Companies · BBSI
Barrett Business Services, Inc.
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Latest analysis
Updated Nov 5, 2026
BBSI benefit cost surge and workers comp pressure compress Q3 margins; tax credit disallowance risk surfaces
BBSI's third-quarter gross margin compressed 220 basis points year-over-year to 21.8% of revenue, driven by benefit cost inflation and elevated workers' compensation expense. Revenue grew 4.7% to $334.1 million, supported by 0.6% WSE growth and 2.7% billing-per-WSE increases, but net income fell 19% to $16.8 million. A material IRS challenge to $54.6 million in employee retention credits claimed by PEO clients and filed through BBSI introduces new tax and client recovery risk, compounded by the company's first-half $11.6 million wage-credit disallowance charge.
Tone: cautiousRevenue
$1.2B
BBSI 10-K · FY 2025
Employees
3,197
Revenue FY2024
$1.1B
Founded
1965
Profile
BBSI 10-K Item 1 · Feb 26, 2026Barrett Business Services, Inc. (BBSI) is a professional employer organization (PEO) and staffing services company serving small and mid-sized businesses across the United States. The company provides a co-employment model that bundles payroll administration, workers' compensation coverage, employee benefits, HR advisory services, and organizational development through decentralized local business teams. Its integrated management platform is designed to reduce employer complexity and improve human capital productivity for its clients.
Read filing description ↓ Collapse description ↑
Barrett Business Services, Inc. ('BBSI,' the 'Company,' 'our' or 'we'), is a leading provider of business management solutions for small and mid-sized companies. The Company has developed a management platform that integrates a knowledge-based approach from the management consulting industry with tools from the human resource outsourcing industry. This platform, through the effective leveraging of human capital, helps our business owner clients run their businesses more effectively. We believe this platform, delivered through a decentralized organizational structure, differentiates BBSI from our competitors. BBSI was incorporated in Maryland in 1965. Our strategy is to align local operations teams with the mission of small and mid-sized business owners, driving value to their business. We operate a decentralized delivery model using operationally-focused business teams, typically located within 50 miles of our client companies. These teams are led by experienced business generalists and include senior level professionals with expertise in human resources, organizational development, risk mitigation and workplace safety, recruiting, employee benefits, and various types of administration, including payroll. BBSI's business teams align with each business owner client through a structured three-tiered progression — Tactical Alignment, Dynamic Relationship, and Strategic Counsel — focusing on the objectives of each business owner and delivering planning, guidance and resources in support of those objectives. In addition to serving as a resource and guide, BBSI can provide workers' compensation coverage as a means of meeting statutory requirements and protecting our clients from employment-related injury claims. BBSI also offers employee benefit programs to our clients, including medical, dental and vision plans, flexible spending accounts and health savings accounts, life insurance and voluntary accident coverage, and critical illness and disability coverage, among others.
Primary products
- Professional Employer Services (PEO)
- Staffing services
- On-demand or short-term staffing assignments
- Contract staffing
- Direct placement
- Long-term or indefinite-term on-site management
Business segments
End markets
Geographies
Named competitors
“We believe that our growth is attributable to our ability to provide small and mid-sized companies with the resources and knowledge base of a large employer delivered through a local operations team.” Competitive position, as stated in the filing
Revenue commentary · FY 2025
Total revenues grew from $1.14 billion in 2024 to $1.24 billion in 2025, driven primarily by growth in Professional Employer Services revenue.
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