• Total Revenue Growth (Q4 2024): Up 40.5%.
• Revenue from Markham Acquisition (Q4 2024): $108.9 million, a 33.2% increase.
• Same Unit Revenue Growth (Q4 2024): Up 6.4%.
• Same Unit Revenue Growth - Financial Services (Q4 2024): Up 7.2%.
• Same Unit Revenue Growth - Benefits and Insurance (Q4 2024): Up 3.8%.
• Total Revenue Growth (Full Year 2024): Up 14%.
• Revenue from Markham Acquisition (Full Year 2024): $108.9 million, a 6.8% increase.
• Same Unit Revenue Growth (Full Year 2024): Up 4.8%.
• Adjusted Earnings Per Share (2024): $2.67, a 10.8% increase over the prior year.
• Depreciation and Amortization (2024): $48.1 million, with $38 million attributed to CBIZ excluding Markham.
• Interest Expense (2024): $19.9 million attributed to CBIZ excluding Markham.
• Adjusted EBITDA Growth (2024): Up approximately 9% to 10% over the prior year.
• Revenue Projection (2025): $2.9 billion to $2.95 billion.
• Adjusted Earnings Per Share Projection (2025): $3.60 to $3.65.
• Adjusted EBITDA Projection (2025): Approximately $455 million.
• Total Debt (Year-End 2024): $1.42 billion.
• Interest Expense Projection (2025): Approximately $100 million.
• Capital Spending (2024): Approximately $13 million.
• Capital Spending Projection (2025): $20 million to $25 million.
• Tax Rate Projection (2025): Approximately 29%.
• Fully Diluted Share Count Projection (2025): Approximately 64.5 million to 65 million shares.

• Warning! GuruFocus has detected 8 Warning Sign with SILA.

Release Date: February 26, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• CBIZ Inc (NYSE:CBZ) achieved growth across nearly every major service line in 2024, including accounting, tax, advisory, and government healthcare consulting.
• The acquisition of Markham, the largest in CBIZ's history, solidified its position as a leading provider of professional services to middle market businesses.
• CBIZ Inc (NYSE:CBZ) reported a 40.5% increase in total revenue for the fourth quarter, with a significant contribution from the newly acquired Markham operations.
• The company has a healthy pipeline of M&A opportunities for 2025, indicating potential for further growth and expansion.
• CBIZ Inc (NYSE:CBZ) expects adjusted earnings per share for 2025 to be within a range of $3.60 to $3.65, reflecting strong financial performance expectations.

Negative Points

• The acquisition of Markham resulted in a significant seasonal operating loss for the months of November and December, impacting overall financial results.
• The departure of a small group of producers in the Southeast region negatively affected the property and casualty insurance group within the benefits and insurance division.
• Integration of Markham is expected to incur significant one-time transaction and integration costs, impacting cash flow in 2025.
• The increased concentration of core tax and accounting business services due to the Markham acquisition will impact the quarterly seasonality of the business.
• Interest expense for 2025 is projected at approximately $100 million, which could affect profitability if not managed effectively.

Q & A Highlights

Q: Does the $3.60 to $3.65 adjusted EPS include an add back of the tax-adjusted intangible amortization? A: Ware Grove, Chief Financial Officer, clarified that the adjusted EPS does not include the tax-adjusted intangible amortization. The amortization added back is the normal intangible amortization, which is tax-affected but separate from the cash flow tax asset.

Q: Can you discuss the benefits of scale with the Markham acquisition, particularly in terms of technology and cost-effectiveness? A: Jerome Grisko, President and CEO, explained that the increased scale allows CBIZ to enhance technology, innovation, brand elevation, and talent attraction. The combination with Markham brings synergies, such as expanded advisory practices and industry groups, providing greater value to clients.

Q: What are the expectations for Markham's organic growth in 2025, and how did they perform in 2024? A: Jerome Grisko noted that Markham's 2024 performance was similar to CBIZ's, except for some specialty areas. For 2025, they expect Markham's core accounting practice to mirror CBIZ's growth, indicating strong performance.

Q: How do you view the pricing environment for the combined CBIZ going forward? A: Jerome Grisko stated that with strong demand for core services, CBIZ expects to maintain pricing power. They anticipate mid-single-digit organic growth, with pricing contributing significantly to this growth.

Q: Are there any concerns about the government healthcare consulting business due to regulatory changes? A: Jerome Grisko mentioned that they do not expect any negative impact from regulatory changes. In fact, there is speculation that a reduced federal workforce might increase reliance on external partners like CBIZ.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.