What happened
Shares of TriNet Group Inc. (TNET -0.98%) rose as much as 15.6% on Wednesday after the human resources company reported first-quarter earnings. As of 12:50 p.m. EDT, the stock was still up 13.1% on the day.
So what
Revenue was up 10% in the quarter to $807.6 million leading to a 22% increase in net service revenue to $199.0 million. Net income jumped from $11.6 million a year ago to $28.7 million, or $0.41 per share and adjusted net income was $31.6 million, or $0.45 per share. Analysts were only expecting $178.2 million in net revenue and $0.32 per share in adjusted earnings so results were well ahead of the bar Wall Street had set.
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Management highlighted the company's management team and differentiated vertical products as the drivers of improving financial performance.
Now what
As hiring improves and businesses look for flexible ways to grow their labor force, TriNet has been a big beneficiary. Its cash flow from operations increased a whopping 88% as well in the first quarter to $75.9 million, showing the leverage in the business' growth. Given hiring trends and the rapidly improving bottom line, I think today's pop in TriNet's shares may be just the beginning.
