Good day, and welcome to the CBIZ First Quarter 2025 Results Conference Call. Please note, this event is being recorded. I would now like to turn the conference over to Lori Novickis, Director of Corporate Relations. Please go ahead.

Good morning, everyone, and thank you for joining us on today's conference call to discuss CBIZ's first quarter 2025 results. As a reminder, this call is being webcast and a link to the live webcast along with today's press release and investor presentation can be found on the Investor Relations page of our website, cbiz.com. A replay and transcript will also be made available after the call. Before we begin, we would like to remind you that during the call, management may discuss certain non-GAAP financial measures. Reconciliations of these measures can be found in the financial tables of today's press release and investor presentation. Today's call may also include forward-looking statements regarding our business, financial condition, results of operations, cash flows, strategies and prospects. Forward-looking statements represent only our expectations, estimates and projections as of the date of this call and are not intended to give any assurance of future results. Because forward-looking statements relate to matters that have not yet occurred, these statements are inherently subject to risks and uncertainties. Many factors could cause future results to differ materially and CBIZ assumes no obligation to update these statements, except as required by law. A more detailed description of such factors can be found in today's press release and in our financial filings with the Securities and Exchange Commission. Joining us for today's call are Jerry Grisko, President and Chief Executive Officer; Brad Lakhia, Chief Financial Officer; and Chris Spurio, President of our Financial Services division. I will now turn the call over to Jerry Grisko for his opening remarks. Jerry?

Thank you, Lori, and good morning, everyone. I'm happy to share an overview of our strong first quarter performance and results, as well as an update on our integration progress following our acquisition of Marcum last November. Overall, our integration efforts are on track, and we are encouraged by the excellent collaboration among our teams as we leverage the strengths of both legacy organizations to establish ourselves as the premier provider of professional services to the middle market. Before I discuss our results, I want to highlight the key aspects of our business model that enable us to perform relatively well even during challenging economic conditions, like those we faced in the first quarter. First, about 77% of our services are essential and recurring, meaning our clients require these services regardless of the business climate. We also enjoy strong and stable cash flows, high client retention rates, a wide geographic presence, servicing a diverse range of industries, and we are not overly concentrated in any one market. Additionally, our business model includes a significant amount of variable expenses, which we can adjust to manage our costs in response to changing circumstances, including a compensation structure linked to growth, profitability, and other key metrics. These characteristics have proven beneficial during difficult economic periods in our history, whether during the financial crisis or the pandemic. Our historical performance during those times reflects our capability to position our business for relatively strong earnings results, while also enhancing our strategic positioning to come out even stronger when conditions improve. When evaluating our revenue results for the first quarter, it is crucial to acknowledge that we are navigating a rapidly changing and increasingly uncertain economic and geopolitical landscape. Although the essential nature of many of our services makes us more resilient, our overall business and our clients are not entirely immune to the challenging business climate, so our Q1 revenue results and full-year outlook should be seen in that context. Despite these challenges, I am pleased to report that our business model allowed us to achieve very strong results for the first quarter. Notably, the essential compliance segment of our core accounting and tax business performed as anticipated during the busy season. We expected some revenue decline in certain areas of our business due to special project work we undertook in Q1 of 2024 that will not recur to the same extent in 2025. Additionally, our revenue was affected by the expected loss of several clients due to conflicts preventing us from continuing work related to the transaction. The current economic and geopolitical situation has had a substantial impact on several industries that influence our clients, particularly in capital markets and not-for-profit sectors, as well as on specific advisory services that are more project-oriented than discretionary. On a positive note, our government healthcare consulting division continues to develop a robust pipeline of new projects and achieved strong revenue growth in Q1. Our Benefits and Insurance segment also excelled, with growth seen across almost all service lines. In summary, we are very satisfied with the business's performance in the first quarter, characterized by strong earnings and consistent cash flows. As we look ahead for the remainder of the year, we acknowledge that we may still be navigating a challenging economic environment, and we are taking all necessary steps to safeguard and grow our earnings in case the business climate does not improve. Given the fundamental attributes of our business that enable us to protect profitability, we are pleased to confirm and maintain our previously announced guidance for adjusted EBITDA and adjusted EPS. However, considering the business climate during the first quarter, the ongoing uncertainties for the coming months, and the portion of our work that leans more towards discretionary for much of the year, we are widening our revenue guidance to a range between $2.8 billion and $2.95 billion. At this time, I would like to introduce our new Chief Financial Officer, who joined us in March following Ware Grove's retirement. We welcome Brad to our team during this incredible opportunity as we integrate Marcum and position our company for accelerated long-term growth. Brad brings nearly 30 years of experience in large complex companies across various financial disciplines, including capital markets, M&A, treasury, financial planning and analysis, and Investor Relations. I'm excited to welcome Brad to the call today and look forward to connecting him with our shareholders and analysts after the call. I'll now hand it over to Brad.

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 alongside 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 10-Q MD&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-GAAP financial metrics, which include adjusted EBITDA, adjusted net income and adjusted diluted earnings per share. For 2025, these adjustments will relate to acquisition and integration-related costs, noncash intangible acquisition amortization expense and facility optimization charges. Reconciliations to these non-GAAP 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 the full quarter of the acquisition now reflected in our results, we are beginning to experience the scale and accretive 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 million to $238 million, reflecting the strong margin and scale attributes of our business model as well as the meaningful accretive 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 pretax income and margins, and we targeted 20 to 50 basis point improvements annually on that pretax margin. Going forward, we will target 20 to 50 basis point improvements of annual adjusted EBITDA margin improvement. Pretax income was $173 million, up $69 million or 66%. When we announced the Marcum acquisition, we said we expected it to be 10% accretive within the first 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 EBITDA to pretax income to adjusted net income and EPS is explained primarily by higher interest and tax expenses. 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 $0.23 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%. B&I adjusted EBITDA was $30 million, up $3 million or 10%. B&I adjusted EBITDA margin was 27%, up nearly 150 basis points versus last year. The revenue and profitability improvements were driven by nearly all B&I service lines, and our B&I 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 experienced seasonal peak levels of working capital usage during the quarter. DSOs were 96 days, five 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 4x 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 2x to 2.5x 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 nonrecurring service lines, and that is a trend we expect to continue. Nonrecurring 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 billion 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 earn-outs in 2026 and approximately $10 million in 2027, and we continue to estimate between $20 million 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 1, there will be an additional approximately 300,000 shares delivered monthly through 2027. All of these shares are subject to our right of first refusal and were authorized to repurchase up to 5 million shares. We'll be prudent and disciplined in managing our share repurchase program. And with that, I'll turn it back to Jerry.

Thank you, Brad. Before we transition to Q&A, I want to share an update on our integration progress and M&A strategy moving forward. As we conclude our busy season for traditional financial services and most urgent client deadlines pass, we can now accelerate our integration efforts, enhance collaboration, and advance key initiatives and strategies to unlock the synergies and growth potential from our combination with Marcum. A primary focus in the coming months will be integrating our technology systems and aligning our teams under a unified technology environment. This is crucial for operational improvements, standardizing processes, and ensuring consistency in client services and team member experiences. Once established, these integrated systems will streamline and automate processes, improve data visibility and analysis, and ultimately provide greater value to all stakeholders. We will continue to approach every step of our integration thoughtfully and intentionally, ensuring we balance progress with change management and training for a smooth transition. Reflecting on the last few months, I'm extremely proud of our advancements, from identifying exceptional leaders to drive our strategic initiatives to establishing new operating models. Our people continue to demonstrate high retention and engagement, and we are actively gathering feedback. Regarding future M&A, following the successful completion of the Marcum transaction and our ongoing integration progress, we’ve observed increased interest in CBIZ as a favored acquirer. We anticipated this response and are carefully evaluating several opportunities to enhance our geographic presence in key markets and strengthen our existing service lines. Lastly, I want to highlight two points mentioned by Brad in my opening remarks, particularly concerning organic revenue growth and our guidance for the year. We typically provide annual guidance for organic revenue growth. This year, however, we were unable to do so because Marcum's numbers were private prior to their integration with CBIZ, making it challenging to establish a reliable baseline for comparison. Consequently, we do not have clear visibility. We have already started integrating these businesses, combining their offices and leadership. While we have some visibility for the first quarter, it will be more complex as we move through the year. That said, our internal analysis for the first quarter shows encouraging results, with the recurring portion of our accounting and tax business performing as expected in the mid-single-digit range, similar to our Benefits and Insurance group. I want to stress that we are pleased with the business performance in the first quarter; where we anticipated strength, we saw it, particularly in our seasonally predictable and recurring business. I also want to address comments regarding our revenue not meeting expectations for the year, which can be categorized into two areas. We don’t provide quarterly guidance; our guidance is annual. The first area includes known factors that affected consensus, accounting for about a $30 million change due to timing and pacing within the year. For instance, the SPAC business, which was a significant part of Marcum's capital markets practice, has been declining from its peak in 2023 and is expected to continue declining in 2024 and 2025. We anticipated this trend and are not concerned, as other areas of the business are growing. Additionally, we faced conflicts, particularly in Marcum's healthcare practice, which overlaps with our government healthcare consulting practice. Also, we sold our KA consulting business last year, which affected this year’s numbers. These known factors contributed to about a $30 million impact for the quarter. The unknown factors pertain to the economic climate, notably the impact on the capital markets. Our SEC audit practice saw a slowdown as market conditions changed unexpectedly due to certain administration policies, which also negatively affected our advisory practice. Together, these unknown issues account for approximately $20 million. Overall, the combined impact is about $50 million. While we don’t guide quarterly, I want to clarify that our results were relatively close to our internal expectations, particularly concerning the factors we anticipated. On guidance, we are pleased to affirm our earnings guidance for the year and related metrics, despite some softness in top-line performance. We don't want to convey any concern regarding the health of the business; that's why we did not lower our top-line guidance. Instead, our assessment reflects a clear understanding of what we've seen in the year so far and our expectations for the remainder of the year if conditions remain stable. Since 23% of our revenue stems from discretionary advisory projects, we thought it wise to widen our revenue range due to new insights we’ve gained since issuing guidance. This should not be interpreted as a lack of optimism about the business's prospects. In fact, we see potential for achieving our original guidance if conditions improve, so we opted to broaden that range. With that, I’ll turn it over to Q&A.

Our first question comes from Christopher Moore with CJS Securities. Please go ahead.

Hi, good morning everyone. Thank you for allowing me to ask a few questions. I'll begin with what you mentioned earlier, Jerry, regarding the non-recurring services, which account for about 23% of revenue. You pointed out capital markets. Are there factors that might lead to softer performance if you were closer to the lower end of that revenue range?

Yes, 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 you know, we have a pretty sizable private equity practice that really relies heavily on deal flow. We've seen - that's a mixed bag, right? We saw kind of 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 kind of 90-day has 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, we help them in that process. When our clients are buying, we help them in their practice. It's not all within that PE practice. It's kind of within our core advisory and core accounting business. So 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 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. 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.

Got it. Very helpful. You mentioned strong government healthcare consulting during Q1. And just given the current conditions, just trying to get a sense of whether you expect that to continue? And is there potentially an opportunity here from some of the - just some of these government entities will need more help from you if some of the cutbacks?

Yes, Chris, that's exactly the way we're looking at it. The question that we get sometimes is how much of your total revenues tied to these several 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, 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 T's are crossed. So when we talk 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 outlook for the business for the remainder of the year.

Got it. Maybe just last one from me. So integration costs related to acquisition, it's obviously a big piece of the add-backs, 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 as when that will start to meaningfully decline? Is that next year? Is that later this year? Or just how you're looking at it?

Yes. The total amount we have earmarked, excluding real estate, is about $75 million, which will be received this year. However, a significant portion related to IT will extend into 2026. A large part of the $75 million will be realized in 2025.

Got it. I appreciate it. I'll leave it there.

Chris, 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. But those facility optimization costs will probably be more pronounced next year. So obviously, when we're at a point where we can provide more information, we have 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.

The next question comes from Andrew Nicholas with William Blair. Please go ahead.

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 auto practice, maybe there's some transactional headwinds there in the PE 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?

Yes. Andrew, we think 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 kind of more project and discretionary work. We also looked at how the business performed in kind of the two most analogous periods 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, 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 performed 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, let's 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.

Yes, 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 there? Like what are the things operationally that you're doing, if anything, to offset some of those pressures, versus things that are inherent to the model in terms of variable comp, and the like? And then also, if there are any synergies that are included in the '25 that you have visibility on that, you might not have a handful of months ago?

Okay. Yes. So let me - before I get to that, kind of what related, let me talk a little bit about pacing, right? So the other thing we didn't do is raise our guidance on the earnings side for the rest of the year. So while we're ahead of guidance, right now, we're being pretty pragmatic in 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 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 earnings 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 are meaningful upside bonuses, and other considerations that we're pleased to be able to reward to people. We kind of accrue that ratably throughout the year. And so in periods of time when we're not seeing that growth, obviously, those amounts can be reversed, right? 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 certain of our services, we're not filling headcount to the same degree. So it affects compensation that way. We've also had really encouraging progress on outsourcing, and our reliance on outsourcing that favorably impacts those metrics as well. So there's a number kind of on the people side. And I would say that's about two-thirds 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 two-thirds, one-third, and we experienced that in the first quarter, and we'd expect to be able to continue to pull those levers, if we don't see improvement in the top line.

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, or 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.

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 our working capital usage was consistent with what we expected, and consistent with our prior patterns that we saw from just a general legacy CBIZ perspective. And really, our cash generation, or cash usage, I should say, 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 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 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 be continuing 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, 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 ROFR potentially. And we feel like we're very, 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.

Thanks, Brad.

Our next question comes from Marc Riddick with Sidoti. Please go ahead.

Hi, 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 clients' 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 complex, 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 complex are, and how they've risen 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 as sort of go through that process?

Yes, Marc, 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 model 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 Marcum 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 had within our model, at least what we've experienced so far. And we don't think - we think most of that is 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.

Okay. And then I was sort of curious as to the - I guess, maybe the timing of when you began to see impacts on the audit practice, and advisory work. I mean, it's interesting because it's something you can sort of point to and say, oh 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?

Marc, 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 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, some of those things, it's just new to us as well. But when we asked the question, it was logical, right? 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-1s. 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 than we've historically experienced.

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?

Yes. I guess I have two responses to that, Marc. Great comment. As you know 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'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 there.

Understandable. Thank you very much.

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'd like to leave you with today, and that is the business, despite some revenue and some macroeconomic kind of pressures on 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, ahead of 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, continue 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, strong leadership working on it, and very happy there. And then maybe most encouragingly, just kind of the 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 when you go in the offices, you can feel as a team sit - around the table and collaborate. So we couldn't be more pleased sitting here today in light of all the work that everybody has put into, getting us to where we are with how we're proceeding through the first quarter. More importantly, and I've said this to our team, and I'll say to you, the future has never looked 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 we need, to continue to invest in the business. It will 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 work 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 CBIZ 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 eight industry groups, with revenues between $100 million 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 of the transaction. I'd be remiss if I didn't acknowledge the tremendous effort, 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.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.