CBIZ third-quarter profit rises 56.7% year over year as Marcum deal costs fall

CBIZ, Inc. reported third-quarter 2026 revenue of $702.24 million, up 1.2% from $693.82 million a year earlier, with GAAP net income of $47.24 million and diluted earnings per share of $0.79, up 56.7% and 64.6% respectively from a year earlier. Adjusted EBITDA rose 6.3% from a year earlier to $131.85 million and adjusted diluted EPS rose 14.2% to $1.21, the Cleveland-based advisory firm said in the exhibit to its October 19 current report.

Profit growth came from the cost line, not the top line

CBIZ's revenue barely moved in the quarter. Total revenue was $702.24 million, up 1.2% from $693.82 million in the same quarter of 2025, and Financial Services — the segment that now absorbs the National Practice group — produced $597.79 million of it after a 1.2% increase. The swing came from expenses: gross margin rose to 16.2% of revenue from 13.0%, though the release's ex-deferred-compensation table, which strips out rabbi-trust investment swings, shows a narrower 16.2% versus 14.1%.

The release's own bridge shows what did the work. Integration costs tied to the Marcum transaction fell to $17.32 million from $28.64 million a year earlier, and corporate general and administrative expenses dropped to $23.88 million from $31.27 million. Three reconciliation items complicate the comparison. In the quarter, GAAP net income includes $5.93 million of income from an ESPP correction that CBIZ removes to reach its adjusted figures; over the nine months, the reconciliation instead adds back a $7.4 million ESPP correction expense. The nine-month GAAP result also carries a $57.96 million gain from finalizing working-capital and purchase-price adjustments on the Marcum transaction. Strip out the Marcum gain and the nine-month picture is flatter than the headline. Adjusted EBITDA was $479.35 million, down 1.2% from a recalculated $485.13 million a year earlier; CBIZ published $475.6 million for the same nine months last October. Adjusted diluted earnings per share rose 5.9% to $4.64 on a smaller share count against a recalculated $4.38, versus $4.27 as originally published.

The prior-year adjusted comparisons were recalculated

Anyone comparing years should read the reconciliation rather than the headline bullets, because the prior-year adjusted figures in this exhibit are not the ones CBIZ published last October. The current schedule also adds back stock-based compensation, and that change alone lifts third-quarter 2025 adjusted EBITDA to $124.01 million from the $120.03 million in the company's third-quarter 2025 release. The same definitional shift sits under the nine-month comparison, where adjusted EBITDA declined 1.2% even as GAAP net income of $218.63 million rose 12.2% on nine-month revenue of $2.23 billion and diluted earnings per share reached $3.62 from $3.06.

Financial services carries growth while benefits slips

Benefits and Insurance Services, the smaller segment, posted $104.45 million of revenue, and its gross margin eased to $18.3 million from $19.31 million, while Financial Services gross margin rose to $109.93 million from $95.91 million. Sequentially, revenue rose 2.9% from the $682.21 million recorded in the second quarter. Cash generation also improved, with nine-month operating cash flow of $147.06 million against $48.85 million a year earlier and free cash flow of $125.24 million compared with $33.81 million.

The deal, not the quarter, sets the timetable

CBIZ gave no guidance for full-year 2026 and held no conference call, citing the pending all-cash acquisition of CBIZ by an affiliate of Grant Thornton in the U.S., backed by New Mountain Capital, at an enterprise value of $5.0 billion, or $55.00 per share in cash. The third-quarter release carries no management commentary at all, unlike the second-quarter release on July 29, in which Chief Executive Jerry Grisko said the company had "delivered year-over-year growth in revenue, earnings and free cash flow" through the first six months. The transaction is expected to close in the fourth quarter of 2026, subject to a CBIZ shareholder vote and regulatory approvals, after which the shares leave the New York Stock Exchange and CBIZ becomes a private company. The release sets no date for the vote.