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]

Core Points - InMed Pharmaceuticals has appointed CBIZ as its new auditor following the resignation of Marcum LLP due to CBIZ's acquisition of Marcum's attest business, effective June 12, 2025 [1][2] - The resignation of Marcum was not due to any disagreements regarding InMed's financial statements, and previous audit reports did not contain adverse opinions [2] - A special meeting of shareholders was held but no business was conducted due to lack of quorum, resulting in no vote on the proposed issuance of 20% or more of the Company's common shares [3] - InMed has amended its Standby Equity Purchase Agreement (SEPA) with Yorkville, allowing for a temporary suspension of the use of its existing registration statement during a "Black Out Period" [4][5] - During any Black Out Period, Yorkville is prohibited from selling shares under the registration statement, but may sell through other legal exemptions [5][6] Company Overview - InMed Pharmaceuticals focuses on developing proprietary small molecule drug candidates targeting diseases with high unmet medical needs, including Alzheimer's and dermatological conditions [8]

Revenue and Income - Revenue for Q1 2025 increased by $343.7 million, or 69.5%, to $838.0 million compared to $494.3 million in Q1 2024[77] - Net income for Q1 2025 was $122.8 million, or $1.91 per diluted share, up from $76.9 million, or $1.53 per diluted share in Q1 2024[77] - Revenue from newly acquired operations contributed $333.4 million, or 66.8% of the incremental revenue for Q1 2025[77] - For the three months ended March 31, 2025, the Financial Services practice group revenue increased by 91.5% to $713.7 million from $372.6 million in the same period of 2024, primarily driven by traditional accounting and tax-related services[96] - The Benefits and Insurance Services practice group revenue increased by $4.6 million, or 4.2%, to $113.0 million, primarily due to increases in payroll-related services and employee benefit services[100] - The National Practices group revenue decreased by $1.9 million, or 14.2%, to $11.4 million, primarily due to a divestiture in the same period of 2024[103] Operating Expenses - Total operating expenses for Q1 2025 increased by $233.4 million, or 62.0%, to $609.9 million compared to $376.5 million in Q1 2024[85] - Operating expenses as a percentage of revenue decreased to 72.8% in Q1 2025 from 76.2% in Q1 2024[85] - Personnel costs increased by approximately $194.1 million in Q1 2025, primarily due to acquisitions and divestitures[86] - G&A expenses for Q1 2025 were $28.1 million, or 3.3% of revenue, compared to $18.7 million, or 3.8% of revenue in Q1 2024[87] - Operating expenses for the Financial Services practice group rose by $244.9 million, or 92.2%, to $510.5 million, with personnel costs increasing by $194.7 million largely due to acquisitions[98] - Operating expenses for the Benefits and Insurance Services practice group increased by $1.7 million, or 2.1%, to $85.4 million, with personnel costs rising by $0.9 million[101] - Total corporate general and administrative expenses increased by $9.4 million, or 50.0%, during the three months ended March 31, 2025, largely due to higher legal and professional services costs associated with a transaction[108] Income Tax and Other Income - The income tax expense for the three months ended March 31, 2025 was $50.1 million, an increase of 84.8% compared to $27.1 million in the same period of 2024, driven by higher pre-tax income[93] - Other income (expense), net for the three months ended March 31, 2025 included a net loss of $2.6 million related to the deferred compensation plan, compared to a net gain of $9.6 million in the same period of 2024[91] - Total other income (expense), net for the three months ended March 31, 2025 was $(27.6) million, a decrease of $32.4 million compared to a gain of $4.8 million in the same period of 2024[107] - Total other (expense) income, net decreased by $32.4 million in Q1 2025 compared to Q1 2024, primarily due to a net loss of $2.6 million associated with the deferred compensation plan[109] Cash Flow and Debt - Cash used in operating activities was $88.3 million in Q1 2025, consisting of a working capital use of $247.7 million, offset by net income of $122.8 million[114] - Cash provided by financing activities was $55.4 million in Q1 2025, primarily from $127.5 million in net proceeds from the credit facility[117] - The company has $1,548.4 million outstanding debt under the 2024 Credit Facilities as of March 31, 2025[79] - Outstanding debt under the 2024 Credit Facilities was $1,548.4 million as of March 31, 2025, with available funds of approximately $384.0 million[119] - The weighted average interest rate under the 2024 Credit Facilities increased to 6.57% in Q1 2025 from 5.23% in Q1 2024[119] - Interest expense for the three months ended March 31, 2025 was $25.2 million, a significant increase from $4.5 million in the same period of 2024, driven by a higher average debt balance of $1,443.4 million[89] - The outstanding balance under the 2024 Credit Facilities was $1,548.4 million as of March 31, 2025, with $1,348.4 million subject to interest rate risk[136] - A 100 basis point change in market rates would result in an annual interest expense fluctuation of approximately $13.5 million[136] Share Repurchase and Acquisitions - The company repurchased 0.1 million shares of common stock for approximately $7.7 million during Q1 2025[80] - The company authorized the purchase of up to 5.0 million shares under its share repurchase program, which expires on March 31, 2026[81] - No acquisitions were completed in Q1 2025, but the company repurchased 0.1 million shares for tax withholding purposes at a cost of approximately $7.7 million[121] Compliance and Risks - The company remains in compliance with financial covenants under the 2024 Credit Facilities as of March 31, 2025[120] - The company is subject to risks related to processing customer transactions, which could materially affect its business and financial condition[132] - The company may incur transaction, integration, and restructuring costs associated with its acquisition program, impacting financial performance[132] - Changes in the U.S. healthcare environment may adversely affect revenue and margins in the healthcare benefit business[132] - The company faces competition in the business services industry, which could negatively impact its financial condition and results of operations[132] - Cybersecurity risks, including potential breaches of computer systems, could materially affect the company's business[132] - The company’s increased leverage following the transaction may adversely impact its business and sensitivity to revenue fluctuations[132] Cash Management - Cash used in investing activities was $5.0 million in Q1 2025, primarily for capital expenditures of $5.2 million[115] - The company segregates funds collected from clients for payroll operations, investing them in short-term investments classified as available-for-sale securities[139] - Cash requirements for 2025 include repayment of outstanding debt, strategic acquisitions, and seasonal working capital needs, with expected sufficiency from operational cash flows[122] Receivables Management - Days sales outstanding (DSO) improved to 96 days in Q1 2025 from 101 days in Q1 2024, indicating better receivables collection efficiency[112]

Company Overview - CBIZ has over 10,000 employees and more than 160 offices across 22 major markets, serving over 135,000 clients[13] - The company reported approximately $2.8 billion in pro forma revenue for fiscal year 2024, reflecting the total company revenue as if the Marcum acquisition occurred on January 1, 2023[13, 14] - CBIZ boasts a high client retention rate of approximately 90%[18] Revenue Breakdown - In 2024, Financial Services accounted for 75% of the revenue, Benefits & Insurance Services contributed 22%, and National Practices made up 3%[21, 22] - Based on 2024 pro forma figures, Financial Services represented 84% of the revenue, Benefits & Insurance Services accounted for 14%, and National Practices comprised 2%[25, 26, 27] - Approximately 77% of the company's services are recurring, while project-based work accounts for about 23%[30, 31, 32] Marcum Acquisition - The acquisition of Marcum is expected to be accretive in 2025, contributing approximately 10% to Adjusted EPS[49] - CBIZ anticipates over $25 million in cost synergies from the Marcum integration[51] Financial Performance and Guidance - In the first quarter of 2025, Financial Services revenue grew by 91.5%, Benefits and Insurance Services increased by 4.2%, while National Practices decreased by 14.2%[61] - The company's revenue guidance for 2025 is between $2.8 billion and $2.95 billion[61] - CBIZ projects GAAP diluted EPS to be in the range of $1.97 to $2.02 and Adjusted Diluted EPS to be between $3.60 and $3.65 for 2025[61]

Financial Data and Key Metrics Changes - The company's first quarter revenue increased by 70% from $494 million to $383 million, primarily due to the acquisition of Marcum [23] - Adjusted EBITDA doubled from $119 million to $238 million, reflecting strong margin and scale attributes [24] - Pretax income rose by $69 million or 66% to $173 million, with adjusted diluted EPS increasing approximately 40% from $1.63 to $2.29 per share [25][26] Business Line Data and Key Metrics Changes - Financial Services segment revenue was $714 million, up $341 million or approximately 92% [27] - Benefits and Insurance segment revenue increased by $5 million or approximately 4% to $113 million, with adjusted EBITDA up 10% to $30 million [28] Market Data and Key Metrics Changes - The company experienced revenue softness in certain areas due to the anticipated loss of clients and the impact of the economic and geopolitical environment on industries such as capital markets and not-for-profits [13][14] - The government healthcare consulting business showed strong revenue growth and a robust pipeline of new projects [14] Company Strategy and Development Direction - The integration of Marcum is on schedule, with a focus on leveraging the combined strengths to enhance service offerings and market presence [8][36] - The company aims to maintain its guidance for adjusted EBITDA and adjusted EPS while widening revenue guidance to $2.8 billion to $2.95 billion due to economic uncertainties [15][32] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging economic environment but expressed confidence in the company's resilience due to the essential nature of its services [12] - The company is taking steps to protect and grow earnings amid ongoing uncertainties, with a focus on managing variable costs [15][50] Other Important Information - The company expects approximately $60 million in payments related to prior acquisitions in 2025, with capital expenditures estimated between $20 million and $25 million [33] - Approximately 4.4 million shares will be eligible for resale effective May 1, 2025, with a share repurchase program in place [34] Q&A Session Summary Question: What are the conditions that the bottom end of the new revenue range would assume? - Management indicated that the bottom end reflects ongoing challenges in capital markets and private equity deal flow, with a reliable range established based on first-quarter performance [68][70] Question: How is the company maintaining its earnings guidance despite revenue headwinds? - Management highlighted operational adjustments, including variable compensation and reduced headcount, as well as ongoing cost management strategies [74][78] Question: Can you provide an update on capital allocation priorities? - The company plans to focus on reducing leverage while remaining opportunistic for strategic acquisitions and share repurchases [87][89] Question: How are client conflicts being managed post-acquisition? - Management noted that client conflicts were anticipated and are being managed within the model, with most impacts now behind them [94][96] Question: What is the outlook for pricing trends in the current environment? - Management reported a positive pricing environment but acknowledged potential downward pressure if market conditions do not improve [101][104]