CBIZ Q4 Earnings Call Highlights

27 Feb 2026, 20:08 by Renee Jackson · The Cerbat Gem

CBIZ (NYSE:CBZ) executives struck an upbeat tone about the company’s positioning in the middle market while acknowledging that softer market conditions and post-merger productivity impacts weighed on 2025 organic growth, according to the company’s fourth quarter 2025 earnings call.

Management emphasized progress integrating Marcum, including completing “the vast majority” of integration priorities, improving systems and processes, and strengthening go-to-market capabilities. CEO Jerry Grisko said the company is shifting its focus in 2026 toward leveraging scale to accelerate growth, supported by continued investment in people, technology, automation, and offshoring.

2025 performance and integration progress

Grisko said CBIZ delivered approximately 2% organic revenue growth in 2025, alongside “solid year-over-year improvement in bottom-line profitability.” He attributed the tempered revenue growth to industrywide soft market conditions and “productivity losses often experienced” in the first year after combining two similarly sized organizations. He added that CBIZ expects those headwinds to ease in 2026 as middle-market sentiment improves and the company completes its first busy season as a combined company on common platforms.

Operationally, Grisko highlighted improvements tied to Marcum’s transformation work, including AI and data-related priorities and changes in how CBIZ deploys offshore teams. He said key retention metrics for clients and managing directors were in line with expectations, and that synergies were “double our initial expectations.” He noted remaining integration work in technology and real estate, along with additional opportunities for cost synergies, but said the integration is “largely behind us.”

Fourth quarter and full-year financial results

CFO Brad Lakhia said fourth quarter revenue was $543 million, up 18% year over year, driven by the acquisition. He said two assumptions underpinned CBIZ’s fourth quarter expectations: stable market conditions and above-average utilization from an early start to busy season. While market conditions were consistent with the third quarter, Lakhia said utilization remained at normal historical levels because clients preferred to push certain work into 2026. He said the work was deferred rather than lost and that CBIZ is “well positioned to convert” that activity in the first half of 2026.

For the full year, Lakhia said revenue rose 52% as reported, with estimated organic growth of about 2%. He cited less favorable market conditions in the first half and lower demand in the SEC capital markets practice as factors behind the below-initial-expectations organic growth.

Lakhia also discussed profitability drivers, including lower incentive compensation tied to top-line performance and synergy acceleration. He said synergies contributed about $35 million of savings in 2025 and, together with lower incentive compensation, helped drive 250 basis points of year-over-year gross margin expansion. Full-year adjusted EBITDA was $447 million, and adjusted EBITDA margin rose about 530 basis points year over year, with lower incentive compensation accounting for about 270 basis points of that improvement.

Fourth quarter adjusted diluted EPS was a loss of $0.70, and full-year adjusted EPS was $3.61, which Lakhia said was in line with original 2025 guidance and supported the company’s stated goal of year-one accretion from the Marcum deal.

CBIZ repurchased about 2.4 million shares for $160 million in 2025. Lakhia said the board approved continuing the repurchase program with authorization to buy up to 5 million shares.

Full-year free cash flow increased $65 million to $176 million, with conversion from adjusted EBITDA of about 40%. Lakhia said conversion was “tempered” by elevated integration-related spending, which is expected to begin abating in 2026.

Segment highlights: Financial Services and Benefits & Insurance

In the Financial Services segment, fourth quarter revenue was $439 million, up 23% year over year, benefiting from an additional month of acquisition contribution. Full-year segment revenue was $2.3 billion, up about 70%, driven by the acquisition. Lakhia said CBIZ estimates low single-digit growth in core accounting and tax service lines, offsetting headwinds in SEC-related business, and noted advisory growth improved in the second half as market conditions improved.

Financial Services adjusted EBITDA ended the year at $449 million, up $264 million, with adjusted EBITDA margin expanding 600 basis points. On pricing, Lakhia said CBIZ achieved mid-single-digit rate increases in 2025, adding that the firm is realizing rate increases that exceed inflation and reflect the value delivered to clients.

In Benefits and Insurance (BNI), CBIZ reported 2025 revenue of $410 million, up 2% year over year, driven by employee benefits and payroll/human capital management growth, partially offset by softness in property and casualty and producer attrition. Adjusted EBITDA rose $3 million, representing 4% growth and 20 basis points of margin expansion. Lakhia said 2026 growth drivers include improving client and producer retention and driving new business, including tying a larger portion of producer incentive compensation to cross-serving targets.

2026 outlook: growth range tied to macro and project work

CBIZ guided for 2026 revenue of $2.8 billion to $2.9 billion, representing 2% to 5% year-over-year growth. Lakhia said the difference between the low and high end of the range is “largely driven by macroeconomic assumptions,” which could impact project-based work. The company expects revenue to be weighted about 55% in the first half and 45% in the second half.

Adjusted EBITDA is expected to be $450 million to $460 million. Lakhia said incentive pool funding will correlate with top-line performance: at 2% growth, the company expects little to no year-over-year headwind versus 2025, while at 5% growth CBIZ would refill incentive compensation at target levels, creating a headwind he described as roughly $65 million. The company expects $70 million to $80 million of integration costs in 2026, with business-related integration costs decreasing but partially offset by higher facility optimization costs.

Adjusted EPS is expected to be $3.75 to $3.85, based on an assumed tax rate of about 28.5% and a weighted average fully diluted share count of about 62 million. Free cash flow is expected to be $270 million to $290 million, representing about 60% conversion at the midpoint. Lakhia cited lower acquisition-related items and the benefit of about $50 million of purchase price adjustment collected in January as key drivers. He said capital expenditures will be higher by about $20 million to $25 million tied to facility optimization, before normalizing to about $20 million to $30 million annually in 2027 and beyond.

CBIZ ended 2025 with net debt of about $1.45 billion, net leverage of 3.3x, and more than $400 million of revolver liquidity as of Dec. 31. Lakhia said deleveraging remains a priority, targeting net leverage of 2x to 2.5x, while also viewing share repurchases as attractive given the company’s free cash flow profile.

AI, offshoring, and strategy to reignite growth

Grisko framed AI as an enterprise-wide capability rather than “isolated pilots,” emphasizing workflow standardization, data discipline, and governance. He said CBIZ has more than 60 dedicated professionals focused on technology and AI strategy and is collaborating with cloud and AI providers. He cited tax automation as one example, including streamlining 1040 preparation and using AI to process more complex data, such as K-1 footnotes. Grisko said CBIZ expects margin expansion over time by delivering more value with greater efficiency and added that management is not currently seeing AI pressure demand or pricing.

The company also outlined expanded use of offshore resources. Grisko said CBIZ has offshore delivery centers in the Philippines and India with more than 500 professionals supporting tax and attest services. The company expects offshore hours to rise from about 6% in 2025 to 10% in 2026, with a longer-term plan to expand to more than 20% over several years.

During Q&A, executives reiterated that macro uncertainty in the first half of 2025 reduced client willingness to invest in discretionary work, while conditions improved later in the year. They also described advisory as an area that can accelerate when markets are favorable, with softer activity in areas such as valuation, risk and advisory, and IPO-related work during weaker periods. Management said its longer-term growth levers include pricing, expanding existing client relationships through broader services, and winning new clients—efforts supported by industry specialization and bundled offerings.

About CBIZ (NYSE:CBZ)

CBIZ, Inc (NYSE: CBZ), founded in 1996 and headquartered in Cleveland, Ohio, is a leading provider of professional business services in the United States. Since its inception, the company has grown through both organic expansion and strategic acquisitions to deliver a broad spectrum of financial, tax and advisory solutions tailored to the needs of small to mid-market organizations.

Through its Financial & Advisory Services segment, CBIZ offers accounting, tax preparation and compliance, audit support, and wealth management services.