Barrett Business Services, Inc. (BBSI): Business Model Canvas [Dec-2025 Updated]

You're looking to deconstruct the operational engine of Barrett Business Services, Inc. (BBSI), and frankly, it's a textbook example of winning with a high-touch, consultative Professional Employer Organization (PEO) model. This isn't just about processing payroll; their strategy centers on embedding local experts with over 8,100 PEO clients and 141,492 average WSEs as of Q3 2025, all while driving TTM revenue to $1.22 billion. Understanding how they manage the cost structure, especially workers' compensation expense, to maintain a gross margin guided between 2.9% to 3.0% for 2025, reveals the core of their competitive moat. Keep reading below to see the full breakdown of the nine building blocks that make this business tick.

Barrett Business Services, Inc. (BBSI) - Canvas Business Model: Key Partnerships

You're looking at the backbone of how Barrett Business Services, Inc. (BBSI) delivers its integrated platform, which combines human resource outsourcing and management consulting across its client base.

Insurance carriers for workers' compensation and benefits

Barrett Business Services, Inc. (BBSI) relies on third-party insurers for its workers' compensation coverage, which is a critical component of its Professional Employer Organization (PEO) offering.

• Approximately 84% of Barrett Business Services, Inc. (BBSI)'s workers' compensation exposure is covered through arrangements with third-party insurers under the insured program.
• Workers' compensation expense as a percent of gross billings for the third quarter of 2025 was 2.2%.
• In late 2025, Barrett Business Services, Inc. (BBSI) noted that carrier filings for rate increases were approaching about 8% to 10%.
• The California Insurance Commissioner approved an average 8.7% increase in workers' compensation premium rates.

For health benefits, Barrett Business Services, Inc. (BBSI) acts as a plan sponsor, engaging with carriers to offer fully insured arrangements starting in 2023.

Benefit Category	Key Partner/Program Detail	Date/Metric Context
Health Benefits Enhancement	Introduction of Kaiser Permanente plans in service areas	Announced April 2024
Premium Health Care Benefits	Strategic, fully-insured partnership with a leading health insurance company	Program launched January 2023
401(k) Administration	Enrollment and registration at MillimanBenefits.com	Relevant for retirement program participants

Technology vendors for HRIS and payroll platforms

The operational efficiency of Barrett Business Services, Inc. (BBSI) is tied directly to its proprietary and integrated technology stack, which connects to external verification services.

• Barrett Business Services, Inc. (BBSI) utilizes its proprietary platform, myBBSI, for end-to-end payroll processing and HR software.
• The TIMECO timekeeping solution integrates seamlessly with the myBBSI Payroll & HR Software.
• BBSI U serves as the Learning Management System, integrating with the myBBSI platform.
• Employment verification for employees of Barrett Business Services, Inc. (BBSI) clients is directed to The Work Number.

The scale of operations supported by this technology is significant:

Metric	Value (Q3 2025)	Context
Total Gross Billings	$2.32 billion	Q3 2025
Average Worksite Employees (WSEs) Growth	6% increase	Year-over-year for Q3 2025
Total PEO Clients Served	More than 8,100	As of late 2025

Local referral networks for new client acquisition

While specific vendor names for local acquisition aren't detailed, the success in client growth points to strong network and sales channel partnerships.

• Barrett Business Services, Inc. (BBSI) operates in all 50 states.
• The volume for what was coming in for 1/1 business through October 2025 was about 60% higher than the prior year.
• Barrett Business Services, Inc. (BBSI) has a Referral Partner Learning Hub Newsletter.

Financial institutions for cash management and investment

The company's capital structure and liquidity management rely on established relationships with financial institutions, though specific bank names aren't always public.

Financial Metric	Amount (As of Sep 30, 2025)	Status/Context
Unrestricted Cash and Investments	$109.8 million	Q3 2025 Quarter End
Debt	Debt free	Q3 2025 Quarter End
Dividends Paid	$2.1 million	Q3 2025

Strategic alliances for geographic market entry

Barrett Business Services, Inc. (BBSI) leverages its structure and growth momentum to expand its footprint, which implies alliances supporting this expansion.

• Barrett Business Services, Inc. (BBSI) reported geographic expansion as a driver for its 2025 outlook.
• The company serves clients in all 50 states.
• The President and CEO noted that growth is driven by technology, product, people, and sales efforts.

The expected growth for the full year 2025 reflects this partnership strategy:

• Gross billings growth expected: 8.5% to 9.5%.
• Growth in average WSEs expected: 6% to 8%.

Finance: draft 13-week cash view by Friday.

Barrett Business Services, Inc. (BBSI) - Canvas Business Model: Key Activities

Delivering comprehensive PEO services (payroll, HR, benefits)

Barrett Business Services, Inc. (BBSI) generated total revenues of $318.9 million for the third quarter ended September 30, 2025, with trailing twelve-month revenue at $1.22 Billion USD as of September 2025. The core of this activity involves managing Worksite Employees (WSEs) for its client base, which spans over 8,100 PEO clients across all 50 states.

Metric	Period Ending Q3 2025	Period Ending June 30, 2025
Quarterly Revenue	$318.9 million	$307.7 million
Quarterly Gross Billings	$2.32 billion	$2.23 billion
Average WSEs Growth (YoY)	6%	8%
Average WSEs (Six Months)	N/A	135,714

Workers' compensation risk management and claims administration

The management of workers' compensation risk is a critical activity, reflected in the expense ratio relative to gross billings. For the third quarter of 2025, workers' compensation expense as a percentage of gross billings was 2.2%. This activity benefited from favorable prior year liability and premium adjustments totaling $3.9 million in Q3 2025. The second quarter of 2025 saw an even lower expense ratio at 2.1% of gross billings, with favorable adjustments of $8.8 million. Barrett Business Services, Inc. (BBSI) projects its full-year 2025 gross margin to fall within the range of 2.9% to 3.0% of gross billings.

Providing professional management consulting and business strategy

Barrett Business Services, Inc. (BBSI) integrates professional management consulting into its service delivery, differentiating its Professional Employer Organization (PEO) model. This involves dedicated support to drive business health and goal achievement.

• Each client receives a dedicated Business Partner.
• The Business Partner helps analyze, plan, and implement tailored strategies.
• The model focuses on proactive management consulting alongside outsourcing.

Developing and maintaining the proprietary myBBSI technology platform

The proprietary technology platform underpins service delivery, offering integrated functionality for clients and managers. The myBBSI portal is central to this activity, allowing users to manage core functions.

• myBBSI provides 24/7 access to paystub and compensation information from any device.
• The platform supports processing and managing payroll, benefits, and employee reporting.
• The system includes functionality for electronic employee onboarding and state tax compliance rules.
• The TIMECO timekeeping solution integrates seamlessly with the myBBSI Payroll & HR Software.
• BBSI U, the learning management system, also integrates with myBBSI.

Executing disciplined geographic expansion into new US markets

Barrett Business Services, Inc. (BBSI) executes its strategy by serving clients across the entire nation, a key component of its growth story. The company operates in all 50 states. Growth in the period was driven by net new client additions, which speaks to successful market share expansion. Management cited continued investment in geographic expansion as a way to mitigate insurance-related risks.

Barrett Business Services, Inc. (BBSI) - Canvas Business Model: Key Resources

You're looking at the core assets Barrett Business Services, Inc. (BBSI) deploys to deliver its value proposition. These aren't just line items; they are the engine of their consultative, co-employment model.

Specialized Human Capital (Business Partners and HR experts)

The model relies on experienced, local teams. These teams are led by Business Partners who act as strategic guides, supported by senior-level professionals across HR, risk mitigation, and organizational development. The scale of this human capital is reflected in the client base it supports.

• PEO Clients Supported (as of late 2025 estimate): Over 8,100
• Total Worksite Employees (WSEs) Managed (as of late 2025 estimate): Over 120,000
• Total Company Employees (as of end of 2024): 3,658
• Development Managers active in asset-light expansion (Q3 2025): 22

Proprietary Technology Stack (myBBSI, HRIS, LMS)

Barrett Business Services, Inc. integrates its service delivery with a dedicated technology suite designed to streamline the employee life cycle for clients. This tech stack is built to support the high-touch service model.

• myBBSI Portal: Used for payroll processing, benefits management, applicant tracking, onboarding, and employee reporting.
• BBSI U: The dedicated Learning Management System (LMS) for training and development.
• Integrated Systems: Includes an Applicant Tracking System (ATS) and various third-party system integrations.

Strong Financial Position

Financial stability underpins the ability to offer complex risk management solutions and invest in technology. The balance sheet remains clean, which is a significant asset in this industry.

Financial Metric	Amount as of Q3 2025 (Sep 30, 2025)
Unrestricted Cash and Investments	$109.8 million
Total Debt	$0
Total Gross Billings (Q3 2025)	$2.32 billion
PEO Gross Billings (Q3 2025)	$2.3 billion
Capital Returned to Shareholders (YTD Q3 2025)	Approximately $31 million

Self-insured and insured workers' compensation programs

Risk management is a core component, managed through a blend of structures that aim to control costs and benefit from favorable claim development. The performance of this program is a direct input to profitability.

• Workers\' Compensation Expense as a Percent of Gross Billings (Q3 2025): 2.2%
• Favorable Prior Year Liability and Premium Adjustments (Q3 2025): $3.9 million
• Program Structure: Utilizes both insured and self-insured structures to manage exposure and benefit from underwriting success.

Extensive network of local, physical BBSI branches

Barrett Business Services, Inc. employs a decentralized delivery model, using local business teams situated close to their clients. This physical presence supports the high-touch service commitment.

• Geographic Reach: Teams are typically located within 50 miles of client companies
• 2025 Expansion: Management anticipated opening 1 or 2 more branches by the end of the year
• New 2025 Locations: Opened branches in Chicago and Dallas in July 2025

Barrett Business Services, Inc. (BBSI) - Canvas Business Model: Value Propositions

You're looking at the core reasons why a small or mid-sized business chooses Barrett Business Services, Inc. (BBSI) over managing HR internally or using point solutions. The value is bundled, not broken out.

Integrated HR outsourcing plus strategic business consulting

Barrett Business Services, Inc. (BBSI) delivers a full suite of services, which is more than just payroll and compliance. This integrated approach is reflected in the growth of the core Professional Employer Organization (PEO) segment. In the third quarter of 2025, PEO gross billings reached $2.3 billion, representing an 8.8% increase over the prior year's quarter. The engine driving this is the worksite employees (WSEs), which grew by 6.1% in the quarter, showing clients are relying more on the comprehensive service offering.

Reduced administrative burden and regulatory compliance risk

The administrative relief is quantified by the efficiency gained, though general selling, general, and administrative (SG&A) expense still rose by approximately 2% in Q3 2025, primarily due to employee-related costs. A key component of risk mitigation is workers' compensation management. For Q3 2025, workers' compensation expense as a percent of gross billings was 2.2%. This is an improvement from the 2.3% reported in the third quarter of 2024. Furthermore, the company recognized $3.9 million in favorable prior year liability and premium adjustments in Q3 2025, demonstrating effective claims management and reserving.

Access to high-quality employee benefits (BBSI Benefits)

The value proposition around benefits is evident in client engagement during renewal season. As health insurance rates increase, clients shop around, but Barrett Business Services, Inc. (BBSI) is seeing increased activity. October submissions for one-to-one benefit transactions were reported as 60% greater than October of the prior year. This suggests clients see the value in retaining the high-quality benefit packages offered through the platform even with rising costs.

Expertise in workers' compensation risk mitigation (2.2% of gross billings in Q3 2025)

This expertise directly impacts a client's bottom line by controlling a major cost center. The 2.2% figure for Q3 2025 is a concrete measure of this efficiency relative to the total volume of business processed, which was $2.32 billion in gross billings for the quarter.

Partnership model that frees owners to focus on core business

Owners are freed up because the company is growing its client base and retaining them. The total gross billings for Q3 2025 were $2.32 billion, up 9% year-over-year. The company also actively returns capital to shareholders, signaling financial health and confidence in the model, with $8 million of shares repurchased in Q3 2025 at an average price of $47 per share, and year-to-date capital returned totaling approximately $31 million.

Here's a quick look at the key financial metrics underpinning these value propositions for the third quarter of 2025:

Metric	Value / Percentage	Context
Total Gross Billings (Q3 2025)	$2.32 billion	Total volume of business processed
PEO Gross Billings (Q3 2025)	$2.3 billion	Core service segment volume
Workers' Compensation Expense (% of Gross Billings) (Q3 2025)	2.2%	Risk mitigation cost efficiency
Year-over-Year Gross Billings Growth (Q3 2025)	9%	Overall business expansion
Year-over-Year WSE Growth (Q3 2025)	6.1%	Growth in the client workforce served
Favorable Prior Year Adjustments (Q3 2025)	$3.9 million	Benefit from claims management expertise
October Benefit Submission Growth vs. Prior Year	60% greater	Client engagement in benefits shopping
Net Income Per Diluted Share (Q3 2025)	$0.79	Resulting profitability for shareholders

The partnership model is further supported by the company's commitment to its stock. In Q3 2025, Barrett Business Services, Inc. (BBSI) paid $2.1 million in dividends and repurchased $8 million worth of shares.

• Integrated service delivery drives WSE growth of 6.1% in Q3 2025.
• Risk cost is contained at 2.2% of gross billings.
• Client interest in benefits is high, with October submissions up 60% year-over-year.
• Shareholder returns totaled approximately $31 million year-to-date.

Barrett Business Services, Inc. (BBSI) - Canvas Business Model: Customer Relationships

You're looking at how Barrett Business Services, Inc. (BBSI) keeps its clients locked in-it's all about deep, personal service backed by scalable tech. The core relationship is built on a high-touch, consultative 'Business Partner' model. This isn't just an account manager; the Business Partner's role is developing a deep understanding of your business, building trust with you and your management team, and offering unwavering support and guidance throughout your business journey. They are business veterans with decades of experience managing teams for various company sizes and industries.

The service delivery relies on dedicated local teams providing tailored support. BBSI specialty is pairing you with a local team of professionals who understand your business goals, and then providing the support you need to achieve them. This local Business Unit Team is specifically designed to help support franchisees and other clients with their day-to-day operational questions, covering payroll, HR, and Workers' Compensation claims.

You get proactive strategic planning sessions (Business Blueprint) as part of this partnership. Your Business Partner will lead these sessions to assess the health of your business, set realistic goals, and identify any obstacles standing in the way of your business plan. For instance, one client set strategic growth with a newly developed business blueprint in collaboration with BBSI.

To balance the high-touch approach, there is digital self-service via the myBBSI online platform. The myBBSI portal allows you to process and manage payroll, benefits, applicant tracking, onboarding, and employee reporting. They also offer BBSI U, which is their learning management system, to help you train and develop your teams.

This integrated approach drives a high client retention rate, driving controllable growth. Management cited excellent client retention as a key factor in fueling solid revenue growth through the first three quarters of 2025. A case study related to a referral partner even noted a stellar client retention rate of over 90%. Controllable growth from new client additions has been a major focus, with the company adding a record 10,100 worksite employees (WSEs) year-over-year from net new clients in the second quarter of 2025. For the full year 2025, WSE growth guidance was projected to be between 6% and 8%, and gross billings growth guidance was increased to a range of 9% to 10%.

Here's a quick look at the key performance indicators tied to this relationship model:

Metric	Latest Reported Figure/Guidance (2025)
Client Retention	Reported as 'strong' and 'exceeded expectations'
Stellar Retention Example (Referral Partner)	Over 90%
Record Net New Client WSE Adds (Q2 2025 YoY)	10,100 WSEs
Full-Year 2025 WSE Growth Guidance	6% to 8%
Full-Year 2025 Gross Billings Growth Guidance (Revised Upward)	9% to 10%
Total Participants in BBSI Benefits (as of October 2025)	Over 20,000 participants across approximately 750 client firms

The health insurance quote pipeline for October 2025 increased 60% year-over-year, which management attributed partly to stronger referral partner relationships. This pipeline activity suggests future client acquisition momentum driven by the value proposition.

Finance: draft 13-week cash view by Friday.

Barrett Business Services, Inc. (BBSI) - Canvas Business Model: Channels

You're looking at how Barrett Business Services, Inc. (BBSI) gets its services-payroll, HR outsourcing, and consulting-into the hands of small and mid-sized businesses. The channel strategy is heavily weighted toward a local, relationship-driven approach, supported by modern digital tools.

Direct sales team and New Market Development Managers

The core of new client acquisition relies on direct sales efforts, which are clearly showing results. For instance, in the first quarter of 2025, Barrett Business Services, Inc. (BBSI) added 55% more WSEs from new client adds than in the prior year's quarter. This speaks directly to the effectiveness of the sales pipeline feeding the business teams.

The asset-light expansion model, which relies on development managers, is also a key channel focus for growth outside of established markets. As of the third quarter of 2025, Barrett Business Services, Inc. (BBSI) had 22 development managers active, up from 21 in the second quarter of 2025. This channel is projected to contribute over 2,000 WSEs for the full year 2025.

Here's a look at the growth metrics tied to client acquisition:

Metric	Period/Projection	Value
Gross Billings Growth (Full Year 2025 Expectation)	2025 Projection	8.5% to 9.5%
Average WSEs Growth (Full Year 2025 Expectation)	2025 Projection	6% to 8%
WSEs Added from New Clients (Q1 2025 vs. Q1 2024)	Q1 2025	55% more

Local brick-and-mortar BBSI branches (e.g., Chicago, Dallas expansion)

The local branch network is the physical manifestation of the Barrett Business Services, Inc. (BBSI) model, ensuring that business owners get that in-person, neighborhood support. As of the end of 2023, the company supported clients with a local presence in 68 markets throughout the United States, and it is licensed to serve businesses in all 50 states. This structure is designed to foster autonomous decision-making by local business teams.

While specific 2025 branch expansion numbers for Chicago or Dallas aren't explicitly detailed in recent reports, the underlying structure shows concentration in key areas. For example, the branch count at the end of 2023 included 20 offices in California, 4 in Oregon, and 4 in Washington. The overall strategy is to maintain this local footprint to deliver integrated solutions.

The success of this channel is reflected in the overall company performance; third quarter 2025 revenues reached $318.9 million, with total gross billings at $2.32 billion, driven primarily by growth in professional employer (PEO) services resulting from net new clients.

Client and partner referral networks

While direct sales and local presence drive much of the new business, the strength of the existing client base and partner ecosystem is a critical, though often unquantified, channel. High client retention is a recurring theme, which naturally fuels referrals. The company noted continued strong client retention trends in Q1 2025, which is a direct indicator of the success of the service delivery channel.

The Net Promoter Score (NPS) is a good proxy for the health of this channel; in Q3 2025, the NPS remained in the high 60s for the third straight year. This high score suggests a strong base for organic growth through word-of-mouth and partner endorsements.

Online portal (myBBSI) for client and worksite employee access

Technology provides the efficiency layer, enabling the local teams to focus on consulting and strategy. The myBBSI portal is where the transactional work gets done. This platform allows users to process and manage payroll, benefits, applicant tracking, onboarding, and employee reporting. The convenience of this portal simplifies management for clients, ensuring efficiency, accuracy, and compliance in core administrative tasks.

The digital channel supports the entire base of over 8,100 PEO clients as of early 2025. The integration of BBSI U, the learning management system, also falls under this digital channel, helping clients train and develop their teams.

Targeted local events and webinars for business owners

Barrett Business Services, Inc. (BBSI) uses local events and educational outreach to engage prospective business owners and demonstrate their value proposition. This is a key part of filling the top of the sales funnel. The company reported a very strong January 1st benefits selling season in Q1 2025, indicating successful engagement around key product offerings, which are often promoted through these targeted outreach efforts. The success in driving growth through client additions suggests these local marketing and educational channels are effective at resonating with the target market.

The overall growth in PEO gross billings in Q3 2025 was 8.6% over the prior year's quarter, a result of solid revenue growth fueled by new client sales and expanded product adoption, which these local engagement channels help facilitate.

Barrett Business Services, Inc. (BBSI) - Canvas Business Model: Customer Segments

You're looking at the core of Barrett Business Services, Inc. (BBSI)'s operation, which is squarely focused on serving small and mid-sized businesses (SMBs) throughout the US. This isn't a one-size-fits-all approach; the customer base is geographically diverse, operating in all 50 states. The value proposition is tailored to companies that need to offload complex, non-core administrative functions to focus on their primary business objectives.

Here's a quick snapshot of the scale of the client base as of the third quarter of 2025, which defintely shows the depth of their market penetration:

Metric	Value (Q3 2025)	Context
Total PEO Clients	Over 8,100	Number of distinct businesses utilizing PEO services.
Average Worksite Employees (WSEs)	141,492	The average total headcount under BBSI's co-employment umbrella for the quarter.
PEO Revenue Growth (YoY)	9.9%	Growth rate for the primary revenue-generating segment in Q3 2025.
Total Gross Billings	$2.32 billion	Total value of payroll, taxes, and benefits processed in Q3 2025.

The customer base spans a wide spectrum of operational environments. You see companies in industries often characterized as blue-collar, such as construction, alongside those in more traditional white-collar sectors. What unites them is the need to outsource comprehensive Human Resource (HR) and risk management functions. They are seeking a partner to manage the administrative burden associated with payroll processing, employee benefits administration, workers' compensation coverage, and workplace safety programs.

These businesses are segmenting themselves based on the complexity of their needs and their desire for operational efficiency. They are looking for:

• Comprehensive HR and risk management outsourcing.
• Expertise in payroll processing and compliance.
• Access to competitive employee benefits packages.
• Mitigation of workers' compensation costs and liabilities.
• Professional management consulting support.

Barrett Business Services, Inc. (BBSI) - Canvas Business Model: Cost Structure

You're looking at the core costs that drive the engine at Barrett Business Services, Inc. (BBSI), which is heavily weighted toward the services it passes through to clients. The largest component, by far, is the direct payroll and related costs for the worksite employees (WSEs) under the Professional Employer Organization (PEO) model; this is the largest pass-through expense that is netted out before reported revenue is calculated. For context, the reported revenue for the trailing twelve months (TTM) leading up to late 2025 stands at $1.22 billion.

Managing the risk associated with that workforce is a significant, though smaller, cost center. For the third quarter ended September 30, 2025, the workers' compensation expense was reported at 2.2% of that quarter's gross billings. Given that Q3 2025 gross billings reached $2.32 billion, this specific cost component amounted to approximately $51.04 million for the quarter.

Beyond the direct pass-throughs, the operational costs support the entire service delivery platform. This includes the compensation for the internal team, such as Business Partners and local branch staff, who are crucial for client acquisition and service delivery. Furthermore, Barrett Business Services, Inc. (BBSI) continues to invest in its infrastructure to maintain its competitive edge.

The general and administrative expenses are the overhead required to support the scale of the business, which is currently generating TTM revenue of $1.22 billion. The TTM total operating expenses, which encompass many of these fixed and semi-fixed costs, were reported at $199.761 million as of late 2025. This figure reflects the cost of running the business-salaries, rent, and technology-relative to its revenue.

Here is a breakdown of key cost-related metrics and figures from the latest reporting periods:

Cost Component/Metric	Latest Reported Value	Period/Basis
Workers' Compensation Expense	2.2%	Q3 2025 Gross Billings
Workers' Compensation Expense (Approximate Dollar Value)	$51.04 million	Q3 2025 (Calculated from $2.32B Gross Billings)
TTM Revenue	$1.22 billion	TTM ending late 2025
TTM Total Operating Expenses (Proxy for G&A/Overhead)	$199.761 million	TTM ending late 2025
Projected Gross Margin as % of Gross Billings	2.9% to 3.0%	Full Year 2025 Guidance

The ongoing investments in the platform are focused on maintaining service quality and driving future growth. These investments are a necessary cost to support the model:

• Technology investment and maintenance for the HRIS platform.
• Compensation for Business Partners and local branch staff.
• Costs associated with new branch expansion and geographic footprint growth.
• General and administrative expenses to support the $1.22 billion TTM revenue base.

It's defintely worth noting that the company's gross margin as a percentage of gross billings is guided to be very tight for the full year 2025, between 2.9% and 3.0%. This low percentage confirms that the vast majority of the gross billings-over 97%-is consumed by the direct payroll and associated costs that are passed through to the client's employees.

Finance: draft 13-week cash view by Friday.

Barrett Business Services, Inc. (BBSI) - Canvas Business Model: Revenue Streams

The revenue streams for Barrett Business Services, Inc. (BBSI) are overwhelmingly concentrated in its Professional Employer Organization (PEO) services, which form the core of its business model. The Staffing Services segment contributes a much smaller, though still present, portion of the total revenue.

For the third quarter ended September 30, 2025, the revenue composition clearly shows the dominance of the PEO segment. PEO services revenue was reported at $299.7 million, while Staffing services revenue was $19.3 million for the same period. This translates to the PEO segment accounting for approximately 94.0% of Q3 2025 revenue, with Staffing Services revenue making up the remaining approximately 6.0%.

Revenue Stream Component	Q3 2025 Revenue (US$ thousands)	Approximate % of Q3 2025 Revenue
PEO Services Revenue	299,685	94.0%
Staffing Services Revenue	19,264	6.0%

Looking forward, Barrett Business Services, Inc. (BBSI) management has provided guidance for the full-year 2025 performance metrics that reflect confidence in their core business execution, even amidst macroeconomic uncertainty. The company anticipates that its gross billings growth will be projected at 8.5% to 9.5% for the full-year 2025. This growth is expected to be supported by an anticipated increase in the average number of worksite employees (WSEs) between 6% and 8% for the full year.

A critical metric for understanding the profitability of the PEO model is the Gross Margin as a percentage of gross billings. For 2025, Barrett Business Services, Inc. (BBSI) is guided to have a gross margin of 2.9% to 3.0% of gross billings. This figure represents the revenue retained after accounting for client wages and payroll taxes, which constitute the vast majority of gross billings.

Fees for administering employee benefits, primarily through the BBSI Benefits offering, represent a key value-add component within the PEO service bundle, driving client stickiness. As of the second quarter of 2025, the company reported significant uptake in this area:

• Total participants across various benefits products reached 19,000 through July 2025.
• The company added approximately 1,600 participants to its benefits products in Q2 2025 alone.
• This participation spans approximately 710 clients on various benefit plans.