Research Update: TriNet Group Inc. Outlook Revised To Stable From Negative On Resilient Second Quarter; Ratings Affirmed

Dublin, Calif.-based HR outsourcing solutions provider TriNet Group Inc. reported GAAP and net service revenues of $948 million and $335 million, respectively, in the second quarter 2020, a 1% and 45% increase compared to 2019. The company also generated $198 million in S&P Global Ratings-adjusted EBITDA in second-quarter 2020, compared to $75 million in 2019; and $281 million of reported free operating cash flow (FOCF) net of worksite employee (WSE) payroll tax obligations in the period relative to $43 million in 2019. We expect the significant one-time cost savings realized in second-quarter 2020 due to a reduction in elective medical procedures amid the COVID-19 lockdowns will largely be reversed over the next 12 months as the company accrues for its

...- Dublin, Calif.-based HR outsourcing solutions provider TriNet Group Inc. reported GAAP and net service revenues of $948 million and $335 million, respectively, in the second quarter 2020, a 1% and 45% increase compared to 2019. The company also generated $198 million in S&P Global Ratings-adjusted EBITDA in second-quarter 2020, compared to $75 million in 2019; and $281 million of reported free operating cash flow (FOCF) net of worksite employee (WSE) payroll tax obligations in the period relative to $43 million in 2019. - We expect the significant one-time cost savings realized in second-quarter 2020 due to a reduction in elective medical procedures amid the COVID-19 lockdowns will largely be reversed over the next 12 months as the company accrues for its client recovery credit program designed to return these cost savings to clients. - While the extent and duration of the recession and its impact on TriNet Group Inc.'s credit measures remains uncertain, we anticipate S&P Global Ratings-adjusted...

Research Update