CBIZ Inc (CBZ) Reports Strong Revenue and Earnings Growth in Q4 and Full-Year 2023
Total Revenue: Increased by 11.0% in Q4 and 12.7% for the full year.
Net Income: Grew by 14.8% for the full year, with GAAP EPS up by 18.9%.
Adjusted EBITDA: Rose by 17.7% for the full year, reflecting operational efficiency.
Acquisitions: Contributed significantly to revenue growth, with three acquisitions adding approximately $67.3 million of annualized revenue.
2024 Outlook: Revenue expected to grow by 7% to 9%, with GAAP and Adjusted EPS projected to increase by 13% to 15%.
On February 15, 2024, CBIZ Inc (NYSE:CBZ) released its 8-K filing, announcing its financial results for the fourth quarter and full year ended December 31, 2023. The company, a leading provider of financial, insurance, and advisory services, reported an 11.0% increase in total revenue for the fourth quarter and a 12.7% increase for the full year, compared to the same periods in 2022. CBIZ's strong performance is particularly noteworthy given the economic challenges faced throughout the year, including rising interest rates and global unrest.
Financial Services Drive Growth
CBIZ operates through three practice groups: Financial Services, Benefits and Insurance Services, and National Practices. The majority of the company's revenue is derived from its Financial Services segment, which has been a significant growth driver. The company's services cater to a diverse range of industries, including agribusiness, construction, healthcare, real estate, and more, predominantly within the United States.
Performance and Challenges
The company's revenue growth was bolstered by both organic growth and strategic acquisitions. Acquired operations contributed $12.6 million to the fourth quarter's revenue growth and $75.2 million for the full year. Same-unit revenue also saw a healthy increase, with a 6.8% rise in the fourth quarter and a 7.4% increase for the full year. However, CBIZ reported a net loss of $12.7 million in the fourth quarter of 2023, compared with a net loss of $11.5 million for the same period a year ago. This loss is attributed to non-recurring transaction and integration expenses related to recent acquisitions, as well as certain non-recurring gains and losses.
Financial Achievements and Industry Significance
For the full year, CBIZ's net income reached $121.0 million, or $2.39 per diluted share, up from $105.4 million, or $2.01 per diluted share, in the previous year. Adjusted net income for the full year was $121.9 million, or $2.41 per diluted share, compared to $111.4 million, or $2.13 per diluted share, for the same period in 2022. Adjusted EBITDA for the full year was $223.8 million, a significant increase from $190.1 million in 2022. These financial achievements underscore the company's ability to grow and remain profitable in a competitive business services industry, even amidst economic uncertainties.
Outlook and Strategic Acquisitions
Looking ahead to 2024, CBIZ anticipates continued growth with total revenue expected to increase by 7% to 9%. The company projects GAAP EPS to grow by 13% to 15%, reaching $2.70 to $2.75 per share, and Adjusted EPS to also grow by 12% to 14%, with the same per-share range. These projections reflect CBIZ's confidence in its business model and its ability to adapt to economic fluctuations.
President and CEO Jerry Grisko expressed optimism about the company's performance and the recent acquisition of Erickson, Brown & Kloster, LLC, which will enhance CBIZ's Financial Services practice in Colorado. Grisko also noted the company's resilience in the face of economic uncertainty and its readiness to navigate the challenges of an election year.
In conclusion, CBIZ Inc (NYSE:CBZ) has demonstrated robust financial growth in 2023, with a positive outlook for the coming year. The company's strategic acquisitions and diversified service offerings position it well for continued success in the business services sector.
Our continued strong performance in 2023 demonstrates the strength and resilience of our business model. Despite economic uncertainty throughout much of the year brought on by rising interest rates, threats of a recession and global unrest, demand remained strong for both our essential, recurring services and our more project-based advisory services," said Jerry Grisko, CBIZ President and CEO.
Explore the complete 8-K earnings release (here) from CBIZ Inc for further details.
This article first appeared on GuruFocus.
