BGSF, Inc.

Second-quarter revenue was $22.3 million, down 5.1% year over year. Gross profit was $7.9 million versus $8.4 million last year, and gross margin was 35.5% versus 35.8%. SG&A was $8.9 million, down 29% from $12.6 million, including $385,000 of strategic review/restructuring costs versus $1.6 million a year ago. Adjusted EBITDA was a loss of $298,000, better than the $1.2 million loss in the prior-year quarter. GAAP net loss from continuing operations was $0.08 per diluted share versus a loss of $0.41 per diluted share last year; adjusted EPS was a loss of $0.02. Cash and cash equivalents, including short-term investments, were $18.2 million; operating cash flow was slightly negative $160,000. The company repurchased 56,256 shares at an average price of $5.20 for about $293,000, with about $2.3 million still available for repurchases. For guidance, management said full-year 2026 revenue is expected to remain relatively consistent with 2025 levels, and gross margin should remain in the 36% range.

Kelly Brown said the business is operating in a cautious spending environment as higher interest rates and elevated operating costs continue to pressure property owners, which is keeping discretionary staffing spend tight. She emphasized operational execution: better fill rates, faster candidate matching, improved onboarding, and heavier use of AI and recruiting technology. On PropTech, she described the business as early-stage but promising, with client interest building and a target contribution of about 1% to 2% of revenue in 2027.

Keith Schroeder highlighted that Q2 was the first reporting period as a stand-alone company after the TSA ended in March, and said the company used the transition to streamline its front- and back-office structure. He cited $385,000 of nonrecurring strategic restructuring costs in the quarter and said ongoing G&A is expected to be about $12 million, including roughly $2 million of public company costs, with more cost cuts still under review. He also noted $18.2 million of cash and cash equivalents, slightly negative operating cash flow of $160,000, and share repurchases of 56,256 shares for about $293,000.

Analysts focused on how BGSF is shortening placement timelines, and management said the main work is using data and technology to match candidate profiles to jobs faster, while also expanding hiring volume and routing candidates either to AI or human recruiters. Kelly Brown said about half of candidates are engaging with the AI interviewer, but placement rates are not meaningfully different between AI and human paths; the AI mainly speeds onboarding. Questions also centered on PropTech’s size and backlog in the core staffing business, and management said PropTech is still being defined by customer feedback while staffing request volume is up year over year but hours worked remain constrained by customer budgets.