Barrett Business Services Reports $14.8 Million Net Loss in Q1 2026

Barrett Business Services, Inc. (BBSI) reported a net loss of $14.8 million for the first quarter of 2026, a significant increase from a net loss of $1.0 million in the same period last year. The diluted loss per share for the quarter was $0.59, compared to $0.04 in the prior year. Total revenues for the quarter reached $307.0 million, reflecting a 4.9% increase from $292.6 million in the first quarter of 2025. This growth was primarily driven by a $18.1 million increase in professional employer services (PEO) revenue, which rose 6.6%, while staffing services revenue decreased by $3.6 million, or 20.6%.

The company's gross margin for the first quarter of 2026 was $43.2 million, representing 14.1% of total revenue, down from 14.6% in the previous year. The decline in gross margin percentage was attributed to increased benefit costs, which rose to $27.4 million or 8.9% of revenue, compared to $17.6 million or 6.0% in the prior year. Additionally, payroll taxes decreased as a percentage of revenue due to a higher mix of revenue from PEO client benefits coverage, which is not subject to payroll taxes. Selling, general, and administrative expenses also increased to $47.5 million, or 15.5% of revenue, up from 15.3% in the previous year.

BBSI's operational metrics showed a slight increase in average worksite employees (WSEs), which rose by 1.9% to 134,993 compared to 132,459 in the first quarter of 2025. The ending WSE count also increased by 1.4% to 135,596. The company reported a significant increase in trade accounts receivable, which rose by $45.0 million, contributing to a net cash used in operating activities of $22.1 million for the quarter, compared to cash provided of $5.2 million in the same period last year.

In terms of strategic developments, BBSI has maintained a focus on enhancing its PEO services, which are critical to its business model. The company continues to leverage its decentralized organizational structure to align local operations with the needs of small and mid-sized business owners. The company’s cash balance at the end of the quarter was $84.6 million, a decrease of $41.8 million from the previous quarter, primarily due to increased operational costs and cash used in financing activities, including stock repurchases totaling $20.3 million.

Looking ahead, BBSI anticipates continued fluctuations in its quarterly operating results, influenced by factors such as seasonality, demand for services, and changes in the labor market. The company remains committed to its strategy of providing comprehensive business management solutions and expects to navigate the challenges posed by economic conditions and competitive pressures effectively.