CBIZ Reports Third-Quarter and Nine-Month 2024 Results

CBIZ, Inc., a leading provider of financial, insurance, and advisory services, has released its financial results for the third quarter and nine months ended September 30, 2024. The company has shown notable growth in several key financial metrics, despite some challenges.

Financial Highlights

For the third quarter of 2024, CBIZ reported a total revenue of $438.9 million, marking a 6.9% increase from the same period in 2023. The company's net income rose by 4.2% to $35.1 million, while adjusted EBITDA saw a significant increase of 23.0% to $75.7 million. GAAP earnings per share (EPS) increased by 4.5% to $0.70, and adjusted EPS surged by 27.3% to $0.84.

Over the nine-month period, CBIZ's total revenue reached $1.4 billion, up 7.1% from the previous year. However, net income slightly decreased by 1.5% to $131.8 million. Adjusted EBITDA for the nine months was $245.2 million, a 7.0% increase from the same period in 2023. GAAP EPS was down 0.8% to $2.62, while adjusted EPS increased by 7.5% to $2.87.

Business and Operational Highlights

CBIZ's revenue growth was driven by both organic growth and acquisitions. Acquired operations, net of divestitures, contributed $7.6 million to the third-quarter revenue growth and $30.9 million to the nine-month revenue growth. Same-unit revenue increased by 5.1% for the quarter and 4.6% for the nine months.

During the third quarter, CBIZ incurred approximately $14.8 million in fees related to the pending acquisition of Marcum LLP, which impacted GAAP earnings by $0.20 per diluted share. For the nine months, these fees totaled $21.4 million, affecting GAAP earnings by $0.31 per diluted share.

Strategic Initiatives and Corporate Developments

CBIZ announced a definitive agreement to acquire Marcum LLP, a national accounting and advisory firm. The transaction is expected to close in the coming days, with most closing conditions already met. This acquisition is anticipated to significantly enhance CBIZ's market position, making it the largest provider of professional services to the middle market in the U.S.

Additionally, CBIZ's balance sheet remains strong, with an outstanding balance of $337.3 million on its unsecured credit facility and $252.0 million of unused borrowing capacity as of September 30, 2024.

Management's Perspective

Jerry Grisko, CBIZ President and Chief Executive Officer, expressed satisfaction with the company's performance, highlighting the 27% increase in adjusted EPS. Grisko reaffirmed the company's full-year 2024 guidance for adjusted EPS, citing a favorable outlook for the fourth quarter.

Grisko also emphasized the strategic importance of the Marcum acquisition, noting the opportunities it presents for team members, clients, and shareholders. The combined entity is expected to generate approximately $2.8 billion in annual revenues and employ over 10,000 team members across the U.S.

Future Outlook

For the full year 2024, CBIZ expects total revenue growth in the range of 7% to 9% over the prior year. The company projects an effective tax rate of approximately 28% and a weighted average fully diluted share count of 50.0 to 50.5 million shares. GAAP fully diluted EPS is expected to be within the range of $2.37 to $2.42 per share, while adjusted fully diluted EPS is projected to grow by 10% to 12%, reaching $2.64 to $2.69 per share.

SEC Filing: CBIZ, Inc. [ CBZ ] - 8-K - Oct. 29, 2024