Key Highlights

  • Third quarter 2026 total Revenue rose 4.0% to $8.8 million from $8.5 million.
  • Franchise royalties reached $8.2 million, an increase of 1.5% year over year.
  • Net income was $1.7 million, or $0.12 per diluted share, compared with $2.3 million a year earlier.
  • SG&A expenses increased 20.7% to $6.1 million for the quarter.

HireQuest (NASDAQ:HQI) reported financial results for the third quarter ended September 30, 2026, on November 12, 2026. The Goose Creek, South Carolina company is a franchisor of on-demand staffing and direct-hire recruiting services. Total revenue grew modestly from a year earlier, while Net Income declined. The company's results were affected by the January 2026 divestiture of certain permanent Placement Franchise assets, which it said makes year-over-year comparisons difficult without adjustment.

Franchise Royalties and Revenue Trends

Franchise royalties in the third quarter were $8.2 million, compared with $8.1 million in the prior-year period. Service revenue increased to $604,000 from $387,000. The third quarter of 2025 included approximately $479,000 in franchise royalties and $61,000 in national Advertising fund fees tied to the MRINetwork Assets Divestiture, which took effect on January 1, 2026.

Total revenue for the quarter was $8.8 million, up 4.0% from $8.5 million. Adjusted for the divestiture, the company reported that franchise royalties increased 7.9% and total revenue increased 11.1% year over year. The company's presentation of pro forma figures alongside reported results allows readers to see the effect of the divested Business on the comparison.

Expenses and Profitability

Selling, general and administrative expenses rose to $6.1 million in the third quarter from $5.1 million in the third quarter of 2025, an increase of 20.7%. The summary does not itemize the increase, so the drivers of the higher overhead cost are not separately identified in the headline section of the release.

Net income for the quarter was $1.7 million, or $0.12 per diluted share, compared with $2.3 million, or $0.16 per diluted share, a year earlier. Adjusted net income was $3.0 million, or $0.22 per diluted share, compared with $3.3 million, or $0.23 per share. For the first nine months of 2026, net income totaled $5.9 million, or $0.43 per diluted share, compared with $4.7 million, or $0.34 per share in the same period of 2025.

Management Commentary and Balance Sheet

Chief Executive Rick Hermanns said the quarter reflected continued Demand improvement across the company's commercial staffing brands, with another quarter of year-over-year revenue growth. He said franchisees are benefiting from a labor market that has been improving through 2026, and that the company is focused on disciplined Capital allocation as it works toward consistently profitable results.

Hermanns also said the company has ample liquidity, and the release describes a Balance Sheet with capacity to support its planned operations. The company did not provide specific guidance for the fourth quarter or 2027 in its summary, and it said its outlook depends on demand conditions across the franchise network.

Final Word

The third quarter shows HireQuest with higher total revenue and franchise royalties on a pro forma basis, alongside a lower net income and higher overhead costs than a year earlier. Management has tied its outlook to continued demand improvement and to the performance of its franchisees, while the company's reported figures include the effect of the MRINetwork divestiture. The fourth-quarter results and any updates on operating costs will show whether the revenue trend persists.