Core Insights - Barrett Business Services, Inc. (BBSI) has opened a new physical branch in Chicago, transitioning to a full-service model in the area [1][2] - The Chicago branch aims to enhance BBSI's support for local businesses, particularly small and mid-sized enterprises, by providing a range of services including payroll, HR, and risk management [2][3] - The branch will be led by Dave Wills, who has extensive experience in Human Capital Management, indicating a strong leadership presence for the new location [4] Company Overview - BBSI is a leading provider of business management solutions, specializing in human resource outsourcing and professional management consulting [5] - The company serves over 8,100 PEO clients across all 50 states, highlighting its extensive reach and operational capabilities [5] - BBSI's integrated platform focuses on payroll processing, employee benefits, workers' compensation, risk management, and workplace safety programs [5]

Core Viewpoint - Barrett Business Services, Inc. (BBSI) will hold a conference call on August 6, 2025, to discuss its financial results for Q2 2025, which ended on June 30, 2025 [1][2]. Group 1 - The conference call will be hosted by CEO Gary Kramer and CFO Anthony Harris, followed by a Q&A session [2]. - The call is scheduled for 5:00 p.m. Eastern time (2:00 p.m. Pacific time) [2]. - Participants can join the call using a toll-free number or an international dial-in number, with a conference ID provided for access [2]. Group 2 - The conference call will be broadcast live and available for replay on the BBSI website, with a replay accessible until September 6, 2025 [3]. - BBSI is recognized as a leading provider of business management solutions, specializing in human resource outsourcing and professional management consulting [3]. - The company serves over 8,100 PEO clients across all 50 states, focusing on improving operational efficiency through its integrated platform [3].

Core Insights - Barrett Business Services, Inc. (BBSI) has opened a new branch in Dallas, Texas, enhancing its presence in the North Texas business community [1][2][3] Company Expansion - The Dallas branch is part of BBSI's asset-light branch model initiated in 2022, aimed at supporting local entrepreneurs [2] - The new location will provide a range of services including payroll administration, benefits, workers' compensation, risk consulting, recruiting, and human resources [3][4] Leadership and Community Engagement - Chase Mortenson, a Dallas native with a background in finance and marketing, will lead the new branch, emphasizing support for local entrepreneurs [5] - The establishment of the Dallas branch reflects BBSI's commitment to local, face-to-face support for business owners in the dynamic Dallas-Fort Worth area [4] Company Overview - BBSI is recognized as a leading provider of business management solutions, combining human resource outsourcing with professional management consulting [6] - The company serves over 8,100 PEO clients across all 50 states, focusing on improving operational efficiency for businesses of various sizes [6]

Industry Overview - The Zacks Outsourcing industry is facing challenges such as data privacy regulations, communication barriers, geopolitical risks, quality control issues, and loss of control [1] - Despite these headwinds, the industry is driven by the need to cut costs, the rise of remote work, increased focus on cybersecurity, and trends in AI and ML [1] Future Trends - Business process outsourcing (BPO) services are experiencing consistent growth due to flexibility, lower costs, and improved service quality [4] - The IT outsourcing market is robust, with companies increasingly outsourcing entire IT departments to reduce costs and focus on core operations, driven by a shortage of in-house engineering talent [4] Cybersecurity Demand - There is a rising demand for data encryption and cybersecurity measures due to increased public awareness and evolving cyber threats [5] - Companies are focusing on employee security training and breach detection systems, with many turning to outsourced cybersecurity services to mitigate risks [5] Technological Innovations - Trends such as IoT, cloud computing, AI, and ML are transforming the outsourcing sector, enhancing efficiency and competitiveness [6] - Innovations allow for real-time decision-making and predictive maintenance, while AI and ML integration in customer support optimizes operational costs [6] Industry Performance - The Zacks Outsourcing industry currently holds a Zacks Industry Rank of 196, placing it in the bottom 20% of 246 Zacks industries, indicating underperformance [7][8] - Over the past year, the industry has declined by 6.9%, underperforming the broader Zacks Business Services sector and the S&P 500, which grew by 16.6% and 13.8% respectively [9][10] Current Valuation - The industry is trading at a forward 12-month price-to-earnings (P/E) ratio of 15.96X, compared to the S&P 500's 22.75X and the sector's 22.38X [12] Investment Opportunities - **Barrett Business Services, Inc. (BBSI)**: Focuses on payroll administration and staffing, with growth driven by new client sales and technology investments [15][16] - **The Brink's Company, Inc. (BCO)**: A global provider of cash management services, experiencing growth across segments, particularly in digital retail solutions [18][19] - **Capgemini SE (CGEMY)**: An IT services and consulting company benefiting from strong growth in financial services and public sector, with a focus on AI [20][21]

Core Points - Barrett Business Services, Inc. (BBSI) has appointed Joseph S. Clabby as the new Chairman of the Board of Directors, succeeding Tony Meeker, who will remain on the board [2][3] - Clabby has been with BBSI since September 2022 and was previously Vice Chairman of the Board, bringing over two decades of experience from ACE Limited and Chubb [3] - The Vice Chairman position will remain unfilled for the time being [4] Company Overview - BBSI is a leading provider of business management solutions, specializing in human resource outsourcing and professional management consulting [5] - The company serves over 8,100 PEO clients across all 50 states, focusing on payroll processing, employee benefits, workers' compensation, risk management, and workplace safety programs [5]

Core Insights - Barrett Business Services (BBSI) reported revenue of $2.09 billion for the quarter ended March 2025, reflecting a year-over-year increase of 9.5% [1] - The earnings per share (EPS) for the same period was -$0.04, compared to -$0.01 a year ago, indicating a decline [1] - The reported revenue exceeded the Zacks Consensus Estimate of $2.06 billion, resulting in a surprise of +1.31% [1] - The company delivered an EPS surprise of +69.23%, with the consensus EPS estimate being -$0.13 [1] Financial Performance Metrics - Gross billings were reported at $2.09 billion, surpassing the two-analyst average estimate of $2.06 billion [4] - Revenues from professional employer services amounted to $274.93 million, exceeding the average estimate of $264.74 million by two analysts, representing an increase of +11.7% year-over-year [4] - Revenues from staffing services were reported at $17.64 million, which fell short of the two-analyst average estimate of $19.94 million, reflecting a year-over-year decline of -10% [4] Stock Performance - Shares of Barrett have returned +8.8% over the past month, compared to the Zacks S&P 500 composite's +10.6% change [3] - The stock currently holds a Zacks Rank 2 (Buy), suggesting potential for outperformance against the broader market in the near term [3]

Financial Data and Key Metrics Changes - Gross billings increased by 9.5% year-over-year to $2.09 billion in Q1 2025 compared to $1.91 billion in Q1 2024 [17] - PEO gross billings rose by 10% to $2.07 billion, while staffing revenues declined by 10% to $18 million [17] - Average billing per worksite employee (WSE) increased by 2.6% in the quarter [18] - The net loss per diluted share was $0.04 compared to a net loss of $0.01 per diluted share in the same quarter last year [23] Business Line Data and Key Metrics Changes - Worksite employees grew by 7.6% in the quarter, driven by a record number of new client additions [18] - Staffing operations experienced a decline of 10% year-over-year, attributed to macroeconomic headwinds [6][17] - The company added approximately 7,900 worksite employees year-over-year from net new clients [5] Market Data and Key Metrics Changes - The East Coast region saw a growth of 14%, Southern California grew by 11%, Mountain region by 9%, Northern California by 6%, while the Pacific Northwest declined by 1% [19] - Southern California represents the largest region for the company, achieving double-digit growth due to consistent client additions and hiring [19] Company Strategy and Development Direction - The company is focusing on geographic expansion with plans to open new physical locations in Chicago, Dallas, and Nashville by early Q3 [8][31] - Investments in new markets and product offerings, including a new health insurance product, are expected to drive future growth [9][10] - The company aims to enhance the employee life cycle experience through technology investments and product launches throughout the year [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding the economic environment, noting potential impacts on client hiring and investment [14][15] - Despite a strong start to the year, the company is maintaining its outlook for billings growth and worksite employee growth due to economic uncertainties [24] - The company believes that small businesses benefit from PEO relationships during challenging times, positioning itself for sustainable growth [15] Other Important Information - The company repurchased $9 million of shares in Q1 under its $75 million repurchase program [24] - The company paid $2.1 million in dividends during the quarter and reaffirmed its dividend for the following quarter [24] Q&A Session Summary Question: What percentage of clients have direct tariff exposure? - Management indicated that most clients are in service industries with minimal direct exposure, primarily facing indirect impacts from increased material costs [28] Question: Is there an annual goal for new physical offices? - Management stated that the number of new physical locations depends on market development rather than a fixed annual target [30] Question: How much growth could come from geographic expansion over the next five years? - Management views geographic expansion as a long-term investment, expecting profitability to materialize in year three and beyond [34] Question: Are existing clients or new clients driving growth in benefits? - The company has seen a shift towards a more balanced contribution from both existing and new clients in the benefits segment [42] Question: Is the company displacing more legacy PEOs than before? - Management noted that while many new clients are first-time PEO users, there is an increase in PEO takeaways in certain markets [46] Question: How is pricing trending in the current economic backdrop? - Management reported that workers' compensation pricing has moderated, with minimal fluctuations expected [54]

Financial Data and Key Metrics Changes - Gross billings increased by 9.5% year-over-year to $2.09 billion in Q1 2025 compared to $1.91 billion in Q1 2024 [17] - PEO gross billings rose by 10% to $2.07 billion, while staffing revenues declined by 10% to $18 million [17] - Average billing per worksite employee (WSE) increased by 2.6% in the quarter [18] - The company reported a net loss per diluted share of $0.04 compared to a net loss of $0.01 per diluted share in the same quarter last year [23] Business Line Data and Key Metrics Changes - The number of PEO worksite employees grew by 7.6% in the quarter, driven by a record number of new client additions [18] - Staffing operations experienced a decline of 10% year-over-year, attributed to macroeconomic headwinds [6][17] - The company added approximately 7,900 worksite employees year-over-year from net new clients [5] Market Data and Key Metrics Changes - The East Coast region saw a 14% growth in PEO gross billings, while Southern California grew by 11% [19] - The Pacific Northwest region, however, experienced a decline of 1% in gross billings [19] - Total hours and overtime hours increased modestly year-over-year, indicating stability in client operations [18] Company Strategy and Development Direction - The company is focusing on geographic expansion with plans to open new physical locations in Chicago, Dallas, and Nashville by early Q3 [8][31] - Investments in technology and product enhancements are ongoing, including the launch of a new applicant tracking system [11][63] - The company aims to enhance the employee life cycle experience through additional product launches throughout the year [11] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding the economic environment, noting potential impacts on client hiring and investment [14][24] - Despite a strong start to the year, the company is maintaining its outlook for gross billings growth between 7% to 9% for the year [24] - The company believes that small businesses benefit from PEO relationships during challenging economic times, positioning itself for sustainable growth [15] Other Important Information - The company repurchased $9 million of shares in Q1 under its $75 million repurchase program [24] - The balance sheet remains strong with $99 million in unrestricted cash and investments and no debt [23] Q&A Session Summary Question: What percentage of clients have direct tariff exposure? - Management indicated that most clients are service businesses with indirect exposure to tariffs, primarily affecting materials and supplies [28] Question: Is there an annual goal for new physical offices? - Management stated that the number of new physical locations depends on market development rather than a fixed annual target [30] Question: How much is the benefits side driving new client growth? - The benefits offering has shifted to a more balanced contribution between existing and new clients, with significant success in attracting new clients [41][42] Question: Are there any areas that have not performed as expected? - Management acknowledged that while there are ongoing investments in technology, some products may take longer to gain traction [65]

Financial Data and Key Metrics Changes - Gross billings increased by 9.5% year-over-year to $2.09 billion in Q1 2025 compared to $1.91 billion in Q1 2024 [17] - PEO gross billings rose by 10% to $2.07 billion, while staffing revenues declined by 10% to $18 million [17] - Average billing per worksite employee (WSE) increased by 2.6% in the quarter [19] - The company reported a net loss per diluted share of $0.04, compared to a net loss of $0.01 per diluted share in the same quarter last year [24] Business Line Data and Key Metrics Changes - The number of worksite employees grew by 7.6% year-over-year, driven by a record number of new client additions [18] - Staffing operations experienced a decline of 10% compared to the prior year quarter [6] - The company added approximately 7,900 worksite employees from net new clients [5] Market Data and Key Metrics Changes - PEO gross billings growth by region showed varied performance: East Coast grew by 14%, Southern California by 11%, Mountain region by 9%, Northern California by 6%, and Pacific Northwest declined by 1% [20] - Southern California remains the largest region, achieving double-digit growth due to consistent client additions and hiring [20] Company Strategy and Development Direction - The company is focusing on geographic expansion with plans to open new physical locations in Chicago, Dallas, and Nashville by early Q3 2025 [8][32] - Investments in technology and product offerings are being prioritized, including the launch of a new applicant tracking system [12][63] - The company aims to enhance the employee life cycle experience through ongoing product launches throughout 2025 [12] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding the economic environment, noting potential impacts from trade negotiations and government initiatives [14] - Despite a strong start to the year, the company is maintaining its outlook for billings growth and WSE growth due to economic uncertainty [25] - The company believes it is well-positioned to navigate macroeconomic dynamics, emphasizing the benefits of PEO relationships for small businesses [16] Other Important Information - The company repurchased $9 million of shares in Q1 2025 under its $75 million repurchase program [25] - The company paid $2.1 million in dividends during the quarter and reaffirmed its dividend for the following quarter [25] Q&A Session Summary Question: What percentage of clients have direct tariff exposure? - Management indicated that most clients are service businesses with indirect exposure to tariffs, primarily affecting material costs [29] Question: Is there an annual goal for new physical offices? - Management stated that the number of new physical locations depends on market development rather than a fixed annual target [32] Question: How much growth could come from geographic expansion over the next five years? - Management views geographic expansion as a long-term investment, expecting profitability to materialize in year three and beyond [34] Question: Are current healthcare partnerships sufficient? - Management confirmed that while Aetna and Kaiser Permanente are key partners, they also work with regional carriers in certain states [37] Question: What factors influenced the decision to maintain guidance despite Q1 performance? - Management considered both the strong Q1 results and potential macroeconomic headwinds when deciding to maintain guidance [40] Question: How is pricing trending in the current economic backdrop? - Management noted that workers' compensation pricing has moderated, with minimal fluctuations expected [56]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION (Exact name of registrant as specified in its charter) ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period From to Commission File Number 0-21886 BARRETT BUSINESS SERVICES, INC. Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended March 31, 2025 (State or other jurisdiction of Incorporation or or ...