HireQuest, Inc. (HQI): BCG Matrix [Dec-2025 Updated]

You're looking for the quick map of HireQuest, Inc.'s business units, so here's the distilled view based on late 2025 performance: Day Labor is your Star, growing 6.1% sequentially, while Franchise Royalty cash flow, hitting $8.1 million with a 55% adjusted EBITDA margin, solidly anchors the Cash Cows. However, the Dogs segment, seeing a 9.8% total revenue drop year-over-year, needs attention, and the high-stakes bets in the HireQuest Health vertical and aggressive M&A pipeline define the Question Marks you need to watch closely. Let's break down exactly where HQI is making money and where it needs to invest its capital right now.

Background of HireQuest, Inc. (HQI)

You're looking at HireQuest, Inc. (HQI) as of late 2025, and honestly, the story is one of resilience in a tough market. HireQuest, Inc. is a national franchisor, meaning they don't directly employ most of the workers; they franchise out the business model. They specialize in staffing solutions, covering everything from on-demand labor to executive search across the U.S. and internationally.

The company operates through several key divisions, which is important for our matrix analysis later. These include HireQuest Direct, HireQuest Health, MRINetwork, Snelling Staffing, and TradeCorp. They focus on providing temporary, direct-hire, and contract staffing, primarily serving industries like construction, light industrial, healthcare, and finance.

Let's look at the scale as of mid-2025. As of June 30, 2025, HireQuest, Inc. had about 413 franchisee-owned offices operating across the globe. They support an operation that annually places around 65,000 personnel. The company is headquartered in Goose Creek, South Carolina.

Looking at the most recent numbers-the third quarter of 2025, ending September 30-the top line showed some pressure. Total revenue for Q3 2025 was $8.5 million, which is down 9.8% compared to the same time last year. The bulk of that revenue comes from franchise royalties, which clocked in at $8.1 million for the quarter, while service revenue was a smaller $387,000. System-wide sales, which is the total sales volume across all franchisees, also decreased by 10.1% year-over-year to $133.6 million.

But here's the part that matters for cash flow: profitability held up. HireQuest, Inc. posted a net income of $2.3 million for Q3 2025, a significant turnaround from the net loss they saw a year prior. The CEO noted that segments like temporary staffing and day labor showed particular strength, which helps explain why the core profitability remained solid despite the top-line revenue dip. They are definitely leaning on that franchise model for stability.

HireQuest, Inc. (HQI) - BCG Matrix: Stars

You're looking at the segment of HireQuest, Inc. (HQI) that's showing the most momentum right now, which, based on the BCG framework, is your Star. For HQI, this points directly to the Day Labor/Temporary Staffing operations, which are demonstrating high relative market share in a market that is beginning to show signs of life, even if the year-over-year comparison is still tough.

The key indicator here is the sequential momentum. For the third quarter of 2025, system-wide sales hit $133.6 million. While that's down from $148.6 million in the third quarter of 2024, the sequential jump from the second quarter of 2025 was a strong 6.1%. That sequential increase was noted as being stronger than the prior year's sequential growth of just 1.7%. This is the definition of a Star: a business unit showing strong current growth within a market that is still generally soft.

To be fair, the overall staffing market has been challenging. For instance, the US staffing market was estimated to have declined by 10% during 2024. HQI's own system-wide sales for the nine months ending September 30, 2025, were down 11.9% to $377.9 million. However, the Day Labor/Temporary Staffing component, which CEO Rick Hermanns highlighted as showing particular strength, is the most resilient segment because it's showing that sequential lift, suggesting it's leading the recovery.

Here's a quick look at how the system-wide sales performance stacked up in Q3 2025:

This segment is your strong foundation for growth when demand returns in earnest. The fact that the CEO specifically called out strength in the temporary staffing and day labor segments, while other areas like permanent placement lagged, solidifies its position here. You want to keep investing heavily in this area to maintain that high market share.

The key characteristics supporting the Star categorization for this business unit are:

• Sequential System-wide Sales Growth in Q3 2025: 6.1%.
• Reported Profitability Despite Market Softness: Net Income of $2.3 million in Q3 2025.
• Resilience Versus Industry Trend: Outperformed the overall declining staffing market.
• Strong Operating Leverage: Adjusted EBITDA margin rose to 55% in Q3 2025.

If HQI can sustain this success until the high-growth market for temporary labor fully reaccelerates, this unit is definitely positioned to transition into a Cash Cow. Finance: draft the capital allocation plan prioritizing marketing spend for Day Labor/Temporary Staffing by next Wednesday.

HireQuest, Inc. (HQI) - BCG Matrix: Cash Cows

You're looking at the core engine of HireQuest, Inc. (HQI) here, the business units that generate the necessary cash to fund the rest of the portfolio. These Cash Cows operate in mature segments of the staffing market but maintain a dominant share, which translates directly to superior financial performance.

The franchise royalty stream is the clearest indicator of this strength. For the third quarter of 2025, Franchise Royalty revenue, which is the primary source of HireQuest, Inc. (HQI) top line, was reported at $8.1 million. This revenue supports the entire corporate structure, and it comes with an incredibly lean operational footprint because of the franchisor model.

The profitability of this model is what makes it a true Cash Cow. HireQuest, Inc. (HQI) posted an Adjusted EBITDA margin of 55% for the third quarter of 2025. That margin is what allows the company to maintain operations without heavy reinvestment into the core business itself. Here's a quick look at the key Q3 2025 figures that define this cash-generating unit:

Because HireQuest, Inc. (HQI) operates primarily as a franchisor, the capital expenditure model is inherently low. You don't need massive plant and equipment upgrades to support franchise royalty collection, which helps keep cash consumption down. This structure is precisely why the company can afford to return capital consistently to shareholders.

The commitment to shareholders is evident in the dividend policy. HireQuest, Inc. (HQI) has maintained a consistent quarterly cash dividend of $0.06 per share, a policy that has been in place since 2020. This payout is a direct result of the reliable, high-margin cash flow generated by these mature, high-share business units.

The Cash Cow segment's primary characteristics for HireQuest, Inc. (HQI) include:

• Franchise royalties are the primary revenue source.
• Adjusted EBITDA margin reached 55% in Q3 2025.
• Quarterly dividend of $0.06 per share is sustained.
• Model requires low capital expenditure.

To maintain this position, the focus isn't on aggressive growth spending but on efficiency. Investments are targeted at supporting infrastructure that can further streamline franchise operations and potentially increase the cash flow extracted from the existing market share base. Finance: draft 13-week cash view by Friday.

HireQuest, Inc. (HQI) - BCG Matrix: Dogs

Dogs are units or products with a low market share and low growth rates. They frequently break even, neither earning nor consuming much cash. Dogs are generally considered cash traps because businesses have money tied up in them, even though they bring back almost nothing in return. These business units are prime candidates for divestiture. Expensive turn-around plans usually do not help; honestly, you should look to minimize exposure here.

The segment most closely aligning with the Dogs quadrant for HireQuest, Inc. (HQI) appears to be the executive search and permanent placement business, primarily represented by the MRINetwork brand. This area has seen persistent weakness, which is characteristic of a low-growth, low-share position that isn't generating significant cash flow to justify continued heavy investment.

Here's the quick math on the top-line performance for the third quarter of 2025, which clearly shows the pressure on the overall revenue base:

The data clearly shows that the overall revenue stream contracted significantly. Franchise royalties, the primary revenue driver, fell by 10.0% year-over-year, while the smaller service revenue component also saw a notable drop.

The specific issues plaguing the permanent placement and executive search operations point directly to the Dog classification:

• Total revenue decline of 9.8% year-over-year in Q3 2025.
• Executive search and permanent placement (MRINetwork) experienced a sharp, protracted downturn.
• Service revenue, a minor component, decreased 9.6% to $387,000 in Q3 2025.
• Franchisees not renewing agreements, specifically impacting the MRINetwork brand.

The impact of franchisees not renewing agreements is a critical factor here. Chairman Hermanns directly cited the negative revenue impact from several MRINetwork franchisees choosing not to renew their franchise agreements over the past few quarters, contributing to year-over-year declines in that segment. This suggests a low-growth market for that specific service line combined with a loss of market share due to franchisee attrition.

Further context on the low-growth/low-share environment for this business mix comes from system-wide sales, which are a key indicator of franchisee activity, even though they aren't reported as HireQuest, Inc. (HQI) revenue. System-wide sales for the third quarter decreased 10.1% to $133.6 million compared to $148.6 million for the third quarter of 2024. While temporary and day labor showed some sequential strength, the permanent placement and MRINetwork business faced these ongoing headwinds. The management noted that active office declines had 'leveled out by the end of the third quarter,' which might suggest the bleeding has stopped, but it doesn't imply a strong growth trajectory is imminent.

You need to watch the MRINetwork segment closely. If expensive turn-around plans don't materialize into renewed franchise commitments, divestiture becomes the logical next step to free up corporate resources.

Finance: draft a sensitivity analysis on the impact of a further 5% drop in MRINetwork royalty contribution for Q4 2025 by Friday.

HireQuest, Inc. (HQI) - BCG Matrix: Question Marks

The Question Marks quadrant represents business units operating in high-growth markets but currently holding a low market share. For HireQuest, Inc. (HQI), the HireQuest Health vertical fits this profile, positioned within the rapidly expanding healthcare staffing industry.

The broader staffing market context supports the high-growth designation. The US staffing market is expected to see a cumulative growth of 10% between 2025 and 2030. More specifically, the healthcare and life sciences vertical is forecast to expand at a 9.15% CAGR between 2025-2030. The global locum tenens staffing market, a related segment, is projected to grow at a 7.6% CAGR from 2025 to 2030.

These units require significant cash investment to capture market share quickly, often through strategic deployment of capital. HireQuest, Inc. (HQI) management has explicitly stated a focus on pursuing M&A opportunities to expand geographic footprint and market verticals. The company has historically completed over $77 million of acquisitions since the Command Center merger. To fund such growth strategies, the company reported an available credit capacity of approximately $42.5 million as of September 30, 2025, with a noted credit facility of $35.9 million available in the second quarter of 2025. Despite this capacity, the cash position was tight, with cash on hand reported at $1.1 million as of September 30, 2025.

The need for heavy investment to gain share is underscored by the high-investment, low-return nature of Question Marks, which can manifest as high operating costs or transaction expenses relative to immediate revenue contribution. The pursuit of geographic expansion into new markets is inherently a low-share, high-investment strategy, requiring upfront capital before market penetration yields significant royalty streams.

The recent financial performance across the consolidated entity, which includes this segment, shows top-line contraction, reflecting the investment drain or market softness, while profitability remains a focus. Here's a quick look at the recent revenue and profitability metrics:

The strategy for these Question Marks involves either heavy investment to rapidly convert them into Stars or divestment if potential is deemed insufficient. The company's focus on M&A suggests an active pursuit of growth through acquisition, which is a direct investment strategy aimed at increasing market share in target verticals like healthcare.

Key strategic focus areas that consume cash and represent potential Question Marks include:

• HireQuest Health vertical, operating in a high-growth industry with a projected 9.15% CAGR.
• Aggressive M&A pipeline focus, requiring capital deployment for value-accretive transactions.
• Geographic expansion into new, lower-share markets, demanding investment in new franchise development or acquisition integration.