CBIZ (CBZ) Q3 2024 earnings summary

Executive summary

• Third quarter and nine-month 2024 results showed strong business health, with Q3 revenue up 6.9% to $438.9 million and nine-month revenue up 7.1% to $1.35 billion year-over-year.

• Adjusted EPS for Q3 2024 rose 27.3% to $0.84, with nine-month adjusted EPS up 7.5%; net income for Q3 was $35.1 million.

• The Marcum acquisition, the largest in company history, was completed on November 1, 2024, significantly expanding scale and service offerings.

• Client sentiment remains cautiously optimistic amid concerns about elections, market volatility, and inflation, but the general economic outlook has improved since early 2024.

• CBIZ is a leading national provider of accounting, insurance, and advisory services, serving over 100,000 clients with high retention rates and a broad geographic footprint.

Financial highlights

• Q3 2024 adjusted EPS was $0.84, up 27.3% year-over-year; Q3 GAAP EPS was $0.70, up 4.5% year-over-year.

• 2023 revenue reached $1.59 billion, with a 13.8% CAGR since 2019; 2023 adjusted EPS was $2.41, up 91.3% from 2019.

• Q3 2024 gross margin was $72.9 million (16.6% of revenue); operating income was $49.7 million, impacted by higher G&A and integration costs.

• Cash provided by operating activities for the nine months ended September 30, 2024 was $68.2 million.

• Five-year total shareholder return was $317.72, outperforming major indices.

Outlook and guidance

• 2024 total revenue is expected to grow 7%-9% over 2023, with adjusted EPS guidance of $2.64–$2.69, up 10%-12%, excluding the Marcum acquisition.

• GAAP EPS for 2024 is expected within 1% of 2023 due to acquisition expenses; projected at $2.37–$2.42.

• Effective tax rate for 2024 projected at approximately 28%; diluted share count 50.0–50.5 million.

• 2025 guidance, including Marcum, will be provided with Q4 and full-year 2024 results.

• Management prioritizes maximizing cash flow to pay down debt and maintain liquidity for future acquisitions.