HQI Q2 2026 - Preliminary Earnings Alert
Event: Quartr Q2 2026 event Retrieved: 2026-08-10T23:00:00Z Comparison mode: maximal Scorecard contract: v1 Source status: release=available (earnings release 3688576) | financials=earnings release only | transcript=available and complete (call 2026-08-10 20:30Z)
Consensus scorecard
| Metric / basis | Quartr actual | API Ninjas consensus | Beat/Miss | Beat/Miss % |
|---|---|---|---|---|
| Revenue / consolidated total revenue | $8.099m | $7.100m | Beat +$0.999m | +14.1% |
| EPS / adjusted diluted | $0.23 | $0.13 | Beat +$0.10 | +76.9% |
- Consensus scorecard, bulleted equivalent:
- Revenue / consolidated total revenue: Quartr actual $8.099m against API Ninjas consensus $7.100m - Beat +$0.999m, +14.1%.
- EPS / adjusted diluted: Quartr actual $0.23 against API Ninjas consensus $0.13 - Beat +$0.10, +76.9%.
Reported results and guidance
| Metric ($000s except per share) | Q2 2026 | Q2 2025 | Change |
|---|---|---|---|
| Franchise royalties | $7,586 | $7,284 | +4.1% |
| Service revenue | $513 | $354 | +44.9% |
| Total revenue | $8,099 | $7,638 | +6.0% |
| Selling, general and administrative expenses | $3,994 | $5,861 | −31.9% |
| Depreciation and amortization | $762 | $734 | +3.8% |
| Income from operations | $3,343 | $1,043 | +220.5% |
| Other miscellaneous income | $5 | $28 | −82.1% |
| Interest income | $118 | $129 | −8.5% |
| Interest and other financing expense | $(30) | $(71) | −57.7% |
| Net income before income taxes | $3,436 | $1,129 | +204.3% |
| Provision for income taxes | $684 | $56 | +1,121% |
| Net income from continuing operations | $2,752 | $1,073 | +156.5% |
| Loss from discontinued operations, net of tax | $(60) | $(13) | wider loss |
| Net income | $2,692 | $1,060 | +153.96% |
| EPS, basic (total) | $0.20 | $0.08 | +150.0% |
| EPS, diluted (total) | $0.19 | $0.08 | +137.5% |
| Adjusted net income (non-GAAP) | $3,200 | $2,100 | +52.4% |
| Adjusted diluted EPS (non-GAAP) | $0.23 | $0.15 | +53.3% |
| Adjusted EBITDA (non-GAAP) | $4,600 | $3,300 | +39.4% |
| Weighted average shares, basic | 13,786 | 13,938 | −1.1% |
| Weighted average shares, diluted | 13,810 | 13,990 | −1.3% |
| System-wide sales | $117,800 | $125,900 | −6.4% |
| Workers' compensation expense | $39 | $127 | −69.3% |
- Q2 income statement, bulleted equivalent (Q2 2026 vs Q2 2025): franchise royalties $7,586k vs $7,284k (+4.1%); service revenue $513k vs $354k (+44.9%); total revenue $8,099k vs $7,638k (+6.0%); selling, general and administrative expenses $3,994k vs $5,861k (−31.9%); depreciation and amortization $762k vs $734k; income from operations $3,343k vs $1,043k (+220.5%); other miscellaneous income $5k vs $28k; interest income $118k vs $129k; interest and other financing expense $(30)k vs $(71)k; net income before income taxes $3,436k vs $1,129k; provision for income taxes $684k vs $56k; net income from continuing operations $2,752k vs $1,073k; loss from discontinued operations $(60)k vs $(13)k; net income $2,692k vs $1,060k; basic EPS $0.20 vs $0.08 and diluted EPS $0.19 vs $0.08; adjusted net income $3.2m vs $2.1m at $0.23 vs $0.15 per diluted share; adjusted EBITDA $4.6m vs $3.3m; weighted average basic shares 13,786k vs 13,938k and diluted 13,810k vs 13,990k; system-wide sales $117.8m vs $125.9m; workers' compensation expense $39k vs $127k.
| Pro forma for the MRINetwork Assets Divestiture | Q2 2026 growth | 6M 2026 growth |
|---|---|---|
| Franchise royalties | +13.8% | +4.0% |
| Total revenue | +16.6% | +5.6% |
| System-wide sales | +6.9% | +3.6% |
- Pro forma detail, bulleted equivalent: the MRINetwork Assets Divestiture closed January 1, 2026 and removed the permanent placement franchisee base of HQ MRI Corporation. Q2 2025 included approximately $620k of franchise royalties, $70k of service revenue, $633k of SG&A expense and $17.7m of system-wide sales tied to those assets; the six months ended June 30, 2025 comparison includes $1.1m of franchise royalties, $144k of service revenue, $1.3m of SG&A and $33.7m of system-wide sales. Excluding those amounts, franchise royalties rose 13.8% in the quarter and 4.0% year to date, total revenue rose 16.6% and 5.6%, and system-wide sales rose 6.9% and 3.6%.
| Six-month item ($000s except per share) | 6M 2026 | 6M 2025 | Change |
|---|---|---|---|
| Franchise royalties | $13,647 | $14,245 | −4.2% |
| Service revenue | $975 | $866 | +12.6% |
| Total revenue | $14,622 | $15,111 | −3.2% |
| Selling, general and administrative expenses | $8,263 | $11,117 | −25.7% |
| Depreciation and amortization | $1,540 | $1,469 | +4.8% |
| Income from operations | $4,819 | $2,525 | +90.9% |
| Gain on divestiture | $248 | - | new |
| Interest and other financing expense | $(38) | $(214) | −82.2% |
| Net income before income taxes | $5,269 | $2,732 | +92.9% |
| Provision for income taxes | $948 | $224 | +323.2% |
| Net income | $4,252 | $2,423 | +75.5% |
| EPS, basic and diluted (total) | $0.31 | $0.17 | +82.4% |
| Adjusted net income (non-GAAP) | $5,100 | $3,900 | +30.8% |
| Adjusted diluted EPS (non-GAAP) | $0.37 | $0.28 | +32.1% |
| Adjusted EBITDA (non-GAAP) | $7,300 | $6,100 | +19.7% |
| System-wide sales | $220,400 | $244,300 | −9.8% |
- Six-month results, bulleted equivalent (6M 2026 vs 6M 2025): franchise royalties $13,647k vs $14,245k (−4.2%); service revenue $975k vs $866k (+12.6%); total revenue $14,622k vs $15,111k (−3.2%); SG&A $8,263k vs $11,117k (−25.7%); depreciation and amortization $1,540k vs $1,469k; income from operations $4,819k vs $2,525k (+90.9%); gain on divestiture $248k against none in the prior year; interest and other financing expense $(38)k vs $(214)k; net income before income taxes $5,269k vs $2,732k; provision for income taxes $948k vs $224k; net income $4,252k vs $2,423k (+75.5%); basic and diluted EPS $0.31 vs $0.17; adjusted net income $5.1m vs $3.9m at $0.37 vs $0.28 per diluted share; adjusted EBITDA $7.3m vs $6.1m; system-wide sales $220.4m vs $244.3m (−9.8%).
| Balance sheet ($000s) | June 30, 2026 | December 31, 2025 |
|---|---|---|
| Cash | $1,640 | $3,895 |
| Accounts receivable, net | $48,856 | $39,281 |
| Total current assets | $55,335 | $48,346 |
| Franchise agreements, net | $16,336 | $17,242 |
| Total assets | $93,371 | $88,227 |
| Due to franchisees | $11,602 | $7,004 |
| Total current liabilities | $20,228 | $15,348 |
| Total liabilities | $24,515 | $19,906 |
| Retained earnings | $31,238 | $31,231 |
| Total stockholders' equity | $68,856 | $68,321 |
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Balance sheet, bulleted equivalent (June 30, 2026 vs December 31, 2025): cash $1,640k vs $3,895k; accounts receivable, net $48,856k vs $39,281k; total current assets $55,335k vs $48,346k; franchise agreements, net $16,336k vs $17,242k; total assets $93,371k vs $88,227k; due to franchisees $11,602k vs $7,004k; total current liabilities $20,228k vs $15,348k; total liabilities $24,515k vs $19,906k; retained earnings $31,238k vs $31,231k; total stockholders' equity $68,856k vs $68,321k. Working capital was $35.1m against $33.0m, and availability under the line of credit was approximately $41.0m as of June 30, 2026, assuming continued covenant compliance.
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Guidance: the release contains no revenue, margin or earnings guidance. The only forward commitments are the stated intention to pay a $0.06 quarterly cash dividend, subject to board discretion, and management's qualitative statement that franchisees are well positioned to capture demand as market conditions improve.
Key bullish aspects
- Total revenue of $8.099m beat the API Ninjas consensus of $7.100m by $0.999m, or 14.1%, and adjusted diluted EPS of $0.23 beat the $0.13 consensus by $0.10, or 76.9%.
- Income from operations rose 220.5% to $3,343k on revenue growth of 6.0%, because SG&A fell 31.9% to $3,994k while revenue rose. Operating margin moved to 41.3% from 13.7%.
- Adjusted EBITDA rose 39.4% to $4.6m and adjusted net income rose 52.4% to $3.2m, so the improvement holds on the company's own non-GAAP measures, not only on GAAP.
- Excluding the MRINetwork Assets Divestiture, the underlying business grew considerably faster than the headline: franchise royalties up 13.8%, total revenue up 16.6% and system-wide sales up 6.9% in the quarter.
- Management describes a stabilizing job market and recovering demand for temporary staffing, and the divested business was the permanent placement franchisee base, so the remaining mix is the one management says is recovering.
- Service revenue grew 44.9% to $513k in the quarter and 12.6% to $975k year to date, despite the divestiture removing $70k of Q2 2025 service revenue.
- Workers' compensation expense fell 69.3% to approximately $39k, and interest and other financing expense fell 57.7% to approximately $30k.
- The balance sheet carries approximately $41.0m of line of credit availability against $24.515m of total liabilities, and working capital rose to $35.1m from $33.0m.
- Diluted share count fell 1.3% year over year to 13,810k, and treasury stock was retired to zero from 48,849 shares.
Key bearish aspects
- On a reported basis the six-month picture is still contraction: total revenue fell 3.2% to $14,622k and franchise royalties fell 4.2% to $13,647k. System-wide sales fell 9.8% year to date and 6.4% in the quarter.
- System-wide sales of $117.8m fell $8.1m year over year while the divestiture accounted for $17.7m, meaning the retained system grew roughly $9.6m; the release presents this as +6.9% pro forma but the absolute system-wide figure is still down.
- Cash fell to $1,640k from $3,895k at December 31, 2025, a 57.9% decline over six months, leaving the company reliant on the credit facility for liquidity.
- Accounts receivable rose 24.4% to $48,856k over six months while six-month revenue fell 3.2%, and receivables are now 52.3% of total assets against total revenue of $14.6m for the half.
- Due to franchisees rose 65.6% to $11,602k and total current liabilities rose 31.8% to $20,228k over the six months, driving total liabilities up 23.2% to $24,515k.
- Retained earnings were essentially flat at $31,238k against $31,231k despite $4,252k of six-month net income, so earnings were fully absorbed by dividends and share repurchases.
- The effective tax rate rose sharply: the quarterly provision was $684k on $3,436k of pre-tax income, roughly 19.9%, against $56k on $1,129k, roughly 5.0%, a year earlier, so part of the prior-year comparison benefited from an unusually low tax charge.
- The gap between GAAP diluted EPS of $0.19 and adjusted diluted EPS of $0.23 is $0.04, and the release does not itemize the reconciling adjustments in the pages read.
- Discontinued operations produced a loss of $(60)k in the quarter against $(13)k a year earlier.
- The release contains no guidance of any kind.
Key uncertainties
- The release states adjusted net income, adjusted diluted EPS and adjusted EBITDA but the reconciliation of those measures to GAAP does not appear on the pages read, so the composition of the $0.04 per share GAAP-to-adjusted gap is not established here.
- Accounts receivable grew $9,575k over six months while due to franchisees grew $4,598k; the release does not explain the receivable build or state days sales outstanding, so whether it reflects growth, timing, or collection slowdown is unknown.
- Pro forma growth rates are given only as percentages; the release does not state the pro forma revenue base, so the pro forma figures cannot be independently recomputed from this document.
- Management's view that franchisees are well positioned as market conditions improve is qualitative, with no franchisee count, same-store metric, or backlog disclosed.
- The MRINetwork Assets Divestiture produced a $248k gain in the six-month period, but the release does not disclose the sale proceeds or whether further consideration is outstanding.
- An investment in an unconsolidated affiliate of $635k appeared on the balance sheet since December 31, 2025 with no explanation in the release.
- An intangible asset held for sale of $672k remains on the balance sheet, down from $1,102k, with no disclosure of the expected timing or proceeds.
- Cash of $1,640k against a quarterly dividend obligation of roughly $833k at 13.8m shares means dividend coverage depends on operating cash flow, which is not presented in the release.
Market context
- API Ninjas price snapshot for HQI: no price snapshot was retrieved for this ticker during this run, so no price or volume figure is stated and no market reaction is characterized.
- The release was published at approximately 2026-08-10T20:09Z per the Quartr source PDF timestamp, ahead of the 20:30Z call, which the release schedules for 4:30 p.m. Eastern time.
Source limitations
- Every displayed actual comes from Quartr earnings release document 3688576. The condensed consolidated statement of income (page 5) and balance sheet (page 4) were read directly; adjusted net income, adjusted diluted EPS, adjusted EBITDA, system-wide sales, working capital and line of credit availability come from the release narrative on pages 1 and 2, which states them rounded to one decimal place in millions.
- Pages 3 and 6 through 8 of the eight-page release were not read. The non-GAAP reconciliation tables that would itemize the adjusted measures are likely among them; their absence is reflected in the uncertainties above rather than filled by estimate.
- API Ninjas supplied only the consensus estimates. Its row for HQI dated 2026-08-10 carries fiscal_year 2026 and fiscal_quarter 2, which agrees with the Quartr fiscal period of Q2 2026, so the fiscal-period match is by populated API fields rather than by the date-only path. The row carried no actual revenue or EPS.
- EPS basis: adjusted diluted EPS was selected under the maximal-mode ladder because the provider's own historical actual EPS series tracks the company's adjusted basis. For Q2 2025 the provider's actual EPS of $0.15 equals the company's adjusted diluted EPS of $0.15 for that quarter, against a GAAP diluted EPS of $0.08. The provider's Q2 2025 actual revenue of $7,638,000 likewise equals the company's reported $7,638k. On GAAP diluted EPS of $0.19 the same $0.13 estimate would still be a beat, of +46.2%, so the basis choice does not change the direction of the result.
- The API Ninjas history also contains a separate HQI row dated 2026-08-06 carrying an estimate of $7.08m revenue and $0.12 EPS. That row does not match the Quartr event date of 2026-08-10 and was not used.
- The income statement is presented in the release in a merged four-column layout covering quarter and six-month periods. Column assignment was verified by footing every subtotal within its column: for the quarter, franchise royalties $7,586k plus service revenue $513k equals total revenue $8,099k, and total revenue less SG&A $3,994k less depreciation and amortization $762k equals income from operations $3,343k.
- The earnings-per-share block in the source table renders the continuing, discontinued and total lines across wrapped rows. Total basic EPS of $0.20 and total diluted EPS of $0.19 for the quarter were confirmed against net income of $2,692k over weighted average basic shares of 13,786k (giving $0.195) and diluted shares of 13,810k (giving $0.195); the release's own rounding to $0.20 basic and $0.19 diluted is reproduced as printed.
- No market price snapshot was retrieved for this ticker during the run, so the Market context section states no price.