CBIZ, Inc.: Form 10-K for the period ended Dec 31, 2025

Overview

CBIZ, Inc. (NYSE: CBZ) 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. CBIZ has more than 9,500 team members across more than 140 locations in 23 major markets coast to coast.

Business Strategy

Since the Company’s founding in 1996, CBIZ has been committed to building an organization that offers unparalleled services and expertise across its industries, addressing its clients' most critical, time-sensitive needs while delivering forward-thinking solutions and actionable insights.

A key component of the Company’s strategy is growth by acquisition. CBIZ pursues highly regarded organizations that help the Company enter attractive geographic markets, strengthen its presence in an existing market, add services or deepen expertise for existing offerings, expand into higher growth industries, and access top talent. The Company has completed acquisitions of organizations seeking a broader national platform and enhanced client service capabilities, possess strong leadership, and demonstrate a cultural fit.

CBIZ’s people are its key differentiator and competitive advantage. Our team members are committed to our clients’ success and take pride in their deep and longstanding client relationships. They combine the scale of national resources with local delivery to provide clients with specialized expertise and technical depth. CBIZ continues to cultivate a culture designed to attract, develop, and retain top talent in support of long-term growth. CBIZ continues to be recognized as an employer of choice and in 2025, received 120 workplace awards from local, national, and industry publications, associations, and organizations.

Business Services

We deliver our services through the following three practice groups: Financial Services, Benefits and Insurance Services, and National Practices. A general description of the services provided by each practice group is presented in the table below.

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Financial Services

The table below is a summary of examples of services provided through our Financial Services Practice Group:

The leaders for each service line report to the President of the Financial Services Practice Group.

Independence restrictions and state accountancy laws and regulations preclude us from rendering audit and attest services. Internal audit services are not attest services and are performed for clients by CBIZ. Accordingly, we maintain joint-referral relationships and administrative service agreements (each, an “ASA”, and collectively, the "ASAs") with independent licensed Certified Public Accounting firms (each, a "CPA firm", and collectively, the “CPA firms”) pursuant to which audit and attest services may be provided by such CPA firms. At December 31, 2025, we maintained ASAs with four CPA firms. Most of the members and/or stockholders of those CPA firms are also our employees, and we render services to the CPA firms as an independent contractor. One of our ASAs is with CBIZ CPAs, P.C. ("CBIZ CPAs"), formerly known as Mayer Hoffman McCann, P.C., an independent national CPA firm headquartered in New York, NY. CBIZ CPAs has 421 stockholders as of December 31, 2025. CBIZ CPAs maintains an eleven member Board of Directors. There are no board members of CBIZ CPAs who hold senior officer positions at CBIZ and none of the senior leaders of the Financial Services Divisions are shareholders in CBIZ CPAs. Our association with CBIZ CPAs provides clients the access to the multi-state resources and expertise of a national CPA firm. We also have an ASA with Myers and Stauffer LC (“MSLC”), an independent national governmental health care consulting CPA firm headquartered in Kansas City, Missouri. At December 31, 2025, MSLC has 43 equity members, all of whom are also our employees. MSLC maintains a five-member executive committee, none of whom hold senior officer positions at CBIZ.

The ASAs have remaining terms ranging up to 49 years, are renewable upon mutual agreement of the parties, and contain rights of extension and termination. Under the ASAs, we provide a range of services to the CPA firms, including (but not limited to): administrative functions such as office management, bookkeeping and accounting; preparation of marketing and promotional materials; and providing office space, computer equipment, systems support and administrative and professional staff. Services are performed in exchange for a fee. Fees earned by us under the ASAs are recorded as revenue in the accompanying Consolidated Statements of Comprehensive Income and totaled approximately $651.2 million, $306.5 million and $259.6 million for the years ended December 31, 2025, 2024 and 2023, respectively, a majority of which is related to services rendered to privately-held clients and governmental agencies. In the event that accounts receivable and unbilled work in process become uncollectible by the CPA firms, the service fee due to us is typically reduced on a proportional basis such that the Company is exposed to losses that create a variable interest. Refer to Note 1, Basis of Presentation and Significant Accounting Policies, to the accompanying consolidated financial statements for further discussion.

Benefits and Insurance Services

The table below is a summary of examples of services provided through our Benefit and Insurance Services Practice Group:

The leaders for each service line report to the President of Benefits and Insurance Services practice group.

The Benefits and Insurance Services practice group maintains relationships with many different insurance carriers. We do not assume underwriting risk. Some of these carriers have compensation arrangements with us whereby some portion of payments due to the Company may be contingent upon meeting certain performance goals, or upon our providing client services that would otherwise be provided by the carriers. These compensation arrangements are provided to us as a result of our performance and expertise, and may result in enhancing our ability to access certain insurance markets and services on behalf of our clients. The aggregate compensation related to these arrangements received during the years ended December 31, 2025, 2024 and 2023 was approximately 1% of consolidated CBIZ revenue for the respective periods.

National Practices

Our National Practices group provides managed networking and hardware services to a single client based on a cost-plus contract which expires on December 31, 2028. We have been serving this client in the United States and Canada for more than 20 years.

Revenue

Revenue by practice group for the years ended December 31, 2025, 2024 and 2023 is provided in the table below (in thousands) along with a discussion of certain external relationships and regulatory factors that currently impact those segments.

Our revenue growth model includes both organic and inorganic components: recurring revenue with high client retention, new client wins, cross-serving additional services to our existing clients, and inorganic strategic acquisitions.

• Recurring Revenue with High Client Retention. A significant portion of our revenue is recurring in nature, reflecting the essential services we provide to our clients on an ongoing basis. We maintain

strong client relations which drives high retention by consistently creating value and helping clients achieve their goals, take advantage of opportunities, and address critical challenges.

• New client wins. As a leading national provider of professional services to middle-market businesses, we offer a breadth of services and depth of expertise that helps differentiate us from our competitors. We combine these offerings with a strong commitment to exceptional client service and a focus on building long-term client relationships to attract new clients.
• Cross-serving. Cross-serving enables us to offer and deliver multiple services to existing clients. Our professionals identify cross-serving opportunities and, through internal coordination across business service lines, we provide more comprehensive solutions that leverage our diverse and integrated capabilities. Serving as our clients’ preferred partner allows us to respond to evolving needs with tailored, multi-disciplinary services.
• Strategic Acquisitions. Since our founding, we have pursued growth through strategic acquisitions. We pursue acquisitions to enter attractive geographic markets, strengthen our presence in existing markets, add services expertise within existing offerings, expand into higher growth industries and service niches and access top talent. Guided by defined criteria, we identify and pursue highly regarded, best-in-class financial, insurance, and advisory firms that desire a greater national platform and enhanced client service capabilities. Our target companies exhibit strong leadership, maintain a positive market reputation, align culturally to CBIZ's values, commit to exceptional client service, and have a client base with cross-serving potential. In 2025, we completed one business acquisition in the fourth quarter that is immaterial to the consolidated financial statements. From time to time, we also divest, through sale or closure, business operations that do not contribute to our long-term growth objectives or are not critical to our service offerings or markets. For further discussion regarding acquisitions, refer to Note 2, Business Combinations, to the accompanying consolidated financial statements.

Clients

We provide multi-disciplinary professional services and comprehensive solutions to a broad and diversified client base across the United States. Our clients range in size from small and middle-market business to larger enterprises and organizations.

Our largest client, which is served by the National Practices group, generated approximately 1.7% of our consolidated revenue in 2025. Management believes that the diversity of our client base helps mitigate the impact of adverse economic conditions affecting any single industry or geographic market. Nevertheless, economic conditions among select clients and groups of clients may have an impact on the demand for the services that we provide.

Regulation

Our operations are subject to regulation by federal, state, and professional governing bodies. Accordingly, our business services may be impacted by legislative changes by these bodies, particularly with respect to provisions relating to payroll, benefits administration and insurance services, pension plan administration and tax and accounting. We remain abreast of regulatory changes affecting our business, as these changes often affect clients’ activities with respect to employment, taxation, benefits, and accounting. For instance, changes in income, estate, or property tax laws may require additional consultation with clients subject to these changes to assist these clients to comply with revised regulations.

We are subject to industry regulation and changes, including changes in laws, regulations, and codes of ethics governing our accounting, insurance, registered investment advisory and broker-dealer operations, as well as in other industries, the interpretation of which may impact our operations.

We are subject to certain privacy and information security laws and regulations, including, but not limited to those under the Health Insurance Portability and Accountability Act of 1996, Financial Modernization Act of 1999, the Health Information Technology for Economic and Clinical Health Act, and other provisions of federal and state laws which may restrict our operations and give rise to expenses related to compliance.

As a public company, we are subject to the Sarbanes-Oxley Act of 2002, as amended (the "Sarbanes-Oxley Act") including the provisions intended to reform the oversight of public company auditing, improve the quality and transparency of financial reporting by those companies and strengthen the independence of auditors.

With respect to CPA firm clients that are required to file audited financial statements with the SEC, the SEC staff views us as an associated entity of the CPA firms with which we maintain ASAs in applying independence rules established by the SEC. Accordingly, we do not hold any financial interest in an SEC-reporting attest client of an associated CPA firm, enter into any business relationship with an SEC-reporting attest client that the CPA firm performing an audit could not maintain, or provide any non-audit services to an SEC-reporting attest client that the CPA firm performing an audit could not provide, under the auditor independence limitations set out in the Sarbanes-Oxley Act and other professional accountancy independence standards. Applicable professional standards generally permit us to provide additional services to privately held companies in addition to those services which may be provided to SEC-reporting attest clients of an associated CPA firm. We and the CPA firms with which we maintain ASAs have implemented policies and procedures designed to enable us and the CPA firms to maintain independence and freedom from conflicts of interest in accordance with applicable standards. Given the policies set by us on our relationships with SEC-reporting attest clients of associated CPA firms, and the limited number and size of such clients, the Sarbanes-Oxley Act independence limitations do not, and are not expected to, materially affect our financial position and results of operation.

The CPA firms with which we maintain ASAs may operate as limited liability companies, limited liability partnerships or professional corporations. The CPA firms are separate legal entities with separate governing bodies and officers. The Company and the CPA firms maintain their own respective liability and risk of loss in connection with the performance of their respective services. Attest services are not permitted to be performed by any individual or entity that is not licensed to do so. We are not permitted to perform audits, reviews, compilations, or other attest services, do not contract to perform them and do not provide the associated attest reports. All of our administrative and professional staff who are provided to such CPA firms work under the sole direction, supervision, and control of the particular CPA firm, and we do not control how any attest work is conducted. Given this legal prohibition, course of conduct, and policies and procedures related to the performance of attest work, we do not believe that either the existence of the ASAs or the providing of services thereunder constitutes organizational or legal control of the CPA firms by us. Furthermore, we do not believe that it is likely that we would bear the risk of litigation losses related to attest services provided by the CPA firms.

We have determined that, because we have economic exposure to both obligations regarding losses and to rights to receive benefits through our relationships with CPA firms with whom we maintain ASAs, the CPA firms qualify as variable interest entities ("VIEs"), and we are the primary beneficiary of the VIEs. Refer to Note 1, Basis of Presentation and Significant Accounting Policies, to the accompanying consolidated financial statements for further discussion.

Liability Insurance

We carry insurance policies, including those for commercial general liability, automobile liability, property, crime, professional liability, directors’ and officers’ liability, fiduciary liability, cyber liability, employment practices liability and workers' compensation, subject to prescribed state mandates. Excess liability coverage is carried over the underlying limits provided by the commercial general liability, directors’ and officers’ liability, professional liability, cyber liability, and automobile liability policies.

Seasonality

Core financial services (traditional tax and accounting services) are impacted by seasonality given the nature of tax season due to a heavier volume of activity during the first four months of the year. Seasonality is most evident in the quarterly earnings per share ("EPS") as most of the annual EPS is earned during the first half of the year. Like most professional service companies, a large portion of our operating costs are relatively fixed in the short term, which generally results in higher operating margins in the first half of the year.

Competition

The professional services industry is highly fragmented and competitive. We compete with global, national, and local professional service firms, such as accounting and tax firms, consulting firms, insurance brokers, and payroll advisors. Unlike many competitors focusing on single-service offerings, we provide multi-disciplinary, actionable solutions designed to deliver forward-thinking insights and drive growth, eliminating a client's need to coordinate between multiple service providers. We embed ourselves in local and regional markets, building meaningful relationships to better understand our clients' businesses and industries. We believe our strong client relationships, wide range of professional service solutions, data-driven expertise, and ability to deliver client-specific innovative insights give us a competitive advantage.

Human Capital

Human capital is our most important asset as a professional services provider as the expertise, experience and human intelligence of our team members directly drives our services and solutions. The ability to attract, develop, and retain top talent is essential for bringing value to our clients, fostering innovation and building meaningful client relationships. Our success and continued growth depend on a highly skilled and future ready workforce to provide multi-disciplinary and technology-enabled solutions that respond to the complexity and uncertainty of today’s business environment. With more than 9,500 team members nationwide, we prioritize our culture and invest in continuous learning, leadership development, and operational excellence to sustain our long-term growth.

We recruit and retain team members through providing transparency regarding career path, ongoing learning and development opportunities, as well as a supportive and inclusive work environment. Our hiring efforts include the recruitment of skilled professionals, along with campus recruiting and internship programs designed to engage students and early-career professionals. We actively seek skilled professionals with deep industry expertise, strong technical capabilities, and a commitment to exceptional service. In addition to our focus on experienced hiring, we are building a strong talent pipeline for the future through targeted campus recruiting, a robust internship program, and engagement opportunities to enable students and early career professionals to experience the numerous career opportunities we offer.

We offer competitive compensation, comprehensive benefits and performance-based incentive programs designed to attract and retain team members. We maintain initiatives intended to support our team members' professional growth, and encourage collaboration and workplace inclusion.

Our centralized recruitment team aligns to our businesses, service lines and geographies. Our team consistently and fairly utilizes best practices and various recruiting tools to source top talent. CBIZ recruiters cultivate relationships to establish strong networks of candidates, and are full life-cycle recruiters. Our recruitment team sources candidates through proactive research across multiple channels including professional associations, career websites, community organizations and social media networks, as well as schools, universities and institutions. As our team members are our best ambassadors, we also leverage employee referrals as another essential component of our recruitment strategy.

CBIZ is an equal opportunity employer and does not discriminate in hiring or employment in accordance with the requirements of all applicable state and federal laws, including race, religion, national origin, ancestry, age, gender identity, marital status, military status, sexual orientation, disability, or medical condition. The CBIZ Human Rights Policy demonstrates our commitment to respecting human rights throughout CBIZ. We believe the protection of human rights is fundamental to conducting great business, and believe we have both the ability and responsibility to drive positive change through our culture and business practices.

We are proud to prioritize learning within our culture. Our approach includes a comprehensive framework of technical and industry skills training, professional and leadership development, experiential learning, coaching, mentoring and specialized programs at every step in a team member's career. These opportunities are offered through in-person, virtual and on-demand programs. As part of our learning culture, we focus on opportunities that enable our team members to continue to build their skills, especially in the face of changing technology, to fully utilize the innovative tools available to them, and to stay ahead of industry trends, regulatory change and emerging best practices. Our investments in learning and development also support our efforts around comprehensive succession planning as we seek to prepare our talent for future leadership roles.

We actively solicit feedback and insights from our team to drive continuous improvement across all our talent initiatives. Through annual engagement surveys, comprehensive internal communication, and community-building opportunities like our employee resource groups, we use direct feedback to refine and enhance our strategies and offerings. Most recently, we have increased our investment in meaningful recognition programs to ensure our team members feel valued for their contributions to our growth and success and aligned to our core values.

In 2025, CBIZ was certified as a Great Place to Work® for the tenth consecutive year and has been honored with numerous workplace awards based on feedback gathered directly from our team members. In 2025, CBIZ was awarded 120 workplace awards, including the following:

• 2025 VAR Top 100 - Accounting Today
• 2025 Top 100 and Fastest Growing Firms - Inside Public Accounting
• 2025 Top Workplaces - Cultural Excellence by Energage with recognition in the following cultural categories: compensation and benefits, innovation, leadership, purpose and values, and work-life flexibility.
• 2025 Healthiest 100 Workplaces in America - Healthiest Employers
• 2025 Top Workplaces Financial Services by Energage – This award celebrates nationally recognized Financial Services companies that make the world a better place to work together by prioritizing a people-centered culture and giving employees a voice. This award is based entirely on feedback from our team members.
• 2025 Best Places to Work in Insurance by Business Insurance Magazine – CBIZ was selected and honored for the eleventh consecutive year as a “Best Places to Work in Insurance” based on our commitment to fostering an exceptional workplace culture where our people feel valued and empowered.
• 2025 Best and Brightest Companies to Work for in the Nation - National Association of Business Resources – For the tenth year in a row, CBIZ was honored as a “Best and Brightest Company” based on our commitment to our people, values, and culture.

Information about our Executive Officers and Key Employees

The following table sets forth certain information regarding the executive officers and certain key employees of CBIZ, as of February 26, 2026. Each executive officer of CBIZ named in the following table has been elected to serve until his or her successor is duly appointed or elected or until his or her earlier removal or resignation from office. No arrangement or understanding exists between any executive officer of CBIZ and any other person pursuant to which he or she was selected as an officer. There is no family relationship between any executive officer or director of CBIZ.

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Jerome P. Grisko, Jr. has served as President and Chief Executive Officer of CBIZ since March 2016. Mr. Grisko was appointed to the CBIZ Board in November 2015. Mr. Grisko joined CBIZ in September 1998. Mr. Grisko served as Vice President, Mergers & Acquisitions from September 1998 through November 1998, as Senior Vice President, Mergers & Acquisitions and Legal Affairs from December 1998 through January 2000, and as President and Chief Operating Officer from February 2000 through February 2016.

Brad Lakhia has served as Chief Financial Officer of CBIZ since March 2025. Prior to joining the Company, Mr. Lakhia served as Executive Vice President, Chief Financial Officer of OPENLANE, Inc., a leading operator of digital marketplaces for wholesale used vehicles. Prior to that, Mr. Lakhia served as Vice President Finance, Americas of The Goodyear Tire & Rubber Company (“Goodyear”) from November 2019 to April 2023. Mr. Lakhia was Vice President, Business Planning & Analysis of Andeavor (formerly Tesoro Corp.) from September 2016 to October 2018 and Vice President, Treasurer and Credit of Andeavor from February 2014 to September 2016. Prior to joining Andeavor, Mr. Lakhia served in accounting, treasury and divisional finance roles with increasing responsibility at Goodyear from October 1996 to February 2014.

Michael P. Kouzelos has served as President of the Benefits and Insurance practice group of CBIZ since May 2015. Mr. Kouzelos joined CBIZ in June 1998. Mr. Kouzelos served as Director of Business Integration from June 1998 to July 2000, as Vice President of Shared Services from August 2000 to March 2001, as Vice President of Strategic Initiatives from April 2001 through August 2005, as Senior Vice President of Strategic Initiatives from September 2005 to May 2015, and, additionally, as the Chief Operating Officer of the Benefits and Insurance practice group from April 2007 to May 2015. Before joining CBIZ, Mr. Kouzelos was associated with the international accounting firm of KPMG LLP from 1990 to September 1996.

Other Key Employees:

John A. Fleischer has served as Senior Vice President and Chief Information Officer ("CIO") of CBIZ since August 2014. Before joining CBIZ, Mr. Fleischer held CIO roles at TTT Holdings (a Talisman Capital Partners company), Ferro Corporation, Goodyear, and T-Systems. Prior to these roles, he held senior IT roles at Volkswagen and Federal-Mogul Corporation. He began his career as a commissioned officer in the United States Army and served twelve years on active duty in numerous roles, which included directing large-scale systems development and integration projects in communications and computing.

Jaileah X. Huddleston has served as Senior Vice President, Chief Legal Officer and Corporate Secretary of CBIZ since December 2023. Before joining CBIZ, Ms. Huddleston held various legal roles of increasing responsibility at Brown-Forman Corporation, a leading global spirits company, including Vice President – Associate General Counsel, Regional, Securities and Governance and Corporate Secretary from October 2022 to November 2023, Vice President, Associate General Counsel and Corporate Secretary from September 2020 to October 2022, Vice President, Assistant General Counsel and Assistant Secretary from March 2019 to September 2020, and Managing Attorney and Assistant Secretary from July 2018 to March 2019. Prior to joining Brown-Forman Corporation, Ms. Huddleston served as Assistant Secretary and Corporate Counsel, Securities and Finance at Evergy, Inc., a publicly traded energy company, from 2010 to 2018.

Donna Mirandola has served as Senior Vice President and Chief Marketing Officer of CBIZ since August 2024. Before joining CBIZ, Ms. Mirandola served as Chief Marketing Officer, Growth Marketing at Aon, a global professional service firm, where she also served in a variety of other roles, including Vice President, Global External Communications; Vice President, Global Content & Digital Marketing; and Global Head of Field Marketing & Communications. Ms. Mirandola has more than 25 years of diversified B2B marketing and communications experience across technology, industrials and diversified professional services. She began her career with the U.S. House of Representatives in Washington, D.C. before serving as deputy press secretary and field director for a U.S. Senate campaign in California. After the campaign, Ms. Mirandola joined Oracle, where she held roles in global communications and customer marketing. She then spent eight years at General Electric, advancing through various communications leadership positions across the Industrial, Energy, and Oil & Gas sectors.

Matthew Morelli has served as Senior Vice President, Corporate Development of CBIZ, since 2018. Mr. Morelli joined CBIZ in June 2007, serving as Associate General Counsel from June 2007 to October 2015, then as Chief of Staff to the Chief Executive Officer from August 2015 to October 2019, and finally as Senior Vice President – Strategic Initiatives from October 2019 to March 2022, during which time he held a position as part of the senior leadership team of CBIZ’s Advisory Division. Before joining CBIZ, Mr. Morelli was a partner at the law firm of Ulmer Berne LLP. While at Ulmer Berne, Mr. Morelli concentrated his practice in the area of business and employment disputes.

Elizabeth Newman has served as Senior Vice President and Chief Human Resources Officer of CBIZ since December 2022. Ms. Newman joined CBIZ in 2019 as Chief of Staff to the Chief Executive Officer. Before joining CBIZ, Ms. Newman was the President and Chief Executive Officer of The Centers, a multi-service, health care organization serving Northeast Ohio. Prior to that, Ms. Newman was associated with the international accounting firm of KPMG where she led organizational transformation, human capital and operational excellence client engagements.

Peter Scavuzzo has served as Senior Vice President, Chief Strategy Officer and National Leader of Technology since November 2024. Mr. Scavuzzo’s responsibilities apply to projects related to transformation, innovation, artificial intelligence, business intelligence and data analytics as well as overseeing the organization’s Technology business division. Before joining CBIZ, Mr. Scavuzzo served as the Chief Information & Digital Officer at Marcum and Chief Executive Officer of Marcum Technology from June 2007 to November 2024. Mr. Scavuzzo has more than 28 years of business and technology experience across a diversified industry portfolio with a specialty in professional services, manufacturing and higher education.

Available Information

Our principal executive office is at 5959 Rockside Woods Blvd. N., Suite 600, Independence, Ohio 44131, and our telephone number is (216) 447-9000. Our website is located at https://www.cbiz.com. We make available, free of charge on our website, through our investor relations page, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to those reports as soon as reasonably practicable after we file (or furnish) such reports with the SEC. In addition, the SEC maintains an internet website that contains reports, proxy and information statements and other information about us at https://www.sec.gov. Our corporate code of conduct, corporate governance guidelines, code of professional conduct and ethics and the charters of the Audit Committee, the Compensation and Human Capital Committee and the Nominating and Governance Committee of the Board of Directors are available on the investor relations page of our website, referenced above, and in print to any stockholder who requests them.

The discussion below describes the material factors, events, and uncertainties that make an investment in our securities risky, and these risk factors should be considered carefully together with all other information in this Annual Report on Form 10-K, including the financial statements and notes thereto. The discussion below does not address all of the risks that we face, and additional risks not presently known to us or that we currently deem immaterial may also arise and impair our business, financial condition and results of operations. Our business, financial condition or results of operations could be materially adversely affected by the occurrence of any of these risks. Accordingly, you should carefully consider the following information.

Risk Factors Related to Our Business and Industry

Payments on accounts receivable may be slower than expected, or amounts due on receivables or notes may not be fully collectible. Professional services firms often experience higher average accounts receivable days outstanding compared to many other industries, which may be magnified if the general economy worsens. If our collections become slower, our liquidity may be adversely impacted. We monitor the aging of receivables regularly and make assessments of the ability of customers to pay amounts due. We provide for potential bad debts and recognize additional reserves against bad debts as we deem appropriate. Notwithstanding these measures, our customers may face unexpected circumstances that adversely impact their ability to pay their trade receivables or note obligations to us, and we may face unexpected losses as a result.

Our business could be adversely affected if the non-attest business assets we acquired, or the attest assets CBIZ CPAs acquired, from Marcum do not perform to our expectations or we underestimate the liabilities we are assuming. Even if we successfully integrate the non-attest business assets we acquired from Marcum and CBIZ CPAs successfully integrates the attest business assets it acquired from Marcum, there can be no assurance we will realize the anticipated benefits of the Transaction. While our management and advisors have spent significant time and resources evaluating Marcum’s business, it is difficult to predict future performance and the benefits from a transaction involving large and complex organizations. In addition, we assumed Marcum’s liabilities other than specified excluded liabilities that were not contributed by Marcum to Marcum Advisory Group ("MAG") prior to closing of the Transaction. It is possible that we may have underestimated the liabilities that we assumed, or we may have assumed liabilities that are unknown or that we did not foresee and were not excluded from Marcum’s contribution to MAG. If the liabilities that we assumed are more than we anticipate, or insurance coverage is not available to us in sufficient amounts to cover the liabilities that we assumed, it could increase the effective cost of the Transaction and adversely impact our financial condition and results of operations. The performance and benefits that we ultimately achieve may be influenced by a variety of factors, many of which are outside of our control. If we do not achieve the anticipated benefits of the Transaction, at all or in the expected timeframe, or become responsible for costs or liabilities that we did not foresee, our business could be adversely affected.

We are dependent on the services of our executive officers, and other key employees, the loss of any of whom may have a material adverse effect on our business, financial condition and results of operations. Our success depends in large part upon the abilities and continued services of our executive officers, our business unit presidents, and other key employees. In the course of business operations, employees may retire, resign or seek employment elsewhere, particularly in the current employment environment, given wage pressures and worker shortages. While most employees are bound in writing to agreements containing non-compete, non-solicit, confidentiality, and other restrictive covenants barring competitive employment, client acceptance, and solicitation of employees for a period of between one and ten years following their resignation, not all employees are subject to such restrictions, especially in jurisdictions that disfavor restrictive employment covenants. Moreover, courts outside of such jurisdictions are at times reluctant to enforce such restrictive covenants. In light of the competitive employment environment and risks related to the enforcement of restrictive covenants, we cannot assure you that we will be able to retain the services of such personnel. If we cannot retain the services of these personnel, there could be a material adverse effect on our business, financial condition and results of operations. In order to support our growth, we intend to continue to effectively recruit, hire, train and retain additional qualified personnel. Our inability to attract and retain necessary personnel to support our current operations and further growth could have a material adverse effect on our business, financial condition and results of operations.

Our profitability could suffer if we are not able to effectively utilize our employees, maintain operational efficiencies or manage our cost structure. Our failure to manage the utilization of our professionals who generally bill on an hourly basis or to maintain or increase the hourly rates we charge our clients for our services, could result in adverse consequences, such as non- or lower-revenue-generating professionals, increased employee turnover, fixed compensation expenses in periods of declining revenue or the inability to appropriately staff engagements.

A number of factors affect the utilization of our professionals, some of which are outside our control, including general economic and financial market conditions; the complexity, number, type, size and timing of client engagements; the level of demand for our services; appropriate staffing levels in light of changing client demands, expectations or market conditions; our ability to transition our employees efficiently from completed engagements to new engagements; the transition period for new hires that results in a temporary drop in utilization; unanticipated changes in the scope of client engagements; our ability to forecast demand for our services; conditions affecting our clients’ businesses and industries; competition; and acquisitions. In addition, our expansion into or within lines of business or geographic locations where our brand is not well-known or where demand for our services is not well-developed could also contribute to low or lower utilization rates in certain service offerings or locations.

Our primary asset is our people, and our people account for the majority of our expenses. If we are unable to manage staffing levels on a timely basis in light of changing opportunities or conditions, our ability to accept or service client engagements, take advantage of positive market and industry developments, expand into new service offerings, realize future growth or manage our cost structure could be negatively affected, which could negatively impact our client relationships, competitiveness, revenue and profitability.

Restrictions imposed by independence requirements and conflict of interest rules, as well as the nature and terms of our current Administrative Service Agreements, limit our ability to provide services to clients of the attest firms with which we have contractual relationships and the ability of such attest firms to provide attestation services to our clients. Restrictions imposed by independence requirements and state accountancy laws and regulations preclude us from rendering audit and other attest services (other than internal audit services). As such, we and our subsidiaries maintain joint-referral relationships and ASAs with independent, licensed CPA firms under which audit and other attest services may be provided to our clients by such CPA firms. The CPA firms are wholly owned by licensed CPAs, a vast majority of whom are employed by us.

As a condition to close the Transaction, CBIZ CPAs, a CPA firm with which we maintain an ASA, purchased from Marcum substantially all of Marcum's attest business assets, subject to certain exclusions (the "Attest Purchase"). The Attest Purchase significantly increased the attest services received and the revenues generated under our existing ASA with CBIZ CPAs.

Under the ASA with CBIZ CPAs and our other ASAs, we provide a range of services to the CPA firms, including: functions such as professional staff, office management, bookkeeping, and accounting; preparing marketing and promotion materials; and providing office space, computer equipment, systems support and administrative support.

Services are performed in exchange for a fee. Fees earned by us under the ASAs are recorded as revenue in our Consolidated Statements of Comprehensive Income. In the event that accounts receivable and unbilled work in process become uncollectible by the CPA firms, the service fee due to us is typically reduced on a proportional basis.

As previously discussed in Item 1, Business, the ASAs do not provide us with control over the associated CPA firms, which are independent entities. As such, the continuation of our association with each CPA firm is subject to the terms and lengths of the applicable ASA, and the ability of the parties to work cooperatively together. Our ability to provide non-attest services to clients that receive attest services from the CPA firms may be contingent on our ability to extend the ASAs as they expire, and the ability and willingness of the CPA firms to retain their attest clients. Further, our ability to realize the anticipated benefits of the Transaction will depend in significant part upon maintaining our relationship with CBIZ CPAs and its ability to integrate Marcum’s attest business assets in an efficient and effective manner. Any inability by CBIZ CPAs to successfully and timely integrate Marcum’s attest business assets could have a material adverse effect on our business and results of operations.

With respect to CPA firm clients that are required to file audited financial statements with the SEC, the SEC staff has informed us that, under Regulation S-X, it considers CBIZ to be an "associated entity" of the CPA firms with which CBIZ has contractual relationships. Accordingly, we do not hold any financial interest in, nor do we enter into any business relationship with, an SEC-reporting attest client that the CPA firm performing an audit could not maintain. Further, we do not provide any non-audit services to an SEC-reporting attest client that the CPA firm performing an audit could not provide under the auditor independence restrictions set out in the Sarbanes-Oxley Act, and other rules and requirements of the SEC and the Public Company Accounting Oversight Board (“PCAOB”). As a result, the acquisition of Marcum's attest business assets into CBIZ CPAs and Marcum's non-attest business assets into CBIZ resulted in conflicts and independence impairments that required certain services to be terminated and resulted in a loss of revenue, and future acquisitions could have a similar effect. Applicable professional standards generally permit us to provide additional services to privately-held companies, in addition to those services that may be provided to SEC-reporting attest clients of a CPA firm. We and the CPA firms have implemented policies and procedures designed to enable us to maintain independence and freedom from conflicts of interest in accordance with applicable standards. In the past, given the pre-existing limits set by CBIZ CPAs on its relationships with SEC-reporting attest clients of the CPA firms, and the limited number and size of such clients, the imposition of independence restrictions under the Sarbanes-Oxley Act, SEC rules and interpretation, and PCAOB standards did not materially affect our revenues. There has been a significant increase in the number of SEC-reporting attest clients of CBIZ CPAs. CBIZ CPAs’ is now subject to annual inspection by the PCAOB. In addition, its system of quality control could be subject to additional regulatory scrutiny following the Transaction as a result of the previously settled PCAOB and SEC sanctions against Marcum related to quality control failures and violations of audit standards in connection with its prior audit work. It may be more challenging to manage conflicts of interest and independence restrictions and these challenges could adversely impact our revenues and results of operations. The SEC staff has further informed us that independence rules that apply to clients that receive attest services under SEC and PCAOB standards from such CPA firms would prohibit such clients from holding any shares of our common stock.

There can be no assurance that following the policies and procedures implemented by us and the CPA firms will enable us and the CPA firms to avoid circumstances that would cause us and them to lack independence from an SEC-reporting attest client; nor can there be any assurance that state, United States Government Accountability Office or United States Department of Labor accountancy authorities or other accountancy authorities will not impose additional restrictions on the profession. To the extent that the CPA firms for whom we provide staffing, administrative and other services are affected, we may experience a decline in fee revenue from these businesses as well as expenses related to addressing independence concerns. Prior to the Attest Purchase, revenues derived from providing services in connection with attestation engagements of the attest firms performed for SEC-reporting clients have not been material, however, they significantly increased as a result of the Attest Purchase.

Our goodwill and other intangible assets could become impaired, which could lead to material non-cash charges against earnings and a material impact on our results of operations and financial condition. As of December 31, 2025, the net carrying value of our goodwill and other intangible assets totaled $2,329.8 million and $540.0 million, respectively. In accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 350, Intangibles - Goodwill and Other, and ASC Topic 360, Property, Plant, and Equipment, we assess these assets, including client lists, to determine if there is any indication of impairment. Failure to achieve the anticipated benefits of the 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, divestitures and sustained market capitalization declines may result in recognition of impairments. Any impairment of goodwill or intangible assets would result in a non-cash charge against current earnings, which could lead to a material impact on our results of operations and financial condition. Given the significant increase in goodwill and intangible assets following the Transaction, the potential magnitude of any such impairment could be significant.

Certain liabilities resulting from acquisitions are estimated and could lead to a material impact on our results of operations. Through our acquisition activities, we record liabilities for future contingent earnout payments that are settled in cash or through the issuance of common stock. The fair value of these liabilities is assessed on a quarterly basis and changes in assumptions used to determine the amount of the liability or a change in the fair value of our common stock could lead to an adjustment that may have a material impact on our results of operations.

We may fail to realize the anticipated benefits of acquisitions, or they may prove disruptive and could result in the combined business failing to meet our expectations. The success of our acquisitions will depend, in part, on our ability to successfully integrate acquired businesses with current operations. If we are not able to successfully achieve this objective, the anticipated benefits of any acquisition may not be realized fully or at all or may take longer or cost more to realize than expected. The process of integrating operations may require a disproportionate amount of resources and management attention. Our management team may encounter unforeseen difficulties in managing integrations.

It is possible that the integration process could result in the loss of valuable employees, the disruption of each company’s ongoing business or inconsistencies in standards, controls, procedures, practices, and policies that could adversely impact our operations. Disruption and distraction caused by this process could also prevent us from pursuing, or otherwise divert resources and attention from, otherwise attractive business and growth opportunities. Any substantial diversion of management attention or difficulties in operating the combined business could affect our revenues and ability to achieve operational, financial and strategic objectives.

Claims or adverse publicity could harm our brand, reputation and ability to compete and attract and retain clients, talent and future acquisition targets. Our reputation is susceptible to damage by actions or statements made by current or former clients, employees, competitors, vendors, adversaries in legal proceedings, government regulators, professional licensing organizations, members of the investment community and the media. Our engagements may involve matters that may result in a severe impact on a client’s business, cause the client a substantial monetary loss or prevent the client from pursuing business opportunities. Additionally, some of our engagements may involve matters or clients that may be socially or politically unpopular, which could result in adverse publicity and harm our reputation. Our ability to retain existing clients and generate repeat engagements depends upon our ability to maintain a high degree of client satisfaction. Our ability to attract new clients and future acquisition targets, and to hire and retain highly skilled professionals, depends upon our reputation in the professional services industry. As a result, any claims or adverse publicity involving the quality of our services or the reputation of our professionals, matters or clients may be more damaging than similar claims or publicity relating to businesses in other industries. There is a risk that negative information about us, even if untrue, could adversely affect our business, could cause damage to our reputation and be challenging to repair.

Damage to our reputation could also reduce the value and effectiveness of our brand name and could reduce investor confidence in us. Any such claims, adverse publicity or negative connotations may adversely affect our reputation or the reputations of our professionals, or may otherwise harm our ability to attract or retain clients, employees and acquisition targets, any of which could have a material adverse effect on our business, financial condition and results of operations.

We may not be able to acquire and finance additional businesses, which could limit our ability to pursue our business strategy. We acquired one business during 2025. Strategic acquisitions are part of our overall business growth strategy, and it is our intention to selectively acquire businesses or client lists over time that are complementary to existing service offerings in our target markets and/or new and attractive markets. However, we cannot be certain that we will be able to continue identifying appropriate acquisition candidates and acquire them on satisfactory terms, and we cannot be assured that such acquisitions, even if completed, will perform as expected or will contribute significant synergies, revenues or profits. In addition, we may face increased competition for acquisition opportunities, which may inhibit our ability to complete transactions on terms that are favorable to us. As discussed below, there are certain provisions under the 2024 Credit Facilities (as defined below) that may limit our ability to acquire additional businesses. In the event that we are not in compliance with certain covenants as specified in the 2024 Credit Facilities, we could be restricted from making acquisitions, restricted from borrowing funds from the Term Loan and Revolving Credit Facility (as defined below) for other uses, or required to pay down the outstanding balance on the line of credit. To the extent we are unable to find suitable acquisition candidates or finance the acquisition of such candidates, an important component of our growth strategy may not be realized.

We will incur transaction, integration, and restructuring costs in connection with our acquisition program. We have incurred and will continue to incur significant costs in connection with our acquisition program, including fees of our attorneys, accountants, and financial advisors. If acquisitions are consummated, we expect to incur additional costs associated with transaction fees and other costs related to the acquisitions. Whether or not such acquisitions are consummated, the related costs may adversely affect our revenues and ability to achieve operational, financial and strategic objectives.

Governmental regulations and interpretations are subject to changes, which could have a material adverse effect on our financial condition. Changes in laws and regulations, or the interpretation and application thereof, could result in changes in the amount or the type of business services required by businesses and individuals, as well as our operational obligations under such legal or regulatory changes, which could have a material adverse effect on our financial condition and our operational, financial and strategic objectives. We cannot be sure that future laws and regulations will provide the similarly favorable opportunities for us to provide business consulting and management services to businesses and individuals, or to meet our operational, financial and strategic objectives.

Uncertainty in the current economic and geopolitical environment could lead to declines in demand for certain of our services. Demand for our services is affected by global economic conditions, including recessions, inflation, interest rates, tax rates, geopolitical conflicts, tariffs, trade wars, government debt ceiling negotiations and economic uncertainty, and the general level of economic activity in the geographic regions and industries in which we operate. When conditions in the global economy, including the credit markets, deteriorate, or economic activity slows, many companies [outsource less of their nonrecurring projects to service providers and some companies, as a cost-saving measure, choose to rely on their own in-house resources to conduct such nonrecurring projects internally, and under these conditions, companies have cut back on demand for the services we offer, all of which negatively affects our financial condition and results of operations.] We also experience more competitive pricing pressure during periods of economic decline. If the geopolitical uncertainties result in a reduction in business confidence, when the national or global economy or credit market conditions in general deteriorate, the unemployment rate increases or any changes occur in U.S. trade policy (including any increases in tariffs that result in a trade war), such uncertainty or changes put negative pressure on demand for our services and our pricing, resulting in lower cash flows and a negative effect on our business, financial condition and results of operations. In addition, some of our clients experience reduced access to credit and lower revenues, resulting in their inability to meet their payment obligations to us.

Changes in the United States healthcare environment, including new healthcare legislation, may adversely affect the revenue and margins in our healthcare benefit businesses. Our employee benefits business, specifically our group health consulting and brokerage businesses, receives commissions for brokering employer-sponsored healthcare policies with insurance carriers on behalf of the client. In many cases, these commissions consist of a ratable portion of the insurance premiums on those policies, based upon a sliding scale pertaining to the dollar value of premiums and/or the number of participants in the plan.

Changes in the healthcare environment, including any legislated changes in the United States’ national healthcare system, that affect the methods by which insurance carriers remunerate brokers, could adversely impact our revenues and margins in this business. Specifically, legislation or other changes could afford our clients and their employees the ability to seek insurance coverage through other means of direct access with insurance carriers or other similar avenues, which could eliminate or adversely alter the remuneration brokers receive from insurance carriers for their services. Furthermore, statutory or regulatory changes may result in establishing alternatives to employer-sponsored healthcare insurance or replace it with government-sponsored health insurance programs. These changes could materially alter the healthcare industry in the United States and our ability to provide effective services in these areas may be substantially limited and adversely affect revenue and margins in our healthcare benefit business.

Higher rates of unemployment in the United States could result in a general reduction in the number of individuals with employer-sponsored healthcare coverage. This decline in employee participation in healthcare insurance plans at our clients could result in a reduction in the commissions we receive from insurance carriers for our brokerage services, which could have an adverse impact on revenues and margins in this business.

We are subject to risks relating to processing customer transactions for our payroll and other transaction processing businesses. The high volume of client funds and data processed by us, or by our out-sourced resources abroad, in our transaction related businesses entails risks for which we may be held liable if the accuracy or timeliness of the transactions processed is not correct. In addition, related to our payroll and employee benefits businesses, we store personal information about some of our clients and their employees for which we may be liable under the Health Insurance Portability and Accountability Act or other governmental regulations if the security of this information is breached. In the past, our third-party service providers have experienced data breaches that allowed unauthorized third-parties to gain access to the Company’s and its clients’ data, including personally identifiable information. While such breaches have not subjected the Company to liability under the Health Insurance Portability and Accountability Act or other governmental regulations, there can be no assurance that in the event of a future breach, we will not be liable under those governmental regulations. We could incur significant legal expense to defend any claims against us, even those claims that we believe are without merit and against which we believe we have substantial defenses. While we carry insurance against these potential liabilities, we cannot be certain that circumstances surrounding such an error or breach of security would be entirely reimbursed through insurance coverage. We make risk-based decisions on the measures to implement, and we believe we have appropriate controls and procedures in place to address our fiduciary responsibility and mitigate these risks. However, if we are not successful in managing these risks, our business, financial condition, and results of operations may could be harmed in the future.

Cyberattacks or other security breaches involving our computer systems or the systems of one or more of our vendors could materially and adversely affect our business. Our systems, like others in the industries we serve, are vulnerable to cybersecurity risks, and we are subject to potential disruption caused by such activities. Companies like ours are subject to frequent attacks on their systems. Such attacks may have various goals, from seeking confidential information to causing operational disruption. We have experienced cyber-attacks and other security breaches in the past. Although to date such activities have not resulted in material disruptions to our operations or materially affected our business strategy, results of operations or financial condition, no assurance can be provided that we will not experience material disruptions or suffer material adverse effects in the future. Any future significant violations of our data security privacy could result in the loss of business, litigation, regulatory investigations, penalties, ongoing expenses related to notifications and client credit monitoring and support, and other expenses, any of which could damage our reputation and adversely affect the growth of our business. Additional events or cyberattacks in the future could exacerbate the foregoing risks and create additional challenges to maintaining client relationships and our reputation. While we have deployed resources that are responsible for maintaining what we consider to be appropriate levels of cybersecurity, and while we utilize third-party technology products and services to help identify threats and protect our information technology systems and infrastructure against security breaches and cyber-incidents, we do not believe such resources or products and services can provide absolute protection against all potential risks and incidents. We make risk-based decisions on the measures to implement, and our responsive and precautionary measures may not be adequate or effective to prevent, identify, or mitigate attacks by hackers, foreign governments, or other actors or breaches caused by employee error, malfeasance, or other disruptions. We are also dependent on security measures that some of our third-party vendors and customers are taking to protect their own systems and infrastructures. In the past, our third-party vendors have experienced issues with their security measures. Although to date such issues have not resulted in material disruptions or materially affected our business, financial condition, or results of operations, no assurance can be provided that we will not experience material disruptions or suffer material adverse effects in the future if our third-party vendors do not maintain adequate security measures, do not require their sub-contractors to maintain adequate security measures, do not perform as anticipated and in accordance with contractual requirements, or become targets of cyberattacks.

We are subject to risk as it relates to software that we license from third parties. We license software from third parties, much of which is integral to our systems and our business. The licenses are generally terminable if we breach our obligations under the license agreements. If any of these relationships were terminated or if any of these parties were to cease doing business or cease to support the applications we currently utilize, we may be forced to spend significant time and resources to replace the licensed software. However, we cannot assure you that the necessary replacements will be available on reasonable terms or on a reasonable timeline, if at all.

We are reliant on information processing systems and any failure or disruptions of these systems could have a material adverse effect on our business, financial condition and results of operations. Our ability to provide business services depends on our capacity to store, retrieve, process and manage significant databases, and expand and upgrade periodically our information processing capabilities. Interruption or loss of our information processing capabilities through loss of stored data, breakdown or malfunctioning of computer equipment and software systems, telecommunications failure, or damage caused by extreme weather conditions, electrical power outage, geopolitical events, or other disruption could have a material adverse effect on our business, financial condition and results of operations. Although we have disaster recovery procedures in place and insurance to protect against such contingencies, we cannot be sure that insurance or these services will continue to be available, cover all our losses or compensate us for the possible loss of clients occurring during any period that we are unable to provide business services.

We could be held liable for errors and omissions. All of our business services entail an inherent risk of malpractice and other similar claims resulting from errors and omissions. Therefore, we maintain errors and omissions insurance coverage. Although we believe that our insurance coverage is adequate, we cannot be certain that actual future claims, judgments, settlements, or related legal expenses would not exceed the coverage amounts. If such judgments, settlements, or related legal expenses exceed insurance coverage by a material amount, they could have a material adverse effect on our business, financial condition and operating results. In addition, we cannot be certain that the different insurance carriers that provide errors and omissions coverage for different lines of our business will not dispute their obligation to cover a particular claim. If we have a large claim, or a large number of claims, on our insurance, the rates for such insurance may increase, and amounts expended in defense or settlement of these claims prior to exhaustion of deductible or self-retention levels may become significant, but contractual arrangements with clients may constrain our ability to incorporate such increases into service fees. Insurance rate increases, disputes by carriers over coverage questions, payments by us within deductible or self-retention limits, as well as any underlying claims or settlement of such claims, could have a material adverse effect on our business, financial condition and results of operations.

We are not a CPA firm and we do not perform any attest services for clients. We do not maintain any ownership interest in or control over any CPA firm with which one of our subsidiaries may maintain an ASA. All of our administrative and professional staff who are provided to such CPA firms work under the sole direction, supervision and control of the particular CPA firm, and we do not control how attest work is conducted. For these reasons we do not believe we have liability to any party related to their receipt of attest services from such CPA firms. Nevertheless, from time to time we have been sued for attest work that we do not perform but which is performed by such CPA firms. While we have been successful to date in defending against such suits, it is possible that similar claims may be brought in the future. We will be required to defend against such claims, and may incur expenses related to such lawsuits and may not be successful in defending against such lawsuits. In the event that the CPA firms with which we maintain ASAs incur judgments and costs related to such suits that threaten the solvency of the CPA firms, we could incur expenditures related to such proceedings, which could have a material adverse effect on our business, financial condition, and results of operations.

The business services industry is competitive and fragmented. If we are unable to compete effectively, our business, financial condition and results of operations could be negatively impacted. We face competition from a number of sources in the business services industry. Many of our competitors are large companies that may have greater financial, technical, marketing and other resources. Our principal competitors include financial and management consulting firms, the consulting practices of major accounting firms, local and regional business services companies, independent contractors, the in-house or former in-house resources of our clients, as well as new entrants into our markets. We cannot assure you that, as our industry continues to evolve, additional competitors will not enter the industry or that our clients will not choose to conduct more of their business services internally or through alternative business services providers. Although we monitor industry trends and respond accordingly, we cannot assure you that we will be able to anticipate and successfully respond to such trends in a timely manner. We cannot be certain that we will be able to effectively compete against current and future competitors, or that competitive pressure will not have a material adverse effect on our business, financial condition and results of operations.

Failure to maintain our reputation and brand could impact our ability to attract and retain clients, employees and future acquisition targets, and may have a material adverse effect on our business, financial condition and results of operations. As a professional services advisor, our ability to secure new engagements depends heavily upon maintaining our reputation and brand and the individual reputations of our professionals. Any factor that diminishes our brand or reputation or that of our professionals, including not meeting client expectations or illegal practices or misconduct by our professionals, could make it substantially more difficult for us to attract new clients, employees and acquisition targets, or to retain existing clients and employees. Similarly, because we obtain many of our new engagements from former or current clients, or from referrals by those clients, any client that is unsatisfied with the quality of our work could impair our ability to secure new engagements and clients, and could impair our ability to hire new employees or attract acquisition targets.

Further, we provide our services primarily in connection with significant or complex matters that often involve confidential and sensitive information, and our work is the product of the judgments of our professionals and other staff operating under significant time and other pressures. As a result, we may not always perform to our client’s standards or expectations. In addition, we may face reputational damage from, among other things, litigation against us, SEC or other domestic or foreign governmental investigations or sanctions, professional licensing organization disciplinary investigations or actions or our failure to protect confidential information. For example, in 2023, the SEC and PCAOB implemented sanctions against Marcum related to quality control failures and violations of audit standards in connection with its audit work for a large number of special purpose acquisition company clients as well as other clients. Likewise, in the past, employee negligence or misconduct has adversely affected our business, and we cannot assure that this will not occur in the future. If our employees engage in actual or perceived misconduct or negligence in the provision of client services, we could be subject to regulatory sanctions and legal liability and could suffer serious harm to our reputation, financial position, current client relationships and ability to attract future clients, and our insurance coverage may not be sufficient to fully compensate us for any losses we may incur. It is not always possible to deter or prevent employee misconduct or negligence, and the precautions we take may not be effective in all cases. In addition, our professionals and other employees are responsible for the security of the information in our systems or under our control and for ensuring that non-public information is kept confidential. Should any employee not follow appropriate security measures, this could result in the improper release or use of confidential information. If our employees engage in misconduct or fail to follow appropriate security measures, we could be subject to legal liability and reputational harm, which could impair our ability to attract and retain clients and in turn materially adversely affect our business, financial condition and results of operations.

We are dependent on our existing client base and our ability to retain and expand our relationships with those clients. Our clients may terminate our engagements with little or no notice and without penalty, which may result in unexpected declines in our revenue or unexpected costs. Our ability to maintain continuing relationships with our clients and successfully obtain payment for our services is essential to the growth and profitability of our business. However, the volume of work performed for any specific client varies from year to year, and we generally do not have long-term commitments from clients to use our services. A client in one year may not provide the same level of revenue for us in any subsequent year. Further, one or more of our clients could be acquired, and there can be no assurance that the acquirer would choose to continue to use our services. In addition, the services we provide to our clients, and the revenue and income from those services, may decline or vary as the type and quantity of services we provide changes over time. Our business model also depends on relationships our teams develop with our clients so that we can understand our clients’ needs and deliver services that are tailored to those needs. If a client is not satisfied with the quality of work performed by us, or with the services delivered, we could incur additional costs to address the situation, the profitability of that work might be impaired, and the client’s dissatisfaction with our services could damage our ability to obtain additional work from that client or new clients in the future. In particular, clients that are not satisfied might seek to terminate existing contracts, which could cause us to incur costs for the services performed prior to termination with no associated revenue. This could also direct future business to our competitors.

Our clients’ ability to terminate engagements with little or no notice, and our clients’ inability or unwillingness to pay for services we performed, can make our future revenue and profitability difficult to predict. Although a substantial majority of our revenue is generated from clients who contributed to our revenue in past years, our engagements with our clients are typically singular in nature. Therefore, we must seek to obtain new engagements when our current engagements end.

The engagement letters that we typically enter into with clients do not obligate them to continue to use our services. Termination, non-renewal, delay or renegotiation of an engagement could cause us to have a higher-than-expected number of unassigned employees and thus compress our margins until we are able to reallocate our headcount. Clients that delay payment, request modifications to their payment arrangements, or fail to meet their payment obligations to us could increase our cash collection time, cause us to incur bad debt expense, or cause us to incur expenses in collections actions. We may also fail to assess the creditworthiness of our clients adequately or accurately. If we are unable to replace clients or revenue as engagements end, or if clients unexpectedly cancel engagements with us or curtail the scope of our engagements and we are unable to replace the revenue from those engagements, eliminate the costs associated with those engagements or find other engagements to utilize our professionals, our business, financial condition and results of operations could be materially adversely affected.

Given our levels of share-based compensation, our tax rate may vary significantly depending on our stock price. We apply FASB ASC Topic 718, Compensation - Stock Compensation under which the tax effects of the accounting for share-based compensation may significantly impact our effective tax rate from period to period. In future periods in which our stock price is higher than the grant date fair value of the share-based compensation vesting or exercises in that period, we will recognize excess tax benefits that will decrease our effective tax rate. In future periods in which our stock price is lower than the grant price of the share-based compensation vesting in that period, our effective tax rate may increase. The amount and value of share-based compensation issued relative to our earnings in a particular period will also affect the magnitude of the impact of share-based compensation on our effective tax rate. These tax effects are dependent on our stock price and exercise activity, which we do not control, and a decline in our stock price could significantly increase our effective tax rate and adversely affect our results of operations.

We may be subject to the actions of activist stockholders. Our Board of Directors and management team are committed to acting in the best interest of all of our stockholders. We value constructive input from investors and regularly engage in dialogue with our stockholders regarding strategy and performance. Activist stockholders who disagree with the composition of the Board of Directors, our strategy or management approach may seek to effect change through various strategies and channels. Responding to stockholder activism can be costly and time-consuming, disrupt our operations, and divert the attention of management and our employees from our strategic initiatives. Activist campaigns can create perceived uncertainties as to our future direction, strategy, or leadership and may result in the loss of potential business opportunities, harm our ability to attract new employees, investors, and customers, and cause our stock price to experience periods of volatility or stagnation.

Rapid technological changes could significantly impact our competitive position, client relationships and operating results and our ability to realize the anticipated benefits of the Transaction. The professional business services industry has been and continues to be impacted by significant technological changes and innovation, enabling companies to offer services competitive with ours. Those technological changes may (i) reduce demand for our services, (ii) enable the development of competitive products or services, or (iii) enable our current customers to reduce or bypass the use of our services. Additionally, rapid changes in artificial intelligence, block chain-based technology, automation and related innovations are increasing the competitiveness landscape. The ability of our combined organization following the Transaction to invest in technology and data analytics in order to serve our client base was a key rationale for the Transaction. While this provides opportunities, it also can expose us to elevated risk if we do not effectively manage these investments, which may be significant. If we are not successful in anticipating or responding to technological changes, we may not generate a return on these investments and demand for our services could be further reduced by advanced technologies being deployed by our competitors. In some cases, we depend on key vendors and partners to provide technology and other support. If these third parties fail to perform their obligations or cease to work with us, our ability to execute on our strategic initiatives could be adversely affected.

The widespread outbreak of a communicable illness or any other public health crisis could adversely affect our business, financial condition and results of operations. We may face risks related to public health threats or widespread outbreak of a communicable illness. A widespread outbreak of a communicable disease or a public health crisis could adversely affect the global and domestic economy and our business partners’ ability to conduct business in the United States for an indefinite period of time. Any mitigation measures implemented by foreign, federal, state, and local governments in response to future public health threats could adversely impact the ability of our employees, contractors, suppliers, customers, and other business partners to conduct business activities. Future public health threats or widespread outbreaks of communicable illnesses could have a material adverse effect on our business, financial condition, and results of operations, and will depend on numerous factors that we may not be able to predict, the duration and severity of the public health threat or pandemic, governmental actions in response to the public health threat or pandemic, the impact of business and economic disruptions on our clients and their demand for our services, and our clients’ ability to pay for our services.

Risk Factors Related to Our Indebtedness

We require a significant amount of cash for interest payments on our debt and to expand our business as planned. As of December 31, 2025, our debt consisted primarily of $1,472.4 million in principal amount outstanding under our Amended and Restated Credit Agreement, by and among CBIZ Operations, Inc., as the Borrower, the Company, the several banks, financial institutions, institutional lenders and other investors from time to time party thereto as the Lenders, and Bank of America, N.A., as Agent, as Issuing Bank and as Swing Line Bank (as amended by that certain First Amendment, dated as of March 7, 2025 and as further amended by that certain Second Amendment, dated as of April 29, 2025, the "2024 Credit Facilities") providing for $2,000.0 million in senior secured credit facilities, consisting of a $1,400.0 million term loan (the "Term Loan") and $600.0 million revolving credit facility (the "Revolving Credit Facility"). Our debt requires us to dedicate a portion of our cash flow from operations to pay interest on our indebtedness, thereby reducing the funds available to use for acquisitions, capital expenditures and general corporate purposes. Our ability to make interest payments on our debt, and to fund acquisitions, will depend upon our ability to generate cash in the future. Insufficient cash flow could place us at risk of default under our debt agreements or could prevent us from expanding our business as planned. Our ability to generate cash is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control. Our business may not generate sufficient cash flow from operations and future borrowings may not be available to us under the 2024 Credit Facilities in an amount sufficient to enable us to fund our other liquidity needs. Volatility in interest rates from monetary policy or economic conditions could increase interest expense, cause uncertainty and impact our ability to pay interest on our indebtedness. Refer to Item 7A, Quantitative and Qualitative Disclosures about Market Risk, for further information regarding interest rate risk.

Terms of the 2024 Credit Facilities could adversely affect our ability to run our business and/or reduce stockholder returns. The terms of the 2024 Credit Facilities could impair our ability to operate our business effectively and may limit our ability to take advantage of business opportunities. For example, the 2024 Credit Facilities contain covenants that could (i) restrict our ability to repurchase or redeem our capital stock or debt, or merge or consolidate with another entity; (ii) limit our ability to borrow additional funds or to obtain other financing in the future for working capital, capital expenditures, acquisitions, investments and general corporate purposes; (iii) limit our ability to dispose of our assets, to create liens on our assets, to extend credit or to issue dividends to our stockholders; and/or (iv) make us more vulnerable to economic downturns and reduce our flexibility in responding to changing business and economic conditions.

Our failure to satisfy covenants in our debt instruments could cause a default under those instruments. Our debt instruments include a number of covenants relating to financial ratios and tests. Our ability to comply with these covenants may be affected by events beyond our control, including prevailing economic, financial and industry conditions. The breach of any of these covenants could result in a default under these instruments. An event of default would permit our lenders and other debt holders to, among other things, declare all amounts borrowed from them to be due and payable, together with accrued and unpaid interest. If the lenders accelerate the repayment of borrowings, we may not have sufficient assets to repay our debt.

Our increased leverage following the Transaction may adversely impact our business. We incurred substantial indebtedness to fund the Transaction. As a result, our debt to EBITDA ratio has increased significantly following the closing of the Transaction. If we do not perform in accordance with our expectations following the Transaction, we could be unable to reduce our debt to EBITDA ratio to be consistent with our prior levels, whether in anticipated timeframes or at all. We could also face difficulties servicing and complying with the covenants and other terms of our debt instruments. The 2024 Credit Facilities provide for floating-rate indebtedness, so increases in interest rates could result in higher interest expense and/or additional hedging costs. In addition, if we are unable to reduce our levels of indebtedness following the Transaction, we may be unable to pursue business and growth opportunities and uses of capital that would be beneficial to us and our stockholders, such as additional acquisitions and share repurchases.

Risk Factors Related to Ownership of Our Common Stock

We may be more sensitive to revenue fluctuations than other companies, which could result in fluctuations in the market price of our common stock. A substantial majority of our operating expenses, such as personnel and related costs and occupancy costs, are relatively fixed in the short term. As a result, we may not be able to quickly reduce costs in response to any decrease in revenue. This factor could cause our quarterly results to be lower than expectations of securities analysts and stockholders, which could result in a decline in the price of our common stock.

The significant number of shares issuable as the stock consideration in the Transaction may adversely impact our stock price. There can be no assurance the Transaction will be accretive to earnings per share, at all or in expected timeframes. If we do not perform as expected following the Transaction or costs or assumed liabilities are greater than anticipated, our earnings per share could be adversely impacted by the significant increase in outstanding shares. In addition, Marcum partners are no longer subject to contractual limitations on their ability to resell shares they received upon the closing of the Transaction. Additionally, pursuant to the terms of the Transaction, CBIZ is obligated to deliver shares to the Marcum partners each month for 36 months following January 2, 2025. While the delivery of the stock consideration in installments over approximately four years may mitigate the potential for sales of a large volume at any particular time, persistent selling, or the perception of persistent selling, could adversely impact the market price of our common stock.

The future issuance of additional shares could adversely affect the price of our common stock. Future sales or issuances of common stock, including those related to the Transaction described below, or the perception that sales could occur, could adversely affect the market price of our common stock and dilute the percentage ownership held by our stockholders. We have authorized 250.0 million shares of common stock, and have approximately 54.7 million shares of common stock outstanding at January 31, 2026. A substantial number of these shares have been issued in connection with acquisitions, including the Transaction. As part of many acquisitions, shares are contractually restricted from sale for a one-year period, and as of January 31, 2026, approximately 63 thousand shares of our common stock were under lock-up contractual restrictions that expire by December 31, 2026. We cannot be sure when sales by holders of our stock will occur, how many shares will be sold or the effect that sales may have on the market price of our common stock.

Furthermore, once fully issued, the future stock consideration issuable from the Transaction is expected to constitute approximately 12%, as of December 31, 2025, of our outstanding shares of common stock, without giving effect to any subsequent issuances, repurchases or other changes in the number of shares outstanding. As a result, our current stockholders will own a meaningfully smaller percentage of the Company than they currently own, and collectively will have less ability to influence the Company’s management and policies. In addition, to the extent that Marcum partners retain a significant portion of the shares that are issued to them, they will collectively have significant influence on any matters requiring a vote of stockholders.

There is volatility in our stock price. The market for our common stock has, from time to time, experienced price and volume fluctuations. Factors such as announcements of variations in our quarterly financial results and fluctuations in revenue, as well as the expectations of stockholders and securities analysts regarding the ability of our business to grow and achieve certain revenue or profitability targets, could cause the market price of our common stock to fluctuate significantly. In addition, the stock market in general has experienced volatility that often has been unrelated to the operating performance of companies such as ours. These broad market and industry fluctuations may adversely affect the price of our stock, regardless of our operating performance.

The price of our common stock could be adversely impacted if we do not perform to expectations following the Transaction. The market price of our common stock could be adversely affected if we do not perform to our own and investor expectations. We are a larger and more complex organization following the closing of the Transaction, and in order to maintain and earn the trust of our investors, we will have to effectively execute on our strategy and achieve the anticipated benefits and synergies of the Transaction. This process will take time, and it will be necessary to effectively communicate our progress and strategy to investors. If we experience challenges or delays in this process, it could adversely impact, or cause volatility in, our operating results. It could also result in a decrease in investor confidence and have an adverse impact to the market price of our common stock or cause increased volatility in trading prices.

CBIZ maintains a cyber risk management program designed to identify, assess, manage, mitigate, and respond to cybersecurity threats. This program, which is integrated into the Company’s enterprise risk management system, includes the development, implementation, and maintenance of security measures and controls, as well as policies and procedures governing the operation of these security measures and controls.

The underlying controls of the cyber risk management program are based on recognized practices and standards for cybersecurity and information technology, including the National Institute of Standards and Technology (“NIST”) Cybersecurity Framework (“CSF”) and the International Organization Standardization (“ISO”) 27002 framework and code of practice for information security controls to establish, implement, and improve an Information Security Management System focused on cybersecurity.

Cyber partners are a key part of CBIZ’s cybersecurity infrastructure. CBIZ partners with leading cybersecurity companies and organizations, leveraging third-party technology and expertise. CBIZ engages with these partners to monitor and maintain the performance and effectiveness of third-party products and services that are deployed in CBIZ’s environment, to scan for potential vulnerabilities and to conduct penetration testing.

CBIZ’s Vice President, IT Security and Compliance reports to CBIZ’s Chief Information Officer and is the head of the Company’s cybersecurity team. The Vice President of IT Security and Compliance is responsible for assessing and managing CBIZ’s cyber risk management program, informing senior management regarding the prevention, detection, mitigation, and remediation of cybersecurity incidents and supervises such efforts. The cybersecurity team has decades of experience selecting, deploying and operating cybersecurity technologies, initiatives and processes. Additionally, members of the cyber security team have extensive information technology and program management expertise and have earned various cybersecurity certifications. Finally, the cybersecurity team relies on threat intelligence as well as other information obtained from governmental, public or private sources, including external consultants engaged by CBIZ.

The Board of Directors oversees CBIZ’s cybersecurity risk exposures and the steps taken by management to monitor and mitigate cybersecurity risks. The cybersecurity team briefs the Board of Directors on the status of CBIZ’s cyber risk management program, typically on a semi-annual basis.

CBIZ faces risks from cybersecurity threats that could have a material adverse effect on its business, financial condition, results of operations or cash flows. CBIZ has experienced, and will continue to experience, cyber incidents in the normal course of its business. However, prior cybersecurity incidents have not had a material adverse effect on CBIZ’s business, financial condition, results of operations or cash flows. See “Risk Factors – Risk Factors Related to Our Business and Industry – Cyberattacks or other security breaches involving our computer systems or the systems of one or more of our vendors could materially and adversely affect our business.”

Our corporate headquarters are located at 5959 Rockside Woods Blvd. N., Suite 600, Independence, Ohio 44131, in leased premises. We lease more than 140 offices in 35 states and the District of Columbia and believe that our current facilities are sufficient for our current needs.

From time to time, we are involved in various legal proceedings relating to claims arising out of our operations. As of the date hereof, we are not engaged in any legal proceedings that are reasonably expected, individually or in the aggregate, to have a material adverse effect on our business, financial condition, results of operations or cash flows.

This Management’s Discussion and Analysis of Financial Condition and Results of Operations relates to, and should be read in conjunction with, our consolidated financial statements included elsewhere in this report. In addition to historical information, this discussion and analysis contain forward-looking statements that involve risks, uncertainties and assumptions, which could cause actual results to differ materially from management’s expectations. Please see the sections of this report entitled “Forward-Looking Statements” and “Risk Factors.” This section generally discusses the results of operations for fiscal year 2025 compared to fiscal year 2024. For discussion related to the results of operations and changes in financial conditions for fiscal year 2024 compared to fiscal year 2023 refer to Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2024 as filed with the SEC on February 28, 2025.

EXECUTIVE SUMMARY

Financial Year in Review - Revenue of $2,758.0 million in 2025 grew $944.5 million, or 52.1%, from revenue of $1,813.5 million in 2024. Revenue from newly acquired operations, net of divestitures, contributed $914.2 million, or 50.4%, of incremental revenue for the year ended December 31, 2025, as compared to the same period in 2024. A detailed discussion of revenue by practice group is included under “Operating Practice Groups.” Net income in 2025 increased $74.4 million, or 181.3%, to $115.4 million from $41.0 million in 2024. Refer to “Results of Operations” for a detailed discussion of the components of net income. Earnings per diluted share was $1.83 in 2025, compared to $0.78 in 2024, with a fully diluted weighted average share count of 63.2 million shares in 2025, compared to 52.7 million shares in 2024.

Strategic Use of Capital - Our overall 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 improve operational excellence. Following the completion of the Transaction, our second priority is to pay down debt to be within a net leverage ratio range of 2.0x and 2.5x overtime. As a result of the Transaction and related 2024 Credit Facilities, we have $1,472.4 million of outstanding debt under the 2024 Credit Facilities as of December 31, 2025. 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.

On February 11, 2026, the CBIZ Board of Directors authorized the purchase of up to 5.0 million shares of our common stock under our Share Repurchase Program (the “Share Repurchase Program”), which may be suspended or discontinued at any time and expires on March 31, 2026. The shares may be purchased (i) in the open market, (ii) in privately negotiated transactions, or (iii) under Rule 10b5-1 trading plans. CBIZ management will determine the timing and amount of the transaction based on its evaluation of market conditions and other factors.

Under the Share Repurchase Program, we repurchased 1.5 million shares of our common stock for a total cost of $109.1 million under the ROFR Agreement and 0.9 million shares of our common stock in the open market during the year ended December 31, 2025 for a total cost of $50.9 million. We repurchased no shares on the open market during the year ended December 31, 2024. Shares repurchased to settle statutory employee withholding related to vesting of stock awards were 0.1 million shares at a cost of $7.8 million during the year ended December 31, 2025 and 0.2 million shares at a cost of $11.5 million during the year ended December 31, 2024. Refer to Note 14, Common Stock, to the accompanying consolidated financial statements for further discussion on the Share Repurchase Program.

RESULTS OF OPERATIONS

We provide professional business services that help clients manage their finances and employees. We deliver our integrated services through the following three practice groups: Financial Services, Benefits and Insurance Services and National Practices. A description of these groups’ operating results and factors affecting their businesses is provided below under "Operating Practice Groups."

Revenue

The following table summarizes total revenue for the years ended December 31, 2025 and 2024:

A detailed discussion of same-unit revenue by practice group is included under “Operating Practice Groups.”

Non-qualified Deferred Compensation Plan - We sponsor a non-qualified deferred compensation plan ("NQDCP"), under which select CBIZ employees compensation deferral is held in a rabbi trust and invested accordingly as directed by the employee. Income and expenses related to the deferred compensation plan are included in “Operating expenses,” “Gross margin” and “Corporate General & Administrative expenses” and are directly offset by deferred compensation gains or losses in “Other income (expense), net” in the accompanying Consolidated Statements of Comprehensive Income. The deferred compensation plan has no impact on “Income before income tax expense” or diluted earnings per share.

Income and expenses related to the deferred compensation plan for the years ended December 31, 2025 and 2024:

(Amounts in thousands)

Excluding the impact of the above-mentioned income and expenses related to the deferred compensation plan, the operating results for the years ended December 31, 2025 and 2024:

(Amounts in thousands, except percentages)

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Operating Expenses

The following table presents our operating expenses for the years ended December 31, 2025 and 2024:

(Amounts in thousands, except percentages)

Our operating expenses increased by $771.6 million. Operating expense as a percentage of revenue decreased to 87.1% of revenue in 2025 as compared to 89.9% of revenue for the prior year. The non-qualified deferred compensation plan increased operating expenses by $20.3 million in 2025 and by $18.8 million in 2024. Excluding the impact of the non-qualified deferred compensation plan, which was recorded in "Corporate and Other" for segment reporting purposes, operating expenses would have been $2,382.3 million, or 86.4% of revenue, in 2025 as compared to $1,612.2 million, or 88.9% of revenue, in 2024.

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) share-based compensation. Excluding the impact of non-qualified deferred compensation plan, which was recorded in "Corporate and Other" for segment reporting purposes, operating expenses increased by approximately $770.1 million in 2025, as compared to 2024. Operating expenses for the year ended December 31, 2025, included approximately $64.3 million costs related to the Transaction for integration, and operating expenses for the year ended December 31, 2024, included approximately $5.0 million in costs related to the Transaction. The increase in operating expenses was driven by $581.3 million higher personnel cost, $50.4 million higher depreciation and amortization costs, $46.9 million higher facility costs, $35.8 million higher direct costs, $20.3 million higher technology costs, $16.4 million higher professional fees, $9.6 million higher travel and entertainment costs, $5.1 million higher marketing costs, $3.5 million higher bad debt expense, and $0.8 million increase in other discretionary spending. Personnel costs and other operating expenses are discussed in further detail under “Operating Practice Groups.”

Corporate General & Administrative Expenses

The following table presents our Corporate General & Administrative (“G&A”) expenses for the years ended December 31, 2025 and 2024:

(Amounts in thousands, except percentages)

Our G&A expenses increased by approximately $12.6 million, or 11.6%, in 2025, as compared to 2024, and decreased to 4.4% of revenue from 6.0% of revenue for the prior year. The non-qualified deferred compensation plan increased G&A expenses by $3.0 million in 2025, and by $2.4 million in 2024. Excluding the impact of the deferred compensation plan, which was recorded in "Corporate and Other" for segment reporting purposes, G&A expenses would have been $118.4 million, or 4.3% of revenue, in 2025, as compared to $106.4 million, or 5.9% of revenue, in 2024, an increase of $12.0 million in 2025 as compared to prior year. The increase was primarily driven by $6.6 million higher personnel costs, $6.2 million higher marketing expenses, $2.4 million higher technology costs, $2.3 million higher insurance costs and $1.6 million higher facility costs. Other discretionary spending increased by approximately $1.2 million to support the growth in business activities. These increases were partially offset by an $8.3 million decrease in professional service fees.

G&A expenses for the year ended December 31, 2025 and 2024 included $24.8 million and $43.7 million, respectively, of costs related to the Transaction.

Other Income (Expense), net

The following table presents the components of Other income (expense), net for the years ended December 31, 2025, and 2024:

(Amounts in thousands)

(1) Other income, net includes a net gain of $23.3 million in 2025 and a net gain of $21.1 million in 2024, associated with the value of investments held in a rabbi trust related to the deferred compensation plan, which was 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” in the accompanying Consolidated Statements of Comprehensive Income. The deferred compensation plan has no impact on “Income before income tax expense” or diluted earnings per share.

Interest Expense - Interest expense was $107.2 million in 2025, compared to $34.4 million in 2024. Our blended average debt balance and blended weighted average interest rate was $1,517.9 million and 6.56%, respectively, in 2025, as compared to $538.6 million and 6.00%, respectively, in 2024. The increase in interest expense in 2025 as compared to 2024, was driven by a higher average debt balance as well as higher weighted average effective interest rate. Our debt is further discussed in Note 10, Debt and Financing Arrangements, to the accompanying consolidated financial statements.

Gain on Sale of Operations, net - During the twelve months ended December 31, 2025, we recorded approximately $1.1 million gain related to the Transaction and a $1.1 million additional gain related to a previously sold business in the National Practice Group. These gains were offset with $1.5 million in adjustments. During the same period in 2024, we recorded approximately $4.9 million additional gain related to a sold business in the National Practice Group.

Other Income (Expense), net - The majority of “Other income (expense), net” consists of net gains and losses associated with the value of the non-qualified deferred compensation plan as discussed above, net adjustments to the fair value of our contingent purchase price liability related to prior acquisitions, as well as gains or losses related to the sale of assets. Other income of $33.3 million in 2025 included a $23.3 million net gain related to the deferred compensation plan. Excluding the impact of the deferred compensation plan the Other Income (Expense), net balance for the year ended December 31, 2025, would be income of $10.0 million. Other income of $13.5 million in 2024 consisted of a net gain of $21.1 million related to the deferred compensation plan. Excluding the impact of the deferred compensation plan, the Other Income (Expense), net balance for the year ended December 31, 2024, would be an expense of $7.6 million. Excluding the impact of the deferred compensation plan from other income (expense), net, would result in an increase of $17.6 million for the year ended December 31, 2025, compared to the same period in 2024. The increase was primarily due to a $12.5 million legal settlement gain, $4.6 million higher contingent earnout adjustment, $3.0 million higher other miscellaneous income, net, and $1.7 million higher interest income. In addition, we recorded a loss of approximately $4.3 million primarily due to early lease terminations, which did not occur in 2024. As a result, the expenses associated with the loss on assets decreased by $4.2 million in 2025 as compared to 2024.

Income Tax Expense

The following table presents our income tax expense for the years ended December 31, 2025 and 2024:

(Amounts in thousands, except percentages)

The increase in income tax expense from 2024 to 2025 was primarily driven by the increase in pre-tax income from 2024 to 2025. The decrease in the effective tax rate from 2024 to 2025 was primarily due to the disallowance expenses having a lesser unfavorable impact against a higher pre-tax income in 2025.

Operating Practice Groups

We deliver our integrated services through three practice groups: Financial Services, Benefits and Insurance Services and National Practices. A description of these groups’ operating results and factors affecting their businesses is provided below.

Financial Services

(Amounts in thousands, except percentages)

The Financial Services practice group revenue increased by 68.9% to $2,301.5 million in 2025 from $1,362.5 million in 2024. This increase of $938.9 million was primarily the result of the Transaction and was across all service lines. When compared to the same period in 2024, revenue from traditional accounting and tax-related services increased by $796.9 million, revenue from advisory services increased by $94.0 million, revenue from national technology services increased by $46.1 million, and revenue from government healthcare consulting services increased $1.9 million.

We provide a range of services to affiliated CPA firms under ASAs. Fees earned under the ASAs are recorded as revenue in the accompanying Consolidated Statements of Comprehensive Income and were $651.2 million and $306.5 million in 2025 and 2024, respectively.

Operating expenses increased by $751.2 million in 2025, as compared to 2024, primarily as a result of $578.3 million higher personnel costs primarily driven by the Transaction in 2025. Compared to the same period in 2024, depreciation and amortization expense, direct costs, facility costs, technology costs, professional service costs, marketing costs, bad debt expense, and employee costs to support business growth increased by $51.7 million, $40.7 million, $40.1 million, $18.4 million, $10.8 million, $5.5 million, $2.8 million and $2.8 million, respectively. Operating expense as a percentage of revenue decreased to 85.4% in 2025 from 89.1% in 2024.

Benefits and Insurance Services

(Amounts in thousands, except percentages)

The Benefits and Insurance Services practice group revenue in 2025 grew by 2.1% to $409.6 million from $401.0 million in 2024. The increase primarily driven by a $11.2 million increase in employee benefit and retirement benefit services lines, as well as a $6.1 million increase from payroll and human capital related services, partially offset by a decrease of $8.7 million in property and casualty services.

Operating expenses increased by $6.4 million in 2025 as compared to 2024. This increase was primarily driven by direct costs and personnel costs which increased by $5.6 million and $1.7 million, respectively, when compared to the same period in 2024. This increase was partially offset by a decrease of $1.3 million of depreciation and amortization expenses and a decrease of $0.4 million in other miscellaneous discretionary costs. Operating expense as a percentage of revenue remained relatively unchanged at 81.7% in 2025, as compared to 81.9% in 2024.

National Practices

(Amounts in thousands, except percentages)

During the year ended December 31, 2024, we completed the sale of CBIZ KA Consulting Services, LLC ("KA Consulting"), which was a component of the National Practices group. For the year ended December 31, 2024, KA Consulting contributed approximately $8.4 million of revenue. The remaining National Practice Group is primarily driven by our cost-plus contract with a single client, which has existed since 1999. The cost-plus contract is a five-year contract with the most recent renewal through December 31, 2028. The decrease in revenue and in operating expense was attributed to the result of the sale of KA Consulting.

Corporate and Other

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.

(Amounts in thousands, except percentages)

Total operating expenses increased by $16.5 million in 2025 as compared to 2024. The non-qualified deferred compensation plan increased operating expenses by $20.3 million in 2025 and by $18.8 million in 2024. Excluding the non-qualified deferred compensation expenses, operating expense increased by approximately $15.0 million, primarily driven by $5.9 million higher professional service fees, $5.3 million higher facility costs, $2.6 million higher personnel costs, and $1.2 million higher other discretionary spending to support business growth.

Total G&A expenses increased by approximately $12.6 million, or 11.6%, for the year ended December 31, 2025 as compared to 2024. The non-qualified deferred compensation plan increased G&A expenses by $3.0 million in 2025 and by $2.4 million in 2024. Excluding the impact of the deferred compensation plan, G&A expenses would have increased by $12.0 million in 2025 as compared to prior year. The increase was primarily driven by $6.6 million higher personnel costs, $6.2 million higher marketing expenses, $2.4 million higher technology costs, $2.3 million higher insurance costs and $1.6 million higher facility costs. Other discretionary spending increased by approximately $1.2 million to support the growth in business activities. These increases were offset by an $8.3 million decrease in professional service fees.

G&A expenses for the year ended December 31, 2025 and 2024 included $24.8 million and $43.7 million, respectively, of costs related to the Transaction.

Total other expense, net increased by $51.8 million to $73.5 million from $21.6 million in 2024. Total other expense, net includes net gains of $23.3 million and $21.1 million associated with the non-qualified deferred compensation plan in 2025 and 2024, respectively. Excluding the impact of the non-qualified deferred compensation plan, total other expense, net would have been $96.8 million in 2025 and $42.8 million in 2024, a net increase in expense of approximately $54.0 million. The increase was primarily due to $72.8 million higher interest expense, partially offset by a gain from a legal settlement of $12.5 million recorded to other income (expense), net, $4.6 million higher fair value adjustments, an increase of $1.7 million of interest income, and $0.1 million higher other adjustments.

LIQUIDITY

The following table is derived from our Consolidated Statements of Cash Flows (in thousands):

We generate strong cash flows from operations and have access to $415.5 million under the 2024 Credit Facilities, which enables us to fund investment and operating projects that are designed to optimize stockholder return. Cash flows from operations and available capital resources allow us to make strategic acquisitions, repurchase shares of our common stock when accretive to stockholders, meet working capital needs, and service our debt. Generally, we maintain low levels of cash and apply any available cash to pay down our outstanding debt balance. Due to the seasonal nature of the Financial Services practice group’s accounting and tax services, which are concentrated in the first four months of the fiscal year, we historically generate a significant portion of our cash flows during the last three quarters of the fiscal year.

Our working capital management primarily relates to trade accounts receivable, accounts payable, incentive-based compensation and other assets, which consist of other receivables and prepaid assets typically related to activities in the normal course of our business operations. At any specific point in time, working capital is subject to many variables, including seasonality and the timing of cash receipts and payments, most notably in the timing of insurance premiums to the carriers within our Benefits and Insurance Services practice group. We have restricted cash on deposit from clients in connection with the pass-through of insurance premiums to the carrier with the related liability for these funds recorded in “Accounts payable” in the accompanying Consolidated Balance Sheets.

Accounts receivable balances increase in response to the increase in revenue generated by the Financial Services practice group during the first four months of the year. 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. DSO was 71 days as of December 31, 2025, and 73 days as of December 31, 2024. 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.

Cash Provided by Operating Activities

Cash provided by operating activities was $192.5 million during 2025, consisting of net income of $115.4 million and certain non-cash items, such as depreciation and amortization expense of $98.3 million, share-based compensation expense of $26.0 million, amortization expense of deferred financing fees of $5.5 million, bad debt expense of $7.3 million, deferred income tax of $4.6 million, and an adjustment to the fair value of contingent purchase consideration of $2.6 million, and other expense of $5.1 million, primarily consisting of a non-cash write-off of lease incentive receivables associated with terminated facility leases. These were offset by $71.6 million of use of cash from working capital management and a $0.7 million loss on sale of operations, net of tax.

Cash provided by operating activities was $123.7 million during 2024, consisting of net income of $41.0 million and certain non-cash items, such as depreciation and amortization expense of $48.1 million, share-based compensation expense of $13.8 million, bad debt expense of $3.8 million, adjustment to the fair value of contingent purchase consideration of $7.0 million, and $23.4 million use of cash from working capital management offset by deferred income tax of $8.6 million and a $4.9 million gain on sale of operations, net of tax.

Cash Used in Investing Activities

The majority of our investing activities relate to acquisitions, capital expenditures and net activity related to funds held for clients. Refer to Note 1, Basis of Presentation and Significant Accounting Policies, and Note 2, Business Combinations, to the accompanying consolidated financial statements for further discussion on our acquisitions and a further description of funds held for clients and client fund obligations.

2025 - Net cash used in investing activities in 2025 consisted primarily of $17.0 million cash paid for capital expenditures, $4.0 million net purchases and change of client fund investments, and $1.6 million cash paid for a business acquisition. These investing cash outflows were offset with $5.2 million payments primarily related to collections to notes receivable and $1.5 million cash received related to prior year divestiture.

2024 - Net cash used in investing activities in 2024 consisted primarily of $1,087.5 million cash paid for the Transaction and other 2024 business acquisitions, $12.9 million in capital expenditures, $1.3 million net purchases of client fund investments, and $34.7 million payments primarily related to the $22.1 million notes to CBIZ CPAs, and other working capital related payments, partially offset by $7.1 million proceeds received from the sale of certain assets.

Cash Provided by and Used in Financing Activities

The majority of our financing activities relate to our 2024 Credit Facilities, share repurchases, net client fund obligation activity, as well as contingent consideration payments for prior acquisitions. Refer to Note 10, Debt and Financing Arrangements, and Note 14, Common Stock, to the accompanying consolidated financial statements for further discussion on our 2024 Credit Facilities and Share Repurchase Program.

2025 - Net cash provided by financing activities in 2025 consisted of $51.5 million net proceeds from our 2024 Credit Facilities and a net increase of $30.8 million in client fund obligations, partially offset by $160.1 million used to repurchase shares, $7.8 million used to repurchase shares for tax withholding purposes, $58.7 million of contingent consideration payments for prior acquisitions, $1.0 million deferred financing fees paid in connection with the 2024 Credit Facilities, and $0.5 million used for payments of notes payable.

2024 - Net cash provided by financing activities in 2024 consisted of $1,108.5 million net proceeds from our 2024 Credit Facilities and a net increase of $16.0 million in client fund obligations, offset by $11.5 million used to repurchase shares for tax withholding purposes, $56.8 million of contingent consideration payments for prior acquisitions, and $20.7 million deferred financing fees paid in connection with the 2024 Credit Facilities.

CAPITAL RESOURCES

The following table presents our capital structure (in thousands):

Credit Facility - Our primary financing arrangement is the $2,000.0 million secured credit facility, which is that certain Amended and Restated Credit Agreement, by and among CBIZ Operations, Inc., as the Borrower, the Company, the several banks, financial institutions, institutional lenders and other investors from time to time party thereto as the Lenders, and Bank of America, N.A., as Agent, as Issuing Bank and as Swing Line Bank (as amended by that certain First Amendment, dated as of March 7, 2025 and as further amended by that certain Second Amendment, dated as of April 29, 2025), which provides us with the capital necessary to meet our working capital needs as well as the flexibility to continue with our strategic initiatives, including business acquisitions and share repurchases, and matures in 2029. At December 31, 2025, we had $1,472.4 million outstanding under the credit facility, as well as letters of credit and license bonds totaling $5.4 million. Available funds under the credit facility, based on the terms of the commitment, were approximately $415.5 million at December 31, 2025. The blended weighted average interest rate under the credit facility was 6.56% in 2025 and 6.00% in 2024. The credit facility 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 credit facility.

Debt Covenant Compliance - We are required to meet certain financial covenants with respect to (i) total leverage ratio and (ii) interest coverage ratio. We were in compliance with our covenants as of December 31, 2025. Our ability to service our debt and to fund future strategic initiatives will depend upon our ability to generate cash in the future. For further discussion regarding the 2024 Credit Facilities, refer to Note 10, Debt and Financing Arrangements, to the accompanying consolidated financial statements.

Use of Capital - Our overall business objective is funding organic growth acceleration and meet working capital needs. This includes investments in client service delivery and emerging technology that support revenue growth and improve operational excellence. Following the completion of the Transaction, our second priority is to pay down debt to be within a net leverage ratio range of 2.0x and 2.5x overtime. As a result of the Transaction and related 2024 Credit Facilities, we have $1,472.4 million of outstanding debt under the 2024 Credit Facilities as of December 31, 2025. 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.

During the year ended December 31, 2025, we completed no material business acquisitions. Under the Share Repurchase Program, we repurchased 1.5 million shares of our common stock for a total cost of $109.1 million under the ROFR Agreement and 0.9 million shares of our common stock in the open market during the year ended December 31, 2025, for a total cost of $50.9 million. We repurchased no shares on the open market during the year ended December 31, 2024. Shares repurchased to settle statutory employee withholding related to vesting of stock awards were 0.1 million shares at a cost of $7.8 million during the year ended December 31, 2025, and 0.2 million shares at a cost of $11.5 million during the year ended December 31, 2024. Refer to Note 14, Common Stock, to the accompanying consolidated financial statements for further discussion on the Share Repurchase Program.

Cash Requirements - Cash requirements for the remainder of 2026 and beyond will include the repayment of outstanding debt and related interest, share repurchases through both our ROFR Agreement and open market purchases, making strategic acquisitions, funding seasonal working capital requirements, making contingent purchase price payments for previous acquisitions, income tax payments, and capital expenditures. We believe that cash provided by operations, as well as available funds under our 2024 Credit Facilities will be sufficient to meet cash requirements for 2026 and beyond.

OBLIGATIONS AND COMMITMENTS

Off-Balance Sheet Arrangements - We maintain ASAs with independent CPA firms (as described more fully under “Business - Financial Services” and in Note 1, Basis of Presentation and Significant Accounting Policies, to the accompanying consolidated financial statements), which qualify as variable interest entities. The accompanying consolidated financial statements do not reflect the operations or accounts of variable interest entities as the impact is not material to the consolidated financial condition, results of operations, or cash flows of CBIZ.

We provide letters of credit for insurance needs as well as to landlords (lessors) of our leased premises in lieu of cash security deposits. Letters of credit totaled $3.2 million and $3.2 million at December 31, 2025 and 2024, 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 $2.2 million at December 31, 2025 and 2024, respectively.

We have various agreements under which we may be obligated to indemnify the other party with respect to certain matters. Generally, these indemnification clauses are included in contracts arising in the normal course of business under which we customarily agree to hold the other party harmless against losses arising from a breach of representations, warranties, covenants or agreements, related to matters such as title to assets sold and certain tax matters. Payment by us under such indemnification clauses are generally conditioned upon the other party making a claim. Such claims are typically subject to challenge by us and to dispute resolution procedures specified in the particular contract. Further, our obligations under these agreements may be limited in terms of time and/or amount and, in some instances, we may have recourse against third parties for certain payments made by us. It is not possible to predict the maximum potential amount of future payments under these indemnification agreements due to the conditional nature of our obligations and the unique facts of each particular agreement. Historically, we have not made any payments under these agreements that have been material individually or in the aggregate. As of December 31, 2025, we were not aware of any obligations arising under indemnification agreements that would require material payments.

Interest Rate Risk Management - We do not purchase or hold any derivative instruments for trading or speculative purposes. We utilize interest rate swaps to manage interest rate risk exposure associated with our floating-rate debt under the 2024 Credit Facilities. Under these interest rate swap contracts, we receive cash flows from counterparties at variable rates based on the Secured Overnight Financing Rate (“SOFR”) and pay the counterparties a fixed rate. To mitigate counterparty credit risk, we only enter into contracts with selected major financial institutions with investment grade ratings and continually assess their creditworthiness. There are no credit risk-related contingent features in our interest rate swaps nor do the swaps contain provisions under which we would be required to post collateral.

As of December 31, 2025, the notional value of all our interest rate swaps were $500.0 million, with maturity dates ranging from July 14, 2026 to July, 2030. For further details on our interest rate swaps, refer to Note 7, Financial Instruments, to the accompanying consolidated financial statements.

In connection with payroll services provided to clients, we collect funds from our clients’ accounts in advance of paying these client obligations. These funds held for clients are segregated and invested in accordance with our investment policy, which requires that all investments carry an investment grade rating at the time of initial investment. The interest income on these investments mitigates the interest rate risk for the borrowing costs of the 2024 Credit Facilities, as the rates on both the investments and the outstanding borrowings against the credit facility are based on market conditions. Refer to Note 7, Financial Instruments, and Note 10, Debt and Financing Arrangements, to the accompanying consolidated financial statements for further discussion regarding investments and our debt and financing arrangements.

CRITICAL ACCOUNTING ESTIMATES

The preparation of our consolidated financial statements in accordance with GAAP is based on the selection and application of accounting policies that require us to make significant estimates and assumptions that in certain circumstances affect amounts reported in the accompanying consolidated financial statements. In preparing these financial statements, we have made our best estimates and judgments of certain amounts included in the consolidated financial statements, giving due consideration to materiality. We consider the accounting policies discussed below to be critical to the understanding of our consolidated financial statements. Actual results could differ from our estimates and assumptions, and any such difference could be material to our consolidated financial statements. Significant accounting policies, including Revenue Recognition, are described fully in Note 1, Basis of Presentation and Significant Accounting Policies, to the accompanying consolidated financial statements.

Accounts Receivable and Notes Receivable - We determine the net amount expected to be collected on our accounts receivable, both billed and unbilled, and notes receivable, based on a combination of factors, including but not limited to our historical incurred loss experience, credit-worthiness of our clients, the age of the receivable balance, current economic conditions that may affect a client's ability to pay, and current and projected economic trends and conditions at the balance sheet date. Significant management judgments and estimates must be made and used in connection with establishing the allowance for doubtful accounts for each accounting period. Material differences may result if facts and circumstances change in relation to the original estimation.

Business Combinations - We recognize and measure identifiable assets acquired and liabilities assumed as of the acquisition date at fair value. Fair value measurements require extensive use of estimates and assumptions, including estimates of future cash flows to be generated by the acquired assets. As we finalize the estimation of the fair value of the assets acquired and liabilities assumed, additional adjustments may be recorded during the measurement period (a period not to exceed 12 months from the acquisition date). In addition, we recognize and measure contingent consideration at fair value as of the acquisition date using a probability-weighted discounted cash flow model. The fair value of contingent consideration obligations that are classified as liabilities are reassessed each reporting period. Any change in the fair value estimate is recorded in the earnings of that period.

Goodwill and Other Intangible Assets - Goodwill represents the difference between the purchase price of the acquired business and the related fair value of the net assets acquired. A significant portion of our assets in the accompanying Consolidated Balance Sheets is goodwill. At December 31, 2025, the carrying value of goodwill totaled $2,329.8 million, compared to total assets of $4,409.5 million and total stockholders’ equity of $1,762.1 million. Intangible assets consist of identifiable intangibles other than goodwill. Identifiable intangible assets other than goodwill include client lists and non-compete agreements, which require significant judgments in determining the fair value. We carry client lists and non-compete agreements at cost, less accumulated amortization, in the accompanying Consolidated Balance Sheets.

Goodwill is not amortized, but rather is tested for impairment annually during the fourth quarter. In addition to our annual goodwill test, on a periodic basis, we are required to consider whether it is more likely than not (defined as a likelihood of more than 50%) that the fair value has fallen below its carrying value, thus requiring us to perform an interim goodwill impairment test. Intangible assets with definite lives, such as client lists and non-compete agreements, are amortized using the straight-line method over their estimated useful lives (generally ranging from three to fifteen years). We review these assets for impairment whenever events or changes in circumstances (including declines in the price of our common stock and market capitalization, deterioration in macroeconomic conditions, and declining financial performance in comparison to projected results) indicate an asset’s carrying value may not be recoverable. Recoverability is assessed based on a comparison of the undiscounted cash flows to the recorded value of the asset. If impairment is indicated, the asset is written down to its estimated fair value based on a discounted cash flow analysis or market comparable method.

The goodwill impairment test is performed at a reporting unit level. A reporting unit is an operating segment of a business or one level below an operating segment. During the fourth quarter of 2025, we completed certain organizational reporting changes which resulted in a realignment and re-aggregation of reporting units in both the Financial Services and Benefits and Insurance Services practice groups, which resulted in new reporting units that align the internal reporting structure with the services provided by these practice groups. The organizational changes did not result in a change in the reportable segments, nor did they result in a change of the total number of reporting units for goodwill impairment test purposes. As of October 31, 2025, immediately after the organizational changes, there are a total of six reporting units, of which three are within the Financial Services practice group, two are within the Benefits and Insurances practice group, and one is within the National Practice group. While the overall number of reporting units did not change, the components within the reporting units were impacted by the organizational reporting changes.

As a result of the aforementioned changes in reporting units, we performed a qualitative assessment immediately before the change in reporting units. We concluded that it was more likely than not that the fair values of each of our reporting units immediately before the change exceeded their respective carrying values and, therefore, goodwill related to those reporting units was determined to not be impaired.

The change in reporting units resulted in a triggering event. Accordingly, we performed a quantitative assessment and comparison of the fair value of our reporting units to their respective carrying value on the annual testing date. Based on the results of the quantitative assessment, the estimated fair values of the reporting units are in excess of their respective carrying values, therefore, there was no impairment to goodwill.

It is possible, depending upon a number of factors that are not determinable at this time or within our control, that the fair values of one or more of our reporting units could decrease in the future and result in an impairment to goodwill. Specifically, further declines in our market capitalization may trigger the need for future impairment tests where the conclusions may differ and could result in the recognition of an impairment charge. Additionally, any significant adverse change in our near or long-term projections or macroeconomic conditions could result in future impairment charges, which could be material.

For further information regarding our goodwill balances and the quantitative assessment performed, refer to Note 6, Goodwill and Other Intangible Assets, net, to the accompanying consolidated financial statements.

Loss Contingencies - Loss contingencies, including litigation claims, are recorded as liabilities when it is probable that a liability has been incurred and the amount of the loss is reasonably estimable. Contingent liabilities are often resolved over long time periods. Estimating probable losses requires analysis that often depends on judgment about potential actions by third parties. Refer to Note 12, Commitments and Contingencies, to the accompanying consolidated financial statements for further information.

Other Significant Policies - Other significant accounting policies, not involving the same level of management judgment and uncertainty as those discussed above, are also critical in understanding the consolidated financial statements. Those policies are described in Note 1, Basis of Presentation and Significant Accounting Policies, to the accompanying consolidated financial statements.

Recent Accounting Pronouncements - Refer to Note 1, Basis of Presentation and Significant Accounting Policies, to the accompanying consolidated financial statements for a description of recent accounting pronouncements, which is incorporated herein by reference.

We do not purchase or hold any derivative instruments for trading or speculative purposes. We utilize interest rate swaps to manage interest rate risk exposure associated with our floating-rate debt under the 2024 Credit Facilities. Under these interest rate swap contracts, we receive cash flows from counterparties at variable rates based on SOFR and pay the counterparties a fixed rate. To mitigate counterparty credit risk, we only enter into contracts with selected major financial institutions with investment grade ratings and continually assess their creditworthiness. There are no credit risk-related contingent features in our interest rate swaps nor do the swaps contain provisions under which we would be required to post collateral.

As of December 31, 2025, we have the following interest rate swaps outstanding (in thousands):

Refer to Note 7, Financial Instruments, to the accompanying consolidated financial statements for further discussion regarding interest rate swaps.

Interest rate risk results when the maturity or repricing intervals of interest-earning assets and interest-bearing liabilities are different. A change in the Federal Funds Rate, or the reference rate set by Bank of America, N.A., would affect the rate at which we could borrow funds under the 2024 Credit Facilities. Our balance outstanding under the 2024 Credit Facilities at December 31, 2025 was $1,472.4 million, of which $972.4 million is subject to rate risk. If market rates were to increase or decrease 100 basis points from the levels at December 31, 2025, interest expense would increase or decrease approximately $9.7 million annually.

In connection with our payroll business, funds held for clients are segregated and invested in short-term investments, such as corporate and municipal bonds. In accordance with our investment policy, all investments carry an investment grade rating at the time of the initial investment. At each respective balance sheet date, these investments are adjusted to fair value with fair value adjustments being recorded to other comprehensive income or loss for the respective period. Refer to Note 7, Financial Instruments, and Note 8, Fair Value Measurements, to the accompanying consolidated financial statements for further discussion regarding these investments and the related fair value assessments.

Evaluation of Disclosure Controls and Procedures - Management has evaluated the effectiveness of our disclosure controls and procedures (“Disclosure Controls”) as of the end of the period covered by this report. This evaluation (“Controls Evaluation”) was done with the participation of our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”). Disclosure Controls are controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure Controls include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file under the Exchange Act is accumulated and communicated to management, including the CEO and CFO, as appropriate to allow timely decisions regarding required disclosure.

Limitations on the Effectiveness of Controls - Management, including the Company’s CEO and CFO, does not expect that its Disclosure Controls or its internal control over financial reporting (“Internal Controls”) will prevent all errors and all fraud. Although our Disclosure Controls are designed to provide reasonable assurance of achieving their objective, a control system, no matter how well conceived and operated, can provide only reasonable, but not absolute, assurance that the objectives of a control system are met. Further, any control system reflects limitations on resources, and the benefits of a control system must be considered relative to its costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of a control. A design of a control system is also based upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and may not be detected.

Conclusions - Based upon the Controls Evaluation, our CEO and CFO have concluded that as of the end of the period covered by this report, our Disclosure Controls are effective at the reasonable assurance level described above.

Management’s Report on Internal Control Over Financial Reporting - Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act. Under the supervision of management, including our CEO and CFO, we conducted an evaluation of our internal control over financial reporting based on the framework provided in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, management has concluded that our internal control over financial reporting was effective as of December 31, 2025.

Changes in Internal Control Over Financial Reporting - During the fiscal quarter ended December 31, 2025, we completed the integration of Marcum, which was acquired in November 2024, into our internal control process. Other than the integration of Marcum into our internal control over financial reporting, there has been no change in our internal controls over financial reporting during our most recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

Our independent auditor, KPMG LLP, an independent registered public accounting firm, has issued an audit report on the effectiveness of our internal control over financial reporting which appears in Item 8 of this Annual Report.