HireQuest (NASDAQ:HQI) management said the staffing industry remained challenging in 2025 as macro conditions pressured hiring demand, but executives emphasized continued profitability and what they described as early signs of stabilization heading into 2026.
On the company’s fourth-quarter and year-end 2025 earnings call, CEO Rick Hermanns pointed to a “steadying market with fewer extremes,” citing a survey of more than 400 offices across the HireQuest Direct, Snelling, and MRINetwork brands. CFO David Hartley reported declining revenue and system-wide sales compared with 2024, while highlighting improvements in workers’ compensation expense and a stronger balance sheet position after paying down borrowings on the company’s credit facility.
MRINetwork restructuring shifts permanent placement into new entity
During the fourth quarter, HireQuest announced a decision to change MRINetwork’s ownership structure by divesting the permanent placement portion into a new entity and transitioning majority ownership to a newly formed leadership group “made up of current and former franchise owners,” Hermanns said.
Hermanns said HireQuest will retain partial ownership and continue providing “essential infrastructure, purchasing power, and shared services” across the network. As of Jan. 1, the permanent placement portion operates under the new entity in which HireQuest holds a minority stake, while HireQuest continues to fully own and operate MRINetwork’s contract staffing business.
In the Q&A session, Hermanns said roughly “35%-40%” of MRINetwork’s 2025 business was retained via the contract staffing side following the change. He added that the permanent placement division had been “break-even at best,” and said the income statement impact from the restructuring “should be nothing.”
Hartley provided additional context, stating that in 2025 the executive search portion of MRINetwork contributed about $65 million of system-wide sales and “just a touch under $2 million” in royalties. He said the segment was “breakeven” and “slightly down a little bit in terms of profitability” in 2025.
Fourth-quarter and full-year results show lower revenue, improved net income
Hartley reported fourth-quarter 2025 revenue of $7.0 million, down from $8.1 million a year earlier. For full-year 2025, revenue totaled $30.6 million, compared with $34.6 million in 2024.
Franchise royalties remained the primary revenue source. Franchise royalties were $6.6 million in the quarter, down from $7.6 million in the prior-year period. For the full year, franchise royalties were $29.0 million, compared with $32.7 million in 2024.
System-wide sales—a metric management described as a contextual performance indicator reflecting sales at all offices, including discontinued locations—declined year over year. In the fourth quarter, system-wide sales were $122.3 million versus $134.8 million in the year-ago quarter. Full-year system-wide sales were $500.2 million, down from $563.6 million in 2024.
Service revenue was $392,000 in the fourth quarter versus $428,000 a year ago, and $1.6 million for the full year versus $1.9 million in 2024.
Net income after tax totaled $1.6 million, or $0.11 per diluted share, in the fourth quarter, compared with $2.2 million, or $0.16 per diluted share, last year. For the full year, net income rose to $6.3 million, or $0.45 per diluted share, from $3.7 million, or $0.26 per diluted share, in 2024.
On a non-GAAP basis, Hartley said adjusted net income was “relatively flat” year over year. Adjusted net income was $2.7 million, or $0.19 per diluted share, in the fourth quarter compared with $2.6 million, or $0.19 per diluted share, in the prior-year quarter. Full-year adjusted net income was $10.0 million, or $0.71 per diluted share, compared with $9.9 million, or $0.71 per diluted share, in 2024.
Adjusted EBITDA was $3.4 million in the fourth quarter, down from $3.8 million a year earlier. Full-year adjusted EBITDA was $14.1 million versus $16.2 million in 2024. Hartley said the company views adjusted EBITDA and adjusted net income as relevant due to “the size of non-cash operating expenses running through our P&L.”
Expenses and workers’ compensation improvement
Selling, general and administrative expenses were $4.5 million in the fourth quarter, down from $5.1 million in the prior-year quarter. Full-year SG&A was $20.7 million, compared with $21.4 million in 2024.
Hartley highlighted a sharp improvement in net workers’ compensation expense, which totaled $89,000 for the full year, compared with “about $2 million” in 2024. He said the decrease of $1.9 million showed progress toward returning the expense to historical levels.
Core SG&A—excluding workers’ compensation, MRINetwork ad fund expenses, and non-recurring operating expenses—was $4.1 million for the quarter and $8.5 million for the full year, Hartley said.
Balance sheet, capital return, and outlook comments
HireQuest ended 2025 with total assets of $88.2 million, down from $94.0 million at the end of 2024. Current assets included $3.9 million in cash and $39.3 million of net accounts receivable, compared with $2.2 million of cash and $42.3 million of net accounts receivable at year-end 2024.
Working capital increased to about $33.0 million at year-end 2025 from $25.1 million at year-end 2024. Hartley said the primary driver was that the company ended 2025 with $0 drawn on its credit facility, down from $6.8 million drawn at the end of 2024. As of Dec. 31, 2025, he said HireQuest had $40.3 million of availability, assuming continued covenant compliance.
Hermanns also noted the board approved a share repurchase program authorizing the company to repurchase up to $20 million of outstanding common shares. He said management views buybacks as an “efficient use” of capital that reflects confidence in the long-term strategy and returns capital to shareholders.
The company also continued its quarterly dividend program. Hartley said HireQuest has paid a regular quarterly dividend since the third quarter of 2020 and most recently paid a $0.06 per share dividend on March 16, 2025, to shareholders of record as of March 2. He said the company expects to continue paying a dividend each quarter, subject to board discretion.
Discussing hiring conditions, Hermanns said the office survey suggested stability: 68% of offices reported time-to-fill for open roles steadied in 2025, while 35% saw increases. He said 61% of recruiters expect time-to-fill to remain stable in 2026, and 15% expect improvement “as candidate supply normalizes.” Hermanns added that late 2025 showed an uptick in urgency among employers to secure top candidates in full-time roles.
In response to a question from Barrington Research’s Kevin Steinke about whether stabilization is benefiting any brand more than others, Hermanns said it has not been more pronounced in a particular division but “it’s very apparent,” adding it carried into the first quarter. He said the market “definitely seems to have found its bottom,” while cautioning it does not appear to be “setting up to be a boom year.”
On acquisitions, Hermanns said the company had pursued a potential deal in the middle of the fourth quarter that appeared likely to close but ultimately did not. He said HireQuest continues to look for acquisitions but has experienced a “dry spell” in finding attractive opportunities and is not willing to pursue deals “just for the sake of having it,” adding the company tends to avoid targets with client concentration risk. He said there is nothing currently in the pipeline.
In closing remarks, Hermanns said the company’s results supported management’s view that the franchise model remains “stable” and “resilient in difficult circumstances,” pointing to the reduction in borrowings from nearly $7 million to debt-free over the year despite a down macro environment.
About HireQuest (NASDAQ:HQI)
HireQuest, Inc is a publicly traded holding company that provides equipment rental and workforce solutions across North America through two primary operating subsidiaries. Its Coast Equipment Rentals division offers a broad range of support equipment—such as pumps, trench safety systems, power and HVAC units, air compressors, light towers and generators—to the construction, industrial, municipal and environmental markets. Coast Equipment Rentals operates more than 135 branch locations in 36 U.S.
