- Fourth Quarter Revenues up 5% to $321.1 Million With Net Income of $16.4 Million, or $0.64 per Diluted Share -
VANCOUVER, Wash., Feb. 25, 2026 (GLOBE NEWSWIRE) -- Barrett Business Services, Inc. (“BBSI” or the “Company”) (NASDAQ: BBSI), a leading provider of business management solutions, reported financial results for the fourth quarter and full year ended December 31, 2025.
Fourth Quarter 2025 Financial Summary vs. Year-ago Quarter
Revenues up 5% to $321.1 million.
Gross billings up 6% to $2.40 billion.
Average worksite employees (“WSEs”) up 5%.
Net income of $16.4 million compared to $16.8 million.
Diluted earnings per share up 2% to $0.64 compared to $0.63.
Full Year 2025 Financial Summary vs. 2024
Revenues up 8% to $1.24 billion.
Gross billings up 9% to $9.04 billion.
Average WSEs up 7%.
Net income up 3% to $54.4 million compared to $53.0 million.
Diluted earnings per share up 5% to $2.08 compared to $1.98.
“BBSI closed 2025 with another quarter of solid execution, finishing in line with our earnings expectations and delivering one of our strongest years of controllable growth in recent history,” said Gary Kramer, President and CEO of BBSI. “While fourth quarter same-customer sales trends moderated and revenue came in slightly below our expectations, our ability to drive new client wins and achieve 93% benefits retention reflects the strength of our client value proposition. As we enter 2026, we remain focused on disciplined growth, operational execution, and navigating evolving workers’ compensation market dynamics to position BBSI for continued long-term success. We are also looking forward to advancing our technology roadmap in 2026, including several new IT product launches designed to strengthen our service model.”
Fourth Quarter 2025 Financial Results
Revenues in the fourth quarter of 2025 increased 5% to $321.1 million compared to $304.8 million in the fourth quarter of 2024.
Total gross billings in the fourth quarter increased 6% to $2.40 billion compared to $2.25 billion in the same year-ago quarter (see “Key Performance Metrics” below). The increase was driven by growth in professional employer (“PEO”) services, primarily resulting from increased WSEs from net new clients, as well as higher average billings per WSE per day.
Workers’ compensation expense as a percent of gross billings was 2.3% in the fourth quarter of 2025 and benefited from lower workers’ compensation costs, including favorable prior year liability and premium adjustments of $2.2 million. This compares to 2.3% in the fourth quarter of 2024, which included favorable prior year liability and premium adjustments of $2.4 million.
Net income for the fourth quarter of 2025 was $16.4 million compared to $16.8 million in the year-ago quarter. Diluted earnings per share increased 2% to $0.64 compared to $0.63 in the year-ago quarter.
Full Year 2025 Financial Results
Revenues in 2025 increased 8% to $1.24 billion compared to $1.14 billion in 2024.
Total gross billings in 2025 increased 9% to $9.04 billion compared to $8.33 billion in 2024 (see “Key Performance Metrics” below). The increase was driven by growth in PEO services, primarily resulting from increased WSEs from net new clients, as well as higher average billings per WSE per day.
Workers’ compensation expense as a percent of gross billings was 2.3% in 2025 and benefited from lower workers’ compensation costs, including favorable prior year liability and premium adjustments of $18.7 million. This compares to 2.4% in 2024, which included favorable prior year liability and premium adjustments of $18.5 million.
Net income in 2025 increased 3% to $54.4 million, or $2.08 per diluted share, compared to net income of $53.0 million, or $1.98 per diluted share, in 2024.
Liquidity
As of December 31, 2025, unrestricted cash and investments were $157.2 million compared to $121.9 million at December 31, 2024. BBSI remained debt free at year end.
Capital Allocation
Continuing under the Company’s stock repurchase program established in August 2025, BBSI repurchased $17 million of stock in the fourth quarter comprising 450,492 shares at an average price of $37.80. At December 31, 2025, approximately $75 million remained available under the $100 million repurchase program.
The Company paid $2.0 million of dividends in the quarter, and BBSI’s board of directors confirmed its next regular quarterly cash dividend at $0.08 per share. The cash dividend will be paid on March 27, 2026, to all stockholders of record as of March 13, 2026.
Through a combination of stock repurchases and dividends, year-to-date capital returned to shareholders totaled more than $50 million.
Outlook
In 2026, BBSI expects the following:
Gross billings growth of 3% to 5%.
Growth in the average number of WSEs of 2% to 4%.
Gross margin as a percent of gross billings of 2.70% to 2.85%.
Effective annual tax rate of 26% to 27%.
Conference Call
BBSI will conduct a conference call on Wednesday, February 25, 2026, at 5:00 p.m. Eastern time (2:00 p.m. Pacific time) to discuss its financial results for the fourth quarter and full year ended December 31, 2025.
BBSI’s CEO Gary Kramer and CFO Anthony Harris will host the conference call, followed by a question and answer period.
Date: Wednesday, February 25, 2026
Time: 5:00 p.m. Eastern time (2:00 p.m. Pacific time)
Toll-free dial-in number: 1-800-717-1738
International dial-in number: 1-646-307-1865
Conference ID: 1197652
Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Gateway Group at 1-949-574-3860.
The conference call will be broadcast live and available for replay here and via the Investors section of the BBSI website at ir.bbsi.com.
A replay of the conference call will be available after 8:00 p.m. Eastern time on the same day through March 25, 2026.
Toll-free replay number: 1-844-512-2921
International replay number: 1-412-317-6671
Replay ID: 1197652
Key Performance Metrics
We report PEO revenues net of direct payroll costs because we are not the primary obligor for wage payments to our clients’ employees. However, management believes that gross billings and wages are useful in understanding the volume of our business activity and serve as important performance metrics in managing our operations, including the preparation of internal operating forecasts and establishing executive compensation performance goals. We therefore present for purposes of analysis gross billings and wage information for the three and twelve months ended December 31, 2025 and 2024.
(Unaudited) | (Unaudited) | |||||||||||||||
Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||
(in thousands) | 2025 | 2024 | 2025 | 2024 | ||||||||||||
Gross billings | $ | 2,397,139 | $ | 2,251,997 | $ | 9,042,132 | $ | 8,327,091 | ||||||||
PEO and staffing wages | $ | 2,089,388 | $ | 1,964,001 | $ | 7,856,320 | $ | 7,245,093 | ||||||||
In monitoring and evaluating the performance of our operations, management also reviews the following ratios, which represent selected amounts as a percentage of gross billings. Management believes these ratios are useful in understanding the efficiency and profitability of our service offerings.
(Unaudited) | (Unaudited) | |||||||||||
Percentage of Gross Billings | Percentage of Gross Billings | |||||||||||
Three Months Ended December 31, | Year Ended December 31, | |||||||||||
2025 | 2024 | 2025 | 2024 | |||||||||
PEO and staffing wages | 87.2 | % | 87.2 | % | 86.9 | % | 87.0 | % | ||||
Payroll taxes and benefits | 7.7 | % | 7.3 | % | 7.9 | % | 7.6 | % | ||||
Workers' compensation | 2.3 | % | 2.3 | % | 2.3 | % | 2.4 | % | ||||
Gross margin | 2.8 | % | 3.2 | % | 2.9 | % | 3.0 | % | ||||
We refer to employees of our PEO clients as WSEs. Management reviews average and ending WSE growth to monitor and evaluate the performance of our operations. Average WSEs are calculated by dividing the number of unique individuals paid in each month by the number of months in the period. Ending WSEs represents the number of unique individuals paid in the last month of the period.
(Unaudited) | ||||||||||||||||||
Three Months Ended December 31, | ||||||||||||||||||
2025 | Year-over-year | 2024 | Year-over-year | 2023 | ||||||||||||||
Average WSEs | 139,944 | 5.1 | % | 133,124 | 5.2 | % | 126,492 | |||||||||||
Ending WSEs | 138,605 | 4.9 | % | 132,069 | 4.4 | % | 126,446 | |||||||||||
(Unaudited) | ||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||
2025 | Year-over-year | 2024 | Year-over-year | 2023 | ||||||||||||||
Average WSEs | 138,218 | 6.7 | % | 129,577 | 4.2 | % | 124,306 | |||||||||||
Ending WSEs | 138,605 | 4.9 | % | 132,069 | 4.4 | % | 126,446 | |||||||||||
About BBSI
BBSI (NASDAQ: BBSI) is a leading provider of business management solutions, combining human resource outsourcing and professional management consulting to create a unique operational platform that differentiates it from competitors. The Company’s integrated platform is built upon expertise in payroll processing, employee benefits, workers’ compensation coverage, risk management and workplace safety programs, and human resource administration. BBSI’s partnerships help businesses of all sizes improve the efficiency of their operations. The company works with more than 8,200 PEO clients in all 50 states. For more information, please visit www.bbsi.com.
Forward-Looking Statements
Statements in this release about future events and financial outlook are forward-looking statements. Such statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Factors that could affect future results include: our ability to retain current clients and attract new clients; technology disruption, including the displacement of employees through the adoption of AI and automation by our clients; difficulties associated with integrating clients into our operations; economic trends in the Company’s service areas and the potential effects of changing governmental policies, including those related to immigration, tariffs, other trade policies, or climate regulation; risks to our business and the business of our clients arising from current or future tariffs or other trade restrictions, supply chain issues, changes in labor force, or geopolitical instability, including the war in Ukraine, conflicts in the Middle East, and the potential for future conflicts or disruptions in other parts of the world; natural disasters; the potential for material deviations from expected future workers’ compensation claims experience; changes in the workers’ compensation regulatory environment in the Company’s primary markets; PEO client benefit costs, particularly with regard to health insurance benefits; security breaches or failures in the Company’s information technology systems; collectability of accounts receivable; changes in executive management; changes in effective payroll tax rates and federal and state income tax rates; the carrying values of deferred income tax assets and goodwill (which may be affected by our future operating results); the effects of inflation on our operating expenses and those of our clients; the impact of and potential changes to the Patient Protection and Affordable Care Act, escalating medical costs, and other health care legislative initiatives on our business; the effect of changing monetary policy, interest rates and conditions in the global capital markets on the Company’s investment portfolio; and the availability of capital, borrowing capacity on our revolving credit facility, or letters of credit necessary to meet state-mandated surety deposit requirements for maintaining our status as a qualified self-insured employer for workers' compensation coverage or our insured program. Other important factors that may affect the Company’s prospects are described in the Company’s 2024 Annual Report on Form 10-K and in subsequent reports filed with the Securities and Exchange Commission under the Securities Exchange Act of 1934. Although forward-looking statements help to provide complete information about the Company, readers should keep in mind that forward-looking statements are less reliable than historical information. The Company undertakes no obligation to update or revise forward-looking statements in this release to reflect events or changes in circumstances that occur after the date of this release.
Barrett Business Services, Inc. | ||||||||
December 31, | December 31, | |||||||
(in thousands) | 2025 | 2024 | ||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 95,033 | $ | 55,367 | ||||
Investments | 62,154 | 66,492 | ||||||
Trade accounts receivable, net | 248,626 | 234,533 | ||||||
Income taxes receivable | 2,965 | 2,662 | ||||||
Prepaid expenses and other | 18,652 | 18,698 | ||||||
Restricted cash and investments | 97,210 | 97,690 | ||||||
Total current assets | 524,640 | 475,442 | ||||||
Property, equipment and software, net | 67,230 | 56,781 | ||||||
Operating lease right-of-use assets | 23,218 | 20,329 | ||||||
Restricted cash and investments | 106,216 | 134,454 | ||||||
Goodwill | 47,820 | 47,820 | ||||||
Other assets | 9,869 | 6,205 | ||||||
Deferred income taxes | 74 | 4,477 | ||||||
Total assets | $ | 779,067 | $ | 745,508 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 7,433 | $ | 6,787 | ||||
Accrued payroll and related benefits | 237,783 | 215,648 | ||||||
Payroll taxes payable | 62,463 | 49,685 | ||||||
Current operating lease liabilities | 6,969 | 6,231 | ||||||
Current premium payable | 38,992 | 31,134 | ||||||
Other accrued liabilities | 19,357 | 10,330 | ||||||
Workers' compensation claims liabilities | 32,875 | 39,081 | ||||||
Total current liabilities | 405,872 | 358,896 | ||||||
Long-term workers' compensation claims liabilities | 75,709 | 89,365 | ||||||
Long-term premium payable | 26,025 | 49,840 | ||||||
Long-term operating lease liabilities | 17,484 | 15,215 | ||||||
Customer deposits and other long-term liabilities | 12,977 | 10,788 | ||||||
Stockholders' equity | 241,000 | 221,404 | ||||||
Total liabilities and stockholders' equity | $ | 779,067 | $ | 745,508 | ||||
Barrett Business Services, Inc. | |||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||
December 31, | December 31, | ||||||||||||||
(in thousands, except per share amounts) | 2025 | 2024 | 2025 | 2024 | |||||||||||
Revenues: | |||||||||||||||
Professional employer services | $ | 303,553 | $ | 284,517 | $ | 1,168,334 | $ | 1,063,386 | |||||||
Staffing services | 17,573 | 20,303 | 71,964 | 81,145 | |||||||||||
Total revenues | 321,126 | 304,820 | 1,240,298 | 1,144,531 | |||||||||||
Cost of revenues: | |||||||||||||||
Direct payroll costs | 13,368 | 15,392 | 54,443 | 61,010 | |||||||||||
Payroll taxes and benefits | 184,245 | 163,720 | 720,798 | 628,534 | |||||||||||
Workers' compensation | 55,248 | 54,333 | 204,144 | 201,736 | |||||||||||
Total cost of revenues | 252,861 | 233,445 | 979,385 | 891,280 | |||||||||||
Gross margin | 68,265 | 71,375 | 260,913 | 253,251 | |||||||||||
Selling, general and administrative expenses | 47,582 | 48,818 | 190,494 | 185,869 | |||||||||||
Depreciation and amortization | 2,163 | 1,938 | 8,256 | 7,601 | |||||||||||
Income from operations | 18,520 | 20,619 | 62,163 | 59,781 | |||||||||||
Other income (expense): | |||||||||||||||
Investment income, net | 2,356 | 2,522 | 9,259 | 11,130 | |||||||||||
Interest expense | (38 | ) | (45 | ) | (171 | ) | (178 | ) | |||||||
Other, net | 17 | (35 | ) | 148 | 89 | ||||||||||
Other income, net | 2,335 | 2,442 | 9,236 | 11,041 | |||||||||||
Income before income taxes | 20,855 | 23,061 | 71,399 | 70,822 | |||||||||||
Provision for income taxes | 4,459 | 6,261 | 16,951 | 17,829 | |||||||||||
Net income | $ | 16,396 | $ | 16,800 | $ | 54,448 | $ | 52,993 | |||||||
Basic income per common share | $ | 0.65 | $ | 0.65 | $ | 2.13 | $ | 2.03 | |||||||
Weighted average number of basic common shares outstanding | 25,362 | 25,907 | 25,613 | 26,076 | |||||||||||
Diluted income per common share | $ | 0.64 | $ | 0.63 | $ | 2.08 | $ | 1.98 | |||||||
Weighted average number of diluted common shares outstanding | 25,777 | 26,626 | 26,141 | 26,708 | |||||||||||
Investor Relations:
Gateway Group, Inc.
Cody Slach
Tel 1-949-574-3860
BBSI@gateway-grp.com