Barrett Business Services Reports 8.4% Revenue Growth to $318.9 Million in Q3 2025

Barrett Business Services, Inc. (BBSI) reported a notable increase in financial performance for the third quarter of 2025, with total revenues reaching $318.9 million, an 8.4% rise from $294.3 million in the same period last year. The company's professional employer services (PEO) segment contributed significantly to this growth, generating $299.7 million, up 9.9% year-over-year. However, staffing services revenue declined by 10.3% to $19.3 million. Net income for the quarter was $20.6 million, compared to $19.6 million in the prior year, resulting in diluted earnings per share of $0.79, up from $0.74.

For the nine months ending September 30, 2025, BBSI's total revenues increased by 9.5% to $919.2 million, driven by an 11.0% rise in PEO services revenue. The average number of worksite employees (WSEs) grew by 7.2%, contributing to the revenue increase. Despite the growth in revenue, gross margin as a percentage of revenue decreased to 20.9% from 21.6% in the previous year, primarily due to higher payroll taxes and benefits expenses, which rose to 58.4% of revenue from 55.4%.

Operationally, BBSI reported an increase in average WSEs to 137,640 for the first nine months of 2025, compared to 128,394 in the same period of 2024. The company also expanded its employee benefit programs, which contributed to increased client benefit costs. The total cash balance at the end of the third quarter was $66.0 million, a decrease of $16.5 million from the beginning of the year, reflecting cash used in operating activities and financing activities, including stock repurchases and dividend payments.

BBSI's liabilities increased slightly to $537.8 million as of September 30, 2025, compared to $524.1 million at the end of 2024. The company maintained compliance with its financial covenants under its revolving credit facility, which was recently extended to August 2028. The company also reported a decrease in workers' compensation claims liabilities, reflecting improved claims management and favorable adjustments from prior periods.

Looking ahead, BBSI anticipates continued growth in its PEO services, supported by its strategic focus on enhancing client relationships and expanding service offerings. However, the company acknowledges potential fluctuations in quarterly results due to seasonality, economic conditions, and changes in the regulatory environment. BBSI remains committed to leveraging its decentralized operational model to drive efficiency and profitability in the coming quarters.