For purposes of this Annual Report, the terms “TriNet," "the Company," “we,” “us” and “our" refer to TriNet Group, Inc., and its consolidated subsidiaries. This reportAnnual Report on Form 10-K contains 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 27A of the Securities Act and Section 21E21 of the Securities Exchange Act of 1934, as amended, orand the Exchange Act.Private Securities Litigation Reform Act of 1995. Forward-looking statements are often identified by the use of words such as, but not limited to, “anticipate,” “believe,” “can,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “project,” “seek,” “should,” “strategy,” “target,” “will,” “would” and similar expressions or variations intended to identify forward-looking statements. TheseExamples of forward-looking statements include, among others, TriNet’s expectations regarding: the growth of our customer base, our ability to roll out additional product offerings as and when planned, our ability to make enhancements to our technology platform, our ability to remediate the material weaknesses in our internal controls over financial reporting, our ability to execute on our vertical market strategy and penetrate the market for human resources (HR) solutions for small to midsize businesses, and other expectations, outlooks and forecasts on our future business, operational and financial performance.

Forward-looking statements are not guarantees of future performance, but are based on management’s expectations as of the date of this report and assumptions that are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict. Forward-looking statements are subject toinvolve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from those in forward-looking statements.our current expectations and any past results, performance or achievements. Important factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements include, but are not limitedinclude:

Any of these factors, as well as such other factors as discussed in the section titled “Risk Factors” included under Part I, Item 1A, below.and throughout Part II, Item 7 of this Annual Report on Form 10-K (Form 10-K), as well as in our periodic filings with the Securities and Exchange Commission (SEC), could cause our actual results to differ materially from our anticipated results. The information provided in this Form 10-K is based upon the facts and circumstances known at this time, and any forward-looking statements made by us in this Form 10-K speak only as of the date on which they are made. All information provided in this report is as of the date of this report and we undertake no duty to update this information except as required by law.

Our strategy is to provide industry-specific products and services (with an incremental chargeto help clients address their HR needs and allow them to focus on operating and growing their businesses. We believe our industry-oriented (vertical) approach is a key differentiator for such services).

TriNet was founded in 1988 and has significantly grown the number of clients we serve, both organically and through strategic acquisitions, including our acquisitions of SOI Holding, Inc. (SOI) and Park Avenue Holding, Inc. (Accord) in 2012 and Ambrose Employer Group, LLC (Ambrose) in 2013. For the year ended December 31, 2016, we processed $34 billion in payroll payments for approximately 13,900 clients with about 338,000 WSEs in all 50 states, the District of Columbia and Canada, co-employed more than 324,000 WSEsCanada.

We recognize as professional service revenues the fees we earn for providing our clients withdeliver a comprehensive suite of HR professionalproducts and services but do not include amounts paid to us by clients as payroll that are paid out to WSEs or amounts withheld and remitted to authorities as taxes.

Our Servicescomprehensive HR products and solutions include the following common capabilities:

We also leverageuse the collective insights and experience that we have gained overof our 27-year operating historyteams of HR, benefits, risk management and compliance professionals to help clients mitigate many of the many administrative, regulatory and practical risks associated with their responsibilities as employers.  We continuously monitor changes in the labor, employment and benefit regulatory environment and offer guidanceemployers, including talent management, recruiting and training, to clients to assist them in avoiding or reducing liabilityperformance management, employee onboarding and exposure.terminations, benefits enrollment and support, claims administration and employment practices risk management. Our professional HR services includeteams provide access to HR templates, best practices, employee handbooks, disciplined process management guidelines, employee relations consultation, issue investigation workplace employment posters,support, and compensation practice benchmarking data.  In addition,employee communications. Each of our clients are ableand WSEs have access to consult directly withvarying levels of service and support from our HR professionals through a variety of interaction models,experts ranging from call center support for basic questions to pooled specialized resources and dedicated HR professionals,to onsite consulting and services, depending uponon the needs of the client and their WSEs. OurIn addition, our teams of in-house HR teamsprofessionals can also provide additional, incremental consulting and other services upon requestrequest.

Under our vertical strategy, we continue to tailor our product and service offerings to specific industries by identifying common needs and leveraging scale and shared experience to provide more efficient, relevant offerings. For example, our fourth vertical product, TriNet Technology, is specifically targeted to help support stages of our clients’ growth, includingthe talent recruiting, orequity compensation and foreign employee immigration needs with applicant tracking systems, immigration services for employees requiring work visas and online tools to help clients manage equity compensation plans that SMBs in other services (with an incremental charge for such services).industries do not face. We now offer four industry specific product offerings: TriNet Technology, TriNet Financial Services, TriNet Life Sciences and TriNet Nonprofit.

We offer our clients and WSEs access to a broad range of TriNet-sponsored benefitsbenefit and insurance programs that many of our clients may be unable to obtain for their WSEs on their own and that are compliant with state, local, and federal regulations. We believe access to our fully-insured, Affordable Care Act compliant group health insurance plans is one of the

We pay premiums to third-party insurance carriers for WSE insurance benefits and reimburse the principal components ofinsurance carriers and third-party administrators for claims payments made on our behalf within our insurance services offerings are employee benefit plans, workers compensation insurance and employment practices liability insurance.deductible layer, where applicable.

We manage the deductible risk that we assume in connection with these policies by being selective in the types of businesses that we take on as new clients, by monitoring claims data and the performance of our carriers and third-party claims management services and vendors and by providing risk management services for existing clients. These services include performing workplace assessment, safety consultation, accident investigation and other risk management services at our client locations to help prevent situations that could lead to claims and services to help remediate claims when they occur.

with a per-claim retention amount. For most of our clients, the retention amount is split between the client and TriNet, with the client paying its portion of the retention amount first.

While we do not provide legal representation to our clients, our clients can benefit from the extensive experience of our employment law specialists in our legal department who support ourand HR professionals in their efforts towho assist clients in avoidingimplementing HR best practices to avoid employment practices liability claims and in managing, processing and responding to such claims. For claims covered by theour EPLI insurance, actual litigation defense is conducted by one of several outside employment law firms chosen by the EPLI carrier with whom we and our EPLI carriers have previously negotiated rates, established billing guidelines and invoice review processes andprocesses. We have also developed a case management protocol to efficiently and effectively defend such claims.

Our business is affected by cyclicalityproducts and services are designed to help our clients comply with local, state and federal employment and benefit laws. Often these changes are staggered and require additional guidance from a variety of local, state or federal agencies, making compliance a continuous challenge. We monitor employer-related developments and assist clients in business activitycomplying with changing regulations and WSE behavior. Historically, we have experienced our highest monthly addition of WSEs,requirements at all levels, from changes in local minimum wage and family leave ordinances to sweeping reforms such as well as our highest monthly levels of client attrition, in the month of January, primarily because clients that change their payroll service providers tend to do so at the beginning of a calendar year. We also experience higher levels of client attrition in connection with renewals of the health insurance we sponsor for our WSEs, in the event that such renewals result in higher costs to our clients. We have also historically experienced higher insurance claim volumes in the secondPatient Protection and third quarters of a fiscal year than in the first and fourth quarters of a fiscal year, as WSEs typically access their health care providers more often in the second and third quarters of a fiscal year, which has negatively impacted our insurance

We operate under a co-employment model business model, under which employment-related responsibilities are contractually allocated between us and our clients, which affords us a close relationship with ourclients. This model allows clients and their WSEs.WSEs to receive the full benefit of our employee benefit plan offerings. Each of our clients enters into a client service agreement with us that defines the suite of professional and insurance services and benefits to be provided by us, the fees payable to us, and the division of responsibilities between us and our clientclients as co-employers. The division of responsibilities under our client service agreements is typically as follows:

We assume responsibility for, and manage certain risks associated with:

Our clients are responsible for employment-related responsibilities that we do not assume, including:

As a result of our co-employment relationship with each of our WSEs, we are liable for payment of salary, wages and certain other compensation to the WSEs as reported and paid to us by the client and are responsible for providing specified employee benefits to such persons to the extent provided in each client service agreement and under federal and state law. In most instances, clients are required to remit payment prior to the applicable payroll date by wire transfer or automated clearinghouse transaction. Although we may become liable, as the employer for payroll purposes, to pay certain amounts for work previously performed, we are not obligated to continue to provide services to the client if payment has not been made. For the year ended December 31, 2015, our bad debt expense relating to such obligations was approximately $2.0 million.transaction (ACH).

We also assume responsibility for payment and liability for the withholding and remittance of federal and state income and employment taxes with respect to salaries, wages and certain other compensation paid to WSEs, although we reserve the right to seek recourse against our clients for any liabilities arising out of their conduct. We perform these functions as the employer for federal employment tax purposes, since our clients transfer legal control over these payroll functions to us. Except to the extent applicable federal legislation and applicable state lawlaws otherwise provide, the client may be held ultimately liable for those obligations if we fail to remit taxes and the bonding security provided by the Employer Services Assurance Corporation (ESAC) is not sufficient to satisfy the obligation. We also secure insurance in the event that we fail to meet these obligations.

We sell our solutions primarily through our direct sales organization. We have aligned our sales organization by industry vertical with the goal of drivinggrowing profitable market share in our targeted industries. This vertical approach deepens our network of relationships and gives us an understanding of the unique HR needs facing SMBs in those industries. As part of our vertical approach, we conduct industry-specific client marketing programs, including industry and geographic focus groups, to foster a sense of community through the sharing of best practices, while also collecting valuable information about the unique requirements of companies in particular industries. This knowledge then allows our sales team to work with our product development and client service teams to build bundled solutions of services that are tailored to the specific needs of clients in these industries.

The number of sales representatives in the field has grown substantially in recent years, through both internal hiring and through onboarding sales representatives from acquired businesses, from 80224 sales representatives as of December 31, 20112012 to 481452 sales representatives as of December 31, 2015. In our direct sales organization, we2016. We recruit and seek to hire sales professionals who have experience in a specific industry vertical market,markets, and with a background in selling business services such as accounting, HR or sales solutions. As of December 31, 2015,2016, we had approximately 5049 regional field sales offices.

We drive sales representative productivity in a number of ways, including by improving the quality of leads generated by our marketing and inside sales teams, and through the development of a sales operations team that offloads sales process work. We believe our focus on specific verticals, and the expertise gained through this focus, makes our sales representatives increasingly relevant to their target audience. Recently, we have expanded our focus on various channel relationships and alliances that drive warm leadsreferrals to our direct sales force. Finally, our sales representatives benefit from building strong relationships with prospects during the sales process,and client service processes, resulting in referrals to new prospects as well as direct support through providing reference calls in regardsregard to our products and services.

Historically, we have pursued strategic acquisitions to both expand our product capabilities and supplement our growth across geographies and certain industry verticals. Our acquisition targets have included other bundled HR providers as well as technology companies or technology product offerings to supplement or enhance our existing HR solutions. We intend to continue to pursue strategic acquisitions that will enable us to add new clients and WSEs, expand our presence in certain geographies or industry verticals and offer our clients and WSEs more comprehensive and attractive products and services.

We approach the market with a vertical, or industry-based, focus. Our clients spanare distributed across a variety of industries including technology, life sciences, not-for-profit, professional services, financial services, property management, retail, manufacturing, and hospitality. We have grownOur clients execute annual service contracts with us that automatically renew. Generally, our number of clients from approximately 4,500 as of December 31, 2011may cancel these contracts with thirty to over 12,700 clients as of December 31, 2015. We have also grown our number of WSEs from approximately 83,000 as of December 31, 2011 to approximately 324,000 in all 50 states, the District of Columbianinety days' notice and Canada as of December 31, 2015.

We believe thatconduct our operations are currently in compliance in all material respects with applicable federal and state statutes and regulations. The sections discussed below summarize what we believe are the most important regulatory aspects of our business:

Our business is affected by seasonality in business activity and we implement processes to protect and preserve this status. With Congressional passageWSE behavior. Clients generally change their payroll service providers at the beginning of the Small Business Efficiency Act in December 2014, the Code clarified the employer status of professional employer organizations, or PEOs, for federalpayroll tax purposes, for those PEOs who voluntarily become certified under this law. The IRS is expected to begin accepting applications for certification in July 2016year and we currently intend to apply for certification.

We own or license from third parties' various computer software, as well as other intellectual property rights, used in our business. Generally, we protect our intellectual property rights through the use of confidentiality and non-disclosure agreements and policies with our employees and third-party partners and vendors, although we currently have one pending U.S. patent application covering our technology. We also own registered trademarks in the United States,U.S., Canada and the European Union that have various expiration dates unless renewed through customary processes. Our trademark registrations may be unenforceable or ineffective in protectingcovering our trademarks. Ourname and other trademarks may be unenforceable in countries outside of the United States, which may adversely affect our ability to build our brand outside of the United States.

We refer to our employees excluding employees that we do not co-employ on behalf ofwith our clients as our corporate employees. We had approximately 2,5002,600 corporate employees as of December 31, 2015.2016. None of our corporate employees isare covered by a collective bargaining agreement.

We were incorporated in 1988 as TriNet Employer Group, Inc., a California corporation. We reincorporated as TriNet Merger Corporation, a Delaware corporation, in 2000 and during that year changed our name to TriNet Group, Inc. Our principal executive offices are located at 1100 San Leandro Blvd., Suite 400, San Leandro, CA 94577 and our telephone number is (510) 352-5000. Our website address is www.trinet.com. Information contained in or accessible through our website is not a part of this report.

On the Investor Relations page of our Internet website at http://www.trinet.com, we make available, free of charge, our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports, as soon as reasonably practicable after such material is electronically filed with or furnished to the SEC. Information contained in or accessible through our website isThe public may read and copy any materials that we file with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Room 1580, Washington, DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains an internet site that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC at www.sec.gov. The contents of these websites are not incorporated into this report and isare not a part of this report.

Our operationsThe products and services we provide to our clients are governed by numerous complex federal, state and local laws relating to labor, tax, employee benefits, insurance and employment matters. However, manyregulations, including those described under the heading "Legal and Regulatory" in Item 1 of this Form10-K. Many of these laws (such as ERISA and federal and state employment tax laws)laws, wage and hour laws, anti-discrimination laws, etc.) may not result in a consistent approach at the federal, state and local level, do not specifically address the obligationsPEOs and responsibilitiesco-employment relationships or may allow significant regulatory interpretation and discretion in enforcement. As a result, there is uncertainty in how they might be applied to our operations and those of a professional employer organization providing outsourced HR services in a co-employment relationship, and the definition of employer under these laws is not uniform. In addition, many states have not addressed the co-employment relationship for purposes of compliance with applicable state laws governing the relationship between employers and employees and state insurance laws. We are not able to predict whether broader federal or state regulation governing our business and the co-employment relationship with our WSEs will be implemented, or if it is, how it will affect us, our clients and WSEs.

New laws, changes in existing laws, or our WSEs. Any adverse application or interpretation (in courts, agencies or otherwise) of new or existing federal or state laws to theregarding our co-employment relationship with our clients and WSEs could reduce or eliminate the need for, or benefit provided by, some or all of the services we provide or require us to make significant changes in our methods of doing business and providing services, which could have a material adverse effect on our financial condition and results of operations. If federal, state or local jurisdictions were to change their regulatory framework related to outsourced HR services, or introduce new laws governing our industry that were materially different from existing laws, thoseRegulatory changes could reduce or eliminate the need for some of our services, or could require that we make significant changes in our methods of doing business, which could increase our cost of doing business. Changes in regulations could also affect the extent and type of employee benefits employers can or must provide employees, the amount and type of taxes employers and employees are required to pay or the time within which employers must remit taxes to the applicable tax authority. These changesFor example, continued uncertainty regarding the implementation and future of health care reform in the U.S. under the ACA, any successor to the ACA, related or similar state laws, and the regulations adopted or to be adopted thereunder, has the potential to substantially change the health insurance market for SMBs and how such employers provide health insurance to their employees, which could substantially decrease our revenues and substantially increase our cost of doing business and have a materialmaterially adverse effect on our financial conditionability to attract and resultsretain our clients. In addition, there could be significant changes to the ACA in 2017 and beyond, including the potential modification, amendment or repeal of the ACA. Changes to the ACA could also result in new or amended regulations being introduced at the state or local level. Changes in, or uncertainty regarding, the ACA and other health care reforms could impact our business and we are not able to predict the direction or ultimate impact of health care reform on our business operations.

Although some statesSimilarly, state regulatory authorities generally impose licensing requirements on companies acting as insurance agents or third-party administrators, such as those that handle health or retirement plan funding and claim processing. We do not explicitly regulate professional employer organizations, 42 states have passed lawsbelieve that haveour current activities require such licensing, certificationbut if regulatory authorities in any state determine that we are acting as an insurance agent or registration requirements applicable to professional employer organizations or recognize the professional employer organization model, and other states may implement such requirements in the future. Laws regulating professional employer organizations vary from state to state, but generally provide for oversight of the fiscal responsibility of professional employer organizations, and in some cases codify and clarify the co-employment relationship for processing unemployment claims, workers compensation and other purposes under state law. We may be required to spend significant time and resources to satisfy licensing requirements or other applicable regulations in some states, andas a third-party administrator, we may not be ableneed to satisfy these requirements or regulations in all states, which could prohibit us from doing business in such states,hire additional personnel to manage regulatory compliance and become obligated to pay annual regulatory fees, which could have a material adverse effect on our financial condition and results of operations.

In order for WSEs to receive the full benefit ofsponsor our employee benefitsbenefit plan offerings it is important thatfor our WSEs, we act andmust qualify as an employer of theour WSEs for certain purposes under the Code and ERISA. In addition, our status as an employer is important for purposes of ERISA’s preemption of certain state laws. The definition of employer under various laws is not uniform, and under both the Code and ERISA, the term is defined in part by complex multi-factor tests. We believe

Generally, these tests are designed to evaluate whether an individual is an independent contractor or employee and they provide substantial weight to whether a purported employer has the right to direct and control the details of an individual's work. Some factors that we

If we were found not to be an employer under the Code orfor ERISA purposes, it could adversely affect the manner in which we are able to provide employee benefits to our WSEs and could have a material adverse effect on our financial condition and results of operations.

If we be licensedare not recognized as an insurance agentemployer under the Code or as a third-party administrator,ERISA, we may needbe required to hire additional personnelchange the method by which we report and remit payroll taxes to manage regulatory compliancethe tax authorities and become obligatedthe method by which we provide, or discontinue providing, certain employee benefits to pay annual regulatory fees,our WSEs, which could have a material adverse effect on our financial conditionbusiness and results of operations.

We must also qualify as an employer of our WSEs under state regulations, which govern licensing, certification and registration requirements for PEOs. Forty-two states have passed such laws and other states may implement such requirements in the future. While we believe that we qualify as an employer of our WSEs under these state regulations, these requirements vary from state to state and change frequently and if we are not able to satisfy existing or future licensing requirements or other applicable regulations of any states, we may be prohibited from doing business in that state.

Maintaining the security of our IT infrastructure and the confidentiality of our, our clients' and WSEs' personal data and information is paramount for us and our clients could be adversely impacted by health care reform.

Maintaining the security of our WSEs' information is particularly important to us as a sponsor of employee benefit plans with access to certain personal health information. The manner in which we manage protected health information (PHI) is subject to HIPAA and the HITECH Act. Although we maintain, and actively seek to improve, security measures and infrastructure designed to protect against unauthorized access to this sensitive data, cyber-attacks and security breaches remain a significant threat to our business. Any security breach could result in the access, public disclosure, loss or theft of the confidential and personal data of our clients and WSEs, which could negatively affect our ability to attract and retain clients. Additionally, we may be limited or delayed in our ability to increase service fees to offset any associated potential increased costs resulting from compliance with the ACA. Furthermore, the uncertainty surrounding the terms and application of the ACA may delay or inhibit the decisions of potentialnew clients, cause existing clients to outsourceterminate their HR needs.agreements with us, result in reputational damage and subject us to lawsuits, regulatory fines, or other actions or liabilities which could materially and adversely affect our business and operating results.

In providing our services, we also rely on third-party service providers and products, such as insurance carriers, to process sensitive information about our clients, WSEs and employees. Through contractual provisions, we take steps to require that our service providers protect sensitive information. However, we cannot provide assurances as to the security steps taken by such providers. Any security breach or other disruption of our third-party service providers that results in an inadvertent disclosure or loss of confidential information could adversely affect our reputation and our business.

The cost of these developmentsprecautionary measures could reduce our operating margins.

Any cyber-attack or security breach that accesses or discloses sensitive data may have a material adverse effect onaffect negatively our financial conditionreputation and resultsour client relationships, and the cost of operations.

We maintain health and workers compensationOur insurance coveringcosts, which make up a significant portion of our WSEs. Our insuranceoverall costs, are impacted significantly by our WSEs’ health and workersworkers' compensation insurance claims experience. We establish reserves to provide for the estimated costs of reimbursing our workersworkers' compensation and health insurance carriers for payingunder our insurance policies, but the volume and severity of claims within the deductible layeractivity is inherently unpredictable. If we experience a sudden or unexpected increase in accordance with theirclaim activity, our costs could increase, and it could be more difficult to secure replacement insurance policies.policies on competitive terms once our current policies expire. Estimating these reserves involves our consideration of a number

Our success dependsfully-insured agreements with our health insurance carriers include non-guaranteed cost policies that typically include limits to our exposure for individual claims, which are referred to as pooling limits, and limits to our maximum aggregate exposure for claims in parteach policy year. Refer to Note 1 in Part II, Item 8 of this Form 10-K for further

discussion of these policies. We have experienced variability, and may experience variability in the future, in the amounts that we are required to pay our health insurance carriers for group health insurance expenses incurred by WSEs within our deductible layer under non-guaranteed cost policies, based on our abilitycontinually changing trends in the frequency and severity of claims. These historical trends may change, and other seasonal trends and variability may develop, which may make it more difficult for us to establish and maintain arrangements and relationships with vendors that supply us with essential componentsmanage this aspect of our services. These service providers include insurance carriers to provide healthbusiness and workers compensation insurance coverage for WSEs, as well as other vendors such as couriers used to deliver client payroll checks and banks used to electronically transfer funds from clients to their WSEs. Failure by these service providers, for any reason, to deliver their services in a timely manner could result in material interruptions to our operations, impact client relations, and result in significant penalties or other liabilities to us. If any of these vendors decide to terminate its relationship with us, particularly our employee benefit carriers, wewhich may have difficulty obtaining replacement services at reasonable rates or on a timely basis, if at all. The loss of any one or more of our key vendors, or our inability to partner with certain vendors that are better-known or more desirable to our clients or potential clients, could have a material adverse effect on our financial conditionbusiness.

Security breaches could resultWe must comply with federal unemployment tax regulations and state unemployment tax regulations where our clients are located. Unemployment taxes are generally based on taxable wages. The tax rates vary by state and are determined, in part, based on our prior years’ compensation and unemployment claims experience in each state. Certain rates are also determined, in part, by each client’s own compensation and unemployment claims experience. In addition, some states can retroactively increase unemployment tax rates to cover deficiencies in the improper disclosure of sensitive company, employee, clientunemployment tax funds, and WSE data, including personal information, exposingfederal unemployment taxes can be retroactively increased in states that have failed to timely repay federal unemployment loans. It may be difficult for us to liability, which would causerecover increased taxes from our business and reputation to suffer.

Our future operating results are subject to quarterly resultsvariations based upon a variety of operationsfactors, many of which are likely to fluctuate, andnot within our results in some quarters may be below the expectations of research analysts and our investors, which could cause the price of our common stock to decline. Some of our significant expenses, such as insurance costs for our WSEs, may require significant lead time to offset or reduce. If we do not achieve our expected revenues targets, we may be unable to adjust our costs quickly enough to offset any revenues shortfall, which could

Many of the above factors are discussed in more detail elsewhere in this “Risk Factors” section and in the sectionPart II, Item 7 of this report titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”Form 10-K. Many of these factors are outside our control, and the variability and unpredictability of these factors

have in the past and could in the future cause us to fail to meet our expectations and the expectations of investors and any industry analysts who cover our shares for revenues or other results of operations for a given period.period, which could result in a decline in our share price and reduced liquidity in our shares. In addition, the occurrence of one or more of these factors might cause our results of operations to vary widely, which could lead to negative impacts on our margins, short-term liquidity or ability to retain or attract key personnel, and could cause other unanticipated issues.issues, including a downgrade of our shares by or change in opinion of industry analysts and a related decline in our share price. Accordingly, we believe that quarter-to-quarter and annual comparisons of our revenues, results of operations and cash flows may not be meaningful and should not be relied upon as an indication of our future performance.

Demand for our services is sensitiveOur clients are small and mid-sized businesses that we believe can be particularly susceptible to changes in the level of overall economic activity in the markets in which we operate. During periods of weak economic conditions, employment levels tend to decrease, small business failures tend to increase and interest rates may become more volatile.employment levels tend to decrease. Current or potential clients may also react to weak economic conditions or forecasted weak economic conditions by reducing their employee headcount or by lowering their wage, bonuswages, bonuses or benefits levels, any of which would affect our revenues, and may affect our margins, because we may be unable to reduce our operating expenses sufficientsufficiently enough or quickly enough to offset the drop in revenues. It is difficult for us to forecast future demand for our services due to the inherent difficulty in forecasting the direction, strength and length of economic cycles. These conditions may affect the willingness of our clients and potential clients to pay outside vendors for services like ours, and may impact their ability to pay their obligations to us on time, or at all. In addition, ifas a result of macroeconomic factors, interest rates may become more volatile. Rising interest rates may negatively affect our net income due to increased interest expense. Increased interest rate volatility could also negatively impact our clients' and prospects' access to credit. If businesses have difficulty obtaining credit, business growth and new business formation may be impaired, which could also harm our business.

Even modest downturns in economic activity or the availability of credit on a regional or national level could have a material adverse effect on our financial condition or results of operations.

We have aligned our business based ondeveloped an industry vertical approach wherebusiness strategy and we plan to continue to devote significant resources and time in pursuit of this strategy. Under our industry vertical strategy, our sales force, product development, and service teams are increasingly focused on specific business sectors. OurWe cannot assure you that our industry vertical approach gives us an understanding ofwill resonate with our existing and prospective clients or that we will target the HR needs facing SMBsright industries or implement our strategy in those industries. This knowledge enables us to provide a bundled solution of services that is tailored to its specific needs of clients in these industries.timely and effective manner. If our vertical strategy is unsuccessful, our business may not grow at the rate that we anticipate, which could have a material adverse effect on our financial condition and results of operations.

In order to raise awareness of the benefits of our services and identify and acquire new clients, weWe have rapidly grown our direct sales force.force historically and we currently expect to rely on this sales force to promote our industry vertical strategy and sell our solutions. Competition for skilled sales personnel is intense, and we cannot assure you that we will be successful in attracting, training and retaining qualified sales personnel, or that our newly hired sales personnel will function effectively, either individually or as a group. In addition, our newly hired sales personnel are typically not productive for up to a yearsome period of time following their hiring. This results in increased near-term costs to us relative to the sales contributions of these newly hired sales personnel. If we are unable to effectively train our sales force and benefit from greater productivity of our sales

We face significant competition on a national and regional level from a number of companies purporting to deliver a range of bundled services that are generally similar to the services we provide, including large professional employer organizations such as the TotalSource business unit of Automatic Data Processing, Inc. and Insperity, Inc., as well as specialized and small professional employer organization service providers. If and to the extent that we and other companies providing these services are successful, we anticipate that future competitors will enter this industry. Some of our current, and any future, competitors have or may have greater marketing and financial resources than we have, and may be better positioned than we are in certain markets. Increased competition in our industry could result in price reductions or loss of market share, any of which could harm our business. We expect that we will continue to experience competitive pricing pressure. If we cannot compete effectively, our market share, business, results of operations and financial condition may suffer.

In addition to competition from other professional employer organizations, we also face significant competition in the form of companies serving their HR needs in both traditional and non-traditional manners. These forms of competition include:

We believe that our services are attractive to many SMBs in part because of our ability to provide workersaccess to TriNet-sponsored workers' compensation, health care and other benefits programs to them on a cost-effective basis. We compete with insurance brokers and other providers of this coverage in this regard, and our offerings must be priced competitively with those provided by these competitors in order for us to attract and retain our clients.

We may not be successful in convincing potential clients that the use of our services is a superior, cost-effective means of satisfying their HR obligations relative to the way in which they currently satisfy these obligations.

If we cannot compete effectively against other professional employer organizations or against the alternative means by which companies meet their HR obligations, or if we are unable to convince clients or potential clients of the advantages of our offerings, our market share and business may suffer, resulting in a material, , adverse effect on our financial condition and results of operations.

The market price of our common stock has been, and is likely to continue to be, volatile for the foreseeable future. Since shares of our common stock were sold in our initial public offering in March 2014 at a price of $16.00 per share, the daily closing price of our common stock hasin 2016 ranged from $16.33$11.10 to $37.88$26.64 per share through December 31, 2015.2016. The market price of our common stock may fluctuate significantly in response to numerous factors, many of which are beyond our control, including the factors listed below and other factors described in this “Risk Factors” section:

In addition, stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many business services companies. Stock prices of many business services companies have fluctuated in a manner unrelated or disproportionate to the operating performance of those companies. In the past, stockholders have instituted securities class action litigation following periods of market volatility. Securities litigation could subject us to substantial costs, divert resources and the attention of management from our business and adversely affect our business, results of operations and financial condition.