CBIZ (CBZ) Q2 EPS Jumps 64%

Key Points

• Adjusted EPS of $0.95 beat consensus by 13% in Q2 2025, reflecting strong profitability and disciplined cost controls.

• GAAP revenue climbed 62.7% year over year in Q2 2025 but missed estimates by 2.6%.

• Integration of the Marcum acquisition drove significant operating scale, but integration expenses and nonrecurring segment revenue remain watch points.

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CBIZ (NYSE:CBZ), a national provider of professional services including accounting, tax, advisory, and benefits, released its financial results for Q2 2025 on July 30, 2025. The company reported a major year-over-year jump in both earnings and profitability, largely due to the recent integration of Marcum LLP, one of its largest acquisitions. However, GAAP revenue, while up significantly from the prior year, fell short of analyst expectations. Specifically, actual GAAP revenue came in at $683.5 million, below the consensus GAAP estimate of $701.4 million, while adjusted earnings per share (EPS) reached $0.95, topping the analyst estimate of $0.84 (non-GAAP). The quarter was marked by strong operational leverage, continued expansion of profit margins, and solid recurring revenues, even as project-driven income remained under pressure.

Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.

CBIZ’s Business Overview and Priorities

CBIZ specializes in essential services for businesses, including accounting, tax preparation, consulting, benefits, and insurance. With over 10,000 employees across more than 160 locations, it serves more than 135,000 clients spanning a wide range of industries in the United States. Its client base is highly diversified, with no single client accounting for more than 2.3% of total revenue in 2024, which helps the business weather sector-specific downturns.

Recently, CBIZ has centered its growth strategy around four main areas: making strategic acquisitions, managing and integrating talent, broadening and deepening its service offerings, and ensuring strong regulatory compliance. Its 2024 acquisition of Marcum LLP, a large accounting and advisory firm, marked a major milestone, boosting its size and service capacity. Successful integration of such acquisitions, as well as retaining top talent and cross-selling services to existing clients, are crucial to the company’s ongoing growth and success.

Quarter Highlights: Financials, Segment Results, and Major Events

In Q2 2025, CBIZ’s GAAP revenue rose by 62.7% compared to the same period last year. This impressive growth was primarily attributed to the addition of Marcum’s business. However, GAAP revenue missed consensus by $17.9 million, or 2.6%. The revenue shortfall was anticipated by management, citing planned declines in legacy Marcum capital markets work, a known wind-down in its special-purpose acquisition company (SPAC) practice, client conflicts, and the prior sale of CBIZ’s KA Consulting business. Unfavorable market conditions in capital markets and the advisory space also contributed.

Profitability metrics showed robust improvement. Adjusted earnings per share reached $0.95, a 63.8% increase, and 13% above consensus. Net income was $41.9 million, more than double the $19.8 million reported for the same period a year ago. Margin expansion was notable, with adjusted EBITDA margin reaching 17.1%, up from 12.2% a year ago (non-GAAP). The company benefited from cost controls, particularly in compensation, travel, and discretionary spending, as well as a high proportion of recurring service revenues in Q1 2025. About 77% of CBIZ’s services are considered recurring and essential to clients, providing stability even as discretionary, project-based revenue (roughly 23% of total) remained soft in Q1 2025.

An 84% year-over-year increase with adjusted EBITDA of $111.2 million and a margin of 19.5%. Benefits and Insurance Services produced revenue of $101.9 million, up 5% year over year, with a 17.6% margin. National Practices, the smallest segment, saw GAAP revenue decline to $11.7 million. Across all segments, recurring accounting, tax, and insurance services grew at a stable mid-single-digit rate in Q1 2025, consistent with management’s guidance.

The integration of Marcum drove both higher revenue and significant costs. Integration-related expenses for the period were $19.2 million, with full-year expectations around $75 million. Many synergy benefits, estimated at $25 million annually, are expected to be realized mainly in the second year of combined operation. The company’s workforce retention remains strong, supported by variable pay aligned to performance.

On the balance sheet, CBIZ’s cash position rose. Net debt as of June 30, 2025, stood at approximately $1.51 billion, reflecting the Marcum acquisition. Debt to equity was 82.2%, and day sales outstanding (DSO), which tracks how quickly the company collects on its invoices, decreased to 87 days in Q2 2025 from 95 days in Q2 2024. Management reaffirmed its plan to use most free cash flow to reduce leverage back below 2.5 times by the end of 2026.

Outlook and What to Watch

For full year 2025, management maintained its adjusted EPS guidance in the range of $3.60 to $3.65, with adjusted EBITDA expected between $450 million and $456 million for the full year. Revenue guidance remained unchanged at $2.8–$2.95 billion for FY2025, but the wide range signals ongoing caution because approximately 23% of total revenue depends on more volatile, project-based work, as disclosed by management in Q1 2025. Effective tax rate guidance is set at 29% for FY2025. Integration costs are budgeted to continue into 2026, especially for technology and facility consolidation.

Areas for investors to monitor in the coming quarters include the pace and cost of Marcum integration, realization of synergy targets, regulatory compliance risk—particularly as CBIZ expands its presence in regulated audit and advisory services—and any persistent softness in the project-based revenue streams. Management’s priority for the near future is reducing leverage and stabilizing cash conversion, with opportunistic share buybacks to be considered as capital allows. CBIZ (NYSE:CBZ)

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

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