Earnings

HireQuest Notes Receivable Write-Down Cuts Third-Quarter Profit

The Tip Desk · November 13, 2026 · 3 min read

The staffing franchisor reported $1.7 million of net income, or $0.12 a share, after a $1.3 million write-down tied to a franchised-location repossession.

HireQuest (HQI), a national franchisor of on-demand staffing and direct-hire recruiting services, reported third-quarter net income of $1.7 million, or $0.12 a share, down from $2.3 million, or $0.16 a share, a year earlier. The company said the decline was primarily attributable to an approximately $1.3 million write-down of notes receivable, primarily related to the repossession of a franchised location, and higher net workers’ compensation expense.

Total revenue was $8.8 million, up 4.0% from $8.5 million in the year-ago quarter. Pro forma for the MRINetwork Assets Divestiture, total revenue increased 11.1%. Franchise royalties were $8.2 million, up 1.5% from $8.1 million a year earlier; pro forma for the divestiture, royalties increased 7.9%. Service revenue was $604,000. The third quarter of 2025 included about $479,000 in franchise royalties and $61,000 in MRINetwork national advertising fund fees within service revenue related to the January 1, 2026 sale of certain HQ MRI Corporation permanent-placement assets.

President and Chief Executive Officer Rick Hermanns said third-quarter results reflected continued momentum across core commercial staffing brands and that improving demand delivered another quarter of year-over-year revenue growth. He said the company believes the improving demand environment seen throughout 2026 positions franchisees well as it closes out the year and looks ahead to 2027.

Selling, general and administrative expenses were $6.1 million, up 20.7% from $5.1 million in the third quarter of 2025. Core SG&A was $4.4 million. Net workers’ compensation expense was approximately $434,000, compared with a net benefit of $99,000 a year earlier. The third quarter of 2025 included about $616,000 in operating expenses related to the MRINetwork Assets Divestiture. Depreciation and amortization was approximately $763,000. Interest and other financing expense was about $35,000.

Adjusted net income was $3.0 million, or $0.22 a share, compared with $3.3 million, or $0.23 a share, a year earlier. Adjusted EBITDA was $4.5 million, consistent with the year-ago third quarter.

System-wide sales were $131.2 million, compared with $133.6 million a year earlier. The company said the decrease was primarily driven by $15.8 million in system-wide sales related to the MRINetwork Assets Divestiture, partially offset by a $7.5 million increase in system-wide sales of HireQuest Direct and a $6.6 million increase at Snelling. Pro forma for the divestiture, system-wide sales increased 11.4%.

Cash was $1.1 million as of September 30, 2026, compared with $3.9 million at December 31, 2025. Total assets were $95.7 million and total liabilities $25.7 million. Working capital was $38.0 million. Assuming continued covenant compliance, availability under the line of credit was approximately $40.5 million based on eligible collateral, less letter of credit reserves, bank product reserves, and current advances.

During the third quarter the company paid a quarterly cash dividend of $0.06 a share, declared on September 1, 2026. It said it intends to pay a $0.06 cash dividend on a quarterly basis, subject to business results, financial position, and board discretion.

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