Management divested the permanent placement arm of MRI Network to a franchise-led entity to better align leadership with owner-operators during a period of slowed executive search demand.

The company retained full ownership of MRI's contract staffing business, which more closely aligns with HireQuest's core franchise model and operational expertise.

Performance in 2025 was impacted by a challenging macro environment for staffing, though the company remained profitable and eliminated its outstanding debt.

A survey of 400 offices indicates the labor market is stabilizing, characterized by steadier 'time to fill' metrics and a reduction in extreme hiring volatility.

Management attributes the shift in hiring priorities to a focus on flexibility, cultural fit, and skilled labor roles that are resistant to AI automation.

The company implemented a $20 million share repurchase program, citing confidence in long-term strategy and a belief that the stock represents an efficient use of capital.

Management expects 2026 to be a year of balance rather than a boom or bust, following three years of steady industry decline.

The hiring landscape in 2026 is expected to be shaped by macro forces including AI integration, reshoring initiatives, and potential tariff relief.

The company anticipates that candidate supply will continue to normalize, with 15% of recruiters expecting further improvements in time-to-fill metrics.

HireQuest remains committed to its franchise model, positioned to benefit from stabilizing markets and shifting employer demands for specialized labor.

The company intends to continue its quarterly dividend policy, supported by a debt-free balance sheet and $40.3 million in available credit.

Workers' compensation expense was reduced to $89,000 for the full year from $2 million in 2024, returning to historical levels through improved management.

The MRI divestiture is expected to reduce system-wide sales and royalties but will have a negligible impact on net income as the unit was operating at breakeven.

Management noted a 'dry spell' in the M&A pipeline, citing a refusal to pursue deals with high client concentration risks despite having significant capital available.

The Snelling brand celebrated 75 years of operation, highlighting its long-term stability within the broader HireQuest portfolio.

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CEO Rick Hermanns noted that stabilization is apparent across all divisions rather than being pronounced in one specific brand.

Management expressed optimism that the market has 'found its bottom' after a multi-year downturn, though they cautioned against expecting an immediate boom.

The divested executive search portion contributed approximately $65 million in system-wide sales and nearly $2 million in royalties in 2025.

HireQuest retained approximately 35% to 40% of MRI's previous business through the contract staffing segment.

Management revealed a potential deal fell through in late 2024 after the seller 'got cold feet.'

The company is actively 'working the phones' but remains disciplined, avoiding acquisitions that do not meet their criteria for client diversification.

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