TNET - Earnings call transcript Q1 2020

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Operator

Good day, and welcome to the TriNet First Quarter 2020 Conference Call. [Operator Instructions].

I would now like to turn the conference over to Alex Bauer with Investor Relations. Please go ahead.

Alex Bauer

Thank you, Operator. welcome XXXX and Call. Quarter everyone, afternoon, to First TriNet's Conference Good

our me our Financial our Murphy, Goldfield, are Officer; Accounting and Michael Joining Burton Beckert, President today CEO; Richard and Chief Officer. Chief

our our prerecorded. were performance. begin overview and remarks prepared in first then more Burton operating review Our quarter will results with will an of financial Richard financial detail.

our Finally, Michael forward-looking will guidance. provide

up then open the will the session. call We Q&A for

COVID-XX X conference this of the mandates. different locations, call, our in to Unique us observing four shelter-in-place are

We as have as will efforts Q&A a to make our possible. best session executed seamlessly

or the including of circumstances market XX-Q or our stock. you to may results our Before We and we refer the in and will are SEC, are in full nature beliefs any predictions, we forward-looking. the our statements or from cause and and second forward-looking future. future statements review otherwise. other differ such statements conditions, might current in detailed to are that predict begin, our that uncertainties by year subject based changes these do inherently please of are information, strategies, our required to assumptions affect being our and today in events Except These of or encourage note may that future historical predictive that new events statements made to changes or expectations in be that today's actual quarter on not circumstances future statements XX-K not the public uncertainties include materially most management's for as undertake discussion with that risks, nature update as be guidance law, in or to other considered and are difficult a of to recent upon light that price filings may XXXX expectations, estimates, or risks, filings results more depend discussion

our from The today our EBITDA forward-looking measures, will us adjusted share. service revise led include guidance for has non-GAAP and our net including impact revenues, adjusted COVID-XX financial guidance. non-GAAP per margin addition, discussion forward-looking to In income net

forward-looking by COVID-XX, guidance especially quarter leading range. second to wider-than-typical guidance Our a impacted is

For non-GAAP of website. our to is see our available guidance quarter, our release on which forward-looking or please filing earnings our available financial most our XX-Q GAAP GAAP results, reconciliations our measures non-GAAP financial website. first through SEC or comparable directly on our measures reconciliation A of for our to the is the also website

opening I the that, his With to for turn will Burton remarks. call over

Burton Goldfield

you, Thank Alex.

have of past the the two consequences we witnessed COVID-XX. immense months, Over

those financial by impacted disciplined financial thoughts were as well Our fallout. are with management. as by results TriNet economic subsequent QX volume by growth affected driven the strong, virus and the those

our times. our and Before I go detail into response results, to around I want these to market these unprecedented address additional

leader in and XX,XXX-plus As difficult business months the this X a segment, have time. guiding our medium-sized customers we small- last spent the through

segment. well patents nearly than U.S. employing are employing scientists other innovators XX% operating our They U.S. of of We the of the the are invaluable are product that majority the engineers to SMBs and focused colleagues addition and business. our consultation, At workforce. more benefits XX% feedback generate SMBs domestic half we providing HR support. while on to and all the our of are the direction in are same economy. and as all the payroll, gross time, any providing as business aspects critical organizations

first offer tests company. is An example company a is of one with blood-based the noninvasive SMB Biodesix for Biodesix, patients X cancer to lung lung innovator diagnostics disease.

felt COVID-XX, technology the the compelled fight to has They for corona now leaders to leverage of virus the their not against are of pandemic. enter focus testing company, Although been expertise detection and Biodesix the processing the hours. to that customers XX this X,XXX and am our know-how Biodesix customer, test technology have just a who kits TriNet is many their proud I per fight and of converted providing in pandemic. day results one and

target our eventual small- Notably, which be market to medium-sized economic businesses key our will is nation's the represent economy. recovery. the and Our backbone these of SMBs,

services. impact all information. quickly Center. I reach resources TriNet am Resiliency dislocation their us began leverage of as We This with as response TriNet to focused as distribution pleased has we and SMBs service employees. the and customers. TriNet's these on important protocol. our content. and resource for a with in COVID-XX in current efficient pandemic We allows as customers center access launched relevant has COVID: and economic time our achieved guiding TriNet mid-March serves and our our scale customers through communications instituted the been our well timely valued web-enabled the created It that providing Business Preparedness to noncustomer a more our customers resulting SMB our support in shelter-in-place enhanced There an and amazing never of to expertise, respect for and

Over we the have daily average, site. under visits on past just X,XXX the seen, to weeks, X

as schedule expertise service customers resources. and out tap been to to to reach it Our us our crucial customer has XxXX team allows on their

a beginning April, The a average historic inquiry. and customer applications of XXX employees. the XX% has for Two the increase been topics key of per their COVID-XX-related of logging loan has frequent options cases Program the CARES specifically, just been day, have the Since on the team SBA SBA caseload. in inquiry of Protection through around customer the administered of been under most roughly health of the passage and care Payroll with driver our assistance Act,

has and to formatted payroll infrastructure and timely the properly analytics customers us with has complete information in necessary loan applications. to It workforce investment provide Our paid enabled specifically off.

of PPP Additionally, we required subsequent payroll of the tracking under the delivering are the data terms loans.

of homepage leveraged walking We well-received, the host series through how-to have also process. loan vignettes, customers a COVID the to

just loan under customers data. have accessed relevant Thus of our the far, half SBA

TriNet access has care addressed issue proactively expected, As health improved with coverage. care. inquiring customers affordable about also to options health have been this related to

such changes, and plan carrier telemedicine cost sharing, communicated waived and testing, co-pays to lab actively as more customers. our have We

With have visits in of wait telemedicine, seen we times. respect a without to increases doubling significant

best sponsored employment. our to ensure WSEs, plans modified have also WSEs have that supporting to and we are We part-time moved furloughed

Finally, results as furloughed we QX and reflect to respect to growth, quarter. through an alternative management. QX with greater results, medical representing am these coupled first return These results pleased Richard go With TriNet's affordable for facilitating TriNet workers, environment our I laid-off Notwithstanding access financial has are COBRA. the plans to to short-term will changed, such, disciplined these with economic detail. financial in results, and strong

two to QX. However, highlight want I items from do

margin our insurance net employee and Our average growth. worksite

delivered quarter, cost health and first believe savings. costs in persist quarters largely due to savings we in the incremental will the margin, costs lower coming health insurance to in trade-off the net COVID to and between utilization. decline due elective We overall procedures Regarding cost attributable XX% health the

the base. return state than generate risk, health of we important the savings health a that and insurance to savings in again utilization prices. margin higher-than-expected Should an installed the to utilization customer in when annual will rather TriNet in net cost look is health unexpected in once prices expect QX we our are we saw see TriNet quarters cost drop excess historical returns, to result to any to of It experience, coming

insurance our departure, our CFO will margin provide upon who detail acting Murphy, be forecast. later Richard's will Michael net greater regarding

employee result That was first to the count. customer customer quarter, count the worksite our largely WSE retention. and customer which effective grew by X%. growth selection drove average Turning of process, improved In service

focus a CIE such services to an having changes Our continues in life as economic in and current base customer our is technology, to financial attractive pay dividends. lower specifically our environment, important installed and with even metric vertical sciences. This When our process SMB our of verticals, model resulted the focus, selection U.S. compared broader unemployment and business market, during in the aspect growth the overweight is correlation rate. has

of quarter. of as WSEs, data XX. circumstances, intra-quarter current last XX% to XXX,XXX our such, attrition given net XXX,XXX range rate provide As update, but it don't to WSE this the typically in since felt volume prudent an of this the provide is we a March for week We current volume

our is enhance service in the During moved decisively critical to these TriNet nearly business. To this of rate Main collar that the verticals. vertical Notably, attrition has our an now our white and protect white-collar vertical. customers, TriNet XX% business of Street period, had twice book

mid-March, structure. Within proud continuing your colleagues I In personally of. work-from-home passion XX,XXX Thank customers our XX% remote, we week, of company. X almost a working executed is an to customers business and and am for transitioned was continuity to while team our around TriNet the very successfully our you to our of team TriNet X,XXX over amazing successfully entire We remote. effectively working This serving achievement transitioned workforce plan, remotely.

further late during XXXX and regulatory changing operating TriNet cross-functional well strengthened established Informed address financial felt maximize In crisis, and our strengthening our as the the by control we we was now as our strong our constructs. it prudent We our experience collective and to $XXX tower liquidity. landscape a customer financial draw credit. lines revolving to million already us, sheet. over of cash down strong already have to available in March, balance liquidity

first developing long run, automation from to our changing industry our of initiatives, in future our In continued Presently, such our rapidly our and that the this invest benefit focus the these the Finally, quarter. we on our strategy customers is retaining in strategic modularity core customers environment. supported helping unique TriNet investments. our prudently right further in offering, customers as TriNet's regulatory our momentum creating continue efficiencies. and will and economic and the complex attracting navigate a in is verticals, about

mission, are a SMB more our in been in COVID-XX. crucial which role customers has never we helping relevant, united are We our and playing survive

turn to the will the over for financial review. I that, Richard Richard? call With

Richard Beckert

Burton. you, Thank

focus will appropriate. we review on financials, and the GAAP where As numbers the I non-GAAP

we financial quite performance, paired our demonstrated growth, with our As to and disciplined were management. as with Burton return operational pleased first quarter it noted, financial

to employees, XXX,XXX growth. count $X service and X% Professional improved first During increased strong grew million. due XX% approximately quarter $XX revenues for the revenues forecast increase. by first approximately revenues XX% base, $XXX million Average year-over-year retention, quarter quarter showing sales. hiring WSE continued $XXX year-over-year increased our approximately in to the service We revenues new for million. WSE net X% year-over-year GAAP total outperformed the service first with installed was XXX,XXX, XX% from year-over-year and year-over-year the to Professional quarter worksite to first billion, finished the quarter, an our

and Insurance XX% insurance insurance QX was $XXX to net year-over-year increased driven March. particularly for increased service quarter service strength in The million. in year-over-year lower service the $XXX XX% costs, net revenues to by revenues first million, revenues

not was compensation. equity from benefit Our first did quarter GAAP XX%, effective quarters, recent of the tax higher as employee treatment than a receive rate we tax

to compared non-GAAP compared our last to share year-over-year same per to GAAP rate was the $XX quarter, $XX year-over-year per year. or $X.XX XX% million, income per XX.X%. $X.XX the million million in last or increased $X.XX XX% $XX For $XX quarter tax or Adjusted $X.XX to or share the share same in net share quarter income increased year. net million, per

million quarter $XXX to for year Adjusted XX%. EBITDA $XXX million margin XX% during cash closed first adjusted $XXX to for quarter the compared EBITDA total of prior the with We the year-over-year increased first of an million. period,

down balance we $XXX line and As and cash equivalent investments. available between of million our cash drew the million, Burton $XXX long-term short- credit and over for to unencumbered now revolving us in of cash, have noted,

XX, million the XXXX, flow capital $XXX Through million comprised $XXX fourth Working operating and million million, XXXX. was quarter quarter the March of in primarily WSE-related corporate payroll $XXX in versus cash from obligations. activities, the used positive months X of we of generated first ending tax $XXX

million. stock a of $XXX approximately was result, cash from spent quarter. outflow repurchase XXX,XXX in We operations $XX total to shares million the approximately first As

our call year I turn full over will provide Michael? updated to Michael now guidance. QX Murphy and the to

Michael Murphy

Richard. Thank you,

I and XXXX will full GAAP guidance. non-GAAP Turning quarter and to our outlook. year both second provide

light understand Before well with like earnings I assumptions typically estimates, in don't some we guidance to information share our provide COVID-XX. guidance of as our begin some better I to would our as intra-quarter of

rate representing a Burton range our noted, XXX,XXX, net in attrition XXX,XXX volume of WSE sequential current XX%. of the is As to

attrition rate our of verticals. of that Our is occurring attrition our comprised Main Main at collar approximately vertical, a XX% Street Within XX% employees. Street to twice Main furloughed of Street is white our

continue assistance small turning economy the employment Act guidance CARES Now support using our Program like will businesses that Paychecks It Protection until to its policymakers and U.S. by presumes to legislation the reopens. assumptions. to

will orders different access tracing quarter. around shelter-in-place gradually rates also country broadens We in lifted therapeutic at as and testing, assume to the be solutions the fourth

the current in in the by the Our steep low volume, fourth our the experiencing, checkmark. which through both QX growing followed strength third of late in cases, QX guidance, and high and the assuming assuming near second of will be we guidance, economic a quarters a economic modeled by the At the have are we in is are economic lower. currently in recovering outlooks, a The revenue recovery we recovery In and low half the At fourth will is before beginning sales end steadily drop, of drop therefore, determine of the assumed in end we're and GAAP informed QX. shape X sales. the of recovery second slope our term, both economic new worsens quarter. quarter range, new

being anything than from the assumes will timing and insurance cost margin Our that provided. as impacted pandemic other by coverage prevents full and year net health medical guidance essential significantly quarter second services of we be the

should net If will savings these return experience, to our benefits of excess to these of savings develop, we margin second quarter noted, cost most in accrue we annual cost the do return insurance over see of before be our installed begin for base. incurred an the look historical to the in Burton As time. these savings generate we we should

the timing such, in second the to health and our across costs differences report we As significant quarter expect year.

As a margin net be of in XX%. XX% to range to expecting our second result, are quarter the we insurance

For net X raising the XXXX, margin percentage full points. we year forecast insurance approximately by are

set I'd financial guidance. Now like out our to

net year-over-year. of service in we down grow For down revenue up in XX% the to expect And of XXXX, X% the GAAP to X%. second we of range to quarter revenues and XX% expect range the be

of We an adjusted the quarter are margin in XX%. forecasting EBITDA range XX% to

XX% range to adjusted net share per XX%, We of grow GAAP XX% to QX expect the earnings of to per in in year-over-year income to and grow range share the XX%. year-over-year

guidance. XXXX our year full to Turning

We are revising our lower. guidance

XX% range in guidance our now to growth. We net to of we the the flat of service up be forecast our be year-over-year GAAP changed guidance versus X% now year-over-year year-over-year down expect of XX% For X%, revenue, change X% down to to previous X% our from to revenue XX% growth. to previous

original earnings XXXX down range our to Our XX%, to down of income per are is down X% is X% X% down EBITDA XX% from targeting full guidance margin and now GAAP between share approximately be year now a per expected of adjusted XX%. to growth. year-over-year, our to XX% our Adjusted growth. guidance year-over-year, X% X% previous from now lowered of to from expected guidance lowered share net XX% be to up previous X%

Burton? return will remarks. to his call I that, the With Burton for closing

Burton Goldfield

Thank significant dislocation, help. you, segment enduring Michael. here The SMB TriNet economic remains and is to

SMBs Our to we is ways our benefit leveraging of in are customers compelling value especially for scale our as independent struggle proposition the mimic.

ensure We stakeholders. have with quarter am results. to of our of first results management. our to TriNet's These I with coupled on reflect growth, our return all steps and disciplined financial behalf we the necessary business, thrive remain we on pleased focused can taken

a and again, and am environment. colleagues. ability at of everything customers center your I how changing remained for to and kept do. wish uncertain awed by we am thanks navigate say you've to to want continued I proud I this Operator? our special of your safety. Most health focused TriNet I importantly, Finally, my the

Operator

first of JPMorgan. Tien-Tsin [Operator Instructions]. Huang question Today's comes from

Tien-Tsin Huang

pieces giving like and when really given quarter, margin or you Thanks you'll digest when the and into that that of the you've savings for plan through around not in get sounds it -- may this layer sort the how I trying we all you detail. of to could XXXX all picture? back? good. assumptions fourth back it. guidance sense ready Makes a net But Because savings. much to those to have It's the made, you it give insurance Still take do feels this firmer the recovery the until into know extend third view be is a like? mean, it moving

Michael Murphy

of anticipated lower our could and those the Clearly, we, net believe a of extreme which guidance, environment, us elective there in of come services. we procedures environment even to have a the COVID savings, from moving of lot are pieces and right And suspension now. utilization more current COVID a

another course, We uncertainty. before we -- I workers' the we past. end an that that of the this compensation finally year. know it. we've And in will to that evolve, that need will when think to determine about when understanding that, will have the program when add it Of we we'll is piece know sort but we more the don't of to able of done to return be We've believe

Tien-Tsin Huang

here. good mid-March Okay. case. you looks that's and into the going sales like I trust had trend retention a It

I pieces, here? are relative again, we revenue WSE line XX% employee, moving employee Given evolving that per white the you professional How that behave collar, to the I forward growth? now know will to -- going you should relative services a professional of do How quickly. know change, think lot but mentioned worksite things model services

Michael Murphy

So set year, now be X% we've in we as of way we're -- prepared we've that to in X%. believe believe and minus change range that will a remarks. the best contemplated in between why is there full annual range Burton's minus we is is range, And mix that estimate described our the of mix our we seeing right which that our at

Tien-Tsin Huang

you. Got last you. one. One Got quick

ability your line protect to bottom Just here. the

to or you're feel anticipating, if On the than it pull you how the on front? expense side, that longer should the levers things available little you extends do bit about expense get worse a what have

Michael Murphy

COVID and clients. count We've our some our already have directed the pulled initiatives also clearly maintained employee of support our We to Yes. them projects. to

we that need We have right to financial we're now, pull. expenses prudent on and we levers are the being comfortable

Operator

Andrew Nicholas Blair. question William And our comes of next from

Andrew Nicholas

you to of being so. sales sell to imagine the month a that the over not lot clients higher-level start, employees Just hoping pretty past the would the bit to of a new your hindrance, focused new I fact would big able maybe could on a and day-to-day. was force speak business meet question. a to SMB I imagine ability the is with face-to-face or I also are

couple you other the of could and remarks that outlook would environment said be color prepared provide selling So any quarters what of outside kind next on the over the you in helpful? the of

Burton Goldfield

more on of medium time, having and growing, detailed small this dynamics of and continue has using prospects the all these my have have question. the have QX. sales I is medium lot experiencing A difficult business much customers. and expect is I will are small conversations most QX with COVID and us tremendous we've meaningful our how existing Yes. and pipeline And point, vantage People than a and be our Conversations it understanding And has And these us are what done interested TriNet as scale customers. in of businesses. we're past. that opportunity marketing, with in in for more impact businesses. new in trend abates From give expect, to little will TriNet, to these which an Great comes in they from is conversations through to be in service we're obviously, sales bit and future. and been a the particularly XXXX. ability and TriNet's branding, environment what prospects the existing recognition our more the evolves, The opportunities around they've the increased invested created

Andrew Nicholas

perspective, out then in XX% about being And Is white in exposure out helpful. a and any life I that can from a hit also be appreciate like overweight a a you being more know of tech That's obviously, to others. then you certain from collar sciences. you appear provide? level? financial similar business Could regions vertical I terms question perspective. it now bit seems break calling And services and mentioned harder there your you Great. detail regional than at mix,

any color So on be exposure regional helpful? would

Richard Beckert

Rich. is This

those has talked XXX,XXX what coming and -- down business employee. that are employee a out help about come out that back online, to week, to We're number about customers furloughed back have between our recount actually been just is had degree furloughed. just what being back to as inside and Let's X/X the trying of Right this a we is about so said. from XXX,XXX to of easy WSEs, now, happy What approximately Think and we go of the last regular being furlough XX%. has into we also account, from coming going of come leave. very it it on -- the leave had is

inside X/X roughly Inside give That's So tech, very, tell XX% as ask know, is we board they have behaving harder hit. you way. don't sign. general, And as start-ups. about a the installed have information. where it their you small affected in When is from in to the the of you hospitality, mirroring really standpoint, the furloughed. degree, can base what very it's we of out looks. only Main a they're But only you businesses And that across can regional positive regional kind of it imagine, of have we Street, that of you about how in

Operator

[Operator Instructions].

question next England from at Berenberg. comes Sam Our

Samuel England

a Just for me. couple

The being I Or one, the sort customer you the late-March? number mid- time here has you think state throughout wondered in of do shock we've April? to after initial a for with that that steady just hit sort first of gave, attrition accelerating been that

Richard Beckert

how we runs. around it's business, see what So really we that would our more is answer payroll is,

a you say played although didn't been more are runs. we've It's actually it an single we fairly at coming see being that as no, we across the payroll lumpy macro you around acceleration. see is, since that that little every -- degree nature, things goes we lesser saw steady same, slowly particular level, So said, it can't already of the seen That has week and the And and installed of lot a part for predominantly we as earlier, said a -- it's you of have hotels, of around what collar, runs. restaurants payroll this white base our book I see out. things

Michael Murphy

our end anticipate the far we of the in will of top of the range, at the range we the end in do recovery recovery our continue and QX, that would bottom as into into our both bottom I top of end QX. guidance, can QX in attrition QX. later add as And -- range to top if in guidance we the goes, through And late see would see the the that

Samuel England

next making assumptions in Okay. numbers I about bases, of HX, just office, potentially you're one, the for what so white-collar cetera, the workforce? get wondered their white worksite start probably the far given et Great. many businesses cost the most side adjustments And collar clients employees on then back revisiting as haven't made too to

Michael Murphy

best -- Yes. forecasts don't volume That's about way our the out The about give to that GAAP on that understanding we're a guide to We look volume. captivates basis. revenue general to growth. thinking way think is our

Operator

And our Crédit question today from Suisse. comes Pawlusiak Palmer next with

Kevin McVeigh

detail X.XX% a kind Is and a a to in QX, way of sense -- What detail, we're QX of there of quarterly you get if as year? on rest today. a X% Super, how WSEs pretty trying fluid to the obviously just a and look the It's does of progression give environment. of I'm basis? thinking Kevin. lot about super then that any you're the like the and

Michael Murphy

Yes.

saying give really out really -- to want As we Sam, don't we forecasts. I don't was volume to

GAAP end understand our is guide recovery best in our we're or later about the a thinking the you the with in think guidance our can guidance shape earlier bottom how and the I probably then that top shape that. way our end, that, the checkmarks recovery of between combined of of

Kevin McVeigh

is how helpful. That's WSEs have then a to many And about there Got just way it. COVID-XX? think

Michael Murphy

coming basis. we tell it's get the that to So in networks early now. too We a normally only -- data from incomplete, on the provider right and paid data is

about So to in X, expect that time. we see weeks' X probably

Operator

from question And Stifel comes David Grossman with our next Financial.

David Grossman

Just Is first and chance the guidance. quarter second you quickly the all year? the non-GAAP could for catch for the run guide through didn't sorry, off, just I there a

Michael Murphy

Sure.

to net in second got to per the So XX%. share the be quarter range for of EBITDA adjusted the second in the for XXXX, XX%. to range income adjusted of year-over-year to grow quarter And we've XX% XX%

David Grossman

for And year? Okay. full the

Michael Murphy

of targeting to the net EBITDA XX% X% year, For now is full adjusted adjusted down up to expected year-over-year. margin income And XX%. X% is our our share range per a be to

David Grossman

Okay. to And year, your revenue for minus was the right? minus X% X%

Burton Goldfield

Correct.

Michael Murphy

Yes.

David Grossman

it. Got Okay.

I'm if about go accurate? Okay. comments Is I talking employee about back retention. your Great. just you're could because to And retention I wondering think that

Richard Beckert

if Rich. our No, working we talking could recall, [indiscernible] all satisfaction, from we is on through we're months retention. you This improve the actually ago ways started And about about way WSE had that better customer first anything supporting them starting and run, year all building through thereafter. half of and the payroll have their clearly found quarter. now QX, in we is then last back What we've much retention onboarding every

So with been. has the retention how we're pretty happy

January we So strong being the quarter. a month, single very biggest had retention

David Grossman

-- the acceleration you if the quarter? the that -- growth look of and would year-over-year you So still growth at as that really in being key would driver X% X% average, characterize retention

Richard Beckert

between January In the with quarter, leave people tie when a the payroll out to insurance quarter? that's normally of you that company large being stubs. Because the because they In month try their true. annual and have such would their

David Grossman

what can this have about tracking but answer client small obviously have on question, how gauge risk probably retention? you attrition business in seen and of very look do the think just And to and of really you too which similar? terms early signs retention if or don't seen WSE any versus it's Or bankruptcies it. of you they -- this, I is but you as minds things I community, Got that, know everybody's and is in -- the like

Burton Goldfield

Yes.

that's here epidemic was that took the and were pandemic. and earlier to the furloughed, And rehiring being knew give and indication that issues. around not forecast own the probably in or on watch leaving X/X already had companies little of the them before tried those that pandemic color they year in their a ever people, to aren't we furloughs, be list to We under. that due had and honestly, actually pandemic in going of the plan why you and due people only on were that So they one a them pretty a financial those trouble that size good are that our down, they saw company we started. we actually we would

hasn't in other when look were harder. So than and hit subverticals you hospitality been much general, of at those anything it types some of

not inside a heard There If as he have knock-on through I and you checkmarks, earlier, will be the shallower and business, white-collar already. you think say Mike clearly, to there's went and the you degree. that the nearly that effect, steeper -- look

David Grossman

Right.

-- this that and -- of when again, probably how reflect do to terms in in any stimulus really deployed? small got actually on look any for at for being it's few the detail, have sense money, you you So -- businesses how early too but it's way

Burton Goldfield

We banks doing separated, on them how lot a did it ask -- what in company did work them. of people and them a lot they We a it helped -- The rules a to it be they we so for track so that can were. the of cases, and that we compliance. ask uniquely have seen Depending unique up. they in can be great bank seen telecoms with that job and for banks, for videos account some could the understand in would so set some have that that

amount think very an It able that fair medium have and to idea. but them, was of that. were And a that business. did mean a for we for there which helpful it, were all everyone did doesn't small So do I we

David Grossman

being What seen retaining and are really you deployed of just they it? Or have yet people? resources But -- are they any are it? the it's how being with doing they bankrolling Right.

Richard Beckert

of the it has towards payroll, answer. to that's The majority so go

David Grossman

Right.

Okay.

of I too So money we what is retention? we I'm Or the guess WSE the is stimulus haven't understand on impact it. yet seen to early? trying the have seen then it

Richard Beckert

just starting the last week so. or just We're within

David Grossman

then and in And Okay. hospitality I it's Street's did that terms And know now embedded I of hear travel, in. say of revenue? Main right? Did XX% that you

Richard Beckert

down correct. drifting It's area, to that

David Grossman

of travel is should and into now Okay. now? think How that big we're this? we hospitality How big kind

Richard Beckert

digits large. base. Not low of the It single wasn't installed --

So part. it big was never a

maybe a looking went should for people we of think we the cheap when through everyone the on. and had had I insurance SOI remind everyone moved to we risk, call repriced that lot migration, on

lot the already now for pain we due those industries So are sort took that suffering of a of pandemic. to that

So our example, renewals an our -- as collar. be tended annual renewals. well just see often we're you how long and is doing the business, and around our the Because more white higher, Main Street, in of left that with in to of how you the also more book rest PEPM, much than

David Grossman

then sales And and it. is conversion. thing, really just and Got on both one backlog it last

since sold would June, you in business you come are I on the year vast did majority, the and have the March -- that So out? quarter, of bigger that for the of clients, that March that onboarding chunk believe, have seasonal deferred new last or a of as -- business new most quarters get Or did come large planned? that some did on

Richard Beckert

a to deferral was where came all on a tail-end as do No. really surface. pandemic really to wait were wanted see. The of That that was planned. only we more people very transactions the starting of and some as saw There March

David Grossman

similarly, long kind you to depressed? you have somewhat expect point X because different -- How do terms out as think what better if And them then cycle, can be Burton, loud where don't out in impacting of you this you of think at don't sales should we XXXX in -- there about do markers know, really I think if your terms get and sales things for. it. goes about how of materially start on you'd stay Got

Michael Murphy

this So Mike. still are we -- is

sales that are they working that we sure and is well-trained force our are still So on productive. making

QX As time. that focused we're clearly, I think sales force on over carefully the we're and going a in depressed and and prudently and the I long-term investments guidance, still adding QX, to very have said to

David Grossman

point inability guess, Or wasn't a it pro question, -- XXXX I are at to really really through really decisions? when on kind -- clients starting what Michael, it get your to the really difficult people it's have up does becomes the material to new Just sense impact? rata year? of make in sell difficult a into a the Well, doesn't get to year new become trying year, based for so when

Burton Goldfield

like customers referrals never our I've to obviously. on these anything survive. be but with customers. growing, tremendously help pipeline ability will The to David, better before, ability seen model existing The well based So showing The this the is is get day drop-dead with. been are the talking what impacting I've look the The XXXX. meaningful. phone. going as are campaign branding The know as expected. I absolutely on thrilled People is like don't Conversations to far campaign, is marketing as working

we'll So today, transparent and wait to This have see. and we're just to is as data be the as have we possible. trying

Operator

a follow-up Huang Tien-Tsin our And from from question JPMorgan. is next

Tien-Tsin Huang

Burton, if had one question longer-term don't for you just mind. I

your in for hopefully thoughts PEO services? pandemic, later, move the Just beyond on your once and rather for structurally might how than sooner just but about thoughts change demand general which we demand outsourcing PEO

Burton Goldfield

loan But the use has Yes. to said, focused Tien-Tsin, overall small with and as and has scale WSEs board. legislative do to businesses. digesting for of to impact to information. It information. the across with midsized and has It TriNet the And has existing or It the well I'm obviously, It have this insurance, on disseminating these as really left. furloughed industry. process. with do to ability an the as both not have on to WSEs I'm do I've is with that do proud

switched optimistic particularly with of on ability So to and clients. its team the thrilled TriNet TriNet meaningfully I base. way future the addressed impact for an this existing the I'm and the has about it to issue have am customer

as move a tell. it's looked PEO at the situation. may variable So cost to we be But of in hard obviously, particular this forward model

Operator

thank all question-and-answer today's and attending concludes today's for gentlemen, conference. ladies you And session today's and this presentation. We

may disconnect and You now a your lines, evening. wonderful have

TriNet (TNET) 28 Apr 202020 Q1 Earnings call transcript