence (deductible layer). The ultimate cost of the workers' compensation services provided cannot be known until all the claims are settled. Our ability to predict these costs is limited by unexpected increases in frequency or severity of claims, which can vary due to changes in the cost of treatments or claim settlements.
Under our risk-based health insurance policies, we assume some of the risk of variability in future health claims costs for our enrollees. This variability typically results from changing trends in the volume, severity and ultimate cost of medical and pharmaceutical claims, due to changes to the components of medical cost trend, which we define as changes in participant use of services, including the introduction of new treatment options, changes in treatment guidelines and mandates, and changes in the mix, cost of providing treatment and timing of services provided to plan participants. These trends change, and other seasonal trends and variability may develop. As a result, it is difficult for us to predict our insurance costs with accuracy and a significant increase in these costs could have a material adverse effect on our business.
(in millions) 2025 2024 2023
Insurance costs $ 3,835 $ 3,797 $ 3,513
Insurance service revenues 4,224 4,224 4,166
Insurance Cost Ratio 91 % 90 % 84 %
ICR increased for the year ended December 31, 2025 as compared to 2024, primarily driven by higher health benefits insurance costs that rose at a higher rate than our insurance services revenues for health benefits. The increase in insurance costs was primarily due to higher rates paid for outpatient and professional services, as well as pharmacy costs for increased utilization of specialty drugs and other high-cost prescriptions, particularly medications for diabetes and obesity. This increase was partially offset by lower volume.
TRINET
2025 FORM 10-K
MANAGEMENT'S DISCUSSION AND ANALYSIS
Total Revenues
Our revenues consist of PSR, ISR and interest income. PSR represents fees charged to clients for processing payroll-related transactions on behalf of our PEO and ASO clients, access to our HR expertise and technology, employment and benefit law compliance services, other HR-related and tax credit filing services and fees charged to access our cloud-based ASO services. ISR consists of insurance-related billings and administrative fees collected from PEO clients and withheld from WSEs for workers' compensation insurance and health benefit insurance plans provided by third-party insurance carriers.
Monthly revenues per co-employed Average WSE is a measure we use to monitor our PEO pricing strategies. This measure increased 8% in 2025 compared to 2024.
We also use the following measures to further analyze changes in total revenue:
•Volume - the percentage change in period over period co-employed Average WSEs,
•Rate - the combined weighted average percentage changes in service fees for each vertical service and changes in service fees associated with each insurance service offering,
•Mix - the change in composition of co-employed Average WSEs within our verticals combined with the composition of our enrolled co-employed WSEs within our insurance service offerings and the composition of products and services our clients receive, such as PEO Platform Users,
•HRIS and ASO, and
•Interest income.
PSR
ISR - % represents proportion of insurance service revenues to total revenues
Interest income
*Total revenues generated from PEO services only, excluding interest income
Total revenue decreased slightly for the year ended December 31, 2025, as lower co-employed Average WSEs was partially offset by rate increases for both professional services and insurance services revenues.
TRINET
2025 FORM 10-K
MANAGEMENT'S DISCUSSION AND ANALYSIS
PSR
Our PEO and ASO clients are primarily billed on a fee per WSE or ASO User per month per transaction. Our vertical approach provides us the flexibility to offer our PEO clients in different industries with varied services at different prices, which we believe potentially reduces the value of solely using Average WSE and Total WSE counts as indicators of future potential revenue performance.
During 2025, we began migrating our clients from our predecessor HRIS services to our ASO product. PSR from PEO Services customers and HRIS and ASO services clients was as follows:
(in millions) 2025 2024
PEO Services $ 684 $ 723
HRIS and ASO Services
35 42
Total $ 719 $ 765
We also analyze changes in PSR with the following measures:
•Volume - the percentage change in period over period co-employed Average WSEs,
•Rate - the weighted average percentage change in fees for each vertical,
•Mix - the change in composition of co-employed Average WSEs across our verticals andthe composition of products and services our clients receive, including PEO Platform Users, and
•HRIS and ASO.
The decrease in PSR for the year ended December 31, 2025 was primarily driven by lower co-employed Average WSEs, and the discontinuance of both a client-level technology fee and our Clarus R+D product. PSR from HRIS services has decreased as we continue to wind down this product and migrate clients to our ASO services.
ISR
ISR consists of insurance services-related billings and administrative fees collected from PEO clients and withheld from WSE payroll for health benefits and workers' compensation insurance provided by third-party insurance carriers.
TRINET
2025 FORM 10-K
MANAGEMENT'S DISCUSSION AND ANALYSIS
We use the following measures to analyze changes in ISR:
•Volume - the percentage change in period over period co-employed Average WSEs,
•Rate - the weighted average percentage change in fees associated with each of our insurance service offerings, and
•Mix - all other changes including the composition of our enrolled co-employed WSEs within our insurance service offerings (health plan enrollment).
ISR was flat for the year as rate increases were offset by lower co-employed Average WSEs.
Interest Income
Interest income primarily includes interest income earned from cash held for our PEO and ASO clients as a result of the requirement of our clients to prefund their payroll and related taxes and other withholding liabilities before payroll is processed or due for payment. Interest income also includes our portion of interest received from tax jurisdictions related to payroll and other tax refunds. Interest income from tax refunds is recognized when the amount and timing of the interest become determinable.
Interest income was slightly higher than the prior period as higher interest received related to payroll tax refunds was partially offset by a decrease in interest earned on our cash and investments.
Insurance Costs
Insurance costs include insurance premiums for coverage provided by insurance carriers, payments for claims costs and expenses for other risk management and administrative services, reimbursement of claims payments made by insurance carriers or third-party administrators below a predefined deductible limit, and changes in accrued costs related to contractual obligations with our workers' compensation and health benefit carriers.
We use the following measures to analyze changes in insurance costs:
•Volume - the percentage change in period over period co-employed Average WSEs,
TRINET
2025 FORM 10-K
MANAGEMENT'S DISCUSSION AND ANALYSIS
•Rate - the weighted average percentage change in cost trend associated with each of our insurance service offerings, and
•Mix - all other changes including the composition of our enrolled co-employed WSEs within our insurance service offerings (health plan enrollment).
The slight increase in insurance costs for the year was primarily due to higher rates paid for outpatient and professional services and increased utilization of high-cost drugs, particularly for specialty drugs and non-specialty medications for diabetes and obesity. This increase is partially offset by lower co-employed Average WSEs.
TRINET
2025 FORM 10-K
MANAGEMENT'S DISCUSSION AND ANALYSIS
Expenses
Expenses include COPS, S&M, G&A, SD&P, D&A, collectively referred to as OE, as well as IE.
We had approximately 3,400 colleagues as of December 31, 2025 primarily across the U.S. but also in India and Canada, down approximately 200 colleagues from 2024. Compensation costs for our colleagues include payroll, payroll taxes, SBC, bonuses, commissions and other payroll- and benefits-related costs. Compensation-related expenses represented 66% and 63% of our expenses in 2025 and 2024, respectively.
In 2025, we had an expense decrease of 7% compared to 2024. This decrease was driven largely by lower expenses related to the execution of our medium term strategy, which includes process optimization, further development of our product offerings, and go-to-market innovations compared to the higher asset impairment and severance expenses seen in 2024 as a result of the initial implementation of such strategy. The ratio of expenses to total revenues was 19% and 20% in 2025 and 2024, respectively.
% represents portion of compensation related expense included in expenses
Compensation related expense
TRINET
2025 FORM 10-K
MANAGEMENT'S DISCUSSION AND ANALYSIS
We analyze and present our expenses based upon the functional categories of COPS, S&M, G&A, SD&P, D&A and IE. The charts below provide a view of the expenses of the business functions. Dollars are presented in millions and percentages represent year-over-year change.
(in millions)
$1,030 2024 Expenses
-15 COPS decreased primarily due to lower compensation expense as a result of our headcount reductions and globalization efforts.
-20
S&M decreased primarily due to lower compensation and conferences and events expenses.
-25 G&A decreased primarily due to lower impairment and severance charges related to restructuring.
+3 SD&P increased primarily due to higher compensation expense as we continue to invest in our platform in support of our medium term strategy.
-9
D&A decreased primarily due to lower intangible asset amortization related to our past acquisitions.
-6 IE decreased driven primarily by lower debt balances.
$958 2025 Expenses
The primary spend type drivers to the changes in our expenses are presented below:
TRINET
2025 FORM 10-K
MANAGEMENT'S DISCUSSION AND ANALYSIS
Income Taxes
Our ETR was 29% and 23% for 2025 and 2024, respectively. The increase in the rate was primarily attributable to decreases in tax benefits for stock-based compensation and charges to valuation allowances.
On July 4, 2025, H.R. 1 - One Big Beautiful Bill Act ("OBBBA") was signed into law, which includes significant changes to federal tax law and other regulatory provisions that may impact the Company. ASC 740, "Income Taxes", requires the effects of changes in tax rates and laws on deferred tax balances to be recognized in the period in which the legislation is enacted. OBBBA did not have a material impact on our ETR.
Liquidity and Capital Resources
Liquidity
Liquidity is a measure of our ability to access sufficient cash flows to meet the short-term and long-term cash requirements of our business operations. Our principal source of liquidity for operations is derived from cash provided by operating activities. We rely on cash provided by operating activities to meet our short-term liquidity requirements, which primarily relate to the payment of corporate payroll and other operating costs, and capital expenditures. Our cash flow related to WSE payroll and benefits is generally matched by advance collection from our PEO clients. To minimize the credit risk associated with remitting the payroll and associated taxes and benefits costs, we require PEO clients to prefund the payroll and related payroll taxes and benefits costs.
Included in our balance sheets are assets and liabilities resulting from transactions directly or indirectly associated with WSEs, including payroll and related taxes and withholdings, our sponsored workers' compensation and health insurance programs, and other benefit programs. Although we are not subject to regulatory restrictions that require us to do so, we distinguish our corporate assets and liabilities separately from those current assets and liabilities held by us to satisfy our employer obligations associated with our WSEs.
TriNet Trust, which is consolidated into our financial statements, holds funds provided by ASO clients for the remittance to ASO Users, tax authorities and other recipients. TriNet Trust also holds ownership and responsibility of certain bank accounts that hold ASO client funds. The associated cash is reflected on our consolidated balance sheets as restricted cash and the associated liabilities are classified as accrued wages, payroll tax liabilities and other payroll withholdings, and accounts payable and other current liabilities. As of December 31, 2025, the balance of restricted cash in TriNet Trust was $79 million. We include the assets and liabilities related to the TriNet Trust in the "WSE & TriNet Trust" category because the underlying cash flows of TriNet Trust are related to the same type of payroll and payroll related liabilities as our WSE cash flows. We continue to use this trust structure as we transition our HRIS services to ASO services.
December 31,
2025 2024
(in millions) Corporate WSE & TriNet Trust Total Corporate WSE & TriNet Trust Total
Current assets:
Cash and cash equivalents $ 286 $ 1 $ 287 $ 359 $ 1 $ 360
Restricted cash, cash equivalents and investments 22 1,672 1,694 23 1,390 1,413
Other current assets 105 782 887 95 1,312 1,407
Total current assets $ 413 $ 2,455 $ 2,868 $ 477 $ 2,703 $ 3,180
Total current liabilities 182 2,455 $ 2,637 $ 278 $ 2,703 $ 2,981
Working capital $ 231 $ - $ 231 $ 199 $ - $ 199
As of December 31, 2025, we did not have any material off-balance sheet arrangements that are reasonably likely to have a current or future effect on our financial condition, results of operations, liquidity, capital expenditures or capital resources.
TRINET
2025 FORM 10-K
MANAGEMENT'S DISCUSSION AND ANALYSIS
Working capital for WSEs and TriNet Trust related activities
We designate funds to ensure that we have adequate current assets to satisfy our current obligations associated with WSEs. We manage our WSE payroll and benefits obligations through collections of payments from our clients which generally occur two to three days in advance of client payroll dates. We regularly review our short-term obligations associated with our WSEs (such as payroll and related taxes, insurance premium and claim payments) and designate funds required to fulfill these short-term obligations, which we refer to as PFC. PFC is included in current assets as restricted cash, cash equivalents and investments.
We manage our sponsored benefit and workers' compensation insurance obligations by maintaining collateral funds in restricted cash, cash equivalents and investments. These collateral amounts are generally determined at the beginning of each plan year and we may be required by our insurance carriers to adjust our collateral balances when facts and circumstances change. We regularly review our collateral balances with our insurance carriers and anticipate funding further collateral in the future based upon our capital requirements. We classify our restricted cash, cash equivalents and investments as current and noncurrent assets to match against the anticipated timing of payments to carriers.
The following table summarizes our workers' compensation obligations, gross of collateral, as of December 31, 2025,
Payments Due by Period
(in millions) Total Less than 1 year 1-3 years 3-5 years More than 5 years
Workers' compensation obligations (1)
$ 151 $ 43 $ 46 $ 19 $ 43
(1) Represents estimated payments that are expected to be made to carriers for various workers' compensation programs under the contractual obligations. These obligations include the costs of reimbursing the carriers for paying claims within the deductible layer in accordance with the workers' compensation insurance policy.
Because the liabilities of the TriNet Trust are largely driven by how much in cash has been deposited into the trust, there is generally no significant working capital in that entity.
Working capital for corporate purposes
Corporate working capital as of December 31, 2025 increased $32 million from December 31, 2024, primarily due to the decreases in our corporate current liabilities. The decrease in corporate current liabilities is primarily driven by the repayment of the outstanding balance on our revolving credit facility in the third quarter of 2025, leaving no outstanding balance on our $700 million revolving line of credit.
We use our available cash and cash equivalents to satisfy our operational and regulatory requirements and to fund capital expenditures. We believe that we can meet our present and reasonably foreseeable operating cash needs and future commitments through existing liquid assets, continuing cash flows from corporate operating activities and the potential issuance of debt or equity securities. We hold both corporate cash and cash associated with WSEs across multiple financial institutions to reduce concentrations of counterparty risk. We believe our existing corporate cash and cash equivalents and positive working capital will be sufficient to meet our working capital expenditure needs for at least the next twelve months.
The following table summarizes our purchase obligations as of December 31, 2025,
Payments Due by Period
(in millions) Total Less than 1 year 1-3 years 3-5 years More than 5 years
Purchase obligations (1)
$ 136 $ 77 $ 58 $ 1 $ -
(1) Our purchase obligations primarily consist of software licenses, consulting and maintenance agreements, and future sales and marketing events.
TRINET
2025 FORM 10-K
MANAGEMENT'S DISCUSSION AND ANALYSIS
Cash Flows
The following table presents our cash flow activities for the stated periods:
Year Ended December 31,
(in millions) 2025 2024
Corporate WSE & TriNet Trust Total Corporate WSE & TriNet Trust Total
Net cash provided by (used in):
Operating activities $ 303 $ - $ 303 $ 279 $ - $ 279
Investing activities (43) - (43) 148 5 153
Financing activities (330) 281 (49) (346) 139 (207)
Net increase (decrease) in cash and cash equivalents, unrestricted and restricted $ (70) $ 281 $ 211 $ 81 $ 144 $ 225
Cash and cash equivalents, unrestricted and restricted:
Beginning of period $ 415 $ 1,276 $ 1,691 $ 334 $ 1,132 $ 1,466
End of period $ 345 $ 1,557 $ 1,902 $ 415 $ 1,276 $ 1,691
Net increase (decrease) in cash and cash equivalents:
Unrestricted $ (73) $ - $ (73) $ 72 $ 1 $ 73
Restricted 3 281 284 9 143 152
Operating Activities
The year-over-year change in net cash provided by operating activities was primarily driven by the timing of collections of receivables and our payments of corporate obligations.
Investing Activities
Cash provided by (used in) investing activities for the periods presented below primarily consisted of purchases of investments and capital expenditures, partially offset by proceeds from the sale and maturity of investments.
Year Ended December 31,
(in millions) 2025 2024
Investments:
Purchases of marketable securities $ (78) $ (190)
Proceeds from sale and maturity of marketable securities 103 421
Cash provided by investments $ 25 $ 231
Acquisitions of property and equipment and software (69) (78)
Cash used in capital expenditures $ (69) $ (78)
Proceeds from sale of business 1 -
Cash used in investing activities $ (43) $ 153
Investments
We invest a portion of available cash in investment-grade securities with effective maturities less than five years that are classified on our balance sheets as investments. We consider industry and issuer concentrations in our investment policy.
We also invest funds held as collateral to satisfy our long-term obligation towards workers' compensation liabilities. These investments are classified on our balance sheets as restricted cash, cash equivalents and investments. We review the amount and the anticipated holding period of these investments regularly in conjunction with our estimated long-term workers' compensation liabilities and anticipated claims payment trend. At December 31, 2025, our investments had a weighted average duration of three-year and an average S&P credit rating of AA.
As of December 31, 2025, we held approximately $2.1 billion in restricted and unrestricted cash, cash equivalents and investments, of which $287 million was unrestricted cash and cash equivalents. Refer to Note 2in Part II, Item 8. Financial Statements and Supplemental Data, in this Form 10-K for a summary of these funds.
TRINET
2025 FORM 10-K
MANAGEMENT'S DISCUSSION AND ANALYSIS
Capital Expenditures
During the twelve months ended December 31, 2025 and 2024, we continued to make investments in software and hardware as we enhanced our existing service offerings and technology platform. We expect capital investments in our software and hardware to continue in the future.
Financing Activities
Net cash used in financing activities for the years ended December 31, 2025 and 2024, which consisted of WSE and TriNet Trust related activities and our debt and equity-related activities are presented below.
Year Ended December 31,
(in millions) 2025 2024
Financing activities
Change in WSE and TriNet Trust related assets and liabilities, net $ 281 $ 139
Repurchase of common stock, net of issuance costs (188) (199)
Repayment of borrowings under revolving credit facility (90) (110)
Dividends paid (52) (37)
Cash used in financing activities $ (49) $ (207)
The year-over-year change in net cash used in financing activities for WSE and TriNet Trust purposes was primarily driven by timing of client payments, payments of payroll and payroll taxes and insurance claim activities.
During the year ended December 31, 2025, we repurchased 2,755,287 shares of our common stock for approximately $182 million through our existing stock repurchase program in addition to 68,823 shares acquired to satisfy tax withholding obligations related to SBC vesting. As of December 31, 2025, approximately $68 million remained available for repurchase under all authorizations by our Board. In February 2026, our Board authorized a $336 million incremental increase to our stock repurchase program. Repurchases are to be deployed subject to market conditions. We plan to use current cash and cash generated from ongoing operating activities to fund this stock repurchase program.
We paid common stock dividends of $0.25 per share in January 2025 and $0.275 per share in April, July and October 2025. We also declared a common stock dividend of $0.275 per share which was paid in January 2026.
Capital Resources
As of December 31, 2025, $500 million and $400 million aggregate principal of our 2029 Notes and 2031 Notes was outstanding, respectively. The indenture governing our 2029 Notes and 2031 Notes each includes restrictive covenants limiting our ability to: (i) create liens on certain assets to secure debt; (ii) grant a subsidiary guarantee of certain debt without also providing a guarantee of the 2029 Notes or 2031 Notes, as applicable; and (iii) consolidate or merge with or into, or sell or otherwise dispose of all or substantially all of our assets to, another person, subject, in each case, to certain customary exceptions.
Our 2021 Credit Agreement includes a $700 million revolver. In July 2025, we paid off the remaining outstanding balance and as of December 31, 2025, no outstanding balance remained. The 2021 Credit Agreement includes negative covenants that limit our ability to incur indebtedness and liens, sell assets and make restricted payments, including dividends and investments, subject to certain exceptions. In addition, the 2021 Credit Agreement also contains other customary affirmative and negative covenants and customary events of default. The 2021 Credit Agreement also contains a financial covenant that requires the Company to maintain certain maximum total net leverage ratios.
We were in compliance with all financial covenants under our 2021 Credit Agreement, 2029 Notes and 2031 Notes at December 31, 2025.
TRINET
2025 FORM 10-K
MANAGEMENT'S DISCUSSION AND ANALYSIS
Critical Accounting Judgments and Estimates
Our consolidated financial statements are prepared in accordance with GAAP, which require us to make estimates, judgments, and assumptions that affect reported amounts of assets, liabilities, revenues and expenses, and the related disclosures of contingent assets and liabilities. These estimates are based on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Some of the assumptions are highly uncertain at the time of estimation. To the extent actual experience differs from the assumptions used, our consolidated financial statements could be materially affected. For additional information about our accounting policies, refer to Note 1 in Part II, Item 8. Financial Statements and Supplementary Data, of this Form 10-K.
The following items require significant estimation or judgment:
Insurance Costs
We purchase workers' compensation and health benefits coverage for our colleagues and WSEs. As part of these insurance policies, we bear claims costs up to a defined deductible amount and as a result, we establish accrued insurance costs including both known claims filed and estimates for incurred but not reported claims.
We use qualified actuaries to evaluate, review and recommend estimates of our accrued workers' compensation and health insurance costs. The accrued costs studies performed by these qualified actuaries analyze historical claims data to develop a range of our potential ultimate costs using loss development, expected loss ratio and frequency/severity methods in accordance with Actuarial Standards of Practice. These methods are applied to classes of the claims data organized by policy year and risk class.
Key judgments and evaluations in arriving at loss estimates by class and the accrued costs selection overall include:
•the selection of method used and the relative weights given to selecting the method used for each policy year,
•the underlying assumptions of LDF used in these models,
•the effect of any changes to the insurers' claims handling and payment processes,
•evaluation of medical and indemnity cost trends, costs from changes in the risk exposure being evaluated and any applicable changes in legal, regulatory or judicial environment.
We review and evaluate these judgments and the associated recommendations in concluding the adequacy of accrued costs. Our quarterly reserving process involves the collaboration of our internal qualified actuaries and our actuarial and finance departments to approve a single point best estimate. In selecting this best estimate, management considers the actuarial estimates and applies informed judgment regarding qualitative factors that may not be fully captured in these actuarial estimates. Such factors include but are not limited to: the timing, volume, severity and complexity of claims, social and judicial trends, medical treatment trends, the extent of our historical loss data versus industry information, rates of participant turnover, the impact of MCT and seasonal trends, the impact of setting prices in advance of benefit periods, and the impact of unanticipated events. Where adjustments are necessary these are recorded in the period in which the adjustments are identified.
These accrued costs may vary in subsequent quarters from the amount estimated. Certain assumptions used in estimating these accrued costs are highly judgmental. Our accrued costs, results of operations and financial condition can be materially impacted if actual experience differs from the assumptions used in establishing these accrued costs.
Accrued Workers' Compensation Costs
Under our policies, we are responsible for reimbursing the insurance carriers for workers' compensation losses up to $1 million per claim occurrence (Deductible Layer). As workers' compensation costs for a particular period are not known for many years after the losses have occurred, these costs represent our best estimate of unpaid claim losses and loss adjustment expenses within the Deductible Layer in accordance with our insurance policies. We use actuaries to evaluate, review and recommend accrued workers' compensation costs on a quarterly basis. The data is segmented by class and state and analyzed by policy year, and states where we have small exposure are aggregated into a single grouping.
TRINET
2025 FORM 10-K
MANAGEMENT'S DISCUSSION AND ANALYSIS
We use a combination of loss development, expected loss ratio and frequency/severity methods which include the following inputs, assumptions and analytical techniques:
•historical volume and severity of workers' compensation cost experience, exposure data and industry loss experience related to TriNet's insurance policies,
•inputs of WSEs' job responsibilities and location,
•estimates of future cost trends,
•expected loss ratios for the latest accident year or prior accident years, adjusted for the loss trend, the effect of rate changes and other quantifiable factors, and
•LDFs to project the reported losses for each accident year to an ultimate basis.
Final cost settlements may vary materially from the present estimates, particularly when payments do not occur until well into the future. In our experience, plan years related to workers' compensation programs may take 10 years or more to be fully settled.
We believe that our estimate of accrued workers' compensation costs is most sensitive to LDFs given the long reporting and paid development patterns for our workers' compensation loss costs. Our methods of estimating accrued workers' compensation costs rely on these LDFs and an estimate of future cost trend.
The following table illustrates the sensitivity of changes in the LDFs on our year end estimate of insurance costs (in millions of dollars):
Change in loss development factor Change in insurance costs
-5.0% ($30)
-2.5% ($17)
+2.5% $18
+5.0% $35
Accrued Health Insurance Costs
We sponsor and administer a number of employee benefit plans for our WSEs, including group health, dental, vision and life insurance as an employer plan sponsor under section 3(5) of the ERISA. Approximately 88% of our group health insurance costs relate to risk-based plans in which we agree to reimburse our carriers for any claims paid within an agreed-upon per-person deductible layer up to a maximum aggregate exposure limit per policy. These deductible dollar limits and maximum limits vary by carrier and year.
Costs covered by these insurance plans generally develop on average within three to six months so insurance costs and accrued health insurance costs include estimates of claims IBNP. Data is grouped and analyzed by insurance carrier.
To estimate accrued health benefits costs we use a number of inputs, assumptions and analytical techniques:
•historical loss claims payment patterns and MCT rates related to TriNet's insurance policies,
•current period claims costs and claims reporting patterns (completion factors), and
•plan enrollment.
MCT rates are a significant factor we use in developing our accrued health insurance costs. MCT are developed through an analysis of claims incurred in prior months, provider pricing and indicators of health care utilization, including pharmacy utilization trends, and outpatient and inpatient utilization. Many factors may cause MCT to vary from our estimates. Such factors include, but are not limited to: the timing of the emergence of claims, volume, severity and complexity of claims, social and judicial trends, medical treatment trends, the extent of our historical loss data versus industry information, rates of participant turnover, the impact of MCT and seasonal trends, the impact of setting prices in advance of benefit periods, new treatment options, and the impact of unanticipated events.
TRINET
2025 FORM 10-K
MANAGEMENT'S DISCUSSION AND ANALYSIS
The following table illustrates the sensitivity of changes in the MCT on our year end estimate of insurance costs (in millions of dollars):
Change in medical cost trend Change in insurance costs
+3.0% $23
+2.0% $15
+1.0% $8
-1.0% $(8)
-2.0% $(15)
-3.0% $(23)
Completion factors are an actuarial estimate based on historical experience and analysis of current trends, of paid costs to carriers as a percentage of the expected ultimate costs to carriers. Many factors may cause actual claims submissions rates from our carriers to vary from our estimated completion factors, including carrier claims processing patterns, the mix of providers and the mix of electronic versus manual claims submitted to our carriers.
The following table illustrates the sensitivity of changes in completion factors on our year end estimate of insurance costs (in millions of dollars):
Change in completion factors Change in insurance costs
-0.75% $21
-0.50% $14
-0.25% $7
+0.25% $(7)
+0.50% $(14)
+0.75% $(21)
Recent Accounting Pronouncements
Refer to Note 1in Part II, Item 8, Financial Statements and Supplementary Data, of this Form 10-K for additional information related to recent accounting pronouncements.
TRINET
2025 FORM 10-K
QUANTITATIVE AND QUALITATIVE DISCLOSURES
TriNet Group Inc. published this content on February 12, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on February 12, 2026 at 13:05 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]