Financial Data and Key Metrics Changes - For Q4 2025, revenue was $543 million, an 18% increase year-over-year, primarily driven by acquisitions [23] - Full-year revenue grew 52% compared to the previous year, with an estimated organic growth of approximately 2% [24] - Adjusted EBITDA for the full year was $447 million, with a margin increase of approximately 530 basis points year-over-year [25] - Full-year free cash flow increased by $65 million to $176 million, with a conversion rate of approximately 40% [27] Business Line Data and Key Metrics Changes - Financial Services revenue for Q4 was $439 million, up 23% year-over-year, with full-year revenue at $2.3 billion, a 70% increase [27][28] - Benefits and Insurance (BNI) revenue for 2025 was $410 million, representing a 2% growth year-over-year, driven by employee benefits and payroll services [29] Market Data and Key Metrics Changes - The company noted that over 70% of its revenue is recurring, providing resilience across economic cycles [22] - The sentiment in the middle market has improved, with clients showing increased comfort in the business environment heading into 2026 [20][21] Company Strategy and Development Direction - The strategic focus for 2026 includes attracting and retaining top talent, elevating brand visibility, and deepening industry specialization [9][12] - The company aims to leverage AI and automation to enhance service delivery and operational efficiency [15][19] - CBIZ is positioned to capitalize on the growing demand for professional services in the middle market, driven by increased complexity and a shortage of accounting talent [4][5] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about improving market conditions and client sentiment, expecting continued growth in advisory work [41][44] - The company anticipates organic revenue growth of 2%-5% for 2026, with a focus on project-based work and macroeconomic conditions influencing performance [31][32] Other Important Information - The company completed significant integration work following the acquisition of Marcum, which is expected to drive long-term growth [6][8] - CBIZ plans to increase offshore hours from approximately 6% in 2025 to 10% in 2026, aiming for over 20% in the coming years [20][19] Q&A Session Summary Question: Impact of soft market conditions on revenue growth - Management noted that soft market conditions in the first half of 2025 affected revenue growth, but sentiment improved as the year progressed, leading to increased advisory work [40][41] Question: Role of AI in the business - Management emphasized that while AI will augment efficiency, the role of trusted advisors remains critical, as clients seek deep industry knowledge and holistic guidance [45][50] Question: Pricing expectations for 2026 - Management confirmed that pricing is expected to remain in the mid-single-digit range for 2026, consistent with 2025 [54][58] Question: Performance of SEC capital markets business - Management indicated that the capital markets work was softer in 2025 due to market conditions, but expressed optimism for improvement in 2026 [63][65] Question: Growth expectations across different business segments - Management highlighted that core accounting and tax services are more predictable, while advisory services are more susceptible to market conditions, with expectations for growth in 2026 [73][75]

Financial Data and Key Metrics Changes - Consolidated first quarter revenue increased 70% from $494 million to $838 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 was $173 million, up $69 million or 66% [25] - Adjusted diluted EPS increased approximately 40% from $1.63 to $2.29 per share [25] - Interest expense increased by $21 million due to higher borrowing and rates from acquisition funding [26] Business Line Data and Key Metrics Changes - Financial Services segment revenue was $714 million, up $341 million or approximately 92% [27] - Financial Services adjusted EBITDA doubled to $230 million, maintaining an adjusted EBITDA margin of 32% [27] - Benefits and Insurance segment revenue was $113 million, up $5 million or approximately 4%, with adjusted EBITDA of $30 million, up $3 million or 10% [28] Market Data and Key Metrics Changes - Nonrecurring services now represent approximately 23% of total revenue, with expected softness due to economic conditions [32] - The government healthcare consulting business posted strong revenue growth in Q1 and is expected to continue performing well [14][60] Company Strategy and Development Direction - The company is focused on integrating technology systems to enhance operational improvements and streamline processes [37] - There is an increased interest in CBIZ as an acquirer of choice following the successful completion of the Marcum transaction [39] - The company aims to maintain its adjusted EBITDA and adjusted EPS guidance while widening revenue guidance due to economic uncertainties [31][32] Management's Comments on Operating Environment and Future Outlook - The management acknowledges the challenging economic and geopolitical environment impacting client industries, particularly capital markets and advisory services [12][14] - Despite revenue pressures, the company is optimistic about its core recurring business performance and integration progress [108][112] - The management emphasizes the importance of maintaining profitability through variable cost adjustments and operational efficiencies [78][82] Other Important Information - The company expects approximately $60 million in payments related to prior acquisitions in 2025, with $30 million already paid in Q1 [33] - Total debt at the end of the quarter was approximately $1.5 billion, with a leverage ratio of about 4x [30] - 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 conditions would the bottom end of the new revenue range assume? - The bottom end of the new range reflects ongoing headwinds from the SEC audit practice and transactional pressures in the private equity business [68][70] Question: What operational measures are being taken to offset revenue pressures? - The company is leveraging variable compensation structures and reducing headcount to manage costs effectively [78][82] Question: Can you provide an update on capital allocation priorities? - The company is focused on reducing leverage while remaining opportunistic for strategic acquisitions and share repurchases [87][89] Question: How are client conflicts being managed post-acquisition? - The company anticipated some client conflicts due to the merger, particularly in healthcare, but these impacts are within expected ranges [94][96] Question: What is the outlook for pricing trends in the current environment? - The company has seen positive pricing trends but acknowledges potential downward pressure if the market remains challenging [103][104]

Financial Data and Key Metrics Changes - The overall performance for the first quarter showed a revenue increase of 70% from $494 million to $838 million, primarily due to the acquisition of Markham [13] - Adjusted EBITDA doubled from $119 million to $238 million, reflecting strong margin and scale attributes [14] - Adjusted diluted EPS increased approximately 40% from $1.63 to $2.29 per share [15] Business Line Data and Key Metrics Changes - The Financial Services segment's revenue was $714 million, up $341 million or approximately 92%, with adjusted EBITDA doubling to $230 million [16] - The Benefits and Insurance segment delivered revenue of $113 million, up $5 million or approximately 4%, with adjusted EBITDA increasing by 10% to $30 million [17] Market Data and Key Metrics Changes - Non-recurring services now represent approximately 23% of total revenue, with anticipated softness due to economic conditions [19] - The government healthcare consulting business showed strong revenue growth and a robust pipeline of new projects [8] Company Strategy and Development Direction - The company is focused on integrating technology systems post-acquisition to enhance operational improvements and streamline processes [23] - There is an ongoing evaluation of M&A opportunities to build geographic presence and strengthen service lines [25] Management's Comments on Operating Environment and Future Outlook - The management acknowledged the challenging economic environment but expressed confidence in the business model's resilience [6] - The company maintained its adjusted EBITDA and adjusted EPS guidance, while widening revenue guidance to $2.8 billion to $2.95 billion due to uncertainties [19] Other Important Information - The company expects approximately $60 million in payments related to prior acquisitions in 2025, with $30 million already paid in Q1 [19] - Total debt at the end of the quarter was approximately $1.5 billion, with a leverage ratio of about four times [18] Q&A Session Summary Question: Concerns about capital markets and revenue guidance - Management indicated that capital markets are a significant concern, with reliance on deal flow affecting revenue [37][40] Question: Outlook for government healthcare consulting - Management expects continued strong performance in government healthcare consulting, with a positive outlook for the remainder of the year [42] Question: Breakdown of integration costs - Management provided insights into integration costs, estimating $75 million for 2025, with significant IT-related costs extending into 2026 [44] Question: Conditions for revised revenue guidance - Management clarified that the revised revenue guidance reflects a pragmatic assessment of current economic conditions and historical performance during similar downturns [49][51] Question: Operational adjustments to maintain earnings guidance - Management highlighted various levers to protect earnings, including adjustments in compensation and discretionary spending [58][60] Question: Capital allocation priorities - Management emphasized a focus on reducing leverage while remaining opportunistic for strategic acquisitions and share repurchases [64][65] Question: Client conflicts and their impact on guidance - Management acknowledged client conflicts as expected during the integration process, with most impacts now behind them [70][72]