Financial Data and Key Metrics Changes - Gross billings increased by 8.6% year-over-year to $2.32 billion in Q3 2025 compared to $2.14 billion in Q3 2024 [11] - PEO gross billings rose by 8.8% to $2.3 billion, while staffing revenues declined by 10% to $19 million [11] - Net income per diluted share grew by 7% to $0.79 compared to $0.74 in the prior year [16] - Average billing per Worksite Employee (WSE) per day increased by 2.5% due to rising wages [11] Business Line Data and Key Metrics Changes - Staffing operations experienced a decline of 10.3% year-over-year, aligning with expectations amid macroeconomic uncertainty [4][5] - PEO Worksite employees grew by 6.1%, driven by a record number of new client additions [11] - The company added approximately 1,300 participants to its benefits products in Q3, with over 20,000 total participants by October [6][7] Market Data and Key Metrics Changes - Southern California saw a 9% growth, while Northern California grew by 3%. The Mountain region grew by 13%, and the East Coast by 14%. The Pacific Northwest declined by 3% [12] - Asset light markets experienced significant growth of 132% [12] Company Strategy and Development Direction - The company is focusing on expanding into new markets with an asset-light model, having opened new branches in Chicago and Dallas [5][51] - Investments in technology and product enhancements are aimed at improving client service and retention [9][54] - The company plans to launch new products in January and March, enhancing its comprehensive human resource information system [54] Management's Comments on Operating Environment and Future Outlook - Management noted a slowdown in client hiring, particularly in California, due to macroeconomic uncertainties [4][10] - The company remains optimistic about future growth, expecting gross billings growth between 8.5% and 9.5% for the year [17] - Management anticipates a strong controllable growth trend and an increase in WSEs between 6% and 8% for the year [17] Other Important Information - The company repurchased $8 million of shares in Q3 at an average price of $47 per share and paid $2.1 million in dividends [16] - The balance sheet remains strong with $110 million in unrestricted cash and no debt [16] Q&A Session Summary Question: How are BBSI benefits policies performing amid rising claims costs? - Management stated that they do not take on risk for health insurance and have de-risked their workers' compensation, noting that rates are increasing across the board [20][21] Question: How much is BBSI benefits driving the record WSE additions? - Management indicated that multiple factors contribute to growth, including technology, product offerings, and sales efforts [24] Question: What are the expectations for WSE growth in 2026? - Management expressed optimism about growth acceleration due to approved rate increases in California, but noted that the impact on WSE growth is still uncertain [28][31] Question: What key variables could affect gross billings in 2026? - Management highlighted controllable growth, wage inflation, and client workforce changes as key variables [34] Question: What is the outlook for new client pipeline compared to last year? - Management confirmed that the new client pipeline is healthier than the previous year, with more business in the funnel [40] Question: How did the openings in Chicago and Dallas perform? - Management reported successful grand openings with strong community engagement and client participation [51] Question: Are there specific areas of opportunity in IT product objectives? - Management emphasized the development of AI-enabled technology to enhance the employee life cycle experience [54]

Financial Data and Key Metrics Changes - Gross billings increased by 10.1% year-over-year to $2.23 billion in Q2 2025, compared to $2.03 billion in Q2 2024 [15] - PEO gross billings rose by 10.3% to $2.22 billion, while staffing revenues declined by 12% to $17 million [15] - Net income per diluted share increased to $0.70 from $0.62 in the prior year quarter, reflecting strong revenue growth and operating leverage [20] Business Line Data and Key Metrics Changes - The staffing business experienced an 11.5% decline year-over-year, attributed to macroeconomic uncertainty and client reluctance to fill staffing orders [6][15] - PEO worksite employees (WSEs) grew by 8%, driven by a record number of new client additions [15] - Average billing per WSE increased by 1.7%, influenced by rising wages but offset by lower average hours worked [20] Market Data and Key Metrics Changes - Southern California, the largest region, saw a 12% growth, while the Pacific Northwest declined by 4% [16] - Asset light markets experienced a significant growth of 100% [16] - Client hiring remained modest and below historical levels, impacting overall workforce growth [6][15] Company Strategy and Development Direction - The company is focusing on expanding its product offerings, particularly in health insurance, to capture a broader market, including white-collar businesses [10][40] - Investments in technology and product enhancements are aimed at improving client service and expanding the total addressable market [10][41] - The company plans to open one or two additional branches by the end of the year, following successful entries into Chicago and Dallas [8][62] Management's Comments on Operating Environment and Future Outlook - Management noted macroeconomic uncertainty has caused clients to pause hiring, but they remain optimistic about future growth driven by new client acquisitions [6][13] - The company has increased its growth outlook for the remainder of the year, expecting gross billings to rise between 9% and 10% [22] - Management emphasized the importance of controllable growth and client retention as key drivers of future performance [45] Other Important Information - The company has a strong balance sheet with $90 million in unrestricted cash and no debt [20] - A new $100 million stock repurchase program was approved, reflecting the company's commitment to returning value to shareholders [22] - The workers' compensation program continues to perform well, with favorable adjustments recognized in the quarter [17][18] Q&A Session Summary Question: Status of workers' compensation rate increase - The California regulatory board recommended an over 11% rate increase, but the approved rate was around 9%, expected to push pricing up [27][28] Question: Impact of workers' compensation adjustments - The $8.8 million adjustment was consistent with prior year adjustments, indicating normal performance [32] Question: Profit potential from workers' compensation renewal - The renewal is expected to improve profit potential, especially if claims continue to perform better than expected [36][38] Question: Technology enhancements and market positioning - The company aims to aggressively target the white-collar market with new technology offerings, expanding its total addressable market [40][41] Question: Performance of healthcare policies - The healthcare market is expected to see higher renewal rates, with the company viewing this as an opportunity for growth [42][44] Question: Considerations for raising guidance - Strong year-to-date performance and consistent controllable growth led to the decision to raise guidance for the remainder of the year [45][46]

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

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

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