Oct 19, 2026, 7:00 AM ETIndustrials

CBIZ — Third Quarter 2026 Earnings Summary

CBZCBIZ INC

Source

Financial Performance

Total revenue for the three months ended September 30, 2026, was $702.2 million, an increase of 1.2% year-over-year; Financial Services revenue grew 1.2%.
Net income for the three months ended September 30, 2026, was $47.2 million, up 56.7% year-over-year; GAAP diluted EPS was $0.79, up 64.6%.
Adjusted EBITDA for the three months ended September 30, 2026, was $131.9 million, up 6.3% year-over-year; Adjusted diluted EPS was $1.21, up 14.2%.
Total revenue for the nine months ended September 30, 2026, was $2,233.0 million, an increase of 0.8% year-over-year; Financial Services revenue grew 1.1%.
Net income for the nine months ended September 30, 2026, was $218.6 million, up 12.2% year-over-year; GAAP diluted EPS was $3.62, up 18.3%.
Adjusted EBITDA for the nine months ended September 30, 2026, was $479.3 million, down 1.2% year-over-year; Adjusted diluted EPS was $4.64, up 5.9%.
Operating cash flow for the nine months ended September 30, 2026, was $147.1 million; Free cash flow was $125.2 million.
Gross margin for the three months ended September 30, 2026, was 16.2% compared to 13.0% in the prior year period.
Gross margin for the nine months ended September 30, 2026, was 18.5% compared to 18.3% in the prior year period.
Operating income for the three months ended September 30, 2026, was $90.2 million (12.8% of revenue) compared to $58.9 million (8.5% of revenue) in the prior year.
Operating income for the nine months ended September 30, 2026, was $308.8 million (13.9% of revenue) compared to $319.2 million (14.4% of revenue) in the prior year.
Debt to equity ratio was 66.8% as of September 30, 2026, down from 75.5% as of December 31, 2025.
Total liabilities were $2,697.7 million as of September 30, 2026, compared to $2,647.5 million as of December 31, 2025.
Total stockholders' equity was $1,912.7 million as of September 30, 2026, compared to $1,762.1 million as of December 31, 2025.
Accounts receivable, net, increased to $782.4 million as of September 30, 2026, from $556.0 million as of December 31, 2025.
Goodwill and other intangible assets, net, were $2,828.6 million as of September 30, 2026, compared to $2,869.8 million as of December 31, 2025.

Guidance and Future Outlook

The Company will not provide financial guidance for the full year 2026 due to the proposed transaction.
The Company will not host a conference call to discuss third-quarter results due to the proposed transaction.
The proposed transaction is expected to close in the fourth quarter of 2026, subject to shareholder approval, regulatory approvals, and other customary closing conditions.

Business Segments and Product Lines

Financial Services revenue was $597.8 million for the three months ended September 30, 2026, and $1,918.4 million for the nine months ended September 30, 2026.
Benefits and Insurance Services revenue was $104.4 million for the three months ended September 30, 2026, and $314.6 million for the nine months ended September 30, 2026.
During the nine months ended September 30, 2026, the National Practice group was combined with the Financial Service practice group to align with internal management and reporting structures.
Financial Services gross margin was $109.9 million (18.4% of segment revenue) for the three months ended September 30, 2026, and $400.0 million (20.9% of segment revenue) for the nine months ended September 30, 2026.
Benefits and Insurance Services gross margin was $18.3 million (17.5% of segment revenue) for the three months ended September 30, 2026, and $56.9 million (18.1% of segment revenue) for the nine months ended September 30, 2026.
Corporate and Other segment reported a net loss of $81.6 million for the three months ended September 30, 2026, and a net loss of $238.3 million for the nine months ended September 30, 2026.

Market and Competitive Landscape

CBIZ is a leading national professional services advisor to middle market businesses with over 9,500 team members across 23 major markets.
The business services industry is described as competitive and fragmented.

Risks and Challenges

Risks include the failure to satisfy closing conditions for the proposed transaction, including regulatory approvals or shareholder approval.
Risks include the potential for the transaction not to be completed on expected terms or timeframes, or at all.
Risks include disruption of management time from ongoing business operations due to the pendency of the proposed transaction.
Risks include the potential for adverse effects on the market price of common stock, credit ratings, or operating results due to announcements related to the transaction.
Risks include the inability to retain and hire key personnel or retain customers due to the transaction.
Risks include the potential for the combined company to fail to realize anticipated benefits, revenue synergies, or cost synergies.
Risks include the possibility that debt financing anticipated for the transaction is not obtained or cannot be obtained on anticipated terms.
Risks include the potential for shareholder litigation or other legal proceedings affecting the timing or completion of the transaction.
Risks include the potential for the Marcum Transaction assets to not perform to expectations or for underestimated liabilities to be assumed.
Risks include the potential for goodwill and intangible assets to become impaired, leading to material non-cash charges.
Risks include the potential for cyberattacks or security breaches to materially affect the business.
Risks include the potential for the business to be adversely affected by changes in the United States healthcare environment.
Risks include the potential for the company to fail to satisfy covenants in its debt instruments, causing a default.
Risks include the potential for increased leverage following the Marcum Transaction to adversely impact the business.
Risks include the potential for the significant number of shares issuable as stock consideration in the Marcum Transaction to adversely impact the stock price.

Management Commentary and Tone

The press release states the Company is a "leading national professional services advisor" delivering "actionable insights" to help clients "accelerate growth."
Management notes that non-GAAP measures are used for financial and operational decision-making and to evaluate results relative to employee compensation targets.
Management excludes the impact of the Marcum Transaction, integration costs, amortization of acquired intangible assets, and other significant non-operating gains and losses from non-GAAP measures.

Analyst Questions and Answers

No analyst questions and answers are included in this press release.

Other Key Points

CBIZ and an affiliate of Grant Thornton in the U.S., backed by New Mountain Capital, entered into a definitive merger agreement for an all-cash transaction.
The proposed transaction values CBIZ at an enterprise value of $5.0 billion, or $55.00 per share.
Following the completion of the transaction, CBIZ's common stock will no longer be listed on the New York Stock Exchange, and CBIZ will become a private company.
The Marcum Transaction involved the acquisition of non-attest business assets and liabilities from Marcum LLP and the purchase of substantially all of Marcum's attest business assets by CBIZ CPAs P.C.
A gain of $57.9 million related to the finalization of working capital and purchase price adjustments associated with the Marcum Transaction was recorded in the nine months ended September 30, 2026.
A legal settlement loss of $7.2 million was recorded in the nine months ended September 30, 2026, associated with a legal matter the Company plans to settle.
An ESPP correction expense of $7.4 million was recorded in the nine months ended September 30, 2026.
The Company has $2.0 billion in senior secured credit facilities, consisting of a $1.4 billion term loan and a $600 million revolving credit facility.
As of September 30, 2026, the Company had $176.5 million outstanding on its Revolver Facility and $1.18 billion in the long-term portion of its Term Loan.