Earnings release
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August 5 , 2026 BBSI TM BBSI Reports Second Quarter 2026 Financial Results - Revenues up 4 % to $ 319.3 Million and Gross Billings up 3 % to $ 2.29 Billion - VANCOUVER , Wash . , Aug. 05 , 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 second quarter ended June 30 , 2026 . Second Quarter 2026 Financial Summary vs. Year - Ago Quarter • Revenues up 4 % to $ 319.3 million . • Gross billings up 3 % to $ 2.29 billion . • Average worksite employees ( " WSES " ) up 0.5 % . • Net income of $ 12.9 million , or $ 0.52 per diluted share , compared to net income of $ 18.5 million , or $ 0.70 per diluted share . " BBSI delivered second quarter results in line with the trends we've been communicating , with strong new client additions once again exceeding our expectations , " said Gary Kramer , President and CEO of BBSI . " Continued softness in client hiring remains our primary growth headwind and has not yet shown the recovery we had anticipated . We saw positive client pricing trends improve throughout Q2 as the workers ' compensation market continues to firm up . This has been offset by a slowing of favorable prior - year claims adjustments a trend we're seeing across the industry . We continue to view 2026 as the low point for margin as our cumulative pricing actions continue to build in the periods ahead . " Second Quarter 2026 Financial Results Revenues in the second quarter of 2026 increased 4 % to $ 319.3 million compared to $ 307.7 million in the second quarter of 2025 . Total gross billings in the second quarter of 2026 increased 3 % to $ 2.29 billion compared to $ 2.23 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 2.5 % in the second quarter of 2026 , which included favorable prior year liability and premium adjustments of $ 2.0 million . This compares to 2.1 % in the second quarter of 2025 , which included favorable prior year liability and premium adjustments of $ 8.8 million . Net income for the second quarter of 2026 was $ 12.9 million , or $ 0.52 per diluted share ,
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compared to net income of $18.5 million, or $0.70 per diluted share, in the year-ago quarter. Liquidity As of June 30, 2026, unrestricted cash and investments were $67.9 million compared to $91.9 million as of March 31, 2026. BBSI remained debt free at quarter end. Capital Allocation Continuing under the Company’s stock repurchase program established in August 2025, BBSI repurchased $15.0 million of common stock in the second quarter, comprising 486,811 shares at an average price of $30.92. At June 30, 2026, approximately $40.3 million remained available under the $100 million repurchase program. The Company paid $1.9 million of dividends in the quarter, and BBSI’s board of directors confirmed its next regular quarterly cash dividend at $0.08 per share. The cash dividend will be paid on September 4, 2026, to all stockholders of record as of August 21, 2026. Through a combination of stock repurchases and dividends, year-to-date capital returned to shareholders totaled more than $39 million. Outlook BBSI is updating its outlook for 2026 as follows: Gross billings growth of 3% to 4%. Growth in the average number of WSEs of 2% to 3%. Gross margin as a percent of gross billings of 2.70% to 2.75%. Effective annual tax rate to remain at 26% to 27%, excluding the one-time charge related to prior-year tax credits. Conference Call BBSI will conduct a conference call on Wednesday, August 5, 2026, at 5:00 p.m. Eastern time (2:00 p.m. Pacific time) to discuss its financial results for the second quarter ended June 30, 2026. BBSI’s CEO Gary Kramer and CFO Anthony Harris will host the conference call, followed by a question and answer period. Date: Wednesday, August 5, 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: 1103264 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
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section of the BBSI website at ir.bbsi.com . A replay of the conference call will be available after 8:00 p.m. Eastern time on the same day through September 5, 2026. Toll-free replay number: 1-844-512-2921 International replay number: 1-412-317-6671 Replay ID: 1103264 Key Performance Metrics and Non-GAAP Financial Measures During the first quarter of 2026, the Company recorded tax-effected charges of $11.6 million related to the disallowance of certain wage-based tax credits claimed in prior years. This charge was recorded within provision for income taxes on our condensed consolidated statements of operations. We have excluded this charge from our non-GAAP measures as it relates to prior periods and is not indicative of our current or future operational performance. The reconciliation of net loss and diluted loss per share to non-GAAP net income and non- GAAP diluted income per share for the six months ended June 30, 2026 is shown in the table below (in thousands, except per share amounts): (Unaudited) Six Months Ended June 30, 2026 Net (Loss) Income Diluted (Loss) Income Per Share GAAP net loss $ (1,933 ) $ (0.08 ) Non-recurring tax adjustment 11,565 0.47 Non-GAAP net income $ 9,632 $ 0.39 Weighted average number of diluted common shares outstanding 24,689 We report PEO revenues net of direct payroll costs because we are not the primary obligor for wage payments to our clients’ employees. However, management believes that gross billings and wages are useful in understanding the volume of our business activity and serve as important performance metrics in managing our operations, including the preparation of internal operating forecasts and establishing executive compensation performance goals. We therefore present for purposes of analysis gross billings and wage information for the three and six months ended June 30, 2026 and 2025. (Unaudited) (Unaudited) Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2026 2025 2026 2025 Gross billings $ 2,292,861 $ 2,234,472 $ 4,454,132 $ 4,323,141
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PEO and staffing wages $ 1,984,228 $ 1,939,966 $ 3,848,893 $ 3,749,434 In monitoring and evaluating the performance of our operations, management also reviews the following ratios, which represent selected amounts as a percentage of gross billings. Management believes these ratios are useful in understanding the efficiency and profitability of our service offerings. (Unaudited) (Unaudited) Percentage of Gross Billings Percentage of Gross Billings Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 PEO and staffing wages 86.5% 86.8% 86.4% 86.7% Payroll taxes 6.9% 7.0% 7.5% 7.5% Benefit costs 1.3% 0.8% 1.3% 0.8% Workers' compensation 2.5% 2.1% 2.4% 2.3% Gross margin 2.8% 3.3% 2.4% 2.7% We refer to employees of our PEO clients as WSEs. Management reviews average and ending WSE growth to monitor and evaluate the performance of our operations. Average WSEs are calculated by dividing the number of unique individuals paid in each month by the number of months in the period. Ending WSEs represents the number of unique individuals paid in the last month of the period. (Unaudited) Three Months Ended June 30, 2026 Year- over-year % Growth 2025 Year- over-year % Growth Average WSEs 139,712 0.5% 138,969 8.0% Ending WSEs 141,561 0.6% 140,671 8.2% (Unaudited) Six Months Ended June 30, 2026 Year- over-year % Growth 2025 Year- over-year % Growth Average WSEs 137,353 1.2% 135,714 7.8% Ending WSEs 141,561 0.6% 140,671 8.2%
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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; the outcome of audits and other determinations by the IRS; 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 wars in Ukraine and Iran, other 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 impact of the One Big Beautiful Bill Act and other recently enacted legislation 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 2025 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
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forward-looking statements in this release to reflect events or changes in circumstances that occur after the date of this release. Barrett Business Services, Inc. Condensed Consolidated Balance Sheets (Unaudited) June 30, December 31, (in thousands) 2026 2025 ASSETS Current assets: Cash and cash equivalents $ 27,037 $ 95,033 Investments 40,852 62,154 Trade accounts receivable, net 301,492 248,626 Income taxes receivable — 2,965 Prepaid expenses and other 24,583 18,652 Restricted cash and investments 72,353 97,210 Total current assets 466,317 524,640 Property, equipment and software, net 74,031 67,230 Operating lease right-of-use assets 23,236 23,218 Restricted cash and investments 91,616 106,216 Goodwill 47,820 47,820 Other assets 8,256 9,869 Deferred income taxes — 74 Total assets $ 711,276 $ 779,067 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 7,003 $ 7,433 Accrued payroll and related benefits 272,487 237,783 Payroll taxes payable 48,462 62,463 Income taxes payable 10,565 — Current operating lease liabilities 7,238 6,969 Current premium payable 22,327 38,992 Other accrued liabilities 9,436 19,357 Workers' compensation claims liabilities 30,367 32,875 Total current liabilities 407,885 405,872 Long-term workers' compensation claims liabilities 67,539 75,709 Deferred income taxes 115 — Long-term premium payable — 26,025 Long-term operating lease liabilities 17,259 17,484 Customer deposits and other long-term liabilities 14,698 12,977 Stockholders' equity 203,780 241,000 Total liabilities and stockholders' equity $ 711,276 $ 779,067
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Barrett Business Services, Inc. Consolidated Statements of Operations (Unaudited) Three Months Ended Six Months Ended June 30, June 30, (in thousands, except per share amounts) 2026 2025 2026 2025 Revenues: Professional employer services $ 304,969 $ 290,170 $ 597,966 $ 565,096 Staffing services 14,299 17,487 28,307 35,127 Total revenues 319,268 307,657 626,273 600,223 Cost of revenues: Direct payroll costs 10,634 13,165 21,116 26,471 Payroll taxes 158,165 155,026 332,261 324,416 Benefit costs 28,918 18,251 56,366 35,867 Workers' compensation 56,697 47,956 108,491 97,586 Total cost of revenues 254,414 234,398 518,234 484,340 Gross margin 64,854 73,259 108,039 115,883 Selling, general and administrative expenses 47,194 48,188 94,674 93,026 Depreciation and amortization 2,257 2,038 4,430 3,996 Income from operations 15,403 23,033 8,935 18,861 Other income (expense): Investment income, net 1,910 2,300 3,932 4,920 Interest expense (42 ) (44 ) (84 ) (88 ) Other, net 52 41 102 99 Other income, net 1,920 2,297 3,950 4,931 Income before income taxes 17,323 25,330 12,885 23,792 Provision for income taxes 4,453 6,876 14,818 6,359 Net income (loss) $ 12,870 $ 18,454 $ (1,933 ) $ 17,433 Basic income (loss) per common share $ 0.53 $ 0.72 $ (0.08 ) $ 0.68 Weighted average number of basic common shares outstanding 24,348 25,592 24,689 25,700 Diluted income (loss) per common share $ 0.52 $ 0.70 $ (0.08 ) $ 0.66 Weighted average number of diluted common shares outstanding 24,708 26,215 24,689 26,309
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Investor Relations: Gateway Group, Inc. Cody Slach Tel 1-949-574-3860 BBSI@gateway-grp.com Source: Barrett Business Services Inc