HQI — HireQuest, Inc.

Summary of HireQuest Q1 2026 Earnings Call

1. Key Financial Results and Metrics

• Total Revenue: $6.5 million, down 12.7% from $7.5 million in Q1 2025, primarily due to the divestiture of MRI Network assets.
• Franchise Royalties: $6.1 million compared to $7 million in the same quarter last year.
• System-Wide Sales: $102.6 million, down from $118.4 million in Q1 2025, reflecting a decline due to the divestiture.
• Net Income: $1.6 million ($0.11 per diluted share), up from $1.4 million ($0.10 per diluted share) year-over-year.
• Adjusted Net Income: $1.8 million ($0.13 per share), unchanged from Q1 2025.
• Adjusted EBITDA: $2.7 million, slightly down from $2.8 million in the previous year.
• Cash Position: $1 million in cash, with no debt and $40.3 million available on the credit facility.

2. Strategic Updates and Business Highlights

• The company emphasizes its resilient franchise staffing model, which aligns incentives and reduces management overhead.
• Management remains committed to a strategy of disciplined M&A and organic growth, having doubled in size over the past five years.
• Positive trends noted in the second half of Q1, with improved year-over-year comparisons and early positive indicators for Q2.
• Investments in the National Accounts program are starting to yield results, contributing to organic growth.

3. Forward Guidance and Outlook

• Management is optimistic about the staffing market's recovery in 2026, citing improved demand trends and favorable year-over-year comparisons.
• The company is exploring a $105 million cash offer for the on-demand portion of TrueBlue's PeopleReady segment, which they believe could enhance their service offerings.

4. Bad News, Challenges, or Points of Concern

• Total revenue decline attributed to the divestiture of MRI Network assets, which may mask underlying performance improvements.
• The first half of Q1 was negatively impacted by seasonal factors, including weather and holiday scheduling, leading to a rough start.
• The overall temporary staffing industry has faced challenges, with a 3% decline in sales since 2019, although HireQuest has outperformed this trend historically.

5. Notable Q&A Insights

• Management acknowledged that early Q1 results were affected by weather and holiday timing but noted a significant improvement in the latter half of the quarter.
• The commercial segment showed stronger performance compared to on-demand services, which remained flat.
• Management expressed confidence in the sustainability of recent positive trends, attributing improvements to both macroeconomic factors and internal strategic initiatives.
• There is cautious optimism about the overall staffing market, with indications of growth in temporary staffing jobs, aligning with broader industry reports.

This summary encapsulates the key takeaways from HireQuest's Q1 2026 earnings call, highlighting financial performance, strategic direction, and market outlook while addressing challenges faced during the quarter.