BGSF Inc. Q2 Earnings Call: Revenue Decline, Strategic Investments, and Improved EBITDA

BGSF Inc. reported Q2 revenues of $23.5 million, an 8.6% decline YoY but a 12.6% improvement QoQ. The company made strategic investments in AI and improved adjusted EBITDA, but faced challenges including a year-over-year revenue decline, increased SG&A expenses, and economic uncertainties impacting the industry. BGSF plans to pay off all outstanding debt following the sale of its Professional division.

BGSF Inc. (NYSE: BGSF), a leading provider of workforce solutions, reported its Q2 2025 financial results on August 6, 2025. The company posted revenues of $23.5 million, an 8.6% year-over-year (YoY) decline but a 12.6% quarter-over-quarter (QoQ) improvement [1]. Despite the sequential increase, the company continues to face challenges, including a year-over-year revenue decline, increased selling, general, and administrative (SG&A) expenses, and economic uncertainties impacting the industry.

The company's adjusted earnings per share (EPS) recorded a loss of ($0.19), driven by a net loss of $4.9 million, which more than doubled from Q2 2024 [1]. Gross profit margin (GAAP) fell by 1.5 percentage points to 35.8% from Q2 2024, while operating losses deepened to ($4.4 million) [1]. SG&A expenses grew to $12.6 million from $10.7 million, including $1.6 million in strategic alternatives review costs [1].

BGSF's strategic focus remains on the Property Management segment, which recorded $23.0 million in contract talent revenue for Q2 FY2025. The company is investing in technology platforms and artificial intelligence (AI) recruiting tools, with the expectation that these investments will drive future growth [1].

The company plans to pay off all outstanding debt following the sale of its Professional division to INSPYR, a proxy statement for which was filed on July 25th [2]. The sale is expected to result in "noisy" quarters ahead as BGSF transitions to a property management-only focus. The company's interim Co-Chief Executive Officer, Keith Schroeder, and Property Management President, Kelly Brown, emphasized the need for strict cost management and improved productivity [2].

Looking ahead, investors should closely monitor BGSF's progress in reducing SG&A expenses, the impact of new recruiting technology, and whether sequential revenue growth translates into year-over-year growth. The company's persistent net and operating losses, combined with a heavy debt load and low cash reserves, underline the need for careful financial management [1].

References:
[1] https://www.nasdaq.com/articles/bgsf-bgsf-q2-revenue-falls-9
[2] https://www.desmoinesregister.com/press-release/story/4922/bgsf-inc-reports-second-quarter-2025-financial-results/