CBIZ Inc (CBZ) Q3 2024 Earnings Call Highlights: Strong Revenue Growth and Strategic Acquisitions

GuruFocus News
4 min read

In This Article:

  • Total Revenue (Q3 2024): Increased by 6.9%.

  • Total Revenue (First Nine Months 2024): Up 7.1%.

  • Same Unit Revenue (Q3 2024): Up 5.1%.

  • Same Unit Revenue (First Nine Months 2024): Up 4.6%.

  • Financial Services Revenue (Q3 2024): Increased by 8.0%.

  • Financial Services Same Unit Revenue (Q3 2024): Up 5.2%.

  • Benefits and Insurance Revenue (Q3 2024): Up 3.7%.

  • Adjusted Earnings Per Share (Q3 2024): $0.84, up over 27% year-over-year.

  • Adjusted Earnings Per Share (First Nine Months 2024): Up 7.5% year-over-year.

  • Expected Full Year 2024 Adjusted EPS Growth: 10% to 12% over $2.41 reported in 2023.

  • Capital Spending (Q3 2024): Approximately $2.7 million.

  • Capital Spending (First Nine Months 2024): Approximately $9.6 million.

  • Depreciation and Amortization (Q3 2024): $9.6 million.

  • Depreciation and Amortization (First Nine Months 2024): $28.6 million.

  • Operating Cash Flow: Continues to be strong.

  • Day Sales Outstanding (First Nine Months 2024): 97 days, compared to 96 days a year ago.

  • Bad Debt Expense (First Nine Months 2024): 15 basis points of revenue, compared to 8 basis points a year ago.

  • Leverage Against EBITDA (September 30, 2024): Approximately 1.5 times.

Release Date: October 29, 2024

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

Positive Points

  • CBIZ Inc (NYSE:CBZ) reported a strong third quarter with total revenue up 6.9% and year-to-date revenue up 7.1%.

  • The Financial Services Division experienced solid organic growth, primarily driven by pricing, and the advisory services exceeded growth expectations.

  • The Government Health Care consulting business had a strong year, benefiting from new contracts and expansion of existing projects.

  • The Benefits and Insurance division saw growth across all major service lines, contributing to overall revenue increases.

  • CBIZ Inc (NYSE:CBZ) is in the final stages of closing its largest acquisition of Marcum, which is expected to enhance its service offerings and market position.

Negative Points

  • CBIZ Inc (NYSE:CBZ) faced unique headwinds in the second quarter, impacting results for that period.

  • Client sentiment has waned compared to the previous year, with concerns about the national election, market volatility, and geopolitical issues.

  • The company incurred significant one-time nonrecurring merger-related expenses in connection with the Marcum transaction.

  • Access to talent and inflation concerns remain top of mind for clients, potentially affecting future business decisions.

  • The leverage levels post-Marcum acquisition are expected to be high initially, with a plan to reduce them over the next 24 months.

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