In the third quarter of 2025 CBIZ delivered revenue of $694 million (up 58% year-over-year) and adjusted EPS of $1.01, with earnings ahead of expectations as recurring accounting and tax businesses held steady and advisory activity improved versus the first half. Marking the one-year anniversary of the Marcum acquisition, management said integration was on or ahead of schedule and raised the deal's synergy target to $50 million or more, while realizing strong mid-single-digit pricing. Offsetting this, the SEC-related practice remained soft, 2025 integration costs were raised $14 million to $89 million on higher severance, and interest expense climbed about $23 million on acquisition debt. The company maintained full-year revenue and earnings guidance, pointing to the low end of its $2.8-$2.95 billion revenue range, and pushed its deleveraging timeline toward 2027 given 2025 buyback activity.
Good afternoon, everyone. Thank you for joining us for today's call, to discuss CBIZ's Third Quarter and Year-to-date 2025 Results. As a reminder, this call is being webcast, and a link to the live webcast, along with today's press release and corresponding investor presentation can be found on the investor relations page of our website, cbiz.com. An archived replay and transcript will also be made available following the call. Before we begin, we would like to remind you that during the call, management may discuss certain non-GAAP financial measures. Reconciliations of these measures can be found in the financial tables of today's press release and investor presentation. Today's call may also include forward-looking statements regarding our business, financial condition, results of operations, cash flows, strategies, and prospects.
Forward-looking statements represent only our expectations, estimates, and projections as of the date of this call and are not intended to give any assurance of future results. Forward-looking statements relate to matters that have not yet occurred, these statements are inherently subject to risks and uncertainties. Many factors could cause future results to differ materially, and CBIZ assumes no obligation to update these statements except as required by law. A more detailed description of such factors can be found in today's press release, and in our filings with the Securities and Exchange Commission. Joining us for today's call are Jerry Grisko, President and Chief Executive Officer, and Brad Lakhia, Chief Financial Officer. I will now turn the call over to Jerry for his opening remarks. Jerry?
Thank you, Lori. Good afternoon, everyone. I'm pleased to have this opportunity to provide you with an update on our performance, and our outlook on the business moving forward. This Saturday marks the one-year anniversary of the Marcum acquisition, and we couldn't be more pleased with first, the quality of the Marcum organization and the complementary fit between our two great companies. Next, the progress that we've made on integration, which is on or ahead of schedule in most key areas, and finally, the opportunities we now have to accelerate growth and break away from our competitors. We knew going into the acquisition, that Marcum was an outstanding firm. What we've learned since has even surpassed our initial expectations. They brought great people, significant scale in key geographic markets, and a substantial and attractive mid-market client base that is similar to ours.
They had also made substantial investments in areas that were strategically important to us, and that complemented investments that we had made in other areas of the business. We are now able to leverage those investments company-wide, including go-to-market industry groups, AI, and other crucial technologies, as well as offshoring resources. Marcum also had very strong leadership throughout the organization, a significant number of whom have assumed key leadership roles in the new CBIZ. From the outset, we were committed to bringing together the best of both companies. We now have a blend of leaders and are establishing standardized processes, policies, and systems that allow our teams to bring the full value of the combined company to our clients.
Now, turning to integration, to support the ability of our teams to work together as one CBIZ and thereby enhancing collaboration, resource sharing, and the pursuit of new business opportunities, we've aligned our collective teams under a common reporting structure. We've adopted many standardized operating processes and systems that allow our teams to work together in key areas, and we've begun to co-locate team members in cities where we both have offices. To improve operating efficiency, we've made significant investments in our shared resources centers, including by adding technical resources to our national tax office and to our national assurance quality and support partner, CBIZ CPAs. We've also invested in the transformation and innovation team, which now has over 60 members devoted to developing new products and solutions for our clients and deploying AI and other technologies to improve operating efficiency.
We've increased our offshore resources in both India and in the Philippines. In addition, to begin unlocking the value of the combined entity to our clients and to accelerate growth, we've identified and split up 12 industry groups to bring unmatched breadth and depth of services to our clients, through solutions that are highly tailored to meet their specific needs. We've streamlined many client-facing processes to improve the client experience and to allow our client-facing teams to be more responsive. We've launched the CBIZ Vertical Vector AI platform, to enable our clients to leverage our proprietary AI platform and capabilities and to improve their business performance. We've launched a new highly visible national brand campaign to promote the new CBIZ, and highlight our expanded capabilities to the market. This campaign is already showing signs of improved brand awareness.
Clearly, a lot of work has been successfully completed in a short period of time, and there are still more opportunities ahead. We are pleased with our retention of top talent and key clients through this transitionary period, and we're competing favorably on both fronts, which positions us for accelerated top and bottom-line growth beginning in 2026 and beyond. Brad will review more details on our results in a minute. Before I turn it over to him, I wanted to provide you with a few of my own perspectives on the third quarter, and what we're expecting for the remainder of the year. We were pleased to see that our recurring businesses held steady during the quarter.
Our core accounting and tax business continued to deliver organic revenue growth consistent with the first half of the year, and increased demand for our project-based advisory businesses delivered improved growth relative to the first half. Encouragingly, as we look to finish off the year, the combination of our broader service offerings and improving market conditions should lead to increased conversion of our late-stage pipeline opportunities. We have a clear line of sight to achieve our 2025 revenue outlook, and the entire leadership team and all our client-facing leaders are laser-focused on capitalizing on these opportunities and trends. With that, let me hand it over to Brad to cover further details on our quarter and our financial outlook. Brad.
Thank you, Jerry and good afternoon. As Jerry said, we are very pleased with our third-quarter results. Revenue and cash flow were in line with our expectations, and earnings exceeded. The benefits of greater scale, and the resiliency of our business model once again are reflected in our operating and financial performance and leave us well-positioned for sustainable long-term growth. On a consolidated basis, third-quarter revenue was $694 million and year-to-date revenue stands at $2.2 billion, a 58% and 64% increase respectively, driven by the acquisition. For the quarter, adjusted EBITDA increased to $120 million and now stands at $476 million year-to-date. Adjusted EBITDA margin was 17.3% in the quarter and 21.5% year-to-date. Year-to-date adjusted EBITDA margin increased approximately 325 basis points versus last year, with lower incentive compensation expense representing approximately 250 of the 325 basis point improvement.
Excluding the impact from lower incentive compensation, we believe our margin expansion is consistent or better than our historical performance, representing the realization of the expected benefits of greater scale. Third-quarter adjusted diluted earnings per share was $1.01 per share, bringing our year-to-date adjusted EPS to $4.27 per share. Third-quarter interest expense was $28 million, $23 million higher than last year, driven by higher debt levels incurred to fund the cash portion of the acquisition. Third-quarter tax expense was $10 million, approximately $6 million lower than last year, driven by higher tax benefits related to stock-based compensation expense, lower pre-tax income, and lower state tax expense, which resulted from recent tax planning actions. Our year-to-date tax expense was $76 million, or $25 million higher than last year, primarily driven by an $88 million increase in pre-tax income. Our year-to-date effective tax rate was flat compared to prior year.
Turning to our financial services segment, third-quarter revenue was $579 million, up $256 million, or approximately 80%. Financial services adjusted EBITDA increased 86% to $126 million, a margin of 21.7%. Revenue growth was largely driven by the acquisition. On an estimated pro forma basis and consistent with the first half, we delivered low single-digit growth in our core accounting and tax service lines, which mitigated headwinds in our SEC-related business. In addition, our advisory business captured improved market conditions in relation to the first half, which enabled single-digit growth. Year-to-date financial services revenue increased by 85% to $1.9 billion, and adjusted EBITDA for the segment nearly doubled to $463 million. In terms of pricing, we were pleased to deliver strong mid-single-digit rate increases in the quarter and year-to-date.
We were competing favorably, and realizing rate increases that exceed overall inflation and capture the value of our clients' gains from our leading service capability. Revenue from our benefits and insurance, or B&I segment was $103 million, with adjusted EBITDA of $22 million. Year-to-date we're pleased with revenue growth of 2.7%, and adjusted EBITDA growth of 6.7% for this segment. Turning to the balance sheet and capital allocation, we ended the quarter with net debt at approximately $1.6 billion and leverage largely unchanged from the second quarter. We had approximately $300 million of available liquidity under our revolver on September 30th. In the third quarter, we took the opportunity to repurchase approximately 800,000 shares at a value of approximately $56 million. This includes approximately 400,000 shares repurchased under the terms of our right of first refusal, and 400,000 shares in the open market.
This brings our year-to-date share repurchases to $128 million or 1.8 million shares. Our current outstanding share count stands at approximately 54.1 million shares, reflecting a net increase of approximately 3.9 million shares since year-end. Since we've had several questions regarding the potential impact of the shares issued and yet to be issued related to the acquisition, we have included a slide on page 18 of our investor presentation posted today, that provides some additional information to help clarify this dynamic. As a reminder, our U.S. GAAP earnings per share and adjusted earnings per share are reported on a fully diluted basis, which assumes all issued and unissued shares are outstanding. As of September 30, year to date, the weighted average fully diluted share count stands at 63.6 million shares. In terms of capital allocation, our long-term priorities are unchanged.
On slide 21 of our investor presentation, we have included a summary of near-term and long-term capital priorities. You will see our near-term priorities are as follows. Our first priority is funding organic growth and maintenance capital. This will include disciplined and targeted investment in client service delivery and operational excellence, with a greater focus on technology, including AI, improving our offshore capability and capacity, and our ongoing investment in attracting and retaining the very best talent in our industry. Our second priority is debt repayment. We continue to target allocating a significant portion of our free cash flow to bring our leverage to a target range of 2x-2.5x over time. When we set this target upon announcement of the acquisition, we assumed the majority of our free cash flow would be allocated to delevering and estimated, we could achieve this goal exiting 2026.
Given the opportunity we've had to allocate capital to share repurchases in 2025, the timing for achieving this range may shift to 2027. Our third priority is share repurchases and/or selective strategic high-return M&A. At our current valuation, we believe share repurchases are accretive. Therefore, our approach is to remain balanced, opportunistic, and disciplined with share repurchases and delevering. With regard to M&A, as always, and consistent with our history, we will continue to evaluate targeted bolt-on strategic opportunities in high-growth service lines and key geographic areas. The strength and scale of our business model and our ability to generate meaningful free cash flow. provide us with continued confidence in our ability to fund investments and high-return growth initiatives, while simultaneously achieving our target leverage. I will wrap up my comments with guidance and modeling. We are maintaining our revenue and earnings guidance for the year.
At this time, we continue to have line of sight to the low end of the revenue guidance of $2.8 billion-$2.95 billion we set earlier this year. We are also maintaining our adjusted EBITDA and adjusted EPS guidance, and we look forward to resuming reporting organic growth metrics in 2026. In terms of our revenue guidance, there are three factors that we believe will enable us to deliver the low end of the range. First, the growth rate we have achieved thus far in the year within our core essential recurring accounting and tax businesses, has proven resilient and sustainable, and we expect this to remain true in the fourth quarter. Second, the improved market conditions we witnessed in the third quarter have also continued thus far in the fourth quarter, and this will allow us to capture revenue opportunities in our non-recurring project-based businesses.
Finally, we plan to execute on a key operational excellence initiative, that we expect will yield improved fourth-quarter staff utilization and will allow us to operate more efficiently in future periods. Our guidance and modeling assumptions are included on page 17 of our investor presentation, and there are two updates I would like to highlight. First, we have updated our synergy goal from the acquisition to a total of $50 million or more. We expect to realize $35 million in synergies this year and the majority of the balance in 2026. Slide 20 of our investor presentation provides further information on these synergies. While we've made a great deal of progress on all fronts, key real estate decisions for some of our largest metro markets remain ahead of us. Therefore, we believe there is more opportunity here, and we will provide further updates as we take actions.
Along with updating our synergy goal, we've updated our integration cost estimate for 2025. We've increased our estimated 2025 integration cost by $14 million to $89 million, which is primarily driven by additional severance costs related to streamlining our combined staffing levels. We do not currently estimate any change to our 2026 integration costs. Second, we've provided further modeling information on our operating expenses, including information on total compensation and benefits and our related incentive compensation programs. As you will see on page 19, historically, our incentive compensation programs represent approximately 16%-17% of our total compensation and benefits. For 2025 performance, we've been very careful to ensure our high-performing teams will be appropriately recognized for their 2025 performance during this integration phase, and we believe our remaining incentive pools are adequate to recognize, retain, and motivate our teams.
As we've highlighted previously, we have variable pay-for-performance-based incentive programs, designed to reward our team for achieving and exceeding growth, profitability, and other operating goals. When our performance meets or exceeds targets, there's meaningful incremental shared value. Conversely, if goals are not met, the funding and the related expense is adjusted accordingly. While the 2025 incentive pools reflect this reality, we have also preserved appropriate funding to recognize our team members for the many important and meaningful accomplishments that are setting us up for success going forward. With that, I'll turn the call back to Jerry for some closing remarks, before we turn the call over for questions.
Thank you, Brad. To reiterate a few key points, as we celebrate the one-year anniversary of the Marcum deal, we are extremely pleased with the foundation we have now built, that positions us to accelerate long-term value creation. Looking ahead to 2026, we expect increased momentum as we transition to the next phase of growth and are seeing strong evidence that we now have what it takes to break away from our competitors. Our success will be rooted in our commitment to providing unmatched client experience and operational excellence, by investing in our people and state-of-the-art tools, including investment in our industry groups, data, AI, and other technology capabilities, as well as offshoring capacity. Together, these investments will deliver valuable client insights and impact, and transform what's possible, unlocking shared value and driving sustainable long-term growth and profitability. With that, I will open the line to questions.