Q4 2025 HireQuest Inc Earnings Call
Speaker #1: Greetings . Welcome to the HireQuest, Inc. fourth quarter and year end 2025 Earnings Conference Call . At this time , all participants are in a listen only mode .
Operator: Greetings. Welcome to the HireQuest, Inc. Q4 and Year-End 2025 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, John Nesbett, of IMS Investor Relations. You may begin.
Operator: Greetings. Welcome to the HireQuest, Inc. Q4 and Year-End 2025 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, John Nesbett, of IMS Investor Relations. You may begin.
Speaker #1: A question and answer session will follow the formal presentation . If anyone should require operator assistance during the conference , please press Star Zero on your telephone keypad .
Speaker #1: Please note, this conference is being recorded. I will now turn the conference over to your host, Walter Frank of IMS Investor Relations.
Speaker #1: You may begin .
Speaker #2: Thank you . Operator , I would like to welcome everybody to the call . Hosting the call today are HireQuest, Inc. CEO , Rick Hermans and CFO David Hartley .
John Nesbett: Thank you, operator. I would like to welcome everybody to the call. Hosting the call today are HireQuest CEO, Rick Hermanns, and CFO, David Hartley. I would like to take a moment to read the safe harbor statement. This conference call contains forward-looking statements as defined within Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements and terms such as anticipate, expect, intend, may, will, should, or other comparable terms, involve risks and uncertainties because they relate to events and depend on circumstances that will occur in the future. Those statements include statements regarding the intent, belief, or current expectations of HireQuest and members of its management, as well as the assumptions on which such statements are based.
Walter Frank: Thank you, operator. I would like to welcome everybody to the call. Hosting the call today are HireQuest CEO, Rick Hermanns, and CFO, David Hartley. I would like to take a moment to read the safe harbor statement. This conference call contains forward-looking statements as defined within Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements and terms such as anticipate, expect, intend, may, will, should, or other comparable terms, involve risks and uncertainties because they relate to events and depend on circumstances that will occur in the future. Those statements include statements regarding the intent, belief, or current expectations of HireQuest and members of its management, as well as the assumptions on which such statements are based.
Speaker #2: I would like to take a moment to read the Safe Harbor statement . This conference call contains forward looking statements as defined within section 27 A of the Securities Act of 1933 , as amended , and section 21 E of the Securities Exchange Act of 1934 , as amended .
Speaker #2: These forward looking statements and terms such as anticipate , expect , intend , may , will , should or other comparable terms involve risks and uncertainties because they relate to events and depend on circumstances that will occur in the future .
Speaker #2: Those statements include statements regarding the intent, belief, or current expectations of higher costs and members of its management, as well as the assumptions on which such statements are based.
Speaker #2: Prospective investors are cautioned that any such forward looking statements are not guarantees of future performance and involve risks and uncertainties , including those described in HireQuest, Inc. periodic reports filed with the SEC , and that actual results may differ materially from those contemplated by such forward looking statements .
John Nesbett: Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, including those described in HireQuest's periodic reports filed with the SEC, and that actual results may differ materially from those contemplated by such forward-looking statements. Except as required by federal securities law, HireQuest undertakes no obligation to update or revise forward-looking statements to reflect changed conditions. I would now like to turn the call over to the CEO of HireQuest, Rick Hermanns.
Walter Frank: Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, including those described in HireQuest's periodic reports filed with the SEC, and that actual results may differ materially from those contemplated by such forward-looking statements. Except as required by federal securities law, HireQuest undertakes no obligation to update or revise forward-looking statements to reflect changed conditions. I would now like to turn the call over to the CEO of HireQuest, Rick Hermanns.
Speaker #2: Except as required by federal securities law, HireQuest, Inc. undertakes no obligation to update or revise forward-looking statements to reflect changed conditions.
Speaker #2: I would now like to turn the call over to the CEO of HireQuest, Inc., Richard Hermanns.
Speaker #3: Good afternoon and thank you for joining our call today . As we've spoken , as we've spoken to on previous calls , the macro environment has driven a challenging time for the staffing industry That said , we remain solidly profitable and executed well in 2025 .
Rick Hermanns: Good afternoon, and thank you for joining our call today. As we've spoken to on previous calls, the macro environment has driven a challenging time for the staffing industry. That said, we remain solidly profitable and executed well in 2025. As many of you already know, we acquired MRI Network, our global executive search and permanent placement brand, back in 2022 as a way for us to tap into the increasing demand for executive search and permanent placement staffing offerings. Since we acquired the business, hiring for both executive search and permanent placement have slowed, and that dynamic impacted our ability to scale and grow MRI. MRI Network had two components of its business, a permanent placement executive recruiting piece and a contract staffing piece.
Rick Hermanns: Good afternoon, and thank you for joining our call today. As we've spoken to on previous calls, the macro environment has driven a challenging time for the staffing industry. That said, we remain solidly profitable and executed well in 2025. As many of you already know, we acquired MRI Network, our global executive search and permanent placement brand, back in 2022 as a way for us to tap into the increasing demand for executive search and permanent placement staffing offerings. Since we acquired the business, hiring for both executive search and permanent placement have slowed, and that dynamic impacted our ability to scale and grow MRI. MRI Network had two components of its business, a permanent placement executive recruiting piece and a contract staffing piece.
Speaker #3: As many of you already know , we acquired we acquired MRI network . Our global executive search and permanent placement brand back in 2022 as a way for us to tap into the increasing demand .
Speaker #3: For executive search and permanent placement staffing offerings, since we acquired the business, hiring for both executive search and permanent placement have slowed, and that dynamic impacted our ability to scale and grow.
Speaker #3: MRI, MRI Network had two components of its business: a permanent placement executive recruiting piece and a contract staffing piece. After careful consideration during the fourth quarter, we announced our strategic decision to change the ownership structure of MRI Network by divesting the permanent placement piece of the business into a new entity and transitioning majority ownership to a newly formed leadership group made up of current and former franchise owners.
Rick Hermanns: After careful consideration during Q4, we announced our strategic decision to change the ownership structure of MRINetwork by divesting the permanent placement piece of the business into a new entity and transitioning majority ownership to a newly formed leadership group made up of current and former franchise owners. We believe this is a positive strategic shift for MRINetwork and the future growth of the brand. By restructuring ownership and aligning MRINetwork's leadership with experienced franchise owner-operators, we're making sure the network is being guided by the people who live its mission every day. This reset is focused on growing and strengthening client partnerships to unite a global network of executive staffing and permanent placement offices into a cohesive, high-performing organization.
Rick Hermanns: After careful consideration during Q4, we announced our strategic decision to change the ownership structure of MRINetwork by divesting the permanent placement piece of the business into a new entity and transitioning majority ownership to a newly formed leadership group made up of current and former franchise owners. We believe this is a positive strategic shift for MRINetwork and the future growth of the brand. By restructuring ownership and aligning MRINetwork's leadership with experienced franchise owner-operators, we're making sure the network is being guided by the people who live its mission every day. This reset is focused on growing and strengthening client partnerships to unite a global network of executive staffing and permanent placement offices into a cohesive, high-performing organization.
Speaker #3: We believe this is a positive strategic shift for the MRI network and the future growth of the brand. By restructuring, ownership, and aligning MRI’s leadership with experienced franchise owner-operators.
Speaker #3: We're making sure the network is being guided by the people who live its mission every day This reset is focused on growing and strengthening client partnerships to unite a global network of executive staffing and permanent placement offices into a cohesive , high performing organization Importantly , hire request remains fully committed to MRI network and will continue to retain partial ownership and support the brand with essential infrastructure purchasing power and shared services across our staffing and recruiting network .
Rick Hermanns: Importantly, HireQuest remains fully committed to MRI Network and will continue to retain partial ownership and support the brand with essential infrastructure, purchasing power, and shared services across our staffing and recruiting network. What that means for HireQuest and you as shareholders of HireQuest is that as of January 1 of this year, the permanent placement portion of MRI is operating under this new entity in which HireQuest has a minority ownership stake in. HireQuest continues to operate and have full ownership of the contract staffing piece of the MRI business, which is the part that more closely aligns with our other franchise offerings. In another development, we announced in December that HireQuest board of directors had approved a share repurchase program that authorizes the company to repurchase up to $20 million of its outstanding shares of common stock.
Rick Hermanns: Importantly, HireQuest remains fully committed to MRI Network and will continue to retain partial ownership and support the brand with essential infrastructure, purchasing power, and shared services across our staffing and recruiting network. What that means for HireQuest and you as shareholders of HireQuest is that as of January 1 of this year, the permanent placement portion of MRI is operating under this new entity in which HireQuest has a minority ownership stake in. HireQuest continues to operate and have full ownership of the contract staffing piece of the MRI business, which is the part that more closely aligns with our other franchise offerings. In another development, we announced in December that HireQuest board of directors had approved a share repurchase program that authorizes the company to repurchase up to $20 million of its outstanding shares of common stock.
Speaker #3: So what that means for HireQuest, Inc. and you as shareholders of HireQuest, Inc. is that as of January 1st of this year , the permanent placement portion of MRI is operating under this new entity in which higher quest has a minority ownership stake in and Higher Quest continues to operate and have full ownership of the contract staffing piece of the MRI business , which is the part that more closely , more closely aligns with our other franchise offerings .
Speaker #3: In another development , we announced in December that HireQuest, Inc. board of Directors , Board of directors had approved a share repurchase program that authorizes the company to repurchase up to $20 million of its outstanding shares of common stock .
Speaker #3: We believe that a share repurchase program is currently an efficient use of our capital. This reflects our commitment to prudent capital management and deployment, and reinforces the confidence that the board and management team have in HireQuest, Inc.'s long-term strategy, while also returning capital to our shareholders.
Rick Hermanns: We believe that a share repurchase program is currently an efficient use of our capital, reflects our commitment to prudent capital management and deployment, and reinforces the confidence that the board and management team have in HireQuest's long-term strategy, while also returning capital to our shareholders. Prior to the close of the year, we surveyed over 400 offices across our HireQuest Direct, Snelling, and MRINetwork brands to get a better sense of the overall job market and hiring trends as we headed into 2026. The data we collected points to a steadying market with fewer extremes and early signals of reallocation across industries.
Rick Hermanns: We believe that a share repurchase program is currently an efficient use of our capital, reflects our commitment to prudent capital management and deployment, and reinforces the confidence that the board and management team have in HireQuest's long-term strategy, while also returning capital to our shareholders. Prior to the close of the year, we surveyed over 400 offices across our HireQuest Direct, Snelling, and MRINetwork brands to get a better sense of the overall job market and hiring trends as we headed into 2026. The data we collected points to a steadying market with fewer extremes and early signals of reallocation across industries.
Speaker #3: Prior to the close of the year, we surveyed over 400 offices across our HireQuest, Inc., Snelling, and MRI brands to get a better sense of the overall job market and hiring trends.
Speaker #3: As we headed— as we headed into 2026, the data we collected points to a steadying market with fewer extremes and early signals of reallocation across industries.
Speaker #3: In other words, while we don't expect 2026 to be defined by a hiring boom or bust, we do expect more balance in the labor market.
Rick Hermanns: In other words, while we don't expect 2026 to be defined by a hiring boom or bust, we do expect more balance in the labor market that appears to be stabilizing around new priorities, including flexibility, fit, and the kind of skilled work and labor that can't be automated by AI. Some key statistics from the survey include 68% of offices surveyed said time to fill for open roles steadied in 2025, while 35% saw increases. This is generally considered to be a clear indicator of market stability. 61% of recruiters expect the time to fill to remain stable in 2026, while 15% expect improvement as candidate supply normalizes. On average, employers are moving faster to secure top candidates in full-time roles, demonstrated by the late 2025 hiring urgency uptick.
Rick Hermanns: In other words, while we don't expect 2026 to be defined by a hiring boom or bust, we do expect more balance in the labor market that appears to be stabilizing around new priorities, including flexibility, fit, and the kind of skilled work and labor that can't be automated by AI. Some key statistics from the survey include 68% of offices surveyed said time to fill for open roles steadied in 2025, while 35% saw increases. This is generally considered to be a clear indicator of market stability. 61% of recruiters expect the time to fill to remain stable in 2026, while 15% expect improvement as candidate supply normalizes. On average, employers are moving faster to secure top candidates in full-time roles, demonstrated by the late 2025 hiring urgency uptick.
Speaker #3: That appears to be stabilizing around new priorities, including flexibility, fit, and the kind of skilled work and labor that can't be automated by AI.
Speaker #3: Some key statistics from the survey include 68% of offices surveyed , said . Time to fill for open roles steadied in 2025 , while 35% saw increases This is generally considered to be a clear indicator of market stability 61% of recruiters expected time to fill to remain stable in 2026 , while 15% expect improvement as candidates supply normalizes on average , employers are moving faster to secure top candidates in full time roles demonstrated by the late 2025 hiring urgency , uptick Looking ahead , we expect several trends , including AI and automation , reshoring and tariff relief , and economic and political shifts to be key forces that will that shape 2026 .
Rick Hermanns: Looking ahead, we expect several trends, including AI and automation, reshoring and tariff relief, and economic and political shifts to be key forces that will shape 2026, the 2026 hiring landscape. HireQuest is keeping a close eye on the many markets in which we operate, and we believe that we're well-positioned with our franchise staffing model to benefit from a stabilizing market and to meet the shifting demands of employers in 2026. Lastly, I'd like to acknowledge that on 3 March, Snelling, our nationwide temporary and direct hire recruiting service, celebrated 75 years of continuous operation, placing it among the longest-running staffing firms in the United States. On behalf of all of HireQuest, we congratulate them on three-quarters of a century of success and look forward to many more years as a leader in their respective markets.
Rick Hermanns: Looking ahead, we expect several trends, including AI and automation, reshoring and tariff relief, and economic and political shifts to be key forces that will shape 2026, the 2026 hiring landscape. HireQuest is keeping a close eye on the many markets in which we operate, and we believe that we're well-positioned with our franchise staffing model to benefit from a stabilizing market and to meet the shifting demands of employers in 2026. Lastly, I'd like to acknowledge that on 3 March, Snelling, our nationwide temporary and direct hire recruiting service, celebrated 75 years of continuous operation, placing it among the longest-running staffing firms in the United States. On behalf of all of HireQuest, we congratulate them on three-quarters of a century of success and look forward to many more years as a leader in their respective markets.
Speaker #3: The 2026 hiring landscape—HireQuest, Inc. is keeping a close eye on the many markets in which we operate, and we believe that we're well positioned with our franchise staffing model to benefit from a stabilizing market and to meet the shifting demands of employers in 2026.
Speaker #3: Lastly , I'd like to acknowledge that on March 3rd , Snelling , our nationwide , temporary and direct hire recruiting service celebrated 75 years of continuous operation , placing it among the longest running staffing firms in the United States .
Speaker #3: On behalf of all of HireQuest, Inc., congratulate them on three quarters of a century of success, and look forward to many more years as a leader in their respective markets.
Speaker #3: With that, I'll now turn the call over to David to provide a closer look at our fourth quarter and full year financial results.
Rick Hermanns: With that, I'll now turn the call over to David to provide a closer look at our Q4 and full-year financial results.
Rick Hermanns: With that, I'll now turn the call over to David to provide a closer look at our Q4 and full-year financial results.
Speaker #4: Thank you, Rick, and good afternoon, everyone. Appreciate you all joining us today. I'll now provide a summary of the fourth quarter and full year results.
David Hartley: Thank you, Rick, and good afternoon, everyone. Appreciate you all joining us today. I'll now provide a summary of the Q4 and full-year results. Total revenue in the Q4 of 2025 was $7 million, compared with revenue of $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. Our revenue is made up of two components: franchise royalties, which is our primary source of revenue, and service revenue, which is generated from certain services and interest charged to our franchisees, as well as other miscellaneous revenue. Franchise royalties for the quarter were $6.6 million compared to $7.6 million for the same quarter last year.
David Hartley: Thank you, Rick, and good afternoon, everyone. Appreciate you all joining us today. I'll now provide a summary of the Q4 and full-year results. Total revenue in the Q4 of 2025 was $7 million, compared with revenue of $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. Our revenue is made up of two components: franchise royalties, which is our primary source of revenue, and service revenue, which is generated from certain services and interest charged to our franchisees, as well as other miscellaneous revenue. Franchise royalties for the quarter were $6.6 million compared to $7.6 million for the same quarter last year.
Speaker #4: Total revenue in the fourth quarter of 2025 was $7 million, compared with revenue of $8.1 million in the prior year, a decrease of 13%.
Speaker #4: For the full year , total revenue was $30.6 million , compared to 34.6 million in 2020 . For our revenue is made up of two components franchise royalties , which is our primary source of revenue and service revenue , which is generated from certain services and interest charged to our franchisees .
Speaker #4: As well as other miscellaneous revenue, franchise royalties for the quarter were $6.6 million, compared to $7.6 million for the same quarter last year.
Speaker #4: And for the full year 2025 , franchise , royalties were $29 million , compared to $32.7 million in 2020 . For underlying franchise royalties are system wide sales , which are not a part of our revenue but are helpful .
David Hartley: For the full year 2025, franchise royalties were $29 million compared to $32.7 million in 2024. Underlying franchise royalties are system-wide sales, which are not a part of our revenue but are a helpful contextual performance indicator. System-wide sales reflect sales at all offices, including those classified as discontinued. In the Q4 of 2025, system-wide sales were $122.3 million, compared to $134.8 million in Q4 2024, a decrease of 9.3%. 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 Q4 was $392 thousand compared to $428 thousand last year.
David Hartley: For the full year 2025, franchise royalties were $29 million compared to $32.7 million in 2024. Underlying franchise royalties are system-wide sales, which are not a part of our revenue but are a helpful contextual performance indicator. System-wide sales reflect sales at all offices, including those classified as discontinued. In the Q4 of 2025, system-wide sales were $122.3 million, compared to $134.8 million in Q4 2024, a decrease of 9.3%. 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 Q4 was $392 thousand compared to $428 thousand last year.
Speaker #4: Contextual performance indicator. System-wide sales reflect sales at all offices, including those classified as discontinued in the fourth quarter of 2025.
Speaker #4: System wide sales were 122.3 million , compared to 134.8 million in Q4 2020 . For a decrease of 9.3% . And for the full year , system wide sales were 500.2 million , compared with 563.6 million in 2020 .
Speaker #4: Four . 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 For the full year was 20.7 million , compared to 21.4 million for the full year 2024 .
David Hartley: For the full year 2025, service revenue was $1.6 million compared to $1.9 million in 2024. Selling, general and administrative expenses in Q4 were $4.5 million compared to $5.1 million in Q4 last year. SG&A for the full year was $20.7 million compared to $21.4 million for the full year 2024. Included in SG&A expense is net workers' compensation expense, which totaled $89 thousand for the full year, compared with about $2 million in the full year of 2024. A decrease of $1.9 million that demonstrates the progress we've made to reduce the impact of this expense on our business and lower it back to historical levels.
David Hartley: For the full year 2025, service revenue was $1.6 million compared to $1.9 million in 2024. Selling, general and administrative expenses in Q4 were $4.5 million compared to $5.1 million in Q4 last year. SG&A for the full year was $20.7 million compared to $21.4 million for the full year 2024. Included in SG&A expense is net workers' compensation expense, which totaled $89 thousand for the full year, compared with about $2 million in the full year of 2024. A decrease of $1.9 million that demonstrates the progress we've made to reduce the impact of this expense on our business and lower it back to historical levels.
Speaker #4: Included in SG&A expense is net workers' compensation expense, which totaled $89,000 for the full year, compared with about $2 million in the full year of 2020.
Speaker #4: For a decrease of $1.9 million. That demonstrates the progress we've made to reduce the impact of this expense on our business and lower it back to historical levels.
Speaker #4: For sG&A , which includes the impact , which excludes the impact of worker's comp , MRI and fund expenses , and any non-recurring operating expenses , was 4.1 million for the quarter and 8.5 million for the full year We provide a table in the press release issued earlier this afternoon with a detailed reconciliation of core S , G , and A to S , G , and a , along with tables for the non-GAAP profitability metrics .
David Hartley: Core SG&A, which includes the impact, which excludes the impact of workers' comp, MRINetwork ad fund expenses, and any non-recurring operating expenses, was $4.1 million for the quarter and $8.5 million for the full year. We provide a table in the press release issued earlier this afternoon with a detailed reconciliation of core SG&A to SG&A, along with tables for the non-GAAP profitability metrics, net income to adjusted net income, and net income to adjusted EBITDA, which I'll discuss shortly. Net income after tax was $1.6 million in Q4 or $0.11 per diluted share, compared to net income of $2.2 million or $0.16 per diluted share last year.
David Hartley: Core SG&A, which includes the impact, which excludes the impact of workers' comp, MRINetwork ad fund expenses, and any non-recurring operating expenses, was $4.1 million for the quarter and $8.5 million for the full year. We provide a table in the press release issued earlier this afternoon with a detailed reconciliation of core SG&A to SG&A, along with tables for the non-GAAP profitability metrics, net income to adjusted net income, and net income to adjusted EBITDA, which I'll discuss shortly. Net income after tax was $1.6 million in Q4 or $0.11 per diluted share, compared to net income of $2.2 million or $0.16 per diluted share last year.
Speaker #4: Net income to adjusted net income, and net income to adjusted EBITDA, which I'll discuss shortly. Net income after tax was $1.6 million in the fourth quarter, or $0.11 per diluted share, compared to net income of $2.2 million, or $0.16 per diluted share last year.
Speaker #4: For the full year , net income was 6.3 million , or $0.45 per diluted share , compared to 3.7 million , or $0.26 per diluted share in 2024 .
David Hartley: For the full year, net income was $6.3 million or $0.45 per diluted share, compared to $3.7 million or $0.26 per diluted share in 2024. Adjusted net income was relatively flat year over year for both the Q4 and full year. In the Q4 of 2025, adjusted net income was $2.7 million or $0.19 per diluted share, compared to adjusted net income of $2.6 million or $0.19 per diluted share in Q4 2024. For the full year, adjusted net income was $10 million or $0.71 per diluted share in 2025, compared with $9.9 million or $0.71 per diluted share in 2024. Adjusted EBITDA in the Q4 was $3.4 million compared to $3.8 million last year.
David Hartley: For the full year, net income was $6.3 million or $0.45 per diluted share, compared to $3.7 million or $0.26 per diluted share in 2024. Adjusted net income was relatively flat year over year for both the Q4 and full year. In the Q4 of 2025, adjusted net income was $2.7 million or $0.19 per diluted share, compared to adjusted net income of $2.6 million or $0.19 per diluted share in Q4 2024. For the full year, adjusted net income was $10 million or $0.71 per diluted share in 2025, compared with $9.9 million or $0.71 per diluted share in 2024. Adjusted EBITDA in the Q4 was $3.4 million compared to $3.8 million last year.
Speaker #4: 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 $0.19 per diluted share , compared to adjusted net income of 2.6 million , or $0.19 per diluted share , in Q4 2024 .
Speaker #4: And for the full year , adjusted net income was 10 million , or $0.71 per diluted share , in 2025 , compared with 9.9 million , or $0.71 per diluted share , in 2024 .
Speaker #4: 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 .
David Hartley: For the full year, adjusted EBITDA was $14.1 million compared to $16.2 million in 2024. Given the size of non-cash operating expenses running through our P&L, we believe adjusted EBITDA and adjusted net income are both relevant metrics for us. Now moving on to the balance sheet. Our total assets as of December 31, 2025, were $88.2 million compared to $94 million at December 31, 2024. Current assets included $3.9 million in cash and $39.3 million of net accounts receivable, while current assets at 2024 year-end included $2.2 million of cash and $42.3 million of net accounts receivable.
David Hartley: For the full year, adjusted EBITDA was $14.1 million compared to $16.2 million in 2024. Given the size of non-cash operating expenses running through our P&L, we believe adjusted EBITDA and adjusted net income are both relevant metrics for us. Now moving on to the balance sheet. Our total assets as of December 31, 2025, were $88.2 million compared to $94 million at December 31, 2024. Current assets included $3.9 million in cash and $39.3 million of net accounts receivable, while current assets at 2024 year-end included $2.2 million of cash and $42.3 million of net accounts receivable.
Speaker #4: Given the size of non-cash operating expenses running through our PNL , we believe adjusted EBITDA and adjusted net income are both relevant metrics for us So now moving on to the balance sheet , our total assets as of December 31st , 2025 , were 88.2 million , compared to 94 million at December 31st , 2020 .
Speaker #4: For current assets, this included $3.9 million in cash and $39.3 million of net accounts receivable, while current assets at 2024 year-end included $2.2 million of cash and $42.3 million of net accounts receivable. We ended 2025 with about $33 million in working capital, compared to $25.1 million at the end of the year in 2024.
David Hartley: We ended 2025 with about 33 million in working capital compared to 25.1 million at the end of the year in 2024. The biggest driver for the increase in working capital is that we ended 2025 with $0 drawn on our credit facility, down from 6.8 million drawn at the end of 2024. At 31 December 2025, we had 40.3 million in availability assuming continued covenant compliance. We have paid a regular quarterly dividend since Q3 2020. Most recently, we paid a $0.06 per common share dividend on 16 March 2025 to shareholders of record as of 2 March. We expect to continue to pay a dividend each quarter subject to the board's discretion.
David Hartley: We ended 2025 with about 33 million in working capital compared to 25.1 million at the end of the year in 2024. The biggest driver for the increase in working capital is that we ended 2025 with $0 drawn on our credit facility, down from 6.8 million drawn at the end of 2024. At 31 December 2025, we had 40.3 million in availability assuming continued covenant compliance. We have paid a regular quarterly dividend since Q3 2020. Most recently, we paid a $0.06 per common share dividend on 16 March 2025 to shareholders of record as of 2 March. We expect to continue to pay a dividend each quarter subject to the board's discretion. With that, I will turn the call back over to Rick for some closing comments.
Speaker #4: The biggest driver for the increase in working capital is that we ended 2025 with $0 drawn on our credit facility, down from $6.8 million drawn at the end of 2024.
Speaker #4: So at December 31st , 2025 , we had 40.3 million in availability . Assuming continued covenant compliance . We have paid a regularly regular quarterly dividend since the third quarter of 2020 .
Speaker #4: Most recently, we paid a $0.06 per common share dividend on March 16, 2025, to shareholders of record as of March 2.
Speaker #4: We expect to continue to pay a dividend each quarter, subject to the Board's discretion. And with that, I will turn the call back over to Rick for some closing comments.
David Hartley: With that, I will turn the call back over to Rick for some closing comments.
Speaker #3: Thank you, David. As always, we'd like to thank our employees and franchisees for their hard work and commitment, and we look forward to speaking with you again when we report the first quarter results in May.
Rick Hermanns: Thank you, David. As always, we'd like to thank our employees and franchisees for their hard work and commitment, and we look forward to speaking with you again when we report the Q1 results in May. With that, we can now open the line to questions. Thanks.
Rick Hermanns: Thank you, David. As always, we'd like to thank our employees and franchisees for their hard work and commitment, and we look forward to speaking with you again when we report the Q1 results in May. With that, we can now open the line to questions. Thanks.
Speaker #3: With that, we can now open the line to questions. Thanks.
Speaker #1: Thank you . At this time , we will be conducting a question and answer session . If you would like to ask a question , please press star one on your telephone keypad .
Operator: Thank you. At this time, we will be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we poll for questions. Once again, please press star one if you have a question or a comment. Our first question comes from Kevin Steinke with Barrington Research. Please proceed.
Operator: Thank you. At this time, we will be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we poll for questions. Once again, please press star one if you have a question or a comment. Our first question comes from Kevin Steinke with Barrington Research. Please proceed.
Speaker #1: A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue.
Speaker #1: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we pull for questions.
Speaker #1: Once again, please press star one if you have a question or a comment. Our first question comes from Kevin Stinky with Barrington Research.
Speaker #1: Please proceed
Speaker #5: Thanks . Good afternoon Rick and David . I was just wondering about the environment you described in terms of stabilization and some clients moving more quickly If you see that benefiting any of your divisions or brands more , more than the other , I'm thinking of HireQuest, Inc. versus Snelling
Kevin Steinke: Thanks. Good afternoon, Rick and David. Was just wondering about the environment you described in terms of stabilization and some clients moving more quickly. If you see that benefiting any of your divisions or brands more than the other, I'm thinking of HireQuest Direct versus Snelling.
Kevin Steinke: Thanks. Good afternoon, Rick and David. Was just wondering about the environment you described in terms of stabilization and some clients moving more quickly. If you see that benefiting any of your divisions or brands more than the other, I'm thinking of HireQuest Direct versus Snelling.
Rick Hermanns: Hey, Kevin, appreciate the question. I would say that it hasn't necessarily been more pronounced in any particular division, but it's very apparent, and it's carried through into Q1. The market has definitely, you know, throughout the quarter, it definitely seems to have found its bottom. Again, I just don't wanna contradict what we just said, which means it's certainly doesn't seem like it's setting up to be a boom year. You know, after three years of a steady decline, we're pretty hopeful that that's over with.
Speaker #3: Hey , Kevin , appreciate the question , I would I would say that it hasn't necessarily been more pronounced in any particular division , but it's very it's very apparent .
Rick Hermanns: Hey, Kevin, appreciate the question. I would say that it hasn't necessarily been more pronounced in any particular division, but it's very apparent, and it's carried through into Q1. The market has definitely, you know, throughout the quarter, it definitely seems to have found its bottom. Again, I just don't wanna contradict what we just said, which means it's certainly doesn't seem like it's setting up to be a boom year. You know, after three years of a steady decline, we're pretty hopeful that that's over with.
Speaker #3: And it's it's carried through into the first quarter . So the market has definitely You know , throughout the quarter , it is it is definitely seems to have found its bottom .
Speaker #3: And again , I don't want to contradict what we just said , which means it's certainly not going to . Doesn't seem like it's setting up to be a boom year , but you know , after three years of a steady decline , we're pretty hopeful that that's over with
Speaker #5: Okay . Thanks . And circling back to the the MRI transaction , can you maybe just give us a sense of , you know , quantification of how we should think about that affecting the numbers move forward in terms of just the revenue and expense impact from the ownership change in that business as it flows through your income statement
Kevin Steinke: Okay, thanks. Circling back to the MRINetwork transaction, can you maybe just give us a sense of, you know, quantification of how we should think about that affecting the numbers as you move forward in terms of just the revenue and expense impact from the ownership change in that business as it flows through your income statement?
Kevin Steinke: Okay, thanks. Circling back to the MRINetwork transaction, can you maybe just give us a sense of, you know, quantification of how we should think about that affecting the numbers as you move forward in terms of just the revenue and expense impact from the ownership change in that business as it flows through your income statement?
Speaker #3: Yeah , I'm going to I'm going to leave that question to David . Other than as far as getting into some of the specific numbers , I will say , Jean , you know , generally speaking , the about 35 to 40% of , let's say from 2025 of what we had in MRI has been retained via the contract staffing So , you know , there there will be a decline from the , you know , from that portion , if that makes any sense .
Rick Hermanns: Yeah. I'm gonna leave that question to David, other than, as far as getting into some of the specific numbers. I will say, you know, generally speaking, that's about 35% to 40% of, let's say, from 2025 of what we had in MRINetwork has been retained via the contract staffing. You know, there will be a decline from that portion, if that makes any sense. Now, realistically, the perm placement division was, you know, breakeven at best. From an actual income standpoint, the effect will literally be nothing. Should be nothing. David, if you have any more on that.
Rick Hermanns: Yeah. I'm gonna leave that question to David, other than, as far as getting into some of the specific numbers. I will say, you know, generally speaking, that's about 35% to 40% of, let's say, from 2025 of what we had in MRINetwork has been retained via the contract staffing. You know, there will be a decline from that portion, if that makes any sense. Now, realistically, the perm placement division was, you know, breakeven at best. From an actual income standpoint, the effect will literally be nothing. Should be nothing. David, if you have any more on that.
Speaker #3: Now , realistically , the perm placement division was , you know , was break even at best . So from an actual income standpoint , the effect will literally be nothing should be nothing .
Speaker #3: But David, if you have any more on that.
Speaker #4: Yeah . So , so in 2025 . The executive search portion of MRI contributed about 65 million of system wide sales and just a touch under 2 million for royalties .
David Hartley: Yeah. In 2025, the executive search portion of MRINetwork contributed about $65 million of system-wide sales and just a touch under $2 million for royalties. And like Rick said, from an expense side of things, it was, you know, break even to this past year, slightly down a little bit in terms of profitability. That's kind of what we should see, you know, as things start to normalize in 2026.
David Hartley: Yeah. In 2025, the executive search portion of MRINetwork contributed about $65 million of system-wide sales and just a touch under $2 million for royalties. And like Rick said, from an expense side of things, it was, you know, break even to this past year, slightly down a little bit in terms of profitability. That's kind of what we should see, you know, as things start to normalize in 2026.
Speaker #4: And like Rick said . From an expense side of things , it was , you know , it was it was break even to , you know , to this past year , slightly down a little bit in terms of profitability .
Speaker #4: So , so those are kind of that's , that's kind of what we should see , you know , as things start to normalize in 2026 .
Speaker #3: And of course, we did. And we did the restructuring.
Rick Hermanns: Of course.
Rick Hermanns: Of course.
Kevin Steinke: Okay, thanks.
Kevin Steinke: Okay, thanks.
Kevin Steinke: We did the restructuring for that money.
Rick Hermanns: We did the restructuring for that money.
Kevin Steinke: Okay.
Kevin Steinke: Okay.
Operator: Kevin, do you have an additional question?
Operator: Kevin, do you have an additional question?
Speaker #1: Kevin, do you have an additional question?
Kevin Steinke: Yeah, just quickly, you didn't mention acquisitions or the acquisition pipeline. Just wondering if you had any update there.
Kevin Steinke: Yeah, just quickly, you didn't mention acquisitions or the acquisition pipeline. Just wondering if you had any update there.
Speaker #5: Yeah , just quickly , you didn't mention acquisitions or the acquisition pipeline . Just wondering if you had any update , update there .
Rick Hermanns: Well, thanks for that question. You know, we had, you know, in the middle of Q4, we had one that we were hopeful, and I would have—if you'd have asked me in November, I would have said there's an 85% chance we were gonna, you know, we were gonna close on that thing. And then, you know, they got cold feet. You know, look, again, we're always looking for it. However, you know, clearly we've had a bit of a dry spell in finding any decent ones. And at the end of the day, we're just simply not going to chase a deal, you know, just for the sake of having it. It just doesn't really help us.
Rick Hermanns: Well, thanks for that question. You know, we had, you know, in the middle of Q4, we had one that we were hopeful, and I would have—if you'd have asked me in November, I would have said there's an 85% chance we were gonna, you know, we were gonna close on that thing. And then, you know, they got cold feet. You know, look, again, we're always looking for it. However, you know, clearly we've had a bit of a dry spell in finding any decent ones. And at the end of the day, we're just simply not going to chase a deal, you know, just for the sake of having it. It just doesn't really help us.
Speaker #3: Well , thanks for that question . You know , we , we , we had , you know , in the middle of the fourth quarter , we had one , we had one that we were hopeful and I would have , if you'd have asked me and November , I would have said there's an 85% chance we were going to , you know , we were going to close on that thing .
Speaker #3: And then , you know , they they got cold feet and , you know , they got cold feet . So , you know , look , we're all again , we're always looking for it .
Speaker #3: However , you know , clearly we've had a bit of a dry spell in finding any decent ones and , and a , at the end of the day , we're just simply not going to chase a deal .
Speaker #3: You know , just for the sake of having it . It just doesn't really doesn't really help us . And so I would say what we're finding more , you know , more than what we want is ones with like client concentrations .
Rick Hermanns: I would say what we're finding more, you know, more than what we want is ones with, like, client concentrations. We, you know, we try avoiding those because those are the ones that tend to fall apart when you buy them. You know, we've had probably a bit less activity than really what I would expect because of the, you know, the fact that we've had 3 years of a down market. I would have thought there would be more that are there. The only thing I can say is after doing this for 35 years, it's just when I say that all of a sudden some nice deal will fall in our lap.
Rick Hermanns: I would say what we're finding more, you know, more than what we want is ones with, like, client concentrations. We, you know, we try avoiding those because those are the ones that tend to fall apart when you buy them. You know, we've had probably a bit less activity than really what I would expect because of the, you know, the fact that we've had 3 years of a down market. I would have thought there would be more that are there. The only thing I can say is after doing this for 35 years, it's just when I say that all of a sudden some nice deal will fall in our lap. You know, we're always out there working the phones and trying to get deals. You know, that said, you know, right now we don't have anything right now.
Speaker #3: And so we try to avoid , we , you know , we try avoiding those because those are the ones that tend to fall apart when you , when you buy them .
Speaker #3: And so , you know , we've had probably a bit less activity than really what I would expect because of the , you know , the fact that we've had three years of a , of a down market , I would have thought there would be more that are there , but the only thing I can say is after doing this for 35 years , it's just when I say that , that all of a sudden some nice deal will fall in our lap .
Rick Hermanns: You know, we're always out there working the phones and trying to get deals. You know, that said, you know, right now we don't have anything right now.
Speaker #3: So , you know , we're just we're always out there working , you know , you know , working , you know , working the phones and trying to get deals .
Speaker #3: And so , you know , you know , that said , you know , right now we don't , you know , we don't have anything right now
Speaker #1: Once again , if you have a question or a comment , please indicate . So by pressing star one on your touchtone phone , once again , that's star one .
Operator: Once again, if you have a question or a comment, please indicate so by pressing star one on your touchtone phone. Once again, that's star one if you have a question or a comment. Okay, we currently have no questions in the queue. I'd like to turn the floor back to management for closing remarks.
Operator: Once again, if you have a question or a comment, please indicate so by pressing star one on your touchtone phone. Once again, that's star one if you have a question or a comment. Okay, we currently have no questions in the queue. I'd like to turn the floor back to management for closing remarks.
Speaker #1: If you have a question or a comment, we currently have no questions in the queue. I'd like to turn the floor back to management for closing remarks.
Rick Hermanns: Well, I wanna thank everybody for joining us today. I think that again, the results presented just further our contention that the HireQuest model is a very stable, profit-centered, proven method to be resilient in difficult circumstances. The fact that we went from nearly $7 million of debt to debt-free, for example, in a year that was, you know, really by any macro sense of things was down, you know, again, just indicates sort of the strength of our model. We just thank you for joining us today and look forward to presenting our Q1 results here in, I guess, in about six weeks. Anyway, thank you and have a good day.
Rick Hermanns: Well, I wanna thank everybody for joining us today. I think that again, the results presented just further our contention that the HireQuest model is a very stable, profit-centered, proven method to be resilient in difficult circumstances. The fact that we went from nearly $7 million of debt to debt-free, for example, in a year that was, you know, really by any macro sense of things was down, you know, again, just indicates sort of the strength of our model. We just thank you for joining us today and look forward to presenting our Q1 results here in, I guess, in about six weeks. Anyway, thank you and have a good day.
Speaker #3: I want to thank everybody for joining us today . I think that , again , the results presented just further our contention that the higher quest model is a very stable , profit centered , proven method to be resilient in difficult circumstances .
Speaker #3: The fact that we went from nearly 7 million of debt to to debt free , for example , in a year that was , you know , really by any macro sense , you know , sense of sense of things was down , you know , again , just indicates sort of the strength of our model .
Speaker #3: And so again , we just thank you for joining us today and look forward to presenting our first quarter results here in , I guess , in about six weeks .
Speaker #3: Anyway, thank you and have a good day.
Operator: This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.
Operator: This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.
