CBIZ, Inc. Q4 FY2025 earnings call

• CBiz is positioned to win in the middle market, having nearly doubled in size, enhanced service offerings, and invested in people, technology, and automation.
• In 2025, completed majority of market integration priorities, delivered ~2% organic revenue growth with improved bottom-line profitability, and saw key retention metrics in line with expectations and synergies double initial expectations.
• Four strategic priorities: attract and retain top talent, elevate national brand, utilize industry specialization, deliver value through enhanced breadth and depth of service offerings.
• Invested in automation including AI, with over 60 dedicated professionals focused on technology and AI strategy, embedding AI tools in workflows and collaborating with top-tier providers.

Financial Services: Fourth quarter revenue was $439 million, up 23% year-over-year, benefiting from an additional month of acquisition. Full-year 2025 revenue was $2.3 billion, an increase of approximately 70% driven by acquisition. Adjusting for known items, core accounting and tax service lines had low single-digit growth, while advisory business grew in the second half. Adjusted EBITDA was up $264 million to $449 million, with margin expanding 600 basis points. Benefits and Insurance: 2025 revenue was $410 million, up 2% year-over-year, primarily driven by employee benefits and payroll/human capital management groups, partially offset by softness in property and casualty market and producer attrition. Adjusted EBITDA was up $3 million, representing 4% growth and 20 basis points of margin expansion.

2026 revenue expected to be between $2.8 to $2.9 billion, representing 2% to 5% year-over-year growth. Adjusted EBITDA expected in range of $450 to $460 million. Adjusted EPS expected in range of $3.75 to $3.85 per share. Free cash flow expected in range of $270 to $290 million. Board approved continuation of share repurchase program authorizing repurchase of up to 5 million shares. Target net leverage ratio of two to two and a half times.

Q: Faiza Alwi with Deutsche Bank asked about revenue growth impacted by soft market conditions and improving middle market sentiment, and role of trusted advisor amidst AI.

A: Jerry Gersko and Peter Scavuzzo responded on market conditions improving with client confidence up and AI augmenting work but trusted advisor role remaining critical.

Q: Chris Moore with CJS Security asked about pricing, incentive comp, and SEC Capital Markets.

A: Brad Lakia and Jerry Gersko discussed mid-single digit pricing, incentive comp tied to growth, and SEC work being market-related with improvement expected.

Q: Andrew Nicholas with William Blair asked about guidance midpoint and disaggregating business segments.

A: Responses discussed guidance range related to macro conditions and disaggregation of core accounting, advisory, and B&I with expectations of growth from industry initiatives and wallet expansion.