CBIZ Posts Strong Q3 Ahead of $5B Grant Thornton Buyout

CBIZ Inc. reported $47.236 million in third-quarter profit on $702.240 million in revenue, a jump of more than 56 percent from a year earlier. The Cleveland-based advisory firm is preparing to leave the public markets in a $5.0 billion all-cash sale to a U.S. affiliate of Grant Thornton.

The company released the results October 19, 2026, for the three months ended September 30, 2026. Net income topped the $30.146 million reported for the same quarter in 2025, when revenue reached $693.818 million. Diluted earnings per share rose to $0.79 from $0.48. Adjusted EBITDA increased to $131.852 million from $124.005 million, while adjusted diluted EPS climbed to $1.21 from $1.06.

The Deal

CBIZ and the Grant Thornton affiliate, backed by New Mountain Capital, signed a definitive merger agreement on July 29, 2026. Grant Thornton will pay $55.00 per share to acquire CBIZ, at an enterprise value of $5.0 billion. The companies expect to close in the fourth quarter of 2026, pending CBIZ shareholder approval, regulatory sign-off and customary conditions.

After closing, CBIZ stock, which trades on the New York Stock Exchange as NYSE: CBZ, will leave the exchange. The company will become private. CBIZ said it won't issue full-year 2026 guidance or hold an investor conference call on the quarter because of the transaction.

Profitability and Cash

Tighter cost control drove much of the quarter's gains. Operating expenses fell to $588.186 million from $603.689 million, while gross margin rose to $114.054 million from $90.129 million. Corporate general and administrative expenses dropped to $23.877 million from $31.265 million. Operating income reached $90.177 million, up from $58.864 million a year ago.

Interest expense eased to $23.986 million from $27.960 million. Income tax expense, though, nearly doubled, rising to $20.404 million from $10.260 million.

The nine-month results tell a less consistent story. Revenue came in at $2.233025 billion, compared with $2.215328 billion, and net income reached $218.627 million versus $194.861 million. Yet adjusted EBITDA slipped to $479.345 million from $485.127 million, and operating income fell to $308.755 million from $319.168 million. A $57.955 million gain tied to final working-capital and purchase-price adjustments for the Marcum Transaction helped lift the bottom line.

Cash generation improved sharply. Net cash from operating activities for the nine months reached $147.055 million, compared with $48.846 million in 2025. Free cash flow totaled $125.235 million, up from $33.811 million. Net cash used in financing activities rose to $185.915 million from $75.233 million.

Leverage and Risk

CBIZ carries real debt on its balance sheet. Its amended credit agreement provides $2.0 billion in senior secured facilities, including a $1.4 billion term loan and a $600 million revolver. At September 30, 2026, the revolver balance stood at $176.500 million; $96.250 million of the term loan was current and $1.181250 billion was long-term. Debt to equity stood at 66.8 percent, down from 75.5 percent at December 31, 2025. Stockholders' equity totaled $1.912724 billion, while goodwill and other intangibles made up $2.828643 billion of $4.610429 billion in total assets.

The company also listed a long range of exposures. Cyberattacks or security breaches involving CBIZ's systems or those of its vendors, it warned, could materially and adversely affect its business. Failures involving licensed third-party software or information-processing systems could cause similar harm. CBIZ also said it could face liability for errors and omissions.

Deal-related risks are substantial: failure to win approvals, transaction costs, integration delays, difficulty retaining key personnel, litigation, debt-financing risks, and disruption to relationships with employees and customers. CBIZ also flagged legal matters, including an estimated $7.2 million loss in the first nine months of 2026 tied to a matter it planned to settle.

CBIZ provides accounting, tax, advisory, benefits, insurance and technology services to middle-market businesses. It reported more than 9,500 team members across 23 major markets. Third-quarter segment revenue came to $597.791 million for Financial Services and $104.449 million for Benefits and Insurance Services.

Why This Matters:

CBIZ's results show a firm extracting more profit from flat revenue, while a private buyer is paying $5.0 billion for that discipline. The sale also removes another mid-cap professional services company from public exchanges, where shareholders receive quarterly transparency and a vote. Private ownership means less disclosure, and the buyer will take on a company with $2.0 billion in credit facilities. The cyber and systems-dependence warnings matter beyond CBIZ: firms handling payroll, benefits and tax data for middle-market clients hold sensitive information, and one breach could affect hundreds of customers. Regulators and shareholders still need to approve the deal. Until then, execution risk remains.