HireQuest Q2 Earnings: Reshoring, Tariff Clarity Revive Growth

A staffing franchisor returns to growth

HireQuest spent most of the past two years reporting results that tracked a weak market for temporary labor. Its second-quarter 2026 report was the first in a while to break from that pattern. Total revenue was $8.1 million, up 6% from $7.6 million a year earlier, and this was the company's first year-over-year revenue increase since the third quarter of 2024.7 The headline growth figure understates the improvement. The year-ago quarter included about $690,000 of revenue from MRINetwork assets that HireQuest sold at the start of 2026. Excluding that business, revenue rose 16.6%.715

Profit grew faster than revenue. Net income more than doubled to $2.7 million, or $0.19 per diluted share, from $1.1 million, or $0.08. Adjusted EBITDA rose to $4.6 million from $3.3 million.15 Selling, general and administrative expense fell 31.9% to $4.0 million. Coverage of the call credited two things: lower legal fees and the MRI divestiture.11 Last year's second quarter carried heavy legal costs from HireQuest's attempted takeover of TrueBlue. Management said there was no single cost-cutting fix behind the drop. Instead, it described the company recovering the scale advantages it lost during roughly three years of a stagnant market.7

For a site focused on supply chains and trade policy, the financial turnaround is not the main point. What matters more is how management explained the recovery. It pointed to manufacturing reshoring and to a tariff environment that, in its words, customers have now largely priced in.

Reshoring: a modest tailwind, not a big one

The company gave three reasons for the rebound: changes in federal immigration policy, stronger demand for manufacturing labor, and early results from its investment in a national accounts program.5 The manufacturing piece shows up in one specific number. Revenue at franchisees of Snelling, the company's brand, rose about 15% year over year, which summaries of the call linked to strength in manufacturing hiring.11

When an analyst asked whether reshoring was helping, CEO Rick Hermanns said yes, but qualified it. He noted that automation and other technology are still removing existing manufacturing jobs from the staffing industry. Reshoring, in his view, is mainly replacing work that would otherwise have disappeared.7 He also made clear he did not see reshoring as a huge force driving the business forward. He described it as a partial offset to erosion.5

That caution is the most useful part of the call. A lot of corporate commentary treats reshoring as an obvious boom. Hermanns described something closer to a net-zero exchange on the factory floor, where new domestic capacity hires workers while older plants automate. For a staffing company that fills general-labor jobs, the result is stable demand rather than a surge. The 15% gain at Snelling franchisees suggests the offset is currently running in HireQuest's favor. The CEO's own wording, though, is a reason to be skeptical of any forecast that assumes reshoring keeps lifting results quarter after quarter.

He also discounted another popular explanation. Hermanns said data centers have mattered less than reshoring. More generally, he said employers are coming back to temporary staffing.15 He called Texas a standout market but said growth had spread more widely across regions than in the past four or five years, when it was concentrated in a few places.7

Tariffs: certainty mattered more than any deal

The trade angle came up only in a brief closing comment, and different reports summarized it slightly differently. Hermanns said tariffs had created considerable uncertainty the previous year, but that tariffs had since become built into corporate decision-making, and that this had helped the company.7 One summary went further, saying the more stable tariff environment had let clients make firmer hiring decisions and had contributed to higher demand.11 Another described tariff uncertainty as having eased.

Those descriptions are close, but they are not identical. "Baked in" means businesses have accepted a set of trade costs and moved ahead with plans. "Subsided" suggests the trade picture itself has improved. HireQuest's actual comments support the first reading. Hermanns did not cite any particular trade agreement, tariff cut, or policy change. He said employers had adjusted. One independent review of the call reached the same conclusion: tariffs got little attention, and management did not discuss any direct effect on HireQuest's costs, pricing, or margins. That fits a franchisor whose exposure comes through its customers' hiring decisions, not through imported goods.13

The practical takeaway is that predictability helped more than any specific trade terms. If manufacturers know what their input costs will be, even high costs, they can approve investments and hire for them. A staffing franchisor like HireQuest sits right where those hiring decisions turn into revenue. This also matches the company's forecast from late 2025, when it said reshoring and early signs of tariff relief were driving manufacturing and construction demand. It also listed tariffs and new federal legislation as wildcards that could still affect activity. The second-quarter results suggest the wildcard has become less of a drag. They do not show that trade policy has become a source of growth on its own.

Momentum during the quarter

The strongest evidence for a real recovery is how growth built over the quarter. Ongoing operations were running about 2% to 4% ahead of the prior year early in the period and reached roughly 12% to 13% in some late-quarter weeks.7 Reports attribute that comment to different executives. Some credit CFO David Hartley2, while others assign it to Hermanns715. The numbers are the same in every version. Management also said the faster pace had continued through the first six weeks of the third quarter.2

One analysis argued that the call was considerably more upbeat than the press release, because the quarterly totals do not show the acceleration within the quarter.13 That seems right. The same review noted how much the tone had changed: in the prior quarter, revenue fell 12% and manufacturing demand was still weak.13 Going from that to double-digit weekly growth in one quarter is a big change for a business tied this closely to the economic cycle.

Management also pointed to operating changes. A new recruiting app lets franchisees fill orders in areas where they have no branch. The first example is a short-term job in Upstate New York needing about 100 workers a day for roughly six weeks.7 Hermanns added that the national accounts pipeline holds more pending opportunities than at-risk ones.7

What the numbers don't show yet

There are reasons for caution, and some of the reporting highlights them. Reported system-wide sales fell to $117.8 million from $125.9 million, mainly because of the $17.7 million contributed by the divested MRI assets a year earlier. Underlying growth was 6.9% on a pro forma basis.11 One summary listed that decline as a negative and called the pro forma growth only modest. Year-to-date revenue was $14.6 million, still below $15.1 million for the first half of 2025.4 Cash fell to $1.6 million from $3.9 million at year-end, while net accounts receivable rose to $48.9 million from $39.3 million.11 That is normal for a franchisor that finances franchisee receivables as volume grows, but it means growth uses working capital. HireQuest has $41.0 million available on its credit facility and no debt, so it has room to absorb that.

Management was also careful not to promise too much. Hermanns said he could not predict the fourth quarter or early next year, and noted that the industry still depends on immigration and the broader economy.7 The company does not give formal guidance.7

The bottom line

Overall, this looks like a real cyclical recovery in which trade policy and reshoring help at the margins rather than drive the story. The largest share of the quarter's gains came from lower costs, the MRI divestiture, and temporary labor demand returning across the market. Reshoring is helping offset automation in factory jobs, and the tariff regime has settled into something employers can plan around. For readers following the reshoring trend, HireQuest offers a ground-level view: domestic manufacturing investment is producing actual hiring orders, but the CEO describes it as a partial offset to automation, not a broad boom.