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Edited Transcript of TNET earnings conference call or presentation 14-Feb-19 10:00pm GMT

Q4 2018 TriNet Group Inc Earnings Call

SAN LEANDRO Feb 25, 2019 (Thomson StreetEvents) -- Edited Transcript of TriNet Group Inc earnings conference call or presentation Thursday, February 14, 2019 at 10:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Alex Bauer

TriNet Group, Inc. - Executive Director of IR

* Burton M. Goldfield

TriNet Group, Inc. - President, CEO & Director

* Richard J. Beckert

TriNet Group, Inc. - CFO & Senior VP

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Conference Call Participants

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* David Michael Grossman

Stifel, Nicolaus & Company, Incorporated, Research Division - MD

* Kevin Damien McVeigh

Crédit Suisse AG, Research Division - MD

* Trevor Romeo

William Blair & Company L.L.C., Research Division - Associate

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Presentation

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Operator [1]

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Good day, everyone, and welcome to the TriNet Fourth Quarter and Full Year 2018 Earnings Conference Call. (Operator Instructions) And please do note that today's event is being recorded. And I would now like to turn the conference over to your host, Alex Bauer of Investor Relations. Please go ahead with your presentation.

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Alex Bauer, TriNet Group, Inc. - Executive Director of IR [2]

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Thank you, operator. Good afternoon, everyone, and welcome to TriNet's 2018 Fourth Quarter Conference Call. Joining me today are Burton M. Goldfield, our President and CEO; and Richard Beckert, our Chief Financial Officer.

Our prepared remarks were prerecorded. Burton will begin with an overview of our fourth quarter operating and financial performance. Richard will then review our financial results in more detail. We will then open up the call for the Q&A session.

Before we begin, please note that today's discussion will include our 2019 first quarter and full year guidance and other statements that are not historical in nature, are predictive in nature or depend upon or refer to future events or conditions, such as our expectations, estimates, predictions, strategies, beliefs or other statements that might be considered forward-looking. These forward-looking statements are based on management's current expectations and assumptions and are inherently subject to risks, uncertainties and changes in circumstances that are difficult to predict and that may cause actual results to differ materially from statements being made today or in the future. Except as may be required by law, we do not undertake to update any of these statements in light of new information, future events or otherwise. We encourage you to review our most recent public filings with the SEC, including our 10-K and 10-Q filings, for a more detailed discussion of the risks, uncertainties and changes in circumstances that may affect our future results or the market price of our stock.

In addition, our discussion today will include non-GAAP financial measures, including our forward-looking guidance for non-GAAP net service revenues, adjusted EBITDA, adjusted EBITDA margin and adjusted net income. For reconciliations of our non-GAAP financial measures to our GAAP financial results, please see our earnings release or our 10-K filing for our fourth quarter and full year of 2018, respectively, both of which are available on our website or through the SEC website. A reconciliation of our non-GAAP forward-looking guidance to the most directly comparable GAAP measures is also available on our website.

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

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Burton M. Goldfield, TriNet Group, Inc. - President, CEO & Director [3]

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Thank you, Alex. Our very strong 2018 financial results highlighted our commitment to provide our clients with extraordinary human resources solutions. By executing our core strategy of targeting the right clients with the right vertical products at the right price, we delivered our value proposition and strong financial performance to our shareholders.

In the fourth quarter, we grew GAAP total revenues 8% year-over-year to $917 million and we grew our net service revenues by 10% year-over-year to $225 million. Professional service revenues grew 6% year-over-year to $124 million. Professional service revenues in the quarter continued to benefit from our shift in client mix towards our white-collar verticals and customers within Main Street that value our comprehensive solution. We also grew insurance service revenues by 8% year-over-year to $793 million, while net insurance service revenues grew 16% year-over-year to $101 million for the quarter. Net insurance service revenues in the quarter benefited from improved workers' compensation performance.

As a reminder, a year ago, GAAP net income for the fourth quarter received a $0.56 per share benefit due to the Tax Cuts and Jobs Act of 2017. As a result, our Q4 GAAP earnings per share contracted by 57% year-over-year to $0.40 per share, while our Q4 adjusted net income per share increased 28% to $0.59 per share.

For 2018, we grew GAAP total revenues 7% year-over-year to $3.5 billion, and we grew net service revenues 10% year-over-year to $893 million. We increased GAAP earnings per share by 6% to $2.65 per share, and we grew adjusted net income per share by 52% to $3.02 per share.

2018 was not only a year of strong financial results. It was a year where we strategically invested in our business to drive growth over the long term. Specifically, we completed the migration of our installed base to one platform. We launched our new brand and marketing campaign that celebrates our nation's small and midsized businesses. We remediated our final material weakness. We continued our efforts to further improve our processes and client experience, and we launched TriNet Professional Services, our sixth vertical product.

Our deliberate effort to structure our products and services to our core verticals drove our strong 2018 financial performance. As a result, we experienced higher participation rates in our health programs and improved workers' compensation performance, which positively impacted net insurance services revenue. We are also pleased to have finished the quarter with approximately 326,000 worksite employees, flat year-over-year and up 2% sequentially. Throughout 2018, we experienced elevated attrition due to our planned platform migration, which is now complete. This anticipated attrition masked the strong hiring within our installed base and our improvement in new sales.

We are deliberate in the service of our 6 verticals: technology, financial services, professional services, life sciences, nonprofit and Main Street. TriNet is addressing their distinct needs and challenges. We accomplish this by leveraging our unique technology, service models and price points. Our focus is on pursuing dynamic small and midsize companies, the backbone of American businesses and innovation. We pursue these businesses with our comprehensive HR products and solutions that include the following common capabilities: HR expertise, benefit options, payroll services, risk mitigation and our technology platform.

TriNet's comprehensive HR solution is a differentiator for our SMB clients versus their competition as they seek to secure and retain employees in a historically tight labor market. Our vertical strategy positioned us to benefit from higher U.S. labor market participation rates and historically low unemployment rates in 2018. This employment dynamic positively impacted us as we realized strong hiring across our installed base.

In addition to the strong hiring within our installed base, we made progress with new sales in 2018. 2018 was our second year compensating our sales team on ACV, or annual contract value. We continue to benefit from this compensation structure as our salespeople sell the value of our services. This resulted in strong professional service revenue growth.

In January, we refreshed our mobile app to address the needs of an increasingly mobile workforce. This provides our clients and their employees with more in-depth, real-time information on pay, paycheck history, benefits, time-off requests and company directory. We also added an in-app messaging feature that allows employees to communicate and collaborate instantly on one unified platform. The new mobile update will help our clients handle HR and payroll on the go so they can keep the vital tasks of their businesses moving forward without being tied to a desk.

Our process improvement initiative includes further automating and improving operations and procedures. This strengthens our ability to keep our customers at the center of everything we do. We believe a key to our long-term success will be leveraging our scale through automation and improved processes. As we become more efficient, our customers will benefit from an improved experience as our products and services are delivered more consistently. Our shareholders will benefit from our lower cost to serve and ultimately, higher client retention rates.

Finally, I am pleased to announce that our Board of Directors authorized an additional $300 million for our share repurchase program. The expansion of our share repurchase program leverages a core strength of our business: strong and consistent cash generation.

Now let me turn the call over to Richard for a review of our financials. Richard?

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Richard J. Beckert, TriNet Group, Inc. - CFO & Senior VP [4]

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

During the fourth quarter, GAAP total revenues increased 8% year-over-year to $917 million. Net service revenues increased 10% year-over-year to $225 million. We finished the fourth quarter with approximately 326,000 worksite employees, flat year-over-year and up 2% sequentially. Average WSE count for the fourth quarter was approximately 322,000, flat year-over-year. Professional service revenues for the fourth quarter increased 6% year-over-year to $124 million. Professional service revenues benefited from improved pricing and our shift in client mix towards our white-collar verticals and those Main Street clients who value our comprehensive solution. Insurance service revenues for the fourth quarter increased 8% year-over-year to $793 million, and net insurance service revenues increased 16% year-over-year to $101 million. Net insurance service revenues in the quarter benefited from continued strength in workers' comp and reduced administrative cost.

Our fourth quarter GAAP effective tax rate was 31%. Our tax rate in the quarter was impacted by higher state taxes and a reduced benefit from tax treatment of employee equity compensation. For the quarter, our non-GAAP tax rate was 26%.

As Burton noted, a year ago, GAAP net income for the fourth quarter received a $0.56 per share benefit due to the Tax Cuts and Jobs Act of 2017. GAAP net income decreased 57% year-over-year to $29 million or $0.40 per share compared to $66 million or $0.92 per share in the same quarter last year. Adjusted net income increased 27% year-over-year to $42 million or $0.59 per share compared to the $33 million or $0.46 per share in the same quarter last year.

Adjusted EBITDA for the fourth quarter increased 2% year-over-year to $70 million compared to $69 million during the prior year period for an adjusted EBITDA margin of 32%. As previewed on our third quarter earnings call, adjusted EBITDA was impacted by increased OpEx as we invested in our marketing and process improvement initiatives.

We closed the fourth quarter with total cash of $228 million and working capital of $221 million versus $237 million and $226 million, respectively, in the third quarter of 2018.

During the fourth quarter, we generated $50 million of positive corporate cash flow from operating activities and generated $322 million, primarily comprised of WSE-related payroll tax obligations. As a result, total cash inflow from operations was $372 million. We spent approximately $14 million to repurchase approximately 295,000 shares of stock in our fourth quarter. As Burton stated, our Board of Directors authorized a $300 million expansion of our share repurchase program.

Turning to our 2018 full year results. We grew GAAP total revenue 7% to $3.5 billion, and we grew net services revenue 10% to $893 million. Total adjusted EBITDA increased 22% to $347 million, with an adjusted EBITDA margin of 39%, a year-over-year improvement of 4 percentage points. The increase in margin was largely attributable to our insurance cost savings from reduced administrative costs and favorable claims experience. GAAP net income in 2018 increased 8% to $192 million or $2.65 per share, and adjusted net income increased 53% to $218 million or $3.02 per share. Our 2018 GAAP effective tax rate was 20%. For the full year 2018, we generated $234 million in corporate cash flows and we spent $43 million in CapEx or approximately 5% of our net services revenues. We spent $61 million to repurchase approximately 1.2 million shares of stock.

Turning to our first quarter and 2019 outlook. I will provide both GAAP and non-GAAP guidance. We expect continued elevated attritions through the first half as the impact from our platform migration lingers longer than initially anticipated. Our 2019 GAAP net income forecast assumes a 22% tax rate, while our non-GAAP adjusted net income assumes a 26% tax rate. Finally, both our GAAP earnings per share and our adjusted net income per share forecasts assumes 72 million diluted shares, unchanged from our 2018 assumption.

For FY '19, we are forecasting GAAP revenues in the range of $3.7 billion to $3.8 billion, which represents year-over-year growth of 5% to 8%. We expect net services revenue in the range of $906 million to $933 million, which represents year-over-year growth of 2% to 5%. Adjusted EBITDA is expected to be in the range of $380 million to $390 million, representing a 42% adjusted EBITDA margin for fiscal year '19. We expect GAAP earnings per share in the range of $2.94 to $3.07, and adjusted net income per share in the range of $3.34 to $3.47.

For Q1 2019, we expect GAAP revenues in the range of $917 million to $927 million, representing year-over-year growth of 7% to 8%; and net services revenue in the range of $225 million to $240 million, which represents year-over-year growth of 2% to 9%. Adjusted EBITDA is expected to be in the range of $91 million to $106 million for the quarter, representing an adjusted EBITDA margin range of 40% to 44%. We expect GAAP earnings per share in the range of $0.75 to $0.89 per share, and adjusted net income per share in the range of $0.82 to $0.96 per share.

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

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Burton M. Goldfield, TriNet Group, Inc. - President, CEO & Director [5]

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Thank you, Richard. I would like to thank the entire TriNet team for a successful 2018. We have developed a unique go-to-market strategy and a customer experience that adds value to the verticals we serve. The per employee per month growth we realized in 2018 demonstrated both the value we provide our clients and the quality of our earnings, trends we expect to continue in 2019.

For 2019, we are forecasting our adjusted EBITDA margin to expand by approximately 3%, and our adjusted net income per share to grow between 11% and 15%. We have delivered a financial model which is levered to WSE growth, and we look forward to updating you on our progress throughout 2019.

With that, I'd like to turn the call over to the operator. Operator?

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Questions and Answers

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Operator [1]

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(Operator Instructions) And today's first questioner will be Kevin McVeigh with Credit Suisse.

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Kevin Damien McVeigh, Crédit Suisse AG, Research Division - MD [2]

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Nice job. Burton, I think you said in your prepared remarks that in the professional services segment, you're seeing a benefit from kind of white-collar customers valuing the services. Can you give us a sense of where you are in that process and how much further we can expect that in terms of maybe quarters, just thinking about that over the course of 2019 into '20?

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Burton M. Goldfield, TriNet Group, Inc. - President, CEO & Director [3]

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Yes. Thanks, Kevin, and I appreciate the comment. Clearly, there's 2 things at play here. One is a mix shift towards the white-collar business, but I would also say that there's been growth and new sales in the Main Street business with clients that value the entire value proposition. So we're seeing PEPM growth from our Main Street customers as well as the core verticals that you were talking about. I think over time, my expectation is all the verticals that we're servicing will grow over time but that mix shift that you're seeing right now will stabilize during the back half of the year.

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Richard J. Beckert, TriNet Group, Inc. - CFO & Senior VP [4]

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And Kevin, just to add, we've been pretty consistent on saying over time, we believe we should get to the high single-digit, low double-digit growth rate as we go outside of this fiscal year.

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Kevin Damien McVeigh, Crédit Suisse AG, Research Division - MD [5]

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Got it. And then -- any sense -- it sounds like -- what the attrition levels were like in '18 versus '17 and what we can expect for '19?

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Richard J. Beckert, TriNet Group, Inc. - CFO & Senior VP [6]

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Can you repeat the question? I'm sorry, Kevin.

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Kevin Damien McVeigh, Crédit Suisse AG, Research Division - MD [7]

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Yes, sure, sure, sure. Sorry about that. Just any sense of how attrition's been trending over the course of '18 and what kind of rate we can expect in '19?

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Richard J. Beckert, TriNet Group, Inc. - CFO & Senior VP [8]

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Sure. So we had elevated attrition due to the migration, and we knew that that was going to happen and we talked about that on our last call. We also talked about -- in the fall of 2018, that we would see -- although the migration is over, there's going to be a lingering effect of having the SOI migration ending at the fiscal year. And then the -- in April time frame, there will be the last of anyone who wanted to stay on because of health. So that should be the end of that migration and we should then be able to transition back to a more normal run rate, if you will, going forward on attrition.

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Kevin Damien McVeigh, Crédit Suisse AG, Research Division - MD [9]

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Got it. And just quickly...

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Burton M. Goldfield, TriNet Group, Inc. - President, CEO & Director [10]

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I'm going to add to that because it's a great question. We believe we hit the inflection point in April, which is the decision point for our legacy SOI installed base medical renewal, which, as Rich said, is the final hurdle on the migration, and don't see, after that, any other key point, and then we see the growth from there.

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Kevin Damien McVeigh, Crédit Suisse AG, Research Division - MD [11]

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Got it. And is there any way to think about the sensitivity of -- from a revenue perspective, what 100 basis points of attrition can mean to revenue if you were to frame that out?

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Richard J. Beckert, TriNet Group, Inc. - CFO & Senior VP [12]

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It really depends. Every WSE is not the same. So if you've been through -- a lot of the attrition that you've seen is at the high end, SOI; where in WSE, they are lower PEPM. They tended to not have health. They also tended to not necessarily see the total value that we provide. So as you see, as we focus our efforts, that's part of why you see the PEPM come up. And so it's a little bit hard to answer that question in any one way, but I think what you're seeing is as attrition is abating, you're seeing our PEPM pick up because our new sales are coming in at a higher PEPM than what's leaving.

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Operator [13]

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And the next questioner today will be David Grossman with Stifel Financial.

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David Michael Grossman, Stifel, Nicolaus & Company, Incorporated, Research Division - MD [14]

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It looks like the business is evolving pretty much kind of as you had articulated. And with that in mind, can you help us deconstruct a little bit some of the stabilization that you're seeing in the WSE count, helping us kind of understand it? What is kind of happening in the blue/gray business versus the white-collar business? And since there's so much that has changed in this business over the last 18 to 24 months, could you maybe give us an update on just how the WSE mix has changed from the last time we talked about it? I think it used to be 1/3 of the business was blue/gray. I'm just wondering how that's morphed over the last several quarters.

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Richard J. Beckert, TriNet Group, Inc. - CFO & Senior VP [15]

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Right. So as Burton had said, we are seeing a -- starting to see the uptick of -- in the new year, we'll start to see Main Street come back on as a larger percent than it was in 2018. That being said, it will take a while for that to really see any meaningful mix change. As we ended 2018, we definitely have a higher percentage of white collar than previous years. And also and more importantly, inside Main Street, we have people that tend to take health and are -- people that see the entire value. So it's not just a price play. And so therefore, we're seeing a higher PEPM in both Main Street and the overall book of business.

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David Michael Grossman, Stifel, Nicolaus & Company, Incorporated, Research Division - MD [16]

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So as we go into -- as this year kind of progresses then and you start layering in more growth in the blue/gray business, I assume that there'll be some dilution, though, to PEPM as that business ramps up. Is that the right way to look at it even though they have a tendency to take more than the old SOI book had taken in the past?

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Richard J. Beckert, TriNet Group, Inc. - CFO & Senior VP [17]

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That will probably happen more out -- going into 2020.

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David Michael Grossman, Stifel, Nicolaus & Company, Incorporated, Research Division - MD [18]

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Got it, okay. And then in the context of the margins, including the insurance margins, can you walk us through just the puts and takes? Because I know workers' comp has been a tailwind this year and I'm just curious just how much of a tailwind that's been. And I know, Burton, you talked about Sarb-Ox. You finally got the last kind of material weakness remedied. So you've got several moving pieces that could affect margins as well as OpEx spending. So perhaps this would be a good time to just refresh us on what the major puts and takes are as we go through 2019.

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Richard J. Beckert, TriNet Group, Inc. - CFO & Senior VP [19]

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Sure, David. So if you think about the workers' comp book of business, as we reprice that to the risk, it has allowed us on an ongoing basis to have a much stronger book of business for workers' comp. If you think about it from the attrition of people that have been attriting, it was people whose risk in us was not where we wanted. So some of them self-selected out and that was their decision.

When you move forward to the rest of the book of business and the way that we're looking at it, 2 things to really think about: we really expanded quite a bit in the number of clients that we have. So that also helps to see -- for you to demonstrate that you're seeing that mix happen in just the volume of new customers. When you go through the -- into the actual margin -- so now you're moving away from the insurance market into the overall margin of the company. As we had said on our last call, Q4 was going to be elevated because of the things that we're investing in. So we're investing in a lot of marketing, and Burton can talk about the marketing efforts that we have, that we did last year and that we have on the way this year, and a lot of the reengineering that we're doing in the company to streamline the business and have a better customer experience. That will continue that elevation through the first half of the year, and you really won't start to see the benefits of that until the back half of the year and then into 2020.

The last piece of that though, is as you're working your way down through the different elements, we overall have a much better command of the company. And I think that overall business model, as you can see, is a margin that we're comfortable with, and we're comfortable with that going forward. And as we start to reach the growth rate acceleration, that just helps with the bottom line margin expansion.

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David Michael Grossman, Stifel, Nicolaus & Company, Incorporated, Research Division - MD [20]

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Right. And did you say 300 basis points of year-over-year EBITDA margin expansion in 2019? Did I get that right?

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Richard J. Beckert, TriNet Group, Inc. - CFO & Senior VP [21]

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Yes, yes.

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David Michael Grossman, Stifel, Nicolaus & Company, Incorporated, Research Division - MD [22]

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Okay. And the last question really is for you, Burton. Just -- I think Rich has touched on this, but can you explain to us -- we started with one sales strategy and model, and we evolved that kind of after the first year or 2. And I'm just wondering, now with all these transitions largely behind you, can you just update us on what you're thinking about in terms of go-to-market, sales force adds and productivity? I know you don't want to give specific numbers on kind of guiding the number of people, but anything you can do to help us understand what those investments that you're making are and when you expect them to start manifesting themselves in bookings and revenue?

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Burton M. Goldfield, TriNet Group, Inc. - President, CEO & Director [23]

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Yes. And you know I love talking about this subject. So what I can tell you, David, is that we invested in sales headcount, which grew double digits in 2018. Second, as we talked about in the past, I'm very focused on keeping the new sales people and developing them into highly productive sellers. One indication is that we grew our client base in 2018 14% year-over-year in clients to 16,900, approximately, clients on the book of business. So we're selling broadly within the verticals that we're starting to penetrate. I think we're in the early stages of seeing -- we have incrementally increased productivity between '17 and '18, but I believe there is much more to do there as we start to understand the verticals and focus on those verticals in each of the geographies. So I am optimistic about the growth of those new -- of the sales force and those new sellers becoming productive. And ultimately, the go-to-market strategy is very unique by focusing on these verticals, and I believe it will pay dividends now that we have better insight into our business and our service models.

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David Michael Grossman, Stifel, Nicolaus & Company, Incorporated, Research Division - MD [24]

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And so how did retention in the sales force trend in 2018 then on a year-over-year basis?

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Burton M. Goldfield, TriNet Group, Inc. - President, CEO & Director [25]

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That's a great question. The new sellers, half are staying, which was the concern that I echoed a year ago. But I want to see them past the 1-year mark and get highly productive in their second year. But early indications are good with the new sellers that we're hiring.

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Operator [26]

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(Operator Instructions) And our next questioner today will be Tim McHugh with William Blair.

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Trevor Romeo, William Blair & Company L.L.C., Research Division - Associate [27]

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This is actually Trevor Romeo on for Tim. I just wanted to ask, so we've seen strong results lately from just about all the PEO companies we follow. Just wondering your thoughts on the broad PEO market growth and the competitive landscape. Are you seeing any signs of increased competition? Or do you think there's still a lot of room for strong PEO demand to kind of lift all boats in the market?

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Burton M. Goldfield, TriNet Group, Inc. - President, CEO & Director [28]

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So thanks for the question. My belief is there is strong demand for PEO. It's being more widely accepted. The PEO model is -- or the PEO companies are investing in marketing like we are. The construct is a phenomenal construct to service small and medium businesses. And my belief is you're seeing an expansion of the market opportunity, not an incremental competitive threat, but a good opportunity for all the PEOs that can deliver the value to those small and medium businesses.

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Richard J. Beckert, TriNet Group, Inc. - CFO & Senior VP [29]

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So Trevor, remember, we still only see, even last quarter, about 25% of the time, another PEO when we're out competing. So it's very much still a wide-open market. So to answer your question, as Burton said, with a very tight economy, it's a very powerful tool for small and medium businesses to be able to provide the kind of HR and insurance, and it allows them to compete against others, and I think they're seeing that and we're getting the benefit from that.

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Trevor Romeo, William Blair & Company L.L.C., Research Division - Associate [30]

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Okay, great. And maybe just a follow-up on that. I think one of the things you've talked about in the past is a lot of people just kind of don't know that the PEO business exists. I know you're investing heavily in marketing. You just said that other PEOs are investing in marketing. Have you seen any indications lately that sort of awareness of the industry is increasing?

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Burton M. Goldfield, TriNet Group, Inc. - President, CEO & Director [31]

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I absolutely believe that. I was on the phone earlier today with a prospect with 200 employees in 3 states, and he stated -- and they're growing quickly. He stated that he had never in the past considered the PEO construct, doing it in-house, and now he's convinced that he's going to go with 1 of the 2 PEOs that are being competed for right now.

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Trevor Romeo, William Blair & Company L.L.C., Research Division - Associate [32]

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Okay, great. And maybe just one more. So we've seen some consolidation in the PEO sector over the last couple of years, let's say, and your balance sheet's pretty strong at the moment. Could you maybe just talk about how aggressively you might look for acquisitions? And would you think about accelerating buybacks if you don't end up doing any deals in the near future?

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Richard J. Beckert, TriNet Group, Inc. - CFO & Senior VP [33]

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Well, as you know, we just received that we're allowed to expand the $300 million from the share buyback, and that's definitely to offset dilution and we'll go in opportunistically. We also believe that where we are versus our peers is undervalued. So we think this is a good time for us to be in the market for share buyback. That being said, our #1 thing is to reinvest in the company and then it would be M&A activity. M&A activity's kind of frothy right now. So whether or not we find a particular target that we think fits our needs and wants, then we will address that. We constantly have our deal radar out there. So it's not as if we're not in the market. We haven't found something yet that fits into our portfolio.

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Operator [34]

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And this will conclude our question-and-answer session as well as today's conference call. I just want to thank you all for attending today's presentation, and you may now disconnect your lines.