CBIZ (CBZ) The 44th Annual William Blair Growth Stock Conference summary

Business overview and strategy

• Provides accounting, insurance, and professional services to middle-market businesses nationwide, with nearly 7,000 employees and over 120 offices.

• Revenue split: 73-74% from accounting/tax/financial services, 24% from benefits and insurance.

• Recurring, essential services drive about 75% of revenue, with high client retention (~90%) and a diverse client base.

• Broad geographic footprint reduces exposure to regional economic fluctuations.

• Competitive edge comes from combining national reach with local expertise and deep subject matter knowledge.

Growth drivers and financial performance

• Growth is balanced between organic expansion, cross-selling, and acquisitions, targeting 8-10% annual top-line growth.

• Five-year compounded top-line growth has reached nearly 14%, with adjusted EPS growing at 17.5%.

• Organic growth is driven by improved pricing strategies and increased producer hiring, especially in insurance.

• Recent guidance for 2024: 7-9% revenue growth, with 12-14% adjusted EPS growth, not including future acquisitions.

• Operating leverage and cost management support 20-50 basis points of margin improvement annually.

M&A strategy and market consolidation

• Acquisitions focus on expanding geography, strengthening markets, adding in-demand services, and acquiring talent.

• Typical deal structure: 80-90% cash, small stock component, with 50-70% paid upfront and the rest over three years.

• Market consolidation is accelerating due to client demand for broader services and the need for investment in technology and talent.

• Private equity is increasingly active, but stability, culture, and long-term track record differentiate the firm.