TriNet at J.P. Morgan Conference: Strategic Shift and AI Focus

On Tuesday, 18 November 2025, TriNet Group (NYSE:TNET) participated in the J.P. Morgan 2025 Ultimate Services Investor Conference. The company, led by President and CEO Mike Simonds, outlined a strategic pivot towards its core SMB-focused PEO and ASO businesses, while emphasizing AI investments and operational efficiencies. Despite facing challenges in the macroeconomic environment, TriNet remains optimistic about its growth trajectory and shareholder value enhancement.

Key Takeaways

• TriNet is focusing on SMB-focused PEO and ASO businesses, exiting the SaaS-only segment.
• The company aims to maintain an insurance cost ratio (ICR) of 90%-92% by 2025.
• AI investments are centered on improving data infrastructure and customer service.
• TriNet expects improved retention rates and is targeting the top end of an 87%-90% retention range next year.
• The company is committed to disciplined cost containment and strategic capital allocation.

Financial Results

• TriNet reaffirmed its revenue guidance midpoint and maintained its ICR guidance of 90%-92%.
• The company expects to track towards the more favorable end of the ICR range in 2025.
• Retention rates are forecasted to be slightly above 80%, with health fees being the largest driver of churn.

Operational Updates

• Strategic focus on SMB-focused PEO and ASO businesses, with increased demand for ASO services.
• The exit from the HRIS business allows for greater focus and investment in core areas.
• AI initiatives include the launch of Personal Health Assistant, TriNet Assistant, and a dashboard to enhance customer service and operational efficiency.

Future Outlook

• TriNet is confident in returning to a targeted ICR range of 90%-92% in 2025, driven by improved predictability and data analysis.
• The company is undergoing its final "catch-up renewal" on healthcare fees during the January 1 renewal period.
• AI tools are expected to drive productivity and elevate growth ambitions for SMBs.

Q&A Highlights

• TriNet's unique insurance risk pricing construct allows effective management of healthcare pricing.
• The industry is not considered over-saturated, with a penetration rate of 10%-12% in TriNet's verticals.
• Improved service delivery and Net Promoter Score (NPS) are critical for retention.

For a detailed review of the conference call, please refer to the full transcript below.

Full transcript - J.P. Morgan 2025 Ultimate Services Investor Conference:

Andrew Polkowitz, Payments Processors and Services Analyst, JPMorgan: I think we're good. Welcome, everybody, to JPMorgan's Ultimate Services Conference here in New York. I'm Andrew Polkowitz, Payments Processors and Services Analyst here. I'm happy to have on stage with me Mike Simonds from TriNet, President and CEO. Mike, thanks for being here.

Mike Simonds, President and CEO, TriNet: Thanks for having me.

Andrew Polkowitz, Payments Processors and Services Analyst, JPMorgan: If we were to get started, big picture. You've been in the seat for almost two years now, right?

Mike Simonds, President and CEO, TriNet: Yep.

Andrew Polkowitz, Payments Processors and Services Analyst, JPMorgan: There has been a lot of important strategic decisions that have gone on, particularly over the past year. I thought before we dive deeper into some of these topics, I would just ask, what are you most proud about in terms of both the progress and execution during this, as you have described it, as a transition year for TriNet?

Mike Simonds, President and CEO, TriNet: Yeah, absolutely. I mean, I think for us, it was about taking a really good, thorough, and objective look at the business and the core of TriNet, the PEO, and increasingly the ASO business, and just the opportunity for profitable growth there, and feeling very good about it. You're right. We had to make some tougher decisions to really narrow the focus to the SMB-focused PEO and ASO. We exited the SaaS-only business. We trimmed a couple of other segments at the same time. I'm really proud of the fact that we built the plan as a team. We went through the organization and really tapped into a pretty remarkable talent base. Then just the discipline to execute.

As we kind of have marched through over the last, laid out the plan here at the beginning of the year, each quarter, just working really hard to sort of hit those milestones. We have been able to do that successfully.

Andrew Polkowitz, Payments Processors and Services Analyst, JPMorgan: That's great. You kind of hit on my next question. Obviously, you've made a lot of investments in actuarial talent, but also kind of refreshing your go-to-market strategy. We'll talk later about some of the AI products that you guys have rolled out. I wanted to ask, how are these changes showing up both in day-to-day execution, but then also how we could track impact in the numbers over the next handful of quarters?

Mike Simonds, President and CEO, TriNet: Yeah. You mentioned one of the changes that we made early on was to carve out the insurance services group. We added some leadership talent. Tim Nimmer, who was running the underwriting and actuarial group at Aetna, came over. He's added a new chief actuary. We've invested a lot in the process and the application of data to that process. Where you see that showing up is kind of we laid out a guidance of 90%-92% on the insurance cost ratio, did it at a time where there's a fair degree of uncertainty in a sort of pretty rapid inflationary health care cost environment, as you know, Andrew.

Coming through the year in a predictable fashion, being where we wanted to be at this point in the year, looking forward to January 1 renewals, which is our last kind of big catch-up renewal on the health care side. The growing confidence there, I think, is starting to shine through in the predictability of results from an insurance cost ratio and from an adjusted EPS point of view. The second piece is getting the revenues growing again. We sort of reaffirmed the midpoint of our guide. Again, we're pretty much on track from a revenue point of view. I'm sure we'll talk about some of the initiatives and how those are meeting the market.

Andrew Polkowitz, Payments Processors and Services Analyst, JPMorgan: OK, great. Yeah, why don't we take a step back for a dive in? I always had to get the SMB macro question out of the way early. Just kind of wanted to ask, from your seat, you obviously have a lot of data, a lot of businesses under your purview. What macro trends do you see around areas like employment, wages, SMB new business formation, and even the implications for TriNet's key verticals?

Mike Simonds, President and CEO, TriNet: Yeah, sure. TriNet focuses on typically SKUs, white-collar, higher income, lower employee turnover verticals. Technology is our largest. Financial services is very large. Life sciences. Historically, we would see net hiring in those verticals through the cycles of, call it, 8%-10%. These are high-growth entrepreneurial-type businesses. We are really probably two and a half years, Andrew, into pretty muted net hiring. If anything, we've seen, we've talked about it on the last call, probably about 50 basis points improvement year over year in net hiring. Bright spots for us, the tech sector is one. A little more, we've seen fewer layoffs in the small end of the tech sector than we had seen in the prior year. Financial services has actually held up really well as well.

Andrew Polkowitz, Payments Processors and Services Analyst, JPMorgan: OK, that's good to hear. I wanted to transition now talking a little bit about ICR range. You've kind of communicated a few times that you have pretty good confidence in returning to that targeted zone. You called out the 90%-88% over the long term, excuse me.

Mike Simonds, President and CEO, TriNet: Yeah.

Andrew Polkowitz, Payments Processors and Services Analyst, JPMorgan: Let's see. I had a few questions here. Maybe to start, you suggested at earnings that you're expecting to track towards the lower or more favorable end for 2025. I kind of wanted to ask, are there any swing factors you would call out that kind of get you to the higher low end, or what informs your confidence there?

Mike Simonds, President and CEO, TriNet: Sure. We guided in 2025 to 90%-92% insurance cost ratio. Like you said, we've run maybe a tick or two more favorable this year. The outlook is to kind of finish to the favorable end of the range. We've actually spent a little less time trying to guide externally to what happens every quarter in insurance, because I think inherently there's just going to be more volatility in every 90-day period. When we step back and sort of look at 200 basis points different in the guide and sort of finding ourselves to the middle favorable end of that, I think it sort of speaks to just getting to a little bit more predictability for TriNet. We'll see how the fourth quarter plays out. It's only a quarter of the year.

We take about $500,000 of risk per member and offload the remainder. We reset that every year on 10/1. That can introduce a little bit of volatility in the fourth quarter as well. It is part of the reason it tends to be the highest ICR cost quarter out of the four.

Andrew Polkowitz, Payments Processors and Services Analyst, JPMorgan: Got it. That makes sense. Yeah, that's an interesting dynamic with the October one. Also, the fall selling retention season is always very important, kind of heading to that January 1 renewal period. Obviously, we're in the midst of that right now. We still have about a month and a half to go. I figured I'd ask the question, just any comments you could give so far on how client conversations have been going. Obviously, you went through repricing a year ago. It's not a totally new dynamic this time around. Just wanted to hear what you're hearing on the ground.

Mike Simonds, President and CEO, TriNet: No, I think it's really important. It is the most wonderful time of year. It is because it's January 1. A lot of small businesses make decisions around that January 1. A couple of ways I talk about it is one of the beautiful things about this business model is it's so much broader than just the health insurance. It is tapping into all the benefits. It is the workers' compensation. It is payroll. It is HR. That breadth, that ends up being a very sticky relationship. In an SMB business, historically, TriNet's been around an 80% retention rate in these kind of high-growth markets. Our forecasts have us coming in right about at that level, maybe even a little bit better, in an environment where we're putting double-digit health fee increases.

I think that bodes well for us, kind of getting back into the long-term range of 87%-90%, probably to the top end of the range next year. It also kind of, I think, underscores just how powerful this business model is and how much value we add to these SMBs.

Andrew Polkowitz, Payments Processors and Services Analyst, JPMorgan: Got it. Yeah, I was going to ask about that later, but I'll jump ahead now. You've mentioned before you're tracking ahead of that 80% retention bogey, despite it being a pretty challenging year from just a pricing setup. Maybe just to put a bow on this topic of pricing, I figured I'd ask the question, is there a way for you to contextualize how much churn this year is attributable truly to the elevated repricing versus more what's normal course, SMB economy, that type of thing?

Mike Simonds, President and CEO, TriNet: Yeah. Yeah, I think there's probably a couple of dimensions. One would be where we were a year ago. As you can imagine, we spend time with every client that's a trading. We talk through in that exit, what's the drivers of it. A year ago, the fourth largest reason was health fees. That is now our single largest. If you took all the other reasons and set aside health fees, we're actually doing better this year on retention by a reasonable amount than we were a year ago. We've put a lot of work into the platform and into our service delivery. We can spend some time on that. Our net promoter score, we've been tracking for about a dozen years at TriNet.

We posted our highest that we've ever had in the company's history in a time when you're passing through big rate increases. I think that as we get through these January 1s, it's really our last catch-up renewal that we need to do on the health fee side. As we get through that, I think that bodes well for retention as we work our way through 26.

Andrew Polkowitz, Payments Processors and Services Analyst, JPMorgan: Got it. That makes sense. Maybe just staying with the worksite employee side. Obviously, there's some mixed dynamics going on, where obviously, the churn from pricing isn't friendly, but it comes out to higher margin, more margin-friendly customers. Thinking about the earnings power that comes from this repricing exercise that you're doing, is there anything that you could kind of share in the margin profile of, call it the remaining base versus what's trading or what you've had to trade?

Mike Simonds, President and CEO, TriNet: Yeah. A couple of things. Price to risk on everything. That is really important to come back to, is we are looking at sort of the block factors and the individual experience factors at each case. Over time, you would anticipate, and certainly it is true to your question, the attributed runs typically at a lower margin. We are asking for bigger health fee increases for the ones that are trading. You could sort of see that as likely to be margin accretive over time. I think the really good thing is we price every 90 days a cohort of our business, which is a little bit unique for us.

That enables us to kind of react pretty quickly as changes happen in the external environment, and also to be a little bit more balanced, knowing that we can work it through and kind of balance the retention with the margin improvement with each cohort as we go.

Andrew Polkowitz, Payments Processors and Services Analyst, JPMorgan: Kind of speaking to that balance, I wanted to ask on the competitive landscape, because I know you guys were early to reprice last year. It sounds like the industry has sort of caught up to where TriNet is repricing. I am curious, is there any change that you've seen competitively? Obviously, you've been in the industry for a long time, but even just versus a year ago?

Mike Simonds, President and CEO, TriNet: Yeah. Yeah, and I think a couple of things. Sometimes it's just sort of circumstance. I had come new into the role, so that's a fresh set of eyes. We carved out the insurance group, and we had some pretty talented people with a lot of experience with a fresh set of eyes. I think that sort of broke the company out of the regular routine. I think we did jump on the fact that it felt like trend was taking off and that we weren't adequately pricing for that. I think that had helped in the we kind of outlined it at the beginning of the year, the 2023, early 2024 new business. I think we were on it a little quicker. Like I said, we're kind of pricing through each cohort every quarter.

We're moving, instead of on an annual basis, every 90 days. I think we were a little quicker up on that curve to catch it. The reality is we're not facing anything unique at TriNet when it comes to health care cost claim trend. I'm fully confident the market's going to get there. Yeah, I'd say we're looking at the conversion rate, for instance, on new business. As we've worked our way through the year, say, on direct PEO, that conversion rate's improved. I think that's indicative of kind of the market coming up.

Andrew Polkowitz, Payments Processors and Services Analyst, JPMorgan: Yep, absolutely. A lot of our friends in the industry have been talking about the same dynamics.

Mike Simonds, President and CEO, TriNet: Yeah, that's all right.

Andrew Polkowitz, Payments Processors and Services Analyst, JPMorgan: It's been a consistent story. Great. Maybe to transition a little bit, you alluded to it before, but kind of exiting the HRIS business, investing in the ASO side. I know you've said that it's early, but demand has probably been more favorable than expected in the early days. Maybe just for those who are less educated on it, I kind of wanted to walk back around the strategic decision to exit HRIS, go into ASO, and how it fits with the broader TriNet model.

Mike Simonds, President and CEO, TriNet: Yeah. I think at the end of the day, we sort of just looked at it and said, if you're looking for really good HCM software and you want to spend $8-$10 pepm, there's going to be some really good, really focused options for you out there and really good competitors. What I think makes TriNet special is strong proprietary technology with outstanding service layered on top of it, and kind of the benefits and the HR expertise that comes with 30 years in the business. Those are price points that are considerably higher. That's considerably more value that you're delivering. It allows our organization to really focus on what we do very well. One of our key values is we always start with the customers.

The first thing we did was if what you need is an $8-$10 pepm software product, we identified good partners, set up the data feeds, made that as seamless as possible for customers. We made some assumptions about who would buy up the services into the ASO model, which, think of that as kind of a 4x increase in the pepm, so not insignificant, 4-5. Yeah, we've been surprised to the upside at the rate at which SMBs were interested. We've kind of taken some more steps to invest not just in the conversion, but in the new NetLogos coming in on the ASO platform. I think that really helps us in the long run for two reasons. One is being SMB-focused, we're going to have some very successful clients that outgrow the PEO model.

The reality is they don't outgrow the whole model at the same time. They don't want to change their health plan and their payroll and their benefits administration. Being able to unwind aspects of maybe down to an ASO is a really good way we can maintain a relationship and professional service fees on a go-forward basis. The other really important one is it puts another really viable solution into our sales reps portfolio. What we've learned over time is tenure is immensely important in this business. When you can bring other, and in some cases, simpler product solutions to help sales reps get to success quicker, and maybe our master health plan or the co-employment relationship's not a good fit, you've got ASO to fall back on.

Andrew Polkowitz, Payments Processors and Services Analyst, JPMorgan: Got it. That's helpful. Maybe sticking to that topic around the Salesforce and just the funnel. Is there a different funnel that you operate with internally for getting kind of customers in the pipeline for ASO versus PEO, or do you look at it more holistically that this could be a candidate for either/or? Let's figure it out together.

Mike Simonds, President and CEO, TriNet: A huge part of our investment thesis is it's largely the same funnel. The work that we do, building the brand, generating top-of-funnel leads, the reality is we can meet our ASO growth objectives several times over alongside the PEO objectives with just that top-of-funnel demand. To be honest, we're baby steps in it right now. We're encouraged. We'll get smarter. We'll get more sophisticated. Yeah, it's largely the same funnel.

Andrew Polkowitz, Payments Processors and Services Analyst, JPMorgan: Got it. OK, that's great. Maybe the last question I'll ask on this topic. You mentioned that there's opportunity on kind of what would be the traditional PEO graduation side to kind of keep some of your customers in-house. Is ASO also an offering that potentially could work for a smaller business that potentially you're not willing to underwrite yet, but you still like them, they're still growing overall? In other words, is it an above PEO and below PEO opportunity?

Mike Simonds, President and CEO, TriNet: It is. It is. I think that's been a big thing for us, is the mindset prior maybe was a little bit more binary. Like you're all PEO or you're nothing. I think increasingly, it's like, hey, at the end of the day, PEO is a construct around co-employment. The reality is it's a bundled set of services and product. ASO represents a subset of what goes into the PEO model. Even within ASO, there's ways to, maybe it's payroll help that you need more than benefits. Again, it sort of puts solutions in front of clients that, yeah, sometimes they may just have less funding to put towards funding the HR support that they get. They may start with something more basic and then grow over time. They may want to insource as they get bigger.

That allows them to unbundle on the other end.

Andrew Polkowitz, Payments Processors and Services Analyst, JPMorgan: Got it. So basically, it's improving the flexibility of the offer, in other words, on both sides. Great. I do have some more questions. I should have said it up front. We'd love to take questions from the audience as well. We'll save time for that. I wanted to talk about AI. I'll break up my question for you. There's sort of the AI impact inside TriNet and then outside of TriNet. Maybe let's start with inside of TriNet.

Mike Simonds, President and CEO, TriNet: Sure.

Andrew Polkowitz, Payments Processors and Services Analyst, JPMorgan: You recently launched your AI suite, Personal Health Assistant, TriNet Assistant, your dashboard. Where would we expect to see TriNet continue to invest on the product side? What are some of the areas that you're most excited about?

Mike Simonds, President and CEO, TriNet: Yeah, I mean, there's opportunities everywhere. And we're in early innings for sure. We did take three different AI-based solutions to market. I would actually tell you, though, that represents a pretty small fraction of our investment in AI. The majority of it has actually been in the data infrastructure. So before I got here, frankly, starting to put the right data lake in place, pull data, extract it from our application layer, make sure we were curating it and had good stewardship there. So even I think you'll see greater velocity. Yes, because the AI capability is getting hardwired into our product development lifecycle, but even more so because it's enabled. We've got the data to be able to train those models.

I think it's everything from that top of the funnel and how do you move prospects two or three rungs down that before the first salesperson needs to get involved. I think it's data mapping to make the process of implementing a new client a lot easier. At its core, it's like what we do for customers is manage complexity. The ability of AI to serve up the right answer for payroll tax withholding in the state of Wisconsin, being able to do that at the fingertips of a client versus involve a call-in or a chat-in, I think there's big experience gains and big efficiency gains.

Andrew Polkowitz, Payments Processors and Services Analyst, JPMorgan: OK, great. Maybe let's flip the question around. That is the AI impact within TriNet. I also get the question from investors, AI outside of TriNet. Specifically, it is a little bit of a macro question. Nobody really knows the impact of AI across the labor force longer term. Obviously, you guys work with lots of tech-forward companies. The question naturally comes up, do you see any change to the normal CIE growth algorithm driven by AI? Obviously, with SMBs, SMBs tend to be a little bit more careful around laying off because it is hard to hire.

Mike Simonds, President and CEO, TriNet: Right.

Andrew Polkowitz, Payments Processors and Services Analyst, JPMorgan: It's a difficult question to answer. I wanted to throw that at you.

Mike Simonds, President and CEO, TriNet: No, it's a good one. I get that one a lot. We pay a lot of attention to it. I'd say a couple of things. One, we saw sort of this sort of current malaise around net hiring two and a half years ago. It kind of predates where GenAI would be a big driver of that. If anything, like I mentioned, this year, we're actually sort of forecasting to be slightly better on net hiring in our customer base than we were a year ago. Nothing sort of precipitous, I don't think. In conversations, admittedly, we're a pretty optimistic crowd. In general, in the SMB market, tools that drive productivity and enable them to move faster is only going to elevate their growth ambitions in general, particularly the verticals that we play in.

I'm not saying at some point a massive tech company isn't going to use AI to sort of manage their workforce down or slow their hiring. I think in the entrepreneurs that I'm talking to and that we're talking to, I think it's a reason for optimism about their business broadly. I guess the last one would be you highlighted tech. That's the first place we went and said, hey, one of the most compelling, obvious, immediate use cases is building software, testing software, automating test scripts. Tech has actually been relatively recently more of a bright spot for us. It's holding in there pretty well.

Andrew Polkowitz, Payments Processors and Services Analyst, JPMorgan: Gotcha. That makes sense. Yeah, we're at the JPMorgan Services Conference. There are lots of people up on the stage talking about AI. It is consistent. It feels like there is a lot of interest in driving productivity. At least in terms of scale offerings, it is still early days as far as how that impacts the labor force.

Mike Simonds, President and CEO, TriNet: I think that's right.

Andrew Polkowitz, Payments Processors and Services Analyst, JPMorgan: Great. I'll ask one more, then we'll open it up to the crowd. Cost containment has been really sharp this year. That's been a theme. I wanted to ask about your capital allocation framework. We talked about some of your investments already and how you rank order, more organic investment, M&A, shareholder returns. A question I've been getting from investors has just been the right level of OpEx, considering that you've been so careful as far as what's sort of the launch points into next year, even over a midterm horizon OpEx growth.

Mike Simonds, President and CEO, TriNet: Yeah. Maybe I'll take OpEx, and then we'll talk capital.

Andrew Polkowitz, Payments Processors and Services Analyst, JPMorgan: A lot of questions.

Mike Simonds, President and CEO, TriNet: Priorities. I mean, I'm here. I'm with you. I'd say OpEx, yeah, I mean, I think really good discipline from the team, thinking hard about both technology investments and globalizing workforce. It's allowed us to sort of bring expenses actually down. I think that's very sustainable. I still think we have a lot of runway. AI is a big opportunity. As we look forward, I do expect over the medium term, operating expenses will grow year over year. We're pretty committed to being sure that there's two-three points of daylight between operating expense growth and revenue growth as that comes through. As kind of the macro picture impacts that top line, we'll manage the bottom line or the operating expense part kind of in lockstep. Capital allocation, pretty straightforward. Like I said, these are great businesses. They're under-penetrated. They're growing.

Investing in organic is a big deal for us. That is the platform and technology. That is definitely investments in our sales force and new broker channel. Secondary is there inorganic opportunities? I would just say our third is shareholder friendly. That is something we are committed to at TriNet. Given where the market is and where TriNet stock is trading right now, that is a pretty high bar for us when we think about inorganic. In general, it is still a fragmented market, both PEO and ASO. To the extent there made sense to do something on a tuck-in basis, that might be something. In general, given where we are, it is a really clear, bright line between driving to that 10%-11% EBITDA margin improvement, getting revenue growth back up into that 4%-6%.

I think the team could sort of see the pathway to that. I think for the most part, we're heads down and executing.

Andrew Polkowitz, Payments Processors and Services Analyst, JPMorgan: OK, makes sense. We have a little over five minutes left. Now would be a good time. Any questions in the crowd? Looks like we have a couple. Start with Connor.

Hi. It's tough for Marcie to get a sense for kind of the insurance risk pricing and kind of the edge you have. Could you just spend a little bit of time talking about that? You mentioned carving out the insurance services. I know your background. Maybe just a little bit more detail you can provide us around that and the edge TriNet has?

Mike Simonds, President and CEO, TriNet: Yeah, sure. Just real quickly, we broke it out and have invested in the talents. We brought people in that come from health insurance and their background, pretty deep actuarial talent. That's key. We look pretty sharp at our process and what we can do to improve there. There is a construct that TriNet operates under, which is pretty unique in the industry. Most PEOs are a pass-through on the health insurance. They're typically getting a renewal on their entire book once a year.

By insourcing that, having the talent both at the macro and at the case level, and then putting a cohort through every 90 days, I think it just puts us in a spot never to be able to predict the future, but just to get our forecasting better and to move pricing to risk through that pipe more quickly. I think what you would anticipate, like, OK, what would I see in results if that's the case? What you see is in times where health care cost inflation took off, what you'd see for TriNet is we'd get quicker to predictability on ICR. We would see constraints on growth because it's going to take the rest of the market a little bit longer. That's exactly what's played here in 2025. I hope that helps.

Andrew Polkowitz, Payments Processors and Services Analyst, JPMorgan: Thanks. Yep.

There's a handful of dominant players in the PEO space. And then there's quite a number, as you said, fragmented players down below. Is there just too much industry capacity for this marketplace, particularly in an economy where the birth rate is pretty much hovering above zero?

Mike Simonds, President and CEO, TriNet: Yeah. Really good question. I think the very short answer is no, I don't think so. The industry's probably it depends on where you look. Napier is a pretty good source. We would estimate for our verticals maybe 10%-12% penetration. I feel like there's still a lot of white space there. I do think the PEO as a construct is just a better way for small businesses to do their HR and to acquire benefits using buying scale. It's an interesting concept around co-employment that for a lot of small businesses is unfamiliar. What we observe is that there's concentrations geographically around the country where it does get a little bit more saturated.

Part of the opportunity in terms of us investing in the brokerage channel is bringing kind of the network that spans the entire country, trusted advisors that can sort of speed up the familiarity cycle and ultimately the sales cycle for us. Maybe one other point that's interesting, the top five of us do have a decent-sized share of the industry. There are still 300-400 small PEOs out there. I think what's happening, Andrew, as we talked about, is just as technology improves and as AI comes on, the ability for a local player to compete, historically on a bespoke, very sort of custom local service delivery model, over time that barrier gets higher and higher around the technology and what the workforce of today is starting to expect. I would imagine that the consolidation that's happening out there is likely to continue down the road.

Andrew Polkowitz, Payments Processors and Services Analyst, JPMorgan: Great. Do another. Good.

I remember a few years back, I believe that TriNet took an approach to addressing the graduation issue in the business by verticalizing and hiring some specialists by verticals, go after the law, the legal practice marketplace, and a few others. Is that paying a dividend in terms of seeing some of those larger players, some of those larger employers be retained better? Or has it just kind of had an overhead expense issue as opposed to a real benefit issue?

Mike Simonds, President and CEO, TriNet: Yeah. I think knowing and understanding the client base is quite important. I'd say just three quick things. One is, yeah, 100% graduation is an issue. I think the ASO product and the ability to unbundle health care and do things like that, I think has got a lot of potential and starting to show some green shoots. I actually will tell you that the two biggest things we can do is get through the current health care pricing to drive retention north. The second thing is we still see small and mid-sized, forget graduation, clients that are retreating because the service isn't quite what they expected or the value for what they're paying in professional service fees. This push to really drive Net Promoter and improve our service delivery, I think, is actually our biggest lever to keep retention moving up.

Andrew Polkowitz, Payments Processors and Services Analyst, JPMorgan: Great. Time has flown by. We have a little less than a minute left. I'll ask my last two questions together because I think they're a good way to close. Number one, we've enjoyed working with Kelly over the years. Obviously, you have Mala Murthy coming in. I wanted to ask, number one, why she was the right choice to become the next CFO of TriNet. Number two, just a closing question, why is TriNet such a good investment today? It's obviously been a choppy macro. Demand has seemed pretty durable. I figured I'd ask these last two together on our final minute.

Mike Simonds, President and CEO, TriNet: It gives me an opportunity to say thank you to Kelly Tuminelli. Five years as TriNet CFO did a fantastic job. I think has done a lot with the investment community and things like with our outside audit and just our blocking and tackling that needs to happen. Also, our open conversation allowed me to spend time in market, find Mala Murthy. We won't miss a beat on any of the blocking and tackling. I think Mala comes with a sort of very commercial-minded and strategic skill set from her time at PepsiCo and American Express and most recently Teladoc. She is very excited. She starts in a couple of weeks. We are excited to have her. I think Mala, like me, like hopefully an increasing number of investors, sort of see the opportunity here. It's an under-penetrated market.

We're a top five share. I think we've taken the steps to be disciplined, refocus on our core, reprice the business, get the expense leverage, and get growth going. Again, January 1 will be our last big catch-up. We kind of work through 2026 with a lot of the capabilities we've been investing in starting to ramp up.

Andrew Polkowitz, Payments Processors and Services Analyst, JPMorgan: Awesome. All right. Thank you very much.

Mike Simonds, President and CEO, TriNet: Good. Thanks for having me, Andrew. Appreciate it.

Andrew Polkowitz, Payments Processors and Services Analyst, JPMorgan: Yep. Thank you.

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