HireQuest Reports Q2 2025 Financial Results with 12% Revenue Decline

HireQuest Inc. reported Q2 2025 earnings with a 12% decline in total revenue to $7.6 million, a decrease in franchise royalties and service revenue, and a net income of $1.1 million, down from $2.0 million last year. Adjusted EBITDA fell to $3.3 million from $4.0 million in the previous year. Despite the decline, the company reduced interest expenses and maintained a stable balance sheet. HireQuest remains focused on executing its business model, controlling expenses, and exploring mergers and acquisitions to expand its market reach.

HireQuest Inc. (HQI) reported its fiscal 2025 Q2 earnings on August 8, 2025, with a notable decline in both revenue and profitability. The results fell short of expectations, with a sharp drop in net income. The company did not provide forward-looking guidance, though it outlined strategic initiatives to drive long-term growth through M&A and cost control.

Revenue and Earnings

HireQuest’s total revenue for the second quarter of 2025 declined by 12.0% year-over-year to $7.64 million [1]. The bulk of this revenue came from franchise royalties, which accounted for $7.28 million, while service revenue contributed an additional $354,000. The performance reflects ongoing challenges in the staffing market, with both segments experiencing headwinds due to weaker demand.

HireQuest’s net income for Q2 2025 dropped by 48.0% to $1.06 million compared to $2.04 million in the same period last year [1]. Earnings per share (EPS) also declined sharply by 46.7%, from $0.15 to $0.08, signaling a significant reduction in profitability amid higher operating costs and market volatility.

Adjusted EBITDA for Q2 2025 fell to $3.3 million from $4.0 million in the previous year [1]. The decrease in EBITDA is attributed to the company's ongoing cost control measures and strategic initiatives aimed at improving operational efficiency.

Price Action

Despite the earnings release, HireQuest’s stock price edged down by 0.00% during the latest trading day, dropped 4.69% over the past week, and has declined 5.71% month-to-date, reflecting investor caution in response to the weaker financial results [1].

Post-Earnings Price Action Review

A 30-day investment strategy of buying HireQuest shares following a revenue increase quarter-over-quarter has underperformed over the past three years, yielding a return of -8.88% compared to a benchmark of 47.91% [1]. The strategy, which delivered a -3.09% CAGR and an excess return of -56.79%, has proven to be a high-risk proposition with no consistent returns. The negative Sharpe ratio of -0.06 and the maximum drawdown of 0.00% further underscore the poor risk-adjusted performance of this approach.

CEO Commentary

Rick Hermanns, CEO of HireQuest, acknowledged the challenging market environment, particularly the 11,000 manufacturing job losses reported by the Bureau of Labor Statistics. Despite the softness, he remained cautiously optimistic about the company’s ability to execute its franchise model, control expenses, and pursue M&A opportunities to expand its geographic reach. Hermanns emphasized the company’s strategic discipline and long-term confidence in the sector’s recovery.

Guidance

The company did not provide specific financial guidance for future quarters. Instead, it outlined strategic priorities including disciplined expense control, M&A activity, and leveraging the franchise model for operating leverage. These priorities reflect a focus on long-term stability and growth, though no quantitative targets were given.

Additional News

Within three weeks of the earnings report, HireQuest announced plans to explore several strategic M&A opportunities to expand its franchise network and geographic footprint. While no formal agreements were disclosed, the company emphasized its intent to target high-potential locations where its business model could drive growth. Additionally, management reiterated its commitment to maintaining a lean and efficient cost structure. There were no reports of C-level executive changes or dividend-related announcements during this period.

Conclusion

HireQuest Inc. faced significant challenges in Q2 2025 due to the ongoing softness in the staffing market, leading to a decline in both revenue and profitability. The company’s strategic focus on cost control, M&A, and leveraging its franchise model positions it for long-term growth. Despite the mixed results, the company’s stable balance sheet and effective cost management indicate a resilient position within the industry.

References

[1] https://www.ainvest.com/news/hirequest-2025-q2-earnings-declining-net-income-market-softness-2508/
[2] https://www.tradingview.com/news/reuters.com,2025:newsml_PLXA70034:0-recruiter-hirequest-q2-revenue-misses-estimates/
[3] https://www.stocktitan.net/news/HQI/hire-quest-reports-financial-results-for-second-quarter-3fnxmbc167eq.html