PART I. FINANCIAL INFORMATION Presents the company's unaudited condensed consolidated financial statements and related notes for the reported periods [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements of CBIZ, Inc. and its subsidiaries for the periods ended June 30, 2025, and December 31, 2024 (balance sheets), and for the three and six months ended June 30, 2025 and 2024 (income, equity, and cash flow statements). It also includes detailed notes explaining significant accounting policies, business combinations, debt arrangements, financial instruments, and segment disclosures [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20%28Unaudited%29%20%E2%80%93%20June%2030%2C%202025%20and%20December%2031%2C%202024) Presents the company's financial position, detailing assets, liabilities, and equity at specific reporting dates Balance Sheet Summary | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (2025 vs 2024) | | :-------------------------------- | :----------------------------- | :------------------------------- | :-------------------- | | **ASSETS** | | | | | Cash and cash equivalents | $39,817 | $13,826 | +$25,991 | | Restricted cash | $49,145 | $38,661 | +$10,484 | | Accounts receivable, net | $676,054 | $534,858 | +$141,196 | | Total current assets | $966,035 | $835,726 | +$130,309 | | Goodwill and other intangible assets, net | $2,899,958 | $2,945,470 | -$45,512 | | Total assets | $4,537,973 | $4,470,883 | +$67,090 | | **LIABILITIES** | | | | | Accounts payable | $119,339 | $90,646 | +$28,693 | | Accrued personnel costs | $106,612 | $172,759 | -$66,147 | | Total current liabilities | $602,321 | $705,802 | -$103,481 | | Long-term debt | $1,488,215 | $1,333,755 | +$154,460 | | Total liabilities | $2,646,130 | $2,690,900 | -$44,770 | | **STOCKHOLDERS' EQUITY** | | | | | Total stockholders' equity | $1,891,843 | $1,779,983 | +$111,860 | [Condensed Consolidated Statements of Comprehensive Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20%28Unaudited%29%20%E2%80%93%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) Details the company's financial performance, including revenue, operating expenses, and net income for the reported periods Comprehensive Income Summary | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :-------------------------------- | :------------------------------------ | :------------------------------------ | :---------------------------------- | :---------------------------------- | | Revenue | $683,496 | $420,012 | $1,521,510 | $914,309 | | Operating expenses | $595,587 | $366,368 | $1,205,499 | $742,853 | | Operating income | $60,272 | $31,594 | $260,304 | $130,695 | | Interest expense | $(27,867) | $(5,884) | $(53,023) | $(10,395) | | Net Income | $41,942 | $19,793 | $164,715 | $96,677 | | Basic EPS | $0.66 | $0.39 | $2.59 | $1.93 | | Diluted EPS | $0.66 | $0.39 | $2.58 | $1.92 | [Condensed Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity%20%28Unaudited%29%20%E2%80%93%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) Outlines changes in stockholders' equity, including net income, share repurchases, and business acquisitions over the periods Stockholders' Equity Summary | Metric (in thousands) | March 31, 2025 | June 30, 2025 | March 31, 2024 | June 30, 2024 | | :-------------------------------- | :------------- | :------------ | :------------- | :------------ | | Total Stockholders' Equity | $1,914,701 | $1,891,843 | $867,089 | $891,434 | | Net income | $41,942 | $41,942 | $19,793 | $19,793 | | Share repurchases | $(71,321) | $(71,321) | $0 | $0 | | Business acquisitions | $2,068 | $2,068 | $2,316 | $2,316 | Stockholders' Equity Changes | Metric (in thousands) | December 31, 2024 | June 30, 2025 | December 31, 2023 | June 30, 2024 | | :-------------------------------- | :---------------- | :------------ | :---------------- | :------------ | | Total Stockholders' Equity | $1,779,983 | $1,891,843 | $791,618 | $891,434 | | Net income | $164,715 | $164,715 | $96,677 | $96,677 | | Share repurchases | $(71,321) | $(71,321) | $0 | $0 | | Indirect repurchase for tax withholding | $(7,758) | $(7,758) | $(11,229) | $(11,229) | | Business acquisitions | $17,335 | $17,335 | $8,476 | $8,476 | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20%28Unaudited%29%20%E2%80%93%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) Summarizes cash inflows and outflows from operating, investing, and financing activities for the reported periods Cash Flow Summary | Cash Flow Activity (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $24,880 | $24,439 | | Net cash used in investing activities | $(12,299) | $(33,247) | | Net cash used in financing activities | $(33,249) | $(11,920) | | Net decrease in cash, cash equivalents and restricted cash | $(20,668) | $(20,728) | | Cash, cash equivalents and restricted cash at end of period | $166,502 | $136,420 | [Notes to the Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements%20%28Unaudited%29) This section provides detailed explanations and disclosures for the unaudited condensed consolidated financial statements. It covers significant accounting policies, recent accounting pronouncements, business combinations (including the Marcum acquisition), accounts receivable, debt and financing arrangements, commitments and contingencies, financial instruments, fair value measurements, other comprehensive income, common stock, employee stock plans, earnings per share, and segment disclosures [NOTE 1. Summary of Significant Accounting Policies](index=9&type=section&id=NOTE%201.%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) Describes CBIZ's business operations, organizational structure, and the key accounting principles applied in preparing the financial statements - CBIZ, Inc. is a diversified services company providing professional business services primarily to small and medium-sized businesses, individuals, governmental entities, and not-for-profit enterprises across the U.S. and parts of Canada. It operates through three practice groups: Financial Services, Benefits and Insurance Services, and National Practices[14](index=14&type=chunk) - In December **2024**, the Company formed a Captive Insurance Company (CBIZ CC, LLC and CBIZ Campus One Cell, LLC) to provide stop-loss coverages to higher education institutions, commencing operations on January **1**, **2025**. Revenue from this entity was not material for the three and six months ended June **30**, **2025**[15](index=15&type=chunk)[16](index=16&type=chunk) - The unaudited condensed consolidated financial statements are prepared in accordance with GAAP and SEC interim financial reporting rules, and include operations of CBIZ, Inc. and its wholly-owned subsidiaries, with intercompany balances eliminated[17](index=17&type=chunk)[18](index=18&type=chunk) [NOTE 2. New Accounting Pronouncements](index=10&type=section&id=NOTE%202.%20NEW%20ACCOUNTING%20PRONOUNCEMENTS) Discusses recently issued FASB Accounting Standards Updates and their anticipated adoption dates by CBIZ - The FASB issued ASU No. **2023-09** (Income Taxes) effective for public companies with annual periods beginning after December **15**, **2024**, which CBIZ plans to adopt for fiscal year ending December **31**, **2025**[23](index=23&type=chunk) - The FASB issued ASU No. **2024-03** (Expense Disaggregation Disclosure) effective for public companies with annual periods beginning after December **15**, **2026**, which CBIZ plans to adopt for fiscal year ending December **31**, **2027**[24](index=24&type=chunk) - The FASB issued ASU No. **2025-03** (Determining the Accounting Acquirer in the Acquisition of a VIE) effective for public companies with annual periods beginning after December **15**, **2026**, which CBIZ plans to adopt for fiscal year ending December **31**, **2027**[25](index=25&type=chunk) [NOTE 3. Business Combinations](index=10&type=section&id=NOTE%203.%20BUSINESS%20COMBINATIONS) Details the financial impact and accounting treatment of significant business acquisitions, including the Marcum LLP acquisition - On November **1**, **2024**, CBIZ acquired Marcum LLP, which contributed **$579.6 million** in revenue and **$119.1 million** in operating income to the Company's condensed consolidated statement of comprehensive income for the six months ended June **30**, **2025**[26](index=26&type=chunk) - The total purchase price for Marcum LLP was **$1,997.8 million**, consisting of **$1,063.0 million** in cash and **$934.7 million** in common stock (**13.6 million** shares)[27](index=27&type=chunk) - During the six months ended June **30**, **2025**, measurement period adjustments resulted in a net **$14.3 million** reduction in goodwill, primarily due to a **$21.0 million** reduction in estimated settlement amounts for an acquired liability, partially offset by an **$8.7 million** increase for previously unrecognized accrued personnel obligations[30](index=30&type=chunk) [NOTE 4. Accounts Receivable, Net](index=12&type=section&id=NOTE%204.%20ACCOUNTS%20RECEIVABLE%2C%20NET) Provides a breakdown of accounts receivable, including trade receivables, unbilled revenue, and the allowance for doubtful accounts Accounts Receivable Details | Metric (in thousands) | June 30, 2025 | December 31, 2024 | Change | | :-------------------- | :------------ | :---------------- | :----- | | Trade accounts receivable | $502,115 | $416,211 | +$85,904 | | Unbilled revenue | $223,856 | $150,362 | +$73,494 | | Total accounts receivable | $725,971 | $566,573 | +$159,398 | | Allowance for doubtful accounts | $(49,917) | $(31,715) | -$18,202 | | Accounts receivable, net | $676,054 | $534,858 | +$141,196 | Allowance for Doubtful Accounts | Allowance for Doubtful Accounts (in thousands) | Six Months Ended June 30, 2025 | Year Ended December 31, 2024 | | :--------------------------------------------- | :----------------------------- | :--------------------------- | | Balance at beginning of period | $(31,715) | $(25,598) | | Provision | $(19,323) | $(19,979) | | Charge-offs, net of recoveries | $1,121 | $13,862 | | Allowance for doubtful accounts (end of period) | $(49,917) | $(31,715) | [NOTE 5. Debt and Financing Arrangements](index=12&type=section&id=NOTE%205.%20DEBT%20AND%20FINANCING%20ARRANGEMENTS) Outlines CBIZ's primary debt instruments, credit facilities, and compliance with financial covenants - CBIZ's primary debt financing is the **2024** Credit Facilities, providing **$2.0 billion** in senior secured credit facilities, including a **$1.4 billion** Term Loan and a **$600.0 million** Revolving Credit Facility, maturing on November **1**, **2029**[35](index=35&type=chunk)[36](index=36&type=chunk) - As of June **30**, **2025**, CBIZ was in compliance with all debt covenants, including a Total Net Leverage Ratio not exceeding **5.00 to 1.00** and a Minimum Consolidated Interest Coverage Ratio of **3.00 to 1.00**[39](index=39&type=chunk) Debt Summary | Debt Type (in thousands) | June 30, 2025 | December 31, 2024 | | :----------------------- | :------------ | :---------------- | | Short-term debt | $66,274 | $66,177 | | Long-term debt | $1,488,215 | $1,333,755 | | Total outstanding debt | $1,554,489 | $1,399,932 | - The blended effective interest rate for the **2024** Credit Facilities was **6.67%** for the six months ended June **30**, **2025**, up from **5.41%** for the same period in **2024**[40](index=40&type=chunk) [NOTE 6. Commitments and Contingencies](index=14&type=section&id=NOTE%206.%20COMMITMENTS%20AND%20CONTINGENCIES) Discloses the company's various commitments, guarantees, and ongoing legal proceedings, including cyberattack litigation - CBIZ provides **$3.2 million** in letters of credit to landlords and **$2.2 million** in license bonds to state agencies as of June **30**, **2025**[44](index=44&type=chunk) - A lawsuit filed by Zotec Partners, LLC against CBIZ Operations, Inc. was finalized on April **8**, **2025**, with the Court of Appeals affirming the dismissal of securities fraud claims against CBIZ and reversing the **$3.1 million** award to CBIZ on its counterclaim[45](index=45&type=chunk) - CBIZ is a defendant in two putative class action lawsuits related to a May **31**, **2023** cyberattack on its MOVEit Transfer server, which compromised PII. These cases are in early stages within a multidistrict litigation (MDL), and the ultimate outcome or potential losses cannot be determined[46](index=46&type=chunk)[47](index=47&type=chunk)[48](index=48&type=chunk)[49](index=49&type=chunk) - In June **2025**, CBIZ settled litigation against former employees, receiving a **$12.5 million** pre-tax gain recorded in "Other income, net"[50](index=50&type=chunk) [NOTE 7. Financial Instruments](index=15&type=section&id=NOTE%207.%20FINANCIAL%20INSTRUMENTS) Describes the company's financial assets and liabilities, including available-for-sale securities and interest rate swap derivatives - CBIZ holds available-for-sale debt securities (corporate and municipal bonds) totaling **$38.9 million** at June **30**, **2025**, primarily from client funds, with maturities ranging from July **2025** to February **2028**. Unrealized losses were not material and not recognized as credit losses due to investment grade quality and management's intent not to sell[53](index=53&type=chunk)[54](index=54&type=chunk) - CBIZ uses interest rate swaps to manage interest rate risk on floating-rate debt under the **2024** Credit Facilities, not for trading or speculative purposes[55](index=55&type=chunk) Interest Rate Swap Details | Interest Rate Swap (in thousands) | Notional Amount | Fixed Rate | Expiration | Fair Value (June 30, 2025) | Balance Sheet Location | | :-------------------------------- | :-------------- | :--------- | :--------- | :------------------------- | :--------------------- | | Interest rate swap 1 | $30,000 | 1.186% | 12/14/2026 | $1,027 | Other non-current asset | | Interest rate swap 2 | $20,000 | 2.450% | 8/14/2027 | $399 | Other non-current asset | | Interest rate swap 3 | $25,000 | 3.669% | 4/14/2028 | $(198) | Other non-current liability | | Interest rate swap 4 | $25,000 | 4.488% | 10/14/2028 | $(864) | Other non-current liability | | Interest rate swap 5 | $50,000 | 3.703% | 3/14/2030 | $(702) | Other non-current liability | | Interest rate swap 6 | $50,000 | 3.503% | 4/14/2030 | $(285) | Other non-current liability | | Interest rate swap 7 | $50,000 | 3.680% | 7/14/2030 | $(636) | Other non-current liability | | Interest rate swap 8 | $50,000 | 3.680% | 7/15/2030 | $(681) | Other non-current liability | [NOTE 8. Fair Value Measurements](index=17&type=section&id=NOTE%208.%20FAIR%20VALUE%20MEASUREMENTS) Presents the fair value hierarchy and measurements for various financial assets and liabilities, including contingent purchase price liabilities Fair Value Measurement Summary | Asset/(Liability) (in thousands) | Level | June 30, 2025 | December 31, 2024 | | :------------------------------- | :---- | :------------ | :---------------- | | Assets of deferred compensation plan | 1 | $177,150 | $167,170 | | Available-for-sale debt securities | 1 | $38,911 | $40,999 | | Other depository assets | 1 | $2,428 | $176 | | Deferred compensation plan obligations | 1 | $(177,150) | $(167,170) | | Interest rate swaps | 2 | $(1,940) | $2,681 | | Bank debt | 2 | $(1,554,489) | $(1,399,932) | | Contingent purchase price liabilities | 3 | $(48,733) | $(96,967) | Contingent Purchase Price Liabilities | Contingent Purchase Price Liabilities (Level 3, in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------------------------------- | :----------------------------- | :----------------------------- | | Beginning balance – December 31 | $(96,967) | $(114,946) | | Additions from business acquisitions | $(2,941) | $(15,184) | | Settlement of contingent purchase price liabilities | $52,662 | $46,929 | | Change in fair value of contingencies | $170 | $423 | | Change in net present value of contingencies | $(1,657) | $(1,061) | | Ending balance – June 30 | $(48,733) | $(83,839) | [NOTE 9. Other Comprehensive Income](index=18&type=section&id=NOTE%209.%20OTHER%20COMPREHENSIVE%20INCOME) Details components of other comprehensive income, including unrealized gains/losses on securities and interest rate swaps Other Comprehensive Income Details | Other Comprehensive (Loss) Income (in thousands, net of tax) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net unrealized gain on available-for-sale securities | $51 | $167 | $123 | $223 | | Net unrealized (loss) gain on interest rate swaps | $(2,164) | $(292) | $(3,465) | $668 | | Foreign currency translation | $(2) | $(17) | $(8) | $(15) | | Total other comprehensive (loss) income | $(2,115) | $(142) | $(3,350) | $876 | [NOTE 10. Common Stock](index=18&type=section&id=NOTE%2010.%20COMMON%20STOCK) Provides information on common stock issuances, share repurchase programs, and the Right of First Refusal agreement - CBIZ issued **13.6 million** shares of common stock as part of the total purchase price consideration for the Marcum acquisition[63](index=63&type=chunk) - The Company has a Right of First Refusal (ROFR) program until November **1**, **2028**, allowing it to repurchase common stock issued to selling shareholders from the Marcum merger[64](index=64&type=chunk) - CBIZ repurchased **1.0 million** shares for **$71.3 million** under the ROFR Agreement and **0.1 million** shares for **$7.8 million** for tax withholding during the six months ended June **30**, **2025**[67](index=67&type=chunk) [NOTE 11. Employee Stock Plans](index=19&type=section&id=NOTE%2011.%20EMPLOYEE%20STOCK%20PLANS) Describes the company's stock-based compensation plans, including restricted stock units and performance share units - The **2019** Stock Omnibus Incentive Plan was amended on May **10**, **2023**, adding **1.5 million** shares, allowing a maximum of **4.6 million** stock options, restricted stock, or other stock-based awards[69](index=69&type=chunk) Stock-Based Compensation Expense | Stock-Based Compensation Expense (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Restricted stock units and awards | $5,289 | $1,552 | $10,148 | $2,903 | | Performance share units | $1,311 | $826 | $2,091 | $2,113 | | Total stock-based compensation expense | $6,600 | $2,378 | $12,239 | $5,016 | - As of June **30**, **2025**, CBIZ had **150 thousand** stock options outstanding with a weighted average exercise price of **$35.22** per share[70](index=70&type=chunk) [NOTE 12. Earnings Per Share](index=20&type=section&id=NOTE%2012.%20EARNINGS%20PER%20SHARE) Presents basic and diluted earnings per share calculations and the impact of share issuances on weighted average shares outstanding Earnings Per Share Metrics | EPS Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net Income (in thousands) | $41,942 | $19,793 | $164,715 | $96,677 | | Basic EPS | $0.66 | $0.39 | $2.59 | $1.93 | | Diluted EPS | $0.66 | $0.39 | $2.58 | $1.92 | | Basic weighted average shares outstanding (in thousands) | 63,542 | 50,111 | 63,692 | 50,079 | | Diluted weighted average shares outstanding (in thousands) | 63,784 | 50,276 | 63,960 | 50,248 | - The increase in weighted average common shares outstanding for the three and six months ended June **30**, **2025**, includes **13.6 million** shares issued as consideration for the Marcum acquisition[73](index=73&type=chunk) [NOTE 13. Segment Disclosures](index=21&type=section&id=NOTE%2013.%20SEGMENT%20DISCLOSURES) Provides financial performance data for CBIZ's operating segments: Financial Services, Benefits and Insurance Services, and National Practices - CBIZ operates through three practice groups: Financial Services, Benefits and Insurance Services, and National Practices, aggregated based on similarity of products, services, regulatory environment, and economic conditions[74](index=74&type=chunk) - "Corporate and Other" includes unallocated operating expenses such as health care costs, deferred compensation plan gains/losses, stock-based compensation, and integration charges[75](index=75&type=chunk) Segment Revenue | Segment Revenue (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Financial Services | $569,819 | $309,233 | $1,283,480 | $681,863 | | Benefits and Insurance Services | $101,929 | $97,419 | $214,905 | $205,827 | | National Practices | $11,748 | $13,360 | $23,125 | $26,619 | | Total CBIZ | $683,496 | $420,012 | $1,521,510 | $914,309 | Segment Income Before Tax | Segment Income Before Tax (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Financial Services | $85,335 | $46,552 | $288,688 | $153,707 | | Benefits and Insurance Services | $17,968 | $14,219 | $45,913 | $39,034 | | National Practices | $1,267 | $1,328 | $2,379 | $2,654 | | Consolidated income before income tax expense | $57,779 | $28,193 | $230,689 | $132,207 | [NOTE 14. Subsequent Events](index=23&type=section&id=NOTE%2014.%20SUBSEQUENT%20EVENTS) Discloses significant events occurring after the reporting period, such as new legislation, interest rate swaps, and share repurchases - On July **4**, **2025**, the U.S. government enacted The One Big Beautiful Bill Act of **2025**, which includes changes to the U.S. corporate income tax system, effective for CBIZ beginning in **2025**. The company is assessing its impact[81](index=81&type=chunk)[82](index=82&type=chunk) - CBIZ entered into two new interest rate swaps in July **2025**: one for **$100 million** at a fixed rate of **3.85%** expiring January **14**, **2027**, and another for **$100 million** at a fixed rate of **4.047%** expiring July **14**, **2026**[82](index=82&type=chunk)[83](index=83&type=chunk) - Subsequent to June **30**, **2025**, and up to July **25**, CBIZ repurchased approximately **0.3 million** shares of common stock for **$25.3 million** under the ROFR Agreement[83](index=83&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides a comprehensive analysis of CBIZ's financial performance, condition, and cash flows for the periods ended June 30, 2025, and 2024. It covers revenue, operating expenses, general and administrative expenses, other income/expense, income tax, and segment-specific results, highlighting the significant impact of the Marcum acquisition. The discussion also addresses liquidity, capital resources, and off-balance sheet arrangements [Overview](index=25&type=section&id=Overview) Provides a general description of CBIZ's business, its service offerings, and operating practice groups - CBIZ provides professional business services, products, and solutions to small and medium-sized businesses, individuals, governmental entities, and not-for-profit enterprises across the U.S. and parts of Canada[86](index=86&type=chunk) - Services are delivered through three practice groups: Financial Services, Benefits and Insurance Services, and National Practices[86](index=86&type=chunk) [Executive Summary](index=25&type=section&id=Executive%20Summary) Summarizes key financial performance metrics, including revenue, net income, and diluted EPS, highlighting major drivers and strategic objectives Executive Summary Financials (Three Months) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change | % Change | | :-------------------------------- | :------------------------------- | :------------------------------- | :----- | :------- | | Revenue | $683.5 million | $420.0 million | +$263.5 million | +62.7% | | Revenue from newly acquired operations (net of divestitures) | $256.2 million | N/A | N/A | +60.3% | | Net income | $41.9 million | $19.8 million | +$22.1 million | +111.6% | | Diluted EPS | $0.66 | $0.39 | +$0.27 | +69.2% | Executive Summary Financials (Six Months) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change | % Change | | :-------------------------------- | :----------------------------- | :----------------------------- | :----- | :------- | | Revenue | $1,521.5 million | $914.3 million | +$607.2 million | +66.4% | | Revenue from newly acquired operations (net of divestitures) | $589.6 million | N/A | N/A | +63.8% | | Net income | $164.7 million | $96.7 million | +$68.0 million | +70.3% | | Diluted EPS | $2.58 | $1.92 | +$0.66 | +34.4% | - The current economic and geopolitical environment has led to softness in demand for nonrecurring project-based services, which may continue and limit forecasting ability for the remainder of **2025**[90](index=90&type=chunk) - CBIZ's strategic capital objective is to maximize cash flow to pay down debt, increasing liquidity for future strategic acquisitions, and considers share repurchases a prudent use of financial resources[91](index=91&type=chunk) [Results of Operations](index=26&type=section&id=Results%20of%20Operations) This section details the financial performance across revenue, operating expenses, G&A, other income/expense, and income tax, providing a breakdown by segment. It highlights significant increases in revenue and net income, largely driven by the Marcum acquisition, and discusses the impact of deferred compensation plans and legal settlements on financial results [Revenue](index=26&type=section&id=Revenue) Details the company's revenue performance, broken down by operating segment, and highlights growth drivers Revenue by Segment (Three Months) | Revenue by Segment (in thousands) | Three Months Ended June 30, 2025 | % of Total (2025) | Three Months Ended June 30, 2024 | % of Total (2024) | $ Change | % Change | | :-------------------------------- | :------------------------------- | :---------------- | :------------------------------- | :---------------- | :------- | :------- | | Financial Services | $569,819 | 83.4% | $309,233 | 73.6% | $260,586 | 84.3% | | Benefits and Insurance Services | $101,929 | 14.9% | $97,419 | 23.2% | $4,510 | 4.6% | | National Practices | $11,748 | 1.7% | $13,360 | 3.2% | $(1,612) | (12.1)% | | Total CBIZ | $683,496 | 100.0% | $420,012 | 100.0% | $263,484 | 62.7% | Revenue by Segment (Six Months) | Revenue by Segment (in thousands) | Six Months Ended June 30, 2025 | % of Total (2025) | Six Months Ended June 30, 2024 | % of Total (2024) | $ Change | % Change | | :-------------------------------- | :----------------------------- | :---------------- | :----------------------------- | :---------------- | :------- | :------- | | Financial Services | $1,283,480 | 84.4% | $681,863 | 74.6% | $601,617 | 88.2% | | Benefits and Insurance Services | $214,905 | 14.1% | $205,827 | 22.5% | $9,078 | 4.4% | | National Practices | $23,125 | 1.5% | $26,619 | 2.9% | $(3,494) | (13.1)% | | Total CBIZ | $1,521,510 | 100.0% | $914,309 | 100.0% | $607,201 | 66.4% | [Non-qualified Deferred Compensation Plan](index=27&type=section&id=Non-qualified%20Deferred%20Compensation%20Plan) Explains the accounting treatment and financial impact of the company's non-qualified deferred compensation plan - The deferred compensation plan's income and expenses are recorded in "Corporate and Other" and directly offset by deferred compensation gains or losses in "Other income, net," having no impact on "Income before income tax expense" or diluted EPS[94](index=94&type=chunk) Deferred Compensation Plan Impact | Deferred Compensation Plan Impact (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Operating (income) expense | $11,717 | $2,283 | $9,285 | $10,859 | | Corporate general & administrative (income) expense | $1,458 | $323 | $1,339 | $1,380 | | Other income, net | $13,175 | $2,606 | $10,624 | $12,239 | [Operating Expenses](index=29&type=section&id=Operating%20Expenses) Analyzes changes in operating expenses, including the impact of integration and retention costs from acquisitions Operating Expenses Analysis (Three Months) | Operating Expenses (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | $ Change | % Change | | :-------------------------------- | :------------------------------- | :------------------------------- | :------- | :------- | | Total Operating expenses | $595,587 | $366,368 | $229,219 | 62.6% | | Operating expenses % of revenue | 87.1% | 87.2% | N/A | -0.1% | | Operating expenses excluding deferred compensation | $583,870 | $364,085 | $219,785 | 60.4% | | Operating expenses excluding deferred compensation % of revenue | 85.4% | 86.7% | N/A | -1.3% | Operating Expenses Analysis (Six Months) | Operating Expenses (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | $ Change | % Change | | :-------------------------------- | :----------------------------- | :----------------------------- | :------- | :------- | | Total Operating expenses | $1,205,499 | $742,853 | $462,646 | 62.3% | | Operating expenses % of revenue | 79.2% | 81.2% | N/A | -2.0% | | Operating expenses excluding deferred compensation | $1,196,214 | $731,994 | $464,220 | 63.4% | | Operating expenses excluding deferred compensation % of revenue | 78.6% | 80.1% | N/A | -1.5% | - Operating expenses for the three months ended June **30**, **2025**, included approximately **$11.1 million** of integration costs associated with the Marcum acquisition[96](index=96&type=chunk) - For the six months ended June **30**, **2025**, operating expenses included approximately **$20.1 million** of integration and retention costs related to the Marcum acquisition[99](index=99&type=chunk) [Corporate General & Administrative (G&A) Expenses](index=30&type=section&id=Corporate%20General%20%26%20Administrative%20%28%22G%26A%22%29%20Expenses) Examines trends in corporate general and administrative expenses, including the effect of acquisition-related integration costs G&A Expenses Analysis (Three Months) | G&A Expenses (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | $ Change | % Change | | :-------------------------- | :------------------------------- | :------------------------------- | :------- | :------- | | G&A expenses | $27,637 | $22,050 | $5,587 | 25.3% | | G&A expenses % of revenue | 4.0% | 5.2% | N/A | -1.2% | | G&A expenses excluding deferred compensation | $26,179 | $21,727 | $4,452 | 20.5% | | G&A expenses excluding deferred compensation % of revenue | 3.8% | 5.2% | N/A | -1.4% | G&A Expenses Analysis (Six Months) | G&A Expenses (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | $ Change | % Change | | :-------------------------- | :----------------------------- | :----------------------------- | :------- | :------- | | G&A expenses | $55,707 | $40,761 | $14,946 | 36.7% | | G&A expenses % of revenue | 3.7% | 4.5% | N/A | -0.8% | | G&A expenses excluding deferred compensation | $54,368 | $39,381 | $14,987 | 38.1% | | G&A expenses excluding deferred compensation % of revenue | 3.6% | 4.3% | N/A | -0.7% | - G&A expenses for the three months ended June **30**, **2025**, included approximately **$8.1 million** of integration costs primarily associated with the Marcum acquisition[100](index=100&type=chunk) - G&A expenses for the six months ended June **30**, **2025**, included approximately **$14.8 million** of integration costs primarily associated with the Marcum acquisition[102](index=102&type=chunk) [Other Income (Expense), Net](index=31&type=section&id=Other%20Income%20%28Expense%29%2C%20Net) Details components of other income and expense, including interest expense, deferred compensation gains, and legal settlements Other Income (Expense) Details (Three Months) | Other Income (Expense), Net (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | $ Change | % Change | | :----------------------------------------- | :------------------------------- | :------------------------------- | :------- | :------- | | Interest expense | $(27,867) | $(5,884) | $(21,983) | N/M | | Other income, net | $25,374 | $2,483 | $22,891 | N/M | | Total other income (expense), net | $(2,493) | $(3,401) | $908 | (26.7)% | Other Income (Expense) Details (Six Months) | Other Income (Expense), Net (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | $ Change | % Change | | :----------------------------------------- | :----------------------------- | :----------------------------- | :------- | :------- | | Interest expense | $(53,023) | $(10,395) | $(42,628) | N/M | | Other income, net | $23,408 | $11,907 | $11,501 | 96.6% | | Total other income (expense), net | $(29,615) | $1,512 | $(31,127) | N/M | - Other income, net for the three months ended June **30**, **2025**, included a **$13.2 million** net gain from the deferred compensation plan and a **$12.5 million** gain from a legal settlement[103](index=103&type=chunk) - Other income, net for the six months ended June **30**, **2025**, included a **$10.6 million** net gain from the deferred compensation plan and a **$12.5 million** gain from a legal settlement[104](index=104&type=chunk) [Interest Expense](index=31&type=section&id=Interest%20Expense) Analyzes the drivers of interest expense, including changes in average debt balance and effective interest rates - Interest expense for the three months ended June **30**, **2025**, increased significantly due to a higher average debt balance (**$1,542.4 million** vs. **$410.1 million**) and a higher weighted average effective interest rate (**6.75%** vs. **4.85%**) compared to the same period in **2024**, primarily driven by the **2024** Credit Facilities[105](index=105&type=chunk)[106](index=106&type=chunk) - For the six months ended June **30**, **2025**, the average debt balance was **$1,493.2 million** with a **6.67%** interest rate, compared to **$367.9 million** and **5.41%** in **2024**, leading to increased interest expense[107](index=107&type=chunk) [Income Tax Expense](index=32&type=section&id=Income%20Tax%20Expense) Discusses the company's income tax expense and effective tax rates, explaining factors influencing their fluctuations Income Tax Metrics (Three Months) | Income Tax Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | $ Change | % Change | | :---------------- | :------------------------------- | :------------------------------- | :------- | :------- | | Income tax expense (in thousands) | $15,837 | $8,400 | $7,438 | 88.5% | | Effective tax rate | 27.4% | 29.8% | N/A | -2.4% | Income Tax Metrics (Six Months) | Income Tax Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | $ Change | % Change | | :---------------- | :----------------------------- | :----------------------------- | :------- | :------- | | Income tax expense (in thousands) | $65,974 | $35,530 | $30,444 | 85.7% | | Effective tax rate | 28.6% | 26.9% | N/A | +1.7% | - The effective tax rate for the three months ended June **30**, **2025**, decreased to **27.4%** from **29.8%** in **2024**, primarily due to lower non-deductible expenses and state income tax expenses relative to pre-tax income[112](index=112&type=chunk) - The effective tax rate for the six months ended June **30**, **2025**, increased to **28.6%** from **26.9%** in **2024**, mainly due to lower tax benefits from stock-based compensation expense[113](index=113&type=chunk) [Operating Practice Groups](index=33&type=section&id=Operating%20Practice%20Groups) This section provides a detailed breakdown of the financial performance for each of CBIZ's three operating practice groups: Financial Services, Benefits and Insurance Services, and National Practices, including their respective revenues, operating expenses, and income before tax [Financial Services](index=33&type=section&id=Financial%20Services) Presents the financial performance of the Financial Services segment, detailing revenue, operating expenses, and income before tax Financial Services Performance (Three Months) | Financial Services (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | $ Change | % Change | | :-------------------------------- | :------------------------------- | :------------------------------- | :------- | :------- | | Revenue | $569,819 | $309,233 | $260,586 | 84.3% | | Operating expenses | $484,458 | $262,809 | $221,649 | 84.3% | | Income before income tax expense | $85,335 | $46,552 | $38,783 | 83.3% | | Gross margin percent | 15.0% | 15.0% | N/A | 0.0% | Financial Services Performance (Six Months) | Financial Services (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | $ Change | % Change | | :-------------------------------- | :----------------------------- | :----------------------------- | :------- | :------- | | Revenue | $1,283,480 | $681,863 | $601,617 | 88.2% | | Operating expenses | $994,951 | $528,370 | $466,581 | 88.3% | | Income before income tax expense | $288,688 | $153,707 | $134,981 | 87.8% | | Gross margin percent | 22.5% | 22.5% | N/A | 0.0% | - Financial Services revenue growth for the three months ended June **30**, **2025**, was primarily driven by a **$196.6 million** increase in traditional accounting and tax services (due to the Marcum acquisition) and a **$48.1 million** increase in advisory services[116](index=116&type=chunk) - Fees earned under Administrative Service Agreements (ASAs) were approximately **$164.6 million** and **$398.9 million** for the three and six months ended June **30**, **2025**, respectively[117](index=117&type=chunk)[121](index=121&type=chunk) [Benefits and Insurance Services](index=34&type=section&id=Benefits%20and%20Insurance%20Services) Outlines the financial performance of the Benefits and Insurance Services segment, including revenue and operating expense trends Benefits and Insurance Services Performance (Three Months) | Benefits and Insurance Services (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | $ Change | % Change | | :--------------------------------------------- | :------------------------------- | :------------------------------- | :------- | :------- | | Revenue | $101,929 | $97,419 | $4,510 | 4.6% | | Operating expenses | $84,007 | $83,243 | $764 | 0.9% | | Income before income tax expense | $17,968 | $14,219 | $3,749 | 26.4% | | Gross margin percent | 17.6% | 14.6% | N/A | +3.0% | Benefits and Insurance Services Performance (Six Months) | Benefits and Insurance Services (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | $ Change | % Change | | :--------------------------------------------- | :----------------------------- | :----------------------------- | :------- | :------- | | Revenue | $214,905 | $205,827 | $9,078 | 4.4% | | Operating expenses | $169,365 | $166,880 | $2,485 | 1.5% | | Income before income tax expense | $45,913 | $39,034 | $6,879 | 17.6% | | Gross margin percent | 21.2% | 18.9% | N/A | +2.3% | - Revenue for Benefits and Insurance Services increased by **$4.5 million** (**4.6%**) for the three months ended June **30**, **2025**, driven by employee benefit/retirement services (**+$3.6 million**) and payroll-related services (**+$2.5 million**), partially offset by a decrease in property and casualty services[124](index=124&type=chunk)[125](index=125&type=chunk) - Operating expenses as a percentage of revenue decreased to **82.4%** for the quarter ended June **30**, **2025**, from **85.4%** in **2024**, primarily due to increased revenue from employee benefit and retirement benefit services[126](index=126&type=chunk) [National Practices](index=35&type=section&id=National%20Practices) Reports the financial performance of the National Practices segment, highlighting revenue and operating expense changes National Practices Performance (Three Months) | National Practices (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | $ Change | % Change | | :-------------------------------- | :------------------------------- | :------------------------------- | :------- | :------- | | Revenue | $11,748 | $13,360 | $(1,612) | (12.1)% | | Operating expenses | $10,481 | $12,028 | $(1,547) | (12.9)% | | Income before income tax expenses | $1,267 | $1,328 | $(61) | (4.6)% | | Gross margin percent | 10.8% | 10.0% | N/A | +0.8% | National Practices Performance (Six Months) | National Practices (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | $ Change | % Change | | :-------------------------------- | :----------------------------- | :----------------------------- | :------- | :------- | | Revenue | $23,125 | $26,619 | $(3,494) | (13.1)% | | Operating expenses | $20,746 | $23,961 | $(3,215) | (13.4)% | | Income before income tax expenses | $2,379 | $2,658 | $(279) | (10.5)% | | Gross margin percent | 10.3% | 10.0% | N/A | +0.3% | - The National Practices group's revenue and operating expenses decreased by **12.1%** and **12.9%** respectively for the three months ended June **30**, **2025**, and by **13.1%** and **13.4%** respectively for the six months ended June **30**, **2025**, primarily driven by a cost-plus contract with a single client[130](index=130&type=chunk) [Corporate and Other](index=36&type=section&id=Corporate%20and%20Other) Details unallocated corporate operating expenses, G&A, and other income/expense, including integration charges - Corporate and Other expenses include unallocated operating expenses such as health care costs, deferred compensation plan gains/losses, stock-based compensation, and integration charges[131](index=131&type=chunk) Corporate and Other Financials (Three Months) | Corporate and Other (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | $ Change | % Change | | :--------------------------------- | :------------------------------- | :------------------------------- | :------- | :------- | | Operating expenses | $16,641 | $8,288 | $8,353 | 100.8% | | Corporate general and administrative expenses | $27,637 | $22,050 | $5,587 | 25.3% | | Operating loss | $(44,278) | $(30,338) | $(13,940) | 45.9% | | Total other (expense) income, net | $(2,514) | $(3,568) | $1,054 | (29.5)% | | Loss before income tax expense | $(46,792) | $(33,906) | $(12,886) | 38.0% | Corporate and Other Financials (Six Months) | Corporate and Other (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | $ Change | % Change | | :--------------------------------- | :----------------------------- | :----------------------------- | :------- | :------- | | Operating expenses | $20,437 | $23,642 | $(3,205) | (13.6)% | | Corporate general and administrative expenses | $55,707 | $40,761 | $14,946 | 36.7% | | Operating loss | $(76,144) | $(64,403) | $(11,741) | 18.2% | | Total other (expense) income, net | $(30,149) | $1,215 | $(31,364) | N/M | | Loss before income tax expense | $(106,293) | $(43,105) | $(63,188) | 68.2% | - Excluding deferred compensation, Corporate and Other operating expenses decreased by **$1.1 million** for the three months ended June **30**, **2025**, primarily due to lower personnel costs[133](index=133&type=chunk) - Excluding deferred compensation, Corporate G&A expenses increased by **$4.5 million** for the three months ended June **30**, **2025**, driven by higher facility, insurance, marketing, professional services, and technology costs, including **$8.1 million** in integration costs from the Marcum acquisition[134](index=134&type=chunk)[135](index=135&type=chunk) [Liquidity](index=37&type=section&id=LIQUIDITY) Discusses CBIZ's sources and uses of cash, focusing on operating, investing, and financing activities and their impact on liquidity - CBIZ's primary liquidity sources are cash from operating and financing activities, with a historical practice of maintaining low cash levels and using available cash to pay down outstanding debt[140](index=140&type=chunk) - The company typically experiences a use of cash for working capital in Q**1** due to seasonal accounting and tax services and incentive payments, with cash provided by operations exceeding this use in subsequent quarters[141](index=141&type=chunk) Cash Flow Summary | Cash Flow Activity (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $24,880 | $24,439 | | Net cash used in investing activities | $(12,299) | $(33,247) | | Net cash used in financing activities | $(33,249) | $(11,920) | | Net decrease in cash, cash equivalents and restricted cash | $(20,668) | $(20,728) | - Cash used in financing activities for the six months ended June **30**, **2025**, was **$33.2 million**, primarily due to **$79.1 million** in share repurchases (including **$71.3 million** under the ROFR Agreement), a **$57.2 million** decrease in client fund obligations, and **$48.8 million** in contingent consideration payments, partially offset by **$152.8 million** in net proceeds from the credit facility[147](index=147&type=chunk) [Capital Resources](index=38&type=section&id=CAPITAL%20RESOURCES) Describes the company's available capital, debt facilities, compliance with covenants, and capital allocation priorities - As of June **30**, **2025**, CBIZ had **$1,573.7 million** outstanding under the **2024** Credit Facilities and **$3.2 million** in outstanding letters of credit, with approximately **$370.0 million** in available funds[148](index=148&type=chunk) - CBIZ was in compliance with all financial covenants under the **2024** Credit Facilities as of June **30**, **2025**[150](index=150&type=chunk) - The company's capital allocation priority is to maximize cash flow to pay down debt to increase liquidity for future strategic acquisitions, while also considering share repurchases as a prudent use of financial resources[151](index=151&type=chunk) - Cash requirements for the remainder of **2025** and beyond include debt repayment, strategic acquisitions, working capital, contingent purchase price payments, income taxes, and capital expenditures, which are expected to be met by operating cash flow and available credit[152](index=152&type=chunk) [Off-Balance Sheet Arrangements](index=39&type=section&id=OFF-BALANCE%20SHEET%20ARRANGEMENTS) Discloses the company's off-balance sheet arrangements, including administrative service agreements and letters of credit - CBIZ maintains administrative service agreements with independent CPA firms that qualify as variable interest entities, but their operations are not materially reflected in the consolidated financial statements[153](index=153&type=chunk) - CBIZ has **$3.2 million** in letters of credit for leased premises and **$2.2 million** in license bonds outstanding as of June **30**, **2025**[154](index=154&type=chunk) - The company has various indemnification agreements in the normal course of business, but historically has not made material payments under these, and no material obligations are currently known[155](index=155&type=chunk) [Critical Accounting Policies and Estimates](index=40&type=section&id=CRITICAL%20ACCOUNTING%20POLICIES%20AND%20ESTIMATES) States that the company's critical accounting policies and estimates remain unchanged from previous disclosures - The preparation of financial statements requires management to make estimates and judgments that affect reported amounts, which could differ materially from actual results[157](index=157&type=chunk) - CBIZ has not made any changes to its critical accounting policies and estimates as previously disclosed in its Annual Report on Form **10-K** for the fiscal year ended December **31**, **2024**[157](index=157&type=chunk) [New Accounting Pronouncements](index=40&type=section&id=NEW%20ACCOUNTING%20PRONOUNCEMENTS) Refers to Note 2 for details on recently issued accounting pronouncements and their potential impact - Refer to Note **2**, New Accounting Pronouncements, for a discussion of recently issued accounting pronouncements[158](index=158&type=chunk) [Forward-Looking Statements](index=40&type=section&id=FORWARD-LOOKING%20STATEMENTS) Highlights the presence of forward-looking statements in the report and the inherent risks and uncertainties associated with them - The report contains forward-looking statements regarding financial position, business strategy, and future performance, identifiable by terms like "will," "could," "may," "intend," "believe," "expect," and "anticipate"[159](index=159&type=chunk) - These statements are subject to risks and uncertainties that could cause actual results to differ materially, including slower-than-expected receivable payments, Marcum acquisition performance, loss of key employees, regulatory restrictions, goodwill impairment, and cybersecurity risks[160](index=160&type=chunk) - CBIZ undertakes no obligation to publicly update forward-looking statements, except as required by law, and advises consulting further SEC filings for detailed risk factors[163](index=163&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=41&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section discusses CBIZ's exposure to market risks, primarily interest rate risk from its floating-rate debt under the 2024 Credit Facilities. It details the use of interest rate swaps to manage this risk and mentions investments in short-term, investment-grade debt securities related to payroll operations - CBIZ is exposed to interest rate risk from its **$1,273.7 million** floating-rate debt under the **2024** Credit Facilities as of June **30**, **2025**; a **100** basis point change in market rates would impact annual interest expense by approximately **$12.7 million**[164](index=164&type=chunk) - CBIZ uses interest rate swaps to convert portions of its floating-rate debt to a fixed-rate basis, not for trading or speculative purposes[165](index=165&type=chunk) - Funds collected from payroll clients are invested in short-term, investment-grade corporate and municipal bonds, classified as available-for-sale securities and adjusted to fair value[168](index=168&type=chunk) [Item 4. Controls and Procedures](index=42&type=section&id=Item%204.%20Controls%20and%20Procedures) This section outlines management's evaluation of CBIZ's disclosure controls and internal control over financial reporting. It concludes that disclosure controls were effective at a reasonable assurance level as of June 30, 2025, and notes ongoing integration of control processes related to the Marcum acquisition [Disclosure Controls and Procedures](index=42&type=section&id=Disclosure%20Controls%20and%20Procedures) Provides information on the effectiveness of CBIZ's disclosure controls and procedures - Management, including the CEO and CFO, evaluated the effectiveness of CBIZ's disclosure controls and procedures as of June **30**, **2025**[169](index=169&type=chunk) - Disclosure controls are designed to provide reasonable, not absolute, assurance of achieving their objectives, acknowledging inherent limitations such as human error, collusion, or management override[170](index=170&type=chunk)[171](index=171&type=chunk) - Based on the evaluation, the CEO and CFO concluded that CBIZ's disclosure controls were effective at a reasonable assurance level as of June **30**, **2025**[172](index=172&type=chunk) [Internal Control over Financial Reporting](index=43&type=section&id=Internal%20Control%20over%20Financial%20Reporting) Discusses the company's internal control over financial reporting, including integration efforts related to acquisitions - CBIZ is actively integrating control processes and information systems related to the Marcum acquisition into its existing control environment, believing necessary steps have been taken to monitor and maintain appropriate internal controls[173](index=173&type=chunk) - No material changes to internal control over financial reporting occurred during the quarter ended June **30**, **2025**, other than those related to the Marcum acquisition integration[174](index=174&type=chunk) PART II. OTHER INFORMATION Contains additional disclosures including legal proceedings, risk factors, equity sales, and controls and procedures [Item 1. Legal Proceedings](index=43&type=section&id=Item%201.%20Legal%20Proceedings) CBIZ is involved in various legal proceedings arising in the ordinary course of business but is not currently engaged in any that are reasonably expected to have a material adverse effect on its financial condition or operations. Information on material proceedings is incorporated by reference from Note 6 - CBIZ is not currently engaged in any legal proceedings expected to have a material adverse effect on its business, financial condition, results of operations, or cash flows[176](index=176&type=chunk) - Information regarding certain material legal proceedings is incorporated by reference from Note **6**, Commitments and Contingencies[176](index=176&type=chunk) [Item 1A. Risk Factors](index=43&type=section&id=Item%201A.%20Risk%20Factors) This section refers readers to the "Risk Factors" discussion in the Company's Annual Report on Form 10-K for the year ended December 31, 2024, noting that there have been no material changes to these factors - Readers should carefully consider the risk factors discussed in the Company's Annual Report on Form **10-K** for the year ended December **31**, **2024**[177](index=177&type=chunk) - There have been no material changes to the previously disclosed risk factors[177](index=177&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=43&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the issuance of unregistered equity securities, including shares for contingent consideration and to selling shareholders of the Marcum acquisition. It also outlines the Company's share repurchase program, which was renewed in February 2025, and its activity during the second quarter [Recent sales of unregistered securities](index=43&type=section&id=Recent%20sales%20of%20unregistered%20securities) Details the issuance of unregistered equity securities for contingent consideration and the Marcum acquisition - During Q**2** **2025**, approximately **14 thousand** shares of common stock were issued as payment for contingent consideration for previous acquisitions[178](index=178&type=chunk) - CBIZ delivered **0.9 million** shares of common stock to selling shareholders as part of the Marcum acquisition, issued in reliance on the Section **4(a)(2)** exemption from registration[178](index=178&type=chunk) [Issuer purchases of equity securities](index=43&type=section&id=Issuer%20purchases%20of%20equity%20securities) Outlines the company's share repurchase program and the volume of shares repurchased during the quarter - On February **11**, **2025**, the Board of Directors authorized the continuation of the Share Repurchase Program, allowing the purchase of up to **5.0 million** shares of common stock through March **31**, **2026**[179](index=179&type=chunk) - Repurchases can occur in the open market, privately negotiated transactions (including from former Marcum partners under the ROFR Agreement), or under Rule **10b5-1** trading plans[180](index=180&type=chunk)[181](index=181&type=chunk) Second Quarter Share Purchases | Second Quarter Purchases (in thousands, except per share data) | Total Number of Shares Purchased | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plan | Maximum Number of Shares That May Yet Be Purchased Under the Plan | | :----------------------------------------------------------- | :------------------------------- | :--------------------------- | :------------------------------------------------------------------ | :---------------------------------------------------------------- | | April 1 – April 30, 2025 | — | $— | — | 5,000 | | May 1 – May 31, 2025 | 617 | $71.81 | 617 | 4,383 | | June 1 - June 30, 2025 | 374 | $72.24 | 374 | 4,009 | | Second Quarter Purchases Total | 991 | N/A | 991 | N/A | [Item 3. Defaults Upon Senior Securities](index=44&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) States that this item is not applicable, indicating no defaults on senior securities - Not applicable[184](index=184&type=chunk) [Item 4. Mine Safety Disclosures](index=44&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) States that this item is not applicable, indicating no mine safety disclosures are required - Not applicable[185](index=185&type=chunk) [Item 5. Other Information](index=44&type=section&id=Item%205.%20Other%20Information) Confirms that no directors or officers adopted or terminated Rule 10b5-1 trading plans during the quarter - No director or officer adopted or terminated any Rule **10b5-1** trading plans or non-Rule **10b5-1** trading arrangements during the quarter ended June **30**, **2025**[186](index=186&type=chunk) [Item 6. Exhibits](index=45&type=section&id=Item%206.%20Exhibits) Lists the various exhibits filed with the Form 10-Q, including amendments to loan agreements, certifications from the CEO and CFO, and XBRL-related documents - Exhibits include the Second Amendment to the Credit Agreement (April **29**, **2025**), Seventh Amendment to Loan Agreement (July **31**, **2025**), CEO and CFO certifications (Sarbanes-Oxley Act Sections **302** and **906**), and various XBRL documents[187](index=187&type=chunk) [Signature](index=46&type=section&id=Signature) Indicates the report was signed by the Chief Financial Officer on a specific date - The report was signed by Brad Lakhia, Chief Financial Officer, on July **31**, **2025**[192](index=192&type=chunk)

Group 1: Earnings Performance - CBIZ reported quarterly earnings of $0.95 per share, exceeding the Zacks Consensus Estimate of $0.84 per share, and up from $0.50 per share a year ago, representing an earnings surprise of +13.10% [1] - Over the last four quarters, CBIZ has surpassed consensus EPS estimates four times [2] - The company posted revenues of $683.5 million for the quarter ended June 2025, missing the Zacks Consensus Estimate by 3.73%, compared to year-ago revenues of $420.01 million [2] Group 2: Stock Performance and Outlook - CBIZ shares have declined approximately 7.5% since the beginning of the year, while the S&P 500 has gained 8.3% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the coming quarter is $0.99 on revenues of $732 million, and for the current fiscal year, it is $3.62 on revenues of $2.85 billion [7] Group 3: Industry Context - The Consulting Services industry, to which CBIZ belongs, is currently ranked in the top 20% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact CBIZ's stock performance [5][6]

Financial Data and Key Metrics Changes - For the second quarter, consolidated revenue was $684 million, and first half revenue was $1.5 billion, reflecting a 6366% increase, largely driven by the Marcom acquisition [16] - Adjusted EBITDA for the second quarter increased by 128% to $66 million, and more than doubled to $356 million for the first half [16] - Adjusted diluted earnings per share increased by 64% to $0.95 for the second quarter and by 47% to $3.26 for the first half [19] Business Line Data and Key Metrics Changes - Organic revenue for core services in the Benefits and Insurance segment and core Accounting and Tax Services grew by low single digits, while the National Practice segment grew by 13% [6] - Financial Services segment revenue was $570 million for the second quarter, up approximately 84%, with adjusted EBITDA more than doubling to $111 million [20] - Benefits and Insurance segment delivered revenue of $102 million in the second quarter, up nearly 5% year-over-year, with adjusted EBITDA of $20 million, a 21% increase [21] Market Data and Key Metrics Changes - Nearly 60% of clients expressed a neutral outlook due to higher operational costs and mixed economic forecasts, leading to a low single-digit decline in nonrecurring project-based revenue year-over-year [8] - Year-to-date rate increases averaged about 4%, which is 200 to 300 basis points below expectations, creating a headwind of approximately $75 million for the full year [9] Company Strategy and Development Direction - The Marcom acquisition is viewed as a significant strategic decision, enhancing the company's position in key U.S. markets and expanding its client base [11][12] - The company aims to maintain a disciplined approach to capital allocation, focusing on deleveraging to 2.5 times or below by 2026 while pursuing strategic opportunities [22][23] Management's Comments on Operating Environment and Future Outlook - The management noted that the current economic climate has impacted market-sensitive areas, but core services remain resilient [5][7] - The company expects market conditions experienced in the first half to persist, anticipating revenue at the low end of guidance for the year [26] Other Important Information - The company ended the quarter with approximately $1.6 billion in net debt, representing 3.7 times leverage, and maintained $400 million in available liquidity [23][24] - Integration costs are projected to be around $75 million for the year, with the first half reflecting $34.8 million [49] Q&A Session Summary Question: Update on the advisory business and guidance assumptions - Management indicated that the second half is expected to mirror the first half, with clients remaining cautious in discretionary spending [31][32] Question: Pricing pushback and structural limits - Management believes the pricing pushback is market-driven and not indicative of reaching structural limits, with optimism for future pricing improvements [38][39] Question: Integration costs and synergies - Integration costs are expected to remain around $75 million, with management confident in surpassing initial synergy targets [52][45] Question: Client feedback on the Markham transaction - The integration has been positive, with strong collaboration and client experiences noted, although some adjustments were made to improve processes [57][68] Question: Discretionary spending trends - Management identified M&A-related work and SEC-related practices as areas impacted by current market conditions, with transaction sizes smaller but higher volume noted [71][74]

Financial Data and Key Metrics Changes - For Q2 2025, consolidated revenue was $684 million, and first half revenue was $1.5 billion, reflecting a 6366% increase, largely driven by the Marcom acquisition [15] - Adjusted EBITDA for Q2 increased by 128% to $66 million, and more than doubled to $356 million for the first half [16] - Adjusted EBITDA margin was 17% for the quarter and 23% year to date, an increase of nearly 500 basis points compared to last year [17] - Adjusted diluted earnings per share for Q2 increased by 64% to $0.95, and for the first half, it increased by 47% to $3.26 [19] Business Line Data and Key Metrics Changes - Financial Services segment revenue for Q2 was $570 million, up approximately 84%, with adjusted EBITDA more than doubling to $111 million, a margin of 20% [20] - Benefits and Insurance segment revenue was $102 million in Q2, up approximately 5%, with adjusted EBITDA of $20 million, a 21% increase [21] Market Data and Key Metrics Changes - Year-to-date organic revenue for core services in Benefits and Insurance and Accounting and Tax Services grew by low single digits, while the National Practice segment grew by 13% [6] - Year-to-date rate increases averaged about 4%, which is 200 to 300 basis points below expectations, creating a headwind of about $75 million for the full year [9] Company Strategy and Development Direction - The Marcom acquisition is viewed as a significant strategic decision, enhancing the company's position in key U.S. markets and expanding its client base [12] - The company aims to maintain a disciplined approach to capital allocation, focusing on deleveraging to 2.5 times or below by 2026 [22][23] Management's Comments on Operating Environment and Future Outlook - The current economic climate has impacted market-sensitive areas, with clients prioritizing cost controls and waiting for more stable conditions before investing in discretionary services [6][8] - Management expects continued steady demand for core recurring essential businesses, despite ongoing headwinds in nonrecurring services [10] Other Important Information - The company ended the quarter with approximately $1.6 billion in net debt, representing 3.7 times leverage, and approximately $400 million of available liquidity [23] - The company has repurchased approximately 1 million shares at a value of approximately $71 million during the second quarter [24] Q&A Session Summary Question: Advisory business performance and guidance - Management indicated that the guidance for the rest of the year suggests the second half will look much like the first half, with clients remaining cautious in a challenging environment [31][32] Question: Pricing pushback and structural limits - Management believes the pricing pushback is market-driven and not indicative of reaching structural limits, with optimism for future pricing improvements as market conditions stabilize [38][39] Question: Integration costs and synergies - Integration costs are expected to remain around $75 million for the year, with ongoing efforts to realize synergies exceeding initial expectations [50][45] Question: Free cash flow and leverage targets - The company anticipates a similar cash flow profile moving forward, with a notable use of working capital in the first quarter and aims to achieve 2.5x leverage by 2026 [54][55] Question: Client feedback on the Markham transaction - Management reported positive feedback regarding team quality and collaboration, with adjustments made to improve client experiences during the integration process [57][66]

Company Overview - CBIZ has over 10,000 employees and more than 160 offices across 22 major markets[12] - The company serves over 135,000 clients, primarily mid-sized businesses, with a client retention rate of approximately 90%[12, 15] - Pro forma revenue for 2024 was approximately $28 billion[12] Financial Performance and Guidance - For the six months ended June 30, 2025, adjusted diluted EPS was $326[83] - The company's revenue growth for the year to date is 664%[53] - 2025 revenue guidance is between $28 billion and $295 billion[53] - The company anticipates an adjusted diluted EPS between $360 and $365 for 2025[53] - The tax rate is approximately 29%[53] Revenue Breakdown - Services account for 84% of the pro forma revenue[20] - Benefits & Insurance Services contribute 14% to the pro forma revenue[21] - National Practices, including IT Managed Services, make up 2% of the pro forma revenue[21] - Recurring services represent approximately 72% of the revenue[24] Marcum Acquisition - The acquisition purchase price is $2285 billion[52] - The transaction is expected to be accretive in 2025, contributing approximately 10% to Adjusted Diluted EPS[40]

[Executive Summary & Business Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Business%20Highlights) CBIZ reported strong financial performance in Q2 and H1 2025, driven by significant revenue and earnings growth, largely attributed to the strategic Marcum acquisition [Second Quarter 2025 Highlights](index=1&type=section&id=Second%20Quarter%202025%20Highlights) CBIZ reported strong financial results for the second quarter of 2025, driven by significant revenue growth and substantial increases in both GAAP and Adjusted earnings, largely attributed to the Marcum acquisition Second Quarter Financial Performance | Metric | Q2 2025 | Q2 2024 | Change (%) | | :----------------------- | :---------- | :---------- | :--------- | | Total Revenue | $683.5 million | $420.0 million | 62.7% | | Net Income | $41.9 million | $19.8 million | 111.9% | | GAAP EPS | $0.66 | $0.39 | 69.2% | | Adjusted EBITDA | $117.2 million | $51.4 million | 127.9% | | Adjusted Diluted EPS | $0.95 | $0.58 | 63.8% | - The Marcum acquisition was highlighted as a **monumental and value-creating strategic decision**, contributing to the strong performance[4](index=4&type=chunk) [Six-Month 2025 Highlights](index=1&type=section&id=Six-Month%202025%20Highlights) For the first six months of 2025, CBIZ continued its robust growth trajectory, reporting significant increases across all key financial metrics, reflecting the positive impact of strategic initiatives and business resilience Six-Month Financial Performance | Metric | H1 2025 | H1 2024 | Change (%) | | :----------------------- | :---------- | :---------- | :--------- | | Total Revenue | $1.5 billion | $914.3 million | 66.4% | | Net Income | $164.7 million | $96.7 million | 70.4% | | GAAP EPS | $2.58 | $1.92 | 34.4% | | Adjusted EBITDA | $355.6 million | $170.2 million | 108.9% | | Adjusted Diluted EPS | $3.26 | $2.22 | 46.8% | [CEO Commentary](index=1&type=section&id=CEO%20Commentary) CEO Jerry Grisko expressed satisfaction with the strong earnings, emphasizing the business model's resilience and the strategic importance of the Marcum acquisition. He highlighted the company's focus on essential, recurring services, strong client retention, robust free cash flow, and disciplined cost management as foundations for future growth - CEO Jerry Grisko noted **strong earnings in Q2 and year-to-date**, demonstrating business model strength and resilience amid challenging market conditions[3](index=3&type=chunk) - The Marcum acquisition is considered one of the **most important and value-creating strategic decisions** in CBIZ's history[4](index=4&type=chunk) - CBIZ is well-positioned for future growth due to **essential, recurring services, strong client retention, robust free cash flow, and disciplined cost management**[4](index=4&type=chunk) [Company Information](index=3&type=section&id=Company%20Information) CBIZ, Inc. is a national professional services advisor to middle-market businesses, providing a range of services across numerous locations and outlining its financial projections for 2025 [About CBIZ](index=3&type=section&id=About%20CBIZ) CBIZ, Inc. is a national professional services advisor to middle-market businesses, offering expertise in accounting, tax, advisory, benefits, insurance, and technology. The company operates across more than 160 locations in 22 major markets with over 10,000 team members - CBIZ, Inc. (NYSE: CBZ) is a **leading professional services advisor to middle-market businesses** nationwide[10](index=10&type=chunk) - Services include **accounting, tax, advisory, benefits, insurance, and technology**, delivering actionable insights to clients[10](index=10&type=chunk) - CBIZ has **over 10,000 team members** across more than 160 locations in 22 major markets[10](index=10&type=chunk) [2025 Outlook](index=3&type=section&id=2025%20Outlook) CBIZ provided its financial outlook for the full year 2025, projecting revenue between $2.8 billion and $2.95 billion, with specific guidance for GAAP and Adjusted EPS, effective tax rate, and Adjusted EBITDA Full Year 2025 Guidance | Metric | Range (Low) | Range (High) | | :----------------------------------- | :---------- | :----------- | | Total Revenue | $2.8 billion | $2.95 billion | | Effective Tax Rate | ~29% | ~29% | | Weighted Average Fully Diluted Shares | 64.5 million | 65.0 million | | GAAP Fully Diluted EPS | $1.97 | $2.02 | | Adjusted Fully Diluted EPS | $3.60 | $3.65 | | Adjusted EBITDA | $450 million | $456 million | [Conference Call Details](index=3&type=section&id=Conference%20Call%20Details) CBIZ hosted a conference call on July 30, 2025, at 5 p.m. (ET) to discuss its second-quarter financial results, with an archived replay available on its investor relations website - CBIZ hosted a conference call on **July 30, 2025, at 5 p.m. (ET)** to discuss Q2 financial results[9](index=9&type=chunk) - The call was webcast, and an archived replay is available at **https://cbiz.gcs-web.com/investor-overview**[9](index=9&type=chunk) [Financial Statements (Unaudited)](index=7&type=section&id=Financial%20Statements%20(Unaudited)) This section presents CBIZ's unaudited financial statements, including detailed income statements, segment data, cash flow, and key financial ratios for Q2 and H1 2025 [Three Months Ended June 30, 2025 and 2024](index=7&type=section&id=Three%20Months%20Ended%20June%2030%2C%202025%20and%202024) CBIZ's income statement for Q2 2025 shows significant growth in revenue and net income compared to Q2 2024, with detailed breakdowns of operating expenses, other income, and the impact of the deferred compensation plan Income Statement Highlights (Q2, in thousands) | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | % of Revenue 2025 | % of Revenue 2024 | | :---------------------------------- | :--------------------- | :--------------------- | :---------------- | :---------------- | | Revenue | $683,496 | $420,012 | 100.0% | 100.0% | | Operating expenses | $595,587 | $366,368 | 87.1% | 87.2% | | Gross margin | $87,909 | $53,644 | 12.9% | 12.8% | | Corporate general and administrative expenses | $27,637 | $22,050 | 4.0% | 5.2% | | Operating income | $60,272 | $31,594 | 8.9% | 7.6% | | Interest expense | $(27,867) | $(5,884) | (4.1)% | (1.4)% | | Other income, net | $25,374 | $2,483 | 3.7% | 0.6% | | Income before income tax expense | $57,779 | $28,193 | 8.5% | 6.8% | | Income tax expense | $15,837 | $8,400 | | | | Net income | $41,942 | $19,793 | 6.1% | 4.7% | | Diluted earnings per share | $0.66 | $0.39 | | | | Diluted weighted average common shares outstanding | 63,784 | 50,276 | | | | Adjusted EBITDA | $117,153 | $51,406 | 17.1% | 12.2% | | Adjusted Diluted EPS | $0.95 | $0.58 | | | - Other income, net for Q2 2025 included a **$12.5 million gain from a legal settlement**[23](index=23&type=chunk) [Six Months Ended June 30, 2025 and 2024](index=9&type=section&id=Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) The six-month income statement for 2025 demonstrates substantial revenue and net income growth, alongside improved operating margins, with detailed adjustments for deferred compensation and other income Income Statement Highlights (Six Months, in thousands) | Metric | H1 2025 (in thousands) | H1 2024 (in thousands) | % of Revenue 2025 | % of Revenue 2024 | | :---------------------------------- | :--------------------- | :--------------------- | :---------------- | :---------------- | | Revenue | $1,521,510 | $914,309 | 100.0% | 100.0% | | Operating expenses | $1,205,499 | $742,853 | 79.2% | 81.2% | | Gross margin | $316,011 | $171,456 | 20.8% | 18.8% | | Corporate general and administrative expenses | $55,707 | $40,761 | 3.7% | 4.5% | | Operating income | $260,304 | $130,695 | 17.1% | 14.3% | | Interest expense | $(53,023) | $(10,395) | (3.5)% | (1.1)% | | Other income, net | $23,408 | $11,907 | 1.5% | 1.3% | | Income before income tax expense | $230,689 | $132,207 | 15.1% | 14.5% | | Income tax expense | $65,974 | $35,530 | | | | Net income | $164,715 | $96,677 | 10.8% | 10.6% | | Diluted earnings per share | $2.58 | $1.92 | | | | Diluted weighted average common shares outstanding | 63,960 | 50,248 | | | | Adjusted EBITDA | $355,569 | $170,236 | 23.4% | 18.6% | | Adjusted EPS | $3.26 | $2.22 | | | - Other income, net for the six months ended June 30, 2025, included a **$12.5 million gain from a legal settlement**[28](index=28&type=chunk) [Select Segment Data](index=11&type=section&id=Select%20Segment%20Data) CBIZ's segment data reveals that Financial Services is the largest contributor to both revenue and gross margin, showing significant growth in Q2 and the first six months of 2025, while Benefits and Insurance Services also contributed positively Revenue by Segment (in thousands) | Segment | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :------------------------ | :---------- | :---------- | :---------- | :---------- | | Financial Services | $569,819 | $309,233 | $1,283,480 | $681,863 | | Benefits and Insurance Services | $101,929 | $97,419 | $214,905 | $205,827 | | National Practices | $11,748 | $13,360 | $23,125 | $26,619 | | **Total Revenue** | **$683,496**| **$420,012**| **$1,521,510**| **$914,309**| Gross Margin by Segment (in thousands) | Segment | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :------------------------ | :---------- | :---------- | :---------- | :---------- | | Financial Services | $85,361 | $46,424 | $288,529 | $153,493 | | Benefits and Insurance Services | $17,922 | $14,176 | $45,540 | $38,947 | | National Practices | $1,267 | $1,332 | $2,379 | $2,658 | | Operating expenses - unallocated | $(16,641) | $(8,288) | $(20,437) | $(23,642) | | **Total Gross Margin** | **$87,909** | **$53,644** | **$316,011**| **$171,456**| [Select Cash Flow Data](index=12&type=section&id=Select%20Cash%20Flow%20Data) For the six months ended June 30, 2025, CBIZ reported a slight increase in net cash provided by operating activities, while net cash used in investing and financing activities also saw changes, resulting in a net decrease in cash, cash equivalents, and restricted cash Cash Flow Highlights (Six Months, in thousands) | Metric | H1 2025 (in thousands) | H1 2024 (in thousands) | | :-------------------------------------------------- | :--------------------- | :--------------------- | | Net income | $164,715 | $96,677 | | Net cash provided by operating activities | $24,880 | $24,439 | | Net cash used in investing activities | $(12,299) | $(33,247) | | Net cash used in financing activities | $(33,249) | $(11,920) | | Net decrease in cash, cash equivalents and restricted cash | $(20,668) | $(20,728) | | Cash, cash equivalents and restricted cash at end of period | $166,502 | $136,420 | [Select Financial Data and Ratios](index=13&type=section&id=Select%20Financial%20Data%20and%20Ratios) CBIZ's balance sheet as of June 30, 2025, shows an increase in total assets and stockholders' equity compared to December 31, 2024, with a slight increase in the debt-to-equity ratio and Days Sales Outstanding (DSO) Balance Sheet and Ratios (in thousands) | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :---------------------------------- | :--------------------------- | :------------------------------- | | Cash and cash equivalents | $39,817 | $13,826 | | Accounts receivable, net | $676,054 | $534,858 | | Total assets | $4,537,973 | $4,470,883 | | Total liabilities | $2,646,130 | $2,690,900 | | Total stockholders' equity | $1,891,843 | $1,779,983 | | Debt to equity | 82.2% | 78.6% | | Days sales outstanding (DSO) | 87 | 73 | - DSO increased from **73 days at December 31, 2024, to 87 days at June 30, 2025**, and was 95 days at June 30, 2024[37](index=37&type=chunk) [Non-GAAP Financial Measures](index=6&type=section&id=Non-GAAP%20Financial%20Measures) This section explains CBIZ's non-GAAP financial measures and provides detailed reconciliations to GAAP for Q2, H1 2025, and full-year 2025 guidance [Explanation of Non-GAAP Measures](index=6&type=section&id=Explanation%20of%20Non-GAAP%20Measures) CBIZ uses non-GAAP financial measures such as Adjusted Net Income (Loss), Adjusted Diluted EPS, and Adjusted EBITDA to supplement GAAP results. These measures exclude the impact of the Marcum acquisition, integration costs, amortization of acquired intangible assets, and other non-recurring gains and losses to provide a clearer view of ongoing operational performance - Non-GAAP measures (Adjusted Net Income, Adjusted Diluted EPS, Adjusted EBITDA) are used to **supplement GAAP financial statements**[17](index=17&type=chunk) - These measures exclude the impact of the Marcum acquisition, integration costs, amortization of acquired intangible assets, and other significant non-operating related gains and losses[17](index=17&type=chunk) - Management uses these non-GAAP measures for **financial and operational decision-making**, evaluating employee compensation targets, and providing meaningful supplemental information to stakeholders[18](index=18&type=chunk) [GAAP Reconciliation: Three Months Ended June 30, 2025 and 2024](index=14&type=section&id=GAAP%20Reconciliation%3A%20Three%20Months%20Ended%20June%2030%2C%202025%20and%202024) The reconciliation for the second quarter shows the adjustments made to GAAP Net Income and EPS to arrive at Adjusted Net Income, Adjusted Diluted EPS, and Adjusted EBITDA, primarily excluding acquisition-related integration costs, amortization of intangibles, and a litigation gain Q2 GAAP to Adjusted Reconciliation (in thousands, except per share data) | Metric | Q2 2025 (Consolidated) | Q2 2025 (EPS) | Q2 2024 (Consolidated) | Q2 2024 (EPS) | | :---------------------------------- | :--------------------- | :------------ | :--------------------- | :------------ | | Net income (loss) | $41,942 | $0.66 | $19,793 | $0.39 | | Adjustments: | | | | | | Integration costs related to acquisitions | $19,163 | $0.31 | $6,981 | $0.14 | | Amortization of acquired intangible assets | $18,790 | $0.29 | $6,020 | $0.12 | | Litigation gain, net | $(11,859) | $(0.19) | N/A | N/A | | Litigation cost | N/A | N/A | $723 | $0.01 | | Income tax effect related to adjustments | $(7,552) | $(0.12) | $(4,114) | $(0.08) | | **Adjusted net income (loss)** | **$60,484** | **$0.95** | **$29,488** | **$0.58** | | Interest expense | $27,867 | | $5,884 | | | Income tax expense | $15,837 | | $8,400 | | | Tax effect related to the adjustments above | $7,552 | | $4,114 | | | Depreciation | $5,413 | | $3,520 | | | **Adjusted EBITDA** | **$117,153** | | **$51,406** | | - Integration costs for 2025 primarily relate to the **Marcum acquisition**, while 2024 costs were for Erickson, Brown & Kloster, LLC and CompuData, Inc. acquisitions[43](index=43&type=chunk) - A **$12.5 million gain from a legal settlement** was recorded in Q2 2025, impacting 'Other income (expense), net'[43](index=43&type=chunk) [GAAP Reconciliation: Six Months Ended June 30, 2025 and 2024](index=16&type=section&id=GAAP%20Reconciliation%3A%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) The six-month reconciliation details the adjustments to GAAP Net Income and EPS to derive Adjusted figures, highlighting the significant impact of acquisition-related costs and a legal settlement gain on the reported results H1 GAAP to Adjusted Reconciliation (in thousands, except per share data) | Metric | H1 2025 (Consolidated) | H1 2025 (EPS) | H1 2024 (Consolidated) | H1 2024 (EPS) | | :---------------------------------- | :--------------------- | :------------ | :--------------------- | :------------ | | Net income (loss) | $164,715 | $2.58 | $96,677 | $1.92 | | Adjustments: | | | | | | Integration costs related to acquisitions | $34,855 | $0.54 | $7,563 | $0.15 | | Amortization of acquired intangible assets | $37,456 | $0.59 | $11,965 | $0.24 | | Litigation gain, net | $(11,063) | $(0.17) | N/A | N/A | | Litigation cost | N/A | N/A | $723 | $0.01 | | Income tax effect related to adjustments | $(17,516) | $(0.28) | $(5,534) | $(0.11) | | **Adjusted net income (loss)** | **$208,447** | **$3.26** | **$111,734** | **$2.22** | | Interest expense | $53,023 | | $10,395 | | | Income tax expense | $65,974 | | $35,530 | | | Tax effect related to the adjustments above | $17,516 | | $5,534 | | | Depreciation | $10,609 | | $7,043 | | | **Adjusted EBITDA** | **$355,569** | | **$170,236** | | - A **$12.5 million gain from a legal settlement** was recorded for the six months ended June 30, 2025[47](index=47&type=chunk) [GAAP Reconciliation: Full Year 2025 Guidance](index=18&type=section&id=GAAP%20Reconciliation%3A%20Full%20Year%202025%20Guidance) CBIZ provided a reconciliation for its full-year 2025 guidance, outlining the adjustments from GAAP Net Income and EPS to Adjusted Net Income, Adjusted Diluted EPS, and Adjusted EBITDA, primarily due to amortization of acquired intangibles and integration costs related to acquisitions Full Year 2025 Guidance Reconciliation (in millions, except per share data) | Metric | Low Amounts | EPS (Low) | High Amounts | EPS (High) | | :----------------------------------- | :---------- | :-------- | :----------- | :--------- | | GAAP Net Income | $127.9 | $1.97 | $131.1 | $2.02 | | Amortization of acquired intangible assets | $75.1 | $1.15 | $75.1 | $1.15 | | Integration costs related to acquisitions | $75.0 | $1.15 | $75.0 | $1.15 | | Income tax effect related to adjustments | $(43.5) | $(0.67) | $(43.5) | $(0.67) | | **Adjusted Net Income** | **$234.5** | **$3.60** | **$237.7** | **$3.65** | | Depreciation | $22.1 | | $22.1 | | | Interest expense | $99.3 | | $99.3 | | | Income tax expense included the tax effect related to the adjustments above | $94.5 | | $97.1 | | | **Adjusted EBITDA** | **$450.4** | | **$456.2** | | - **Amortization of acquired intangible assets** and **integration costs related to acquisitions** are key adjustments for the full year 2025 guidance[48](index=48&type=chunk)[49](index=49&type=chunk) [Forward-Looking Statements & Risk Factors](index=3&type=section&id=Forward-Looking%20Statements%20%26%20Risk%20Factors) This section outlines the nature of forward-looking statements within the release, emphasizing that actual results may differ materially due to various risks and uncertainties. Key risks include slower-than-expected receivable payments, Marcum acquisition performance, dependence on key employees, regulatory restrictions, goodwill impairment, and integration costs - The release contains forward-looking statements regarding financial position, business strategy, and future performance, identifiable by terms like 'will,' 'expect,' and 'anticipate'[11](index=11&type=chunk) - Actual results could differ materially from projections due to **various risks and uncertainties**[13](index=13&type=chunk)[15](index=15&type=chunk) - Key risks include: **Marcum acquisition performance, dependence on executive officers, restrictions from independence requirements, goodwill impairment, failure to realize acquisition benefits, SEC/PCAOB sanctions against Marcum, internal control issues post-acquisition, inability to finance new acquisitions, integration costs, changes in governmental regulations, healthcare environment changes, cyberattacks, and reliance on information processing systems**[13](index=13&type=chunk)[14](index=14&type=chunk) - Further detailed risk factors are available in the **Annual Report on Form 10-K** for the year ended December 31, 2024[16](index=16&type=chunk) [Contacts](index=18&type=section&id=Contacts) Contact information for media and investor relations inquiries is provided for CBIZ, Inc. - Media Contact: **Amy McGahan, Director of Corporate & Strategic Communications, amy.mcgahan@cbiz.com**[50](index=50&type=chunk) - Investor Relations Contact: **Lori Novickis, Director, Corporate Relations, lnovickis@cbiz.com**[50](index=50&type=chunk)

Core Insights - CBIZ, Inc. reported strong financial results for the second quarter and the first half of 2025, highlighting the resilience of its business model amid challenging market conditions [1][2][4] Financial Performance - For Q2 2025, CBIZ achieved revenue of $683.5 million, a 62.7% increase from $420.0 million in Q2 2024. Net income rose to $41.9 million, or $0.66 per diluted share, compared to $19.8 million, or $0.39 per diluted share, in the same period last year [2][20] - Adjusted net income for Q2 2025 was $60.5 million, up from $29.5 million in Q2 2024, with adjusted earnings per share increasing by 63.8% to $0.95 [3][20] - For the first half of 2025, total revenue reached $1.52 billion, a 66.4% increase from $914.3 million in the same period of 2024. Net income for the six months was $164.7 million, or $2.58 per diluted share, compared to $96.7 million, or $1.92 per diluted share, in the prior year [4][24] Adjusted Financial Metrics - Adjusted EBITDA for Q2 2025 was $117.2 million, reflecting a 127.9% increase from $51.4 million in Q2 2024. For the first half of 2025, adjusted EBITDA was $355.6 million, compared to $170.2 million in the same period of 2024 [3][5][24] Strategic Outlook - The company anticipates total revenue of approximately $2.8 billion to $2.95 billion for 2025, with net income projected at $164.7 million, representing a 70.4% increase [6][7] - The effective tax rate is expected to be around 29%, with diluted earnings per share forecasted to be between $1.97 and $2.02 [7][8] Segment Performance - In Q2 2025, the Financial Services segment generated $569.8 million in revenue, while Benefits and Insurance Services contributed $101.9 million. For the first half, Financial Services revenue was $1.28 billion [27][24] Cash Flow and Balance Sheet - For the first half of 2025, net cash provided by operating activities was $24.4 million, with a net decrease in cash and cash equivalents of $20.7 million [30][33]

Group 1 - CBIZ, Inc. will announce its financial results for the second quarter and first half of 2025 on July 30, 2025, after market close [1] - A conference call to discuss the financial results will be hosted by the President and CEO Jerry Grisko and CFO Brad Lakhia at 5 p.m. (ET) on the same day [2] - The conference call will be available via live webcast on the CBIZ investor relations page, with an archived replay accessible after the call [2] Group 2 - CBIZ, Inc. is a leading professional services advisor to middle-market businesses, providing expertise in various areas including accounting, tax, advisory, benefits, insurance, and technology [4] - The company has over 10,000 team members across more than 160 locations in 22 major markets nationwide [4]

Core Insights - The analysis of CBIZ, Inc. (NYSE: CBZ) began in February 2025, with a strong buy recommendation considered at that time [1] - The article was completed in mid-July 2025, indicating a six-month period of evaluation [1] Company Background - The author, Anthony Joseph ("A.J.") Cataldo II, has extensive experience in accounting and finance, including roles as a CFO and public accountant [1] - Cataldo has authored 10 books and over 200 articles across more than 50 journals and outlets, showcasing a strong background in research and analysis [1] Personal Context - The author faced significant health challenges, including stage 3 pancreatic cancer, but has since achieved three years of clean test results, allowing for travel in Southeast Asia [1]

Industry Overview - The Consulting Services industry is facing challenges due to ongoing geopolitical tensions, tariff uncertainties, and fears of an economic slowdown through 2026, leading to budget cuts and delayed decision-making [1][5] - Despite these challenges, strong demand for AI-driven transformation and corporate cost optimization efforts are providing some resilience [1] - The industry is expected to continue its exponential growth beyond 2025, building on momentum from the post-2008 financial crisis [3] Economic Conditions - Recent economic activity has slowed, with GDP declining at an annual rate of 0.5% in Q1 2025, following a 2.4% increase in Q4 2024 [5] - The services sector contracted for the first time since June 2024, with the ISM Services PMI dropping to 49.9, indicating cautious corporate spending [5] Industry Performance - The Consulting Services industry has underperformed compared to the S&P 500 and the broader sector, losing 8.3% over the past year while the S&P 500 gained 11.3% [9] - The industry currently has a Zacks Industry Rank of 165, placing it in the bottom 32% of 244 Zacks industries, indicating a challenging outlook [6] Valuation Metrics - The industry is trading at a forward 12-month price-to-earnings (P/E) ratio of 24.51X, higher than the S&P 500's 22.13X and the sector's 21.94X [12] Key Companies Stantec Inc. (STN) - Stantec provides professional services in infrastructure and facilities, benefiting from strong macroeconomic drivers and effective internal strategies [16][17] - The Zacks Consensus Estimate for Stantec's 2025 EPS is $3.86, reflecting a nearly 1% increase in the past 30 days [18] CBIZ, Inc. (CBZ) - CBIZ is a major provider of financial, insurance, and advisory services for middle-market businesses, entering a strong growth phase due to strategic expansion [21][22] - The Zacks Consensus Estimate for CBIZ's 2025 EPS is $3.62, remaining unchanged in the past 30 days [23] Charles River Associates (CRAI) - CRAI offers economic, financial, and management consulting services, focusing on high-quality analytical and strategic consulting across diverse industries [26][27] - The Zacks Consensus Estimate for CRAI's 2025 EPS is $8, unchanged in the past 30 days [29]