$CBZ earnings report

This supplemental 8-K is not a full earnings release. It updates the previously furnished results for the three and nine months ended September 30, 2026 with an expense identified during CBIZ's on-going quarter-end closing procedures and financial review. CBIZ disclosed additional one-time legal expenses of approximately $15 million that were not included in the Prior Form 8-K.

The company expects the additional expense to decrease net income by approximately $10.5 million, net of tax. The filing does not provide revised revenue, operating income, net income, diluted EPS, margins, cash flow, or balance-sheet amounts, so the scale of the change relative to reported results cannot be assessed from this document.

The adjustment creates a clear divergence between GAAP and adjusted reporting. CBIZ states that the expense will not affect disclosed Adjusted Net Income (Loss), Adjusted Diluted EPS or Adjusted EBITDA because it will be added back as transactional and corporate project related legal and professional services costs. The classification and reconciliation of these costs are therefore central to evaluating the revised quarterly results.

The disclosure is tied to a potential debt financing transaction associated with the pending acquisition of CBIZ by an affiliate of Grant Thornton in the U.S. The filing also highlights financing, approval, integration, cost, leverage and transaction-completion risks. Investors should focus on the forthcoming Form 10-Q for the final GAAP presentation of the expense and the supporting reconciliation to adjusted measures.

CBIZ reported modest top-line growth in the third quarter, with revenue of $ 702,240 compared with $ 693,818 in the prior-year period. Financial Services revenue was $ 597,791 and was identified in the financial highlights as up 1.2%, while Benefits and Insurance Services revenue was 104,449. For the nine months, total revenue was $ 2,233,025, up 0.8%, with Financial Services revenue of $ 1,918,445 and Benefits and Insurance Services revenue of 314,580. The Financial Services comparisons reflect the combination of the National Practice group with the Financial Service practice group and the corresponding adjustment of 2025 data.

Third-quarter profitability improved substantially on a GAAP basis. Gross margin was 114,054, or 16.2 % of revenue, compared with 90,129, or 13.0 %, and operating income was 90,177, or 12.8 %, compared with 58,864, or 8.5 %. Net income was $ 47,236 and diluted EPS was $ 0.79, compared with $ 30,146 and $ 0.48. The period also benefited from lower corporate general and administrative expenses of 23,877 compared with 31,265 and lower interest expense of (23,986 ) compared with (27,960 ).

The non-GAAP presentation also showed third-quarter improvement. Adjusted EBITDA was $ 131,852, up 6.3%, and Adjusted EBITDA margin was 18.8 %, compared with 17.9 %. Adjusted diluted EPS was $ 1.21, up 14.2%. Reconciliation items included 17,321 of acquisition-related integration costs, 2,136 of corporate projects related costs, 3,442 of stock-based compensation, and ESPP correction income of (5,933 ).

Nine-month performance was less favorable at the operating-profit level. Operating income was 308,755, compared with 319,168, and Adjusted EBITDA was $ 479,345, compared with $ 485,127. Adjusted EBITDA margin was 21.5 %, compared with 21.9 %. GAAP net income nevertheless rose to 218,627 from 194,861, with diluted EPS of $ 3.62 compared with $ 3.06, aided by a gain from acquisition related adjustment, net of 57,955. The nine-month adjusted reconciliation included 55,991 of integration costs related to acquisitions and a $7.2 million estimated legal settlement loss.

Cash generation improved over the nine-month period, with net cash provided by operating activities of $ 147,055 and Free Cash Flow of $ 125,235, versus $ 48,846 and $ 33,811. Accounts receivable, net increased to 782,392 as of September 30, 2026 from 555,995 at year-end. CBIZ reported a current portion of Term Loan of $ 96,250, Revolver Facility borrowings of 176,500, and a long-term portion of Term Loan of 1,181,250. The near-term reporting focus is the proposed Grant Thornton transaction, for which CBIZ suspended full-year guidance and its third-quarter conference call.

CBIZ reported a softer second quarter, with total revenue of $682M, down 0.2%. Profit measures declined more sharply: net income was $19M, down 55.6%; GAAP EPS was $0.31, down 53.0%; Adjusted EBITDA was $103M, down 14.3%; and adjusted diluted EPS was $0.91, down 8.1%. Financial Services revenue was also down 0.2%, although the filing did not provide its dollar amount.

The first-half picture was more favorable at the revenue and reported earnings level. Total revenue was $1,531M, up 0.6%, while net income of $171M increased 4.1% and GAAP EPS of $2.83 increased 9.7%. First-half adjusted diluted EPS of $3.44 increased 3.6%, but Adjusted EBITDA of $347M declined 3.8%, leaving a divergence between reported earnings and the adjusted EBITDA measure.

Cash-flow commentary was positive, with first-half operating cash flow up $97M and free cash flow up $99M. The filing did not disclose the underlying operating cash flow or free cash flow amounts, nor did it provide cash, debt, repurchase, dividend, gross-margin or operating-income figures in the provided text.

Management highlighted platform investments and commercial initiatives, including the enterprise-wide AI rollout, 100% employee certification, more than 1,500 team members enabled to create custom Microsoft Copilot agents, and expansion of the business transformation team to more than 60 professionals. CBIZ also cited a 60% year-over-year increase in Benefits & Insurance producer hiring and the acquisition of BINDZ, which added 250+ India-based professionals.

The earnings release is dominated by the announced transaction with Grant Thornton, backed by New Mountain Capital. Grant Thornton agreed to acquire CBIZ in an all-cash transaction with an enterprise value of $5.0 billion, or $55.00 per share, expected to close in the fourth quarter of 2026 subject to shareholder, regulatory and customary closing conditions. CBIZ canceled its earnings conference call, withdrew fiscal 2026 guidance and suspended further updates, making transaction progress the principal near-term disclosure item.