CBIZ (CBZ) CBZ Q3 Financial Results Summary
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CBIZ, Inc. (CBZ) Q3 2026: Strong Earnings Growth Amidst Merger — Positive Outlook
CBIZ, Inc. (NYSE: CBZ) reported its third-quarter financial results for the period ended September 30, 2026, showcasing a notable increase in net income and earnings per share (EPS). The company achieved total revenue of $702 million, reflecting a growth of $8.2 million or 1.2% year-over-year compared to $693.8 million in Q3 2025. This revenue growth was accompanied by a significant rise in net income, which reached $47 million, up $16.9 million or 56.7% from the previous year, and a GAAP EPS of $0.79, marking an increase of 64.6% from $0.48 in Q3 2025.
Analyst View
This quarter's performance is a positive outcome for shareholders, driven by robust net income growth and substantial EPS improvement. The increase in net income and EPS indicates effective cost management and operational efficiency, which are critical as the company navigates its proposed merger with Grant Thornton. The merger, valued at $5.0 billion or $55.00 per share, is expected to close in Q4 2026, pending shareholder and regulatory approvals. This strategic move could enhance CBIZ's market position and operational capabilities, potentially leading to further growth.
Key Financial Metrics
- Total Revenue: $702 million, up $8.2 million or 1.2% YoY
- Net Income: $47 million, up $16.9 million or 56.7% YoY
- GAAP EPS: $0.79, up $0.31 or 64.6% YoY
- Adjusted EBITDA: $132 million, up $8.3 million or 6.3% YoY
- Adjusted Diluted EPS: $1.21, up $0.15 or 14.2% YoY
Additional Insights
- Operating Cash Flow: Increased by $98 million, indicating improved cash generation capabilities.
- Free Cash Flow: Up $91 million, reflecting strong operational performance.
- Financial Services Revenue: Grew by 1.2%, contributing positively to overall revenue growth.
The company did not provide financial guidance for the full year 2026 due to the pending merger, which adds a layer of uncertainty for investors. However, the strong performance in Q3 suggests that CBIZ is well-positioned to capitalize on future opportunities.
Shareholder Returns and Future Outlook
While there were no announcements regarding dividends or share buybacks in this quarter, the significant increase in net income and EPS is a positive indicator for potential future shareholder returns. Investors should closely monitor the progress of the merger with Grant Thornton, as successful integration could lead to enhanced operational efficiencies and market expansion.
Forward Catalyst
Looking ahead, investors should watch for developments related to the merger with Grant Thornton, including shareholder approval and regulatory clearances. Additionally, the company's ability to maintain its growth trajectory in revenue and profitability during the integration process will be crucial. The next quarter will be pivotal in determining how well CBIZ can leverage its current momentum while transitioning into a larger entity post-merger.
In summary, CBIZ's Q3 2026 results reflect a strong operational performance and a promising outlook as it prepares for a significant merger, making it an attractive prospect for shareholders.
Condensed Consolidated Statements of Income (In thousands, except percentages and per share data)
Note: All amounts are in thousands.
| Three Months Ended September 30, 2026 | % | 2025 | % | |
|---|---|---|---|---|
| Revenue | $702,240 | 100.0% | $693,818 | 100.0% |
| Operating expenses | 588,186 | 83.8 | 603,689 | 87.0 |
| Gross margin | 114,054 | 16.2 | 90,129 | 13.0 |
| Corporate general and administrative expenses | 23,877 | 3.4 | 31,265 | 4.5 |
| Operating income | 90,177 | 12.8 | 58,864 | 8.5 |
| Other (expense) income: | ||||
| Interest expense | (23,986) | (3.4) | (27,960) | (4.0) |
| Gain from acquisition related adjustments | — | — | 1,124 | 0.2 |
| Other income, net | 1,449 | 0.2 | 8,378 | 1.2 |
| Total other expense, net | (22,537) | (3.2) | (18,458) | (2.6) |
| Income before income tax expense | 67,640 | 9.6 | 40,406 | 5.9 |
| Income tax expense | 20,404 | 10,260 | ||
| Net income | $47,236 | 6.7% | $30,146 | 4.3% |
| Diluted income per share: | ||||
| Diluted earnings per share | $0.79 | $0.48 | ||
| Diluted weighted average common shares | 59,986 | 62,699 | ||
| Other data: | ||||
| Adjusted EBITDA | $131,852 | 18.8% | $124,005 | 17.9% |
| Adjusted Diluted EPS | $1.21 | $1.06 |
Condensed Consolidated Balance Sheets (In thousands)
Note: All amounts are in thousands.
| September 30, 2026 | December 31, 2025 | |
|---|---|---|
| Cash and cash equivalents | $17,551 | $18,290 |
| Restricted cash | 40,853 | 38,234 |
| Accounts receivable, net | 782,392 | 555,995 |
| Other current assets | 88,389 | 79,693 |
| Current assets before funds held for clients | $929,185 | $692,212 |
| Funds held for clients | 134,454 | 207,037 |
| Goodwill and other intangible assets, net | 2,828,643 | 2,869,790 |
| Total assets | $4,610,429 | $4,409,528 |
| Current liabilities before client fund obligations, excluding short-term debt | 468,227 | $462,484 |
| Client fund obligations | 135,305 | 206,738 |
| Current portion, Term Loan | $96,250 | $70,000 |
| Revolver Facility | 176,500 | 142,400 |
| Long-term portion, Term Loan | 1,181,250 | 1,260,000 |
| Total liabilities | $2,697,705 | $2,647,461 |
| Treasury stock | (1,156,495) | (1,078,521) |
| Total stockholders’ equity | $1,912,724 | $1,762,067 |
| Debt to equity | 66.8% | 75.5% |
| Shares outstanding | 54,761 | 54,380 |
| Basic weighted average common shares | 60,057 | 62,909 |
| Diluted weighted average common shares | 60,333 | 63,240 |
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