CBIZ’s third quarter was shaped by the ongoing integration of the Marcum acquisition, which management described as a source of both scale and operational improvement. While the company’s revenue came in below Wall Street’s expectations, the non-GAAP profit outpaced consensus, reflecting margin gains from cost discipline and synergy realization. CEO Jerry Grisko emphasized steady organic growth in core accounting and tax services, as well as better demand in project-based advisory work. Management credited investments in technology, AI, and expanded industry groups for supporting client retention and new business wins.
Is now the time to buy CBZ? Find out in our full research report (it’s free for active Edge members).
CBIZ (CBZ) Q3 CY2025 Highlights:
- Revenue: $693.8 million vs analyst estimates of $709.2 million (58.1% year-on-year growth, 2.2% miss)
- Adjusted EPS: $1.01 vs analyst estimates of $0.90 (12.6% beat)
- Adjusted EBITDA: $120 million vs analyst estimates of $115 million (17.3% margin, 4.4% beat)
- The company reconfirmed its revenue guidance for the full year of $2.88 billion at the midpoint
- Management reiterated its full-year Adjusted EPS guidance of $3.63 at the midpoint
- EBITDA guidance for the full year is $453 million at the midpoint, in line with analyst expectations
- Operating Margin: 11.3%, in line with the same quarter last year
- Market Capitalization: $2.94 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From CBIZ’s Q3 Earnings Call
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Christopher Moore (CJS Securities) asked about the sustainability of mid-single-digit pricing gains. CEO Jerry Grisko responded that current pricing reflects strong client relationships and expects this range to continue, barring any structural industry changes.
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Moore also questioned client and staff retention post-acquisition. Grisko explained that anticipated client losses were in line with expectations, and there were no notable losses among key revenue-generating partners.
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Moore requested clarification on integration costs in 2026 versus 2025. CFO Brad Lakhia stated that while the nature of integration costs would shift toward real estate, the overall mix would remain similar, with some components like severance declining.
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Andrew Nicholas (William Blair) inquired about the impact of macro trends, including tax regulation changes and insurance market softness. Grisko noted that regulatory changes such as OBBBA boosted tax revenue, while insurance softness was driven by broader market trends.
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Marc Riddick (Sidoti) asked about client feedback related to rate cuts and integration progress. Grisko said positive market signals encourage discretionary client projects, and co-location of staff is progressing both physically and virtually.
Catalysts in Upcoming Quarters
In the coming quarters, our analysts will be watching (1) the pace and magnitude of synergy realization from Marcum integration activities, (2) sustained pricing power and organic growth in core accounting and tax services, and (3) stabilization or improvement in the Benefits and Insurance segment. Execution on real estate consolidation and further technology adoption will also be important drivers of performance.
CBIZ currently trades at $55.06, up from $51.35 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free for active Edge members).
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