Core Insights - HireQuest, Inc. reported quarterly earnings of $0.15 per share, exceeding the Zacks Consensus Estimate of $0.11 per share, with a year-over-year comparison showing no change in earnings [1] - The company achieved a revenue of $7.64 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 1.57%, although this represents a decline from $8.68 million in the same quarter last year [2] - HireQuest's stock has underperformed, losing approximately 31% since the beginning of the year, while the S&P 500 has gained 7.9% [3] Earnings Performance - Over the last four quarters, HireQuest has surpassed consensus EPS estimates three times [2] - The company had a previous earnings surprise of -28.57% when it reported earnings of $0.10 per share against an expectation of $0.14 per share [1][2] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $0.11 on revenues of $7.59 million, and for the current fiscal year, it is $0.40 on revenues of $34.2 million [7] - The estimate revisions trend for HireQuest was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Staffing Firms industry, to which HireQuest belongs, is currently ranked in the bottom 21% of over 250 Zacks industries, suggesting potential challenges ahead [8]

Core Insights - HireQuest reported adjusted earnings per share (EPS) of $0.15, exceeding analysts' expectations of $0.12 by 25.0% [1] - GAAP revenue was $7.6 million, slightly below the estimate of $7.66 million, with both revenue and system-wide sales declining by double digits year-over-year [1][5] Financial Performance - Non-GAAP adjusted EPS decreased by 16.7% from $0.18 in Q2 2024 [2] - GAAP revenue fell by 12.0% from $8.7 million in Q2 2024 [2] - Adjusted EBITDA dropped by 18.9% to $3.3 million compared to the prior year [2][6] - System-wide sales decreased by 13.9% to $125.9 million [2][6] - GAAP net income was $1.1 million, down from $2.0 million in Q2 2024 [6] Operational Highlights - SG&A expenses increased by 10.8% to $5.9 million, influenced by $929,000 in transaction costs related to acquisitions [2][7] - Franchise royalties were $7.3 million, down from $8.2 million in the prior-year period [5] - Service revenue dropped by 26% to $354,000, indicating broad-based industry demand weakness [5] Strategic Focus - The company is pursuing targeted acquisitions, optimizing its asset-light franchise structure, and strengthening capital allocation practices [4] - Management described the staffing industry as experiencing "protracted softness," partly due to sustained manufacturing-job losses [8] - The franchise model is highlighted for its ability to maintain profitability even under subdued demand [8] Future Outlook - Management did not provide explicit revenue or profit guidance for the next quarter or full year, focusing instead on cost control and acquisition opportunities [10] - Investors will monitor system-wide sales, acquisition integration, segment-level growth trends, and improvements in the job market [11]

Financial Data and Key Metrics Changes - Total revenue for Q2 2025 was $7.6 million, a decrease of 12% compared to $8.7 million in Q2 2024 [10] - Franchise royalties decreased to $7.3 million from $8.2 million year-over-year [10] - Net income after tax was $1.1 million or $0.08 per diluted share, down from $2 million or $0.15 per diluted share in the previous year [12] - Adjusted net income was $2.1 million or $0.15 per diluted share, compared to $2.5 million or $0.18 per diluted share in Q2 2024 [13] - Adjusted EBITDA was $3.3 million with a margin of 43%, down from $4 million and 47% in the prior year [13] Business Line Data and Key Metrics Changes - System-wide sales for Q2 2025 were $125.9 million, down from $146.1 million in Q2 2024, but increased by 6% sequentially from $118.4 million in Q1 2025 [11] - Service revenue was $354,000, down from $479,000 in the same quarter last year [11] - Temporary staffing and day labor offerings performed better than MRI Network, although the Upper Midwest market remained weak [7] Market Data and Key Metrics Changes - The manufacturing industry continued to contract, losing 11,000 jobs in July, marking the lowest factory employment levels since July 2020 [6] - The overall hiring environment remains challenging, with employers delaying hiring decisions due to macroeconomic uncertainties [6] Company Strategy and Development Direction - The company is focused on acquisitions to expand market reach and geographic footprint, having completed over $77 million in acquisitions since the merger with Command Center [8] - The company maintains a strong balance sheet with only $4.3 million in debt, positioning itself for potential value-creating opportunities [9] - The company is optimistic about the enforcement of immigration regulations, which may create a more level playing field in the staffing industry [8] Management's Comments on Operating Environment and Future Outlook - Management noted that the hiring environment has been challenging for over two years, with a wait-and-see approach from employers [6] - There are signs of stabilization in demand, but the company has not yet exceeded last year's sales figures [36] - Management expressed cautious optimism about regaining clients in sectors like food processing, which typically employ a large number of non-E-Verify workers [39] Other Important Information - Current assets exceeded current liabilities by $28.6 million as of June 30, 2025, compared to $25.1 million at the end of 2024 [14] - The company has paid a regular quarterly dividend since 2020, with the most recent dividend of $0.06 per share paid on June 16, 2025 [15] Q&A Session Summary Question: Update on potential acquisition of TrueBlue - Management remains interested in pursuing a transaction with TrueBlue but has no new updates to report [23] Question: Market share and system-wide sales performance - Management acknowledged losing some market share due to significant MRI franchisees not renewing their agreements, impacting overall sales figures [25][30] Question: Overall market environment and demand trends - Management noted that while there are signs of stabilization, sales have not yet exceeded last year's figures, and the hiring environment remains challenging [36] Question: SG&A expense outlook - Management indicated that SG&A expenses were down sequentially, and there are no significant changes expected in the third quarter [41] Question: Workers' compensation expense outlook - Management aims to eliminate workers' compensation expenses, with improvements expected in the coming year [45]

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents the company's unaudited consolidated financial statements and management's analysis of financial condition and results of operations [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents HireQuest, Inc.'s unaudited consolidated financial statements as of June 30, 2025, detailing financial position, operations, and cash flows [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets slightly increased to $94.3 million, total liabilities decreased to $28.3 million, and total stockholders' equity rose to $66.0 million Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$94,315** | **$94,013** | | Total Current Assets | $51,818 | $49,240 | | Franchise agreements, net | $18,885 | $19,737 | | **Total Liabilities** | **$28,293** | **$29,209** | | Line of credit | $4,333 | $6,829 | | Total Current Liabilities | $23,256 | $24,096 | | **Total Stockholders' Equity** | **$66,022** | **$64,804** | [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) For Q2 2025, total revenue decreased to $7.6 million and net income fell to $1.1 million, with similar declines observed for the six-month period Q2 2025 vs Q2 2024 Performance (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $7,638 | $8,680 | -12.0% | | Income from Operations | $1,043 | $2,695 | -61.3% | | Net Income | $1,060 | $2,039 | -48.0% | | Diluted EPS | $0.08 | $0.15 | -46.7% | Six Months 2025 vs 2024 Performance (in thousands, except per share data) | Metric | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $15,111 | $17,099 | -11.6% | | Income from Operations | $2,525 | $4,797 | -47.4% | | Net Income | $2,423 | $3,658 | -33.8% | | Diluted EPS | $0.17 | $0.26 | -34.6% | [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities significantly improved to $4.4 million for the six months ended June 30, 2025, contributing to a $0.5 million increase in cash position Six-Month Cash Flow Summary (in thousands) | Activity | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $4,411 | $(779) | | Net cash provided by investing activities | $313 | $445 | | Net cash used in financing activities | $(4,268) | $(394) | | **Net increase (decrease) in cash** | **$456** | **$(728)** | [Notes to Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail accounting policies, acquisitions, related-party transactions, debt, and impairment charges, including the acquisition of Ready Temporary Staffing and a goodwill impairment in Q3 2024 - As of June 30, 2025, the company had **413 franchisee-owned offices** and **1 company-owned office** across **43 states** and **13 countries**[20](index=20&type=chunk) - The company completed the acquisition of Ready Temporary Staffing, LLC (RTS) on December 30, 2024, for **$1.4 million**, which included **$0.56 million in goodwill**[19](index=19&type=chunk)[37](index=37&type=chunk)[39](index=39&type=chunk) - During Q3 2024, the company recognized a goodwill impairment charge of approximately **$4.8 million** and an intangible asset impairment of **$1.2 million**, both related to the MRI reporting unit due to industry and market conditions[78](index=78&type=chunk) - The effective tax rate for the six months ended June 30, 2025 was **8.2%**, significantly lower than **19.2%** for the same period in 2024, primarily due to the federal Work Opportunity Tax Credit (WOTC)[84](index=84&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the Q2 revenue decrease to a decline in system-wide sales across key brands, while maintaining sufficient liquidity despite increased operating expenses from transaction costs [Results of Operations](index=24&type=section&id=Results%20of%20Operations) Q2 2025 total revenue fell 12.0% year-over-year due to a 13.9% drop in system-wide sales, with operating expenses rising due to transaction costs partially offset by lower workers' compensation expense - Q2 2025 system-wide sales decreased by **13.9%** to **$125.9 million** from **$146.1 million** in Q2 2024. The decline was primarily driven by MRI (**$10.3 million**), HQ Direct (**$5.9 million**), and Snelling/HQ (**$3.4 million**)[112](index=112&type=chunk) - Six-month 2025 system-wide sales decreased by **12.8%** to **$244.3 million** from **$280.2 million** in the prior year period, with declines led by MRI (**$19.2 million**), HQ Direct (**$8.7 million**), and Snelling/HQ (**$6.4 million**)[131](index=131&type=chunk) Franchise Royalties by Brand - Q2 (in thousands) | Brand | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | HireQuest Direct | $3,471 | $3,851 | | Snelling and HireQuest | $2,029 | $2,288 | | Northbound, MRI, and SearchPath | $1,505 | $1,740 | | **Total** | **$7,284** | **$8,201** | - Workers' compensation expense for Q2 2025 was **$127 thousand**, a significant decrease of **$420 thousand** from **$547 thousand** in Q2 2024[117](index=117&type=chunk) [Use of Non-GAAP Financial Measure: Adjusted EBITDA](index=24&type=section&id=Use%20of%20Non-GAAP%20Financial%20Measure%3A%20Adjusted%20EBITDA) Adjusted EBITDA, a non-GAAP measure, decreased to $3.3 million for Q2 2025 and $6.1 million for the six-month period compared to the prior year Adjusted EBITDA Reconciliation (in thousands) | Line Item | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Net income | $1,060 | $2,039 | $2,423 | $3,658 | | Interest expense | $71 | $253 | $214 | $495 | | Provision for income taxes | $56 | $557 | $224 | $897 | | Depreciation and amortization | $734 | $697 | $1,469 | $1,395 | | Acquisition related charges, net | $929 | $0 | $846 | $11 | | **Adjusted EBITDA** | **$3,255** | **$4,040** | **$6,073** | **$7,398** | [Liquidity and Capital Resources](index=33&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains sufficient liquidity through cash from operations and a $50 million revolving credit facility, with $2.7 million in cash and $35.9 million available on the credit line as of June 30, 2025 - At June 30, 2025, current assets of **$51.8 million** exceeded current liabilities of **$23.3 million**, resulting in a working capital of **$28.6 million**[8](index=8&type=chunk)[151](index=151&type=chunk) - The company has a **$50 million** revolving credit facility with Bank of America, with an outstanding balance of **$4.3 million** and availability of **$35.9 million** as of June 30, 2025[55](index=55&type=chunk)[161](index=161&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=37&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) As a "smaller reporting company," HireQuest, Inc. is not required to provide quantitative and qualitative disclosures about market risk - The company is a "smaller reporting company" as defined by Rule 12b-2 of the Exchange Act and is not required to provide quantitative and qualitative disclosures about market risk[170](index=170&type=chunk) [Item 4. Controls and Procedures](index=37&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls were not effective as of June 30, 2025, due to a material weakness in accounting resources, for which remediation efforts are underway - A material weakness in internal control over financial reporting was identified due to insufficient accounting resources to handle technical accounting issues and provide adequate review functions[172](index=172&type=chunk) - Remediation efforts include engaging third-party experts for acquisitions, hiring additional accounting staff, and transitioning responsibilities from the Chief Accounting Officer to other personnel[172](index=172&type=chunk) - Despite the material weakness, management concluded that the financial statements included in the report are fairly presented in all material respects[173](index=173&type=chunk) [PART II. OTHER INFORMATION](index=39&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section provides updates on legal proceedings and any material changes to previously disclosed risk factors [Item 1. Legal Proceedings](index=39&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal and administrative proceedings but does not anticipate any material uninsured losses from these matters - The company does not expect material uninsured losses from current legal proceedings and believes their outcomes will not have a material adverse effect on its business or financial condition[177](index=177&type=chunk) [Item 1A. Risk Factors](index=39&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2024 - No material changes have occurred in the risk factors since the filing of the Annual Report on Form 10-K for the fiscal year ended December 31, 2024[178](index=178&type=chunk)

[HireQuest Q2 2025 Financial Performance Summary](index=1&type=section&id=HireQuest%20Reports%20Financial%20Results%20for%20Second%20Quarter%202025) [Management Commentary](index=1&type=section&id=Management%20Commentary) Despite a soft staffing market, HireQuest achieved solid Q2 2025 profitability by executing its franchise model, controlling expenses, and pursuing M&A - The company maintained **solid results and profitability** despite a persistent softness in the staffing market for over two years, with the manufacturing industry showing recent job losses[3](index=3&type=chunk) - Strategic focus remains on diligent execution of the business model, expense control, and pursuing M&A to expand its geographic and market footprint[3](index=3&type=chunk) - The company's unique franchise model is expected to deliver superior performance and provide operating leverage when market demand improves[3](index=3&type=chunk) [Second Quarter 2025 Financial Results](index=1&type=section&id=Second%20Quarter%202025%20Review) Q2 2025 total revenue decreased 12.0% to $7.6 million, with net income falling to $1.1 million due to lower royalties and higher SG&A Q2 2025 Key Financial Metrics (vs. Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $7.6 million | $8.7 million | -12.0% | | Franchise Royalties | $7.3 million | $8.2 million | -11.0% | | Net Income | $1.1 million | $2.0 million | -45.0% | | Diluted EPS | $0.08 | $0.15 | -46.7% | | Adjusted Net Income | $2.1 million | $2.5 million | -16.0% | | Adjusted EBITDA | $3.3 million | $4.0 million | -17.5% | | System-wide Sales | $125.9 million | $146.1 million | -13.9% | - SG&A expenses increased **10.8% to $5.9 million**, primarily driven by **$929,000 in transaction expenses**, partially offset by a significant decrease in net workers' compensation expense to **$127,000** from **$547,000** in the prior year[5](index=5&type=chunk) [Year-To-Date 2025 Financial Results](index=1&type=section&id=Year-To-Date%202025%20Review) YTD 2025 total revenue declined 11.6% to $15.1 million, with net income at $2.4 million, reflecting market softness and transaction expenses YTD 2025 Key Financial Metrics (vs. YTD 2024) | Metric | YTD 2025 | YTD 2024 | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $15.1 million | $17.1 million | -11.6% | | Franchise Royalties | $14.2 million | $16.0 million | -11.3% | | Net Income | $2.4 million | $3.7 million | -35.1% | | Diluted EPS | $0.17 | $0.26 | -34.6% | | Adjusted Net Income | $3.9 million | $4.5 million | -13.3% | | Adjusted EBITDA | $6.1 million | $7.4 million | -17.6% | | System-wide Sales | $244.3 million | $280.2 million | -12.8% | - SG&A expenses for the six-month period were **$11.1 million**, a slight increase from **$10.9 million** in the prior year, with the rise attributed to **$929,000 in transaction expenses**[11](index=11&type=chunk) - Workers' compensation expense saw a significant decrease of **$964,000** for the first six months of 2025 compared to the same period in 2024[11](index=11&type=chunk) [Balance Sheet and Capital Structure](index=2&type=section&id=Balance%20Sheet%20and%20Capital%20Structure) As of June 30, 2025, HireQuest maintained a stable financial position with $2.7 million cash, $94.3 million total assets, and $35.9 million available credit Balance Sheet Summary | Metric | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash | $2.7 million | $2.2 million | | Total Assets | $94.3 million | $94.0 million | | Total Liabilities | $28.3 million | $29.2 million | | Working Capital | $28.6 million | $25.1 million | - As of June 30, 2025, the company had approximately **$35.9 million** available under its line of credit, assuming continued covenant compliance[15](index=15&type=chunk) [Financial Statements](index=4&type=section&id=Financial%20Statements) [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets were $94.3 million, total liabilities $28.3 million, and stockholders' equity $66.0 million Assets Breakdown (in thousands) | Asset Category | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total current assets | $51,818 | $49,240 | | Franchise agreements, net | $18,885 | $19,737 | | Other intangible assets, net | $7,901 | $8,442 | | **Total assets** | **$94,315** | **$94,013** | Liabilities and Equity Breakdown (in thousands) | Liability & Equity Category | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total current liabilities | $23,256 | $24,096 | | **Total liabilities** | **$28,293** | **$29,209** | | **Total stockholders' equity** | **$66,022** | **$64,804** | | **Total liabilities and stockholders' equity** | **$94,315** | **$94,013** | [Consolidated Statement of Income](index=5&type=section&id=Consolidated%20Statement%20of%20Income) Q2 2025 total revenue was $7.6 million with $1.1 million net income, while YTD revenue reached $15.1 million with $2.4 million net income Income Statement Highlights - Three Months Ended June 30 (in thousands) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Total revenue | $7,638 | $8,680 | | Income from operations | $1,043 | $2,695 | | Net income | $1,060 | $2,039 | | Diluted EPS | $0.08 | $0.15 | Income Statement Highlights - Six Months Ended June 30 (in thousands) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Total revenue | $15,111 | $17,099 | | Income from operations | $2,525 | $4,797 | | Net income | $2,423 | $3,658 | | Diluted EPS | $0.17 | $0.26 | [Non-U.S. GAAP Reconciliations](index=6&type=section&id=Non-U.S.%20GAAP%20Reconciliations) The company provides non-GAAP reconciliations for Adjusted EBITDA and Adjusted Net Income to clarify core operational performance [Reconciliation of Net Income to Adjusted EBITDA](index=6&type=section&id=Reconciliation%20of%20Net%20Income%20to%20Adjusted%20EBITDA) Adjusted EBITDA for Q2 2025 was $3.3 million, a decrease from Q2 2024, with significant adjustments for acquisition-related charges Adjusted EBITDA Reconciliation (in thousands) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Net income | $1,060 | $2,039 | $2,423 | $3,658 | | Adjustments | $2,195 | $1,001 | $3,650 | $3,740 | | **Adjusted EBITDA** | **$3,255** | **$4,040** | **$6,073** | **$7,398** | [Reconciliation of Net Income to Adjusted Net Income](index=7&type=section&id=Reconciliation%20of%20Net%20Income%20to%20Adjusted%20Net%20Income) Adjusted net income for Q2 2025 was $2.1 million ($0.15 diluted EPS), reflecting adjustments for amortization and acquisition costs Adjusted Net Income Reconciliation (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Net income | $1,060 | $2,039 | $2,423 | $3,658 | | **Adjusted net income** | **$2,146** | **$2,476** | **$3,924** | **$4,502** | | **Adjusted net income per diluted share** | **$0.15** | **$0.18** | **$0.28** | **$0.32** | [Shareholder Information](index=2&type=section&id=Shareholder%20Information) [Dividend Information](index=2&type=section&id=Dividend%20Information) HireQuest paid a $0.06 per share quarterly cash dividend in June 2025 and intends to maintain this dividend going forward - On June 16, 2025, the company paid a quarterly cash dividend of **$0.06 per share** of common stock[16](index=16&type=chunk) - The company intends to continue paying a **$0.06 cash dividend** on a quarterly basis, subject to business results, financial position, and board of director discretion[16](index=16&type=chunk) [Conference Call Details](index=2&type=section&id=Conference%20Call) A conference call was held on August 7, 2025, to discuss Q2 financial results, with a replay available until August 21, 2025 - A conference call was held on Thursday, August 7, 2025, at 4:30 p.m. Eastern Time to discuss the financial results[17](index=17&type=chunk)[18](index=18&type=chunk) - A replay of the conference call is available through Thursday, August 21, 2025, with specific access details provided[20](index=20&type=chunk)[21](index=21&type=chunk) [About the Company and Disclosures](index=2&type=section&id=About%20the%20Company%20and%20Disclosures) [About HireQuest](index=2&type=section&id=About%20HireQuest) HireQuest is a franchisor offering diverse staffing solutions across the U.S. and internationally through multiple divisions - HireQuest is a franchisor of staffing solutions providing temporary, direct-hire, and contract staffing[22](index=22&type=chunk) - The company operates through several primary divisions: HireQuest Direct, HireQuest Health, MRINetwork, Snelling, and TradeCorp, serving industries such as construction, healthcare, finance, and manufacturing[22](index=22&type=chunk) [Forward-Looking Statements](index=2&type=section&id=Important%20Cautions%20Regarding%20Forward-Looking%20Statements) This section warns that forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially - The news release contains forward-looking statements within the meaning of the safe harbor provisions of U.S. securities laws[23](index=23&type=chunk)[24](index=24&type=chunk) - These statements are not historical facts and are inherently uncertain, subject to risks such as industry demand, economic uncertainty, and success in integrating acquisitions[25](index=25&type=chunk) [Non-U.S. GAAP Financial Measures](index=3&type=section&id=Non-U.S.%20GAAP%20Financial%20Measures) Non-GAAP financial measures are used to supplement U.S. GAAP results, providing useful insights into the company's performance - The report contains supplemental non-U.S. GAAP financial measures that management uses to analyze company performance[27](index=27&type=chunk) - Management believes these non-GAAP measures provide useful information for understanding the company's financial condition and are a complement to U.S. GAAP measures[27](index=27&type=chunk)

Financial Data and Key Metrics Changes - The company reported the approval of the compensation of the named executive officers at $20.24, which indicates a focus on aligning executive pay with performance metrics [12][21]. Business Line Data and Key Metrics Changes - No specific data on individual business lines was provided during the meeting [20]. Market Data and Key Metrics Changes - No specific market data or key metrics changes were discussed in the meeting [20]. Company Strategy and Development Direction and Industry Competition - The company is focused on maintaining strong governance through the election of directors and the appointment of independent auditors, which reflects a commitment to transparency and accountability [6][9][21]. Management's Comments on Operating Environment and Future Outlook - Management did not provide specific comments on the operating environment or future outlook during the meeting [20]. Other Important Information - The meeting included the election of six directors, the ratification of the independent auditor, and advisory votes on executive compensation, indicating a structured approach to corporate governance [2][5][21]. Q&A Session Summary Question: Were there any questions from stockholders? - There were no questions submitted by stockholders during the Q&A session [20].

Financial Data and Key Metrics Changes - Total revenue for Q1 2025 was $7.5 million, a decrease of 11.2% from $8.4 million in Q1 2024 [12] - Net income after tax was $1.4 million or $0.10 per diluted share, compared to $1.6 million or $0.12 per diluted share in Q1 2024 [14] - Adjusted EBITDA was $2.8 million, down from $3.4 million in the prior year, with an adjusted EBITDA margin of 37% compared to 40% in Q1 2024 [14] Business Line Data and Key Metrics Changes - Franchise royalties for Q1 2025 were $7 million, down from $7.8 million in the same quarter last year [12] - Service revenue was $512,000 for Q1 2025, compared to $588,000 in the year-ago period [12] Market Data and Key Metrics Changes - System-wide sales for Q1 2025 were $118.4 million, down from $134 million in Q1 2024 [13] - Current liabilities were 46% of current assets as of March 31, 2025, compared to 49% at the end of 2024 [16] Company Strategy and Development Direction - The company is focused on expense management and cost reduction initiatives, with consistent reductions in SG&A expenses year over year [6][7] - M&A is a key part of the company's strategy, with a strong pipeline of potential deals to expand into new geographic regions and market verticals [7][10] - The company is positioned to benefit from increased demand due to stricter immigration laws, which may lead to new business opportunities [8][24] Management's Comments on Operating Environment and Future Outlook - The staffing industry is facing macroeconomic headwinds, causing employers to slow or suspend hiring decisions [6] - Despite the challenging environment, the company continues to achieve solid margins and profitability [6] - Management remains optimistic about the future, citing the potential for acquisitions and the strength of the franchise model to maintain profitability [36] Other Important Information - The company has paid a regular quarterly dividend since Q3 2020, with the most recent dividend of $0.06 per share paid on March 17, 2025 [16] - A planned transition in the CFO role will occur with David Hartley succeeding Steve Crane effective May 31, 2025 [10] Q&A Session Summary Question: Recent trends in business and impact of tariffs - Management noted no dramatic shift in business trends since the start of Q2, with ongoing macroeconomic challenges still affecting hiring [21] Question: Impact of stricter immigration policies on new business - Management confirmed that stricter immigration policies are opening new business opportunities, with clients returning due to compliance needs [23][24] Question: Trends in SG&A expenses and cost management - Management explained that some anomalies in the first quarter masked the true trend in SG&A expenses, with ongoing efforts to manage costs effectively [25][27] Question: M&A pipeline and near-term opportunities - Management expressed confidence in the M&A pipeline, noting that ongoing weak demand is leading to more realistic pricing from potential acquisition targets [28][29] Question: Transition of CFO role and corporate development - Management indicated plans to add a deal sourcer to support corporate development, but not at the VP level [30][32]

Financial Data and Key Metrics Changes - Total revenue for Q1 2025 was $7.5 million, a decrease of 11.2% from $8.4 million in Q1 2024 [11] - Franchise royalties decreased to $7 million from $7.8 million year-over-year [11] - Net income after tax was $1.4 million or $0.10 per diluted share, down from $1.6 million or $0.12 per diluted share in the previous year [13] - Adjusted EBITDA was $2.8 million, compared to $3.4 million in the prior year, with an adjusted EBITDA margin of 37% versus 40% [13] Business Line Data and Key Metrics Changes - Service revenue for Q1 2025 was $512,000, down from $588,000 in the same period last year [12] - System-wide sales for Q1 2025 were $118.4 million, compared to $134 million in Q1 2024 [12] Market Data and Key Metrics Changes - The staffing industry continues to face macroeconomic headwinds, leading to slower hiring decisions by employers [6] - Stricter immigration policies are expected to increase demand for staffing services that comply with E-Verify regulations [8] Company Strategy and Development Direction - The company is focused on expense management and cost reduction initiatives, with a consistent decrease in SG&A expenses year-over-year [6][12] - M&A is a key part of the company's strategy, with a strong pipeline of potential deals to expand into new geographic regions and market verticals [7][29] - The company is optimistic about the potential for acquisitions due to the ongoing weakness in demand affecting less capitalized competitors [29] Management's Comments on Operating Environment and Future Outlook - Management noted that the first quarter results reflect broader industry challenges but emphasized the company's solid margins and profitability [6] - The company remains confident in its ability to maintain profitability during difficult times, leveraging its franchise model [36] Other Important Information - The CFO transition is planned, with David Hartley succeeding Steve Crane effective May 31, 2025 [9] - The company has paid a regular quarterly dividend since Q3 2020, with the most recent dividend of $0.06 per share paid on March 17, 2025 [15] Q&A Session Summary Question: Recent trends in business and impact of tariffs - Management indicated no dramatic shift in business trends since the start of Q2, with ongoing uncertainty holding employers back [20][21] Question: Impact of stricter immigration policies on new business - Management confirmed that stricter immigration policies are opening new business opportunities, with clients returning due to increased enforcement [22][24] Question: Trends in SG&A expenses and cost management - Management explained that some anomalies in the first quarter masked the true trend in SG&A expenses, with ongoing efforts to manage costs [25][26] Question: M&A pipeline and near-term opportunities - Management expressed optimism about the M&A pipeline, noting that ongoing demand weakness is leading to more realistic pricing from potential acquisition targets [28][29] Question: Transition of CFO and corporate development staffing - Management confirmed plans to add a deal sourcer to support corporate development, but not at the VP level [30][32]

[PART I. FINANCIAL INFORMATION](index=2&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section covers HireQuest, Inc.'s Q1 2025 financial statements, management's analysis, market risk, and internal controls [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) HireQuest, Inc.'s Q1 2025 financial statements show a slight asset decrease, lower revenue and net income, but improved operating cash flow [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) As of March 31, 2025, total assets slightly decreased, liabilities fell, and stockholders' equity rose, with a reduced line of credit Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$93,737** | **$94,013** | | Cash | $2,087 | $2,219 | | Accounts receivable, net | $42,218 | $42,348 | | Goodwill | $1,633 | $1,633 | | **Total Liabilities** | **$28,173** | **$29,209** | | Line of credit | $5,456 | $6,829 | | Total current liabilities | $23,268 | $24,096 | | **Total Stockholders' Equity** | **$65,564** | **$64,804** | [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) Q1 2025 total revenue and net income declined due to lower franchise royalties compared to the prior-year period Q1 2025 vs Q1 2024 Performance (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Franchise royalties | $6,960 | $7,831 | | **Total revenue** | **$7,472** | **$8,419** | | Income from operations | $1,483 | $2,102 | | **Net income** | **$1,363** | **$1,619** | | Diluted earnings per share | $0.10 | $0.12 | [Consolidated Statements of Changes in Stockholders' Equity](index=5&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Stockholders%27%20Equity) Stockholders' equity increased in Q1 2025, driven by net income and stock-based compensation, partially offset by dividends - Key changes in stockholders' equity for Q1 2025 included net income of **$1.36 million** and dividend payments of **$842 thousand**[14](index=14&type=chunk) [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Q1 2025 saw improved operating cash flow, significant cash used in financing, resulting in a slight decrease in the overall cash balance Cash Flow Summary (in thousands) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $1,854 | $(967) | | Net cash provided by investing activities | $316 | $213 | | Net cash (used in) provided by financing activities | $(2,302) | $981 | | **Net (decrease) increase in cash** | **$(132)** | **$227** | [Notes to Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail accounting policies, recent acquisitions, and financial instruments, including the franchise model, RTS acquisition, and credit facility status - As of March 31, 2025, the company had **424** franchisee-owned offices and **1** company-owned office across **43** states, D.C., and **13** other countries[21](index=21&type=chunk) - On December 30, 2024, the company acquired Ready Temporary Staffing, LLC (RTS) for **$1.4 million** in cash[20](index=20&type=chunk)[37](index=37&type=chunk) - The company has a **$50 million** revolving credit facility with Bank of America, with approximately **$5.4 million** drawn and **$9.2 million** utilized for letters of credit as of March 31, 2025[56](index=56&type=chunk)[61](index=61&type=chunk) - The company paid a quarterly dividend of **$0.06 per share**, totaling **$842 thousand** in Q1 2025[68](index=68&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2025 revenue decline due to lower system-wide sales, reduced operating expenses, decreased Adjusted EBITDA, and strong liquidity [Results of Operations](index=24&type=section&id=Results%20of%20Operations) Q1 2025 total revenue decreased due to lower system-wide sales, while operating expenses fell, leading to reduced income from operations - Total revenue decreased **11.2%** year-over-year, driven by an **11.7%** (**$15.6 million**) decrease in system-wide sales, led by MRI, HQ Direct, and Snelling/HQ brands[117](index=117&type=chunk) Franchise Royalties by Brand (in thousands) | Brand | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | HireQuest Direct | $3,587 | $3,823 | | Snelling and HireQuest | $1,953 | $2,110 | | Northbound, MRI, and SearchPath | $1,158 | $1,649 | | **Total Franchise Royalties** | **$6,960** | **$7,831** | - Workers' compensation expense decreased significantly to **$28 thousand** in Q1 2025 from **$572 thousand** in Q1 2024[123](index=123&type=chunk) - The effective tax rate for continuing operations was **10.5%** in Q1 2025, compared to **16.7%** in Q1 2024, primarily due to the federal Work Opportunity Tax Credit (WOTC)[88](index=88&type=chunk)[132](index=132&type=chunk) [Use of Non-GAAP Financial Measure: Adjusted EBITDA](index=24&type=section&id=Use%20of%20Non-GAAP%20Financial%20Measure%3A%20Adjusted%20EBITDA) Adjusted EBITDA, a non-GAAP measure, decreased to $2.8 million in Q1 2025, reflecting adjustments to net income for various items Adjusted EBITDA Reconciliation (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net income | $1,363 | $1,619 | | Interest expense | $144 | $243 | | Provision for income taxes | $169 | $340 | | Depreciation and amortization | $734 | $698 | | EBITDA | $2,410 | $2,900 | | Non-cash compensation | $239 | $362 | | Acquisition related (gains) charges, net | $(103) | $11 | | **Adjusted EBITDA** | **$2,799** | **$3,358** | [Key Performance Indicator: System-Wide Sales](index=32&type=section&id=Key%20Performance%20Indicator%3A%20System-Wide%20Sales) System-wide sales decreased by 11.7% in Q1 2025, with significant declines in the Northbound, MRI, SearchPath, and HireQuest Health segments System-Wide Sales by Brand (in thousands) | Brand | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | HireQuest Direct | $51,572 | $54,333 | (5.1)% | | Snelling and HireQuest | $33,660 | $36,559 | (7.9)% | | Northbound, MRI, and SearchPath | $28,675 | $38,350 | (25.2)% | | HireQuest Health | $1,143 | $1,728 | (33.9)% | | **Total System-wide sales** | **$118,391** | **$134,035** | **(11.7)%** | [Liquidity and Capital Resources](index=30&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity with $27.3 million in working capital and $34.8 million available under its credit facility - At March 31, 2025, working capital (current assets minus current liabilities) was approximately **$27.3 million**[138](index=138&type=chunk) - Cash provided by continuing operations was **$1.9 million** in Q1 2025, compared to cash used of **$0.9 million** in Q1 2024[142](index=142&type=chunk) - As of March 31, 2025, availability under the Senior Credit Facility was approximately **$34.8 million**[149](index=149&type=chunk) [Number of Offices](index=33&type=section&id=Number%20of%20Offices) The total number of offices decreased by one in Q1 2025, with two new openings offset by three closures Office Count Reconciliation | Period | Count | | :--- | :--- | | Offices, December 31, 2024 | 425 | | Opened in 2025 | 2 | | Closed in 2025 | (3) | | **Offices, March 31, 2025** | **424** | [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=33&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) As a smaller reporting company, HireQuest is exempt from providing quantitative and qualitative market risk disclosures - As a "smaller reporting company" defined by Rule 12b-2 of the Exchange Act, HireQuest is not required to provide quantitative and qualitative disclosures about market risk[157](index=157&type=chunk) [Item 4. Controls and Procedures](index=33&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were ineffective due to a material weakness in accounting resources, with remediation efforts underway - Management concluded that disclosure controls and procedures were not effective as of March 31, 2025, due to a continuing material weakness[158](index=158&type=chunk) - The material weakness stems from insufficient accounting resources to handle technical accounting issues and provide adequate review; remediation efforts are underway[159](index=159&type=chunk) - Despite the material weakness, management concluded that the financial statements are fairly presented in all material respects[160](index=160&type=chunk) [PART II. OTHER INFORMATION](index=35&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section addresses legal proceedings, risk factors, equity sales, and other required disclosures [Item 1. Legal Proceedings](index=35&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal proceedings but does not anticipate any material uninsured losses from these matters - The company does not expect current legal proceedings to have a material adverse effect on its business, financial condition, or results of operations[164](index=164&type=chunk) [Item 1A. Risk Factors](index=35&type=section&id=Item%201A.%20Risk%20Factors) No material changes have occurred in the company's risk factors since the filing of its 2023 Annual Report on Form 10-K - No material changes have occurred in the company's risk factors since the filing of its 2023 Form 10-K[165](index=165&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=35&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities during the period - None[166](index=166&type=chunk) [Item 5. Other Information](index=35&type=section&id=Item%205.%20Other%20Information) The company reported no other information for this item - None[167](index=167&type=chunk) [Item 6. Exhibits](index=35&type=section&id=Item%206.%20Exhibits) The report includes various exhibits, notably CEO and CFO certifications and Inline XBRL data files - Filed exhibits include CEO and CFO certifications (Exhibits **31.1**, **31.2**, **32.1**) and Inline XBRL documents (Exhibit **101** series)[168](index=168&type=chunk)

[Financial Highlights](index=1&type=section&id=First%20Quarter%202025%20Summary) HireQuest reported a decline in key financial metrics for Q1 2025 compared to the prior year, with system-wide sales, total revenue, and net income all decreasing. The company attributes this to macroeconomic headwinds affecting the staffing industry, but notes it maintained solid margins and profitability | Financial Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | System-wide Sales | $118.4 million | $134.0 million | -11.7% | | Total Revenue | $7.5 million | $8.4 million | -11.2% | | Net Income | $1.4 million | $1.6 million | -12.5% | | Diluted EPS | $0.10 | $0.12 | -16.7% | | Adjusted Net Income | $1.8 million | $2.0 million | -10.0% | | Adjusted EBITDA | $2.8 million | $3.4 million | -17.6% | - The company's first-quarter results reflect the broader staffing industry's challenges, which continue to be impacted by macroeconomic headwinds[5](index=5&type=chunk) [Management Commentary & Strategy](index=1&type=section&id=Management%20Commentary%20%26%20Strategy) The CEO highlighted the company's resilience due to its franchise model and expense management, despite industry-wide headwinds. Acquisitions remain a key growth strategy, with a strong M&A pipeline. A change in CFO was also announced, with David Hartley succeeding the retiring Steve Crane - Despite macroeconomic challenges, the company achieved **solid margins and profitability**, attributed to the strength of its franchise model and a focus on expense management[5](index=5&type=chunk) - Acquisitions are a key component of the long-term growth plan to expand the company's geographic footprint and market verticals. The M&A pipeline is reported to be strong[5](index=5&type=chunk) - David Hartley has been appointed as the new Chief Financial Officer, succeeding Steve Crane, who is retiring[6](index=6&type=chunk) [Detailed Financial Performance](index=1&type=section&id=First%20Quarter%202025%20Financial%20Results) In Q1 2025, total revenue decreased by 11.2% to $7.5 million, primarily due to a drop in franchise royalties. The company successfully reduced SG&A expenses by 6.5% and saw a significant decrease in net workers' compensation expense. Consequently, income from operations was $1.5 million, down from $2.1 million in the prior-year period | Revenue & Expenses (in thousands) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Franchise Royalties | $7,000 | $7,800 | | Service Revenue | $512 | $588 | | **Total Revenue** | **$7,500** | **$8,400** | | SG&A Expenses | $5,300 | $5,600 | | Net Workers' Compensation Expense | $28 | $572 | | Depreciation and Amortization | $734 | $698 | | Profitability (in thousands) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Income from Operations | $1,500 | $2,100 | | Net Income | $1,400 | $1,600 | [Balance Sheet and Capital Structure](index=1&type=section&id=Balance%20Sheet%20and%20Capital%20Structure) As of March 31, 2025, HireQuest maintained a stable balance sheet with total assets of $93.7 million and total liabilities of $28.2 million. The company had $2.1 million in cash and approximately $34.8 million available under its line of credit. A quarterly cash dividend of $0.06 per share was paid in March 2025, with the intention to continue this quarterly payment, subject to board approval | Balance Sheet Item (in millions) | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash | $2.1 | $2.2 | | Total Assets | $93.7 | $94.0 | | Total Liabilities | $28.2 | $29.2 | - Working capital increased to **$27.4 million** as of March 31, 2025, from **$25.1 million** at the end of 2024[12](index=12&type=chunk) - The company has approximately **$34.8 million** available under its line of credit, assuming continued covenant compliance[12](index=12&type=chunk) - A quarterly cash dividend of **$0.06 per share** was paid on March 17, 2025. The company intends to continue this quarterly dividend, subject to board discretion[13](index=13&type=chunk) [Non-GAAP Financial Measures](index=3&type=section&id=Non-U.S.%20GAAP%20Financial%20Measures) The company reported non-GAAP adjusted EBITDA of $2.8 million and adjusted net income of $1.8 million for Q1 2025, both showing a decrease from the prior year. These figures adjust for items like amortization of acquired intangible assets, acquisition-related charges, and non-cash compensation to provide what management believes is a clearer view of core operational performance | Non-GAAP Metric (in millions) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Adjusted EBITDA | $2.8 | $3.4 | | Adjusted Net Income | $1.8 | $2.0 | - Management uses non-GAAP measures, which exclude certain items, to supplement U.S. GAAP results and provide a better understanding of the company's financial condition and performance[24](index=24&type=chunk) [Financial Statements](index=4&type=section&id=Financial%20Statements) This section contains the detailed, unaudited consolidated financial statements for the period ended March 31, 2025, including the Balance Sheets, Statement of Income, and reconciliations of GAAP to non-GAAP measures such as Adjusted EBITDA and Adjusted Net Income [Consolidated Balance Sheets](index=4&type=section&id=HireQuest%2C%20Inc.%20Consolidated%20Balance%20Sheets) | Key Balance Sheet Items (in thousands) | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total current assets | $50,640 | $49,240 | | Total assets | $93,737 | $94,013 | | Total current liabilities | $23,268 | $24,096 | | Total liabilities | $28,173 | $29,209 | | Total stockholders' equity | $65,564 | $64,804 | [Consolidated Statement of Income](index=5&type=section&id=HireQuest%2C%20Inc.%20Consolidated%20Statement%20of%20Income) | Income Statement (in thousands) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total revenue | $7,472 | $8,419 | | Income from operations | $1,483 | $2,102 | | Net income | $1,363 | $1,619 | | Diluted earnings per share | $0.10 | $0.12 | [Reconciliation of Net Income to Adjusted EBITDA](index=6&type=section&id=HireQuest%2C%20Inc.%20Non-U.S.%20GAAP%20-%20Reconciliation%20of%20Net%20Income%20to%20Adjusted%20EBITDA) | Reconciliation to Adjusted EBITDA (in thousands) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net income | $1,363 | $1,619 | | Adjustments (Interest, Taxes, D&A, etc.) | $1,436 | $1,739 | | **Adjusted EBITDA** | **$2,799** | **$3,358** | [Reconciliation of Net Income to Adjusted Net Income](index=7&type=section&id=HireQuest%2C%20Inc.%20Non-U.S.%20GAAP%20-%20Reconciliation%20of%20Net%20Income%20to%20Adjusted%20Net%20Income) | Reconciliation to Adjusted Net Income (in thousands) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net income | $1,363 | $1,619 | | Adjustments (Amortization, acquisition charges, etc.) | $400 | $408 | | **Adjusted net income** | **$1,763** | **$2,027** | [Conference Call Information](index=2&type=section&id=Conference%20Call) HireQuest will host a conference call on May 8, 2025, at 4:30 p.m. Eastern Time to discuss the Q1 2025 financial results. Dial-in numbers and a webcast link are provided for participation, with a replay available until May 22, 2025 - The conference call to discuss financial results is scheduled for Thursday, May 8, 2025, at **4:30 p.m. Eastern Time**[15](index=15&type=chunk) - A live broadcast and replay of the call will be available via webcast[16](index=16&type=chunk) - A telephone replay of the conference call will be available through Thursday, May 22, 2025[17](index=17&type=chunk)[18](index=18&type=chunk)