CBIZ, Inc. 10-Q

Item 1. Financial Statements CBIZ, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands) September 30, 2025 December 31, 2024 ASSETS Current assets: Cash and cash equivalents $ 16,969 $ 13,826 Restricted cash 44,455 38,661 Accounts receivable, net 719,554 534,858 Other current assets 96,655 72,528 Current assets before funds held for clients 877,633 659,873 Funds held for clients 127,782 175,853 Total current assets 1,005,415 835,726 Non-current assets: Property and equipment, net 83,730 88,163 Goodwill and other intangible assets, net 2,885,727 2,945,470 Assets of deferred compensation plan 181,127 167,170 Right-of-use assets, net 349,101 393,512 Other non-current assets 40,044 40,842 Total non-current assets 3,539,729 3,635,157 Total assets $ 4,545,144 $ 4,470,883 LIABILITIES Current liabilities: Accounts payable $ 99,653 $ 90,646 Income taxes payable 41,712 — Accrued personnel costs 149,367 172,759 Contingent purchase price liabilities 30,506 61,164 Lease liabilities 64,183 60,549 Short-term debt (1) 66,323 66,177 Other current liabilities 62,425 78,579 Current liabilities before client fund obligations 514,169 529,874 Client fund obligations 127,590 175,928 Total current liabilities 641,759 705,802 Non-current liabilities: Long-term debt (1) 1,502,639 1,333,755 Income taxes payable 2,961 2,193 Deferred income taxes, net 5,190 10,880 Deferred compensation plan obligations 181,127 167,170 Contingent purchase price liabilities 10,751 35,803 Lease liabilities 322,241 372,586 Other non-current liabilities 6,677 62,711 Total non-current liabilities 2,031,586 1,985,098 Total liabilities 2,673,345 2,690,900 STOCKHOLDERS' EQUITY Common stock 1,438 1,380 Additional paid in capital 1,828,903 1,791,863 Retained earnings 1,090,983 896,122 Treasury stock ( 1,046,152 ) ( 910,601 ) Accumulated other comprehensive (loss) income ( 3,373 ) 1,219 Total stockholders’ equity 1,871,799 1,779,983 Total liabilities and stockholders’ equity $ 4,545,144 $ 4,470,883 See the accompanying notes to the unaudited condensed consolidated financial statements (1) Reflects the net debt for the Term Loan and Revolving Credit Facility with the associated debt issuance costs in short-term and long-term liabilities. See Note 5. Debt and Financing Arrangements for further discussion of the short-term and long-term debt. 3 CBIZ, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) (In thousands, except per share data) Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Revenue $ 693,818 $ 438,884 $ 2,215,328 $ 1,353,193 Operating expenses 603,689 365,971 1,809,188 1,108,824 Gross margin 90,129 72,913 406,140 244,369 Corporate general and administrative expenses 31,265 23,227 86,972 63,988 Operating income 58,864 49,686 319,168 180,381 Other (expense) income: Interest expense ( 27,960 ) ( 4,968 ) ( 80,983 ) ( 15,363 ) Gain on sale of operations, net 1,124 4,953 1,124 4,953 Other income, net 8,378 1,300 31,786 13,207 Total other (expense) income, net ( 18,458 ) 1,285 ( 48,073 ) 2,797 Income before income tax expense 40,406 50,971 271,095 183,178 Income tax expense 10,260 15,887 76,234 51,417 Net income $ 30,146 $ 35,084 $ 194,861 $ 131,761 Earnings per share: Basic $ 0.48 $ 0.70 $ 3.08 $ 2.63 Diluted $ 0.48 $ 0.70 $ 3.06 $ 2.62 Basic weighted average shares outstanding 62,360 50,145 63,243 50,101 Diluted weighted average shares outstanding 62,699 50,401 63,609 50,359 Comprehensive income: Net income $ 30,146 $ 35,084 $ 194,861 $ 131,761 Other comprehensive loss, net of tax ( 1,242 ) ( 2,497 ) ( 4,592 ) ( 1,621 ) Comprehensive income $ 28,904 $ 32,587 $ 190,269 $ 130,140 See the accompanying notes to the unaudited condensed consolidated financial statements 4 CBIZ, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited) (In thousands) Issued Common Shares Treasury Shares Common Stock Additional Paid In Capital Retained Earnings Treasury Stock Accumulated Other Comprehensive Loss Total June 30, 2025 142,851 88,827 $ 1,429 $ 1,821,388 $ 1,060,837 $ ( 989,680 ) $ ( 2,131 ) $ 1,891,843 Net income — — — — 30,146 — — 30,146 Other comprehensive loss, net of tax — — — — — — ( 1,242 ) ( 1,242 ) Share repurchases — 826 — — — ( 56,433 ) — ( 56,433 ) Indirect repurchase of shares for minimum tax withholding — — — — — ( 39 ) — ( 39 ) Restricted stock units and awards 1 — — — — — — — Stock-based compensation — — — 7,334 — — — 7,334 Business acquisitions 905 — 9 181 — — — 190 September 30, 2025 143,757 89,653 $ 1,438 $ 1,828,903 $ 1,090,983 $ ( 1,046,152 ) $ ( 3,373 ) $ 1,871,799 Issued Common Shares Treasury Shares Common Stock Additional Paid In Capital Retained Earnings Treasury Stock Accumulated Other Comprehensive Income (Loss) Total June 30, 2024 137,905 87,743 $ 1,379 $ 845,962 $ 951,761 $ ( 910,322 ) $ 2,654 $ 891,434 Net income — — — — 35,084 — — 35,084 Other comprehensive loss, net of tax — — — — — — ( 2,497 ) ( 2,497 ) Indirect repurchase of shares for minimum tax withholding — 3 — — — ( 215 ) — ( 215 ) Restricted stock units and awards 6 — — — — — — — Stock-based compensation — — — 2,415 — — — 2,415 Business acquisitions 23 — — 1,699 — — — 1,699 September 30, 2024 137,934 87,746 $ 1,379 $ 850,076 $ 986,845 $ ( 910,537 ) $ 157 $ 927,920 See the accompanying notes to the unaudited condensed consolidated financial statements 5 Issued Common Shares Treasury Shares Common Stock Additional Paid In Capital Retained Earnings Treasury Stock Accumulated Other Comprehensive Income (Loss) Total December 31, 2024 137,945 87,747 $ 1,380 $ 1,791,863 $ 896,122 $ ( 910,601 ) $ 1,219 $ 1,779,983 Net income — — — — 194,861 — — 194,861 Other comprehensive loss, net of tax — — — — — — ( 4,592 ) ( 4,592 ) Share repurchases — 1,817 — — — ( 127,754 ) — ( 127,754 ) Indirect repurchase of shares for minimum tax withholding — 89 — — — ( 7,797 ) — ( 7,797 ) Restricted stock units and awards 100 — 1 ( 1 ) — — — — Performance share units 124 — 1 ( 1 ) — — — — Stock-based compensation — — — 19,573 — — — 19,573 Business acquisitions 5,588 — 56 17,469 — — — 17,525 September 30, 2025 143,757 89,653 $ 1,438 $ 1,828,903 $ 1,090,983 $ ( 1,046,152 ) $ ( 3,373 ) $ 1,871,799 Issued Common Shares Treasury Shares Common Stock Additional Paid In Capital Retained Earnings Treasury Stock Accumulated Other Comprehensive Income (Loss) Total December 31, 2023 137,387 87,573 $ 1,374 $ 832,475 $ 855,084 $ ( 899,093 ) $ 1,778 $ 791,618 Net income — — — — 131,761 — — 131,761 Other comprehensive loss, net of tax — — — — — — ( 1,621 ) ( 1,621 ) Indirect repurchase of shares for minimum tax withholding — 173 — — — ( 11,444 ) — ( 11,444 ) Restricted stock units and awards 124 — 1 ( 1 ) — — — — Performance share units 273 — 3 ( 3 ) — — — — Stock-based compensation — — — 7,431 — — — 7,431 Business acquisitions 150 — 1 10,174 — — — 10,175 September 30, 2024 137,934 87,746 $ 1,379 $ 850,076 $ 986,845 $ ( 910,537 ) $ 157 $ 927,920 See the accompanying notes to the unaudited condensed consolidated financial statements 6 CBIZ, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands) Nine Months Ended September 30, 2025 2024 Cash flows from operating activities: Net income $ 194,861 $ 131,761 Adjustments to reconcile net income to net cash provided by operating activities: Gain on sale of operations, net of tax ( 1,124 ) ( 4,953 ) Depreciation and amortization expense 74,313 28,593 Bad debt expense, net of recoveries 3,216 2,099 Adjustment to contingent purchase price liabilities 1,984 6,340 Stock-based compensation expense 19,572 7,431 Deferred income taxes 8,815 4,842 Other, net 5,256 434 Changes in assets and liabilities, net of acquisitions and divestitures: Accounts receivable, net ( 186,884 ) ( 99,967 ) Other assets ( 31,071 ) ( 7,202 ) Accounts payable 9,162 3,032 Income taxes payable 46,364 10,385 Accrued personnel costs ( 33,962 ) ( 17,055 ) Other liabilities ( 61,656 ) 2,428 Net cash provided by operating activities 48,846 68,168 Cash flows from investing activities: Business acquisitions and purchases of client lists, net of cash acquired — ( 22,930 ) Purchases of client fund investments ( 35,600 ) ( 16,100 ) Proceeds from the sales and maturities of client fund investments 31,645 15,156 Proceeds from sales of divested operations 1,413 9,883 Change in funds held for clients 12 902 Additions to property and equipment ( 15,035 ) ( 9,650 ) Other, net 652 ( 2,172 ) Net cash used in investing activities ( 16,913 ) ( 24,911 ) Cash flows from financing activities: Proceeds from bank debt 1,193,400 818,500 Payment of bank debt ( 1,027,500 ) ( 793,600 ) Deferred financing costs ( 983 ) ( 241 ) Payment for acquisition of treasury stock ( 127,754 ) — Indirect repurchase of shares for minimum tax withholding ( 7,797 ) ( 11,444 ) Changes in client funds obligations ( 48,338 ) ( 47,576 ) Payment of contingent consideration for acquisitions and client lists ( 55,825 ) ( 50,861 ) Other, net ( 436 ) — Net cash used in financing activities ( 75,233 ) ( 85,222 ) Net decrease in cash, cash equivalents and restricted cash ( 43,300 ) ( 41,965 ) Cash, cash equivalents and restricted cash at beginning of year $ 187,170 $ 157,148 Cash, cash equivalents and restricted cash at end of period $ 143,870 $ 115,183 Reconciliation of cash, cash equivalents and restricted cash to the Condensed Consolidated Balance Sheets: Cash and cash equivalents $ 16,969 $ 1,076 Restricted cash 44,455 43,104 Cash equivalents included in funds held for clients 82,446 71,003 Total cash, cash equivalents and restricted cash $ 143,870 $ 115,183 See the accompanying notes to the unaudited condensed consolidated financial statements 7 CBIZ, INC. AND SUBSIDIARIES NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Selected Terms Used in Notes to the Condensed Consolidated Financial Statements ASA – Administrative Service Agreement ASC – Accounting Standards Codification ASU – Accounting Standards Update CPA firm – Certified Public Accounting firm FASB – The Financial Accounting Standards Board GAAP – United States Generally Accepted Accounting Principles SOFR – Secured Overnight Financing Rate SEC – United States Securities and Exchange Commission Marcum Acquisition - the Transaction Description of Business: CBIZ, Inc., together with all of its wholly-owned subsidiaries ("CBIZ," the "Company," "we," "us," or "our"), is a diversified services company which, acting through its subsidiaries, has been providing professional business services since 1996, primarily to small and medium-sized businesses, as well as individuals, governmental entities, and not-for-profit enterprises throughout the United States and parts of Canada. CBIZ manages and reports its operations along three practice groups: Financial Services, Benefits and Insurance Services and National Practices. A further description of products and services offered by each of the practice groups is provided in Note 13, Segment Disclosures. In December of 2024, the Company formed CBIZ CC, LLC and CBIZ Campus One Cell, LLC (collectively “Captive Insurance Company”). CBIZ CC, LLC, a sponsored captive core, is not expected to have any underwriting activities. CBIZ Campus One Cell, LLC, a sponsored captive cell, provides stop-loss coverages to a group of higher education institutions who self-insure their medical and prescription drug benefits. The term of the insurance policy is one year, and the insured is billed at the beginning of each month for that month’s coverage. Registered in the State of Vermont, the Captive Insurance Company commenced operation on January 1, 2025. The Captive Insurance Company recognizes premium as revenue monthly as monthly coverage expires. For the three and nine months ended September 30, 2025, revenue from the Captive Insurance Company was not material. Basis of Consolidation: The accompanying unaudited condensed consolidated financial statements include the operations of CBIZ, Inc. and all of its wholly-owned subsidiaries after elimination of all intercompany balances and transactions. We have determined that our relationship with certain CPA firms with which we maintain ASAs qualify as variable interest entities ("VIEs"), and we are the primary beneficiary of such VIEs. The accompanying unaudited condensed consolidated financial statements do not reflect the operations or accounts of the VIEs as the impact is not material to the financial condition, results of operations, or cash flows of CBIZ. Unaudited Interim Financial Statements: The unaudited condensed consolidated financial statements have been prepared in accordance with GAAP and applicable rules and regulations of the SEC regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. As such, the information included in this Quarterly Report on Form 10-Q should be read in conjunction with the consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, 2024. In the opinion of CBIZ management, the accompanying unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the financial condition, results of operations, and cash flows for the interim periods presented, but are not necessarily indicative of the results of operations to be anticipated for the full year ending December 31, 2025. 8 Use of Estimates: The preparation of unaudited condensed consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the amounts reported and disclosed in the financial statements and the accompanying notes. Changes in circumstances could cause actual results to differ materially from these estimates. Changes in Accounting Policies: We have consistently applied the accounting policies for the periods presented as described in Note 1, Basis of Presentation and Significant Accounting Policies, to the consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2024. Certain prior period amounts have been reclassified to conform to current year presentation. NOTE 2. NEW ACCOUNTING PRONOUNCEMENTS Recent Accounting Pronouncements - The FASB ASC is the sole source of authoritative GAAP other than the SEC issued rules and regulations that apply only to SEC registrants. The FASB issues an ASU to communicate changes to the FASB codification. We assess and review the impact of all ASUs. ASUs not listed below were reviewed and determined to be either not applicable or are not expected to have a material impact on the consolidated financial statements. Accounting Standards Issued But Not Yet Adopted - In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires disaggregated information about an entity's effective tax rate reconciliation as well as information on income tax paid. The guidance in this ASU is effective for public companies with annual periods beginning after December 15, 2024. We plan to adopt the guidance for the fiscal year ending December 31, 2025. We are currently evaluating the effect of adopting this ASU will have on our consolidated financial statements. In November 2024, the FASB issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosure (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires disaggregated disclosure of certain costs and expenses on an interim and annual basis in the notes to the financial statements. The guidance in this ASU is effective for public companies with annual periods beginning after December 15, 2026, and interim periods within the annual period beginning after December 15, 2027. We plan to adopt the guidance for the fiscal year ending December 31, 2027. We are currently evaluating the effect of adopting this ASU will have on our consolidated financial statements. In May 2025, the FASB issued ASU No. 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810): Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity (VIE). This standard clarifies the guidance in determining the accounting acquirer in a business combination effected primarily by exchanging equity interests when the acquiree is a VIE that meets the definition of a business. The guidance in this ASU is effective for public companies with annual periods beginning after December 15, 2026, and interim periods within those fiscal years. We plan to adopt the guidance for the fiscal year ending December 31, 2027. We are currently evaluating the effect of adopting this ASU will have on our consolidated financial statements. In July 2025, the FASB issued ASU No. 2025-05, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets (“ASU 2025-05”). This standard introduces a practical expedient for all entities when estimating expected credit losses on current accounts receivable and contract assets arising from transactions under ASC Topic 606. Under the practical expedient, entities may assume that conditions at the balance sheet date remain unchanged over the life of the asset, reducing the need to prepare complex macroeconomic forecasts for short-term balances. ASU 2025-05 is effective for public companies with annual periods beginning after December 15, 2025, and interim periods within such fiscal years, with prospective application required. Early adoption is permitted. We do not expect adoption of ASU 2025-05 to have a material impact on our consolidated financial statements. In September 2025, the FASB issued ASU No. 2025-06, Intangibles - Goodwill and Other Internal-Use Software (Subtopic 350-40): Targeted Improvement to the Accounting for Internal-Use Software ("ASU 9 2025-06"). This ASU modernizes the recognition and disclosure framework for internal-use software by removing all references to software project development stages and providing new guidance on how to evaluate whether the probable-to-complete recognition threshold has been met. This ASU is effective for annual periods beginning after December 15, 2027, and interim periods within those annual reporting periods. We plan to adopt the guidance for the fiscal year ending December 31, 2028. We are currently evaluating the effect of adopting this ASU will have on our consolidated financial statements. NOTE 3. BUSINESS COMBINATIONS Acquisition of Marcum LLP On November 1, 2024, the Company completed the acquisition of Marcum LLP (“Marcum”). The acquisition is referred to herein as the “Transaction”. During the nine months ended September 30, 2025, the Company’s Condensed Consolidated Statements of Comprehensive Income included $ 840.0 million of revenue and $ 162.3 million of operating income associated with the results of operations of Marcum. Stock Consideration Transferred At closing, the purchase price for the Transaction consisted of an aggregate of $ 1,063.0 million of cash consideration and $ 934.7 million of the Company’s common stock, which represents a fair value of 13.6 million shares issued as stock consideration. Pursuant to the terms of the Transaction, with respect to the 13.6 million shares of stock consideration, approximately 5.8 million shares, in aggregate, were delivered from January 2, 2025 to October 1, 2025 to the selling shareholders. The remaining 7.8 million shares will be delivered in 26 monthly installments starting on November 3, 2025. Measurement Period Adjustments The Company applied the acquisition method of accounting in accordance with ASC 805, Business Combinations (“ASC 805”) and recognized assets acquired and liabilities assumed at their fair value as of the date of acquisition, with the excess purchase consideration recorded to goodwill. As the Company finalizes the estimation of the fair value of the assets acquired and liabilities assumed, additional adjustments may be recorded during the measurement period (a period not to exceed 12 months from the acquisition date). During the nine months ended September 30, 2025, the Company reassessed its estimates and inputs as new information about facts and circumstances that existed as of the acquisition date became known. As a result, the Company recorded a $ 5.8 million net reduction in goodwill as a measurement period adjustment. The reduction to goodwill consists of a $ 21.0 million adjustment reflecting a reduction of the estimated settlement amounts associated with an acquired liability from $ 61.0 million to $ 40.0 million. The Company also recorded a $ 10.6 million increase to goodwill associated with accrued personnel costs, primarily as a result of recording an assumed liability associated with certain accrued personnel obligations previously unrecognized on the provisional opening balance sheet, and a $ 4.6 million increase to goodwill from a net decrease in assets acquired. The income statement impact, had those adjustments been made as of the acquisition date, was considered immaterial. 10 The following table summarizes the preliminary acquisition date fair value of net tangible and intangible assets acquired, net of liabilities assumed from Marcum, with the excess recorded as goodwill (in thousands): On November 1, 2024 Fair Value Total consideration transferred $ 1,997,781 Assets acquired: Account receivable 169,391 Unbilled revenue 23,247 Other current assets 24,431 Property and equipment 31,221 Other intangible assets 490,000 Right-of-use asset 166,840 Deferred income taxes, net 3,533 Total identifiable assets acquired 908,663 Liabilities assumed: Account payable 27,278 Accrued personnel costs 55,220 Other current liabilities 67,156 Contingent purchase price assumed (current and non-current) 24,947 Lease liabilities (current and non-current) 174,256 Other non-current liabilities 1,295 Total liabilities assumed 350,152 Net asset acquired 558,511 Goodwill $ 1,439,270 The preliminary purchase price allocation is subject to further refinement and may require adjustments to arrive at the final purchase price allocation. The above fair value of assets acquired and liabilities assumed are preliminary and are based on the information that was available as of the reporting date. The final determination of the fair value of certain assets and liabilities will be completed as soon as the necessary information, such as final working capital adjustments, becomes available but no later than one year from the acquisition date. Refer to Note 2, Business Combinations, to the consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2024 for further discussion of the Transaction. NOTE 4. ACCOUNTS RECEIVABLE, NET Accounts receivable, less allowance for doubtful accounts, reflects the net realizable value of receivables and approximates fair value. Unbilled revenue is recorded at estimated net realizable value. Assessing the collectability of the receivables (billed and unbilled) requires management judgment based on a combination of factors, including but not limited to, an evaluation of our historical incurred loss experience, credit-worthiness of our clients, age of the trade receivable balance, current economic conditions that may affect a client’s ability to pay, and reasonable and supportable forecasts. Receivables are charged-off against the allowance when the balance is deemed uncollectible. 11 Accounts receivable, net, at September 30, 2025 and December 31, 2024 was as follows (in thousands): September 30, 2025 December 31, 2024 Trade accounts receivable $ 471,792 $ 416,211 Unbilled revenue, at net realizable value 300,936 150,362 Total accounts receivable 772,728 566,573 Allowance for doubtful accounts ( 53,174 ) ( 31,715 ) Accounts receivable, net $ 719,554 $ 534,858 Changes to the allowance for doubtful accounts for the nine months ended September 30, 2025 and year ended December 31, 2024 were as follows (in thousands): September 30, 2025 December 31, 2024 Balance at beginning of period $ ( 31,715 ) $ ( 25,598 ) Provision ( 27,086 ) ( 19,979 ) Charge-offs, net of recoveries 5,627 13,862 Allowance for doubtful accounts $ ( 53,174 ) $ ( 31,715 ) NOTE 5. DEBT AND FINANCING ARRANGEMENTS 2024 Credit Facilities - Our primary debt financing arrangement is the Amended and Restated Credit Agreement, dated as of November 1, 2024, as amended by the First Amendment, dated as of March 7, 2025, by and among the Company, CBIZ, Inc. as the borrower, the lenders party thereto from time to time and Bank of America, N.A., as the agent, which provides $ 2.0 billion in senior secured credit facilities, consisting of term loans with an original principal amount of $ 1.4 billion (the “Term Loan”) and a $ 600.0 million revolving credit facility (the “Revolving Credit Facility” and, together with the Term Loan, as may be further amended, restated, supplemented or otherwise modified from time to time, the "2024 Credit Facilities"). On April 29, 2025, the Company entered into a Second Amendment (the "Debt Amendment") to the 2024 Credit Facilities. The Debt Amendment added a usual and customary "Available Amount" basket available for making of certain investments and/or restricted payments (including share repurchases) from time to time subject to the satisfaction of certain terms and conditions set forth therein and made certain other technical changes. The changes resulting from the Debt Amendment were accounted for as a modification under ASC 470, Debt ("ASC 470") with an immaterial impact to the financial statements. Th e 2024 Credit Facilities mature on November 1, 2029. The Term Loan provides for scheduled annual principal amortization payments of 5 % in the first two years following closing, 7.5 % annually in the third and fourth year following closing and 10 % in the fifth year following closing, with the balance due at maturity. The 2024 Credit Facilities contain certain restrictive covenants customary for facilities of this type, including restrictions on indebtedness, liens or other encumbrances, making certain payments, investments, or to sell or otherwise dispose of a substantial portion of assets, or to merge or consolidate with an unaffiliated entity. The 2024 Credit Facilities also limit our ability to make dividend payments. Historically, we have not paid cash dividends on our common stock. Our Board of Directors has discretion over the payment and level of dividends on our common stock, subject to the limitations of the 2024 Credit Facilities and applicable law. The 2024 Credit Facilities contain a provision that, in the event of a defined change in control, the 2024 Credit Facilities may be terminated. In addition, the 2024 Credit Facilities include a financial covenant requiring that Total Net Leverage Ratio not exceed 5.00 to 1.00 initially, stepping down in increments to 3.75 to 1.00 during and after the seventh fiscal quarter after the closing (with a limited ability to temporarily increase in connection with material acquisitions commencing in the sixth fiscal quarter after the closing). The 2024 Credit Facilities also require a Minimum Consolidated Interest Coverage Ratio of 3.00 to 1.00 and affirmative and negative covenants that are in each case generally similar to those contained in our previous amended 12 and restated 2022 credit facility, but with increases to certain baskets and caps and certain other exceptions. As of September 30, 2025, we were in compliance with all covenants under the 2024 Credit Facilities. The balance outstanding under the 2024 Credit Facilities at September 30, 2025 and December 31, 2024 was as follows (in thousands): September 30, 2025 December 31, 2024 Short-term debt Current portion, Term Loan $ 70,000 $ 70,000 Current portion debt issuance costs, Term Loan ( 3,677 ) ( 3,823 ) Total short-term debt $ 66,323 $ 66,177 Long-term debt Revolver Facility $ 239,300 $ 20,900 Debt issuance costs, Revolver ( 6,919 ) ( 7,160 ) Long-term portion, Term Loan 1,277,500 1,330,000 Long-term portion Debt Issuance Costs, Term Loan ( 7,242 ) ( 9,985 ) Total long-term debt $ 1,502,639 $ 1,333,755 The blended effective interest rates under the 2024 Credit Facilities and the 2022 credit facility, including the impact of interest rate swaps associated with those credit facilities, for the nine months ended September 30, 2025 and 2024 were as follows: Nine Months Ended September 30, 2025 2024 Weighted average rates 6.64 % 5.40 % Range of effective rates 3.18 % - 8.75 % 1.93 % - 6.83 % We had approximately $ 316.0 million of available funds under the 2024 Credit Facilities at September 30, 2025, based on the terms of the commitment. Available funds under the 2024 Credit Facilities are based on a multiple of earnings before interest, taxes, depreciation and amortization as defined in the 2024 Credit Facilities, and are reduced by letters of credit, other indebtedness and outstanding borrowings under the 2024 Credit Facilities. Under the 2024 Credit Facilities, loans are charged an interest rate consisting of a base rate or term SOFR rate plus an applicable margin, letters of credit are charged based on the same applicable margin, and a commitment fee is charged on the unused portion of the 2024 Credit Facilities. Refer to Note 10, Debt and Financing Arrangements, to the consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2024 for further discussion on the 2024 Credit Facilities and the 2022 credit facility. Other Line of Credit - We have an unsecured $ 20.0 million line of credit by and among CBIZ Benefits and Insurance, Inc. and Huntington National Bank ("line of credit"). We utilize this line of credit to support our short-term funding requirements of payroll client fund obligations due to the investment of client funds, rather than liquidating client funds that have already been invested in available-for-sale securities. The line of credit did no t have a balance outstanding at September 30, 2025 or December 31, 2024. The line of credit was renewed in July 2025 and will now terminate on July 30, 2026. Interest Expense - Interest expense, including amortization of deferred financing costs, commitment fees, line of credit fees, and other applicable bank charges, for the three and nine months ended September 30, 2025 and 2024 was as follows (in thousands): 13 Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Credit facilities $ 27,953 $ 4,968 $ 80,973 $ 15,360 Other 7 — 10 3 Total $ 27,960 $ 4,968 $ 80,983 $ 15,363 NOTE 6. COMMITMENTS AND CONTINGENCIES Letters of Credit and Guarantees - We provide letters of credit to landlords (lessors) of our leased premises in lieu of cash security deposits, which totaled $ 3.2 million and $ 3.2 million at September 30, 2025 and December 31, 2024, respectively. In addition, we provide license bonds to various state agencies to meet certain licensing requirements. The amount of license bonds outstanding was $ 2.2 million and $ 2.2 million at September 30, 2025 and December 31, 2024, respectively. Legal Proceedings - On November 10, 2023, CBIZ was named as a defendant in a putative class action lawsuit in the United States District Court for the District of Massachusetts by an individual claiming to be an employee of a CBIZ client whose personally identifiable information (“PII”) was compromised and stolen during a cyberattack CBIZ experienced on or about May 31, 2023. As a result of this incident, hackers were able to access and download certain files from CBIZ’s MOVEit Transfer server. The lawsuit alleges that CBIZ and Progress Software Corporation, the owner of MOVEit Transfer, failed to adequately secure and safeguard the individual’s, and similarly situated employees of CBIZ’s clients, PII from unauthorized access. The lawsuit seeks various remedies, including actual, compensatory, and punitive damages, along with injunctive relief, costs, and attorneys’ fees. On December 8, 2023, CBIZ was named as a defendant in a second putative class action lawsuit in the United States District Court for the District of Massachusetts by an individual making similar claims and seeking similar remedies as in the first lawsuit regarding the cyberattack CBIZ experienced on or about May 31, 2023. Both cases were transferred into a multidistrict litigation, styled as In Re: MOVEit Customer Data Security Breach Litigation, pending in the United States District Court for the District of Massachusetts (the “MDL”). To date, the MDL has over 180 cases against over 100 different defendants, all with claims arising out of the cyberbreach by hackers of Progress Software Corporation’s MOVEit Transfer software. The cases in the MDL, including the cases against CBIZ, are in their earliest stages, with a stay in place until the MDL Court issues a scheduling order. Due to the early stage of litigation, the Company is not able to determine or predict the ultimate outcome of these lawsuits nor reasonably provide an estimate or range of the possible outcome or losses, if any. In June of 2025, the Company settled litigation against a small group of former employees. As part of the settlement of that litigation, the Company received a settlement payment of $ 12.5 million, which was recorded as a pre-tax gain in “Other income, net” on the Condensed Consolidated Statements of Comprehensive Income for the nine months ended September 30, 2025. In addition to the items disclosed above, the Company is, from time to time, subject to claims and lawsuits arising in the ordinary course of business. We cannot predict the outcome of all such matters or estimate the possible loss, if any. Although the proceedings are subject to uncertainties in the litigation process and the ultimate disposition of these proceedings is not presently determinable, we intend to vigorously defend these matters. Refer to Note 12, Commitments and Contingencies, to the consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2024 for further discussion on the Company's commitments and contingencies. NOTE 7. FINANCIAL INSTRUMENTS Available-For-Sale Debt Securities - In connection with certain services provided by our payroll operations, we collect funds from our clients’ accounts in advance of paying client obligations. These funds held for clients are segregated and invested in accordance with our investment policy, which requires all investments carry an investment grade rating at the time of initial investment. These investments, primarily consisting of corporate and municipal bonds, are classified as available-for-sale and are included in the “Funds held for clients” line item on the accompanying unaudited Condensed 14 Consolidated Balance Sheets. The par value of these investments totaled $ 45.3 million and $ 41.3 million at September 30, 2025 and December 31, 2024, respectively, and these investments have maturity or callable dates ranging from October 2025 through February 2030. At September 30, 2025, unrealized losses on the securities were not material and have not been recognized as a credit loss because the bonds are investment grade quality and management is not required or does not intend to sell prior to an expected recovery in value. The bond issuers continue to make timely principal and interest payments. The following table summarizes activities related to these investments for the nine months ended September 30, 2025 and the year ended December 31, 2024 (in thousands): Nine Months Ended September 30, 2025 Year Ended December 31, 2024 Fair value at beginning of period $ 40,999 $ 39,459 Purchases 35,600 23,210 Redemptions ( 3,525 ) ( 500 ) Maturities ( 28,120 ) ( 21,423 ) Change in bond premium ( 16 ) ( 386 ) Fair market value adjustment 221 639 Fair value at end of period $ 45,159 $ 40,999 In addition to the available-for-sale debt securities discussed above, we also held other depository assets in the amount of $ 0.2 million and $ 0.2 million at September 30, 2025 and December 31, 2024, respectively. Those depository assets are classified as Level 1 in the fair value hierarchy. Interest Rate Swaps - We utilize interest rate swaps to manage interest rate risk exposure associated with our floating-rate debt under the 2024 Credit Facilities, or the forecasted acquisition of such liability. We do not purchase or hold any derivative instruments for trading or speculative purposes. Refer to Note 7, Financial Instruments, to the consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2024 for further discussion on our interest rate swaps. The following table summarizes our outstanding interest rate swaps and their classification in the accompanying unaudited Condensed Consolidated Balance Sheets at September 30, 2025 and December 31, 2024 (amounts in thousands, except percentages): September 30, 2025 Notional Amount Fixed Rate Expiration Fair Value Balance Sheet Location Interest rate swap (1) $ 100,000 4.047 % 7/14/2026 $ ( 294 ) Other current liability Interest rate swap $ 30,000 1.186 % 12/14/2026 $ 829 Other non-current asset Interest rate swap (1) $ 100,000 3.850 % 7/14/2027 $ ( 828 ) Other non-current liability Interest rate swap $ 20,000 2.450 % 8/14/2027 $ 330 Other non-current asset Interest rate swap $ 25,000 3.669 % 4/14/2028 $ ( 216 ) Other non-current liability Interest rate swap $ 25,000 4.488 % 10/14/2028 $ ( 846 ) Other non-current liability Interest rate swap $ 50,000 3.703 % 3/14/2030 $ ( 773 ) Other non-current liability Interest rate swap $ 50,000 3.503 % 4/14/2030 $ ( 375 ) Other non-current liability Interest rate swap $ 50,000 3.658 % 7/14/2030 $ ( 709 ) Other non-current liability Interest rate swap $ 50,000 3.680 % 7/15/2030 $ ( 753 ) Other non-current liability (1) Entered into during the third quarter of 2025. 15 December 31, 2024 Notional Amount Fixed Rate Expiration Fair Value Balance Sheet Location Interest rate swap $ 50,000 0.834 % 4/14/2025 $ 495 Other current asset Interest rate swap $ 30,000 1.186 % 12/14/2026 $ 1,604 Other non-current asset Interest rate swap $ 20,000 2.450 % 8/14/2027 $ 776 Other non-current asset Interest rate swap $ 25,000 3.669 % 4/14/2028 $ 243 Other non-current asset Interest rate swap $ 25,000 4.488 % 10/14/2028 $ ( 437 ) Other non-current liability Refer to Note 8, Fair Value Measurements, for additional disclosures regarding fair value measurements. The following table summarizes the effects of the interest rate swaps on the accompanying Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2025 and 2024 (in thousands): Loss Recognized in AOCI, net of tax Gain Reclassified from AOCI into Expense Three Months Ended September 30, Three Months Ended September 30, 2025 2024 2025 2024 Interest rate swaps $ ( 636 ) $ ( 1,818 ) $ 846 $ 1,186 (Loss) Gain Recognized in AOCI, net of tax Gain Reclassified from AOCI into Expense Nine Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Interest rate swaps $ ( 3,072 ) $ 623 $ 2,219 $ 3,551 16 NOTE 8. FAIR VALUE MEASUREMENTS The following table summarizes our assets and (liabilities) at September 30, 2025 and December 31, 2024, respectively, that are measured at fair value on a recurring basis subsequent to initial recognition and indicates the fair value hierarchy of the valuation techniques utilized by us to determine such fair value (in thousands): Level September 30, 2025 December 31, 2024 Assets of deferred compensation plan 1 $ 181,127 $ 167,170 Available-for-sale debt securities 1 $ 45,159 $ 40,999 Other depository assets 1 $ 180 $ 176 Deferred compensation plan obligations 1 $ ( 181,127 ) $ ( 167,170 ) Interest rate swaps 2 $ ( 3,635 ) $ 2,681 Bank debt, net 2 $ ( 1,568,962 ) $ ( 1,399,932 ) Contingent purchase price liabilities 3 $ ( 41,257 ) $ ( 96,967 ) During the nine months ended September 30, 2025 and 2024, there were no transfers between the valuation hierarchy Levels 1, 2 and 3. The following table summarizes the change in Level 3 fair values of our contingent purchase price liabilities for the nine months ended September 30, 2025 and 2024 (pre-tax basis, in thousands): 2025 2024 Beginning balance – December 31 $ ( 96,967 ) $ ( 114,946 ) Additions from business acquisitions ( 2,941 ) ( 15,184 ) Contingent purchase price liabilities assumed — ( 5,231 ) Settlement of contingent purchase price liabilities 60,635 58,468 Change in fair value of contingencies 170 516 Change in net present value of contingencies ( 2,154 ) ( 1,625 ) Ending balance – September 30 $ ( 41,257 ) $ ( 78,002 ) The following table summarizes the changes in contingent purchase price consideration for previous acquisitions and contingent payments made for previous business acquisitions in the three and nine months ended September 30, 2025 and 2024, respectively (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Net expense $ 497 $ 5,702 $ 1,984 $ 6,340 Cash settlement paid $ 7,061 $ 9,840 $ 55,825 $ 50,695 Shares issued (number) 13 23 60 117 Refer to Note 8, Fair Value Measurements, to the consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2024 for further discussion on the fair value measurements and classification of our financial assets and liabilities. 17 NOTE 9. OTHER COMPREHENSIVE INCOME The following table is a summary of other comprehensive income and discloses the tax impact of each component of other comprehensive (loss) income for the three and nine months ended September 30, 2025 and 2024 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Net unrealized gain on available-for-sale securities, net of taxes (1) $ 35 $ 215 $ 158 $ 438 Net unrealized (loss) on interest rate swaps, net of taxes (2) ( 1,271 ) ( 2,709 ) ( 4,736 ) ( 2,041 ) Foreign currency translation ( 6 ) ( 3 ) ( 14 ) ( 18 ) Total other comprehensive (loss), net of tax $ ( 1,242 ) $ ( 2,497 ) $ ( 4,592 ) $ ( 1,621 ) (1) Net of income tax expense of $ 12 and $ 85 for the three months ended September 30, 2025 and 2024, respectively. Net of income tax expense of $ 63 and $ 174 for the nine months ended September 30, 2025 and 2024, respectively. (2) Net of income tax benefit of $ 422 and $ 903 for the three months ended September 30, 2025 and 2024, respectively. Net of income tax benefit of $ 1,578 and $ 680 for the nine months ended September 30, 2025 and 2024, respectively. NOTE 10. COMMON STOCK Common Stock Issued for the Transaction - Pursuant to the Agreement and Plan of Merger, dated as of July 30, 2024, by and among the Company, Marcum and the other parties thereto (the “Merger Agreement”) and as part of the total purchase price consideration, we issued shares of our common stock to the selling shareholders in the Transaction. Refer to Note 3, Business Combinations, for more detail. Right of First Refusal Program - Pursuant to the Merger Agreement, the Company and selling shareholders entered into a Right of First Refusal Agreement (the “ROFR Agreement”). Under the ROFR Agreement, the selling shareholders granted the Company a right of first refusal to repurchase all or any portion of our common stock issued to the selling shareholders pursuant to the Merger Agreement. The Company holds the right of first refusal until November 1, 2028. Share Repurchase Program - Over the past twenty years , our Board of Directors has annually renewed the Company’s share repurchase program, which permits the Company to repurchase, in accordance with SEC rules, up to 5 million shares of our outstanding common stock (i) in the open market, (ii) in privately negotiated transactions, or (iii) under Rule 10b5-1 trading plans (the “Share Repurchase Program”). The Board of Directors authorized the Share Repurchase Program on February 11, 2025, permitting repurchases through March 31, 2026. Privately negotiated transactions may include repurchases from employees, officers and directors and repurchases from former partners of Marcum pursuant to the ROFR Agreement, as discussed above. Refer to Note 14, Common Stock, to the consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2024 for more detail about the Share Repurchase Program. We repurchased 1.4 million shares of our common stock for a total cost of $ 102.8 million under the ROFR Agreement and 0.4 million shares of our common stock in the open market for $ 25.0 million during the nine months ended September 30, 2025. Additionally, to settle statutory employee withholdings related to vesting of stock awards, we repurchased 0.1 million shares of our common stock at a cost of $ 7.8 million during the nine months ended September 30, 2025 and 0.2 million shares at a cost of $ 11.4 million during the nine months ended September 30, 2024. 18 NOTE 11. EMPLOYEE STOCK PLANS On May 10, 2023, the shareholders of the Company approved an amendment to the 2019 Stock Omnibus Incentive Plan (the “2019 Plan”). The amendment added 1.5 million shares to the total number of shares that may be issued under the 2019 Plan. All other aspects of the 2019 Plan remain unchanged. The 2019 Plan, which expires in 2029, permits the grant of various forms of stock-based awards. A maximum of 4.6 million stock options, restricted stock or other stock-based compensation awards may be granted. The terms and vesting schedules for the stock-based awards vary by type and date of grant. Shares subject to award under the 2019 Plan may be either authorized but unissued shares of our common stock or treasury shares. Refer to Note 15, Employee Stock Plans to the consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2024 for further discussion on the 2019 Plan. Compensation expense for stock-based awards recognized during the three and nine months ended September 30, 2025 and 2024 was as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Restricted stock units and awards $ 5,134 $ 1,291 $ 15,282 $ 4,194 Performance share units 2,200 1,124 4,291 3,237 Total stock-based compensation expense $ 7,334 $ 2,415 $ 19,573 $ 7,431 Stock Options and Restricted Stock Units and Awards – The Company did no t grant any stock options, no r were any stock options exercised during the nine months ended September 30, 2025. As of September 30, 2025, we have 150 thousand stock options outstanding with a weighted average exercise price per share of $ 35.22 . The following table presents our restricted stock units and awards activity during the nine months ended September 30, 2025 (in thousands, except per share unit data): Restricted Stock Units and Awards Number of Shares Weighted Average Grant-Date Fair Value (1) Outstanding at beginning of year 899 $ 67.01 Granted 133 $ 80.16 Exercised or released ( 101 ) $ 52.73 Expired or canceled ( 8 ) $ 80.59 Outstanding at September 30, 2025 923 $ 70.35 (1) Represents weighted average market value of the shares; awards are granted at no cost to the recipients. Performance Share Units (“PSUs”) – PSUs are earned based on our financial performance over a contractual term of three years and the associated expense is recognized over that period based on the fair value of the award. A three-year cliff vesting schedule of the PSUs is dependent upon the Company’s performance relative to pre-established goals based on an earnings per share target (weighted 70 %) and total growth in revenue (weighted 30 %). The fair value of PSUs is calculated using the market value of a share of our common stock on the date of grant. For performance achieved above specified levels, the recipient may earn additional shares of stock, not to exceed 200 % of the number of PSUs initially granted. For the PSUs granted in 2025, the recipients may earn additional shares of stock, not to exceed 300 % of the number of PSUs initially granted if performance achieved above specified levels. 19 The following table presents our PSUs activity during the nine months ended September 30, 2025 (in thousands, except per share unit data): Performance Share Units Weighted Average Grant-Date Fair Value Per Unit (1) Outstanding at beginning of year 285 $ 48.18 Granted 81 $ 84.67 Vested ( 124 ) $ 38.12 Adjustments for performance results 25 $ 49.49 Outstanding at September 30, 2025 267 $ 63.99 (1) Represents weighted average market value of the PSUs; PSUs are granted at no cost to the recipients. NOTE 12. EARNINGS PER SHARE The following table sets forth the computation of basic and diluted earnings per share for the three and nine months ended September 30, 2025 and 2024 (in thousands, except per share data): Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Numerator: Net income $ 30,146 $ 35,084 $ 194,861 $ 131,761 Denominator: Basic Weighted average common shares outstanding (1) 62,360 50,145 63,243 50,101 Diluted Stock options (2) 68 77 77 77 Restricted stock units and awards (2) 152 74 170 76 Performance share units 116 96 116 96 Contingent shares (3) 3 9 3 9 Diluted weighted average common shares outstanding (4) 62,699 50,401 63,609 50,359 Basic earnings per share $ 0.48 $ 0.70 $ 3.08 $ 2.63 Diluted earnings per share $ 0.48 $ 0.70 $ 3.06 $ 2.62 (1) A total of 13.6 million shares that were issued as consideration in connection with the Transaction are included for the three and nine months ended September 30, 2025. Refer to Note 3, Business Combinations for more detail. (2) A total of 103 thousand and 73 thousand shares of stock-based awards were excluded from the calculation of diluted earnings per share for the three and nine months ended September 30, 2025, respectively, as their effect would be anti-dilutive. A total of 8 thousand and 49 thousand shares of stock-based awards were excluded from the calculation of diluted earnings per share for the three and nine months ended September 30, 2024, respectively, as their effect would be anti-dilutive. (3) Contingent shares represent additional shares to be issued for purchase price earned by former owners of businesses acquired by us once future conditions have been met. (4) The denominator used in calculating diluted earnings per share did not include 151 thousand PSUs for both the three and nine months ended September 30, 2025. The denominator used in calculating diluted earnings per share did not include 158 thousand PSUs for both the three and nine months ended September 30, 2024. The performance conditions associated with 20 these PSUs were not met and consequently none of these PSUs were considered as issuable for the three and nine months ended September 30, 2025 and 2024. NOTE 13. SEGMENT DISCLOSURES Our business units have been aggregated into three practice groups: Financial Services, Benefits and Insurance Services, and National Practices. The business units have been aggregated based on the following factors: similarity of the products and services provided to clients; similarity of the regulatory environment in which they operate; and similarity of economic conditions affecting long-term performance. The business units are managed along these segment lines. Refer to Note 19, Segment Disclosure, to the consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2024 for further discussion on the segment lines. Corporate and Other - Included in Corporate and Other are operating expenses that are not directly allocated to the individual business units. These expenses primarily consist of certain health care costs, gains or losses attributable to assets held in our non-qualified deferred compensation plan, stock-based compensation, consolidation and integration charges, certain professional fees, certain advertising costs, and other various expenses. Accounting policies of the practice groups are the same as those described in Note 1, Basis of Presentation and Significant Accounting Policies, to the Annual Report on Form 10-K for the year ended December 31, 2024. Upon consolidation, intercompany accounts and transactions are eliminated, thus inter-segment revenue is not included in the measure of profit or loss for the practice groups. Performance of the practice groups is evaluated on income (loss) before income tax expense (benefit) excluding those costs listed above, which are reported in “Corporate and Other”. The practice groups respective revenue and pre-tax income, significant segment expenses, and a reconciliation of segment profit or loss measure to the consolidated income before income tax expense for the three and nine months ended September 30, 2025 and 2024 is presented below. We do not manage our assets on a segment basis, therefore segment assets are not presented below. Segment information for the three and nine months ended September 30, 2025 and 2024 was as follows (in thousands): Three Months Ended September 30, 2025 Financial Services Benefits and Insurance Services National Practices Total Revenue from external customers $ 578,522 $ 103,387 $ 11,909 $ 693,818 Significant expenses: Personnel costs 381,106 65,222 10,560 456,888 Facility costs 22,937 3,219 2 26,158 Other costs, gains, and losses, net (1) 80,417 15,599 ( 1,001 ) 95,015 Total segment expense 484,460 84,040 9,561 578,061 Segment income before income tax expense 94,062 19,347 2,348 115,757 Corporate & other: Unallocated corporate operating expenses 25,081 General & administrative expenses 31,265 Interest expense 27,960 Other income, net ( 8,955 ) Consolidated income before income tax expense $ 40,406 21 Three Months Ended September 30, 2024 Financial Services Benefits and Insurance Services National Practices Total Revenue from external customers $ 322,295 $ 104,040 $ 12,549 $ 438,884 Significant expenses: Personnel costs 210,418 64,855 10,643 285,916 Facility costs 11,962 3,110 42 15,114 Other costs, gains, and losses, net (1) 38,244 14,998 ( 4,537 ) 48,705 Total segment expense 260,624 82,963 6,148 349,735 Segment income before income tax expense 61,671 21,077 6,401 89,149 Corporate & other: Unallocated corporate operating expenses 11,266 General & administrative expenses 23,227 Interest expense 4,968 Other income, net ( 1,283 ) Consolidated income before income tax expense $ 50,971 22 Nine Months Ended September 30, 2025 Financial Services Benefits and Insurance Services National Practices Total Revenue from external customers $ 1,862,002 $ 318,292 $ 35,034 $ 2,215,328 Significant expenses: Personnel costs 1,170,676 196,965 31,072 1,398,713 Facility costs 70,283 9,622 7 79,912 Other costs, gains, and losses, net (1) 238,293 46,445 ( 772 ) 283,966 Total segment expense 1,479,252 253,032 30,307 1,762,591 Segment income before income tax expense 382,750 65,260 4,727 452,737 Corporate & other: Unallocated corporate operating expenses 45,518 General & administrative expenses 86,972 Interest expense 80,983 Other income, net ( 31,831 ) Consolidated income before income tax expense $ 271,095 Nine Months Ended September 30, 2024 Financial Services Benefits and Insurance Services National Practices Total Revenue from external customers $ 1,004,158 $ 309,867 $ 39,168 $ 1,353,193 Significant expenses: Personnel costs 640,021 196,013 33,486 869,520 Facility costs 35,807 9,354 167 45,328 Other costs, gains, and losses, net (1) 112,952 44,389 ( 3,540 ) 153,801 Total segment expense 788,780 249,756 30,113 1,068,649 Segment income before income tax expense 215,378 60,111 9,055 284,544 Corporate & other: Unallocated corporate operating expenses 34,908 General & administrative expenses 63,988 Interest expense 15,363 Other income, net ( 12,893 ) Consolidated income before income tax expense $ 183,178 (1) Other costs, gains, and losses, net primarily consist of travel and entertainment costs, computer and technology related costs, depreciation and amortization expenses, and other discretionary costs. 23