BBSI Reports Strong Second Quarter 2025 Financial Results

- Revenues and Gross Billings up 10% to $307.7 Million and $2.23 Billion -
- Announces New $100 Million Stock Repurchase Program -

VANCOUVER, Wash., Aug. 06, 2025 (GLOBE NEWSWIRE) -- Barrett Business Services, Inc. (“BBSI” or the “Company”) (NASDAQ: BBSI), a leading provider of business management solutions, reported financial results for the second quarter ended June 30, 2025.

Second Quarter 2025 Financial Summary vs. Year-Ago Quarter

  • Revenues up 10% to $307.7 million.
  • Gross billings up 10% to $2.23 billion.
  • Average worksite employees (“WSEs”) up 8%.
  • Net income of $18.5 million, or $0.70 per diluted share, compared to net income of $16.7 million, or $0.62 per diluted share.

“BBSI sustained its positive momentum, delivering another strong quarter of net new client growth,” said Gary Kramer, President and CEO of BBSI. “This controllable growth, combined with continued strong client retention and sustained momentum in BBSI Benefits, demonstrates the strength of our model and the value we deliver to our clients. While existing-customer hiring was modest in the quarter, reflecting a more cautious macroeconomic environment, our ability to drive growth through client additions highlights the resilience of our business and the demand for our differentiated service offering. We remain focused on execution and are confident in our ability to deliver long-term, sustainable growth.”

Second Quarter 2025 Financial Results

Revenues in the second quarter of 2025 increased 10% to $307.7 million compared to $279.7 million in the second quarter of 2024.

Total gross billings in the second quarter of 2025 increased 10% to $2.23 billion compared to $2.03 billion in the same year-ago quarter (see “Key Performance Metrics” below). The increase was driven by growth in professional employer (“PEO”) services, primarily resulting from increased WSEs from net new clients, as well as modest client hiring and higher average billings per WSE per day.

Workers’ compensation expense as a percent of gross billings was 2.1% in the second quarter of 2025 and benefited from lower workers’ compensation costs, including favorable prior year liability and premium adjustments of $8.8 million. This compares to 2.5% in the second quarter of 2024, which included favorable prior year liability and premium adjustments of $8.9 million.

Net income for the second quarter of 2025 was $18.5 million, or $0.70 per diluted share, compared to net income of $16.7 million, or $0.62 per diluted share, in the year-ago quarter.

Liquidity

As of June 30, 2025, unrestricted cash and investments were $90.4 million compared to $99.1 million as of March 31, 2025. BBSI remained debt free at quarter end.

Capital Allocation

Continuing under the Company’s stock repurchase program established in July 2023, BBSI repurchased $8.0 million of stock in the second quarter, comprising 197,200 shares at an average price of $40.80.

On August 4, 2025, the Board of Directors authorized the repurchase of up to $100 million of the Company’s common stock over a two-year period beginning August 4th. The new repurchase program replaces the program approved in July 2023.

The Company paid $2.0 million of dividends in the quarter, and BBSI’s board of directors confirmed its next regular quarterly cash dividend at $0.08 per share. The cash dividend will be paid on September 5, 2025, to all stockholders of record as of August 22, 2025.

Through a combination of stock repurchases and dividends, year-to-date capital returned to shareholders totaled more than $21 million.

Outlook

BBSI expects the following for 2025:

  • Gross billings growth of 9% to 10% (previously 7% to 9%).
  • Growth in the average number of WSEs of 6% to 8% (previously 4% to 6%).
  • Gross margin as a percent of gross billings of 2.9% to 3.05% (previously 2.85% to 3.10%).
  • Effective annual tax rate to remain at 26% to 27%.

Conference Call

BBSI will conduct a conference call on Wednesday, August 6, 2025, at 5:00 p.m. Eastern time (2:00 p.m. Pacific time) to discuss its financial results for the second quarter ended June 30, 2025.

BBSI’s CEO Gary Kramer and CFO Anthony Harris will host the conference call, followed by a question and answer period.

Date: Wednesday, August 6, 2025
Time: 5:00 p.m. Eastern time (2:00 p.m. Pacific time)
Toll-free dial-in number: 1-800-717-1738
International dial-in number: 1-646-307-1865
Conference ID: 94609

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 Gateway Group at 1-949-574-3860.

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 8:00 p.m. Eastern time on the same day through September 6, 2025.

Toll-free replay number: 1-844-512-2921
International replay number: 1-412-317-6671
Replay ID: 1194609

Key Performance Metrics

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 and six months ended June 30, 2025 and 2024.

    (Unaudited)     (Unaudited)  
    Three Months Ended June 30,     Six Months Ended June 30,  
(in thousands)   2025     2024     2025     2024  
Gross billings   $ 2,234,472     $ 2,029,036     $ 4,323,141     $ 3,936,584  
PEO and staffing wages   $ 1,939,966     $ 1,764,182     $ 3,749,434     $ 3,420,626  
                                 

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)   (Unaudited)
    Percentage of Gross Billings   Percentage of Gross Billings
    Three Months Ended June 30,   Six Months Ended June 30,
    2025     2024     2025     2024  
PEO and staffing wages     86.8 %     86.9 %     86.7 %     86.9 %
Payroll taxes and benefits     7.8 %     7.3 %     8.3 %     7.9 %
Workers' compensation     2.1 %     2.5 %     2.3 %     2.5 %
Gross margin     3.3 %     3.3 %     2.7 %     2.7 %
                                 

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 June 30,
    2025     Year-over-year
% Growth
  2024     Year-over-year
% Growth
Average WSEs     138,969       8.0 %     128,734       3.7 %
Ending WSEs     140,671       8.2 %     130,046       2.1 %
                                 

  (Unaudited)
    Six Months Ended June 30,
    2025     Year-over-year
% Growth
  2024     Year-over-year
% Growth
Average WSEs     135,714       7.8 %     125,892       3.4 %
Ending WSEs     140,671       8.2 %     130,046       2.1 %
                                 

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 8,100 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 of the Company to be materially different from any future results expressed or implied by such forward-looking statements. Factors that could affect future results include: economic conditions in the Company’s service areas and the potential effects of changing governmental policies, including those related to immigration and tariffs; natural disasters; the effects of inflation on our operating expenses and those of our clients; the availability of certain fully insured medical and other health and welfare benefits to qualifying worksite employees; the effect of changes in the Company’s mix of services on gross margin; the Company’s ability to attract and retain clients and to achieve revenue growth; the availability of financing or other sources of capital; the Company’s relationship with its primary bank lender; the potential for material deviations from expected future workers’ compensation claims experience; changes in the workers’ compensation regulatory environment in the Company’s primary markets; PEO client benefits costs, particularly with regard to health insurance benefits; litigation costs; security breaches or failures in the Company’s information technology systems; the collectability of accounts receivable; changes in executive management; changes in effective payroll tax rates and federal and state income tax rates; the carrying value of deferred income tax assets and goodwill; the outcome of tax audits; the effect of changing interest rates and conditions in the global capital markets on the Company’s investment portfolio; and the potential for and effect of acquisitions, among others. Other important factors that may affect the Company’s prospects are described in the Company’s 2024 Annual Report on Form 10-K and in subsequent reports filed with the Securities and Exchange Commission under the Securities Exchange Act of 1934. Although forward-looking statements help to provide complete information about the Company, readers should keep in mind that forward-looking statements are less reliable than historical information. The Company undertakes no obligation to update or revise forward-looking statements in this release to reflect events or changes in circumstances that occur after the date of this release.

Barrett Business Services, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)

    June 30,     December 31,  
(in thousands)   2025     2024  
ASSETS            
Current assets:            
Cash and cash equivalents   $ 26,348     $ 55,367  
Investments     64,097       66,492  
Trade accounts receivable, net     264,175       234,533  
Income taxes receivable           2,662  
Prepaid expenses and other     25,769       18,698  
Restricted cash and investments     91,042       97,690  
Total current assets     471,431       475,442  
Property, equipment and software, net     61,695       56,781  
Operating lease right-of-use assets     24,343       20,329  
Restricted cash and investments     99,701       134,454  
Goodwill     47,820       47,820  
Other assets     6,076       6,205  
Deferred income taxes     2,562       4,477  
Total assets   $ 713,628     $ 745,508  
LIABILITIES AND STOCKHOLDERS' EQUITY            
Current liabilities:            
Accounts payable   $ 4,933     $ 6,787  
Accrued payroll and related benefits     239,444       215,648  
Payroll taxes payable     41,026       49,685  
Income taxes payable     324        
Current operating lease liabilities     6,682       6,231  
Current premium payable     39,805       31,134  
Other accrued liabilities     11,066       10,330  
Workers' compensation claims liabilities     35,368       39,081  
Total current liabilities     378,648       358,896  
Long-term workers' compensation claims liabilities     78,534       89,365  
Long-term premium payable           49,840  
Long-term operating lease liabilities     18,828       15,215  
Customer deposits and other long-term liabilities     11,801       10,788  
Stockholders' equity     225,817       221,404  
Total liabilities and stockholders' equity   $ 713,628     $ 745,508  
                 

Barrett Business Services, Inc.
Consolidated Statements of Operations
(Unaudited)

    Three Months Ended     Six Months Ended  
    June 30,     June 30,  
(in thousands, except per share amounts)   2025     2024     2025     2024  
Revenues:                        
Professional employer services   $ 290,170     $ 259,887     $ 565,096     $ 506,076  
Staffing services     17,487       19,764       35,127       39,357  
Total revenues     307,657       279,651       600,223       545,433  
Cost of revenues:                        
Direct payroll costs     13,165       14,693       26,471       29,410  
Payroll taxes and benefits     173,277       148,810       360,283       310,705  
Workers' compensation     47,956       48,251       97,586       97,854  
Total cost of revenues     234,398       211,754       484,340       437,969  
Gross margin     73,259       67,897       115,883       107,464  
Selling, general and administrative expenses     48,188       45,577       93,026       87,991  
Depreciation and amortization     2,038       1,912       3,996       3,764  
Income from operations     23,033       20,408       18,861       15,709  
Other income (expense):                        
Investment income, net     2,300       3,069       4,920       6,343  
Interest expense     (44 )     (44 )     (88 )     (88 )
Other, net     41       27       99       93  
Other income, net     2,297       3,052       4,931       6,348  
Income before income taxes     25,330       23,460       23,792       22,057  
Provision for income taxes     6,876       6,759       6,359       5,492  
Net income   $ 18,454     $ 16,701     $ 17,433     $ 16,565  
Basic income per common share   $ 0.72     $ 0.64     $ 0.68     $ 0.63  
Weighted average number of basic common shares outstanding     25,592       26,067       25,700       26,174  
Diluted income per common share   $ 0.70     $ 0.62     $ 0.66     $ 0.62  
Weighted average number of diluted common shares outstanding     26,215       26,765       26,309       26,794  
                                 

Investor Relations:
Gateway Group, Inc.
Cody Slach
Tel 1-949-574-3860
BBSI@gateway-grp.com


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Source: Barrett Business Services Inc