CBIZ, Inc.

Previous wording

The following discussion is intended to assist in the understanding of our financial position at March 31, 2026 and December 31, 2025, results of operations for the three months ended March 31, 2026 and 2025, and cash flows for the three months ended March 31, 2026 and 2025, and should be read in conjunction with the unaudited condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q and with our Annual Report on Form 10-K for the year ended December 31, 2025. This discussion and analysis contains forward-looking statements and should be read in conjunction with the disclosures and information contained in “Forward-Looking Statements” included elsewhere in this Quarterly Report on Form 10-Q and in “Item 1A. Risk Factors” included in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2025.

Current wording

The following discussion is intended to assist in the understanding of our financial position at June 30, 2026 and December 31, 2025, results of operations for the three and six months ended June 30, 2026 and 2025, and cash flows for the six months ended June 30, 2026 and 2025, and should be read in conjunction with the unaudited condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q and with our Annual Report on Form 10-K for the year ended December 31, 2025, as amended. This discussion and analysis contains forward-looking statements and should be read in conjunction with the disclosures and information contained in “Forward-Looking Statements” included elsewhere in this Quarterly Report on Form 10-Q and in “Item 1A. Risk Factors” included in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2025, as amended.

Previous wording

We provide professional business services, products and solutions that help our clients grow and succeed by better managing their finances and employees. These services are primarily provided to small and medium-sized businesses, as well as individuals, governmental entities, and not-for-profit enterprises throughout the United States and parts of Canada. As discussed in Note 13, Goodwill, the National Practices practice group, which consisted of a single reporting unit, is now included in the Financial Services practice group to align our internal management 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.

Current wording

We provide professional business services, products and solutions that help our clients grow and succeed by better managing their finances and employees. These services are primarily provided to small and medium-sized businesses, as well as individuals, governmental entities, and not-for-profit enterprises throughout the United States and parts of Canada. As discussed in Note 14, Goodwill, the National Practices practice group, which consisted of a single reporting unit, is now included in the Financial Services practice group to align our internal management 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.

Previous wording

Refer to the Annual Report on Form 10-K for the year ended December 31, 2025 for further discussion of our business and strategies, as well as the external relationships and regulatory factors that currently impact our operations.

Current wording

Refer to the Annual Report on Form 10-K for the year ended December 31, 2025, as amended, for further discussion of our business and strategies, as well as the external relationships and regulatory factors that currently impact our operations.

Previous wording

Revenue for the three months ended March 31, 2026 increased by $10.6 million, or 1.3%, to $848.6 million from $838.0 million for the same period in 2025. Same-unit revenue increased by approximately $8.4 million, or 1.0%, as compared to the same period in 2025. Revenue from newly acquired operations contributed $2.1 million of incremental revenue for the three months ended March 31, 2026, as compared to the same period in 2025. A detailed discussion of revenue by practice group is included under "Operating Practice Groups."

Current wording

Revenue for the three months ended June 30, 2026 decreased by $1.3 million, or 0.2%, to $682.2 million from $683.5 million for the same period in 2025. Same-unit revenue decreased by approximately $3.5 million, or 0.5%, as compared to the same period in 2025. Revenue from newly acquired operations contributed $2.2 million of incremental revenue for the three months ended June 30, 2026, as compared to the same period in 2025. A detailed discussion of revenue for the three months ended June 30, 2026 by practice group is included under "Operating Practice Groups."

Previous wording

For the three months ended March 31, 2026, net income was $161.6 million, or $2.63 per diluted share, compared to $122.8 million, or $1.91 per diluted share, for the same period in 2025. Refer to “Results of Operations" for a detailed discussion of the components of net income.

Current wording

For the three months ended June 30, 2026, net income was $18.6 million, or $0.31 per diluted share, compared to $41.9 million, or $0.66 per diluted share, for the same period in 2025. For the six months ended June 30, 2026, net income was $171.4 million, or $2.83 per diluted share, compared to $164.7 million, or $2.58 per diluted share, for the same period in 2025. Refer to “Results of Operations" for a detailed discussion of the components of net income.

Previous wording

Our primary business objective is funding organic growth acceleration and meeting working capital needs. This includes investments in client service delivery and emerging technology that support revenue growth and enhance operational excellence. Following the completion of the Transaction, our second priority is to pay down debt to be at a net leverage ratio of less than 2.5x over time. As a result of the Transaction and related 2024 Credit Facilities, we have $1,551.5 million of outstanding debt under the 2024 Credit Facilities as of March 31, 2026. In addition, we believe that repurchasing shares of our common stock can be an attractive use of capital and an efficient means to provide value to our stockholders. We will also remain focused on making strategic acquisitions that allow us to strengthen our presence in existing markets, expand into high growth industries, and broaden our services to our clients.

Current wording

Our primary business objective is funding organic growth acceleration and meeting working capital needs. This includes investments in client service delivery and emerging technology that support revenue growth and enhance operational excellence. Following the completion of the Marcum Transaction, our second priority is to pay down debt to be at a net leverage ratio of less than 2.5x over time. As a result of the Marcum Transaction and related 2024 Credit Facilities, we have $1,473.5 million of outstanding debt under the 2024 Credit Facilities as of June 30, 2026. In addition, we believe that repurchasing shares of our common stock can be an attractive use of capital and an efficient means to provide value to our stockholders. We will also remain focused on making strategic acquisitions that allow us to strengthen our presence in existing markets, expand into high growth industries, and broaden our services to our clients.

Previous wording

During the three months ended March 31, 2026, 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 pursuant to our Share Repurchase Program (defined below). 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

Current wording

During the six months ended June 30, 2026, 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 pursuant to our Share Repurchase Program (defined below). 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. 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. To settle statutory employee withholdings related to vesting of stock awards, we repurchased 0.1 million shares at a cost of $7.8 million during the six months ended June 30, 2025. Refer to Note 11, Common Stock, to the accompanying unaudited condensed consolidated financial statements for further details.

Previous wording

The following tables summarize total revenue for the three months ended March 31, 2026 and 2025:

Current wording

The following tables summarize total revenue for the three and six months ended June 30, 2026 and 2025:

Previous wording

(1)During the three months ended March 31, 2026, the National Practice practice group was combined with the Financial Service practice group to better align with internal management and reporting structure. As a result, the Financial Services revenue for the three months ended March 31, 2025 was adjusted to reflect this change.

Current wording

(1)During the six months ended June 30, 2026, the National Practice practice group was combined with the Financial Service practice group to better align with internal management and reporting structure. As a result, the Financial Services revenue for the three and six months ended June 30, 2025 was adjusted to reflect this change.

Previous wording

Refer to Note 13, Employee Benefits, 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 Non-qualified Deferred Compensation Plan.

Current wording

Refer to Note 13, Employee Benefits, 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 Non-qualified Deferred Compensation Plan.

Previous wording

Losses related to the deferred compensation plan assets for the three months ended March 31, 2026 and 2025 were recorded as follows (in thousands, except percentages):

Current wording

Income and expenses related to the deferred compensation plan assets for the three and six months ended June 30, 2026 and 2025 were recorded as follows (in thousands, except percentages):

Previous wording

Excluding the impact of the above-mentioned income and expenses related to the deferred compensation plan, the operating results for the three months ended March 31, 2026 and 2025 were as follows:

Current wording

Excluding the impact of the above-mentioned income and expenses related to the deferred compensation plan, the operating results for the three and six months ended June 30, 2026 and 2025 were as follows:

Previous wording

The following tables summarize total operating expenses for the three months ended March 31, 2026 and 2025:

Current wording

The following tables summarize total operating expenses for the three and six months ended June 30, 2026 and 2025:

Previous wording

(1)During the three months ended March 31, 2026, the National Practice practice group was combined with the Financial Service practice group to better align with internal management and reporting structure. As a result, the Financial Services operating expenses for the three months ended March 31, 2025 was adjusted to reflect this change.

Current wording

(1)During the six months ended June 30, 2026, the National Practice practice group was combined with the Financial Service practice group to better align with internal management and reporting structure. As a result, the Financial Services operating expenses for the three and six months ended June 30, 2025 was adjusted to reflect this change.

Previous wording

Three months ended March 31, 2026 compared to March 31, 2025. Total operating expenses for the three months ended March 31, 2026 increased by $12.7 million, or 2.1%, to $622.6 million as compared to $609.9 million in the same period in 2025. The deferred compensation plan decreased operating expenses by $3.1 million for the three months ended March 31, 2026 and by $2.4 million during the same period in 2025. Excluding the impact of deferred compensation, which was recorded in "Corporate and Other" for segment reporting purposes, operating expenses would have been $625.6 million and $612.3 million, or 73.7% and 73.1% of revenue, for the three months ended March 31, 2026 and 2025, respectively. In addition, operating expense for the three months ended March 31, 2026 and 2025, included approximately $20.7 million and $9.0 million, respectively, of integration costs associated with the Transaction.

Current wording

Six months ended June 30, 2026 compared to June 30, 2025. Total operating expenses for the six months ended June 30, 2026 increased by $26.8 million, or 2.2%, to $1,232.3 million as compared to $1,205.5 million in the same period in 2025. The deferred compensation plan increased operating expenses by $14.0 million for the six months ended June 30, 2026 and increased operating expenses by $9.3 million during the same period in 2025. Excluding the impact of deferred compensation, which was recorded in "Corporate and Other" for segment reporting purposes, operating expenses would have been $1,218.3 million and $1,196.2 million, or 79.6% and 78.6% of revenue, for the six months ended June 30, 2026 and 2025, respectively. In addition, operating expense for the six months ended June 30, 2026 and 2025, included approximately $38.7 million and $20.1 million, respectively, of integration costs associated with the Marcum Transaction.

Previous wording

The majority of our operating expenses relate to personnel costs, which include (i) salaries and benefits, (ii) commissions paid to producers, (iii) incentive compensation, and (iv) stock-based compensation. Excluding the impact of deferred compensation, which was recorded in "Corporate and Other" for segment reporting purposes, operating expenses increased by approximately $13.3 million during the three months ended March 31, 2026 as compared to the same period in 2025, driven by $4.6 million higher facility costs, $2.7 million higher technology costs, $2.5 million higher direct costs, $1.8 million higher personnel costs, $1.1 million higher travel and entertainment costs, and $0.6 million higher professional service costs.

Current wording

The majority of our operating expenses relate to personnel costs, which include (i) salaries and benefits, (ii) commissions paid to producers, (iii) incentive compensation, and (iv) stock-based compensation. Excluding the impact of deferred compensation, which was recorded in "Corporate and Other" for segment reporting purposes, operating expenses increased by approximately $22.1 million during the six months ended June 30, 2026 as compared to the same period in 2025, driven by $13.3 million in higher personnel costs, $1.7 million higher facility costs, $3.0 million higher technology costs, $3.2 million higher direct costs, and $1.5 million higher travel and entertainment costs, partially offset by $2.8 million lower professional service costs.

Previous wording

Three months ended March 31, 2026 compared to March 31, 2025. The deferred compensation plan decreased G&A expenses by $0.3 million for the three months ended March 31, 2026, and by $0.1 million during the same period in 2025. G&A expenses, excluding the impact of the deferred compensation plan, would have been $29.9 million, or 3.5% of revenue, for the three months ended March 31, 2026, compared to $28.2 million, or 3.4% of revenue, for the same period in 2025, an increase of $1.7 million. The increase in G&A expenses was primarily due to approximately $1.2 million higher technology costs, $0.4 million higher facility costs, and $0.1 million higher other discretionary spending to support business growth. The G&A expenses for the three months ended March 31, 2026 and 2025, included approximately $3.1 million and $6.7 million, respectively, of integration costs primarily associated with the Transaction.

Current wording

Six months ended June 30, 2026 compared to June 30, 2025. The deferred compensation plan increased G&A expenses by $2.0 million for the six months ended June 30, 2026, and increased G&A expenses by $1.3 million during the same period in 2025. G&A expenses, excluding the impact of the deferred compensation plan, would have been $77.9 million, or 5.1% of revenue, for the six months ended June 30, 2026, compared to $54.4 million, or 3.6% of revenue, for the same period in 2025, an increase of $23.5 million. The increase in G&A expenses was primarily due to approximately $17.2 million of higher personnel costs driven by $10.9 million cumulative impact of the ESPP correction and higher compensation, $2.6 million higher technology costs, $2.0 million higher professional services costs, $0.6 million higher facility costs, and $2.6 million higher other discretionary spending to support business growth. The G&A expenses for the six months ended June 30, 2026 and 2025, included approximately $7.6 million and $14.8 million, respectively, of integration costs primarily associated with the Marcum Transaction.

Previous wording

(1)Other expense, net includes a net loss of $3.4 million during the three months ended March 31, 2026, compared to a net loss of $2.6 million for the same period in 2025, associated with the value of investments held in a rabbi trust related to the deferred compensation plan, which were recorded in "Corporate and Other" for segment reporting purposes. The adjustments to the investments held in a rabbi trust related to the deferred compensation plan are offset by a corresponding increase or decrease to compensation expense, which is recorded as “Operating expenses” and “G&A expenses.” The deferred compensation plan has no impact on “Income before income tax expense” or diluted earnings per share. In addition, included in other expense, net for the three months ended March 31, 2026 and 2025, is expense of $0.2 million and $0.5 million, respectively, related to net changes in the fair value of contingent consideration related to prior acquisitions.

Current wording

(1)Other income, net includes a net gain of $19.4 million during the three months ended June 30, 2026, compared to a net gain of $13.2 million for the same period in 2025, associated with the value of investments held in a rabbi trust related to the deferred compensation plan, which were recorded in "Corporate and Other" for segment reporting purposes. The adjustments to the investments held in a rabbi trust related to the deferred compensation plan are offset by a corresponding increase or decrease to compensation expense, which is recorded as “Operating expenses” and “G&A expenses.” The deferred compensation plan has no impact on “Income before income tax expense” or diluted earnings per share. In addition, included in other income (expense), net for the three months ended June 30, 2026 and 2025, is an income of $1.8 million and an expense of $1.0 million, respectively, related to net changes in the fair value of contingent consideration related to prior acquisitions.

Previous wording

Three months ended March 31, 2026 compared with March 31, 2025. During the three months ended March 31, 2026, our average debt balance and interest rate were $1,466.6 million and 6.11%, respectively, compared to $1,443.4 million and 6.57%, respectively, for the same period in 2025. The decrease in interest expense for the three months ended March 31, 2026 as compared to the same period in 2025 was $1.2 million. This was primarily driven by the lower interest rates.

Current wording

Three and six months ended June 30, 2026 compared with June 30, 2025. During the three months ended June 30, 2026, our average debt balance and weighted average effective interest rate were $1,505.2 million and 6.01%, respectively, compared to $1,542.4 million and 6.75%, respectively, for the same period in 2025. The decrease in interest expense for the three months ended June 30, 2026 as compared to the same period in 2025 was primarily driven by the lower average debt balance and interest rates.

Previous wording

Three months ended March 31, 2026 compared with March 31, 2025. During the three months ended March 31, 2026, our gain from acquisition related adjustment, net was $58.0 million compared to no gain for the same period in 2025. As stated in Note 3, Business Combinations, to the accompanying unaudited condensed consolidated financial statements, the Company recorded a $57.2 million working capital adjustment and related purchase price settlement, which was recognized as a gain within acquisition related adjustments in Total other income (expense), net in the consolidated statements of operations. Additionally, the Company also recorded another adjustment related to acquisitions of $0.8 million within gains from acquisition related adjustments.

Current wording

Three and six months ended June 30, 2026 compared with June 30, 2025. During the six months ended June 30, 2026, our gain from acquisition related adjustment, net was $58.0 million, compared to no gain for the same periods in 2025. As stated in Note 4, Business Combinations, to the accompanying unaudited condensed consolidated financial statements, the Company recorded a $57.2 million working capital adjustment and related purchase price settlement, which was recognized as a gain within acquisition related adjustments in Total other income (expense), net in the consolidated statements of operations. Additionally, the Company also recorded an adjustment related to acquisitions of $0.8 million within gains from acquisition related adjustments during the six months ended June 30, 2026.

Previous wording

Three months ended March 31, 2026 compared with March 31, 2025. For the three months ended March 31, 2026, other expense, net includes a net loss of $3.4 million associated with the non-qualified deferred compensation plan. For the same period in 2025, other expense, net includes a net loss of $2.6 million associated with the non-qualified deferred compensation plan. Excluding the impact of the deferred compensation plan, the other expense, net for the three months ended March 31, 2026 would have been a loss of $0.6 million, as compared to a gain of $0.6 million during the same period in 2025. The change was primarily due to a $1.1 million higher loss on sale of assets and a $0.1 million increase of other miscellaneous expense.

Current wording

For the six months ended June 30, 2026, Other income (expense), net includes a net gain of $16.0 million associated with the non-qualified deferred compensation plan. For the same period in 2025, Other income (expense),net includes a net gain of $10.6 million associated with the non-qualified deferred compensation plan. Excluding the impact of the deferred compensation plan, the other income, net for the six months ended June 30, 2026 would have been an expense of approximately $6.1 million, as compared to an income of $12.8 million during the same period in 2025, a decrease of approximately $18.9 million. The decrease was primarily due to a $7.2 million legal settlement loss recorded in the three months ended June 30, 2026 as compared to a $12.5 million gain from a legal settlement recorded in the same period in 2025.

Previous wording

Three months ended March 31, 2026 compared with March 31, 2025. The effective tax rate for the three months ended March 31, 2026 was 28.6%, compared to an effective tax rate of 29.0% for the same period in 2025. The decrease in the effective tax rate is primarily due to a lower effective state tax rate in the current period compared to the same period in 2025 reduced by tax expense in the current period related to stock-based compensation. The increase in income tax expense of $14.7 million for the three months ended March 31, 2026, when compared to the same period in 2025, was primarily driven by the increase in pre-tax income in 2026.

Current wording

Three and six months ended June 30, 2026 compared with June 30, 2025. The effective tax rate for the three months ended June 30, 2026 was 21.5%, compared to 27.4% for the same period in 2025. The decrease in the effective tax rate is primarily attributed to a tax benefit recognized in the current period related to the purchase of certain transferrable tax credits, partially offset by tax expense related to stock-based compensation. The decrease in income tax expense of $10.8 million for the three months ended June 30, 2026, when compared to the same period in 2025, was primarily driven by the lower pre-tax income in 2026 and the tax benefit recognized from the purchase of certain transferrable tax credits.

Previous wording

During the three months ended March 31, 2026, the National Practice practice group was combined with the Financial Service practice group to better align with internal management and reporting structure. 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. A description of these groups' operating results and factors affecting their businesses is provided below.

Current wording

During the six months ended June 30, 2026, the National Practice practice group was combined with the Financial Service practice group to better align with internal management and reporting structure. 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. A description of these groups' operating results and factors affecting their businesses is provided below.

Previous wording

The Financial Services practice group revenue for the three months ended March 31, 2026 grew by 2.1% to $740.3 million from $725.0 million during the same period in 2025. Same-unit revenue grew by $13.2 million, or 1.8%, primarily driven by those units that provide advisory services, which increased by approximately $7.3 million, the units that provide traditional accounting and tax-related services, which increased $5.2 million, the units that provide government healthcare compliance business consulting, which increased by approximately $0.5 million, and the units that provide technology services, which increased $0.2 million.

Current wording

The Financial Services practice group revenue for the three months ended June 30, 2026 decreased by 0.2% to $580.3 million from $581.6 million during the same period in 2025. Same-unit revenue declined by $3.4 million, or 0.6%, primarily driven by those units that provide traditional accounting and tax-related services, which decreased $8.0 million and by those units that provide project based advisory services, which decreased by $1.4 million, The decrease was partially offset by the increase in revenue from the units that provide government healthcare compliance business consulting, which increased by approximately $3.5 million, and the units that provide technology services, which increased by $2.4 million.

Previous wording

We provide a range of services to affiliated CPA firms under joint referral and administrative service agreements (“ASAs”). Fees earned under the ASAs are recorded as revenue in the accompanying Condensed Consolidated Statements of Comprehensive Income and were approximately $219.4 million and $234.3 million for the three months ended March 31, 2026 and 2025, respectively.

Current wording

We provide a range of services to affiliated CPA firms under joint referral and administrative service agreements (“ASAs”). Fees earned under the ASAs are recorded as revenue in the accompanying Condensed Consolidated Statements of Comprehensive Income and were approximately $148.6 million and $164.7 million for the three months ended June 30, 2026 and 2025, respectively.

Previous wording

Operating expenses for the three months ended March 31, 2026 increased by $10.0 million, or 1.9%, as compared to the same period in 2025. Compared to the same period in 2025, facility costs, subscription costs, travel and entertainment costs, technology costs, direct costs, and other discretionary spending to support business growth increased by approximately $4.7 million, $1.9 million, $1.2 million, $1.1 million, $0.9 million, and $0.2 million, respectively. Operating expenses as a percentage of revenue decreased slightly to 71.7% for the three months ended March 31, 2026 from 71.8% of revenue for the same period in 2025.

Current wording

Operating expenses for the three months ended June 30, 2026 increased by $4.9 million, or 1.0%, as compared to the same period in 2025. The increase is primarily due to increases in direct costs and other discretionary spending. Operating expenses as a percentage of revenue increased slightly to 86.1% for the three months ended June 30, 2026 from 85.1% of revenue for the same period in 2025.

Previous wording

Operating expenses for the three months ended March 31, 2026 decreased by $0.1 million, or 0.1%, when compared to the same period in 2025. The decrease was not material, and operating expenses within the Benefits and Insurance practice group remained generally consistent period over period. Operating expenses as a percentage of revenue increased to 78.7% for the quarter ended March 31, 2026 from 75.6% of revenue for the same period in 2025.

Current wording

Operating expenses for the three months ended June 30, 2026 increased by $2.3 million, or 2.7%, when compared to the same period in 2025. The increase was not material, and operating expenses within the Benefits and Insurance practice group remained generally consistent period over period. Operating expenses as a percentage of revenue increased slightly to 84.7% for the quarter ended June 30, 2026 from 82.4% of revenue for the same period in 2025 due to decrease in revenue.

Previous wording

The Benefits and Insurance Services practice group revenue decreased by $4.7 million, or 4.2%, to $108.2 million during the three months ended March 31, 2026 compared to $113.0 million for the same period in 2025. The decrease was primarily driven by a $1.4 million decrease from human capital related services, a $1.4 million decrease in life insurance services, a$1.3 million decrease in property and casualty services revenue, and a $0.9 million decrease in retirement benefit services lines revenue. These decreases were partially offset by a $0.3 million increase in Employee Benefit Services revenue.

Current wording

The Benefits and Insurance Services practice group revenue decreased by $4.8 million, or 2.2%, to $210.1 million during the six months ended June 30, 2026 compared to $214.9 million for the same period in 2025. The decrease was primarily driven by a $3.4 million decrease in property and casualty services and $1.2 million from human capital related services. and a $1.8 million decrease in retirement benefit and other services. These decreases were partially offset by a $1.6 million increase in Employee Benefit Services revenue.

Previous wording

Total operating expenses increased by $2.8 million during the three months ended March 31, 2026, as compared to the same period in 2025. The non-qualified deferred compensation plan decreased operating expenses by $3.1 million for the three months ended March 31, 2026 and by $2.4 million during the same period in 2025. Excluding the impact of non-qualified deferred compensation plan, operating expenses increased by $3.4 million during the three months ended March 31, 2026, as compared to the same period in 2025. The increase was primarily driven by $1.4 million higher technology costs, $1.2 million higher professional service costs, $0.3 million higher depreciation costs, $0.3 million higher travel and entertainment costs, $0.1 million higher marketing costs, and $0.1 million higher facility costs.

Current wording

Total operating expenses increased by $7.0 million during the three months ended June 30, 2026, as compared to the same period in 2025. The non-qualified deferred compensation plan increased operating expenses by $17.1 million for the three months ended June 30, 2026 and increased operating expenses by $11.7 million during the same period in 2025. Excluding the impact of non-qualified deferred compensation plan, Corporate operating expenses increased by $1.6 million during the three months ended June 30, 2026, as compared to the same period in 2025. The increase was primarily driven by $1.4 million higher technology costs, $0.3 million higher depreciation costs, $0.4 million higher travel and entertainment costs, $0.3 million higher marketing costs, offset by $0.5 million decrease in facility related costs, and $0.3 million other discretionary costs.

Previous wording

Total corporate G&A expenses increased by $1.5 million, or 5.3%, during the three months ended March 31, 2026, as compared to the same period in 2025. The non-qualified deferred compensation plan decreased corporate G&A expenses by $0.3 million for the three months ended March 31, 2026 and by $0.1 million during the same period in 2025. Excluding the impact of the non-qualified deferred compensation plan, corporate G&A expense increased by approximately $1.7 million during the three months ended March 31, 2026, as compared to the same period in 2025. The increase in corporate G&A expenses was primarily due to approximately $1.2 million higher technology costs, $0.4 million higher facility costs, and $0.1 million higher other discretionary spending to support business growth. The corporate G&A expenses for the three months ended March 31, 2026 and 2025, included approximately $3.1 million and $6.7 million, respectively, of integration costs primarily associated with the Transaction.

Current wording

Total corporate G&A expenses increased by $10.7 million, or 38.8%, during the three months ended June 30, 2026, as compared to the same period in 2025. The non-qualified deferred compensation plan increased corporate G&A expenses by $2.3 million for the three months ended June 30, 2026 and increased corporate G&A expenses by $1.5 million during the same period in 2025. Excluding the impact of the non-qualified deferred compensation plan, corporate G&A expense increased by approximately $9.9 million during the three months ended June 30, 2026, as compared to the same period in 2025. The increase was primarily driven by $4.8 million in higher personnel costs, $4.8 million higher professional services costs, $1.4 million higher marketing costs, and $1.4 million higher technology costs, partially offset by $0.5 million decrease in other discretionary costs. The G&A expenses for the three months ended June 30, 2026 and 2025 included approximately $4.5 million and $8.1 million of integration costs primarily associated with the Marcum Transaction.

Previous wording

Total other income (expense), net increased by $58.2 million during the three months ended March 31, 2026, as compared to the same period in 2025. For the three months ended March 31, 2026, total other income (expense), net included a net loss of $3.4 million associated with the non-qualified deferred compensation plan. For the same period in 2025, total other income (expense), net included a net loss of $2.6 million associated with the non-qualified deferred compensation plan. Excluding the impact of the non-qualified deferred compensation plan, total other income (expense), net increased by $59.0 million for the three months ended March 31, 2026 as compared to the same period in 2025. The increase was primarily due to a $57.2 million gain related to the final working capital settlement and other acquisition related adjustments of $0.8 million, as well as $1.0 million lower interest expense. See Note 3, Business Combinations, to the accompanying unaudited condensed consolidated financial statements in the three months ended March 31, 2026 for further detail.

Current wording

Total other expense, net increased by $7.8 million during the three months ended June 30, 2026, as compared to the same period in 2025. For the three months ended June 30, 2026, total other expense, net included a net gain of $19.4 million associated with the non-qualified deferred compensation plan. For the same period in 2025, total other expense, net included a net gain of $13.2 million associated with the non-qualified deferred compensation plan. Excluding the impact of the non-qualified deferred compensation plan, total other expense, net increased by $14.1 million for the three months ended June 30, 2026 as compared to the same period in 2025. The increase was primarily due to a $7.2 million estimated legal loss recorded in the three months ended June 30, 2026 as compared to a $12.5 million gain from a legal settlement recorded in the same period in 2025, offset by $3.6 million lower interest expense and $2.0 million favorable adjustment to the fair value of contingent consideration related to prior acquisitions.

Previous wording

We historically experience a use of cash to fund working capital requirements during the first quarter of each fiscal year. This is primarily due to the seasonal nature of the Financial Services practice group's accounting and tax services, as well as payment of accrued employees' incentives programs. Upon completion of the seasonal accounting and tax services period, cash provided by operations during the remaining three quarters of the fiscal year substantially exceeds the use of cash in the first quarter of the fiscal year.

Current wording

We historically experience a use of cash to fund working capital requirements during the first quarter of each fiscal year. This is primarily due to the seasonal nature of the Financial Services practice group's accounting and tax services, as well as payment of accrued employees' incentives programs. Upon completion of the seasonal accounting and tax services period, cash provided by operations during the remaining three quarters of the fiscal year substantially exceeds the use of cash in the first quarter of the fiscal year. We also expect to fund the rescission offer relating to the ESPP from either our existing cash balance or funds from our revolving credit facility.

Previous wording

Accounts receivable balances increase in response to the first three months' revenue generated by the Financial Services practice group. A significant amount of this revenue is billed and collected in subsequent quarters. Days sales outstanding (“DSO”) represent accounts receivable and unbilled revenue (net of realization adjustments) at the end of the period, divided by trailing twelve months' daily revenue. We provide DSO data because such data is commonly used as a performance measure by analysts and investors and as a measure of our ability to collect on receivables in a timely manner. Trailing-twelve-month DSO, including the impact of acquisitions, was 99 days and 96 days at March 31, 2026 and 2025, respectively. DSO at December 31, 2025 was 71 days.

Current wording

Accounts receivable balances increase in response to the first three months' revenue generated by the Financial Services practice group. A significant amount of this revenue is billed and collected in subsequent quarters. Days sales outstanding (“DSO”) represent accounts receivable and unbilled revenue (net of realization adjustments) at the end of the period, divided by trailing twelve months' daily revenue. We provide DSO data because such data is commonly used as a performance measure by analysts and investors and as a measure of our ability to collect on receivables in a timely manner. Trailing-twelve-month DSO, including the impact of acquisitions, was 89 days and 87 days at June 30, 2026 and 2025, respectively. DSO at December 31, 2025 was 71 days.

Previous wording

Operating Activities -Cash used in operating activities was $25.5 million during the three months ended March 31, 2026, primarily consisted of working capital use of $236.9 million, which was offset by net income of $161.6 million and certain non-cash items, such as depreciation and amortization expense of $23.8 million, deferred income tax of $14.7 million, stock-based compensation expense of $7.5 million, bad debt expense of $1.4 million, amortization of deferred financing fees of $1.3 million, and other, net and an adjustment to contingent earnout liability of $1.0 million. Cash used in operating activities was $88.3 million during the three months ended March 31, 2025, primarily consisted of working capital use of $247.7 million, which was offset by net income of $122.8 million and certain non-cash items, such as depreciation and amortization expense of $24.8 million, deferred income tax of $4.3 million, stock-based compensation expense of $5.6 million, amortization of deferred financing fees of $1.3 million, and an adjustment to contingent earnout liability of $0.5 million. In addition, as discussed in Note 3, Business Combinations, we received $46.5 million cash as a result of the final working capital adjustment associated with the Transaction during the first quarter of 2026.

Current wording

Operating Activities -Cash provided by operating activities was $122.2 million during the six months ended June 30, 2026, primarily consisted of working capital use of $136.9 million, which was offset by net income of $171.4 million and certain non-cash items, such as depreciation and amortization expense of $47.1 million, deferred income tax of $19.7 million, stock-based compensation expense of $15.6 million, bad debt expense of $3.1 million, amortization of deferred financing fees of $2.7 million, and offset by $0.6 million non-cash income primarily due to favorable fair value adjustments to contingent purchase considerations. Cash provided by operating activities was $24.9 million during the six months ended June 30, 2025, primarily consisted of working capital use of $225.1 million, which was offset by net income of $164.7 million and certain non-cash items, such as depreciation and amortization expense of $49.9 million, deferred income tax of $17.1 million, stock-based compensation expense of $12.2 million, and an adjustment to contingent earnout liability of $1.5 million.

Previous wording

Investing Activities -Cash used in investing activities during the three months ended March 31, 2026 was $2.9 million and consisted primarily of $3.5 million used for a business acquisition, $3.0 million in capital expenditures and $0.5 million in net client fund investment activity, partially offset by $3.2 million of other investing activities primarily related to $3.5 million received related to the final working capital adjustment payments under certain notes receivable and $0.3 million from additional earnout proceeds received from previous sales of businesses. The net cash flow related to funds held for clients and other activities was immaterial. Cash used in investing activities during the three months ended March 31, 2025 was $5.0 million and consisted primarily of $5.2 million in capital expenditures, and $0.1 million in other investing activities primarily related to acquisition related working capital adjustment payments and notes receivable. The net cash flow related to funds held for clients and other activities was immaterial.

Current wording

Investing Activities -Cash used in investing activities during the six months ended June 30, 2026 was $21.5 million and consisted primarily of $14.0 million used for business acquisitions, $11.7 million in capital expenditures and $0.3 million in net client fund investment activity, partially offset by $4.0 million of other investing activities and $6.0 million related to proceeds from the sales and maturities of client fund investments. The net cash flow related to funds held for clients and other activities was immaterial. Cash used in investing activities during the six months ended June 30, 2025 was $12.3 million and consisted primarily of $13.1 million in capital expenditures, and $0.5 million in other investing activities primarily related to acquisition related working capital adjustment payments and notes receivable. The net cash flow related to funds held for clients and other activities were immaterial.

Previous wording

The balances in funds held for clients and client fund obligations can fluctuate with the timing of cash receipts and the related cash payments. The nature of these accounts is further described in Note 1, Basis of Presentation and Significant Accounting Policies, to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2025.

Current wording

The balances in funds held for clients and client fund obligations can fluctuate with the timing of cash receipts and the related cash payments. The nature of these accounts is further described in Note 1, Basis of Presentation and Significant Accounting Policies, to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2025, as amended.

Previous wording

Financing Activities -Cash used in financing activities during the three months ended March 31, 2026 was $12.6 million and consisted of $29.0 million of cash used in share repurchases, of which $3.5 million was used under the ROFR Agreement and $25.5 million were open market purchases. Additionally, $53.8 million was paid to reduce client fund obligations and $6.3 million was paid as contingent consideration payments related to prior acquisitions. The use of cash was partially offset by $79.1 million in net proceeds from borrowings under the 2024 Credit Facilities. Cash provided by financing activities during the three months ended March 31, 2025 was $55.4 million and primarily consisted of $127.5 million in net proceeds from borrowings under the 2024 Credit Facilities, partially offset by $7.6 million of cash used in share repurchases for tax withholding purposes, a $35.1 million net decrease in client fund obligations and $29.5 million in contingent consideration payments related to prior acquisitions.

Current wording

Financing Activities -Cash used in financing activities during the six months ended June 30, 2026 was $158.3 million and consisted of $67.5 million of cash used in share repurchases, of which $7.4 million was used under the ROFR Agreement and $60.1 million were open market purchases. Additionally, $71.4 million was paid to reduce client fund obligations and $18.2 million was paid as contingent consideration payments related to prior acquisitions. The use of cash was partially offset by $1.1 million in net proceeds from borrowings under the 2024 Credit Facilities. Cash used in financing activities during the six months ended June 30, 2025 was $33.2 million and primarily consisted of $79.1 million of cash used in share repurchases, of which $71.3 million was under the ROFR Agreement, a $57.2 million net decrease in client fund obligations and $48.8 million in contingent consideration payments related to prior acquisitions, which was partially offset by $152.8 million in net proceeds from the credit facility.

Previous wording

Credit Facilities -At March 31, 2026, we had $1,551.5 million outstanding under the 2024 Credit Facilities as well as $3.2 million of outstanding letters of credit. Available funds under the 2024 Credit Facilities, based on the terms of the commitment, were approximately $333.4 million at March 31, 2026. The weighted average interest rate under the 2024 Credit Facilities was 6.11% during the three months ended March 31, 2026, compared to 6.57% for the same period in 2025. The 2024 Credit Facilities allows for the allocation of funds for future strategic initiatives, including acquisitions and the repurchase of our common stock, subject to the terms and conditions of the 2024 Credit Facilities.

Current wording

Credit Facilities -At June 30, 2026, we had $1,473.5 million outstanding under the 2024 Credit Facilities as well as $3.2 million of outstanding letters of credit. Available funds under the 2024 Credit Facilities, based on the terms of the commitment, were approximately $418.3 million at June 30, 2026. The weighted average interest rate under the 2024 Credit Facilities was 6.06% during the six months ended June 30, 2026, compared to 6.67% for the same period in 2025. The 2024 Credit Facilities allows for the allocation of funds for future strategic initiatives, including acquisitions and the repurchase of our common stock, subject to the terms and conditions of the 2024 Credit Facilities.

Previous wording

Use of Capital -Our overall business objective continues to focus on funding organic growth acceleration and meeting working capital needs. This includes investments in client service delivery and emerging technology that supports revenue growth and improves operational excellence. Following the completion of the Transaction, our second priority is to pay down debt to have a net leverage ratio of less than 2.5x over time. As a result of the Transaction and related 2024 Credit Facilities, we have $1,551.5 million of outstanding debt as of March 31, 2026. In addition, we believe that repurchasing shares of our common stock can be prudent use of our financial resources, and that investing in our stock is an attractive use of capital and an efficient means to provide value to our stockholders. We will also remain focused on making strategic acquisitions that allow us to strengthen our presence in existing markets, expand into high growth industries, and broaden our services to our clients.

Current wording

Use of Capital -Our overall business objective continues to focus on funding organic growth acceleration and meeting working capital needs. This includes investments in client service delivery and emerging technology that supports revenue growth and improves operational excellence. Following the completion of the Marcum Transaction, our second priority is to pay down debt to have a net leverage ratio of less than 2.5x over time. As a result of the Marcum Transaction and related 2024 Credit Facilities, we have $1,473.5 million of outstanding debt as of June 30, 2026. In addition, we believe that repurchasing shares of our common stock can be prudent use of our financial resources, and that investing in our stock is an attractive use of capital and an efficient means to provide value to our stockholders. We will also remain focused on making strategic acquisitions that allow us to strengthen our presence in existing markets, expand into high growth industries, and broaden our services to our clients.

Previous wording

During the three months ended March 31, 2026, we completed one acquisition. During the three months ended March 31, 2026, we repurchased 0.1 million shares of our common stock at a 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. 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. During the three months ended March 31, 2025, we made no share repurchases under the ROFR Agreement or in the open market. To settle statutory employee withholdings related to vesting of stock awards, we repurchased 0.1 million shares at a cost of $7.7 million during the three months ended March 31, 2025.

Current wording

During the six months ended June 30, 2026, we completed two acquisition for approximately $14.0 million. During the six months ended June 30, 2026, we repurchased 0.2 million shares of our common stock at a 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. 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. During the six months ended June 30, 2025 we repurchased 1.0 million of our common stock for a cost of $71.3 million under the ROFR Agreement and no share repurchases from the open market. To settle statutory employee withholdings related to vesting of stock awards, we repurchased 0.1 million shares at a cost of $7.8 million during the six months ended June 30, 2025.