HireQuest’s Q2 2026 net income increased 154% to $2.69 million from $1.06 million, even as underlying system-wide sales declined 6.4% to $117.8 million from $125.9 million, as lower corporate expenses and growth at several continuing franchise brands more than offset the effect of a divested business.
Reported revenue increased approximately 6% to $8.1 million from $7.6 million. Franchise royalty revenue rose 4.1% to $7.59 million, supported by higher sales at HireQuest Direct and Snelling.
The decline in system-wide sales was heavily influenced by the January 2026 divestiture of certain assets and liabilities associated with the MRINetwork permanent-placement franchise base. That transaction removed approximately $17.7 million of comparable system-wide sales from the quarter.
Growth elsewhere partly replaced that volume. Snelling system-wide sales increased by approximately $5.2 million, while HireQuest Direct added another $5.1 million. Franchise royalties from HireQuest Direct increased to $3.87 million from $3.47 million, while Snelling and HireQuest royalties increased to $2.39 million from $2.03 million.
Operating leverage was substantial. Selling, general and administrative expenses declined to $3.99 million from $5.86 million, while income from operations more than tripled to $3.34 million from $1.04 million. Net income before taxes increased to $3.44 million from $1.13 million.
Adjusted EBITDA increased 41.7% to $4.61 million from $3.26 million. Adjusted EBITDA represented 57% of reported revenue compared with 42.6% in the prior-year quarter, although the measure excludes several items that management considers non-operating or non-recurring.
The cash-flow picture was less favorable than the earnings improvement. For the first six months, net income increased to $4.25 million from $2.42 million, but cash provided by continuing operations fell to $1.92 million from $4.50 million.
Accounts receivable was the major source of that divergence. Receivables increased to $48.86 million at June 30 from $39.28 million at year-end, and the increase in accounts receivable consumed approximately $9.64 million of operating cash during the first half.
HireQuest’s business model exposes the company directly to franchisee customer receivables because it provides working-capital funding and other administrative services to franchisees. Its service revenue also includes interest charged to franchisees when customer receivables become overdue, making the receivable balance an important operating and liquidity metric.
The company continued returning capital despite lower operating cash flow. During the first half, HireQuest spent approximately $2.4 million repurchasing shares and $1.7 million paying dividends, contributing to $4.1 million of financing cash outflow. Cash declined to $1.64 million from $3.90 million at year-end.
HireQuest still had approximately $41 million of availability under its Bank of America senior credit facility at June 30, subject to eligible collateral, reserves and continued covenant compliance. The facility carries a maximum commitment of $50 million, with an option to increase it to $60 million.
The quarter therefore shows a notable separation between operating profitability and headline system-wide sales. HireQuest generated substantially more income from a smaller system-wide sales base, but the sharp increase in receivables meant that the improvement did not translate proportionately into operating cash flow.
