Brad Lakhia
Thank you, Jerry and good morning, everyone. I'm happy to have the opportunity to join you today on my first CBIZ earnings call, and I'm excited to work along Jerry, the entire CBIZ team, and our investment community.
Before I discuss our first quarter financial results, I want to start by providing a few reminders regarding some financial reporting impacts we highlighted on our last earnings call that resulted from the Marcum transaction.
First, to be consistent with our 10Q MA&A and due to complexities associated with providing accurate comparability, we will not be providing same unit comparisons in 2025.
These complexities include a number of factors such as accounting policy differences, impacts associated with integrating businesses, teams, systems, and business processes.
We plan to reassess our ability to provide same unit comparisons once we lap into our 2026 financial reporting periods.
Second, to facilitate a better understanding of our operating performance, we are reporting adjusted non-gap financial metrics, which include adjusted EBA, adjusted net income, and adjusted diluted earnings per share.
For 2025, these adjustments will relate to acquisition and integration-related costs, non-cash intangible acquisition, amortization expense, and facility optimization charges.
Reconciliations to these non-gap measures are provided in the supplemental schedules included in our earnings release published earlier this morning.
Lastly, our 2025 results will reflect the impact of higher share count and higher interest expense, both of which are directly connected to the funding of the Marcum acquisition.
With that, I'll turn to our results. As Jerry indicated, our overall performance met our expectations.
And with a full quarter of the acquisition now reflected in our results, we are beginning to experience the scale and accreted benefits associated with this transformative acquisition.
We are equally pleased to see the combined team collaborating to pursue the unique growth opportunities that are enabled by the one CBIZ service client offering.
On a consolidated basis, first quarter revenue increased 70% from $494 million to $383 million due primarily to the acquisition. Adjusted EBITDA doubled from 119 to 238 million.
Reflecting the strong margin and scale attributes of our business model as well as the meaningful creative impact of the acquisition.
Please note, going forward, we expect to focus our profitability reporting using adjusted EBITDA given higher interest expense levels.
In the past, we focused primarily on pre-tax income and margins, and we targeted 20 to 50 basis point improvements annually on that pre-tax margin.
Going forward, we will target 20 to 50 basis point improvements of annual adjusted EBITDA margin improvement. Pre-tax income was 173 million, up $69 million or 66%.
When we announced the Markham acquisition, we said we expected it to be 10% accretive within the 1st year. Therefore, we are pleased to report adjusted diluted EPS increased approximately 40% in the first quarter from $1.63 to $2.29 per share.
The lower drop through rate from adjusted even to pre-tax income to adjusted net income in EPS is explained primarily by higher interest and tax expense.
Interest expense was $21 million higher than last year due to increased borrowing and borrowing rates resulting from the acquisition funding.
Our effective tax rate increased approximately 300 basis points, reflecting $5 million in higher tax expense.
The increase in our effective tax rate is primarily driven by the addition of legacy Marcum revenue coming from jurisdictions with higher rates.
Higher interest expense and tax rate represent an impact on GAAP diluted EPS of approximately $23 and $0.08 per share, respectively.
Our financial services segment, first quarter revenue was $714 million up 341 million, or approximately 92%.
Financial services adjusted EBITDA doubled to 230 million, reflecting an adjusted EBITDA margin of 32%, which was similar to last year. And our benefits and insurance segment delivered revenue of $113 million up 5 million, or approximately 4%.
BNI adjusted EBITDA was 30 million, up 3 million, or 10%.
BNI adjusted EBITDA margin was 27%, up nearly 150 basis points versus last year.
The revenue and profitability improvements were driven by nearly all BNI service lines and our BNI team is engaging aggressively to pursue a strong pipeline of Marcum-related cross-serving opportunities.
In terms of cash flow and net debt, and consistent with prior years, we experience seasonal peak levels of working capital usage during the quarter. DSO's were 96 days, 5 days lower than prior year, driven by improved collections.
Total debt at the end of the quarter was approximately 1.5 billion and we had approximately $385 million of unused capacity on our $2 billion facility.
As a result, our leverage at the end of Q1 was approximately 4 times or approximately a half turn higher than year end. This increase is consistent with what we experienced prior to the Marcum acquisition.
And as we discussed on prior calls and assuming we use all or most of our free cash flow to reduce debt, we estimate our leverage could be 2 to 2.5 times by the end of 2026. Turning to our outlook and guidance items, our adjusted EBITDA and adjusted EPS guidance is unchanged.
However, the uncertainty in the current economic and geopolitical environment has already led to softness in our non-recurring service lines, and that is a trend we expect to continue. Non-recurring services now represent approximately 23% of our revenue.
Given this uncertainty and the company's limited visibility into forecasting demand for these services for the balance of the year, we now expect full year 2025 revenue to be within a range of 2.8 to 2.95 billion.
And as we have previously said, we have a range of variable cost items that we can fairly quickly adjust to mitigate the uncertain impacts of our top line. We expect approximately $60 million of payments in 2025 related to prior acquisitions, primarily earn out payments, of which $30 million was paid in the first quarter.
We expect another 30 million of payments related to prior acquisition related earnouts in 2026 and approximately $10 million in 2027. And we continue to estimate between 20 and 25 million in capital expenditures for 2025, of which $5 million was incurred in the first quarter.
Depreciation and amortization was nearly 25 million for the first quarter, and we estimate approximately 100 million for the full year. And we continue to expect approximately 25 million in synergies with the majority to be delivered in year two and beyond.
Finally, as a reminder, approximately 4.4 million shares will have been issued to former Marcum Partners and will become eligible for resale effective May 1, 2025.
After May 1st, there will be an additional approximately 300,000 shares delivered monthly through 2027. All of these shares are subject to our first our right of first refusal, and we're authorized to repurchase up to 5 million shares. We will be prudent and disciplined in managing our share repurchase program.
And with that, I'll turn it back to Jerry.
Jerry Grisko
Thank you, Brad. Before we move to Q&A, I want to provide further update on our progress with integration and our M&A strategy going forward.
As we are wrapping up our traditional financial services busy season, and most of the time sensitive client deadlines will soon be behind us, we now have the opportunity to accelerate our integration efforts, deepen collaboration, and move forward with key initiatives and strategies that will begin to unlock the synergies and growth potential of our exciting combination with Marcum.
A major area of focus in the months ahead will be the integration of our technology systems and moving our teams onto a unified technology environment.
This is one of the most critical enablers to operational improvements, process standardization, and our ability to drive consistency in everything from delivery of client services to our clip to our team member experiences.
Once in place, these integrated systems will allow us to streamline and automate processes. Enhance data visibility and analysis and ultimately deliver greater value to all of our stakeholders.
As with every step in our integration process, we will continue to take a thoughtful and intentional approach, balancing progress with change management and training to support a smooth transition for our entire team.
As we reflect on the past few months, I'm incredibly proud of the progress we've made on many fronts, from identifying a group of incredibly talented leaders to drive our most impactful strategic initiatives to establishing new operating models. For our people, we continue to see high retention and strong engagement, and we're gathering feedback and input along the way.
In terms of future M&A with the successful completion of the Marcum transaction and our continued progress with integration, we're seeing an increased interest in CBIZ as an enquirer of choice.
We expected this outcome and are thoughtfully evaluating a number of opportunities that will continue to build on our geographic presence in key markets and add strength to our existing service lines.
Finally, I want to touch on two items that Brad touched on. I touched on in my opening remarks, specifically relating to organic revenue growth and our guidance for the year.
As it relates to organic revenue growth, as we've historically provided that guidance annually throughout the year.
The reason that we were not able to do that this year is because when we look at the Marcum numbers, they were private, obviously before they joined CBIZ. It's very difficult for us, from an apples-to-apples comparison to have a good baseline for them, a good reliable baseline on their organic growth. And so, we just really don't have a good line of sight.
More importantly, we've already, as you would expect, and we expect, we've already begun to bring these businesses together regionally. We're combining their offices with ours. We have combined leadership. We're combining our teams. So while we do have a little bit of line of sight in the first quarter, that's going to be historic that's going to be even more difficult as we progress throughout the year.
With that said, we did have some line of sight in the first quarter, and I want to lend that to you. Based on the internal analysis that we have, very encouragingly. As expected, the recurring portion of our accounting and tax business, both within Legacy, CBIZ and Legacy Marcum performed as expected in that mid-single digit range, as well as our benefits and insurance group performing within that mid-single digit rate.
So I just want to convey that message that we're pleased with the performance of the business through the first quarter. And where we expected it to be strong, it was strong, that being in our seasonally kind of predictable, more heavily, more recurring business in the first quarter.
I also want to touch on a couple of things. I noticed that that there were some comments around our revenue not hitting guidance or I'm sorry, expectations consensus for the year that really falls into two buckets. As we don't guide quarterly, we guide annually.
So let me kind of bring a little bit of colour to that.
The two buckets are the known things. We knew some things that we couldn't convey to the analysts that created consensus. And that resulted in about a $30 million dollar Change and it's really pacing and timing on the year, but we had about $30 million in category, one being the staff business, we've talked a lot about this. Markham within their capital markets practice traditionally did a lot of staff work. That work predictably has been winding down from a peak in 2023, and we saw it, decline in 2024 and expectedly decline, again in 2025.
We're not concerned about that. We know that we'll sell over. There’re other parts of the business that are in fact increasing, but we knew that back business would wind down. The other thing that we expected, we've talked about this, we haven't quantified it, is there were a couple portions of the business that that we were going to have conflicts with.
Most notably on their healthcare side, Marcum had a healthcare practice. That was in conflict with the conflict with our government healthcare consulting practice. That's another piece of that. And then, of course, as we announced last year, we sold our KA consulting business that was in last year's number, isn't in this year's number. That's about impact on the quarter of about $30 million of known items.
The unknown portion of it was really related to the economic climate, and while there's a number of items there, I would just say it was the impact on the capital markets, so our SEC audit practice and the work that we would traditionally do there when that, when the markets just kind of hit the pause button as a as a result of some of the policies of the administration, that work just kind of halted. No one saw that. When we began the year and of course it had a like impact on our advisory practice.
So those two things are about $20 million. So combined about $50 million again, we don't guide the quarters, but when I saw the comments that, we missed the consensus, I would say it wasn't far off, our results weren't far off our internal expectations, certainly on the items that that we knew and expected.
Lastly, turning to guidance, We're really pleased and again the model affirms that that despite some of some of the softness on the top line, we're able to yet affirm our earnings guidance for the year and other earnings related metrics.
From a top line, we don't want the message to be concern over optimism or health of the business. That's why we didn't guide down on the top end of that. The guidance is really just a result of kind of a pragmatic look at what we've seen so far in the year and what we expect to see.
Through the continuance of the year, if conditions don't improve. Again, with 23% of our revenue really being more advisory project, discretionary side, we thought it was prudent at this point to widen that range, on the revenue side because we know some things now that we didn't know when we gave that guidance.
But in no terms should it be viewed as a lack of optimism about the prospects for the range of the business and in fact we, in fact, we have some line of sight that if things improve a little bit, we will in fact hit that original guidance, but we wanted to broaden that range.
So with that, I'll turn it over to Q&A.
Operator
We will now begin the question-and-answer session. To ask a question, you may press star, then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then too. At this time, we will pause momentarily to assemble our roster.
Comes from Christopher Moore with CJS Securities. Please go ahead.
Christopher Moore
Hey, good morning, guys. Thanks for taking a few questions. Yeah, maybe I'll just start with where you left off, Jerry, in terms of the non-recurring services represent about 23% of revenue. You called out capital markets.
Are there Concerned about there or would be softer if you were, to be closer to the low end of that revenue range.
Jerry Grisko
Yeah, Chris, thank you for the question. I would say capital markets is a big piece of that. The other thing is anything deal related, as we have a pretty sizable private equity practice that that's really relies heavily on deal flow. We've seen that's a mixed bag, right?
We saw kind of and through part of this year, through the first kind of quarter, we saw some softness. We're actually seeing some encouraging kind of activity in the pipeline and it's almost kind of month by month, right, as tariffs are imposed, activity slows this this kind of 90 day actually increased our pipeline.
So it's just very difficult to predict. So that's a sizable part of our practice. And then we do a lot of other work that's kind of harder to quantify and identify, but related to transactions when our clients are selling, of course, Help them in that process. When our clients are buying, we help them in their practice.
It's not all within that P/E practice, it's kind of within our core advisory and core accounting business. So there, there's a pretty heavy reliance on M&A and we just don't have a lot of visibility into what that might look like this year. I will also comment on that note that we serve predominantly a middle market client.
That client tends to be very optimistic and resilient, kind of regardless of business conditions, but what they do need is a line of sight, right? And I think the thing that's been unique to this, the start of this year is the uncertainty almost week to week and certainly month to month that they're seeing. I, if we get more predictability, in kind of what the landscape looks like, then our optimism as to What those project works will look like, will obviously improve. It's just been a very uncertain environment for us.
Christopher Moore
Got it. Very helpful.
You mentioned strong government healthcare consulting during Q1.
I just given the current conditions, just trying to get a sense whether you expect that to continue and is there potentially an opportunity here from, some of the some of these government entities will need more help from you if some of the cutbacks actually.
Jerry Grisko
Yeah, Chris, that's exactly the way we're looking at, the question that we get sometimes is, how much of your total revenues tied to these federal contracts within that government healthcare consulting business, it's about 40 million directly related, but there's also an indirect relationship in that the work that we do on the Medicaid side is in part dependent on getting data from the federal government.
So, but as we sit here today, we actually are on the, I think the right side of the doge and the efforts around cost containment and savings because in fact, the work we do is work that supports that, right? Making sure that the programs are in compliance, making sure that I's are dotted and Ts are crossed. So, when we talked to our team on that side of the business, they're quite encouraged right now by not only how the business performed through the first quarter, but the outlooks of the business for the remainder of the year.
Christopher Moore
Got it. Maybe just the last one for me. So, integration costs related to acquisition, it's obviously a big piece of the ad back, I think it was 15.7% this quarter. Can you just, can you break that down into a few more primary buckets and, maybe give us a sense.
When that will start to me include decline, is that next year, is that later this year, or just how you're looking at it?
Jerry Grisko
Yeah, I think the total amount that we have kind of earmarked for again kind of excluding real estate is about $75 million.
Will come this year, but we will have a significant, we'll have a significant IT related portion of that kind of in the 2026, but a large portion of the 25 will come into this year. I'm sorry, the 75 will come into the 2025.
Christopher Moore
Got it.
I appreciate it. I'll leave it.
Brad Lakhia
This is Brad, I just want to point out on the facility, based, integration we haven't provided any outlook on that at this point in time. We're starting to obviously get the integration team is starting to get its arms around, what that's going to look like, how it's going to unfold, kind of market to market, butt, those facility optimization costs will probably be more.
More pronounced next year. So obviously, when we're at a point where we can provide more information and we have a better line of sight to that, we will, but that currently is not incorporated, just generally speaking in what we provided. I just want to remind you of that.
Christopher Moore
Got it. I appreciate that. Yeah, I'll jump back in line. Thanks guys.
Operator
The next question comes from Andrew Nicholas with William Blair. Please go ahead.
Andrew Nicholas
Hi, good morning. Thanks for taking my questions. First question, just to clarify on the revised revenue guide. Can you speak to kind of the conditions that the bottom end of the new range would assume?
Jerry, you talked about I think $20 million of headwind, that was a little bit unknown in the first quarter SEC audit practice, maybe there's some transactional headwinds there in the P/E business. Should we assume that continuation of that would get you to the bottom end, or is there some cushion if things were to get worse from the prevailing run rate?
Jerry Grisko
Yeah, Andrew, we think it's a, it's a pretty reliable range at this point. And here's how we got there, right? We basically, to your point, we looked at kind of how the business has performed so far in the first quarter. We kind of annualized that through the rest of the year, and again, we're certainly hopeful that things will improve, but we said if they don't, what could that look like again with 23% of our revenue kind of tied to So kind of more projects and discretionary work.
We also looked at how the business performed in kind of the two most analogous periods that that we've seen, most notably or most recently was kind of COVID. In COVID, that portion of the practice was down 10 to 15% if you do the math on that. So, we basically looked at our range that we had originally provided, which we were very comfortable with obviously at that time.
But through that lens, we said, look, the environment is a little bit different today. When we go and say, how did it perform, the business performs during that period of time again, COVID down 10 to 15, what would that look like? How did the business perform in the first quarter.
Annualize that, again, kind of a pretty pragmatic approach to let's just widen that range. Again, I will emphasize that we have line of sight to hitting the original guidance, but we just thought it was such a tight range that we'd rather kind of address it now than throughout the year.
Andrew Nicholas
Yeah, makes sense that's helpful.
Obviously, I just asked a question about revenue, but you are maintaining the earnings guide, even despite those potential headwinds. So can you maybe just spend a little bit more time talking about the puts and takes.
They like what are the things operationally that you're doing if anything to offset some of those pressures, versus you know things that are inherent to the model in terms of variable comp and the like and then also if there are any synergies that that are included in 2025 that that you have visibility on that you might not have, a handful of months ago.
Jerry Grisko
Okay, yeah, so let me, before I get to that, kind of related, let me talk a little bit about pacing, right? So the other thing we didn't do is raise our guidance on the earning side for the rest of the year.
So while we're ahead of guidance right now, we're being pretty pragmatic and looking, or we're ahead of consensus, I guess, we're pretty pragmatic in looking at the rest of the year and basically saying as we As we suggested at the year-end call, the pacing is going to be a little bit different than what you've seen historically, just because of the acquisition and the seasonality of the business now.
So we're maintaining that full year guidance, despite the fact that I think we're ahead of consensus really on that side. So, but to more specifically answer your question, I think naturally, as you've seen with our business, even When we have a more challenging economic environment or business climate that affects our revenue, we nonetheless have a considerable number of levers that we can pull to protect the earning side of the business.
They come in these buckets really one is around kind of our people and comp costs. Our comp structure is designed to reward growth, and when we get that growth, there's meaningful ups, Bonus and other consideration that we were, we're pleased to be able to reward to people. We kind of accrue that rateably throughout the year.
And so in periods of time when we're not seeing that growth, obviously, those amounts can be reversed, right? They, we wouldn't accrue if we're not getting the growth or we're not getting the performance.
Also, with kind of a little lighter demand for some certain of our services, we're not filling headcount to the same degree, so it affects compensation that way. We've also had really encouraged progress on outsourcing and our reliance on outsourcing that favourably impacts those metrics as well. So, there's a number kind of on the people side, and I would say that's about 2/3.
Of the adjustments that we've been able to make or savings we've been able to incur. And then the other third is around what you would just expect on discretionary side T&E advertising, recruiting costs, those types of things are all kind of naturally lower during this period of time.
So I'd say 2/3, 1/3, and we experienced that in the first quarter, and we'd expect to be able to continue to pull those levers if we if we don't see improvement in the in the top line.
Andrew Nicholas
Very helpful thanks Jerry And then maybe just one last one on capital allocation I think you've talked since the Marcum announcement about a willingness to buy back some shares if the opportunity presents itself also kind of save up or consider deals maybe later this year early next just in light of the current environment and what you've seen so far with Marcum in the first, half year or so.
If you could just kind of give us an update on prioritization amongst all those different items that would be great thanks again.
Brad Lakhia
Yeah, hi, Andrew, Brad here, appreciate the question. So listen, I think I'll start by saying in the quarter, I'll remind you kind of what I said previously, which is, working capital usage was consistent with what we expected and consistent with our prior patterns that we saw from a just a general legacy CI perspective, and really our cash generation, or cash usage, I should say in in the quarter, was a little better than what we expected, so we were encouraged by that.
Turning to your question, I guess from a capital allocation perspective, remember, historically, we've prioritized organic and inorganic opportunities. So, in terms of, using free cash flow, for those opportunities. And then really that was kind of, followed by your shareholder returns, right?
And then keeping our leverage, usually, around 2.5 times or below, flexing for higher leverage for strategic opportunities. So that was our historical capital allocation. Priority. I'd say going forward here for the next year or two, Andrew, we are focused on getting our leverage back down, so we'll continue to focus on getting our debt down to, underneath 2.5 times and we feel like I said, with free cash flow generation that we should be able to get there by the end of 2026.
But we're also going to be very opportunistic, and be, kind of ready and flexible to do some things strategically if the right opportunity presents itself. And then as you said, we have the opportunity to deal with our share repurchase program.
We have shares coming back on the road for potentially, and we feel like we're very well positioned to be able to do the right thing there and be prudent and financially disciplined. So those will be our priorities here over the next year or two.
Andrew Nicholas
Thanks Brad.
Operator
Again, if you have a question, please press star, then one.
Our next question comes from Marc Riddick with Sidoti. Please go ahead.
Marc Riddick
Hey, good morning, everyone. Brad, welcome, looking forward to working with you going forward. I wanted to sort of touch a little bit, as, the mention on the client’s reception and I guess it's sort of a combination, right? There's the general retention which seems to be fine, and then the client conflicts which some of which are, obviously to be expected.
Can you talk a little bit about how the, as you sort of discovered where the conflicts are and how they've arisen to this point. What your thoughts are as to the timing of those impacts and how that played into, guidance for the remainder of the year?
Do you think you kind of through most of that or how should we think about that and sort of, go through that process?
Jerry Grisko
Yeah, Mark, I'll take it.
Let me deal with the client side first. Let me start here.
Whenever you combine two organizations of our size, it's inevitable you're going to have some client conflicts, you can't continue that work. We knew about the healthcare practice, we modelled that, and by the way, the numbers that we experienced, which are all behind us at this point, are within the model.
We also expected that there would be some de minimis amount of additional client conflicts that were going to occur, and it might be as simple as we're doing a test work for the engagement and that was Legacy Markham was doing that at test work and Legacy CBIZ may have been providing a commissioned insurance product.
The independence rules prohibit us from doing those types of things, so we have to shed the client. So, I will tell you it's not a large number. In the scope of our total revenue and it's also within the range that we have within our model, at least what we've experienced so far, and we don't think, we think most of that's behind us as well. So, again, as expected within the model, but year over year it certainly did impact the comparable numbers year over year.
Marc Riddick
Okay, and then I was sort of curious as to the I guess maybe the timing of when you begin to see impacts on the audit practice and advisory work. I mean, it's interesting because it's some things you can sort of point to and say, okay, that was when the tariffs were announced or what have you.
Is there sort of any particular signpost or was it sort of a gradual process as far as the timing of when some of those impacts were seen?
Jerry Grisko
Mark, truthfully, I did not ask that specific question, but what I've learned, and again, just remember that. That's a practice that kind of SEC PCAOB practice is one that that Legacy Marcum brought to us by the way, great practice, great people, great opportunity. We're excited about it, but not one that we had before.
So as to how that the client work evolves and comes the timing, those some of those things it's just new to us as well. But when we asked the question, it was logical, right? They, the response is that many of the clients that we're serving there are going out regularly for financing they need comfort letters, right?
If they're not raising funds, they don't need those comfort letters. They're filing S ones with there's a considerable amount of work to be done when they do those things. If that work stalls, that work doesn't get done. Now, that's not to say that work won't come, it will come. I think naturally, as the market improves and as optimism improves, we just can't predict the timing. So, there's a little more uncertainty around even that portion of the practice and we've historically experienced.
Marc Riddick
Okay, that's very helpful. And I was sort of curious as to, I'm not sure if we discussed the pricing environment. Have you seen any changes there or anything that's different than what you would have originally experienced as far as just general pricing trends?
Jerry Grisko
Yeah, I guess I have two responses to that, Mark, great comment. As we, I think, ahead of others in the industry have really a very disciplined approach to Pricing and making sure we have pricing and processes behind it and reporting and follow up and training, all of those things. So, we, we've had considerable success in pricing over the past couple of years.
We've actually seen, and yield is kind of our proxy for pricing. We've actually seen really nice lift in our pricing, through the first quarter. The second part of that, I said there were two parts.
The second part is inevitably, if the market continues to be a more challenging environment and work is harder to come by, people look to keep their people busy and oftentimes that translates into people lowering rates. So, we haven't seen that yet, but I wouldn't be surprised, that we'd see a more challenging environment, in the future if the business climate doesn't improve.
Marc Riddick
Understandable. Thank you very much.
Operator
This concludes our question-and-answer session. I would like to turn the conference back over to Jerry Grisko for any closing remarks.
Jerry Grisko
Sure, thank you. As we wrap up today, I always, as we always do, I want to thank our shareholders and analysts for joining us and for your continued support. There's a headline that I, that I'd like to leave you with today, and that is the business, despite, revenue, some revenue and some macroeconomic, kind of pressures on the business.
The business performed very well, right? And it performed as it should in this climate. Very strong earnings number, right? And so even environments where the revenue might be off a consensus a little bit, we were able to deliver very strong earnings and in fact had a consensus a little bit.
The other high note is the core business, the core recurring business, both on the benefits and insurance side and on the core accounting and tax side, continued to perform as expected and within the range of the mid-single digits that we had guided, again, very encouragingly.
The integration, again, it's no easy task to bring two organizations of this size and scale together on schedule and by all accounts going very well. We have a very disciplined process behind that. I'm doing, I'm having regular check-ins with our team. And things are on schedule, and very pleased.
We kind of look at it every week as a red, yellow, green, and it's almost green always across the board. So, we have a strong team working on it, a strong leadership working on it, and very happy there. And then maybe most encouragingly, just kind of a cultural alignment. You don't know what you're going to find when you bring two organizations together and just the, I wouldn't say cultural identical, but cultural alignment has been far better than expected.
Legacy Marcum, brought to us really strong leadership. They brought exceptional talent. They brought a really strong culture that combined with our extraordinary culture is you can feel it. You can feel it when you go in the offices, you can feel it as a team sit around the table and clap around the table and collaborate.
So we couldn't be more pleased sitting here today in light of all the work that everybody's put in getting us to where we are with how we're How we're proceeding through the first quarter. More importantly, and I've said this to our team, and I'll say it to you, the futures never look brighter. Just as a reminder as to why we brought this together, we now have scale that we never had before.
That scale will allow us to make investments in the firm to continue the growth and success in all the areas that that we need to continue to invest in the business. It'll provide us with the ability to go to market and provide our clients and our prospects with services and solutions that we feel are unmatched by any of our competitors in the industry and equally important, position us to be able to win that war for talent by offering people career opportunities that they would never have had in a smaller organization or one that doesn't have the culture and the commitment to people that see this has. .
I mentioned the client side. On top of scale, if you consider CBIZ today compared to anyone else that might be in our peer group, we are unmatched not only in our geographic presence.
In our breadth of services, but in our industry expertise. And on that industry side, we now have 8 industry groups with revenues between $100 and $300 million. We actually have identified 12 industry groups.
The power of bringing our breadth of services, our depth of expertise, a holistic approach to the solutions that we can bring to those clients again unmatched. And so, while there's no question, a lot of work that still needs to be done, we sit here today more excited today than we've ever been about the prospects of the business and even more excited than we were on November 1 when we announced the closing the transaction.
I'd be remiss if I didn't acknowledge the tremendous effort and adaptability and resilience of each of our team members that's been involved in this process. Everything that we've accomplished, every milestone, every client win is made possible as a result of your hard work, your commitment, your dedication to the team and to the clients.
As I mentioned, I've never been more excited for the future of the business, and I'm incredibly proud of all that you've accomplished to date, and I'm excited to be on this journey with you in the future. With that, I'll conclude the call and thank you for joining us today.
Operator
The conference is now concluded.
Thank you for attempting today's presentation. You may now disconnect.
