In This Article:
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Gross Billings: Increased 9% to $2.14 billion in Q3 2024 from $1.96 billion in the prior year quarter.
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PEO Gross Billings: Increased 9% to $2.12 billion in the quarter.
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Staffing Revenues: Declined 2% to $21 million in the quarter.
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Worksite Employees (WSE): Grew by 5% year-over-year.
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Average Billing per WSE: Increased 3% in the quarter.
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Regional Performance: East Coast grew by 18%, Mountain and Southern California each grew by 10%, Northern California grew by 6%, and Pacific Northwest declined by 1%.
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Workers' Compensation Adjustments: Recognized favorable prior year liability and premium adjustments of $4.3 million.
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Net Income per Diluted Share: $0.74 compared to $0.67 in the year-ago quarter.
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Unrestricted Cash and Investments: $94 million as of September 30th.
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Share Repurchase: $8 million of shares repurchased at an average price of $35.09 per share.
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Dividends Paid: $2.1 million at a rate of $0.08 per share.
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Full Year Gross Billings Outlook: Expected to increase between 7% and 8%.
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Gross Margin Outlook: Expected to be between 3.03% and 3.07% of gross billings.
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Effective Annual Tax Rate: Expected to remain between 26% and 27%.
Release Date: November 06, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Barrett Business Services Inc (NASDAQ:BBSI) reported a strong third quarter with financial results exceeding expectations.
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Gross billings increased by 9% over the prior year quarter, driven by a record number of worksite employees from new client additions.
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Client retention remains high, attributed to the value provided by BBSI's teams.
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The company successfully entered new markets with an asset-light model, hiring additional local talent to support clients.
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BBSI benefits, the new health insurance offering, is gaining traction with a strategic partnership with Kaiser Permanente, leading to more new subscribers.
Negative Points
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Staffing business declined by 2% over the prior year quarter due to strategic repricing and client jettisoning.
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The Pacific Northwest region experienced a decline in PEO gross billings by 1%, impacted by slower client growth.
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Client hiring rates remain below historical averages, affecting overall growth potential.
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SG&A expenses increased due to variable employee compensation and incentive pay related to stronger financial results.
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The competitive environment remains challenging, with intense competition in the workers' compensation market.
Q & A Highlights
Q: Can you discuss the competitive environment and whether BBSI benefits are helping you outpace growth relative to peers? A: Gary Kramer, President and CEO, explained that BBSI's clients are in a favorable position in the macro economy, with modest hiring and high retention rates. The company has focused on improving its sales pipeline and efficiency, leading to more referrals and client acquisitions. The introduction of BBSI benefits has attracted new referral partners and clients, contributing to growth.