Barrett Business Services Reports 10% Revenue Growth to $307.7 Million in Q2 2025

Barrett Business Services, Inc. (BBSI) reported a notable increase in financial performance for the second quarter of 2025, with total revenues reaching $307.7 million, a 10% increase from $279.7 million in the same period last year. The growth was primarily driven by a $30.3 million rise in Professional Employer Organization (PEO) services revenue, which accounted for $290.2 million, reflecting an 11.7% increase year-over-year. However, staffing services revenue decreased by 11.5% to $17.5 million. The company's net income for the quarter was $18.5 million, up from $16.7 million in the prior year, resulting in a diluted earnings per share of $0.70 compared to $0.62.

In the first half of 2025, BBSI's total revenues also increased by 10% to $600.2 million, with PEO services revenue growing by 11.7% to $565.1 million. The company reported a net income of $17.4 million for the six months ended June 30, 2025, compared to $16.6 million in the same period of 2024. The gross margin for the first half of 2025 was $115.9 million, representing 19.3% of revenue, slightly down from 19.7% in the previous year. The decrease in gross margin percentage was attributed to higher payroll taxes and benefits expenses, which rose to 60% of revenue, compared to 57% in the prior year.

Operationally, BBSI reported an increase in average worksite employees (WSEs), which grew by 8% to 138,969 in the second quarter of 2025, compared to 128,734 in the same quarter of 2024. The company also noted a 1.7% increase in average billing per WSE per day. However, the staffing services segment saw a decline in revenue, which the company attributed to a shift in its customer base. The total employee headcount at BBSI remained stable, with no significant changes reported.

BBSI's balance sheet showed total assets of $713.6 million as of June 30, 2025, down from $745.5 million at the end of 2024. Current liabilities increased to $378.6 million, up from $358.9 million, primarily due to higher accrued payroll and related benefits. The company maintained a strong liquidity position with cash and cash equivalents totaling $26.3 million, although this was a decrease from $55.4 million at the end of 2024. The company also announced a new share repurchase program, authorizing the buyback of up to $100 million of its common stock over the next two years.

Looking ahead, BBSI remains optimistic about its growth trajectory, particularly in its PEO services, which continue to be a significant driver of revenue. The company plans to focus on expanding its client base and enhancing its service offerings, including the introduction of additional employee benefit programs. However, BBSI acknowledges potential challenges, including fluctuations in the labor market and regulatory changes that could impact its operations. The company is committed to navigating these challenges while continuing to deliver value to its clients and shareholders.