CBIZ, Inc. 10-Q

Item 1. Financial Statements CBIZ, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands) March 31, 2026 December 31, 2025 ASSETS Current assets: Cash and cash equivalents $ 28,718 $ 18,290 Restricted cash 40,622 38,234 Accounts receivable, net 769,442 555,995 Other current assets 77,639 79,693 Current assets before funds held for clients 916,421 692,212 Funds held for clients 152,862 207,037 Total current assets 1,069,283 899,249 Non-current assets: Property and equipment, net 80,100 81,242 Goodwill and other intangible assets, net 2,856,166 2,869,790 Assets of deferred compensation plan 181,515 186,870 Right-of-use assets, net 408,593 334,048 Other non-current assets 34,303 38,329 Total non-current assets 3,560,677 3,510,279 Total assets $ 4,629,960 $ 4,409,528 LIABILITIES Current liabilities: Accounts payable $ 86,743 $ 90,934 Income taxes payable 60,596 11,008 Accrued personnel costs 120,240 197,534 Contingent purchase price liabilities 31,602 30,035 Lease liabilities 58,598 64,674 Short-term debt (1) 75,170 66,372 Other current liabilities 70,002 68,299 Current liabilities before client fund obligations 502,951 528,856 Client fund obligations 152,951 206,738 Total current liabilities 655,902 735,594 Non-current liabilities: Long-term debt (1) 1,461,203 1,389,552 Income taxes payable 3,177 3,009 Deferred income taxes, net 29,577 7,141 Deferred compensation plan obligations 181,515 186,870 Contingent purchase price liabilities 4,375 10,213 Lease liabilities 395,356 307,905 Other non-current liabilities 4,679 7,177 Total non-current liabilities 2,079,882 1,911,867 Total liabilities 2,735,784 2,647,461 STOCKHOLDERS' EQUITY Common stock 1,458 1,447 Additional paid in capital 1,831,208 1,830,866 Retained earnings 1,173,178 1,011,566 Treasury stock ( 1,110,111 ) ( 1,078,521 ) Accumulated other comprehensive loss ( 1,557 ) ( 3,291 ) Total stockholders’ equity 1,894,176 1,762,067 Total liabilities and stockholders’ equity $ 4,629,960 $ 4,409,528 See the accompanying notes to the unaudited condensed consolidated financial statements (1) 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 March 31, 2026 2025 Revenue $ 848,579 $ 838,014 Operating expenses 622,562 609,912 Gross margin 226,017 228,102 Corporate general and administrative expenses 29,568 28,070 Operating income 196,449 200,032 Other (expense) income: Interest expense ( 23,916 ) ( 25,156 ) Gain from acquisition related adjustments, net 57,955 — Other expense, net ( 4,016 ) ( 1,966 ) Total other income (expense), net 30,023 ( 27,122 ) Income before income tax expense 226,472 172,910 Income tax expense 64,860 50,137 Net income $ 161,612 $ 122,773 Earnings per share: Basic $ 2.63 $ 1.92 Diluted $ 2.63 $ 1.91 Basic weighted average shares outstanding 61,424 63,843 Diluted weighted average shares outstanding 61,537 64,142 Comprehensive income: Net income $ 161,612 $ 122,773 Other comprehensive income (loss), net of tax 1,734 ( 1,235 ) Comprehensive income $ 163,346 $ 121,538 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) Income Total December 31, 2025 144,654 90,274 $ 1,447 $ 1,830,866 $ 1,011,566 $ ( 1,078,521 ) $ ( 3,291 ) $ 1,762,067 Net income — — — — 161,612 — — 161,612 Other comprehensive income, net of tax — — — — — — 1,734 1,734 Share repurchases — 1,079 — — — ( 28,963 ) — ( 28,963 ) Indirect repurchase of shares for minimum tax withholding — 82 — — — ( 2,627 ) — ( 2,627 ) Restricted stock units and awards 86 — 1 ( 1 ) — — — — Performance share units 102 — 1 ( 1 ) — — — — Stock-based compensation — — — 7,530 — — — 7,530 Business acquisitions 892 — 9 ( 7,186 ) — — — ( 7,177 ) March 31, 2026 145,734 91,435 $ 1,458 $ 1,831,208 $ 1,173,178 $ ( 1,110,111 ) $ ( 1,557 ) $ 1,894,176 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 — — — — 122,773 — — 122,773 Other comprehensive loss, net of tax — — — — — — ( 1,235 ) ( 1,235 ) Indirect repurchase of shares for minimum tax withholding — 88 — — — ( 7,726 ) — ( 7,726 ) Restricted stock units and awards 78 — 1 ( 1 ) — — — — Performance share units 124 — 1 ( 1 ) — — — — Stock-based compensation — — — 5,639 — — — 5,639 Business acquisitions 3,777 — 38 15,229 — — — 15,267 March 31, 2025 141,924 87,835 $ 1,420 $ 1,812,729 $ 1,018,895 $ ( 918,327 ) $ ( 16 ) $ 1,914,701 See the accompanying notes to the unaudited condensed consolidated financial statements 5 CBIZ, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands) Three Months Ended March 31, 2026 2025 Cash flows from operating activities: Net income $ 161,612 $ 122,773 Adjustments to reconcile net income to net cash used in operating activities: Depreciation and amortization expense 23,750 24,791 Bad debt expense, net of recoveries 1,409 417 Adjustment to contingent purchase price liabilities 195 502 Stock-based compensation expense 7,530 5,639 Deferred income taxes 14,660 4,320 Amortization of deferred financing fees 1,349 1,298 Other, net 837 ( 289 ) Changes in assets and liabilities, net of acquisitions and divestitures: Accounts receivable, net ( 214,671 ) ( 201,258 ) Other assets 2,910 ( 8,990 ) Accounts payable ( 4,191 ) 11,985 Income taxes payable 49,791 45,626 Accrued personnel costs ( 77,295 ) ( 84,642 ) Other liabilities 6,599 ( 10,438 ) Net cash used in operating activities ( 25,515 ) ( 88,266 ) Cash flows from investing activities: Business acquisitions and purchases of client lists, net of cash acquired ( 3,495 ) — Purchases of client fund investments ( 4,100 ) ( 8,300 ) Proceeds from the sales and maturities of client fund investments 3,640 8,410 Proceeds from sales of divested operations 332 289 Change in funds held for clients 462 ( 91 ) Additions to property and equipment ( 3,000 ) ( 5,177 ) Other, net 3,242 ( 92 ) Net cash used in investing activities ( 2,919 ) ( 4,961 ) Cash flows from financing activities: Proceeds from bank debt 250,700 485,600 Payment of bank debt ( 171,600 ) ( 358,100 ) Payment for acquisition of treasury stock ( 28,963 ) — Indirect repurchase of shares for minimum tax withholding ( 2,627 ) ( 7,555 ) Changes in client funds obligations ( 53,787 ) ( 35,062 ) Payment of contingent consideration for acquisitions and client lists ( 6,301 ) ( 29,520 ) Net cash (used in) provided by financing activities ( 12,578 ) 55,363 Net decrease in cash, cash equivalents and restricted cash ( 41,012 ) ( 37,864 ) Cash, cash equivalents and restricted cash at beginning of year $ 218,090 $ 187,170 Cash, cash equivalents and restricted cash at end of period $ 177,078 $ 149,306 Reconciliation of cash, cash equivalents and restricted cash to the Condensed Consolidated Balance Sheets: Cash and cash equivalents $ 28,718 $ 8,850 Restricted cash 40,622 40,777 Cash equivalents included in funds held for clients 107,738 99,679 Total cash, cash equivalents and restricted cash $ 177,078 $ 149,306 See the accompanying notes to the unaudited condensed consolidated financial statements 6 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 Transaction – On November 1, 2024, the Company completed the acquisition of Marcum LLP (“Marcum”), an accounting and advisory services firm headquartered in New York City with offices in major markets throughout the United States, to expand the breadth and depth of the Company’s professional services portfolio in the U.S. Pursuant to the Agreement and Plan of Merger dated July 30, 2024 (the “Merger Agreement”), a wholly owned subsidiary of the Company, merged with and into Marcum Advisory Group, a wholly owned subsidiary of Marcum ("MAG"), to which Marcum contributed substantially all of its non-attest business assets and liabilities, (the “Merger”), resulting in MAG surviving the Merger and becoming a wholly owned subsidiary of the Company. In a separate transaction, CBIZ CPAs P.C., with which the Company has an existing ASA, purchased from Marcum substantially all of Marcum’s attest business assets, subject to certain exclusions (the "Attest Purchase"). As noted in Note 1, Basis of Presentation and Significant Accounting Policies included in our Annual Report on Form 10-K for the year ended December 31, 2025, the Company does not consolidate certain CPA firms with whom we maintain ASAs, including CBIZ CPAs P.C., therefore, the Merger solely is referred to herein as the “Transaction.” Description of Business: CBIZ, Inc. is a leading professional services advisor to middle-market businesses nationwide. With industry knowledge and expertise in accounting, tax, advisory, benefits, insurance, and technology, CBIZ delivers actionable insights to help clients anticipate what is next and discover new ways to accelerate growth to clients throughout the United States and parts of Canada. Acting through its subsidiaries, it serves small and medium-sized businesses, as well as individuals, governmental entities, and not-for-profit enterprises.CBIZ manages and reports its operations along two practice groups: Financial Services Group and Benefits and Insurance Services Group. A further description of products and services offered by each of the practice groups is provided in Note 14, Segment Disclosures. 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, 2025. 7 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, 2026. 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, 2025. 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 Standard Adopted in 2026 - 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. We adopted ASU 2025-05 in 2026 and the adoption had no material impact on our unaudited consolidated financial statements. NOTE 3. BUSINESS COMBINATIONS Stock Consideration Transferred Pursuant to the terms of the Transaction, with respect to the 13.6 million shares of stock consideration, approximately 7.3 million shares, in aggregate, were delivered from January 2, 2025 to March 31, 2026 to the selling shareholders. The remaining 6.2 million shares will be delivered in 21 monthly installments starting on April 1, 2026. Working Capital Adjustment Related to Transaction During the three months ended March 31, 2026, the Company finalized the working capital and related purchase price adjustment associated with the Transaction in accordance with the applicable provisions of the Merger Agreement. As a result, the Company received $ 46.5 million in cash on January 26, 2026. In addition, the Company recorded a notes receivable of $ 10.7 million, of which $ 3.5 million was received on January 26, 2026, from Marcum and Marcum Partners SPV LLC, entities not owned by CBIZ, related to the remaining working capital payments. Total cash received from the finalization of working capital adjustment was $ 50.0 million during the three months ended March 31, 2026. The Company recorded a gain of $ 57.2 million related to this final working capital adjustment. Additionally, the Company recorded a gain of $ 0.8 million associated with other acquisition related adjustments. Both gains were reported as Gain from acquisition related adjustments, net in the accompanying condensed consolidated statements of operations. In addition to the cash received from the final working capital adjustment, the Company received $ 3.1 million in cash from an indemnity escrow associated with the Transaction. Total cash received on January 26, 2026 was $ 53.1 million. 8 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 other pertinent factors that may impact the collectivity of the receivables. Receivables are charged-off against the allowance when the balance is deemed uncollectible. Accounts receivable, net, at March 31, 2026 and December 31, 2025 was as follows (in thousands): March 31, 2026 December 31, 2025 Trade accounts receivable $ 510,952 $ 469,209 Unbilled revenue, at net realizable value 308,584 136,701 Total accounts receivable 819,536 605,910 Allowance for doubtful accounts ( 50,094 ) ( 49,915 ) Accounts receivable, net $ 769,442 $ 555,995 Changes to the allowance for doubtful accounts for the three months ended March 31, 2026 and year ended December 31, 2025 were as follows (in thousands): March 31, 2026 December 31, 2025 Balance at beginning of period $ ( 49,915 ) $ ( 31,715 ) Provision ( 6,080 ) ( 34,447 ) Charge-offs, net of recoveries 5,901 16,247 Allowance for doubtful accounts $ ( 50,094 ) $ ( 49,915 ) NOTE 5. DEBT AND FINANCING ARRANGEMENTS 2024 Credit Facilities - Our primary financing arrangement is the 2024 Credit Facilities. The 2024 Credit Facilities is a $ 2.0 billion senior secured credit facilities, consisting of a $ 1.4 billion term loan (the “Term Loan”) and $ 600.0 million revolving credit facility (the “Revolving Credit Facility”). Th e 2024 Credit Facilities matures 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 contains 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 limits 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 contains 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 includes 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 requires 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 and restated 2022 credit facility, but with increases to certain baskets and caps and certain other exceptions. As of March 31, 2026, we were in compliance with all covenants under the 2024 Credit Facilities. 9 The balance outstanding under the 2024 Credit Facilities at March 31, 2026 and December 31, 2025 was as follows (in thousands): March 31, 2026 December 31, 2025 Short-term debt Current portion, Term Loan $ 78,750 $ 70,000 Current portion debt issuance costs, Term Loan ( 3,580 ) ( 3,628 ) Total short-term debt $ 75,170 $ 66,372 Long-term debt Revolver Facility $ 239,000 $ 142,400 Debt issuance costs, Revolver ( 6,071 ) ( 6,495 ) Long-term portion, Term Loan 1,233,750 1,260,000 Long-term portion Debt Issuance Costs, Term Loan ( 5,476 ) ( 6,353 ) Total long-term debt $ 1,461,203 $ 1,389,552 The blended effective interest rates under the 2024 Credit Facilities, including the impact of interest rate swaps associated with those credit facilities, for the three months ended March 31, 2026 and 2025 were as follows: Three Months Ended March 31, 2026 2025 Weighted average rates 6.11 % 6.57 % Range of effective rates 3.54 % - 6.84 % 3.18 % - 8.75 % We had approximately $ 333.4 million of available funds under the 2024 Credit Facilities at March 31, 2026, 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, 2025 for further discussion on the 2024 Credit Facilities. 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 March 31, 2026 or December 31, 2025. 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 months ended March 31, 2026 and 2025 was $ 23.9 million and $ 25.2 million, respectively. 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 March 31, 2026 and December 31, 2025, 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 $ 2.1 million at March 31, 2026 and December 31, 2025, respectively. 10 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 300 cases against over 100 different defendants, all with claims arising out of the cyber breach by hackers of Progress Software Corporation’s MOVEit Transfer software. The MDL has a bellwether structure, under which defendants in the MDL cases have been divided into bellwether and non-bellwether defendants. CBIZ is a non-bellwether defendant. The cases against the bellwether defendants are moving forward while the cases against the non-bellwether defendants, including CBIZ, are not. The bellwether cases are in early stages of discovery, which will be followed by class certification and dispositive-motion practice. Due to the early stage of litigation against the bellwether defendants and CBIZ’s status as a non-bellwether defendant, 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 year ended December 31, 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, 2025 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 Consolidated Balance Sheets. The par value of these investments totaled $ 45.5 million and $ 45.0 million at March 31, 2026 and December 31, 2025, respectively, and these investments have maturity or callable dates ranging from April 2026 through January 2031. At March 31, 2026, 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. 11 The following table summarizes activities related to these investments for the three months ended March 31, 2026 and the year ended December 31, 2025 (in thousands): Three Months Ended March 31, 2026 Year Ended December 31, 2025 Fair value at beginning of period $ 45,004 $ 40,999 Purchases 4,100 43,375 Redemptions — ( 5,096 ) Maturities ( 3,640 ) ( 34,595 ) Change in bond premium ( 63 ) 11 Fair market value adjustment ( 348 ) 310 Fair value at end of period $ 45,053 $ 45,004 In addition to the available-for-sale debt securities discussed above, we also held other depository assets in the amount of $ 0.1 million and $ 0.5 million at March 31, 2026 and December 31, 2025, 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, 2025 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 March 31, 2026 and December 31, 2025 (amounts in thousands, except percentages): March 31, 2026 Notional Amount Fixed Rate Expiration Fair Value Balance Sheet Location Interest rate swap $ 100,000 4.047 % 7/14/2026 $ ( 110 ) Other current liability Interest rate swap $ 30,000 1.186 % 12/14/2026 $ 523 Other current asset Interest rate swap $ 100,000 3.850 % 7/14/2027 $ ( 279 ) Other non-current liability Interest rate swap $ 20,000 2.450 % 8/14/2027 $ 316 Other non-current asset Interest rate swap $ 25,000 3.669 % 4/14/2028 $ ( 53 ) Other non-current liability Interest rate swap $ 25,000 4.488 % 10/14/2028 $ ( 570 ) Other non-current liability Interest rate swap $ 50,000 3.703 % 3/14/2030 $ ( 316 ) Other non-current liability Interest rate swap $ 50,000 3.503 % 4/14/2030 $ 46 Other non-current asset Interest rate swap $ 50,000 3.658 % 7/14/2030 $ ( 232 ) Other non-current liability Interest rate swap $ 50,000 3.680 % 7/15/2030 $ ( 275 ) Other non-current liability December 31, 2025 Notional Amount Fixed Rate Expiration Fair Value Balance Sheet Location Interest rate swap $ 100,000 4.047 % 7/14/2026 $ ( 269 ) Other current liability Interest rate swap $ 30,000 1.186 % 12/14/2026 $ 628 Other current asset Interest rate swap $ 100,000 3.850 % 7/14/2027 $ ( 838 ) Other non-current liability Interest rate swap $ 20,000 2.450 % 8/14/2027 $ 263 Other non-current asset Interest rate swap $ 25,000 3.669 % 4/14/2028 $ ( 228 ) Other non-current liability Interest rate swap $ 25,000 4.488 % 10/14/2028 $ ( 805 ) Other non-current liability Interest rate swap $ 50,000 3.703 % 3/14/2030 $ ( 708 ) Other non-current liability Interest rate swap $ 50,000 3.503 % 4/14/2030 $ ( 327 ) Other non-current liability Interest rate swap $ 50,000 3.658 % 7/14/2030 $ ( 637 ) Other non-current liability Interest rate swap $ 50,000 3.680 % 7/15/2030 $ ( 681 ) Other non-current liability 12 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 months ended March 31, 2026 and 2025 (in thousands): Gain (Loss) Recognized in AOCI, net of tax Gain Reclassified from AOCI into Expense Three Months Ended March 31, Three Months Ended March 31, 2026 2025 2026 2025 Interest rate swaps $ 2,056 $ ( 717 ) $ 89 $ 779 NOTE 8. FAIR VALUE MEASUREMENTS The following table summarizes our assets and (liabilities) at March 31, 2026 and December 31, 2025, 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 March 31, 2026 December 31, 2025 Assets of deferred compensation plan 1 $ 181,515 $ 186,870 Available-for-sale debt securities 1 $ 45,053 $ 45,004 Other depository assets 1 $ 67 $ 470 Deferred compensation plan obligations 1 $ ( 181,515 ) $ ( 186,870 ) Interest rate swaps 2 $ ( 950 ) $ ( 3,602 ) Bank debt, net 2 $ ( 1,536,373 ) $ ( 1,455,924 ) Contingent purchase price liabilities 3 $ ( 35,977 ) $ ( 40,248 ) During the three months ended March 31, 2026 and 2025, 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 three months ended March 31, 2026 and 2025 (pre-tax basis, in thousands): 2026 2025 Beginning balance – December 31 $ ( 40,248 ) $ ( 96,967 ) Additions from business acquisitions ( 1,835 ) ( 757 ) Settlement of contingent purchase price liabilities 6,301 32,228 Change in fair value of contingencies 128 170 Change in net present value of contingencies ( 323 ) ( 637 ) Ending balance – March 31 $ ( 35,977 ) $ ( 65,963 ) 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 months ended March 31, 2026 and 2025, respectively (in thousands): Three Months Ended March 31, 2026 2025 Net expense $ 195 $ 467 Cash settlement paid $ 6,301 $ 29,520 Shares issued (number) — 33 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, 2025 for further discussion on the fair value measurements and classification of our financial assets and liabilities. 13 NOTE 9. OTHER COMPREHENSIVE INCOME The following table is a summary of other comprehensive income (loss) and discloses the tax impact of each component of other comprehensive income (loss) for the three months ended March 31, 2026 and 2025 (in thousands): Three Months Ended March 31, 2026 2025 Net unrealized (loss) gain on available-for-sale securities, net of taxes (1) $ ( 249 ) $ 72 Net unrealized gain (loss) on interest rate swaps, net of taxes (2) 1,991 ( 1,301 ) Foreign currency translation ( 8 ) ( 6 ) Total other comprehensive income (loss), net of tax $ 1,734 $ ( 1,235 ) (1) Net of income tax benefit of $ 99 and income tax expense of $ 29 for the three months ended March 31, 2026 and 2025, respectively. (2) Net of income tax expense of $ 661 and income tax benefit of $ 434 for the three months ended March 31, 2026 and 2025, respectively. NOTE 10. COMMON STOCK Common Stock Issued for the Transaction - Pursuant to 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. On February 11, 2025, the Board of Directors renewed and authorized the Share Repurchase Program, permitting repurchases through March 31, 2026, of 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. On February 11, 2026, our Board of Directors authorized the continuation of the Share Repurchase Program. It was effective beginning on February 11, 2026 from which the amount of shares of common stock available to be purchased by the Company was reset to 5 million shares, and the Share Repurchase Program expires on March 31, 2027. 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, 2025 for more detail about the Share Repurchase Program. We repurchased 0.1 million shares of our common stock for a total cost of $ 3.5 million under the ROFR Agreement and 1.0 million shares of our common stock in the open market for $ 25.5 million during the three months ended March 31, 2026. During the three months ended March 31, 2025, we made no share repurchases under the ROFR Agreement or from the open market. 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 $ 2.6 million during the three months ended March 31, 2026 and 0.1 million shares at a cost of $ 7.7 million during the three months ended March 31, 2025. NOTE 11. EMPLOYEE STOCK PLANS We granted various stock-based awards under the CBIZ, Inc. 2019 Stock Omnibus Incentive Plan, as amended (the “2019 Plan”). The 2019 Plan, which expires in 2029, permits 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 14 contained in our Annual Report on Form 10-K for the year ended December 31, 2025 for further discussion on the 2019 Plan and descriptions of the types of stock-based awards. Compensation expense for stock-based awards recognized during the three months ended March 31, 2026 and 2025 was as follows (in thousands): Three Months Ended March 31, 2026 2025 Restricted stock units and awards $ 6,370 $ 4,859 Performance share units 1,160 780 Total stock-based compensation expense $ 7,530 $ 5,639 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 three months ended March 31, 2026. As of March 31, 2026, we have 150 thousand stock options outstanding with a weighted average exercise price per share of $ 35.22 . During the first quarter of 2026, the Company granted a total of 698 thousand Restricted Stock Units ("RSU") to certain employees, of which 324 thousand RSUs vest on the third anniversary of the grant date, 99 thousand RSUs vest on the second anniversary of the grant date, and 275 thousand RSUs vest evenly over three years . The following table presents our restricted stock units and awards activity during the three months ended March 31, 2026 (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 911 $ 70.36 Granted 698 $ 28.16 Exercised or released ( 86 ) $ 68.16 Expired or canceled — $ — Outstanding at March 31, 2026 1,523 $ 51.15 (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 measured against pre-established goals which are mainly based on a weighted combination of an earnings per share target and a total growth in revenue target or relative total shareholder return target. 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, except for the PSUs granted in 2025 that shall not to exceed 300 %. The following table presents our PSUs activity during the three months ended March 31, 2026 (in thousands, except per share unit data): Performance Share Units Weighted Average Grant-Date Fair Value Per Unit (1) Outstanding at beginning of year 253 $ 64.83 Granted 256 $ 28.33 Vested ( 102 ) $ 48.40 Outstanding at March 31, 2026 407 $ 45.98 (1) Represents weighted average market value of the PSUs; PSUs are granted at no cost to the recipients. 15 NOTE 12. EARNINGS PER SHARE The following table sets forth the computation of basic and diluted earnings per share for the three months ended March 31, 2026 and 2025 (in thousands, except per share data): Three Months Ended March 31, 2026 2025 Numerator: Net income $ 161,612 $ 122,773 Denominator: Basic Weighted average common shares outstanding 61,424 63,843 Diluted Stock options (1) 19 84 Restricted stock units and awards (1) 58 215 Performance share units — — Contingent shares (2) 36 — Diluted weighted average common shares outstanding (3) 61,537 64,142 Basic earnings per share $ 2.63 $ 1.92 Diluted earnings per share $ 2.63 $ 1.91 (1) A total of 369 thousand and 44 thousand shares of stock-based awards were excluded from the calculation of diluted earnings per share for the three months ended March 31, 2026 and 2025 , respectively, as their effect would be anti-dilutive. (2) 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. (3) The denominator used in calculating diluted earnings per share did not include 407 thousand PSUs for the three months ended March 31, 2026. The denominator used in calculating diluted earnings per share did not include 239 thousand PSUs for the three months ended March 31, 2025. The performance conditions associated with these PSUs were not met and consequently none of these PSUs were considered as issuable for the three months ended March 31, 2026 and 2025. NOTE 13. GOODWILL During the first quarter of 2026, we completed certain organizational changes which resulted in a change to our presentation of reportable segments. The National Practice practice group, which consisted of a single reporting unit, is now included in the Financial Services practice group to align the internal management and reporting structure with the services provided by the practice groups. As of February 28, 2026, immediately after the organizational changes, there are a total of five reporting units, of which three are within the Financial Services practice group and two are within the Benefits and Insurances practice group. As a result of the aforementioned changes in reporting units, we performed a qualitative assessment immediately before the change in reporting units as it relates to the two reporting units impacted by the change. We concluded that it was more likely than not that the fair values of these reporting units immediately before the change exceeded their respective carrying values and, therefore, goodwill related to those reporting units immediately before the change was determined to not be impaired. The change in reporting units is considered a triggering event. We performed a quantitative assessment immediately after the change in reporting units by comparing the fair values of the reporting units to their respective carrying values. In measuring the estimated fair value of each reporting unit, we utilized a combination of an income approach and a market approach. Under the income approach, a discounted cash flow analysis is performed with estimates based on forecasted and projected operating cash flows, with significant assumptions related to revenue growth rates, profitability margins, and discount rates, which all vary among reporting units. The market approach utilizes the guideline public 16 company method and is based on revenue and earnings multiple data derived from publicly traded peer group companies. Based on the results of the quantitative assessment, we concluded that the estimated fair values of our reporting units immediately after the change were in excess of their respective carrying values, and goodwill was not impaired. We have experienced a decline in the Company's market capitalization. This decline, along with increases in discount rates used in the impairment analysis, reduced the excess of fair value over carrying value of our Financial Accounting Services reporting unit within the Financial Services practice group, which exceeded its carrying value by approximately 7.4 %, and of our Property and Casualty reporting unit within our Benefits and Insurance Services practice group, which exceeded its carrying value by approximately 14.5 %. As of March 31, 2026, the carrying value of Financial Accounting Services' goodwill was $ 1,679.9 million and the carrying value of Property and Casualty's goodwill was $ 78.8 million. It is possible, depending upon a number of factors that are not determinable at this time or within our control, that the fair value of one or more of our reporting units could decrease in the future, which could result in an impairment to goodwill. Such factors include failure to achieve the anticipated benefits of the Transaction, significant negative industry or economic trends, disruptions to our business, adverse changes resulting from new governmental regulations, negative impact on client list due to loss of customers, impact on client list due to declining revenue of existing customers, or divestitures. Additionally, further declines in our market capitalization may result in the need for impairment assessments in the future, which could result in the recognition of an impairment charge. Further, any significant adverse change in our near or long-term projections or macroeconomic conditions could result in future impairment charges, which could be material. A summary of changes in the carrying amount of goodwill by operating segment for the three months ended March 31, 2026 is as follows (in thousands): Financial Services Benefits and Insurance Services National Practice Total Gross Goodwill at December 31, 2025 $ 2,039,675 $ 340,238 $ 33,873 $ 2,413,786 Accumulated impairment ( 44,047 ) ( 7,733 ) ( 32,207 ) ( 83,987 ) Goodwill, Net at December 31, 2025 1,995,628 332,505 1,666 2,329,799 Additions 3,010 — — 3,010 Transfer - Gross goodwill (1) 33,873 — ( 33,873 ) — Transfer - Accumulated impairment (1) ( 32,207 ) — 32,207 — Gross Goodwill at March 31, 2026 2,076,558 340,238 — 2,416,796 Accumulated impairment ( 76,254 ) ( 7,733 ) — ( 83,987 ) Goodwill, Net at March 31, 2026 $ 2,000,304 $ 332,505 $ — $ 2,332,809 (1) Reflects change in reporting units which is the transfer of the reporting unit previously included under the National Practice segment to the Financial Services segment during the three months ended March 31, 2026. NOTE 14. SEGMENT DISCLOSURES As discussed in Note 13. Goodwill, the National Practices reportable segment, which consisted of a single reporting unit, was combined with a reporting unit included in the Financial Services practice group to better align our current internal management information reviewed by Chief Operating Decision Maker and reporting structure with the services provided. As a result of these changes, we now operate with two reportable segments: Financial Services and Benefits and Insurances Services. Financial results of the Financial Service Practice Group for the three months ended March 31, 2025 were adjusted to reflect the change in reportable segments. 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. 17 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, 2025. 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 months ended March 31, 2026 and 2025 is presented below. The segment profit or loss measure for the three months ended March 31, 2025 has been restated and reflects the current two reportable segments. We do not manage our assets on a segment basis, therefore segment assets are not presented below. Segment information for the three months ended March 31, 2026 and 2025 was as follows (in thousands): Three Months Ended March 31, 2026 Financial Services Benefits and Insurance Services Total Revenue from external customers $ 740,330 $ 108,249 $ 848,579 Significant expenses: Personnel costs 407,772 64,687 472,459 Facility costs 28,462 3,224 31,686 Other costs, gains, and losses, net (1) 95,409 16,948 112,357 Total segment expense 531,643 84,859 616,502 Segment income before income tax expense 208,687 23,390 232,077 Corporate & other: Unallocated corporate operating expenses 6,558 General & administrative expenses 29,568 Interest expense 23,916 Gain from acquisition related adjustment,net ( 57,955 ) Other expense, net 3,518 Consolidated income before income tax expense $ 226,472 18 Three Months Ended March 31, 2025 Financial Services Benefits and Insurance Services Total Revenue from external customers $ 725,038 $ 112,976 $ 838,014 Significant expenses: Personnel costs 421,457 66,665 488,122 Facility costs 23,712 3,208 26,920 Other costs, gains, and losses, net (1) 75,404 15,158 90,562 Total segment expense 520,573 85,031 605,604 Segment income before income tax expense 204,465 27,945 232,410 Corporate & other: Unallocated corporate operating expenses 3,797 General & administrative expenses 28,070 Interest expense 25,156 Other expense, net 2,477 Consolidated income before income tax expense $ 172,910 NOTE 15. SUBSEQUENT EVENTS Subsequent to March 31, 2026 and through April 27, we repurchased approximately 27 thousand shares of our common stock under the ROFR Agreement at a total cost of approximately $ 0.8 million and we repurchased 0.9 million shares of our common stock at a total cost of approximately $ 27.0 million in the open market. 19