CBIZ, Inc. 10-Q

Item 1. Financial Statements CBIZ, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands) June 30, 2026 December 31, 2025 ASSETS Current assets: Cash and cash equivalents $ 20,901 $ 18,290 Restricted cash 49,615 38,234 Accounts receivable, net 711,919 555,995 Other current assets 86,717 79,693 Current assets before funds held for clients 869,152 692,212 Funds held for clients 135,047 207,037 Total current assets 1,004,199 899,249 Non-current assets: Property and equipment, net 84,777 81,242 Goodwill and other intangible assets, net 2,846,962 2,869,790 Assets of deferred compensation plan 202,044 186,870 Right-of-use assets, net 400,084 334,048 Other non-current assets 35,640 38,329 Total non-current assets 3,569,507 3,510,279 Total assets $ 4,573,706 $ 4,409,528 LIABILITIES Current liabilities: Accounts payable $ 115,513 $ 90,934 Income taxes payable 30,117 11,008 Accrued personnel costs 155,525 197,534 Contingent purchase price liabilities 17,406 30,035 Lease liabilities 59,135 64,674 Short-term debt (1) 83,975 66,372 Other current liabilities 86,866 68,299 Current liabilities before client fund obligations 548,537 528,856 Client fund obligations 135,308 206,738 Total current liabilities 683,845 735,594 Non-current liabilities: Long-term debt (1) 1,375,734 1,389,552 Income taxes payable 2,654 3,009 Deferred income taxes, net 44,566 7,141 Deferred compensation plan obligations 201,964 186,870 Contingent purchase price liabilities 3,606 10,213 Lease liabilities 387,417 307,905 Other non-current liabilities 6,188 7,177 Total non-current liabilities 2,022,129 1,911,867 Total liabilities 2,705,974 2,647,461 STOCKHOLDERS' EQUITY Common stock 1,467 1,447 Additional paid in capital 1,831,241 1,830,866 Retained earnings 1,182,957 1,011,566 Treasury stock ( 1,148,632 ) ( 1,078,521 ) Accumulated other comprehensive income (loss) 699 ( 3,291 ) Total stockholders’ equity 1,867,732 1,762,067 Total liabilities and stockholders’ equity $ 4,573,706 $ 4,409,528 See the accompanying notes to the unaudited condensed consolidated financial statements (1) See Note 6. 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 June 30, Six Months Ended June 30, 2026 2025 2026 2025 Revenue $ 682,206 $ 683,496 $ 1,530,785 $ 1,521,510 Operating expenses 609,768 595,587 1,232,330 1,205,499 Gross margin 72,438 87,909 298,455 316,011 Corporate general and administrative expenses 38,366 27,637 79,877 55,707 Operating income 34,072 60,272 218,578 260,304 Other (expense) income: Interest expense ( 24,335 ) ( 27,867 ) ( 48,251 ) ( 53,023 ) Gain from acquisition related adjustments, net — — 57,955 — Other income, net 13,949 25,374 9,933 23,408 Total other (expense) income, net ( 10,386 ) ( 2,493 ) 19,637 ( 29,615 ) Income before income tax expense 23,686 57,779 238,215 230,689 Income tax expense 5,082 15,837 66,824 65,974 Net income $ 18,604 $ 41,942 $ 171,391 $ 164,715 Earnings per share: Basic $ 0.31 $ 0.66 $ 2.84 $ 2.59 Diluted $ 0.31 $ 0.66 $ 2.83 $ 2.58 Basic weighted average shares outstanding 59,500 63,542 60,444 63,692 Diluted weighted average shares outstanding 59,703 63,784 60,546 63,960 Comprehensive income: Net income $ 18,604 $ 41,942 $ 171,391 $ 164,715 Other comprehensive income (loss), net of tax 2,256 ( 2,115 ) 3,990 ( 3,350 ) Comprehensive income $ 20,860 $ 39,827 $ 175,381 $ 161,365 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 March 31, 2026 145,734 91,435 1,458 1,831,208 1,164,353 ( 1,110,111 ) ( 1,557 ) 1,885,351 Net income — — — — 18,604 — — 18,604 Other comprehensive income, net of tax — — — — — — 2,256 2,256 Share repurchases — 1,300 — — — ( 38,509 ) — ( 38,509 ) Indirect repurchase of shares for minimum tax withholding — — — — — ( 12 ) — ( 12 ) Restricted stock units and awards 43 — — — — — — — Stock-based compensation — — — 8,105 — — — 8,105 Business acquisitions 928 — 9 ( 8,072 ) — — — ( 8,063 ) June 30, 2026 146,705 92,735 $ 1,467 $ 1,831,241 $ 1,182,957 $ ( 1,148,632 ) $ 699 $ 1,867,732 Issued Common Shares Treasury Shares Common Stock Additional Paid In Capital Retained Earnings Treasury Stock Accumulated Other Comprehensive Loss Total March 31, 2025 141,924 87,835 $ 1,420 $ 1,812,729 $ 1,018,895 $ ( 918,327 ) $ ( 16 ) $ 1,914,701 Net income — — — — 41,942 — — 41,942 Other comprehensive income, net of tax — — — — — — ( 2,115 ) ( 2,115 ) Share repurchases — 991 — — — ( 71,321 ) — ( 71,321 ) Indirect repurchase of shares for minimum tax withholding — 1 — — — ( 32 ) — ( 32 ) Restricted stock units and awards 21 — — — — — — — Stock-based compensation — — — 6,600 — — — 6,600 Business acquisitions 906 — 9 2,059 — — — 2,068 June 30, 2025 142,851 88,827 $ 1,429 $ 1,821,388 $ 1,060,837 $ ( 989,680 ) $ ( 2,131 ) $ 1,891,843 5 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 — — — — 171,391 — — 171,391 Other comprehensive income, net of tax — — — — — — 3,990 3,990 Share repurchases — 2,379 — — — ( 67,472 ) — ( 67,472 ) Indirect repurchase of shares for minimum tax withholding — 82 — — — ( 2,639 ) — ( 2,639 ) Restricted stock units and awards 129 — 1 ( 1 ) — — — — Performance share units 102 — 1 ( 1 ) — — — — Stock-based compensation — — — 15,635 — — — 15,635 Business acquisitions 1,820 — 18 ( 15,258 ) — — — ( 15,240 ) June 30, 2026 146,705 92,735 $ 1,467 $ 1,831,241 $ 1,182,957 $ ( 1,148,632 ) $ 699 $ 1,867,732 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 — — — — 164,715 — — 164,715 Other comprehensive loss, net of tax — — — — — — ( 3,350 ) ( 3,350 ) Share repurchases — 991 — — — ( 71,321 ) — ( 71,321 ) Indirect repurchase of shares for minimum tax withholding — 89 — — — ( 7,758 ) — ( 7,758 ) Restricted stock units and awards 99 — 1 ( 1 ) — — — — Performance share units 124 — 1 ( 1 ) — — — — Stock-based compensation — — — 12,239 — — — 12,239 Business acquisitions 4,683 — 47 17,288 — — — 17,335 June 30, 2025 142,851 88,827 $ 1,429 $ 1,821,388 $ 1,060,837 $ ( 989,680 ) $ ( 2,131 ) $ 1,891,843 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) Six Months Ended June 30, 2026 2025 Cash flows from operating activities: Net income $ 171,391 $ 164,715 Adjustments to reconcile net income to net cash used in operating activities: Depreciation and amortization expense 47,134 49,858 Bad debt expense, net of recoveries 3,116 1,862 Adjustment to contingent purchase price liabilities ( 1,578 ) 1,487 Stock-based compensation expense 15,635 12,239 Deferred income taxes 19,746 17,148 Amortization of deferred financing fees 2,686 2,735 Other, net 1,013 ( 52 ) Changes in assets and liabilities, net of acquisitions and divestitures: Accounts receivable, net ( 158,856 ) ( 143,107 ) Other assets ( 8,331 ) ( 12,459 ) Accounts payable 24,580 28,848 Income taxes payable 19,346 28,119 Accrued personnel costs ( 42,009 ) ( 75,561 ) Other liabilities 28,354 ( 50,952 ) Net cash provided by operating activities 122,227 24,880 Cash flows from investing activities: Business acquisitions and purchases of client lists, net of cash acquired ( 13,989 ) — Purchases of client fund investments ( 6,250 ) ( 19,350 ) Proceeds from the sales and maturities of client fund investments 5,965 21,645 Proceeds from sales of divested operations 332 289 Change in funds held for clients 252 ( 2,285 ) Additions to property and equipment ( 11,739 ) ( 13,125 ) Other, net 3,969 527 Net cash used in investing activities ( 21,460 ) ( 12,299 ) Cash flows from financing activities: Proceeds from bank debt 451,400 849,600 Payment of bank debt ( 450,300 ) ( 696,800 ) Deferred financing costs — ( 983 ) Payment for acquisition of treasury stock ( 67,472 ) ( 71,321 ) Indirect repurchase of shares for minimum tax withholding ( 2,639 ) ( 7,758 ) Changes in client funds obligations ( 71,430 ) ( 57,223 ) Payment of contingent consideration for acquisitions and client lists ( 18,211 ) ( 48,764 ) Other, net 337 — Net cash used in financing activities ( 158,315 ) ( 33,249 ) Net decrease in cash, cash equivalents and restricted cash ( 57,548 ) ( 20,668 ) Cash, cash equivalents and restricted cash at beginning of year $ 218,090 $ 187,170 Cash, cash equivalents and restricted cash at end of period $ 160,542 $ 166,502 Reconciliation of cash, cash equivalents and restricted cash to the Condensed Consolidated Balance Sheets: Cash and cash equivalents $ 20,901 $ 39,817 Restricted cash 49,615 49,145 Cash equivalents included in funds held for clients 90,026 77,540 Total cash, cash equivalents and restricted cash $ 160,542 $ 166,502 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 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 “Marcum 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, as amended, 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 “Marcum 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 15, 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, as amended, for the year ended December 31, 2025. 8 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, as amended, for the year ended December 31, 2025. 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. REVISION OF PREVIOUSLY ISSUED INTERIM FINANCIAL STATEMENTS Nature of the Error During the quarter ended June 30, 2026, the Company discovered it inadvertently purchased and delivered up to 481,049 shares of our common stock (the "excess shares") in excess of the number of shares available under its 2007 Employee Stock Purchase Plan (as amended from time to time, the “ESPP”) and registered pursuant to two registration statements on Form S-8. The Company determined that it has an obligation to remediate this matter, including amounts expected to be paid to eligible participants for declines in shares price for shares currently held or lost profits for shares previously if sold, related interest, and applicable employer payroll taxes. Management evaluated the error in accordance with the guidance in Staff Accounting Bulletin No. 99, Materiality , and Staff Accounting Bulletin No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements . Based on this evaluation, the Company determined, after an evaluation of both quantitative and qualitative factors, that the purchase and delivery of the excess shares did not have a material impact on the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, as amended. However, as a result of the purchase and delivery of the excess shares and the associated obligation, the Company has revised the previously issued interim financial information for the three months ended March 31, 2026 included in this Quarterly Report on Form 10-Q. 9 Impact of the Revision The following tables summarize the effect of the revision on the Company's previously reported condensed consolidated financial statements (in thousands, except per share data): Three Months Ended March 31, 2026 As Previously Reported Adjustment As Adjusted Condensed Consolidated Balance Sheet Line Items: Other current liabilities $ 70,002 $ 11,943 $ 81,945 Total current liabilities $ 655,902 $ 11,943 $ 667,845 Deferred income taxes, net $ 29,577 $ ( 3,118 ) $ 26,459 Total non-current liabilities $ 2,079,882 $ ( 3,118 ) $ 2,076,764 Total liabilities $ 2,735,784 $ 8,825 $ 2,744,609 Retained earnings $ 1,173,178 $ ( 8,825 ) $ 1,164,353 Total stockholders' equity $ 1,894,176 $ ( 8,825 ) $ 1,885,351 Three Months Ended March 31, 2026 As Previously Reported Adjustment As Adjusted Condensed Consolidated Statements of Comprehensive Income Line Items: Corporate general and administrative expenses $ 29,568 $ 11,943 $ 41,511 Income before income tax expense $ 226,472 $ ( 11,943 ) $ 214,529 Income tax expense $ 64,860 $ ( 3,118 ) $ 61,742 Net income $ 161,612 $ ( 8,825 ) $ 152,787 Earnings per share - basic $ 2.63 $ ( 0.14 ) $ 2.49 Earnings per share - diluted $ 2.63 $ ( 0.14 ) $ 2.49 Three Months Ended March 31, 2026 As Previously Reported Adjustment As Adjusted Condensed Consolidated Statements of Cash Flow Line Items: Net income $ 161,612 $ ( 8,825 ) $ 152,787 Deferred income taxes $ 14,660 $ ( 3,118 ) $ 11,542 Other liabilities $ 6,599 $ 11,943 $ 18,542 Net cash used in operating activities $ ( 25,515 ) $ — $ ( 25,515 ) NOTE 4. BUSINESS COMBINATIONS Marcum Acquisition Stock Consideration Transferred Pursuant to the terms of the Marcum Transaction, with respect to the 13.6 million shares of stock consideration, approximately 8.2 million shares, in aggregate, were delivered from January 2, 2025 to June 30, 2026 to the selling shareholders. The remaining 5.3 million shares will be delivered in 18 monthly installments starting July 1, 2026. Working Capital Adjustment Related to the Marcum Transaction During the six months ended June 30, 2026, the Company finalized the working capital and related purchase price adjustment associated with the Marcum Transaction in accordance with the applicable provisions of the Marcum Merger Agreement. As a result, the Company received $ 46.5 million in cash 10 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 six months ended June 30, 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 Marcum Transaction. Total cash received on January 26, 2026 was $ 53.1 million. BINDZ Acquisition On June 1, 2026, the Company acquired BINDZ Consulting Private Limited ("BINDZ"), an India-based professional services company, for $ 9.8 million in cash. BINDZ previously played a critical role in supporting CBIZ’s client delivery across accounting and tax. This acquisition allows CBIZ to scale its global capabilities in India, expanding capacity for delivery of its professional services. BINDZ maintains its general ledger in local currency (or rupees). The BINDZ financials are translated into US currency, which results in foreign currency translation gain and loss. NOTE 5. 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 June 30, 2026 and December 31, 2025 was as follows (in thousands): June 30, 2026 December 31, 2025 Trade accounts receivable $ 542,883 $ 469,209 Unbilled revenue, at net realizable value 222,883 136,701 Total accounts receivable 765,766 605,910 Allowance for doubtful accounts ( 53,847 ) ( 49,915 ) Accounts receivable, net $ 711,919 $ 555,995 Changes to the allowance for doubtful accounts for the six months ended June 30, 2026 and year ended December 31, 2025 were as follows (in thousands): June 30, 2026 December 31, 2025 Balance at beginning of period $ ( 49,915 ) $ ( 31,715 ) Provision ( 16,027 ) ( 34,447 ) Charge-offs, net of recoveries 12,095 16,247 Allowance for doubtful accounts $ ( 53,847 ) $ ( 49,915 ) NOTE 6. 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”). 11 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 June 30, 2026, we were in compliance with all covenants under the 2024 Credit Facilities. The balance outstanding under the 2024 Credit Facilities at June 30, 2026 and December 31, 2025 was as follows (in thousands): June 30, 2026 December 31, 2025 Short-term debt Current portion, Term Loan $ 87,500 $ 70,000 Current portion debt issuance costs, Term Loan ( 3,525 ) ( 3,628 ) Total short-term debt $ 83,975 $ 66,372 Long-term debt Revolver Facility $ 178,500 $ 142,400 Debt issuance costs, Revolver ( 5,648 ) ( 6,495 ) Long-term portion, Term Loan 1,207,500 1,260,000 Long-term portion Debt Issuance Costs, Term Loan ( 4,618 ) ( 6,353 ) Total long-term debt $ 1,375,734 $ 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 six months ended June 30, 2026 and 2025 were as follows: Six Months Ended June 30, 2026 2025 Weighted average rates 6.06 % 6.67 % Range of effective rates 3.54 % - 6.84 % 3.18 % - 8.75 % We had approximately $ 418.3 million of available funds under the 2024 Credit Facilities at June 30, 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. 12 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, as amended, 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 June 30, 2026 or December 31, 2025. The line of credit was renewed in July 2026 and will now terminate on July 30, 2027. 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 six months ended June 30, 2026 and 2025 was as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Credit facilities $ 24,309 $ 27,862 $ 48,224 $ 53,018 Other 26 5 27 5 Total $ 24,335 $ 27,867 $ 48,251 $ 53,023 NOTE 7. 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 June 30, 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 $ 2.1 million and $ 2.1 million at June 30, 2026 and December 31, 2025, 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 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 parties to the two CBIZ MOVEit matters have reached agreement in principle to settle such matters for a combined amount of $ 7.2 million, which CBIZ recorded as a loss as a component of Other income, net on the condensed consolidated statement of comprehensive income for the three and six months ended June 30, 2026. CBIZ anticipates the full such amount being paid by applicable insurance coverage following approval by the MDL court of such settlement. 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 13 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, as amended, for further discussion on the Company's commitments and contingencies. NOTE 8. 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 $ 45.3 million and $ 45.0 million at June 30, 2026 and December 31, 2025, respectively, and these investments have maturity or callable dates ranging from December 2026 through March 2031. At June 30, 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. The following table summarizes activities related to these investments for the six months ended June 30, 2026 and the year ended December 31, 2025 (in thousands): Six Months Ended June 30, 2026 Year Ended December 31, 2025 Fair value at beginning of period $ 45,004 $ 40,999 Purchases 6,250 43,375 Redemptions — ( 5,096 ) Maturities ( 5,965 ) ( 34,595 ) Change in bond premium ( 28 ) 11 Fair market value adjustment ( 483 ) 310 Fair value at end of period $ 44,778 $ 45,004 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 $ 0.5 million at June 30, 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, as amended, 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 June 30, 2026 and December 31, 2025 (amounts in thousands, except percentages): 14 June 30, 2026 Notional Amount Fixed Rate Expiration Fair Value Balance Sheet Location Interest rate swap $ 100,000 4.047 % 7/14/2026 $ ( 16 ) Other current liability Interest rate swap $ 30,000 1.186 % 12/14/2026 $ 361 Other current asset Interest rate swap $ 100,000 3.850 % 7/14/2027 $ 92 Other non-current asset Interest rate swap $ 20,000 2.450 % 8/14/2027 $ 334 Other non-current asset Interest rate swap $ 25,000 3.669 % 4/14/2028 $ 110 Other non-current asset Interest rate swap $ 25,000 4.488 % 10/14/2028 $ ( 322 ) Other non-current liability Interest rate swap $ 50,000 3.703 % 3/14/2030 $ 238 Other non-current asset Interest rate swap $ 50,000 3.503 % 4/14/2030 $ 594 Other non-current asset Interest rate swap $ 50,000 3.658 % 7/14/2030 $ 329 Other non-current asset Interest rate swap $ 50,000 3.680 % 7/15/2030 $ 287 Other non-current asset 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 Refer to Note 9, 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 six months ended June 30, 2026 and 2025 (in thousands): Gain (Loss) Recognized in AOCI, net of tax Gain Reclassified from AOCI into Expense Three Months Ended June 30, Three Months Ended June 30, 2026 2025 2026 2025 Interest rate swaps $ 2,246 $ ( 1,719 ) $ 38 $ 594 Gain (Loss) Recognized in AOCI, net of tax Gain Reclassified from AOCI into Expense Six Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Interest rate swaps $ 4,303 $ ( 2,436 ) $ 127 $ 1,373 NOTE 9. FAIR VALUE MEASUREMENTS The following table summarizes our assets and (liabilities) at June 30, 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): 15 Level June 30, 2026 December 31, 2025 Assets of deferred compensation plan 1 $ 202,044 $ 186,870 Other depository assets 1 $ 243 $ 470 Deferred compensation plan obligations 1 $ ( 201,964 ) $ ( 186,870 ) Available-for-sale debt securities 2 $ 44,778 $ 45,004 Interest rate swaps 2 $ 2,007 $ ( 3,602 ) Bank debt, net 2 $ ( 1,459,709 ) $ ( 1,455,924 ) Contingent purchase price liabilities 3 $ ( 21,012 ) $ ( 40,248 ) During the six months ended June 30, 2026 and 2025, there were no transfers between the valuation hierarchy Levels 1, 2, and 3. The Company reclassified its available-for-sale debt securities from Level 1 to Level 2 as these securities are not traded on an exchange as of June 30, 2026 and December 31, 2025. The following table summarizes the change in Level 3 fair values of our contingent purchase price liabilities for the six months ended June 30, 2026 and 2025 (pre-tax basis, in thousands): 2026 2025 Beginning balance – December 31 $ ( 40,248 ) $ ( 96,967 ) Additions from business acquisitions ( 1,835 ) ( 2,941 ) Settlement of contingent purchase price liabilities 19,493 52,662 Change in fair value of contingencies 2,117 170 Change in net present value of contingencies ( 539 ) ( 1,657 ) Ending balance – June 30 $ ( 21,012 ) $ ( 48,733 ) 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 six months ended June 30, 2026 and 2025, respectively (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Net (income) expense $ ( 1,773 ) $ 1,020 $ ( 1,578 ) $ 1,487 Cash settlement paid $ 11,910 $ 19,245 $ 18,211 $ 48,764 Shares issued (number) 36 14 36 47 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, as amended, for further discussion on the fair value measurements and classification of our financial assets and liabilities. NOTE 10. 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 and six months ended June 30, 2026 and 2025 (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Net unrealized (loss) gain on available-for-sale securities, net of taxes (1) $ ( 96 ) $ 51 $ ( 345 ) $ 123 Net unrealized gain (loss) on interest rate swaps, net of taxes (2) 2,342 ( 2,164 ) 4,333 ( 3,465 ) Foreign currency translation 10 ( 2 ) 2 ( 8 ) Total other comprehensive income (loss), net of tax $ 2,256 $ ( 2,115 ) $ 3,990 $ ( 3,350 ) (1) Net of income tax benefit of $ 39 thousand and income tax expense of $ 22 thousand for the three months ended June 30, 2026 and 2025, respectively. Net of income tax expense of 16 $ 138 thousand and $ 51 thousand for the six months ended June 30, 2026 and 2025, respectively. (2) Net of income tax expense of $ 616 thousand and income tax benefit of $ 722 thousanrd for the three months ended June 30, 2026 and 2025, respectively. Net of income tax expense of $ 1,277 thousand and income tax benefit of $ 1,156 thousand for the six months ended June 30, 2026 and 2025, respectively. NOTE 11. COMMON STOCK Common Stock Issued for the Marcum Transaction - Pursuant to the Marcum Merger Agreement and as part of the total purchase price consideration, we issued shares of our common stock to the selling shareholders in the Marcum Transaction. Refer to Note 4, Business Combinations, for more detail. Right of First Refusal Program - Pursuant to the Marcum 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 Marcum 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. The continuation of the Share Repurchase Program was effective beginning on February 11, 2026 at which time the amount of shares of common stock available to be purchased by the Company was reset to 5 million shares. 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, as amended, for more detail about the Share Repurchase Program. We repurchased 0.2 million shares of our common stock for a total cost of $ 7.4 million under the ROFR Agreement and 2.1 million shares of our common stock in the open market for $ 60.1 million during the six months ended June 30, 2026. During the six months ended June 30, 2025, we repurchased 1.0 million shares of our common stock for a cost of $ 71.3 million under the ROFR Agreement and no share repurchases 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 six months ended June 30, 2026 and 0.1 million shares at a cost of $ 7.8 million during the six months ended June 30, 2025. NOTE 12. 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 to 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, 2025, as amended, 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 and six months ended June 30, 2026 and 2025 was as follows (in thousands): 17 Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Restricted stock units and awards $ 6,382 $ 5,289 $ 12,752 $ 10,148 Performance share units 1,723 1,311 2,883 2,091 Total stock-based compensation expense $ 8,105 $ 6,600 $ 15,635 $ 12,239 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 six months ended June 30, 2026. As of June 30, 2026, we have 150 thousand stock options outstanding with a weighted average exercise price per share of $ 35.22 . For the six months ended June 30, 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 . Additionally, 42 thousand Restricted Stock Awards ("RSA") were granted to non-employee directors. The following table presents our restricted stock units and awards activity during the six months ended June 30, 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 740 $ 28.20 Exercised or released ( 104 ) $ 69.51 Expired or canceled ( 14 ) $ 46.81 Outstanding at June 30, 2026 1,533 $ 50.28 (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 exceed 300 %. The following table presents our PSUs activity during the six months ended June 30, 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 June 30, 2026 407 $ 45.98 (1) Represents weighted average market value of the PSUs; PSUs are granted at no cost to the recipients. NOTE 13. EARNINGS PER SHARE The following table sets forth the computation of basic and diluted earnings per share for the three and six months ended June 30, 2026 and 2025 (in thousands, except per share data): 18 Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Numerator: Net income $ 18,604 $ 41,942 $ 171,391 $ 164,715 Denominator: Basic Weighted average common shares outstanding 59,500 63,542 60,444 63,692 Diluted Stock options (1) 10 77 14 81 Restricted stock units and awards (1) 153 165 48 187 Performance share units 40 — 40 — Diluted weighted average common shares outstanding (2) 59,703 63,784 60,546 63,960 Basic earnings per share $ 0.31 $ 0.66 $ 2.84 $ 2.59 Diluted earnings per share $ 0.31 $ 0.66 $ 2.83 $ 2.58 (1) A total of 850 thousand and 1,271 thousand shares of stock-based awards were excluded from the calculation of diluted earnings per share for the three and six months ended June 30, 2026, respectively, as their effect would be anti-dilutive. A total of 63 thousand and 79 thousand shares of stock-based awards were excluded from the calculation of diluted earnings per share for the three and six months ended June 30, 2025. (2) The denominator used in calculating diluted earnings per share did not include 367 thousand PSUs for the three and six months ended June 30, 2026. The denominator used in calculating diluted earnings per share did not include 239 thousand PSUs for the three and six months ended June 30, 2025. The performance conditions associated with these PSUs were not met and consequently none of these PSUs were considered as issuable for the three and six months ended June 30, 2026 and 2025. NOTE 14. 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 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. 19 During the first quarter of 2026, we experienced a decline in the Company's market capitalization. This decline, along with increases in discount rates used in the aforementioned quantitative impairment analysis, reduced the excess of fair value over carrying value of our Financial Accounting Services reporting unit within the Financial Services practice group and our Property and Casualty reporting unit within our Benefits and Insurance Services practice group as of March 31, 2026. During the second quarter of 2026, the Company's market capitalization improved, and we performed a qualitative assessment of its goodwill and concluded that it was more likely than not the fair values of the Company's reporting units exceeded their respective carrying value, and therefore, goodwill related to the Company's reporting units was determined to not be impaired. 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 Marcum 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 six months ended June 30, 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 11,470 — — 11,470 Transfer - Gross goodwill (1) 33,873 — ( 33,873 ) — Transfer - Accumulated impairment (1) ( 32,207 ) — 32,207 — Gross Goodwill at June 30, 2026 2,085,018 340,238 — 2,425,256 Accumulated impairment ( 76,254 ) ( 7,733 ) — ( 83,987 ) Goodwill, Net at June 30, 2026 $ 2,008,764 $ 332,505 $ — $ 2,341,269 (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 six months ended June 30, 2026. NOTE 15. SEGMENT DISCLOSURES As discussed in Note 14. 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 and six months ended June 30, 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. 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, as amended. Upon consolidation, intercompany accounts and transactions are 20 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 six months ended June 30, 2026 and 2025 is presented below. The segment profit or loss measure for the three and six months ended June 30, 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 June 30, 2026 and 2025 was as follows (in thousands): Three Months Ended June 30, 2026 Financial Services Benefits and Insurance Services Total Revenue from external customers $ 580,324 $ 101,882 $ 682,206 Significant expenses: Personnel costs 379,658 65,335 444,993 Facility costs 21,550 3,207 24,757 Other costs, gains, and losses, net (1) 98,719 17,693 116,412 Total segment expense 499,927 86,235 586,162 Segment income before income tax expense 80,397 15,647 96,044 Corporate & other: Unallocated corporate operating expenses 23,661 General & administrative expenses 38,366 Interest expense 24,308 Other expense, net ( 13,977 ) Consolidated income before income tax expense $ 23,686 Three Months Ended June 30, 2025 Financial Services Benefits and Insurance Services Total Revenue from external customers $ 581,567 $ 101,929 $ 683,496 Significant expenses: Personnel costs 388,625 65,078 453,703 Facility costs 23,639 3,195 26,834 Other costs, gains, and losses, net (1) 82,701 15,688 98,389 Total segment expense 494,965 83,961 578,926 Segment income before income tax expense 86,602 17,968 104,570 Corporate & other: Unallocated corporate operating expenses 16,638 General & administrative expenses 27,637 Interest expense 27,867 Other expense, net ( 25,351 ) Consolidated income before income tax expense $ 57,779 21 Six Months Ended June 30, 2026 Financial Services Benefits and Insurance Services Total Revenue from external customers $ 1,320,654 $ 210,131 $ 1,530,785 Significant expenses: Personnel costs 787,430 130,022 917,452 Facility costs 50,012 6,431 56,443 Other costs, gains, and losses, net (1) 194,128 34,641 228,769 Total segment expense 1,031,570 171,094 1,202,664 Segment income before income tax expense 289,084 39,037 328,121 Corporate & other: Unallocated corporate operating expenses 30,219 General & administrative expenses 79,877 Interest expense 48,224 Gain from acquisition related adjustment ( 57,955 ) Other income, net ( 10,459 ) Consolidated income before income tax expense $ 238,215 Six Months Ended June 30, 2025 Financial Services Benefits and Insurance Services Total Revenue from external customers $ 1,306,605 $ 214,905 $ 1,521,510 Significant expenses: Personnel costs 810,082 131,743 941,825 Facility costs 47,351 6,403 53,754 Other costs, gains, and losses, net (1) 158,105 30,846 188,951 Total segment expense 1,015,538 168,992 1,184,530 Segment income before income tax expense 291,067 45,913 336,980 Corporate & other: Unallocated corporate operating expenses 20,435 General & administrative expenses 55,707 Interest expense 53,023 Other income, net ( 22,874 ) Consolidated income before income tax expense $ 230,689 (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. NOTE 16. SUBSEQUENT EVENTS On July 28, 2026, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”), by and among the Company, Viking ParentCo, Inc., a Delaware corporation (“Parent”), and Viking MergerCo, Inc., a Delaware corporation and a direct wholly owned subsidiary of Parent (“Merger Sub”), pursuant to which, upon the terms and subject to the conditions set forth therein, 22 Merger Sub will merge with and into the Company (the “Merger”), with the Company surviving the proposed Merger as a direct wholly owned subsidiary of Parent. Pursuant to the Merger Agreement, upon the consummation of the proposed Merger transaction, each share of common stock, par value $ 0.01 per share, of the Company (the “Shares” and each a “Share”) issued and outstanding immediately prior to the effective time of the Merger (other than certain excluded shares as set forth in the Merger Agreement) will be converted into the right to receive $ 55.00 per share in cash, without interest thereon (the “Merger Consideration”). The Merger Agreement also provides for the treatment of the Company’s outstanding equity awards in accordance with its terms upon consummation of the proposed Merger. The completion of the proposed Merger is subject to customary closing conditions, including approval by the Company’s stockholders, the receipt of required regulatory approvals, the absence of any law or order prohibiting the consummation of the transaction and no material adverse effect having occurred since the signing of the Merger Agreement. The Merger Agreement also contains customary representations, warranties, covenants, and termination provisions. If the Merger Agreement is consummated, we will become a privately held company and our common stock will be delisted from the New York Stock Exchange and deregistered under the Securities Exchange Act of 1934, as amended. A copy of the Merger Agreement is incorporated by reference as Exhibit 2.1 to this Quarterly Report on Form 10-Q.