CBIZ (CBZ) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue rose 69.5% year-over-year to $838.0 million, driven by the Marcum acquisition and strong client retention, positioning the company as a leading middle-market professional services provider.

• Net income increased to $122.8 million ($1.91 per diluted share), with adjusted EBITDA doubling to $237.6 million and adjusted diluted EPS up 40.5% to $2.29.

• 77% of services are essential and recurring, supporting resilience in challenging economic environments; client retention rate is over 90%.

• Marcum integration is on schedule, supporting operational synergies and positive cultural alignment.

• Strategic focus remains on acquisitions, debt reduction, and share repurchases.

Financial highlights

• Q1 2025 revenue increased 69.5% year-over-year to $838.0 million, with adjusted EBITDA at $237.6 million and adjusted net income at $147.2 million.

• Adjusted diluted EPS was $2.29; GAAP diluted EPS was $1.91.

• Operating income for Q1 2025 was $200.0 million, up from $99.1 million in Q1 2024.

• Gross margin was $228.1 million (27.2% of revenue), up from $117.8 million (23.8%).

• Effective tax rate increased to 29.0%, mainly due to higher-tax jurisdictions from Marcum revenue.

Outlook and guidance

• Full-year 2025 revenue expected between $2.8 billion and $2.95 billion, with adjusted diluted EPS at $3.60–$3.65 and adjusted EBITDA guidance set at $450–$456 million.

• Adjusted EBITDA and adjusted EPS guidance for 2025 remain unchanged.

• Management expects continued softness in demand for nonrecurring project-based services due to economic and geopolitical uncertainty.

• Weighted average fully diluted share count expected between 64.5–65.0 million.

• Company expects to achieve $25 million in synergies, mostly in year two and beyond.