BBSI · Barrett Business Services, Inc.

Barrett Business Services, Inc. reported first quarter 2026 results reflecting revenue growth of 5% to $307.0 million, primarily from professional employer services which rose to $293.0 million from $274.9 million year-over-year, supported by a 1.9% increase in average worksite employees to 134,993 and higher billings per WSE. Gross billings expanded 3% to $2.16 billion, with workers' compensation expense stable at 2.4% of gross billings despite lower favorable prior-year adjustments. Gross margin held steady at 2.0% of gross billings, or $43.2 million, amid stable payroll taxes at 8.1% and benefit costs rising to 1.2% following new presentation as a discrete line item. The GAAP net loss widened to $14.8 million from $1.0 million due to an $11.6 million tax-effected non-recurring charge from a U.S. Tax Court decision disallowing prior-year tax credits (2017-2022), yielding non-GAAP net loss of $3.2 million. Management noted results aligned with expectations, citing stable margins from improved pricing, strong client additions offset by hiring headwinds, and IT platform advancements. Liquidity stood at $91.9 million in unrestricted cash and investments, down from year-end due to $20.1 million in share repurchases (700,926 shares at $28.68 average) under the $100 million program ($55.3 million remaining) and $2.0 million dividends, while remaining debt-free. The board declared the regular $0.08 per share quarterly dividend. BBSI reaffirmed full-year 2026 outlook, signaling confidence in 3-5% gross billings growth, 2-4% WSE expansion, and 2.70-2.85% gross margins, with CEO Gary Kramer emphasizing consistent underlying trends positioning for long-term growth.