- Revenues up 5% to
First Quarter 2026 Financial Summary vs.
- Revenues up 5% to
$307.0 million . - Gross billings up 3% to
$2.16 billion . - Average worksite employees (“WSEs”) up 1.9%.
- Net loss of
$14.8 million , or$(0.59) per diluted share, compared to a net loss of$1.0 million , or$(0.04) per diluted share, reflecting a one-time charge related to aU.S. Tax Court decision on prior-year tax credits. Net loss excluding the charge was$3.2 million , or$(0.13) per diluted share.
“BBSI delivered first quarter results in line with our expectations, supported by stable margins, benefiting from improved pricing,” said
First Quarter 2026 Financial Results
Revenues in the first quarter of 2026 increased 5% to
Total gross billings in the first quarter of 2026 increased 3% to
In the first quarter of 2026, the Company began presenting benefit costs as a discrete financial statement line item on the consolidated statements of operations. These costs primarily represent the premiums associated with its fully insured PEO client benefits program. As a result, these costs are directly correlated to the related client billings for PEO services.
Workers’ compensation expense as a percent of gross billings was 2.4% in the first quarter of 2026, including favorable prior year liability and premium adjustments of
Net loss for the first quarter of 2026 was
Liquidity
As of
Capital Allocation
Continuing under the Company’s stock repurchase program established in
The Company paid
Through a combination of stock repurchases and dividends, year-to-date capital returned to shareholders totaled more than
Outlook
BBSI reaffirms its outlook for 2026 as follows:
- Gross billings growth of 3% to 5%.
- Growth in the average number of WSEs of 2% to 4%.
- Gross margin as a percent of gross billings of 2.70% to 2.85%.
- Effective annual tax rate to remain at 26% to 27%.
Conference Call
BBSI will conduct a conference call on
BBSI’s CEO
Date:
Time:
Toll-free dial-in number: 1-800-717-1738
International dial-in number: 1-646-307-1865
Conference ID: 11161330
Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact
The conference call will be broadcast live and available for replay here and via the Investors section of the BBSI website at ir.bbsi.com.
A replay of the conference call will be available after
Toll-free replay number: 1-844-512-2921
International replay number: 1-412-317-6671
Replay ID: 11161330
Key Performance Metrics and Non-GAAP Financial Measures
During the first quarter of 2026, the Company recorded tax-effected charges of
The reconciliation of net loss and diluted loss per share to non-GAAP net loss and non-GAAP diluted loss per share for the three months ended
| (Unaudited) | ||||||||
| Three Months Ended | ||||||||
| 2026 | ||||||||
| Net Loss | Diluted Loss Per Share | |||||||
| GAAP net loss | $ | (14,803 | ) | $ | (0.59 | ) | ||
| Non-recurring tax adjustment | 11,565 | 0.46 | ||||||
| Non-GAAP net loss | $ | (3,238 | ) | $ | (0.13 | ) | ||
| Weighted average number of diluted common shares outstanding | 25,031 | |||||||
We report PEO revenues net of direct payroll costs because we are not the primary obligor for wage payments to our clients’ employees. However, management believes that gross billings and wages are useful in understanding the volume of our business activity and serve as important performance metrics in managing our operations, including the preparation of internal operating forecasts and establishing executive compensation performance goals. We therefore present for purposes of analysis gross billings and wage information for the three months ended
| (Unaudited) | ||||||||
| Three Months Ended | ||||||||
| (in thousands) | 2026 | 2025 | ||||||
| Gross billings | $ | 2,161,271 | $ | 2,088,669 | ||||
| PEO and staffing wages | $ | 1,864,665 | $ | 1,809,468 | ||||
In monitoring and evaluating the performance of our operations, management also reviews the following ratios, which represent selected amounts as a percentage of gross billings. Management believes these ratios are useful in understanding the efficiency and profitability of our service offerings.
| (Unaudited) | ||||||
| Percentage of Gross Billings | ||||||
| Three Months Ended | ||||||
| 2026 | 2025 | |||||
| PEO and staffing wages | 86.3% | 86.6% | ||||
| Payroll taxes | 8.1% | 8.1% | ||||
| Benefit costs | 1.2% | 0.9% | ||||
| Workers' compensation | 2.4% | 2.4% | ||||
| Gross margin | 2.0% | 2.0% | ||||
We refer to employees of our PEO clients as WSEs. Management reviews average and ending WSE growth to monitor and evaluate the performance of our operations. Average WSEs are calculated by dividing the number of unique individuals paid in each month by the number of months in the period. Ending WSEs represents the number of unique individuals paid in the last month of the period.
| (Unaudited) | ||||||||||||||
| Three Months Ended | ||||||||||||||
| 2026 | Year-over-year % Growth | 2025 | Year-over-year % Growth | |||||||||||
| Average WSEs | 134,993 | 1.9% | 132,459 | 7.6% | ||||||||||
| Ending WSEs | 135,596 | 1.4% | 133,699 | 7.1% | ||||||||||
About BBSI
BBSI (NASDAQ: BBSI) is a leading provider of business management solutions, combining human resource outsourcing and professional management consulting to create a unique operational platform that differentiates it from competitors. The Company’s integrated platform is built upon expertise in payroll processing, employee benefits, workers’ compensation coverage, risk management and workplace safety programs, and human resource administration. BBSI’s partnerships help businesses of all sizes improve the efficiency of their operations. The Company works with more than 8,200 PEO clients in all 50 states. For more information, please visit www.bbsi.com.
Forward-Looking Statements
Statements in this release about future events and financial outlook are forward-looking statements. Such statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Factors that could affect future results include: our ability to retain current clients and attract new clients; technology disruption, including the displacement of employees through the adoption of AI and automation by our clients; difficulties associated with integrating clients into our operations; economic trends in the Company’s service areas and the potential effects of changing governmental policies, including those related to immigration, tariffs, other trade policies, or climate regulation; risks to our business and the business of our clients arising from current or future tariffs or other trade restrictions, supply chain issues, changes in labor force, or geopolitical instability, including the war in
Condensed Consolidated Balance Sheets (Unaudited) | ||||||||
| (in thousands) | 2026 | 2025 | ||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 36,582 | $ | 95,033 | ||||
| Investments | 55,290 | 62,154 | ||||||
| Trade accounts receivable, net | 293,612 | 248,626 | ||||||
| Income taxes receivable | — | 2,965 | ||||||
| Prepaid expenses and other | 29,410 | 18,652 | ||||||
| Restricted cash and investments | 123,119 | 97,210 | ||||||
| Total current assets | 538,013 | 524,640 | ||||||
| Property, equipment and software, net | 70,785 | 67,230 | ||||||
| Operating lease right-of-use assets | 24,335 | 23,218 | ||||||
| Restricted cash and investments | 93,801 | 106,216 | ||||||
| 47,820 | 47,820 | |||||||
| Other assets | 8,386 | 9,869 | ||||||
| Deferred income taxes | 84 | 74 | ||||||
| Total assets | $ | 783,224 | $ | 779,067 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 5,869 | $ | 7,433 | ||||
| Accrued payroll and related benefits | 263,178 | 237,783 | ||||||
| Payroll taxes payable | 69,311 | 62,463 | ||||||
| Income taxes payable | 7,337 | — | ||||||
| Current operating lease liabilities | 7,169 | 6,969 | ||||||
| Current premium payable | 70,689 | 38,992 | ||||||
| Other accrued liabilities | 9,621 | 19,357 | ||||||
| Workers' compensation claims liabilities | 31,538 | 32,875 | ||||||
| Total current liabilities | 464,712 | 405,872 | ||||||
| Long-term workers' compensation claims liabilities | 70,272 | 75,709 | ||||||
| Long-term premium payable | 11,315 | 26,025 | ||||||
| Long-term operating lease liabilities | 18,408 | 17,484 | ||||||
| Customer deposits and other long-term liabilities | 12,851 | 12,977 | ||||||
| Stockholders' equity | 205,666 | 241,000 | ||||||
| Total liabilities and stockholders' equity | $ | 783,224 | $ | 779,067 | ||||
Consolidated Statements of Operations (Unaudited) | ||||||||
| Three Months Ended | ||||||||
| (in thousands, except per share amounts) | 2026 | 2025 | ||||||
| Revenues: | ||||||||
| Professional employer services | $ | 292,997 | $ | 274,926 | ||||
| Staffing services | 14,008 | 17,640 | ||||||
| Total revenues | 307,005 | 292,566 | ||||||
| Cost of revenues: | ||||||||
| Direct payroll costs | 10,482 | 13,306 | ||||||
| Payroll taxes | 174,096 | 169,390 | ||||||
| Benefit costs | 27,448 | 17,616 | ||||||
| Workers' compensation | 51,794 | 49,630 | ||||||
| Total cost of revenues | 263,820 | 249,942 | ||||||
| Gross margin | 43,185 | 42,624 | ||||||
| Selling, general and administrative expenses | 47,480 | 44,838 | ||||||
| Depreciation and amortization | 2,173 | 1,958 | ||||||
| Loss from operations | (6,468 | ) | (4,172 | ) | ||||
| Other income (expense): | ||||||||
| Investment income, net | 2,022 | 2,620 | ||||||
| Interest expense | (42 | ) | (44 | ) | ||||
| Other, net | 50 | 58 | ||||||
| Other income, net | 2,030 | 2,634 | ||||||
| Loss before income taxes | (4,438 | ) | (1,538 | ) | ||||
| Provision for (benefit from) income taxes | 10,365 | (517 | ) | |||||
| Net loss | $ | (14,803 | ) | $ | (1,021 | ) | ||
| Basic loss per common share | $ | (0.59 | ) | $ | (0.04 | ) | ||
| Weighted average number of basic common shares outstanding | 25,031 | 25,809 | ||||||
| Diluted loss per common share | $ | (0.59 | ) | $ | (0.04 | ) | ||
| Weighted average number of diluted common shares outstanding | 25,031 | 25,809 | ||||||
Investor Relations:
Tel 1-949-574-3860
BBSI@gateway-grp.com
