CBIZ Inc.

10/30/2025 | Press release | Distributed by Public on 10/30/2025 06:55

Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Unless the context otherwise requires, references in this Quarterly Report on Form 10-Q to "we", "us", "our", "CBIZ" or the "Company" shall mean CBIZ, Inc., and its operating subsidiaries.
The following discussion is intended to assist in the understanding of our financial position at September 30, 2025 and December 31, 2024, results of operations for the three and nine months ended September 30, 2025 and 2024, and cash flows for the nine months ended September 30, 2025 and 2024, and should be read in conjunction with the unaudited condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q and with our Annual Report on Form 10-K for the year ended December 31, 2024. This discussion and analysis contains forward-looking statements and should be read in conjunction with the disclosures and information contained in "Forward-Looking Statements" included elsewhere in this Quarterly Report on Form 10-Q and in "Item 1A. Risk Factors" included in this Quarterly Report on Form 10-Q and in the Annual Report on Form 10-K for the year ended December 31, 2024.
OVERVIEW
We provide professional business services, products and solutions that help our clients grow and succeed by better managing their finances and employees. These services are primarily provided to small and medium-sized businesses, as well as individuals, governmental entities, and not-for-profit enterprises throughout the United States and parts of Canada. We deliver integrated services through three practice groups: Financial Services, Benefits and Insurance Services, and National Practices. Refer to Note 19, Segment Disclosures to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2024 for further discussion on the practice groups.
Refer to the Annual Report on Form 10-K for the year ended December 31, 2024 for further discussion of our business and strategies, as well as the external relationships and regulatory factors that currently impact our operations.
EXECUTIVE SUMMARY
Revenue for the three months ended September 30, 2025 increased by $254.9 million, or 58.1%, to $693.8 million from $438.9 million for the same period in 2024. Revenue from newly acquired operations, net of divestitures, contributed $245.6 million, or 56.0%, of incremental revenue for the three months ended September 30, 2025, as compared to the same period in 2024. A detailed discussion of revenue by practice group is included under "Operating Practice Groups."
Revenue for the nine months ended September 30, 2025 increased by $862.1 million, or 63.7%, to $2,215.3 million from $1,353.2 million for the same period in 2024. Revenue from newly acquired operations, net of divestitures, contributed $835.2 million, or 61.7%, of incremental revenue for the nine months ended September 30, 2025 as compared to the same period in 2024. A detailed discussion of revenue by practice group is included under "Operating Practice Groups".
Net income was $30.1 million, or $0.48 per diluted share, in the third quarter of 2025, compared to $35.1 million, or $0.70 per diluted share, in the third quarter of 2024. For the nine months ended September 30, 2025, net income was $194.9 million, or $3.06 per diluted share, compared to $131.8 million, or $2.62 per diluted share, for the same period in 2024. Refer to "Results of Operations" for a detailed discussion of the components of net income.
The uncertainty in the current economic and geopolitical environment has already led to softness in the demand for the nonrecurring project-based services we offer. We expect this softness in demand caused by the current economic and geopolitical environment could continue and may limit management's ability to forecast demand for the remainder of 2025.
Strategic Use of Capital
Our overall business objective continues to focus on making strategic acquisitions that allow us to strengthen our presence in existing markets, expand into high growth industries, and broaden our services to our existing clients. As a result of the Transaction and related 2024 Credit Facilities, we have $1,586.8 million of outstanding debt under the 2024 Credit Facilities as of September 30, 2025. To achieve our business objective of making strategic acquisitions, our current priority for use of capital is to maximize cash flow to fund working capital to drive organic growth and to pay down debt, which will allow us more liquidity to make strategic, selective, and high-return acquisitions in the future. In addition, we believe that repurchasing shares of our common stock can be a prudent use of our financial resources, and that investing in our stock is an attractive use of capital and an efficient means to provide value to our stockholders.
During the nine months ended September 30, 2025, we repurchased 1.4 million shares of our common stock for $102.8 million under the ROFR Agreement and 0.4 million shares of our common stock in the open market for $25.0 million. Additionally, to settle statutory employee withholding related to vesting of stock awards, we repurchased 0.1 million shares of our common stock at a cost of $7.8 million during the nine months ended September 30, 2025 and 0.2 million shares at a cost of $11.4 million during the nine months ended September 30, 2024. Refer to Note 10, Common Stock, to the accompanying unaudited condensed consolidated financial statements for further details.
On February 11, 2025, the CBIZ Board of Directors authorized the purchase of up to 5.0 million shares of our common stock under our share repurchase program (the "Share Repurchase Program"), which may be suspended or discontinued at any time and expires on March 31, 2026. The shares may be purchased in the open market, in privately negotiated transactions, and pursuant to Rule 10b5-1 trading plans. Privately negotiated transactions may include purchases from our employees, officers and directors, in accordance with the Securities and Exchange Commission ("SEC") rules. CBIZ management will determine the timing and amount of the purchases based on its evaluation of market conditions and other factors.
RESULTS OF OPERATIONS
Revenue
The following tables summarize total revenue for the three and nine months ended September 30, 2025 and 2024:
Three Months Ended September 30,
2025 % of
Total 		2024 % of
Total 		$
Change 		%
Change
(Amounts in thousands, except percentages)
Financial Services $ 578,522 83.4 % $ 322,295 73.4 % $ 256,227 79.5 %
Benefits and Insurance Services 103,387 14.9 % 104,040 23.7 % (653) (0.6) %
National Practices 11,909 1.7 % 12,549 2.9 % (640) (5.1) %
Total CBIZ $ 693,818 100.0 % $ 438,884 100.0 % $ 254,934 58.1 %
Nine Months Ended September 30,
2025 % of
Total 		2024 % of
Total 		$
Change 		%
Change
(Amounts in thousands, except percentages)
Financial Services $ 1,862,002 84.1 % $ 1,004,158 74.2 % $ 857,844 85.4 %
Benefits and Insurance Services 318,292 14.4 % 309,867 22.9 % 8,425 2.7 %
National Practices 35,034 1.5 % 39,168 2.9 % (4,134) (10.6) %
Total CBIZ $ 2,215,328 100.0 % $ 1,353,193 100.0 % $ 862,135 63.7 %
Non-qualified Deferred Compensation Plan
We sponsor a Non-qualified Deferred Compensation Plan (the "deferred compensation plan"), under which a CBIZ employee's compensation deferral is held in a rabbi trust and invested accordingly as directed by the employee. Income and expenses related to the deferred compensation plan, which are recorded in "Corporate and Other" for segment reporting purposes, are included in "Operating expenses", "Gross margin" and "Corporate general and administrative expenses" and are directly offset by deferred compensation gains or losses in "Other income, net" in the accompanying Condensed Consolidated Statements of Comprehensive Income. The deferred compensation plan has no impact on "Income before income tax expense" or diluted earnings per share.
Income and expenses related to the deferred compensation plan for the three and nine months ended September 30, 2025 and 2024 were as follows:
Three Months Ended September 30, Nine Months Ended September 30,
2025 2024 2025 2024
(Amounts in thousands)
Operating (income) expense $ 7,847 $ 7,305 $ 17,132 $ 18,164
Corporate general & administrative (income) expense 1,076 1,064 2,415 2,444
Other income, net 8,923 8,369 19,547 20,608
Excluding the impact of the above-mentioned income and expenses related to the deferred compensation plan, the operating results for the three and nine months ended September 30, 2025 and 2024 were as follows:
Three Months Ended September 30,
2025 2024
(Amounts in thousands, except percentages)
As Reported Deferred Compensation Plan Adjusted % of Revenue As Reported Deferred Compensation Plan Adjusted % of Revenue
Gross margin $ 90,129 $ 7,847 $ 97,976 14.1 % $ 72,913 $ 7,305 $ 80,218 18.3 %
Operating income 58,864 8,923 67,787 9.8 % 49,686 8,369 58,055 13.2 %
Other income (expense), net
8,378 (8,923) (545) (0.1) % 1,300 (8,369) (7,069) (1.6) %
Income before income tax expense 40,406 - 40,406 5.8 % 50,971 - 50,971 11.6 %
Nine Months Ended September 30,
2025 2024
(Amounts in thousands, except percentages)
As Reported Deferred Compensation Plan Adjusted % of Revenue As Reported Deferred Compensation Plan Adjusted % of Revenue
Gross margin $ 406,140 $ 17,132 $ 423,272 19.1 % $ 244,369 $ 18,164 $ 262,533 19.4 %
Operating income 319,168 19,547 338,715 15.3 % 180,381 20,608 200,989 14.9 %
Other income (expense), net
31,786 (19,547) 12,239 0.6 % 13,207 (20,608) (7,401) (0.5) %
Income before income tax expense 271,095 - 271,095 12.2 % 183,178 - 183,178 13.5 %
Operating Expenses
The following tables summarize total operating expenses for the three and nine months ended September 30, 2025 and 2024:
Three Months Ended September 30,
2025 2024 $
Change 		%
Change
(Amounts in thousands, except percentages)
Operating expenses by segment:
Financial Services $ 483,841 $ 260,639 $ 223,202 85.6 %
Benefits and Insurance Services 84,082 82,965 1,117 1.3 %
National Practices 10,685 11,101 (416) (3.7) %
Corporate and Other 25,081 11,266 13,815 122.6 %
Total Operating expenses $ 603,689 $ 365,971 $ 237,718 65.0 %
Operating expenses % of revenue 87.0 % 83.4 %
Operating expenses excluding deferred compensation $ 595,842 $ 358,666 $ 237,176 66.1 %
Operating expenses excluding deferred
compensation % of revenue 		85.9 % 81.7 %
Nine Months Ended September 30,
2025 2024 $
Change 		%
Change
(Amounts in thousands, except percentages)
Operating expenses by segment:
Financial Services 1,478,792 $ 789,009 $ 689,783 87.4 %
Benefits and Insurance Services 253,447 249,845 3,602 1.4 %
National Practices 31,431 35,062 (3,631) (10.4) %
Corporate and Other 45,518 34,908 10,610 30.4 %
Total Operating expenses $ 1,809,188 $ 1,108,824 $ 700,364 63.2 %
Operating expenses % of revenue 81.7 % 81.9 %
Operating expenses excluding deferred compensation $ 1,792,056 $ 1,090,660 $ 701,396 64.3 %
Operating expenses excluding deferred
compensation % of revenue 		80.9 % 80.6 %
Three months ended September 30, 2025 compared to September 30, 2024. Total operating expenses for the three months ended September 30, 2025 increased by $237.7 million, or 65.0%, to $603.7 million as compared to $366.0 million in the same period in 2024. The deferred compensation plan increased operating expenses by $7.8 million for the three months ended September 30, 2025 and increased operating expenses by $7.3 million in the same period in 2024. Excluding the deferred compensation expenses, which were recorded in "Corporate and Other" for segment reporting purposes, operating expenses would have been $595.8 million and $358.7 million, or 85.9% and 81.7% of revenue, for the three months ended September 30, 2025 and 2024, respectively. In addition, operating expenses for the three months ended September 30, 2025 included approximately $23.2 million of integration costs associated with the Transaction, and the operating expenses for the three months ended September 30, 2024 included approximately $0.6 million of non-recurring integration costs associated with the acquisitions completed in 2024.
The majority of our operating expenses relate to personnel costs, which include (i) salaries and benefits, (ii) commissions paid to producers, (iii) incentive compensation, and (iv) stock-based compensation. Excluding the impact of deferred compensation, which was recorded in "Corporate and Other" for segment reporting purposes, operating expenses increased by approximately $237.2 million during the three months ended September 30, 2025 as compared to the same period in 2024, driven by $175.9 million higher personnel costs primarily as a result of the
Transaction, $17.1 million higher facility costs, $14.9 million higher depreciation and amortization costs, $10.5 million higher direct costs, $6.5 million higher technology costs, $5.6 million higher professional service costs, $3.3 million higher travel and entertainment costs, $1.8 million higher discretionary spending to support business growth, and $1.6 million higher marketing costs.Personnel costs are discussed in further detail under "Operating Practice Groups" below.
Nine months ended September 30, 2025 compared to September 30, 2024. Total operating expenses for the nine months ended September 30, 2025 increased by $700.4 million, or 63.2%, to $1,809.2 million as compared to $1,108.8 million in the same period in 2024. The deferred compensation plan increased operating expenses by $17.1 million for the nine months ended September 30, 2025 and by $18.2 million during the same period in 2024. Excluding the impact of deferred compensation, which was recorded in "Corporate and Other" for segment reporting purposes, operating expenses would have been $1,792.1 million and $1,090.7 million, or 80.9% and 80.6% of revenue, for the nine months ended September 30, 2025 and 2024, respectively. In addition, operating expense for the nine months ended September 30, 2025 included approximately $43.3 million of integration costs associated with the Transaction, and the operating expenses for the nine months ended September 30, 2024 included approximately $0.9 million of non-recurring integration costs associated with the acquisitions completed in 2024. The increase in operating expense was primarily driven by personnel costs increase of $531.7 million primarily as a result of the Transaction, $45.9 million higher depreciation and amortization expense, $40.7 million higher facility costs, $32.3 million higher direct costs, $18.5 million higher technology related costs, $12.8 million higher travel and entertainment costs, $12.5 million higher professional services costs, and $4.5 million higher marketing costs, as well as $2.5 million higher other discretionary spending to support business growth.
Corporate General & Administrative ("G&A") Expenses
Three Months Ended September 30,
2025 2024 $
Change 		%
Change
(Amounts in thousands, except percentages)
G&A expenses $ 31,265 $ 23,227 $ 8,038 34.6 %
G&A expenses % of revenue 4.5 % 5.3 %
G&A expenses excluding deferred compensation $ 30,189 $ 22,163 $ 8,026 36.2 %
G&A expenses excluding deferred compensation % of revenue 4.4 % 5.0 %
Nine Months Ended September 30,
2025 2024 $
Change 		%
Change
(Amounts in thousands, except percentages)
G&A expenses $ 86,972 $ 63,988 $ 22,984 35.9 %
G&A expenses % of revenue 3.9 % 4.7 %
G&A expenses excluding deferred compensation $ 84,557 $ 61,544 $ 23,013 37.4 %
G&A expenses excluding deferred compensation % of revenue 3.8 % 4.5 %
Three months ended September 30, 2025 compared to September 30, 2024. The deferred compensation plan increased G&A expenses by $1.1 million for the three months ended September 30, 2025, and increased G&A expenses by $1.1 million during the same period in 2024. The G&A expenses, excluding the impact of the deferred compensation plan, would have been $30.2 million, or 4.4% of revenue, for the three months ended September 30, 2025, compared to $22.2 million, or 5.0% of revenue, for the same period in 2024, an increase of approximately $8.0 million. The increase was primarily driven by $3.1 million higher personnel costs, $1.8 million higher marketing costs, $1.0 million higher insurance costs, $0.9 million higher other discretionary spending to support business growth, $0.8 million higher technology costs, and $0.4 million higher travel and entertainment costs. The G&A expenses for the three months ended September 30, 2025 included approximately $5.4 million of integration costs
primarily associated with the Transaction. For the three months ended September 30, 2024, there were approximately $7.7 million of non-recurring transaction and integration costs associated with the Transaction.
Nine months ended September 30, 2025 compared to September 30, 2024. The deferred compensation plan increased G&A expenses by $2.4 million for the nine months ended September 30, 2025, and increased G&A expenses by $2.4 million during the same period in 2024. G&A expenses, excluding the impact of the deferred compensation plan, would have been $84.6 million, or 3.8% of revenue, for the nine months ended September 30, 2025, compared to $61.5 million, or 4.5% of revenue, for the same period in 2024, an increase of $23.0 million. The increase in G&A expenses was primarily due to approximately $5.9 million higher professional fees, $4.8 million higher personnel costs, $3.3 million higher marketing costs, $2.8 million higher insurance costs, $1.8 million higher technology costs, $1.6 million higher other discretionary spending to support business growth, $1.5 million higher facility costs, and $1.3 higher legal settlement costs. The G&A expenses for the nine months ended September 30, 2025 included approximately $20.2 million of integration costs primarily associated with the Transaction. For the nine months ended September 30, 2024, there were approximately $15.0 million of non-recurring transaction and integration costs associated with the Transaction.
Other Income (Expense), Net
Three Months Ended September 30,
2025 2024 $
Change 		%
Change
(Amounts in thousands, except percentages)
Interest expense $ (27,960) $ (4,968) $ (22,992) N/M
Gain on sale of operations, net 1,124 4,953 (3,829) (77.3) %
Other income, net (1)
8,378 1,300 7,078 N/M
Total other (expense) income, net
$ (18,458) $ 1,285 $ (19,743) N/M
(1)Other income, net includes a net gain of $8.9 million during the three months ended September 30, 2025, and a net gain of $8.4 million for the same period in 2024, associated with the value of investments held in a rabbi trust related to the deferred compensation plan, which were recorded in "Corporate and Other" for segment reporting purposes. The adjustments to the investments held in a rabbi trust related to the deferred compensation plan are offset by a corresponding increase or decrease to compensation expense, which is recorded as "Operating expenses" and "G&A expenses." The deferred compensation plan has no impact on "Income before income tax expense" or diluted earnings per share. In addition, included in other income, net for the three months ended September 30, 2025 and 2024, is expense of $0.5 million and $5.7 million, respectively, related to net changes in the fair value of contingent consideration related to prior acquisitions.
Nine Months Ended September 30,
2025 2024 $
Change 		%
Change
(Amounts in thousands, except percentages)
Interest expense $ (80,983) $ (15,363) $ (65,620) N/M
Gain on sale of operations, net 1,124 4,953 (3,829) (77.3) %
Other income, net (2)
31,786 13,207 18,579 N/M
Total other income (expense), net $ (48,073) $ 2,797 $ (50,870) N/M
(2)Other income, net includes a net gain of $19.5 million during the nine months ended September 30, 2025, compared to a net gain of $20.6 million for the same period in 2024, associated with the value of investments held in a rabbi trust related to the deferred compensation plan, which were recorded in "Corporate and Other" for segment reporting purposes. The adjustments to the investments held in a rabbi trust related to the deferred compensation plan are offset by a corresponding increase or decrease to compensation expense, which is recorded as "Operating expenses" and "G&A expenses." The deferred compensation plan has no impact on "Income before income tax expense" or diluted earnings per share. In addition, included in other income, net for the nine months ended September 30, 2025 and 2024, is expense of $2.0 million and $6.3 million, respectively, related to net changes in the fair value of contingent consideration related to prior acquisitions. As stated in Note 6, Commitments and Contingencies, to the accompanying unaudited condensed consolidated financial statements in the nine months ended September 30, 2025, the Company recorded a gain of $12.5 million from a legal settlement within Other income, net.
Interest Expense
Three and nine months ended September 30, 2025 compared with September 30, 2024.During the three months ended September 30, 2025, our average debt balance and weighted average effective interest rate were $1,554.7 million and 6.62%, respectively, compared to $350.7 million and 5.37%, respectively, for the same period in 2024. The increase in interest expense of $23.0 million for the three months ended September 30, 2025 as compared to the same period in 2024 was primarily driven by the higher average debt balance as well as higher weighted average effective interest rate associated with the 2024 Credit Facilities which was entered into on November 1, 2024.
During the nine months ended September 30, 2025, our average debt balance and interest rate were $1,513.9 million and 6.64%, respectively, compared to $362.1 million and 5.40%, respectively, for the same period in 2024. The increase in interest expense for the nine months ended September 30, 2025 as compared to the same period in 2024 was $65.6 million. This was primarily driven by the higher average debt balance as well as higher weighted
average effective interest rate associated with the 2024 Credit Facilities which was entered into on November 1, 2024.
Our indebtedness is further discussed in Note 5, Debt and Financing Arrangements, to the accompanying unaudited condensed consolidated financial statements.
Other Income (Expense), Net
Three and nine months ended September 30, 2025 compared with September 30, 2024.For the three months ended September 30, 2025, other income, net includes a net gain of $8.9 million associated with the deferred compensation plan. For the same period in 2024, other income, net includes a net gain of $8.4 million associated with the deferred compensation plan. Excluding the impact of the deferred compensation plan, the other income, net would have been a $0.5 million loss for the three months ended September 30, 2025 and a $7.1 million loss for the same period in 2024. The decrease in other expense, net was primarily attributed to a $5.3 million assumed contingent purchase price liability during the three months ended September 30, 2024, which did not recur in 2025. Other miscellaneous expenses, net, decreased by $1.3 million in 2025 as compared to 2024.
For the nine months ended September 30, 2025, other income, net includes a net gain of $19.5 million associated with the non-qualified deferred compensation plan. For the same period in 2024, other income, net includes a net gain of $20.6 million associated with the non-qualified deferred compensation plan. Excluding the impact of the deferred compensation plan from other income, net would result in an increase of $19.6 million for the nine months ended September 30, 2025 compared to the same period in 2024. The increase was primarily due to a $12.5 million legal settlement gain, $1.4 million of higher interest income, and $1.3 million of higher other miscellaneous income, net. In addition, we recorded a $5.3 million assumed contingent purchase price liability in 2024, which did not recur in 2025, as a result, the expenses associated with the contingent earnout decreased by $4.4 million in 2025 as compared to 2024.
Further discussion related to the legal settlement is included in Note 6, Commitments and Contingencies, to the accompanying unaudited condensed financial statements.
Income Tax Expense
Three Months Ended September 30,
2025 2024 $
Change 		%
Change
(Amounts in thousands, except percentages)
Income tax expense $ 10,260 $ 15,887 $ (5,627) (35.4) %
Effective tax rate 25.4 % 31.2 %
Nine Months Ended September 30,
2025 2024 $
Change 		%
Change
(Amounts in thousands, except percentages)
Income tax expense $ 76,234 $ 51,417 $ 24,817 48.3 %
Effective tax rate 28.1 % 28.1 %
Three and nine months ended September 30, 2025 compared with September 30, 2024. The effective tax rate for the three months ended September 30, 2025 was 25.4%, compared to an effective tax rate of 31.2% for the comparable period in 2024. The decrease in the effective tax rate for the three month period ended September 30, 2025 was primarily due to a higher tax benefit recognized related to stock based compensation expense along with lower state income tax expense during the third quarter of 2025 compared to the same period in 2024. These items favorably affected the tax rate as related to pre-tax income for the three months ended September 30, 2025 when compared to the same period in 2024. The decrease in income tax expense for the three months ended September 30, 2025, when compared to the same period in 2024, was primarily driven by the decrease in pre-tax income in 2025, along with the aforementioned favorable items.
The effective tax rate for the nine months ended September 30, 2025 was 28.1%, compared to an effective tax rate of 28.1% for the same period in 2024. The increase in income tax expense for the nine months ended September 30, 2025, when compared to the same period in 2024, was primarily driven by the increase in pre-tax income in 2025.
Operating Practice Groups
We deliver our integrated services through three practice groups: Financial Services, Benefits and Insurance Services, and National Practices. A description of these groups' operating results and factors affecting their businesses is provided below.
Financial Services
Three Months Ended September 30,
2025 2024 $
Change 		%
Change
(Amounts in thousands, except percentages)
Revenue $ 578,522 $ 322,295 $ 256,227 79.5 %
Operating expenses 483,841 260,639 223,202 85.6 %
Gross margin / Operating income 94,681 61,656 33,025 53.6 %
Total other (expense) income, net
(619) 15 (634) N/M
Income before income tax expense $ 94,062 $ 61,671 $ 32,391 52.5 %
Gross margin percent 16.4 % 19.1 %
Nine Months Ended September 30,
2025 2024 $
Change 		%
Change
(Amounts in thousands, except percentages)
Revenue $ 1,862,002 $ 1,004,158 $ 857,844 85.4 %
Operating expenses 1,478,792 789,009 689,783 87.4 %
Gross margin / Operating income 383,210 215,149 168,061 78.1 %
Total other (expense) income, net
(460) 229 (689) N/M
Income before income tax expense $ 382,750 $ 215,378 $ 167,372 77.7 %
Gross margin percent 20.6 % 21.4 %
Three months ended September 30, 2025 compared to September 30, 2024.
Revenue
The Financial Services practice group revenue for the three months ended September 30, 2025 grew by 79.5% to $578.5 million from $322.3 million during the same period in 2024. This increase of $256.2 million was primarily the result of the Transaction and was across almost all service lines. When compared to the same period in 2024, revenue from traditional accounting and tax-related services increased by $226.0 million, revenue from advisory services increased by $23.3 million, and revenue from national technology services increased by $8.6 million. Revenue from government healthcare consulting services remained relatively consistent.
We provide a range of services to affiliated CPA firms under joint referral and administrative service agreements ("ASAs"). Fees earned under the ASAs are recorded as revenue in the accompanying Condensed Consolidated Statements of Comprehensive Income and were approximately $130.3 million and $60.9 million for the three months ended September 30, 2025 and 2024, respectively.
Operating Expenses
Operating expenses for the three months ended September 30, 2025 increased by $223.2 million, or 85.6%, as compared to the same period in 2024. Personnel costs increased by $171.1 million, of which acquisitions contributed approximately $161.3 million to the increase. Compared to the same period in 2024, depreciation and amortization costs, direct costs, facility costs, technology costs, professional services costs, travel and entertainment costs, marketing costs, other discretionary spending to support business growth, and office expenses increased by approximately $15.3 million, $11.0 million, $11.0 million, $6.0 million, $3.6 million, $2.4 million, $1.5
million, $0.8 million, and $0.5 million, respectively. Operating expenses as a percentage of revenue increased to 83.6% for the three months ended September 30, 2025 from 80.9% of revenue for the same period in 2024.
Nine months ended September 30, 2025 compared to September 30, 2024.
Revenue
Revenue for the nine months ended September 30, 2025 grew by 85.4% to $1,862.0 million from $1,004.2 million during the same period in 2024. This increase of $857.8 million was primarily the result of the Transaction and was across all service lines. As compared to the same period in 2024, revenue from the traditional accounting and tax-related services increased by $738.1 million, revenue from advisory services increased by $80.0 million, revenue from national technology increased by $37.2 million, and revenue from government healthcare consulting services increased by approximately $3.0 million.
Fees earned under the ASAs, as described above, were approximately$529.1 million and $217.7 million for the nine months ended September 30, 2025 and 2024, respectively.
Operating Expenses
Operating expenses for the nine months ended September 30, 2025 increased by $689.8 million, or 87.4%, as compared to the same period last year. Personnel costs increased by $530.8 million, of which acquisitions contributed approximately $519.2 million to the increase. Compared to the same period in 2024, depreciation and amortization costs, direct costs, facility costs, technology costs, professional services costs, travel and entertainment costs, marketing costs, and employee costs increased by approximately $46.9 million, $36.8 million, $34.5 million, $17.5 million, $8.1 million, $5.6 million, $5.1 million, and $2.6 million, respectively. In addition, other discretionary costs increased by approximately $1.9 million to support the business growth. Operating expense as a percentage of revenue increased to 79.4% during the nine months ended September 30, 2025 from 78.6% of revenue during the same period in 2024.
Benefits and Insurance Services
Three Months Ended September 30,
2025 2024 $
Change 		%
Change
(Amounts in thousands, except percentages)
Revenue $ 103,387 $ 104,040 $ (653) (0.6) %
Operating expenses 84,082 82,965 1,117 1.3 %
Gross margin / Operating income 19,305 21,075 (1,770) (8.4) %
Total other income, net 42 2 40 N/M
Income before income tax expense $ 19,347 $ 21,077 $ (1,730) (8.2) %
Gross margin percent 18.7 % 20.3 %
Nine Months Ended September 30,
2025 2024 $
Change 		%
Change
(Amounts in thousands, except percentages)
Revenue $ 318,292 $ 309,867 $ 8,425 2.7 %
Operating expenses 253,447 249,845 3,602 1.4 %
Gross margin / Operating income 64,845 60,022 4,823 8.0 %
Total other income, net 415 89 326 N/M
Income before income tax expense $ 65,260 $ 60,111 $ 5,149 8.6 %
Gross margin percent 20.4 % 19.4 %
Three months ended September 30, 2025 compared to September 30, 2024.
Revenue
The Benefits and Insurance Services practice group revenue for the three months ended September 30, 2025 remained relatively unchanged when compared to the same period in 2024. Revenue for the three month period ended September 30, 2025 increased by $2.3 million from payroll and human capital related services and increased
by $0.3 million in employee benefit and retirement benefit service lines. This increase was offset by a $3.2 million decrease in the property and casualty services revenue.
Operating Expenses
Operating expenses for the three months ended September 30, 2025 increased by $1.1 million, or 1.3%, when compared to the same period in 2024. The increase was primarily driven by direct costs and professional services, which increased by $1.3 million and $0.2 million, respectively, when compared to the same period in 2024. The increase was offset with a decrease of approximately $0.4 million of depreciation and amortization expense. Operating expenses as a percentage of revenue increased to 81.3% for the quarter ended September 30, 2025 from 79.7% of revenue for the same period in 2024.
Nine months ended September 30, 2025 compared to September 30, 2024.
Revenue
The Benefits and Insurance Services practice group revenue increased by $8.4 million, or 2.7%, to $318.3 million during the nine months ended September 30, 2025 compared to $309.9 million for the same period in 2024. The increase was primarily driven by a $10.3 million increase from payroll and human capital related services and a $7.0 millionincrease in employee benefit and retirement benefit services lines. The increase was offset by a $8.8 million decrease in the property and casualty services revenue.
Operating Expenses
Operating expenses for the nine months ended September 30, 2025 increased by $3.6 million, or 1.4%, when compared to the same period in 2024. This increase was primarily driven by direct costs and personnel costs which increased by $4.3 million and $1.0 million, respectively, when compared to the same period in 2024. This increase was offset by a decrease of $1.0 million of depreciation and amortization expenses and a decrease of $0.7 million in travel and entertainment costs. Operating expense as a percentage of revenue decreased to 79.6% during the nine months ended September 30, 2025 as compared to 80.6% of revenue for the same period in 2024.
National Practices
Three Months Ended September 30,
2025 2024 $
Change 		%
Change
(Amounts in thousands, except percentages)
Revenue $ 11,909 $ 12,549 $ (640) (5.1) %
Operating expenses 10,685 11,101 (416) (3.7) %
Gross margin / Operating income 1,224 1,448 (224) (15.5) %
Total other (expense) income, net 1,124 4,953 (3,829) (77.3) %
Income before income tax expenses $ 2,348 $ 6,401 $ (4,053) (63.3) %
Gross margin percent 10.3 % 11.5 %
Nine Months Ended September 30,
2025 2024 $
Change 		%
Change
(Amounts in thousands, except percentages)
Revenue $ 35,034 $ 39,168 $ (4,134) (10.6) %
Operating expenses 31,431 35,062 (3,631) (10.4) %
Gross margin / Operating income 3,603 4,106 (503) (12.3) %
Total other (expense) income, net 1,124 4,949 (3,825) (77.3) %
Income before income tax expenses $ 4,727 $ 9,055 $ (4,328) (47.8) %
Gross margin percent 10.3 % 10.5 %
Three and nine months ended September 30, 2025 compared with September 30, 2024.
Revenue and Operating Expenses
During the three months ended September 30, 2024, we completed the sale of CBIZ KA Consulting Services, LLC ("KA Consulting"), which was a component of the National Practices group. KA Consulting contributed approximately $2.2 million and $8.4 million of revenue for the three and nine months ended September 30, 2024. The remaining National Practice group is primarily driven by a cost-plus contract with a single client, which has existed since 1999. The cost-plus contract is a five-year contract with the most recent renewal through December 31, 2028. During the three and nine months ended September 30, 2025, revenue decreased by $0.6 million, or 5.1%, and by $4.1 million, or 10.6%, respectively, while operating expenses decreased by $0.4 million or 3.7%, and $3.6 million, or 10.4%, respectively. The decrease in revenue and in operating expense was attributed to the result of the sale of KA Consulting.
Corporate and Other
Corporate and Other are operating expenses that are not directly allocated to the individual business units. These expenses primarily consist of certain health care costs, gains or losses attributable to assets held in our deferred compensation plan, stock-based compensation, consolidation and integration charges, certain professional fees, certain advertising costs, and other various expenses.
Three Months Ended September 30,
2025 2024 $
Change 		%
Change
(Amounts in thousands, except percentages)
Operating expenses $ 25,081 $ 11,266 $ 13,815 122.6 %
Corporate general and administrative expenses 31,265 23,227 8,038 34.6 %
Operating loss (56,346) (34,493) (21,853) 63.4 %
Total other expense, net
(19,006) (3,685) (15,321) N/M
Loss before income tax expense $ (75,352) $ (38,178) $ (37,174) 97.4 %
Nine Months Ended September 30,
2025 2024 $
Change 		%
Change
(Amounts in thousands, except percentages)
Operating expenses $ 45,518 $ 34,908 $ 10,610 30.4 %
Corporate general and administrative expenses 86,972 63,988 22,984 35.9 %
Operating loss (132,490) (98,896) (33,594) 34.0 %
Total other expense, net
(49,154) (2,470) (46,684) N/M
Loss before income tax expense $ (181,644) $ (101,366) $ (80,278) 79.2 %
Three months ended September 30, 2025 compared to September 30, 2024.
Total operating expenses increased by $13.8 million during the three months ended September 30, 2025, as compared to the same period in 2024. The deferred compensation plan increased operating expenses by $7.8 million for the three months ended September 30, 2025 and increased operating expenses by $7.3 million during the same period in 2024. Excluding the deferred compensation expenses, operating expenses increased by $13.3 million during the three months ended September 30, 2025, as compared to the same period in 2024. The increase was primarily driven by $5.9 million higher facility costs, $4.6 million higher personnel costs, $1.8 higher professional service costs, and $1.5 million higher other discretionary spending to support business growth.
Total corporate G&A expenses increased by $8.0 million, or 34.6%, during the three months ended September 30, 2025, as compared to the same period in 2024. The deferred compensation plan increased corporate G&A expenses by $1.1 million for the three months ended September 30, 2025 and by $1.1 million during the same
period in 2024. Excluding the deferred compensation expenses, corporate G&A expense increased by approximately $8.0 million during the three months ended September 30, 2025, as compared to the same period in 2024. The increase was primarily driven by $3.1 million higher personnel costs, $1.8 million higher marketing costs, $1.0 million higher insurance costs, $0.9 million higher other discretionary spending to support business growth, $0.8 million higher technology costs, and $0.4 million higher travel and entertainment costs. The G&A expenses for the three months ended September 30, 2025 included approximately $5.7 million of integration costs primarily associated with the Transaction. For the three months ended September 30, 2024, there were approximately $7.7 million of integration costs associated with the Transaction.
Total other expense, net increased by $15.3 million during the three months ended September 30, 2025, as compared to the same period in 2024. For the three months ended September 30, 2025, total other expense, net included a net gain of $8.9 million associated with the deferred compensation plan. For the same period in 2024, total other expense, net included a net gain of $8.4 million associated with the deferred compensation plan. Excluding the impact of the deferred compensation plan, total other expense, net increased by $15.9 million for the three months ended September 30, 2025 compared to the same period in 2024. The increase was primarily due to $23.0 million higher interest expense, partially offset by $5.0 million higher fair value adjustments as well as $2.5 million other adjustments recorded to other income (expense), net.
Nine months ended September 30, 2025 compared to September 30, 2024.
Total operating expenses increased by $10.6 million, or 30.4%, during the nine months ended September 30, 2025, as compared to the same period in 2024. The deferred compensation plan increased operating expenses by $17.1 million for the nine months ended September 30, 2025, and by $18.2 million during the same period in 2024. Excluding the deferred compensation expenses, operating expense increased by approximately $11.6 million during the nine months ended September 30, 2025, as compared to the same period in 2024. This increase was primarily driven by $5.2 million higher facility costs, $4.1 million higher professional service costs, $2.1 million higher personnel costs, and $0.2 million higher other discretionary spending to support business growth.
Total corporate G&A expenses increased by $23.0 million, or 35.9%, during the nine months ended September 30, 2025, as compared to the same period in 2024. The deferred compensation plan increased corporate G&A expenses by $2.4 million for the nine months ended September 30, 2025 and by $2.4 million during the same period in 2024. Excluding the deferred compensation expenses, corporate G&A expense increased by approximately $23.0 million during the nine months ended September 30, 2025, as compared to the same period in 2024. The increase was primarily due to approximately $5.9 million higher professional fees, $4.8 million higher personnel costs, $3.3 million higher marketing costs, $2.8 million higher insurance costs, $1.8 million higher technology costs, $1.6 million higher other discretionary spending to support business growth, $1.5 million higher facility costs, and $1.3 higher legal settlement costs. The G&A expenses for the nine months ended September 30, 2025 included approximately $20.2 million of integration costs primarily associated with the Transaction. For the nine months ended September 30, 2024 there were approximately $15.0 million of non-recurring transaction and integration costs associated with the Transaction.
Total other expense, net increased by $46.7 million during the nine months ended September 30, 2025, as compared to the same period in 2024. Total other expense, net for the nine months ended September 30, 2025 includes a net gain of $19.5 million associated with the deferred compensation plan. For the same period in 2024, total other expense, net includes a net gain of $20.6 million associated with the deferred compensation plan. Excluding the impact of the deferred compensation plan, total other expense, net increased by $45.6 million for the nine months ended September 30, 2025 compared to the same period in 2024. The increase was primarily due to $65.6 million higher interest expense, partially offset by a gain from a legal settlement of $12.5 million recorded to other income (expense), net, $4.4 million higher fair value adjustments and $1.7 million higher other adjustments, as well as an increase of $1.4 million of interest income.
LIQUIDITY
Our principal sources of liquidity are cash generated from operating activities and financing activities. Our cash flows from operating activities are driven primarily by our operating results and changes in our working capital requirements while our cash flows from financing activities are dependent upon our ability to access credit or other capital. We historically maintain low cash levels and apply any available cash to pay down the outstanding debt balance.
We historically experience a use of cash to fund working capital requirements during the first quarter of each fiscal year. This is primarily due to the seasonal accounting and tax services period under the Financial Services practice group, as well as payment of accrued employees' incentives programs. Upon completion of the seasonal
accounting and tax services period, cash provided by operations during the remaining three quarters of the fiscal year substantially exceeds the use of cash in the first quarter of the fiscal year.
Accounts receivable balances increase in response to the first three months' revenue generated by the Financial Services practice group. A significant amount of this revenue is billed and collected in subsequent quarters. Days sales outstanding ("DSO") represent accounts receivable and unbilled revenue (net of realization adjustments) at the end of the period, divided by trailing twelve months' daily revenue. We provide DSO data because such data is commonly used as a performance measure by analysts and investors and as a measure of our ability to collect on receivables in a timely manner. Trailing-twelve-month DSO, including the impact of acquisitions, was 94 days and 97 days at September 30, 2025 and 2024, respectively. DSO at December 31, 2024 was 73 days.
The following table presents selected cash flow information. For additional details, refer to the accompanying Condensed Consolidated Statements of Cash Flows.
Nine Months Ended September 30,
2025 2024
(Amounts in thousands)
Net cash provided by operating activities $ 48,846 $ 68,168
Net cash used in investing activities (16,913) (24,911)
Net cash used in financing activities (75,233) (85,222)
Net decrease in cash, cash equivalents and restricted cash $ (43,300) $ (41,965)
Operating Activities - Cash provided by operating activities was $48.8 million during the nine months ended September 30, 2025, primarily consisted of working capital use of $258.0 million, which was offset by net income of $194.9 million and certain non-cash items, such as depreciation and amortization expense of $74.3 million, deferred income tax of $8.8 million, stock-based compensation expense of $19.6 million, and an adjustment to contingent earnout liability of $2.0 million. Cash provided by operating activities was $68.2 million during the nine months ended September 30, 2024, primarily consisted of working capital use of $108.4 million, which was offset by net income of $131.8 million and certain non-cash items, such as depreciation and amortization expense of $28.6 million, deferred income tax of $4.8 million, stock-based compensation expense of $7.4 million, and an adjustment to contingent earnout liability of $6.3 million.
Investing Activities - Cash used in investing activities during the nine months ended September 30, 2025 was $16.9 million and consisted primarily of $15.0 million in capital expenditures and $4.0 million in net client fund investment activity, partially offset by $1.4 million received from sale of operations and $0.7 million in other investing activities primarily related to acquisition related working capital adjustment payments and notes receivable. The net cash flow related to funds held for clients and other activities were immaterial. Cash used in investing activities during the nine months ended September 30, 2024 was $24.9 million and consisted primarily of $22.9 million used for business acquisitions, $9.7 million in capital expenditures, and $2.2 million in other investing activities primarily related to acquisition related working capital adjustment payments and notes receivable. The net cash flow related to funds held for clients and other activities were immaterial.
The balances in funds held for clients and client fund obligations can fluctuate with the timing of cash receipts and the related cash payments. The nature of these accounts is further described in Note 1, Basis of Presentation and Significant Accounting Policies, to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2024.
Financing Activities - Cash used in financing activities during the nine months ended September 30, 2025 was $75.2 million and primarily consisted of $135.6 million of cash used in share repurchases, of which $102.8 million was used under the ROFR Agreement and $25.0 million were open market purchases. Additionally, $48.3 million was paid to reduce client fund obligations and $55.8 million was paid as contingent consideration payments related to prior acquisitions. The use of cash was partially offset by $165.9 million in net proceeds from the 2024 Credit Facilities. Cash used in financing activities during the nine months ended September 30, 2024 was $85.2 million and primarily consisted of $24.9 million in net proceeds from the 2022 credit facility, partially offset by $11.4 million cash used in share repurchases for tax withholding purposes, a $47.6 million net decrease in client fund obligations and $50.9 million in contingent consideration payments related to prior acquisitions.
CAPITAL RESOURCES
Credit Facilities - At September 30, 2025, we had $1,586.8 million outstanding under the 2024 Credit Facilities as well as $3.2 million of outstanding letters of credit. Available funds under the 2024 Credit Facilities, based on the terms of the commitment, were approximately $316.0 million at September 30, 2025. The weighted average interest rate under the 2024 Credit Facilities was 6.64% during the nine months ended September 30, 2025, compared to 5.40% for the same period in 2024 under the 2022 credit facility. The 2024 Credit Facilities allows for the allocation of funds for future strategic initiatives, including acquisitions and the repurchase of our common stock, subject to the terms and conditions of the 2024 Credit Facilities.
Debt Covenant Compliance - Under the 2024 Credit Facilities, we are required to meet certain financial covenants with respect to (i) total leverage ratio and (ii) minimum interest charge coverage ratio. We were in compliance with our financial covenants as of September 30, 2025. Our ability to service our debt and to fund future strategic initiatives will depend upon our ability to generate cash in the future. For further discussion regarding our 2024 Credit Facilities, refer to Note 5, Debt and Financing Arrangements, to the accompanying unaudited condensed consolidated financial statements.
Use of Capital - Our overall business objective continues to focus on making strategic acquisitions that allow us to strengthen our presence in existing markets, expand into high growth industries, and broaden our services to our existing clients. As a result of the Transaction and related 2024 Credit Facilities we have $1,586.8 million of outstanding debt as of September 30, 2025. To achieve our business objective of making strategic acquisitions, our current priority for use of capital is to maximize cash flow to fund working capital to drive organic growth and to pay down debt, which will allow us more liquidity to make strategic, selective, and high-return acquisitions in the future. In addition, we believe that repurchasing shares of our common stock can be a prudent use of our financial resources, and that investing in our stock is an attractive use of capital and an efficient means to provide value to our stockholders.
During the nine months ended September 30, 2025, we completed no acquisitions. During the nine months ended September 30, 2025, we repurchased 1.4 million shares of our common stock at a cost of $102.8 million under the ROFR Agreement and 0.4 million shares of our common stock in the open market for $25.0 million. Additionally, to settle statutory employee withholdings related to vesting of stock awards, we repurchased 0.1 million shares of our common stock at cost of $7.8 million during the nine months ended September 30, 2025 and 0.2 million shares at a cost of $11.4 million during the nine months ended September 30, 2024.
Cash Requirements - Cash requirements for the remainder of 2025 and beyond will include share repurchases through both our ROFR Agreement and open market purchases, the repayment of outstanding debt and related interest, making strategic acquisitions, funding seasonal working capital requirements, making contingent purchase price payments for previous acquisitions, income tax payments, and capital expenditures. We believe that cash provided by operations, as well as available funds under our 2024 Credit Facilities, will be sufficient to meet cash requirements for the remainder of 2025 and beyond.
OFF-BALANCE SHEET ARRANGEMENTS
We maintain administrative service agreements with independent CPA firms (as described more fully under Item 1. "Business - Financial Services" and in Note 1, Basis of Presentation and Significant Accounting Policies, to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2024), which qualify as variable interest entities. The accompanying unaudited condensed consolidated financial statements do not reflect the operations or accounts of variable interest entities as the impact is not material to the financial condition, results of operations, or cash flows of CBIZ.
We provide letters of credit to landlords (lessors) of our leased premises in lieu of cash security deposits, which totaled $3.2 million and $3.2 million at September 30, 2025 and December 31, 2024, respectively. In addition, we provide license bonds to various state agencies to meet certain licensing requirements. The amount of license bonds outstanding was $2.2 million and $2.2 million at September 30, 2025 and December 31, 2024, respectively.
We have various agreements under which we may be obligated to indemnify the other party with respect to certain matters. Generally, these indemnification clauses are included in contracts arising in the normal course of business under which we customarily agree to hold the other party harmless against losses arising from a breach of
representations, warranties, covenants or agreements, related to matters such as title to assets sold and certain tax matters. Payment by us under such indemnification clauses is generally conditioned upon the other party making a claim. Such claims are typically subject to challenge by us and to dispute resolution procedures specified in the particular contract. Further, our obligations under these agreements may be limited in terms of time and/or amount and, in some instances, we may have recourse against third parties for certain payments made by us. It is not possible to predict the maximum potential amount of future payments under these indemnification agreements due to the conditional nature of our obligations and the unique facts of each particular agreement. Historically, we have not made any payments under these agreements that have been material individually or in the aggregate. As of September 30, 2025, we are not aware of any material obligations arising under indemnification agreements that would require payment.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
The SEC defines critical accounting policies as those that are most important to the portrayal of a company's financial condition and results and that require management's most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.
Our discussion and analysis of our results of operations, financial condition and liquidity is based upon our unaudited condensed consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these financial statements requires us to make estimates and judgments that affect the amounts of assets and liabilities, revenues and expenses and disclosure of contingent assets and liabilities as of the date of the unaudited condensed consolidated financial statements. As more information becomes known, these estimates and assumptions could change, which would have an impact on actual results that may differ materially from these estimates and judgments under different assumptions. We have not made any changes to our critical accounting policies and estimates as previously disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.
NEW ACCOUNTING PRONOUNCEMENTS
Refer to Note 2, New Accounting Pronouncements, to the accompanying unaudited condensed consolidated financial statements for a discussion of recently issued accounting pronouncements.
FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). All statements other than statements of historical fact included in this Quarterly Report on Form 10-Q, including, without limitation, "Management's Discussion and Analysis of Financial Condition and Results of Operations" regarding our financial position, business strategy and plans and objectives for future performance are forward-looking statements. You can identify these statements by the fact that they do not relate strictly to historical or current facts. Forward-looking statements are commonly identified by the use of such terms and phrases as "will," "could," "can," "may," "strive," "hope," "intend," "believe," "estimate," "continue," "plan," "expect," "project," "anticipate," "outlook," "foreseeable future," "seek" and words or phrases of similar import in connection with any discussion of future operating or financial performance. In particular, these include statements relating to future actions, future performance or results of current and anticipated services, sales efforts, expenses, and financial results.
From time to time, we may also provide oral or written forward-looking statements in other materials we release to the public. Any or all of our forward-looking statements in this Quarterly Report on Form 10-Q and in any other public statements that we make, are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. Such risks and uncertainties include, but are not limited to: payments on accounts receivable may be slower than expected, or amounts due on receivables or notes may not be fully collectible; our business could be adversely affected if Marcum does not perform to our expectations or we underestimate the liabilities we have assumed; we are dependent on the services of our executive officers, and other key employees, the loss of whom may have a material adverse effect on our business, financial condition and results of operations; restrictions imposed by independence requirements and conflict of interest rules, as well as the nature and terms of our current Administrative Service Agreements, limit our ability to provide services to clients of the attest firms with which we have contractual relationships and the ability of such attest firms to provide attestation services to our clients; our goodwill and other intangible assets could become impaired, which could lead to material non-cash charges against earnings and a material impact on our results of operations and financial
condition; certain liabilities resulting from acquisitions are estimated and could lead to a material impact on our results of operations; we may fail to realize the anticipated benefits of acquisitions, or they may prove disruptive and could result in the combined business failing to meet our expectations; recent SEC and Public Company Accounting Oversight Board ("PCAOB") sanctions against Marcum may adversely impact our performance and reputation; if we are unable to implement and maintain effective internal control over financial reporting following the Transaction, we may fail to prevent or detect material misstatements in our financial statements, in which case investors could lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock may decline; we may not be able to acquire and finance additional businesses, which could limit our ability to pursue our business strategy; we will incur transaction, integration, and restructuring costs in connection with our acquisition program; governmental regulations and interpretations are subject to changes, which could have a material adverse effect on our financial condition; continuing uncertainty in the current economic and geopolitical environment could lead to continuing softness in demand for certain of our services; changes in the United States healthcare environment, including new healthcare legislation, may adversely affect the revenue and margins in our healthcare benefit business; we are subject to risks relating to processing customer transactions for our payroll and other transaction processing businesses; cyberattacks or other security breaches involving our computer systems or the systems of one or more of our vendors could materially and adversely affect our business; we are subject to risk as it relates to software that we license from third parties; we are reliant on information processing systems and any failure or disruptions of these systems could have a material adverse effect on our business, financial condition and results of operations; we could be held liable for errors and omissions; the business services industry is competitive and fragmented, if we are unable to compete effectively, our business, financial condition and results of operations could be negatively impacted; given our levels of share-based compensation, our tax rate may vary significantly depending on our stock price; rapid technological changes could significantly impact our competitive position, client relationships and operating results and our ability to realize the anticipated benefits of the Transaction; climate change legislation or regulations restricting emissions of greenhouse gases could result in increased operating costs; the adverse impact of legislative and regulatory changes in the U.S. and globally, including as a result of the One Big Beautiful Bill Act, on our tax rate, accounting practices, operations and results; the widespread outbreak of a communicable illness or any other public health crisis could adversely affect our business, financial condition and results of operations; we require a significant amount of cash for interest payments on our debt and to expand our business as planned; terms of the 2024 Credit Facilities could adversely affect our ability to run our business and/or reduce stockholder returns; our failure to satisfy covenants in our debt instruments could cause a default under those instruments; our increased leverage following the Transaction may adversely impact our business; we may be more sensitive to revenue fluctuations than other companies, which could result in fluctuations in the market price of our common stock; the significant number of shares issuable as the stock consideration in the Transaction may adversely impact our stock price; the future issuance of additional shares could adversely affect the price of our common stock; there is volatility in our stock price; and the price of our common stock could be adversely impacted if we do not perform to expectations following the Transaction.
Such forward-looking statements can be affected by inaccurate assumptions we might make or by known or unknown risks and uncertainties. Should one or more of these risks materialize, or should the underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated, projected or implied.
Consequently, no forward-looking statement can be guaranteed. A more detailed description of risk factors may be found in our periodic filings with the SEC, including in "Item 1A. Risk Factors" of our Annual Report on Form 10-K for the year ended December 31, 2024. All forward-looking statements made in this Quarterly Report on Form 10-Q are made only as of the date hereof, and we undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. You are advised, however, to consult any further disclosures we make on related subjects in the current, quarterly, periodic and annual reports we file with the SEC.
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