On July 31, 2024, CBIZ Inc (CBZ, Financial) released its 8-K filing detailing its financial performance for the second quarter and first half of 2024. CBIZ Inc, through its subsidiaries, provides professional business services across various industries, including Agribusiness, SAAS, Construction, Health Care, Oil and Gas, Real Estate, Retail, Financial Institutions, and Government. The company operates in three practice groups: Financial Services, Benefits and Insurance Services, and National Practices, with the majority of its revenue derived from the Financial Services segment within the United States.
Performance Overview
CBIZ Inc (CBZ, Financial) reported a 5.4% increase in total revenue for Q2 2024, reaching $420.0 million compared to $398.5 million in Q2 2023. However, the company's GAAP earnings per share (EPS) fell by 26.4% to $0.39, down from $0.53 in the same period last year. Adjusted EPS also saw a decline of 9.1%, coming in at $0.50 compared to $0.55 in Q2 2023. The company's net income decreased by 26.3% to $19.8 million, and Adjusted EBITDA dropped by 6.9% to $50.7 million.
Key Financial Metrics
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Total Revenue | $420.0 million | $398.5 million |
| GAAP EPS | $0.39 | $0.53 |
| Adjusted EPS | $0.50 | $0.55 |
| Net Income | $19.8 million | $26.9 million |
| Adjusted EBITDA | $50.7 million | $54.4 million |
Challenges and Achievements
The decline in EPS and net income was partly attributed to a $6.7 million expense related to the acquisition of Marcum LLP, a national accounting and advisory firm. This acquisition, valued at approximately $2.3 billion, is expected to close in the fourth quarter of 2024. The acquisition-related expenses impacted the company's financial results, contributing to the decline in both GAAP and adjusted EPS.
"We are pleased to report that our second-quarter results were generally in line with our expectations and that the overall health of our business remains strong. At the same time, we did experience a small number of unique headwinds that impacted our results for the quarter," said Jerry Grisko, CBIZ President and Chief Executive Officer.
Income Statement Highlights
For the six months ended June 30, 2024, CBIZ recorded revenue of $914.3 million, a 7.2% increase from $853.1 million in the same period in 2023. Net income for the first half of 2024 was $96.7 million, or $1.92 per diluted share, compared to $100.0 million, or $1.98 per diluted share, in the first half of 2023. Adjusted net income for the first half of 2024 was $102.5 million, with an adjusted EPS of $2.04, a 1.5% increase from $2.01 in the same period last year.
Balance Sheet and Cash Flow
As of June 30, 2024, the balance outstanding on CBIZ's unsecured credit facility was $381.0 million, with $209.8 million of unused borrowing capacity. The company's financial position remains robust, providing a solid foundation for future growth and acquisitions.
Conclusion
While CBIZ Inc (CBZ, Financial) faced some challenges in Q2 2024, including acquisition-related expenses and the departure of key personnel, the company demonstrated resilience with a notable increase in revenue. The upcoming acquisition of Marcum LLP is expected to further strengthen CBIZ's market position and drive future growth. Investors and stakeholders will be keenly watching how these developments unfold in the coming quarters.
Explore the complete 8-K earnings release (here) from CBIZ Inc for further details.
