CBIZ, Inc. Q1 FY2026 earnings call

Key managerial messages include: 2026 focus on reigniting growth engine and leveraging scale. Strategic growth priorities such as attracting top talent, launching Spring National Brand Campaign, advancing 12 industry vertical strategies, and promoting coordinated client experience across services. Progress in AI roadmap with full rollout of internal capabilities to enhance productivity and efficiency. Offshoring progress towards increasing offshore hours from ~6% in 2025 to 10% in 2026 and planning to expand to over 20% in several years.

Financial services: Revenue increased 2.1% year-over-year with reported organic growth of 1.8%. Expected organic growth to accelerate as attrition and integration-related impacts are lapped in the first half and growth initiatives are implemented in the second half. Benefits and insurance: First quarter revenue was $108 million, a 4% year-over-year decrease. Driven by tough comps on project-related work, contingent commissions decline, and unexpected producer departure. Recurring portion of B&I business was up approximately 4% when normalized for the producer departure.

Reaffirms revenue, adjusted EBITDA, and free cash flow targets. Revenue expected between $2.8 and $2.9 billion. Adjusted EBITDA range is $465 to $475 million. Adjusted EPS outlook increased to range of $4 to $4.10 per share. Free cash flow guidance unchanged at $270 to $290 million.

Potential client unbundling of services and pricing pressure due to AI tools. Client attrition related to integration, though isolated producer departure in benefits and insurance is not anticipated to repeat.

Q: Peter, given the tools out there, do you think clients might do some work you're doing from AI perspective?

A: I don't think the tools are able to provide the expertise and knowledge we can offer in the regulated environment.

Q: Benefits and insurance producer count increase pace?

A: Planning on about a 15% year-over-year increase.

Q: Price increases color?

A: Confident in mid-single-digit pricing, not hearing pushback.

Q: Integration progress?

A: Confident in lapping churn as conditions improved and pipeline is strong.