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Globe and Mail
6 days ago
- Business
- Globe and Mail
Barrett (BBSI) Q2 Revenue Jumps 10%
Key Points Revenue (GAAP) of $307.7 million exceeded expectations in Q2 2025 and rose 10.0% year over year. Earnings per share (GAAP) were $0.70, beating consensus and up 12.9% year-over-year. Management raised its outlook for gross billings growth to 9% to 10% (from 7% to 9%) and for worksite employee growth to 6% to 8% (from 4% to 6%) for fiscal 2025. These 10 stocks could mint the next wave of millionaires › Barrett Business Services (NASDAQ:BBSI), a provider of business management solutions and professional employer organization (PEO) services for small and mid-sized businesses, reported financial results for the second quarter of fiscal 2025 on August 6, 2025. The company posted GAAP revenue and earnings above analyst expectations in Q2 2025, with reported GAAP revenue of $307.7 million versus the $299.8 million estimate, and GAAP earnings per share of $0.70, outpacing the $0.6875 consensus. The period saw strong net new client additions and improved workers' compensation costs, though existing client hiring remained muted. Management increased full-year 2025 guidance for gross billings (to 9%–10%) and average worksite employee growth (to 6%–8%), reflecting continued business momentum. Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report. Understanding Barrett Business Services' Business Model and Strategic Focus Barrett Business Services operates as a business management solutions provider, specializing in professional employer organization (PEO) services for smaller companies. Through its services, it handles human resource administration, payroll processing, and workers' compensation, freeing up clients to focus on their core operations. The company differentiates itself by offering an integrated management platform. This approach combines HR outsourcing with consulting support, helping clients manage personnel needs and meet regulatory requirements. The firm emphasizes localized, decentralized service teams that work closely with client companies to tailor offerings, nurture relationships, and deliver responsive support. Its success depends on adding new clients, expanding its product suite (like healthcare benefits and HR technology), managing insurance cost risks, and maintaining compliance across regulatory environments. Quarter in Review: Growth Drivers and Operational Developments During the quarter, Revenue increased 10% and net income rose 10.8% compared to Q2 2024. Revenue (GAAP) reached $307.7 million, and Earnings per share (GAAP) grew to $0.70. The company's gross billings—a non-GAAP measure of all client billings before deduction of direct staffing costs—rose 10% year-over-year, highlighting continued expansion in its core PEO offering. Net new client additions were a critical factor, driving a year-over-year increase of 8.0% in average worksite employees, from 128,734 to 138,969. Management noted that 'sustained momentum in BBSI Benefits'—the firm's healthcare product suite—was a key factor in landing new customers. The BBSI Benefits platform, which as of April 2025 covers more than 17,500 participants, exceeded expectations for participant growth, especially in California where real uptake outpaced estimates by 2.5 times in just seven months. The company also rolled out an applicant tracking system in March 2025, a software product that allows clients to manage job postings and integrate those seamlessly into payroll and timekeeping. While still early, initial client feedback was positive. Risk management, particularly around workers' compensation expenses, remained strong. Workers' compensation expense as a percent of gross billings fell to 2.1%, down from 2.5% in Q2 2024, partly due to favorable prior-year liability and premium adjustments totaling $8.8 million. These adjustments lower the company's current-year expense but may not recur at the same level in future quarters. The company's staffing services, which comprise a smaller share of total revenue, experienced a decline earlier in 2025.—Staffing revenue fell 11.5% to $17.5 million compared to Q2 2024.—continuing a recent trend of softer demand in that area. Capital returned to shareholders included $8.0 million in share repurchases and a dividend payout of $2.0 million. The company also authorized a new $100 million stock repurchase program, set to run for two years beginning August 4, 2025. For Q3, a dividend of $0.08 per share was declared. Looking Forward: Guidance and Monitor Points for Investors Management raised guidance for the remainder of fiscal 2025. Expected gross billings growth rose to a range of 9% to 10%, up from a previous range of 7% to 9% for 2025. Average worksite employee growth is now anticipated in the 6% to 8% band, compared to the earlier 4% to 6% for 2025. Gross margin guidance was also narrowed and nudged upward at the low end, with a projected range of 2.9% to 3.05% of gross billings. The company expects an effective annual tax rate between 26% and 27%. Looking ahead, investors should watch for continued traction in client additions and adoption of value-added services such as BBSI Benefits and new HR technology. While net new clients remain a central driver, management cautions that existing client hiring is sluggish, reflecting broader macroeconomic caution. Ongoing weakness in the staffing segment and one-time insurance adjustments are other factors to monitor for potential volatility in results. The quarterly dividend was maintained at $0.08 per share. Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted. Where to invest $1,000 right now When our analyst team has a stock tip, it can pay to listen. After all, Stock Advisor's total average return is 1,026%* — a market-crushing outperformance compared to 180% for the S&P 500. They just revealed what they believe are the 10 best stocks for investors to buy right now, available when you join Stock Advisor. *Stock Advisor returns as of August 4, 2025
Yahoo
10-06-2025
- Business
- Yahoo
51 Talk Online Education Group (COE) Q1 2025 Earnings Call Highlights: Surging Revenues and ...
Net Revenues: USD18.2 million, a 93.1% increase from the same quarter last year. Gross Margin: 77% for the first quarter. Gross Billings: USD21.9 million, a 74.6% increase from the same quarter last year. Operating Expenses: USD15.3 million, a 35.6% increase from the same quarter last year. Sales and Marketing Expenses: USD11.1 million, a 42.7% increase from the same quarter last year. Product Development Expenses: USD1 million, a 9.8% increase from the same quarter last year. General and Administrative Expenses: USD3.2 million, a 23.8% increase from the same quarter last year. Operating Loss: USD1.3 million, a 67.6% decrease from the same quarter last year. Net Loss Attributable to Ordinary Shareholders: USD1.5 million, a 53.2% decrease from the same quarter last year. GAAP and Non-GAAP EPS: Negative $0.25 and $0.2, respectively. Total Cash, Cash Equivalents, and Time Deposits: USD29.5 million at the end of the first quarter. Advances from Students: USD47.9 million at the end of the first quarter. Q2 2025 Gross Billings Outlook: Expected to be between USD24.5 million and USD25.5 million. Warning! GuruFocus has detected 4 Warning Signs with COE. Release Date: June 09, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. First-quarter growth billings increased by 74.6% compared to the same period last year, indicating strong business performance. Net revenues for the first quarter were USD18.2 million, a 93.1% increase from the same quarter last year. Gross margin for the first quarter was 77%, showcasing efficient cost management. The company is establishing leadership positions in many core markets and is confident in outperforming incumbents. Advances from students were USD47.9 million at the end of the first quarter, indicating strong future revenue potential. First-quarter operating expenses increased by 35.6% compared to the same quarter last year, driven by higher sales and marketing costs. Q1 operating loss was USD1.3 million, despite revenue growth. Net loss attributable to ordinary shareholders was USD1.5 million, although it decreased from the previous year. Sales and marketing expenses increased by 42.7% from the same quarter last year, impacting profitability. General and administrative expenses rose by 23.8% from the same quarter last year, contributing to the overall operating loss. Q: Can you provide an overview of the company's financial performance for the first quarter of 2025? A: Jack Huang, CEO, highlighted that the company's first-quarter growth billings increased by 74.6% compared to the same period last year, demonstrating the robustness of their business model. Cindy Tang, CFO, added that net revenues were USD18.2 million, a 93.1% increase from the same quarter last year, driven by an increase in active students. Q: What were the key drivers behind the increase in operating expenses? A: Cindy Tang, CFO, explained that Q1 operating expenses were USD15.3 million, a 35.6% increase from the same quarter last year. This was primarily due to a 42.7% increase in sales and marketing expenses, which amounted to USD11.1 million, driven by higher sales personnel costs and increased marketing activities. Q: How did the company perform in terms of profitability? A: Cindy Tang, CFO, reported that the overall Q1 operating loss was USD1.3 million, while the net loss attributable to ordinary shareholders was USD1.5 million, representing a 67.6% and 53.2% decrease from the same quarter last year, respectively. Q: What is the company's outlook for the second quarter of 2025? A: Cindy Tang, CFO, stated that the company expects net gross billings to be between USD24.5 million and USD25.5 million for the second quarter of 2025, based on current market conditions and preliminary estimates of market and operating conditions and customer demands. Q: How is the company positioning itself for future growth? A: Jack Huang, CEO, mentioned that the company is encouraged by positive momentum in the second quarter and is making strategic investments in new regions. They are optimizing their organizational structure, accelerating AI training and adoption, and deepening user engagement to foster stronger community connections. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Sign in to access your portfolio
