HireQuest, Inc. Q4 FY2025 earnings call

1. The macro environment has been challenging for the staffing industry, but HireQuest remained solidly profitable in 2025. 2. Acquired MRI Network in 2022 to tap into executive search and permanent placement demand, but hiring for these slowed. In Q4 2025, announced strategic decision to change MRI Network's ownership structure, divesting the permanent placement piece into a new entity with HireQuest having a minority stake and retaining full ownership of the contract staffing piece. 3. Board of directors approved a share repurchase program authorizing repurchase of up to $20 million of outstanding common stock. 4. Surveyed over 400 offices across HireQuest Direct, Snelling, and MRI brands in Q4 2025, with data pointing to a steadying market with fewer extremes and early reallocation signals across industries. 5. Key trends for 2026 include AI and automation, reshoring and tariff relief, and economic and political shifts. 6. Snelling celebrated 75 years of continuous operation on March 3rd, 2025

Total revenue in the fourth quarter of 2025 was $7 million, compared with $8.1 million in the prior year, a decrease of 13%. For the full year, total revenue was $30.6 million compared to $34.6 million in 2024. Franchise royalties for the quarter were $6.6 million compared to $7.6 million for the same quarter last year. And for the full year 2025, franchise royalties were $29 million compared to $32.7 million in 2024. System-wide sales in the fourth quarter of 2025 were $122.3 million compared to $134.8 million in Q4 2024, a decrease of 9.3%. And for the full year, system-wide sales were $500.2 million compared with $563.6 million in 2024, a decrease of 11.3%. Service revenue in the fourth quarter was $392,000 compared to $428,000 last year. And for the full year 2025, service revenue was $1.6 million compared to $1.9 million in 2024. Selling general and administrative expenses in the fourth quarter were $4.5 million compared to $5.1 million in the fourth quarter last year. SG&A for the full year was $20.7 million compared to $21.4 million for the full year 2024. Net income after tax was $1.6 million in the fourth quarter, or 11 cents per diluted share, compared to net income of $2.2 million, or 16 cents per diluted share last year. For the full year, net income was $6.3 million or 45 cents per diluted share compared to $3.7 million or 26 cents per diluted share in 2024. Adjusted net income was relatively flat year over year for both the fourth quarter and full year. And in the fourth quarter of 2025, adjusted net income was $2.7 million or 19 cents per diluted share compared to adjusted net income of $2.6 million or 19 cents per diluted share in Q4 2024. And for the full year, adjusted net income was $10 million or 71 cents per diluted share in 2025 compared with $9.9 million or 71 cents per diluted share in 2024. Adjusted EBITDA in the fourth quarter was $3.4 million compared to $3.8 million last year. And for the full year, adjusted EBITDA was $14.1 million compared to $16.2 million in 2024

1. Expect a steadying labor market in 2026 with more balance, stabilizing around new priorities like flexibility, fit, and skilled work not automatable by AI. 2. Board expects to continue paying quarterly dividends, subject to its discretion

1. Macro environment uncertainties could impact the staffing industry's performance. 2. Changes in MRI Network's ownership structure and its potential impact on future performance. 3. Uncertainties in the acquisition pipeline with deals potentially falling through

Q: About the environment stabilization benefiting divisions, A: Haven't seen more pronounced benefit in specific division; market has found its bottom but not a boom year.

Q: Quantification of MRI transaction impact, A: In 2025, the executive search portion of MRI contributed about $65 million of system-wide sales and just under $2 million for royalties, and was break even at best.

Q: Update on acquisitions, A: Had a deal in mid-Q4 2025 hopeful to close but it fell through; currently no active deals and avoiding those with client concentrations