CBZ earnings analysis
What we found in CBZ's 10-Q: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
CBIZ posted essentially flat Q2 revenue of $682.206 million, but profitability deteriorated materially: diluted EPS fell to $0.31 from $0.66 and reported operating margin fell to 5.0% from 8.8%. Financial Services was modestly lower and Benefits and Insurance was flat in the quarter, while first-half EPS growth to $2.83 was driven largely by a $57.955 million acquisition-related gain rather than operating improvement. Cash conversion improved sharply, but the company retains $1.474 billion of debt, has identified two material control weaknesses, and faces merger-related execution risk following the $55.00-per-share cash agreement.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Quarterly revenue slipped; first half modestly grew
- Q2 revenue was $682.206 million, down $1.290 million, or 0.2%, from $683.496 million. First-half revenue nevertheless increased $9.275 million, or 0.6%, to $1.531 billion.
- Financial Services demand mixed
- Financial Services Q2 revenue declined 0.2% to $580.324 million, as an $8.0 million decline in traditional accounting and tax services and a $1.4 million decline in project advisory outweighed $3.5 million growth in government healthcare compliance consulting and $2.4 million in technology services.
- Operating cash flow materially improved
- Operating cash flow improved to $122.227 million in the first six months of 2026 from $24.880 million a year earlier. After $11.700 million of capital expenditures, implied free cash flow was $110.527 million, equal to 7.2% of first-half revenue.
- Lower rates reduced interest expense
- Interest expense fell $3.532 million, or 12.7%, year over year in Q2 to $24.335 million, reflecting a lower $1.505 billion average debt balance and 6.01% average effective rate, versus $1.542 billion and 6.75%.
- First-half EPS increase was gain-assisted
- First-half net income rose to $171.391 million, or $2.83 per diluted share, from $164.715 million, or $2.58. The increase was substantially aided by a $57.955 million acquisition-related gain, including a $57.2 million working-capital adjustment.
- Cash merger agreement sets $55.00 consideration
- The company entered a merger agreement on July 28, 2026 under which holders would receive $55.00 per CBIZ share in cash, subject to closing conditions.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- Sharp quarterly margin and earnings contraction
- Q2 reported operating income declined 43.5% to $34.072 million from $60.272 million, and operating margin contracted to 5.0% from 8.8%. Excluding deferred-compensation effects, adjusted operating margin declined to 7.8% from 10.7%.
- Benefits segment revenue and margin weakened
- Benefits and Insurance Services first-half revenue fell $4.774 million, or 2.2%, to $210.131 million; its gross margin fell to 18.4% from 21.2%. Property and casualty services declined $3.4 million, human-capital services $1.2 million, and retirement/other services $1.8 million.
- New merger execution and disruption risks
- The new merger risk factors state the July 28, 2026 proposed transaction may not close, could disrupt employee and customer relationships, and may create litigation or transaction-cost exposure. Shareholders would receive $55.00 per share in cash if completed, but the filing provides no closing date or assurance that conditions will be met.
- Leverage and floating-rate exposure remain high
- At June 30, 2026, debt under the 2024 Credit Facilities was $1.474 billion. Of this, $973.5 million was exposed to floating rates; a 100-basis-point rate change would change annual interest expense by approximately $9.7 million.
- Material weaknesses and ESPP remediation
- Management identified material weaknesses in ESPP administration and goodwill reassignment controls, and disclosure controls were not effective as of June 30, 2026. The ESPP issue involved up to 481,049 excess shares delivered from October 16, 2023 through April 15, 2026.
- Working-capital use and demand visibility pressure
- Working capital consumed $136.9 million in the first half, while trailing-12-month DSO increased to 89 days at June 30, 2026 from 71 days at December 31, 2025. Management says macro uncertainty could continue to soften demand for project-based services.
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $0.31
- Gross margin
- 10.6%
- Operating margin
- 5.0%
- Segment
- Financial Services: $580.324 million Q2 2026 revenue, down $1.243 million (0.2%) year over year.
- Segment
- Benefits and Insurance Services: $101.882 million Q2 2026 revenue, down $0.047 million year over year (flat).
What they said about what is next.
No explicit fiscal 2026 revenue or EPS guidance was provided in the 10-Q. Management expects economic and geopolitical uncertainty to continue to soften demand for nonrecurring project-based services and limit forecasting visibility for the remainder of 2026; it believes operating cash flow and credit-facility availability will meet cash requirements for the remainder of 2026 and beyond.
The filing reads worse than the one before it.
What came before.
- 10-K · August 4, 2026
- CBIZ’s 2025 results show a substantial acquisition-led inflection: revenue rose 52.1% to $2.758 billion, operating income rose to $234.0 million, and operating cash flow reached $192.5 million as the Marcum acquisition…
- 10-Q · April 30, 2026
- CBIZ, Inc. reported Q1 2026 results with revenue rising to $848.6 million, a 1.3% increase from $838.0 million in Q1 2025. The company achieved an EPS of $2.63, significantly higher than $1.91 reported a year ago,…
- 10-K · February 26, 2026
- CBIZ reports strong multi-year top-line growth to $2,757,991,000 in 2025 (from $1,813,472,000 in 2024 and $1,591,194,000 in 2023), driven primarily by Financial Services which generated $2,301,462,000 (83.4% of revenue)…
- 10-Q · October 30, 2025
- CBIZ reported quarterly revenue of $693,818,000 (Q3 2025), up $254,934,000 (+58.1%) versus Q3 2024, driven by the Marcum acquisition, while diluted EPS fell to $0.48 from $0.70 a year ago. Operating income improved to…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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