Hudson Global Reports 2024 Third Quarter Results
OLD GREENWICH, Conn., Nov. 12, 2024 (GLOBE NEWSWIRE) -- Hudson Global, Inc. (NASDAQ:HSON) ("Hudson Global" or "the Company"), a leading global total talent solutions company, announced today financial results for the third quarter ended September 30, 2024.
2024 Third Quarter Summary
Revenue of $36.9 million decreased 6.5% from the third quarter of 2023 and 8.1% in constant currency.
Adjusted net revenue of $18.6 million decreased 4.0% from the third quarter of 2023 and 5.2% in constant currency.
Net loss was $0.8 million, or $0.28 per diluted share, compared to net income of $0.5 million, or $0.17 per diluted share, for the third quarter of 2023. Adjusted net loss per diluted share (non-GAAP measure)* was $0.13 compared to adjusted net income per diluted share of $0.24 in the third quarter of 2023.
Adjusted EBITDA (non-GAAP measure)* was $0.8 million, a decrease versus adjusted EBITDA of $2.0 million in the third quarter of 2023.
Under the $5 million common stock repurchase program effective August 8, 2023, the Company repurchased $0.4 million of stock in the third quarter of 2024. Year to date, the Company has repurchased $2.5 million of stock under this program and a total of $2.9 million since August 2023.
Total cash including restricted cash was $16.5 million at September 30, 2024.
"Results for the third quarter of 2024 continued to be impacted by a market-driven slowdown in hiring activity, which we are seeing across our client base," said Jeff Eberwein, CEO of Hudson Global. "We have taken steps to mitigate the impacts of the current environment while also positioning ourselves for a market recovery."
Jake Zabkowicz, Global CEO of Hudson RPO, added, "In the third quarter of 2024, we made multiple strategic hires with a focus on further enhancing our geographic reach and service offerings. These individuals bring deep industry expertise to Hudson RPO, further enhancing our global reputation and capabilities. Our efforts are evidenced by a myriad of recognitions we were proud to receive, including our 16th consecutive year ranking among HRO Today magazine's Baker's Dozen list of top enterprise RPO providers."
* The Company provides non-GAAP measures as a supplement to financial results based on accounting principles generally accepted in the United States ("GAAP"). Constant currency, adjusted EBITDA, EBITDA, adjusted net income or loss, and adjusted net income or loss per diluted share are defined in the segment tables at the end of this release and a reconciliation of such non-GAAP measures to the most directly comparable GAAP measures is included within such segment tables.
Regional Highlights
All rate comparisons are in constant currency.
Americas
In the third quarter of 2024, Americas revenue of $7.6 million increased 6% and adjusted net revenue of $6.6 million decreased 3% from the third quarter of 2023. EBITDA was $0.4 million in the third quarter of 2024, versus a breakeven EBITDA in the same period last year. Adjusted EBITDA was $0.6 million in the third quarter of 2024 compared to adjusted EBITDA of $0.3 million in the same period last year.
Asia Pacific
Asia Pacific revenue of $22.6 million decreased 15% and adjusted net revenue of $7.8 million decreased 11% in the third quarter of 2024 compared to the same period in 2023. EBITDA was $0.3 million in the third quarter of 2024 compared to EBITDA of $1.9 million in the same period one year ago, and adjusted EBITDA was $0.9 million compared to adjusted EBITDA of $2.3 million in the third quarter of 2023.
Europe, Middle East, and Africa ("EMEA")
EMEA revenue in the third quarter of 2024 increased 7% to $6.7 million and adjusted net revenue of $4.1 million increased 5% from the third quarter of 2023. EBITDA was flat in the third quarter of 2024 compared to an EBITDA loss of $0.3 million in the same period one year ago. Adjusted EBITDA of $0.2 million in the third quarter of 2024 was in line with adjusted EBITDA of $0.2 million in the third quarter of 2023.
Corporate Costs
In the third quarter of 2024, the Company's corporate costs were $0.9 million, compared to $0.8 million in the prior year quarter. Corporate costs in both the third quarter of 2024 and 2023 excluded non-recurring expenses of $0.1 million.
Liquidity and Capital Resources
The Company ended the third quarter of 2024 with $16.5 million in cash, including $0.7 million in restricted cash. The Company generated $1.3 million in cash flow from operations during the third quarter of 2024 compared to an outflow of $0.7 million of cash flow from operations in the third quarter of 2023.
Share Repurchase Program
The Company approved a new $5 million common stock share repurchase program, effective August 8, 2023. As of September 30, 2024, under this program, the Company has acquired 61,224 shares in the open market for a total of $1 million. In addition, the Company repurchased 44,250 shares in the first quarter of 2024 and 69,567 shares in the second quarter of 2024 in privately negotiated transactions, leaving a remaining balance of $2.1 million available for purchase under the 2023 authorization. The Company continues to view share repurchases as an attractive use of capital.
NOL Carryforward
As of December 31, 2023, Hudson Global had $302 million of usable net operating losses ("NOL") in the U.S., which the Company considers to be a very valuable asset for its stockholders. In order to protect the value of the NOL for all stockholders, the Company has a rights agreement and charter amendment in place that limit beneficial ownership of Hudson Global common stock to 4.99%. Stockholders who wish to own more than 4.99% of Hudson Global common stock, or who already own more than 4.99% of Hudson Global common stock and wish to buy more, may only acquire additional shares with the Board's prior written approval.
Conference Call/Webcast
The Company will conduct a conference call today, Tuesday, November 12, 2024 at 10:00 a.m. ET to discuss this announcement. Individuals wishing to listen can access the webcast on the investor information section of the Company's web site at hudsonrpo.com.
If you wish to join the conference call, please use the dial-in information below:
Toll-Free Dial-In Number: (833) 816-1383
International Dial-In Number: (412) 317-0476
The archived call will be available on the investor information section of the Company's website at hudsonrpo.com.
About Hudson Global
Hudson Global, Inc. is a leading global total talent solutions provider operating under the brand name Hudson RPO. We deliver innovative, customized recruitment outsourcing and total talent solutions to organizations worldwide. Through our consultative approach, we develop tailored talent solutions designed to meet our clients' strategic growth initiatives. As a trusted advisor, we meet our commitments, deliver quality and value, and strive to exceed expectations.
For more information, please visit us at hudsonrpo.com or contact us at
Investor Relations:The Equity GroupLena Cati212 836-9611
Forward-Looking Statements
This press release contains statements that the Company believes to be "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact included in this press release, including statements regarding the Company's future financial condition, results of operations, business operations and business prospects, are forward-looking statements. Words such as "anticipate," "estimate," "expect," "project," "intend," "plan," "predict," "believe" and similar words, expressions and variations of these words and expressions are intended to identify forward-looking statements. All forward-looking statements are subject to important factors, risks, uncertainties, and assumptions, including industry and economic conditions that could cause actual results to differ materially from those described in the forward-looking statements. Such factors, risks, uncertainties and assumptions include, but are not limited to, global economic fluctuations; the Company's ability to successfully achieve its strategic initiatives ; risks related to potential acquisitions or dispositions of businesses by the Company; the Company's ability to operate successfully as a company focused on its RPO business; risks related to fluctuations in the Company's operating results from quarter to quarter due to various factors such as rising inflationary pressures and interest rates; the loss of or material reduction in our business with any of the Company's largest customers; the ability of clients to terminate their relationship with the Company at any time; competition in the Company's markets; the negative cash flows and operating losses that may recur in the future; risks relating to how future credit facilities may affect or restrict our operating flexibility; risks associated with the Company's investment strategy; risks related to international operations, including foreign currency fluctuations, political events, natural disasters or health crises, including the Russia-Ukraine war, the Hamas-Israel war, and potential conflict in the Middle East; the Company's dependence on key management personnel; the Company's ability to attract and retain highly skilled professionals, management, and advisors; the Company's ability to collect accounts receivable; the Company's ability to maintain costs at an acceptable level; the Company's heavy reliance on information systems and the impact of potentially losing or failing to develop technology; risks related to providing uninterrupted service to clients; the Company's exposure to employment-related claims from clients, employers and regulatory authorities, current and former employees in connection with the Company's business reorganization initiatives, and limits on related insurance coverage; the Company's ability to utilize net operating loss carryforwards; volatility of the Company's stock price; the impact of government regulations; restrictions imposed by blocking arrangements; risks related to the use of new and evolving technologies; and the adverse impacts of cybersecurity threats and attacks. Additional information concerning these, and other factors is contained in the Company's filings with the Securities and Exchange Commission. These forward-looking statements speak only as of the date of this document. The Company assumes no obligation, and expressly disclaims any obligation, to update any forward-looking statements, whether as a result of new information, future events or otherwise.
Financial Tables Follow
HUDSON GLOBAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
Three Months Ended September 30,
Nine Months Ended September 30,
2024
2023
2024
2023
Revenue
$
36,853
$
39,398
$
106,456
$
127,367
Operating expenses:
Direct contracting costs and reimbursed expenses
18,250
20,028
53,908
63,650
Salaries and related
14,908
14,335
44,399
49,206
Office and general
2,823
2,503
8,164
7,991
Marketing and promotion
971
881
2,627
2,794
Depreciation and amortization
358
374
1,042
1,076
Total operating expenses
37,310
38,121
110,140
124,717
Operating (loss) income
(457
)
1,277
(3,684
)
2,650
Non-operating income (expense):
Interest income, net
93
90
280
284
Other (expense) income, net
(184
)
(404
)
(318
)
(321
)
(Loss) income before income taxes
(548
)
963
(3,722
)
2,613
Provision for income taxes
298
430
463
1,148
Net (loss) income
$
(846
)
$
533
$
(4,185
)
$
1,465
(Loss) earnings per share:
Basic
$
(0.28
)
$
0.17
$
(1.39
)
$
0.48
Diluted
$
(0.28
)
$
0.17
$
(1.39
)
$
0.47
Weighted-average shares outstanding:
Basic
2,975
3,068
3,009
3,062
Diluted
2,975
3,141
3,009
3,134
HUDSON GLOBAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts)
(unaudited)
September 30,2024
December 31,2023
ASSETS
Current assets:
Cash and cash equivalents
$
15,835
$
22,611
Accounts receivable, less allowance for expected credit losses of $372 and $378, respectively
24,475
19,710
Restricted cash, current
457
354
Prepaid and other
2,254
3,172
Total current assets
43,021
45,847
Property and equipment, net of accumulated depreciation of $1,750 and $1,564, respectively
301
421
Operating lease right-of-use assets
1,272
1,431
Goodwill
5,771
5,749
Intangible assets, net of accumulated amortization of $3,646 and $2,771, respectively
2,759
3,628
Deferred tax assets, net
3,634
3,360
Restricted cash, non-current
201
205
Other assets
195
317
Total assets
$
57,154
$
60,958
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable
$
1,166
$
868
Accrued salaries, commissions, and benefits
5,461
4,939
Accrued expenses and other current liabilities
5,757
4,635
Operating lease obligations, current
757
768
Total current liabilities
13,141
11,210
Income tax payable
91
87
Operating lease obligations
543
664
Other liabilities
439
