HireQuest Q1 2025: Navigating Contradictions in Market Recovery, Immigration Impact, and M&A Opportunities

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Macroeconomic Headwinds Impacting Industry:
- HireQuest's total revenue decreased by 11.2% to $7.5 million in Q1 2025, compared to $8.4 million in the same quarter last year.
- This decline was attributed to the broader staffing industry's impact from macroeconomic headwinds, causing employers to suspend hiring decisions during the uncertain market.

Expense Management and SG&A Reduction:
- Selling, general and administrative expenses decreased by 6.5% to $5.3 million in Q1 2025, compared to $5.6 million in the prior-year period.
- The reduction in SG&A expenses resulted from consistent cost management initiatives and strategic allocation of capital to position the company for long-term growth.

Immigration Policy Impact on Demand:
- HireQuest observed an increase in demand for its services due to more stringent immigration policies under the Trump administration.
- Enhanced immigration enforcement is redirecting employers to hire documented workers, benefiting HireQuest as an E-Verify employer.

M&A Pipeline and Acquisition Strategy:
- HireQuest is encouraged by a strong M&A pipeline, with visibility into potential deals and resources for execution.
- Acquisitions are utilized to expand geographic reach and market verticals, enabling faster growth than organic methods.

Profitability and Dividend Continuation:
- The company reported adjusted EBITDA of $2.8 million, with a margin of 37% in Q1 2025.
- HireQuest continues to pay a regular quarterly dividend, with the most recent payment being $0.06 per share, indicating financial stability and confidence in future performance.