Barrett Business Services (BBSI) investor relations material

Business model and services

• Provides comprehensive business solutions as a professional employer organization (PEO), empowering small businesses to grow and prosper.

• Offers high-touch, local service teams delivering payroll, HR, benefits, risk & safety, and business strategy support.

• Proprietary myBBSI technology platform centralizes payroll, onboarding, benefits, and reporting for clients.

• Delivers fully-insured workers' compensation and health benefits programs, minimizing insurance risk for shareholders.

• Maintains 90%+ annual client retention through relationship-based, long-term partnerships.

Market opportunity and growth

• Targets companies with fewer than 500 employees, representing 99% of firms and 44% of GDP.

• PEO industry penetration remains low, with only ~2% in mature markets and significant white space for expansion.

• Industry has shown steady growth: 7% annual increase in worksite employees and 19% in wages from 2020 to 2022.

• Growth strategy includes scaling existing branches, asset-light expansion into new geographies, and omni-channel go-to-market approach.

• Referral partners and client referrals are primary channels, supplemented by digital presence.

Financial performance and strategy

• Achieved 9% gross billings CAGR (2014–2025) and 12% diluted EPS CAGR (2017–2025).

• No debt, capital-light model, and strong free cash flow exceeding $50M annually.

• Active shareholder return plan includes dividends (16% payout ratio) and a $100M stock repurchase program.

• 2026 financial outlook: $9.1B gross billings (TTM), $2.01 diluted EPS (TTM), and 2.70–2.85% gross margin.

• Prioritizes reinvestment in business, potential acquisitions, and continued shareholder returns.