HireQuest, Inc.

What they do

HireQuest operates as a franchisor rather than as a direct operator of most staffing offices. Its franchise network provides direct-dispatch and commercial staffing in light industrial and blue-collar industries, plus permanent placement services in executive, managerial and administrative fields. The company has grown through acquisitions such as TEC Staffing Services in 2023 and Ready Temporary Services in 2024, typically selling acquired operating assets to franchisees and retaining franchise agreements. It also divested the non-contract staffing assets of its MRINetwork business into MRI Operations, LLC effective January 1, 2026, retaining a 40% ownership interest.

Revenue drivers

• Franchise royalties — The largest revenue line, $7.6 million in Q2 2026, up 4.1% from $7.3 million in Q2 2025 and 13.8% higher pro forma for the MRINetwork divestiture.
• Service revenue — A smaller line at $513,000 in Q2 2026 versus $354,000 in Q2 2025, separate from royalty income.
• System-wide sales — Franchisee-level sales totaled $117.8 million in Q2 2026, down from $125.9 million a year earlier, with the decline primarily tied to $17.7 million of MRINetwork system-wide sales.
• Permanent placement / MRINetwork — The company divested the non-contract staffing assets of HQ MRI Corporation's MRINetwork business effective January 1, 2026, retaining contract-staffing assets and a 40% interest in MRI Operations, LLC.

Recent performance

For the second quarter ended June 30, 2026, total revenue was $8.1 million, up 6.0% from $7.6 million a year earlier; pro forma for the MRINetwork divestiture, total revenue rose 16.6%. Net income was $2.7 million, or $0.19 per diluted share, versus $1.1 million, or $0.08 per diluted share, in Q2 2025. Adjusted net income was $3.2 million, or $0.23 per diluted share, and adjusted EBITDA was $4.6 million versus $3.3 million. SG&A expenses fell 31.9% to $4.0 million from $5.9 million, and system-wide sales were $117.8 million compared with $125.9 million. For the six months ended June 30, 2026, total revenue was $14.6 million, down 3.2% from $15.1 million, but up 5.6% pro forma for the divestiture.

Strategy

Management describes HireQuest as pursuing growth partly through acquisitions, which it funds with cash on hand and draws on its line of credit and has historically followed by selling acquired operating assets to franchisees. The company has also shed non-core assets, agreeing in December 2025 to contribute the MRINetwork non-contract staffing assets and franchise agreements into MRI Operations, LLC in exchange for 40% of that entity, effective January 1, 2026. Per the 10-K, the company remediated a previously identified material weakness in internal control over financial reporting as of December 31, 2025. It also pays a dividend, at $0.24 per share in each of 2023, 2024 and 2025.

Risks

• Acquisition integration and internal controls — The 10-K states acquisitions may be difficult to integrate into operational software and financial reporting systems, and notes a previously identified material weakness in internal control that was remediated as of December 31, 2025, with no assurance additional weaknesses will not be found.
• Dependence on franchisee sales — Royalty revenue is tied to system-wide sales, which fell to $117.8 million in Q2 2026 from $125.9 million a year earlier, partly due to the MRINetwork divestiture.
• Divestiture effects on comparability — Reported results include material MRINetwork-related amounts in prior periods, such as $620,000 of Q2 2025 franchise royalties and $17.7 million of system-wide sales, making reported declines distinct from pro forma growth.
• Acquisition pipeline availability — The 10-K states the growth strategy may be impeded if acquisition candidates are not available on acceptable terms.

Outlook

CEO Rick Hermanns said the second quarter reflected a stabilizing job market and recovering demand for temporary staffing, and that franchisees are positioned to capture demand as conditions improve. He stated confidence in the long-term strategy and the ability to deliver consistently profitable results. No specific numeric guidance was provided in the excerpts.