Summary of Hudson Global Conference Call - September 17, 2025 Company Overview - **Company**: Hudson Global (NasdaqGS:HSON) - **Recent Merger**: Hudson Global merged with Star Equity Holdings, completed on August 21, 2025, with Hudson as the surviving entity due to its $240 million net operating loss (NOL) [4][3] Core Business Strategy - **Vision**: Aim to be the "Berkshire Hathaway of microcaps" by focusing on excellent businesses, management, and capital allocation [3] - **Revenue Projections for 2026**: Expected revenue of $250 million, adjusted EBITDA of $15 million, and adjusted earnings per share of approximately $1.50 [5][11] - **Long-term EBITDA Goal**: Anticipate reaching $40 million in EBITDA by the end of the decade, driven by organic growth and market share increase in growing industries [6] Acquisition Strategy - **Focus on Bolt-on Acquisitions**: Targeting acquisitions that enhance existing businesses, aiming for each to generate at least $10 million in EBITDA [6][20] - **Capital Allocation**: Plans to use cash, debt, and preferred stock for acquisitions, avoiding stock issuance due to perceived undervaluation [8][9] - **Asset Monetization**: Over $20 million in non-EBITDA generating assets expected to be monetized, which could significantly impact market cap [9] Financial Metrics and Valuation - **Current Valuation**: Stock is considered undervalued with a PE ratio of 6 and EV/EBITDA of 3 based on 2026 estimates [12][11] - **Preferred Stock**: Approximately $27 million in preferred stock, viewed as a flexible acquisition currency [12][30] - **Free Cash Flow Yield**: High free cash flow yield available for shareholder value creation through acquisitions or stock buybacks [34] Industry Dynamics - **Staffing Business Outlook**: Experienced a peak in 2022, followed by a decline, but is seeing a gradual return to normal hiring levels, particularly among Fortune 500 clients [31][33] - **Attrition Rates**: Noted a significant drop in attrition rates post-COVID, indicating a stabilization in the workforce [32] Key Business Segments - **Building Solutions**: Expected to grow at an average of 10% revenue growth over the next five years, with a focus on engineered wood products [22] - **Business Services**: Largest division, aiming to return to 2022 profitability levels with a focus on long-term contracts with Fortune 500 companies [23] - **Energy Services**: Looking for acquisitions in non-capital intensive, mission-critical products and services [24] Management and Team Structure - **Management Team**: Comprised of experienced individuals from both Hudson and Star, with a focus on operational efficiency and strategic growth [36] Conclusion - **Future Outlook**: Hudson Global is positioned for long-term value creation through strategic acquisitions, organic growth, and effective capital allocation, with a strong focus on enhancing shareholder value [5][9][34]

Core Viewpoint - Hudson Global, Inc. will change its corporate name to Star Equity Holdings, Inc. effective September 5, 2025, following its merger with Star Operating Companies, Inc. This change reflects the company's strategic direction towards building a diversified portfolio aimed at long-term shareholder value [1][2][4]. Company Overview - Star Equity Holdings, Inc. is a diversified holding company focused on acquiring, managing, and growing businesses with strong fundamentals and market opportunities. The company comprises four divisions: Building Solutions, Business Services, Energy Services, and Investments [4]. Leadership - The company will be led by Jeff Eberwein as Chief Executive Officer and Rick Coleman as Chief Operating Officer, with additional management including Matt Diamond as Chief Accounting Officer, Hannah Bible as Chief Legal Officer, and Shawn Miles as Executive Vice President – Finance [3]. Divisions - **Building Solutions**: This division operates in three niches: modular building manufacturing, structural wall panel and wood foundation manufacturing, and glue-laminated timber (glulam) column, beam, and truss manufacturing [5]. - **Business Services**: This division provides flexible and scalable recruitment solutions to a global clientele, focusing on mid-market and enterprise organizations, and partners with talent acquisition, HR, and procurement leaders [6]. - **Energy Services**: This division is involved in the rental, sale, and repair of downhole tools used in various industries including oil and gas, geothermal, mining, and water-well [7]. - **Investments**: This division manages and finances the company's real estate assets and investment positions in private and public companies [8].

Core Points - Hudson Global, Inc. announced a partial cash dividend of $0.025 per share for its 10% Series A Cumulative Perpetual Preferred Stock, effective from August 22, 2025, with a record date of September 1, 2025, and a payment date of September 10, 2025 [1] - The company completed a merger with Star Equity Holdings, which resulted in the automatic conversion of Star's preferred stock into Hudson Global's Series A preferred stock, trading under the ticker symbol "HSONP" [3] Company Overview - Hudson Global, Inc. is a diversified holding company with four business divisions: Building Solutions, Business Services, Energy Services, and Investments [4] Business Divisions - **Building Solutions**: This division includes modular building manufacturing, structural wall panel and wood foundation manufacturing, and glue-laminated timber (glulam) column, beam, and truss manufacturing [5] - **Business Services**: Provides flexible recruitment solutions for clients at all organizational levels, focusing on mid-market and enterprise-level organizations globally [6] - **Energy Services**: Engages in the rental, sale, and repair of downhole tools for various industries including oil and gas, geothermal, mining, and water-well [7] - **Investments**: Manages and finances the company's real estate assets and investment positions in both private and public companies [8]

Core Viewpoint - The merger between Hudson Global, Inc. and Star Equity Holdings, Inc. has been successfully completed, creating a larger and diversified holding company that aims to leverage its increased size, diversified revenue streams, and improved profitability to deliver compelling returns to shareholders [5][8]. Company Structure and Operations - Hudson Global now operates with four reporting segments: Building Solutions, Business Services, Energy Services, and Investments [6][10]. - The Building Solutions division includes modular building manufacturing, structural wall panel and wood foundation manufacturing, and glue-laminated timber manufacturing [11]. - The Business Services division provides flexible recruitment solutions to a global client base, focusing on mid-market and enterprise-level organizations [12]. - The Energy Services division is involved in the rental, sale, and repair of downhole tools for various industries [13]. - The Investments division manages the company's real estate assets and investment positions in both private and public companies [14]. Financial and Market Impact - The merger results in pro-forma annualized revenues of $210 million, enhancing revenue diversity and positioning the company for potential inclusion in the Russell 2000 index [5]. - The merger allows for the utilization of Hudson Global's $240 million U.S. federal net operating losses (NOLs) [5]. Stock and Trading Information - Hudson Global's common stock will continue trading under the symbol "HSON," while its 10% Series A Cumulative Perpetual Preferred Stock will begin trading under "HSONP" [2]. - Star's common and preferred stock has been suspended from trading on Nasdaq as of August 22, 2025 [2]. Management and Governance - The board of directors of Hudson Global consists of seven members, with six being independent, and is led by CEO Jeff Eberwein and COO Rick Coleman [7].

PART I – FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) The unaudited condensed consolidated financial statements for Hudson Global, Inc. show a slight decrease in revenue and an increased net loss for the second quarter of 2025 compared to 2024, with improved cash flow from operations. [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For Q2 2025, revenue slightly decreased to $35.5 million, resulting in a wider net loss of $688 thousand, while the six-month period saw a narrowed net loss despite a revenue decline. Consolidated Statements of Operations Highlights (in thousands, except per share amounts) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | **Revenue** | $35,541 | $35,712 | $67,407 | $69,603 | | **Operating Loss** | $(211) | $(187) | $(1,935) | $(3,227) | | **Net Loss** | $(688) | $(441) | $(2,444) | $(3,339) | | **Diluted Loss Per Share** | $(0.23) | $(0.15) | $(0.82) | $(1.10) | [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets increased to $55.6 million, driven by higher accounts receivable, while total liabilities also rose to $15.4 million, leading to a slight decrease in stockholders' equity. Balance Sheet Summary (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $16,837 | $17,011 | | Accounts receivable, net | $23,549 | $20,093 | | **Total Current Assets** | **$43,293** | **$40,140** | | **Total Assets** | **$55,577** | **$52,583** | | **Total Current Liabilities** | **$14,256** | **$11,222** | | **Total Liabilities** | **$15,447** | **$12,155** | | **Total Stockholders' Equity** | **$40,130** | **$40,428** | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities significantly improved to $0.7 million for the six months ended June 30, 2025, compared to $6.1 million in the prior year, with minimal impact from investing and financing activities. Cash Flow Summary (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(663) | $(6,058) | | Net cash (used in) provided by investing activities | $(43) | $1,053 | | Net cash used in financing activities | $(31) | $(2,580) | | **Net decrease in cash, cash equivalents, and restricted cash** | **$(144)** | **$(7,891)** | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail the company's RPO business, a pending merger with Star Equity Holdings, strategic expansions, and the post-quarter acquisition of Alpha Consulting Group in Japan. - The company entered into a merger agreement with Star Equity Holdings, Inc. on May 21, 2025, which, if consummated, will transform Hudson into a diversified holding company[26](index=26&type=chunk)[27](index=27&type=chunk)[29](index=29&type=chunk) - On July 23, 2025, the company acquired Alpha Consulting Group ("ACG"), a Japan-based recruitment services provider, marking its entry into the Japanese market[129](index=129&type=chunk) Disaggregation of Revenue (in thousands) | Revenue Source | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | RPO | $17,428 | $17,770 | $33,170 | $33,608 | | Contracting | $18,113 | $17,942 | $34,237 | $35,995 | | **Total Revenue** | **$35,541** | **$35,712** | **$67,407** | **$69,603** | - The company manages its business across three reportable geographic segments: Americas, Asia Pacific, and EMEA, with **Asia Pacific being the largest segment by revenue** ($40.7 million) for the six months ended June 30, 2025[105](index=105&type=chunk)[109](index=109&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes a slight revenue decline in H1 2025 to challenging market conditions, while EBITDA loss improved, and the company maintains sufficient liquidity. - The company is facing challenging market conditions due to persistent inflation, higher interest rates, and decreased demand for labor in certain markets, which are expected to continue into the next quarter[139](index=139&type=chunk)[140](index=140&type=chunk) - A pending merger with Star Equity Holdings, Inc. was announced on May 21, 2025, which, if completed, will transform the company into a diversified holding company[137](index=137&type=chunk)[138](index=138&type=chunk) Financial Performance Highlights - Q2 2025 vs Q2 2024 | Metric | Q2 2025 | Q2 2024 | Change | Change % | | :--- | :--- | :--- | :--- | :--- | | Revenue | $35.5M | $35.7M | $(0.2)M | -0.5% | | Adjusted Net Revenue | $18.6M | $17.6M | $1.0M | +5.8% | | EBITDA (loss) | $(0.2)M | $0.0M | $(0.2)M | N/A | | Net Loss | $(0.7)M | $(0.4)M | $(0.3)M | N/A | Financial Performance Highlights - H1 2025 vs H1 2024 | Metric | H1 2025 | H1 2024 | Change | Change % | | :--- | :--- | :--- | :--- | :--- | | Revenue | $67.4M | $69.6M | $(2.2)M | -3.2% | | Adjusted Net Revenue | $35.0M | $33.9M | $1.1M | +3.2% | | EBITDA (loss) | $(1.7)M | $(2.7)M | $1.0M | N/A | | Net Loss | $(2.4)M | $(3.3)M | $0.9M | N/A | [Results of Operations - Americas](index=34&type=section&id=Results%20of%20Operations%20-%20Americas) The Americas segment reported revenue growth of 2% in Q2 2025 and 8% in H1 2025, driven by new contracting clients, leading to an improved EBITDA of $0.1 million for H1 2025. Americas Performance (in millions) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $7.1 | $7.0 | $14.0 | $13.0 | | Adjusted Net Revenue | $6.3 | $6.3 | $12.3 | $12.1 | | EBITDA (loss) | $0.2 | $0.4 | $0.1 | $(0.5) | - For H1 2025, **contracting revenue increased by 478%** due to new client engagements, while RPO revenue decreased by 6% due to lower demand from existing clients[155](index=155&type=chunk) [Results of Operations - Asia Pacific](index=36&type=section&id=Results%20of%20Operations%20-%20Asia%20Pacific) Asia Pacific revenue decreased by 3% in Q2 2025 and 5% in H1 2025 on a constant currency basis, primarily due to a decline in contracting revenue in Australia, yet profitability significantly improved with H1 2025 EBITDA reaching $1.7 million. Asia Pacific Performance (in millions, constant currency) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $21.6 | $22.2 | $40.7 | $42.9 | | Adjusted Net Revenue | $8.8 | $7.5 | $16.0 | $13.9 | | EBITDA (loss) | $1.4 | $0.2 | $1.7 | $(0.4) | - In Australia, H1 2025 revenue declined **10%** due to a **17% decrease in contracting revenue**, partially offset by a **12% increase in RPO revenue**[167](index=167&type=chunk) [Results of Operations - EMEA](index=38&type=section&id=Results%20of%20Operations%20-%20EMEA) EMEA constant currency revenue increased by 6% in Q2 2025 but remained flat for H1 2025, with a 22% increase in contracting revenue offset by a 14% decrease in RPO revenue, resulting in an EBITDA loss of $1.3 million for H1 2025. EMEA Performance (in millions, constant currency) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $6.8 | $6.4 | $12.7 | $12.8 | | Adjusted Net Revenue | $3.5 | $3.8 | $6.7 | $7.8 | | EBITDA (loss) | $(0.7) | $0.2 | $(1.3) | $0.5 | - The increase in SG&A and Non-Op for H1 2025 was primarily the result of higher consultant staff costs[192](index=192&type=chunk) [Liquidity and Capital Resources](index=41&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2025, the company maintained **$17.5 million in cash and equivalents**, with significantly improved operating cash flow and an undrawn Australian invoice finance facility, indicating sufficient liquidity for the next 12 months. Cash Position (in millions) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash, cash equivalents, and restricted cash | $17.5 | $17.7 | - Net cash used in operating activities decreased by **$5.4 million** in H1 2025 compared to H1 2024, driven by more favorable working capital and a lower net loss[206](index=206&type=chunk) - The company has access to a **4 million Australian dollar invoice finance credit facility**, which was undrawn as of June 30, 2025[209](index=209&type=chunk)[211](index=211&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=45&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) As a smaller reporting company, Hudson Global, Inc. is exempt from providing quantitative and qualitative disclosures about market risk. - As a smaller reporting company, Hudson Global, Inc. is not required to provide quantitative and qualitative disclosures about market risk[222](index=222&type=chunk) [Item 4. Controls and Procedures](index=45&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting. - The CEO and CFO concluded that the company's disclosure controls and procedures were **effective** as of June 30, 2025[223](index=223&type=chunk) - No material changes were made to the company's internal control over financial reporting during the six months ended June 30, 2025[224](index=224&type=chunk) PART II – OTHER INFORMATION [Item 1. Legal Proceedings](index=46&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any pending legal proceedings expected to have a material adverse effect on its financial condition or results of operations. - The company reports no pending legal proceedings that would be reasonably expected to have a material adverse effect[226](index=226&type=chunk) [Item 1A. Risk Factors](index=46&type=section&id=Item%201A.%20Risk%20Factors) The company incorporates by reference risk factors from its 2024 Annual Report on Form 10-K and additional risks related to the pending merger from its Registration Statement on Form S-4. - Risk factors are incorporated by reference from the company's 2024 Form 10-K and the Form S-4 filed on July 23, 2025, related to the pending merger[227](index=227&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=46&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company did not repurchase any common stock during Q2 2025, with approximately $2.1 million remaining available under its authorized share repurchase program. - No shares were repurchased during the three months ended June 30, 2025[228](index=228&type=chunk)[229](index=229&type=chunk) - As of June 30, 2025, approximately **$2,118,651 remained available** under the company's share repurchase program authorized on August 8, 2023[229](index=229&type=chunk) [Item 6. Exhibits](index=47&type=section&id=Item%206.%20Exhibits) The report includes key exhibits such as the merger agreement with Star Equity Holdings, CEO and CFO certifications, and iXBRL formatted financial statements. - Key exhibits filed include the merger agreement with Star Equity Holdings, Inc. and Sarbanes-Oxley certifications by the CEO and CFO[233](index=233&type=chunk)

Financial Data and Key Metrics Changes - For Q2 2025, the company reported revenue of $35.5 million, a slight decrease year over year in constant currency, while adjusted net revenue increased by 5.1% year over year in constant currency to $18.6 million [5] - Adjusted EBITDA for Q2 was $1.3 million, improving from $700,000 a year ago, while the net loss was $700,000 or $0.23 per diluted share compared to a net loss of $400,000 or $0.15 per diluted share in the same period last year [5] - On an adjusted basis, Q2 2025 adjusted net income per share was $0.12 compared to net income of $0.04 in the second quarter of last year [5] Business Line Data and Key Metrics Changes - Revenue for the Americas business increased by 2%, while adjusted net revenue decreased by 1% year over year in constant currency, with adjusted EBITDA of $700,000 compared to $600,000 last year [7] - Asia Pacific revenue decreased by 3%, but adjusted net revenue increased by 17% year over year in constant currency, with adjusted EBITDA rising to $1.9 million from $800,000 a year ago [7] - EMEA revenue increased by 6% year over year in constant currency, while adjusted net revenue decreased by 9%, resulting in an adjusted EBITDA loss of $400,000 compared to a gain of $300,000 in the previous year [8] Market Data and Key Metrics Changes - The company ended Q2 2025 with $17.5 million in cash, including $700,000 of restricted cash, and reported a cash flow from operations inflow of $100,000 compared to an outflow of $4.3 million in the previous year [10] - Days sales outstanding remained unchanged at 56 days as of June 30, 2025 [9] Company Strategy and Development Direction - The growth strategy focuses on organic expansion, targeted bolt-on acquisitions, and cross-regional service integration initiatives to broaden the client base and extend geographic footprint [6] - Recent strategic transactions include the acquisition of Alpha Consulting Group to enter the Japanese market and the integration of Mackenzie's CMO Group to enhance brand strategy and talent engagement capabilities [13] - The company is committed to investing in high-impact areas that deliver long-term value to clients and shareholders, with a focus on expanding geographical reach and service offerings [14] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the business turning a corner, with expectations for continued growth through the end of 2025 and into 2026 despite a mixed macro environment for talent [6] - The company is well-positioned for strong future growth and aims to outperform peers, with operational improvements expected to strengthen bottom-line performance [15] - Management highlighted the importance of the upcoming merger with Star Equity, which is anticipated to deliver significant value through greater scale and enhanced revenue diversification [15] Other Important Information - The company invested approximately $1.4 million in sales, marketing, and technology above maintenance levels to enhance future growth [6] - The merger with Star Equity is scheduled for a special meeting on August 21, 2025, and shareholders are encouraged to vote in favor [15] Q&A Session Summary Question: What led to higher margins in Asia? - Management indicated that the previous year's revenue was depressed due to a slowdown in hiring in the financial sector, and the current results reflect a return to normal activity levels [20] Question: What contributed to revenue growth in the Americas despite a poor jobs report? - Management attributed growth to new logo sales and a land and expand strategy, which has seen an increase in clients and service offerings [22] Question: What explains the outperformance in Europe? - Management noted traction from investments in the Middle East and an uptick in boutique executive search services, contributing to revenue growth [25] Question: Is the ACG acquisition immediately accretive to the bottom line? - Management expects immediate revenue growth from the ACG acquisition but indicated it would be roughly breakeven initially due to the previous struggles of the acquired business [39] Question: What are the capital allocation priorities post-merger? - The top priority is to make profitable investments in existing businesses, followed by potential bolt-on acquisitions and share buybacks once the merger is completed [57]

分组1 - Hudson Global reported quarterly earnings of $0.12 per share, missing the Zacks Consensus Estimate of $0.17 per share, and showing an increase from $0.04 per share a year ago, resulting in an earnings surprise of -29.41% [1] - The company posted revenues of $35.54 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 3.38%, but down from $35.71 million year-over-year [2] - Hudson Global shares have declined approximately 30.1% since the beginning of the year, contrasting with the S&P 500's gain of 7.8% [3] 分组2 - The current consensus EPS estimate for the upcoming quarter is $0.28 on revenues of $35.68 million, and for the current fiscal year, it is $0.22 on revenues of $138.42 million [7] - The Outsourcing industry, to which Hudson Global belongs, is currently ranked in the top 20% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8]

Financial Performance - Q2 2025 - Revenue decreased slightly by 0.5% to $35.5 million compared to $35.7 million in Q2 2024[5] - Adjusted net revenue increased by 5.8% to $18.6 million from $17.6 million in Q2 2024[5] - SG&A expenses increased by 2.7% to $17.3 million compared to $16.9 million in Q2 2024[5] - Adjusted EBITDA increased significantly by 76.6% to $1.3 million from $0.7 million in Q2 2024[5] - Net loss increased by 56.3% to $(0.7) million from $(0.4) million in Q2 2024[5] Financial Performance - YTD Q2 2025 - Revenue decreased by 3.2% to $67.4 million compared to $69.6 million in YTD Q2 2024[8] - Adjusted net revenue increased by 3.2% to $35.0 million from $33.9 million in YTD Q2 2024[8] - SG&A expenses decreased by 1.0% to $34.4 million compared to $34.7 million in YTD Q2 2024[8] - Adjusted EBITDA increased significantly by 181.4% to $0.6 million from $(0.8) million in YTD Q2 2024[8] - Net loss decreased by 26.8% to $(2.4) million from $(3.3) million in YTD Q2 2024[8] Regional Performance - Q2 2025 - Americas revenue increased by 2.4% to $7.1 million[11] - Asia Pacific revenue decreased by 4.8% to $21.6 million, but adjusted net revenue increased by 15.9% to $8.8 million[14] - EMEA revenue increased by 12.2% to $6.8 million, but adjusted net revenue decreased by 4.0% to $3.5 million[17]

[Q2 2025 Performance and Strategic Overview](index=1&type=section&id=Q2%202025%20Performance%20and%20Strategic%20Overview) Hudson Global's Q2 2025 saw a slight revenue dip but strong adjusted net revenue growth and improved profitability, driven by strategic acquisitions and investments [Financial Highlights](index=1&type=section&id=Financial%20Highlights) In the second quarter of 2025, Hudson Global reported a slight revenue decrease of 0.5% to $35.5 million, but saw a 5.8% increase in adjusted net revenue to $18.6 million. The company's net loss widened to $0.7 million from $0.4 million year-over-year. However, on an adjusted basis, net income per diluted share improved significantly to $0.12 from $0.04, and adjusted EBITDA nearly doubled to $1.3 million Q2 2025 Key Financial Metrics | Metric | Q2 2025 | Q2 2024 | Change | Constant Currency Change | | :--- | :--- | :--- | :--- | :--- | | Revenue | $35.5M | $35.7M | -0.5% | -0.2% | | Adjusted Net Revenue | $18.6M | $17.6M (implied) | +5.8% | +5.1% | | Net Loss | ($0.7M) | ($0.4M) | Increased Loss | N/A | | Diluted Loss Per Share | ($0.23) | ($0.15) | Increased Loss | N/A | | Adjusted Net Income Per Diluted Share | $0.12 | $0.04 | +200% | N/A | | Adjusted EBITDA | $1.3M | $0.7M | +85.7% | N/A | - The company ended the second quarter with a total cash position of **$17.5 million**, including restricted cash[7](index=7&type=chunk) [Management Commentary and Strategy](index=1&type=section&id=Management%20Commentary%20and%20Strategy) Management attributes the growth in adjusted net revenue to a modest business upturn, especially in the Asia Pacific region. The company is focused on a growth strategy involving organic expansion, strategic acquisitions, and cross-regional integration. Key activities in the first half of 2025 include strategic hires, the acquisition of Alpha Consulting Group in Japan and McKinsey CMO Group (CMRG), and a $1.4 million investment in sales, marketing, and technology. Additionally, a definitive merger agreement was signed with Star Equity Holdings, which is expected to create value through increased scale and cost synergies - Strategic initiatives in H1 2025 included key hires and two acquisitions: **Alpha Consulting Group** to enter the Japanese market and **McKinsey CMO Group (CMRG)** to enhance recruitment marketing[5](index=5&type=chunk) - The company invested approximately **$1.4 million** in sales, marketing, and technology during the first half of 2025 to support future growth[5](index=5&type=chunk) - A definitive merger agreement was signed with **Star Equity Holdings** (Nasdaq: STRR) in May 2025, pending shareholder approval. The merger is expected to increase size, diversify revenue, and eliminate redundant public company costs[6](index=6&type=chunk) [Regional Performance](index=3&type=section&id=Regional%20Performance) Hudson Global's Q2 2025 regional performance showed strong adjusted net revenue growth in Asia Pacific, mixed results in Americas, and a decline in EMEA [Americas](index=3&type=section&id=Americas) The Americas region reported a 2% increase in revenue to $7.1 million in Q2 2025. However, adjusted net revenue saw a slight decrease of 1% to $6.3 million. EBITDA fell to $0.2 million from $0.4 million, while adjusted EBITDA saw a modest increase to $0.7 million Americas Q2 2025 Performance (vs. Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Revenue | $7.1M | $7.0M (approx) | +2% | | Adjusted Net Revenue | $6.3M | $6.3M (approx) | -1% | | EBITDA | $0.2M | $0.4M | -50% | | Adjusted EBITDA | $0.7M | $0.6M | +16.7% | [Asia Pacific](index=3&type=section&id=Asia%20Pacific) The Asia Pacific region demonstrated strong growth in profitability. While revenue decreased by 3% to $21.6 million, adjusted net revenue grew significantly by 17% to $8.8 million. EBITDA surged to $1.4 million from $0.2 million, and adjusted EBITDA more than doubled to $1.9 million from $0.8 million in the prior-year quarter Asia Pacific Q2 2025 Performance (vs. Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Revenue | $21.6M | $22.6M | -3% (const. currency) | | Adjusted Net Revenue | $8.8M | $7.6M | +17% (const. currency) | | EBITDA | $1.4M | $0.2M | +600% | | Adjusted EBITDA | $1.9M | $0.8M | +137.5% | [Europe, Middle East, and Africa ("EMEA")](index=3&type=section&id=Europe%2C%20Middle%20East%2C%20and%20Africa%20%28%22EMEA%22%29) The EMEA region experienced mixed results with a 6% increase in revenue to $6.8 million, but a 9% decrease in adjusted net revenue to $3.5 million. The region swung to an EBITDA loss of $0.7 million and an adjusted EBITDA loss of $0.4 million, compared to positive contributions in the same period last year EMEA Q2 2025 Performance (vs. Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Revenue | $6.8M | $6.1M | +6% (const. currency) | | Adjusted Net Revenue | $3.5M | $3.6M | -9% (const. currency) | | EBITDA | ($0.7M) | $0.1M | Loss vs. Profit | | Adjusted EBITDA | ($0.4M) | $0.3M | Loss vs. Profit | [Corporate Financial Position](index=4&type=section&id=Corporate%20Financial%20Position) Hudson Global maintained a strong cash position and improved operating cash flow in Q2 2025, while continuing its share repurchase program and protecting its NOL carryforwards [Corporate Costs](index=4&type=section&id=Corporate%20Costs) Corporate costs for Q2 2025 were $0.9 million, remaining flat compared to the prior year. These figures exclude non-recurring expenses, which amounted to $0.6 million in Q2 2025 and $0.2 million in Q2 2024 - Corporate costs were approximately flat year-over-year at **$0.9 million** in Q2 2025[13](index=13&type=chunk) - Non-recurring corporate expenses increased to **$0.6 million** in Q2 2025 from **$0.2 million** in Q2 2024[13](index=13&type=chunk) [Liquidity and Capital Resources](index=4&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintained a solid liquidity position, ending Q2 2025 with $17.5 million in cash. A notable improvement was seen in cash flow from operations, which was a positive $0.1 million, compared to a significant outflow of $4.3 million in the same quarter of the previous year - The company held **$17.5 million** in cash, including **$0.7 million** in restricted cash, at the end of Q2 2025[14](index=14&type=chunk) - Cash flow from operations was an inflow of **$0.1 million** in Q2 2025, a significant turnaround from an outflow of **$4.3 million** in Q2 2024[14](index=14&type=chunk) [Shareholder Programs](index=4&type=section&id=Shareholder%20Programs) Hudson Global continues to execute its $5 million share repurchase program, having bought back $2.9 million worth of shares to date with $2.1 million remaining. The company also highlights its valuable $240 million U.S. Net Operating Loss (NOL) carryforward, which is protected by a rights agreement limiting individual stock ownership to 4.99% without board approval - Under its **$5 million** share repurchase program effective August 2023, the company has purchased **175,041 shares** for **$2.9 million**, with **$2.1 million** remaining[15](index=15&type=chunk) - The company possesses a valuable asset of **$240 million** in U.S. Net Operating Loss (NOL) carryforwards as of December 31, 2024, protected by a shareholder rights plan[16](index=16&type=chunk) [Financial Statements and Reconciliations](index=7&type=section&id=Financial%20Statements%20and%20Reconciliations) This section provides detailed financial statements including income statements, balance sheets, and reconciliations of non-GAAP measures like Adjusted EBITDA and Adjusted Net Income [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the three months ended June 30, 2025, the company's revenue was $35.5 million, a slight decrease from $35.7 million in the prior year. Total operating expenses were marginally lower at $35.8 million, resulting in an operating loss of $0.2 million. The net loss for the quarter widened to $0.7 million, or ($0.23) per share, compared to a net loss of $0.4 million, or ($0.15) per share, in Q2 2024 Q2 2025 Income Statement Summary (in thousands) | Line Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Revenue | $35,541 | $35,712 | | Total operating expenses | $35,752 | $35,899 | | Operating loss | ($211) | ($187) | | Net loss | ($688) | ($441) | | Diluted loss per share | ($0.23) | ($0.15) | [Condensed Consolidated Balance Sheets](index=8&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, Hudson Global had total assets of $55.6 million, up from $52.6 million at the end of 2024. The increase was driven primarily by higher accounts receivable. Total liabilities also increased to $15.4 million from $12.2 million, while total stockholders' equity slightly decreased to $40.1 million Balance Sheet Summary (in thousands) | Line Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $16,837 | $17,011 | | Total current assets | $43,293 | $40,140 | | Total assets | $55,577 | $52,583 | | Total current liabilities | $14,256 | $11,222 | | Total liabilities | $15,447 | $12,155 | | Total stockholders' equity | $40,130 | $40,428 | [Segment Analysis and Non-GAAP Reconciliation](index=9&type=section&id=Segment%20Analysis%20and%20Non-GAAP%20Reconciliation) This section reconciles the company's GAAP net loss to the non-GAAP measure of Adjusted EBITDA. For Q2 2025, the net loss of $0.7 million was adjusted for taxes, interest, D&A, stock-based compensation, and non-recurring fees to arrive at an Adjusted EBITDA of $1.3 million. The Asia Pacific region was the largest contributor to positive Adjusted EBITDA, while EMEA and Corporate segments were detractors Q2 2025 Reconciliation of Net Loss to Adjusted EBITDA (in thousands) | Line Item | Amount | | :--- | :--- | | Net loss | ($688) | | Provision from income taxes | $345 | | Interest income, net | ($54) | | Depreciation and amortization | $245 | | **EBITDA (loss)** | **($152)** | | Stock-based compensation expense | $243 | | Non-recurring severance and professional fees | $1,039 | | Other non-operating adjustments | $186 | | **Adjusted EBITDA** | **$1,316** | [Constant Currency Reconciliation](index=11&type=section&id=Constant%20Currency%20Reconciliation) The company provides a constant currency analysis to show underlying business trends without the impact of foreign exchange fluctuations. For Q2 2025, the reported revenue decline of 0.5% was a 0.2% decline in constant currency. More significantly, the reported 5.8% growth in adjusted net revenue was a 5.1% growth on a constant currency basis, indicating solid underlying operational performance Q2 2025 Constant Currency Impact (in thousands) | Metric | As Reported (2025) | As Reported (2024) | Constant Currency (2024) | % Change (Constant Currency) | | :--- | :--- | :--- | :--- | :--- | | Total Revenue | $35,541 | $35,712 | $35,628 | -0.2% | | Total Adjusted Net Revenue | $18,635 | $17,615 | $17,738 | +5.1% | [Adjusted Net Income Per Share Reconciliation](index=12&type=section&id=Adjusted%20Net%20Income%20Per%20Share%20Reconciliation) This table reconciles GAAP net loss to non-GAAP adjusted net income. For Q2 2025, the GAAP net loss of $0.7 million, or ($0.23) per share, was adjusted for $1.0 million in non-recurring severance and professional fees (after tax). This resulted in an adjusted net income of $0.4 million, or $0.12 per diluted share, a significant improvement from $0.04 in the prior year Q2 2025 Reconciliation to Adjusted Net Income Per Share | Line Item | Net Income (in thousands) | Per Diluted Share | | :--- | :--- | :--- | | Net loss (GAAP) | $(688) | $(0.23) | | Non-recurring fees (after tax) | $1,039 | $0.35 | | **Adjusted net income (Non-GAAP)** | **$351** | **$0.12** | [Important Disclosures](index=5&type=section&id=Important%20Disclosures) This section outlines critical legal and financial disclaimers, including forward-looking statements and specific information regarding the proposed merger with Star Equity Holdings [Forward-Looking Statements](index=5&type=section&id=Forward-Looking%20Statements) This section contains the standard "safe harbor" statement, cautioning investors that statements in the press release that are not historical facts are forward-looking and subject to risks and uncertainties. It lists numerous risk factors, including economic conditions, the ability to achieve strategic initiatives, and specific risks related to the proposed merger with Star Equity Holdings - The press release includes forward-looking statements concerning future financial conditions and business prospects, which are subject to significant risks and uncertainties[19](index=19&type=chunk) - Key risks highlighted include global economic fluctuations, risks related to the proposed merger with **Star Equity Holdings**, competition, and reliance on information systems[19](index=19&type=chunk) [Merger Solicitation and Information](index=6&type=section&id=Merger%20Solicitation%20and%20Information) This section provides legal disclosures related to the proposed merger with Star Equity Holdings. It clarifies that the press release is considered solicitation material and is not a substitute for official SEC filings. Investors are strongly urged to read the S-4 Registration Statement and the joint Proxy Statement/Prospectus for complete and important information about the transaction - This press release is deemed solicitation material regarding the proposed merger with **Star Equity Holdings**[21](index=21&type=chunk) - Investors are urged to read the official Registration Statement on Form S-4 and the Proxy Statement/Prospectus, which contain important information about the merger[21](index=21&type=chunk) - Official documents related to the merger are available for free on the SEC's website (sec.gov) and Hudson's investor relations website[23](index=23&type=chunk)

Core Insights - Hudson Global, Inc. reported financial results for the second quarter ended June 30, 2025, highlighting a modest increase in adjusted net revenue driven by improved business activity, particularly in the Asia Pacific region [1][3] - The company made strategic hires and completed two acquisitions, enhancing its capabilities and marking its entry into the Japanese market [3][4] - A merger agreement with Star Equity Holdings is expected to create significant value for shareholders through increased size and diversification of revenue streams [4] Financial Performance - For Q2 2025, total revenue was $35.5 million, a decrease of 0.5% from Q2 2024, while adjusted net revenue was $18.6 million, an increase of 5.8% [7][40] - The net loss for Q2 2025 was $0.7 million, or $0.23 per diluted share, compared to a net loss of $0.4 million, or $0.15 per diluted share, in Q2 2024 [7][43] - Adjusted EBITDA for Q2 2025 was $1.3 million, up from $0.7 million in the same period last year [7][34] Regional Highlights - In the Americas, revenue was $7.1 million, a 2% increase, while adjusted net revenue decreased by 1% to $6.3 million [5] - Asia Pacific revenue was $21.6 million, a 3% decrease, but adjusted net revenue increased by 17% to $8.8 million [8] - EMEA revenue increased by 6% to $6.8 million, while adjusted net revenue decreased by 9% to $3.5 million [9] Corporate Strategy - The company invested approximately $1.4 million in sales, marketing, and technology in the first half of 2025 to support future growth [3] - The growth strategy focuses on organic expansion, targeted acquisitions, and cross-regional service integration [3] - The company has a $5 million share repurchase program, with $2.1 million remaining [12] Liquidity and Capital Resources - As of June 30, 2025, the company had $17.5 million in cash, including $0.7 million in restricted cash [11] - Cash flow from operations was $0.1 million in Q2 2025, a significant improvement from an outflow of $4.3 million in Q2 2024 [11] NOL Carryforward - As of December 31, 2024, Hudson Global had $240 million of usable net operating losses (NOL) in the U.S., which the company considers a valuable asset [13]