• Total Revenue (Q4 2024): $8.1 million, a decrease of 17.2% from $9.8 million in Q4 2023.
• Total Revenue (Full Year 2024): $34.6 million, down from $37.9 million in 2023.
• Franchise Royalties (Q4 2024): $7.6 million, compared to $8.9 million in Q4 2023.
• Franchise Royalties (Full Year 2024): $32.7 million, compared to $35.8 million in 2023.
• System-wide Sales (Q4 2024): $134.8 million, down from $143.5 million in Q4 2023.
• System-wide Sales (Full Year 2024): $563.6 million, compared to $605.1 million in 2023.
• Service Revenue (Q4 2024): $439,000, compared to $871,000 in Q4 2023.
• Service Revenue (Full Year 2024): $1.9 million, compared to $2.1 million in 2023.
• SG&A Expenses (Q4 2024): $5.1 million, a decrease of 22.7% from $6.6 million in Q4 2023.
• SG&A Expenses (Full Year 2024): $21.4 million, down 12.4% from $24.4 million in 2023.
• Net Income (Q4 2024): $2.2 million or $0.16 per diluted share, compared to $15,000 or zero earnings per share in Q4 2023.
• Net Income (Full Year 2024): $3.7 million or $0.26 per diluted share, compared to $6.1 million or $0.45 per diluted share in 2023.
• Adjusted Net Income (Q4 2024): $2.6 million or $0.19 per diluted share, compared to $2.5 million or $0.18 per diluted share in Q4 2023.
• Adjusted Net Income (Full Year 2024): $9.9 million or $0.71 per diluted share, compared to $9.9 million or $0.72 per diluted share in 2023.
• Adjusted EBITDA (Q4 2024): $3.8 million, with a margin of 47%.
• Adjusted EBITDA (Full Year 2024): $16.1 million, with a margin of 47%.
• Current Assets (Dec 31, 2024): $49.2 million, compared to $51.5 million at Dec 31, 2023.
• Cash (Dec 31, 2024): $2.2 million, compared to $1.3 million at Dec 31, 2023.
• Net Accounts Receivable (Dec 31, 2024): $42.3 million, compared to $44.4 million at Dec 31, 2023.
• Credit Facility Drawn (Dec 31, 2024): $6.8 million, with $33.4 million in availability.

• Warning! GuruFocus has detected 4 Warning Sign with HQI.

Release Date: March 27, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• HireQuest Inc (NASDAQ:HQI) achieved profitability in the fourth quarter of 2024, supported by total revenues of $8.1 million.
• The company reported a significant reduction in SG&A expenses, with a 22.7% decline in the fourth quarter compared to the previous year.
• Workers' compensation expenses decreased by approximately 46% in 2024, contributing positively to the company's financial performance.
• HireQuest Inc (NASDAQ:HQI) remains active in mergers and acquisitions, identifying and acquiring businesses to expand its staffing footprint.
• The company has maintained a regular quarterly dividend since the third quarter of 2020, demonstrating a commitment to returning value to shareholders.

Negative Points

• Total revenue for the fourth quarter of 2024 decreased by 17.2% compared to the same quarter last year, reflecting a challenging market environment.
• The MRINetwork segment underperformed, with an 18.6% decline in permanent placement and executive search business compared to 2023.
• The overall staffing market softened throughout 2024, impacting HireQuest Inc (NASDAQ:HQI)'s revenue and system-wide sales.
• Temporary staffing and day labor demand were affected by relaxed immigration policies, reducing the need for documented workers.
• The company experienced a non-cash impairment charge of $6 million related to MRINetwork assets, impacting profitability.

Q & A Highlights

Q: Can you discuss the current demand environment and any changes since the third quarter of 2024? A: Richard Hermanns, CEO: At the beginning of the fourth quarter, our numbers were strong, but demand softened in December, partly due to the holiday schedule. The tariff discussions have also impacted demand. While the first quarter hasn't shown much improvement, recent weeks have seen some positive changes. The market remains uncertain, but we are hopeful for improvement.

Q: What changes have you made at MRINetwork to position it for future demand? A: Richard Hermanns, CEO: We have streamlined operations by combining departments, such as training, across different segments to drive efficiencies. This reorganization aims to better position us for when demand for permanent placement and executive search services returns.

Q: Are there more acquisition opportunities in the current market environment? A: Richard Hermanns, CEO: There are always opportunities, and pricing is becoming more reasonable due to the prolonged downturn in the staffing industry. We completed a small acquisition at the end of the year, which has been beneficial. We are actively engaged with several potential acquisitions, and we expect to find more opportunities as pricing expectations adjust.

Q: Can you provide more insight into the reduction in workers' compensation expenses and expectations for 2025? A: Richard Hermanns, CEO: Workers' compensation expenses have decreased significantly due to improved claims data and higher rates. We expect further reductions in 2025, potentially returning to a neutral impact on income. The improvements are based on better accident trends and more adequate rates.

Q: Are there specific industries or sectors showing weakness in temporary staffing and day labor? A: Richard Hermanns, CEO: Construction has leveled off, while manufacturing and warehousing remain weak. Although the declines in staffing are not as pronounced as in executive search, the industrial sectors are still experiencing some softness.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.