HireQuest (HQI) Q2 2025 earnings summary

Executive summary

• Q2 2025 results were in line with expectations, with revenue at $7.6M, down 12% year-over-year, and net income at $1.1M, down from $2M, amid a challenging hiring environment and manufacturing sector weakness.

• System-wide sales declined 13.9% to $125.9M, mainly due to lower sales at MRI, HQ Direct, and Snelling/HQ, while temporary staffing and day labor outperformed permanent placement.

• Franchise model provided operating leverage and sector outperformance, with 413 franchisee-owned offices and 1 company-owned office across 43 states and 13 countries.

• Enhanced enforcement of immigration regulations and ongoing M&A activity, including the acquisition of Ready Temporary Staffing, were notable developments.

• Management remains focused on cost control, acquisitions, and positioning for growth when demand returns.

Financial highlights

• Q2 2025 total revenue was $7.6M, down from $8.7M in Q2 2024; franchise royalties were $7.3M, down from $8.2M; service revenue was $354K, down from $479K.

• System-wide sales were $125.9M, down from $146.1M in Q2 2024, but up 6% sequentially from Q1 2025.

• Net income after tax was $1.1M ($0.08 per diluted share), compared to $2M ($0.15 per share) in Q2 2024.

• Adjusted net income was $2.1M ($0.15 per share), down from $2.5M ($0.18 per share) year-over-year.

• Adjusted EBITDA was $3.3M (43% margin), compared to $4M (47% margin) in Q2 2024.

Outlook and guidance

• Management expects continued pressure on system-wide sales due to economic headwinds and franchisee attrition, especially in MRI.

• No significant recovery in sales yet, but some positive signs and client wins are emerging.

• Sufficient liquidity is anticipated for the next 12 months, supported by cash, operations, and credit facility.

• Intends to continue quarterly cash dividends, subject to board discretion and business results.