Hudson Global (HSON) 30 Mar 232022 Q4 Earnings call transcript

Good morning, and welcome to the Hudson Global Conference Call for the Fourth Quarter of 2022.

Our call today will be led by Chief Executive Officer, Jeff Eberwein and Chief Financial Officer, Matt Diamond.

Please be advised that the statements made during the presentation include forward-looking statements under applicable securities laws. Such forward-looking statements involve certain risks and uncertainties that may cause actual results to differ materially from those contained in the forward-looking statements. These risks are discussed in our Form 8-K filed today and in other filings made with the Securities and Exchange Commission, including our Annual Report on Form 10-K. obligation any any statements. disclaims company to forward-looking update The

encourage adjusted references this made constant During our share. and included of measures call, for currency, per this helpful and release time call. will will as a these I Reconciliations EBITDA as guide as both the access during course our our website, posted in such they conference earnings to on be are diluted terms to adjusted earnings non-GAAP earnings reference our slides, www.hudsonrpo.com. quarterly you materials at serve

call I turn to now will the over Jeff Eberwein.

operator, everyone. update reviewing CFO, on our some additional us and today. Thank an and fourth you financial you, joining Hudson will provide results. by start highlights welcome our the for in your Diamond, on interest give I'll for current details quarter thank then and conditions. I'll Global business XXXX We Matt

reported net income costs and share $X.XX $XX million recorded income the million XXXX net of quarter and net of million fourth adjusted SG&A a $X.XX or a million. $X.X revenue adjusted of $XX.X we a EBITDA adjusted versus we $X.X and year were the ago. $X.XX of fourth million, of quarter of a in In share $XX.X revenue

from over fourth to Matt by details CFO, some quarter. I'll results now turn the call our the review as financial to additional financial Diamond, our region well as

our EBITDA $X.X EBITDA adjusted revenue net year's EBITDA X% you, business everyone. year-over-year of constant Thank million net decreased last decreased $X.X decreased million constant and XX% revenue for currency. million year versus of Pacific of a $X.X and in adjusted Asia ago. adjusted million. currency, Americas our business for morning in from grew Jeff, XX% and of currency. $X.X Adjusted good in decreased adjusted EBITDA constant Revenue Adjusted Revenue

a year grew XXXX in in ago. million currency. versus EMEA quarter increased EBITDA the of fourth and XX% adjusted revenue constant XX% net of slightly Our business revenue Adjusted $X.X

cash. outstanding Turning to up with the December XX sales Day days million from we some XX DSO from and at in XXXX, in days ended fourth additional quarter, was financial details XXXX. QX restricted of $XX.X cash December

In fourth Karani XXXX of & of of million XXXX, third as of acquisition goodwill quarter in million and of the Badge amortizable assets. in intangible the connection our the Coit balance XXXX, $X.X quarter in quarter $X.X Hunt fourth year-end with the Group and of net of reflects sheet

decreased XXXX. XXXX million to The quarter company's in of $X.X $X.X the cash, from working of end the capital, fourth excluding million at

finalized in this on Australia we million a $X.X reminder, April new market, expected the flow a we facility in end during of generated client As QX. fourth the quarter. capital at the The credit that to working company a of facility XXXX cash nothing from had but as in support in operations wins in growth result needs drawn

I'll over some now business our in turn more our trends to Jeff to give and to the call current back on business. review RPO perspective

and Australia lockdowns. we In of U.K. to of strong top China in in was you, in growth partially the by revenue due tech Thank line COVID-XX offset grew lower A slowdown X%. sector hiring XXXX adjusted fourth related the Matt. the and quarter volumes the net

cost costs structure make further versus we able can to and fourth needed. last million if declined were to than SG&A EBITDA adjusted year's $X Although QX quarter, reduce more versus adjustments by our

the respond quickly we and market a clients to to We with business, have different we very our activity are well of of team positioned new experienced at a to navigating We win needs various believe continue cycles. history levels.

is of technology hold half our now our XX% well. where second Further, significant consists the business, of slowdown last project work year. seen the comprises business continues we approximately emphasize in our to I'd have of of RPO which work The enterprise starting in which to that very like up a XX% work, sector remaining and

to and market responded Our conditions these our protect have these profitability to position the respond accordingly reverse. teams changes quickly business should to

thank their to of our I flexibility, we've our dedicated all and want business challenging employees dedication been through. work for highly hard As clients the in to working always, conditions and

please questions. Operator, the can you open for line

[Operator Instructions].

Our first go from Sidoti with ahead. question Marc & comes Riddick Company. Please

Hi! Good morning.

morning. Good

data well recall the through bring seeing some I were us if was price pricing working you far pay seeing on sort as there. maybe Maybe environment, give as to wondering to as an maybe update So bill you're you what as of as as could I up you're what rates, putting increases. just to rates,

second that and increases. we Yeah, follows rates price positive, continues issue was are Sure. Pricing be the year last volume In the half labor we continued pricing the wage our to general, had all getting and of market. related. in

labor going a So indicator, trends. pretty for good leading pricing if that's wage a rates, rates are up, our indicator

results one the if the of rate be the of. maybe Okay, notice should to was anything than I and expecting. wondering was kind was higher – was wondering about particular aware I be seem in we did things this that then of was I be there tax I to there

generate large a good mix is only income, around world. frustrating NOL, U.S. and but know we're have because really just Really you we that's and and such global question, the Yes, a income Marc. for that very issue it’s it’s as a NOL

crazy. in QX UK, the China, in rate places because as and you rate our if XX-K Australia, total, looks that's in effective a you'll mix. – of see QX It's out, when it tax X% U.S. why has pay of look like and effectively QX little really a comes you we Kong, and international so and at we a that if had Hong So taxes the which percentage like grew a decline

what could I just the And give to sort your like or bit – sense. remarks, as mix talk makes or I prepared us, wondering maybe you us activities. to there given was anything your attracting well, a seeing as much if it thoughts wondering that. pipeline mentioned an geographic prior that Okay, if you at be – it of changed, some update anything maybe little whether maybe about, what if then out the was in has potential and of you're the acquisition valuations

I looking, would we were and a who quite pay would market year. were but we're I other Yeah, willing were. by good were we're actually There than it valuation get by a A saying acquired acquisition just for patient that to possibilities say, those last along. higher people few always to some did waiting on the summarize opportunities come of few

in we're always to few a looking, anything. market, didn't happen, of get don't we're have quite we didn't them But always do done and the

maybe geographic don't really those We to accretive, have new a new easier really it’s (a) a it's is than just immediately looking are our build situations for. or we but in looking or (b) to for really to from whether sector we're where what valuation, a region, something acquire business that scratch, that's adds good

Great! And then I taking a one around everything place headlines I me. we've in of guess last that's for know lot the the seen tech world.

seeing some into you throughout you of that if in wondering prior kind that of the bigger smaller there about about, be seeing or maybe talking know this what I how a any we're to of from outs would about not year much you. you about. little worthy year, some guess were that think that I as other maybe could leading filtered bit call last some you've I Thank companies companies were in talk talked year. made, are to the was commentary verticals

My care and would lot we devices, strength care about and health we're Healthcare. for us providers care other on in health health of seeing other mean focus talk not Yes, sciences, really we companies. pharmaceuticals, hospital providers. medical know That's might a say what is life I chains when you

and area strength but select particular financial services. there's industrials. high pocket some strength of we’re some So end of strength and the strength, some pockets of that's seeing There's consumer, in particularly manufacturing also in there,

So like is about there's areas related continuing ramp. new backed weaker talk those of to by technology companies, we business. more see where we're still need and someone venture AI activity activity far get typically are are we're even under help a where going with And firms, the partner them us capital on more been team and repositioned, by and – those in those and a at areas and as healthy with Services, we’ve and we're have sector funded like it's our there Clients hire surface, some is starting are to some seeing to there decent few startups really is won the IT but to there general the - but rates sector. lot

activity maybe given Great, wondered and any – macroeconomic and – seeing Thanks. last with environment. update recent trends I I'll one one, then see if had you in RPO to sneak what you're one as the sorry.

Yes, healthy. it continues be to

and think we vast year which enterprise also do the have good ago, coming either companies, RPO, up minute last had COVID, by care, have hold were to kind somewhat first just the a and it like what it RPO, COVID. the really dealing want RPO So solution And we another in this were of independent they year out they've to the A in would time, what's and of with we'll of chalk they studying just that I year. mentioned opportunities and it would is for distraction good going I those and just been sector. because of was for cycle the bulk on banking are while lot economic a that being an far a kind a on health biggest But of I such use of up to of chalk or year, that. because

provider, flexible seeing And to with another they needed as unhappy the some incumbent are they incumbent in that cases wasn't we're be. provider because them as then didn't, is thing as their

seeing the way partner. go already satisfied the and for is not more usual with current than are their to business we're so opportunities convinced where to client just pitch RPO they And is

Thank you.

Please Our go Bernaldez from Ignacio comes next ahead. with Hutton. EF question

Two Hey! Good thank Eddie time. calling I'm here. morning, of and behalf Reilly. questions for your on you

business current given macro just regarding mentioned wins the these in press environment. driving first, The the what's new release, wins curious the

won there's Yeah, revenue additional first new run million, number. it’s an $X well on it. running TV says, business doesn't market net quarter. at rate is I what XXXX, things in of It this, someone amount and probably the we've mean annualized a somewhere. would and of fully it’s million always bull I healthy a there's when up number look $X as in more that's the the And encouraging it one annualized when estimate that around at always

And won just to for looking decent healthcare. where hygiene a size company collection with a products, responding and water gaming, that it's need clean specialty the focuses We pretty really client chemical products, it's on of so a account need. and that is

COVID, where a weakness companies at financial as lot then lot There's the countries, the pause during see coming some like dot-com the and in the more real you I from all and degrees; varying some during ahead. real think Cost situations on sector, a and crisis. burst of like the of U.S. what bad downturns environment of going just epicenter we've were particularly And the know we on to the steam the That’s all West COVID as of seen other sectors, out all severe of a lot some great after mixed. tech epicenter, countries and the it's say is I countries would sectors, was it is full current sectors,

what looking you. ahead then hear, kind the of top really strategic your helpful, thank priority is? That's wondering just And at for XXXX, secondly yeah just

that’s just continue to the that to delivering we really make our to deliver. are It's expect execute well sure question. results Yeah, them and and prudent good really a investments

and a how growth spending spending, and marketing, say While ago four we have we investment we've much or years believe those technology, talked continue we've growth past increased about company the believe five We areas our in areas in in significantly we're we're we're we are the and the increased to areas. sales, a – of where versus business. invest

of and why those business investments a high we're healthy that’s we've think, new very made. It's pipeline we that's of because seeing opportunities. ROI pretty it's think why We

it's so out we those we way the expect playing just And to, sure are the investment out. them really played given making that that

That's Thank really for you today. helpful. so much time your

Absolutely.

Mark from Investor. Private comes question a next [ph] Our Bishop

Good morning!

have Thanks taking call. my for couple of here. Hi! I things a

through cut in earnings million how – much you that you SG&A. has in $X your flowed How and not about of First, plus much to QX benefited yet? said

the one others second have we year just while changes have flexible fairly half a say a clients, there short and we at the adjusted I where ramping, thumb level, had run quarter another some of so of we last decreasing, be That certain people a to we're in those move Yes, a of of costs we very and our hiring sectors inefficiencies flexible XX% revenue. one area were takes countries, as activity of out situations can structure and and in itself – we around cost very would term usually in around kind or that were a in two SG&A is can And very where area. and quickly reducing certain was high should good levels. rule times adjust to work certain net odd

building a looking at pretty or at way to term model So think. good business of just like forecast, look a you that's kind if were we the long a

EBITDA $X.XX that revenue because general, costs of that. the the drop $X another different like So to if already being things the to we we global overhead and all have other in and $X.XX have we line, down of add SG&A of should and get

pretty were absolute we think we SG&A $X little our to costs a make declined out flexible million can And adjustments versus by by, adjustments we just pointing just dollars over was wanted QX it So model, that we a just we down have our QX dollars and up further in in to highlight business I as show can or do that required clients. make quickly.

a one do takes SG&A terms use net we or a Sometimes a but quarter as it is XX% over revenue. number in think two, of time of percent that to good

or for I revenue I number net like that of of $XX adjusted year. quarters almost XX% Does for at it see you mean you million neighborhood of would something looking revenue your at looking quarter SG&A about $XX adjusted we the forward, have net to back you’ve know just the or or here million had your adjusted the wrong? $XX numbers more the to from expect think that XX% could presentation, like get next Okay, that be at on numbers going I couple million net ‘XX. the revenue in that. am of in like

No, I think right. you're looking numbers, at the

while, it’s on is And a precise sectors, and lot the that is work time. will in I now way that XX% Said guidance below give of geographies than something to net that, out level. it to SG&A quarter of You example, of trend way, increased for COVID, team of but which an our where definitely by and was kind incredibly is divided was that in like quickly our more a another unsustainable normalize by so think hiring hard volumes normal revenue thin coming of over lot for hours. a stretched working was kind

SG&A I thing, out you is strip to the think that have numbers look other at items. the one if non-recurring you

is the for was number. Sometimes ended in Chinese the significant and of I Australia the always at That in And New guidance of is Asia year. and the during mean is Most year. started QX year the a Year have look guidance – there's out note giving items when largely stopped at very the you PAC. ended and quarter the year, for weak January, look non-recurring a SG&A beach note. presence on and – to weak But year Hong a China, due Kong on our some then in I when this not we I giving COVID slowest

think almost be is XXXX no year QX of and So quarter is always for exception. the to the us, weakest I going

then quarter. And improvement the quarter each will an think I versus show prior

just way the on trends we probably know QX. if year really, that, of massive highest the the we there's And works, annualization anything or economy strong then go be the disruption things a no hiring you quarter the QX the entered and or note. or XXXX will really way in So think, like

in very So and we in then weakness had QX QX, to a we strong weakness QX. and qX very strong started further seeing

year-over-year be comps comps when having like And and get think QX we'll positive so get easier QX. out much so the out get to you you I to when QX and

that of QX your or Probably to QX net QX. we know direct around question, net we'll be middle of SG&A the terms very year, being it’ll in in that revenue. confident the answer revenue, of So than number be XX% are of you XX% sometime worse at

whether Okay, that project, weak and much that's has on tech just On I all its break more you being more it was think wondering thought by your you are weakness of is you project of if great. Thank reined sporadic bit that very areas. break or out that is versus and – little that. in near said it things. and because for of revenue nature to you bottom think could think is is a some project the the tech you come anywhere or – you if you still maybe give XX% out can by or near, tech revenue, economic

let thing year the with business, Most medium It’s bit Its little to clients Yes, RPO. are size our a all good and highest companies. do. usually is value me big that's companies. we that is growth, enterprise out of. that heard our our And XXX you've of the butter and Fortune questions, bread typically contracts three traded business just and publically larger zoom say original companies

have RPO. funnel helped other business enterprise think we businesses all we’re that to We three in

largely just and in led a enterprise that been with It became exactly build it leads business enterprise a client our to contracting contracting win QX RPO client. the was was an that that. hope a enterprise there to relationship our new So work of kind RPO with RPO biggest side we've service do, offer is we one examples have contracting But the clients. of that few historically we for where a

happy So about we're very that. very,

more the XXXX tech in we and That's came the business different sector the tech model. most in IPO we of that's can type contract. from recruiter did quickly It fairly sector, of on-demand, be do it’s work place late the a turned from an in the Coit In like turned might more acquisition have companies. on, MSA pre contract and we a off

be a ramped somewhere little it ramped work. and But down up bit or project for can

reason the to to convert do whole RPO. to tax hoping to do is we're So in on-demand recruit that project enterprise work the sector and

throw to that So wanted of I there. kind just out

possibly needed as ago, of out I strong. really, as a into terms very really year takes to much sector strong was study COVID. help Project place, was time can in to of a need XXXX it coming kind time the and And get. think coming people Companies numbers, there it a long for tech And takes put work work. a project long they do. Enterprise in big RPO show could what of was

coming the we in probably year total. our tremendous and in peak project split I by half end it amount at and of so of saw probably strength that of tremendous And a of year of ago, the of a it XX% project. And tech probably a the total, was strength out COVID, amount tech, half work, down to our would XX% was

RPO growing, of is that tech very right today, XX% and the sector the it's the steady we probably work. and enterprise is areas very, XX% and now project what So have of weakness do, in to big, been and big

thank helpful, you. very That's

any equity equity. future premier just seeing know may I've customers if hearing concerns you're for be by private to possible As – didn't are a I can any backed talk with speak that question, been weakness private issues or that of your you there in general. some whether

PE based don't and private have our companies. big get are to it's big an RPO firm. acquired and that. is client owned PE one do We that lot company, business and like have see we're that. publicly traded of enterprise that's publicly and Its firms, just a is I the a global European company, version traded enough, of mentioned just backed this a a they more so short antidote We by a by because of going clients interestingly firm. are many Most one clients we that equity don't Yeah,

is backed so. would PE So huge made I comes that just and doing the mind acquisition, say incredibly well that one is client a to

that's that, of seen QX. balancing to low except with been we VC to we that, the companies. lot QX And that owned weakness like PE along is already and and we've if companies, because have I've owned of tech big the exposed in about, And at PE we're level, really talking really see a not kind where decline, exposure was a and really maybe and for there in sector wouldn't do

that's Okay, I’m great. almost here. done

– time India do the you last, secondly, are you of you good one is you about is, economic doing? is – considering can acquisition more you do acquisitions because And weary the see Just think this still uncertainty? then did thank last your be that do to a or you talk how you

Sure.

help from the a natural could be are so it So is a have were really market, and right our really fit, approach come could business where the accelerate good we've acquisitions market. a model done where looking. takes one do it with right to approach always and place the vision at tricky and thing meeting and and we market a just from buyer in the one owner, and a different And growth. how that in learn because we that their three, willing willing companies their to really equals We they had we we the plus and being the acquisition, listening the just being approach, a seller, time lot from acquisitions always and

That's really it. to key the

the volumes So or it’s market's going to what to economy or going trying are to much more is to do bottom or view some predict the up going hiring macroeconomic what than do. do what

based are in both a of currently, they in clients sector. in on we last very, we impacted of list with, tech terms have past was business that an have year, attractive They historic we do India. made the the acquisition In But slowdown their in results. very by hiring that they and strong the it do a very new We winning India and small been acquisition. at got valuation think the business

for positions think be very, will decades acquisition, to a we be really very for to well very it's place a it great small us come. what but So

employees but we're our they is historically, serving an with similar strategy to haven't any multinationals working that and we So India. India, where acquisition strategy had now have for are European, in what, to is U.S., we We've our UK, big and who clients, had offering offering in This in in China work. in operations U.S. India, have to were, India.

Thank that. much for you very all

Sure.

concludes I That now remarks. to over Eberwein the for question-and-answer to session. like turn today's would closing call Jeff

Thanks Thanks next Feel questions, or All for you you release good on contact to your very free Relations for thank quarter's joining website us day! information a and much. Investor today. to call. look contact our interest Have using we on Global. in and the Hudson anytime us updating forward great our press

Thank website joining be Global conference hudsonrpo.com. Section available and Investors quarter fourth will the has Hudson Today's on call call. been recorded our of you for