• Revenue: $36.9 million, down 8% year over year in constant currency.
• Adjusted Net Revenue: $18.6 million, down 5% year over year in constant currency.
• Adjusted EBITDA: $0.8 million, compared to $2 million a year ago.
• Net Loss: $0.8 million or $0.28 per diluted share, versus net income of $0.5 million or $0.17 per diluted share last year.
• Adjusted Net Loss Per Share: $0.13, compared to net income per diluted share of $0.24 last year.
• Americas Revenue: Increased 6%; adjusted net revenue decreased 3% year over year in constant currency.
• Americas Adjusted EBITDA: $0.6 million, up from $0.3 million last year.
• Asia-Pacific Revenue: Decreased 15%; adjusted net revenue decreased 11% year over year in constant currency.
• Asia-Pacific Adjusted EBITDA: $0.9 million, compared to $2.3 million a year ago.
• EMEA Revenue: Increased 7% year over year in constant currency; adjusted net revenue increased 5%.
• EMEA Adjusted EBITDA: $0.2 million, flat compared to last year.
• Cash: $16.5 million, including $0.7 million of restricted cash.
• Cash Flow from Operations: $1.3 million, compared to a $0.7 million cash outflow last year.
• Days Sales Outstanding: 56 days as of September 30, 2024, compared to 59 days as of June 30, 2024.
• Working Capital (excluding cash): $14 million, compared to $12 million at December 31, 2023.

• Warning! GuruFocus has detected 5 Warning Signs with HSON.

Release Date: November 12, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Revenue for the Americas business increased by 6% year over year in constant currency.
• EMEA business saw a 7% increase in revenue and a 5% increase in adjusted net revenue year over year.
• The company generated $1.3 million in cash flow from operations during Q3 2024, compared to a $0.7 million cash outflow in Q3 2023.
• Hudson Global Inc (NASDAQ:HSON) has been recognized for the 16th consecutive year in HRO Today Magazine's Baker's Dozen List of Top Enterprise RPO Providers.
• Strategic hires have been made to enhance geographical reach and service offerings, strengthening the company's global reputation and capabilities.

Negative Points

• Overall revenue decreased by 8% year over year in constant currency.
• Adjusted EBITDA for Q3 2024 was $0.8 million, down from $2 million in the same quarter last year.
• The company reported a net loss of $0.8 million compared to a net income of $0.5 million in Q3 2023.
• Revenue for the Asia-Pacific business decreased by 15% year over year in constant currency.
• New logo sales were disappointing, with potential clients delaying or shrinking their scope.

Q & A Highlights

Q: Can you discuss the regional differences in activity, particularly the growth in the Americas and EMEA compared to Asia Pacific? A: Jeffrey Eberwein, CEO: The new business wins in 2023 have met expectations, but existing clients, especially in Asia Pacific's financial sector, have hired below expectations. This is seen as temporary, with a return to normal levels expected next year. Jacob Zabkowicz, Global CEO of Hudson RPO, added that while new business is picking up, current hiring volumes remain below expectations, though the "land and expand" strategy is showing success in new geographies.

Q: Are there any industry verticals showing increased activity or differentiation? A: Jacob Zabkowicz, Global CEO of Hudson RPO: Life sciences and pharmaceuticals remain stable, while financial services are lower than expected. The technology sector shows incremental improvement but lacks a significant rebound. Overall, sector performance is consistent.

Q: What are the potential political ramifications on client demand? A: Jeffrey Eberwein, CEO: It's too early to determine political impacts. The current environment has been uncertain, with factors like COVID, inflation, and interest rates affecting hiring. A stable, pro-business environment would benefit sectors like financial services, which are expected to return to normal hiring levels next year.

Q: Could you elaborate on free cash flow, cash usage, and acquisition plans? A: Jeffrey Eberwein, CEO: The company prefers organic growth but is open to acquisitions that enhance geography, sector, or services. No significant acquisitions are imminent. The company has been buying back stock, considering it a good use of capital, with $2.5 million repurchased this year.

Q: Are there any updates on share repurchase activity? A: Jeffrey Eberwein, CEO: Hudson Global has consistently repurchased shares, with the share count down over time. The company views its stock as undervalued and plans to continue repurchasing shares as opportunities arise.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.