Barrett Business Services(US:BBSI)2025-11-05 22:45Financial Performance - Net income for Q3 2025 was $20.6 million, an increase from $19.6 million in Q3 2024, with diluted net income per share rising to $0.79 from $0.74[104] - Revenue for Q3 2025 totaled $318.9 million, reflecting an increase of $24.7 million or 8.4% compared to Q3 2024, driven by a 9.9% increase in PEO services revenue[105] - Net income for the first nine months of 2025 was $38.1 million, an increase of 5.2% from $36.2 million in the same period of 2024, with diluted net income per share rising to $1.45 from $1.35[113] - Revenue for the first nine months of 2025 reached $919.2 million, reflecting a 9.5% increase from $839.7 million in 2024, driven by an 11.0% increase in PEO services revenue[114] Margins and Costs - Gross margin for Q3 2025 was $76.8 million, representing 24.0% of revenue, down from 25.3% in Q3 2024[106] - Gross margin for the first nine months of 2025 was $192.6 million, or 20.9% of revenue, down from $181.9 million, or 21.6% of revenue in 2024[115] - Direct payroll costs for Q3 2025 were $14.6 million, or 4.6% of revenue, compared to 5.5% in Q3 2024[107] - Direct payroll costs decreased to $41.1 million, or 4.5% of revenue, compared to $45.6 million, or 5.4% of revenue in 2024[116] - Payroll taxes and benefits for Q3 2025 totaled $176.3 million, or 55.3% of revenue, up from 52.4% in Q3 2024, attributed to higher payroll tax rates and increased client benefit costs[108] - Payroll taxes and benefits increased to $536.6 million, or 58.4% of revenue, from $464.8 million, or 55.4% of revenue in 2024, due to higher average payroll tax rates[117] - Workers' compensation expense for Q3 2025 was $51.3 million, or 16.1% of revenue, down from 16.8% in Q3 2024[109] - Workers' compensation expense was $148.9 million, or 16.2% of revenue, compared to $147.4 million, or 17.6% of revenue in 2024, reflecting lower costs[118] - SG&A expenses for Q3 2025 were $49.9 million, or 15.6% of revenue, compared to 16.7% in Q3 2024[110] - SG&A expense rose to $142.9 million, or 15.5% of revenue, from $137.1 million, or 16.3% of revenue in 2024, primarily due to increased employee-related costs[119] Taxation - The effective income tax rate for Q3 2025 was 22.9%, a decrease from 23.6% in Q3 2024[112] - The effective income tax rate for the first nine months of 2025 was 24.7%, slightly higher than 24.2% in 2024[121] Employee Metrics - Average worksite employees (WSEs) for Q3 2025 increased by 6.1% year-over-year to 141,492, while ending WSEs grew by 5.8% to 140,409[103] Cash Flow - Net cash used in operating activities for the first nine months of 2025 was $10.2 million, significantly improved from $43.3 million in 2024[124] - The company's cash balance decreased to $66.0 million as of September 30, 2025, down from a decrease of $46.1 million in the same period of 2024[123] Gross Billings - Gross billings for Q3 2025 reached $2.32 billion, up from $2.14 billion in Q3 2024, with PEO and staffing wages totaling $2.02 billion[101]