Hudson Global(US:HSON)2025-11-14 21:19Revenue and Growth - Revenue for the nine months ended September 30, 2025, was $115.4 million, an increase of $8.9 million, or 8.4%, compared to $106.5 million for the same period in 2024[238] - The revenue growth was principally driven by the inclusion of revenues from the Star Operating Companies acquisition, contributing 10 percentage points to the revenue increase[238] - Revenue for Q3 2025 was $48.0 million, up from $36.9 million in Q3 2024, representing a 30.1% increase, primarily due to the acquisition of Star Operating Companies contributing 30 percentage points to revenue growth[239] - For the nine months ended September 30, 2025, revenue increased by $10.0 million, or 9.5%, with the Star Operating Companies contributing 10 percentage points to this growth[242] Profitability and Expenses - Gross profit for Q3 2025 was $20.6 million, an increase of 10.9% from $18.6 million in Q3 2024, driven by the Star Operating Companies acquisition which added 11 percentage points to gross profit growth[239] - Gross profit for the nine months ended September 30, 2025, was $55.7 million, a 5.9% increase from $52.5 million in the same period of 2024, with the acquisition contributing 4 percentage points to the growth[242] - SG&A and Non-Op expenses rose to $21.8 million in Q3 2025, a 15.5% increase from $18.9 million in Q3 2024, with the acquisition contributing $2.2 million to this increase[239] - SG&A and Non-Op for the nine months ended September 30, 2025, was $58.5 million, up from $55.5 million in the same period of 2024, with the acquisition contributing $2.2 million to this increase[242] - Operating income for the nine months ended September 30, 2025, was $1.6 million, compared to $0.4 million in 2024, while EBITDA increased to $1.3 million, or 1% of revenue[273] Losses and Financial Position - EBITDA loss for Q3 2025 was $0.9 million, worsening from a loss of $0.3 million in Q3 2024, with a constant currency basis also reflecting a $0.6 million increase in loss[239] - Net loss for Q3 2025 was $1.8 million, compared to a net loss of $0.8 million in Q3 2024, indicating an increase in loss of $0.9 million[239] - Net loss for the nine months ended September 30, 2025, remained at $4.2 million, slightly increasing from the same period in 2024, with a constant currency basis reflecting a $0.1 million increase in loss[242] - For the three months ended September 30, 2025, the net loss was $1.8 million, an increase of $0.9 million compared to a net loss of $0.8 million for the same period in 2024[291] - For the nine months ended September 30, 2025, the net loss was $4.2 million, consistent with the net loss of $4.2 million for the same period in 2024[292] Business Segments Performance - The Building Solutions division continues to see significant demand for products despite a higher interest rate environment, although execution delays have been noted[232] - The Business Services division faced challenging market conditions in the first three quarters of 2025 due to persistent inflation and decreased demand for labor[233] - For the three months ended September 30, 2025, Building Solutions generated revenue of $9.6 million, reflecting recovery from previous macroeconomic challenges[248] - Building Solutions contributed a gross profit of $1.7 million for the three months ended September 30, 2025, supported by higher volumes and improved project mix[249] - Business Services revenue for the three months ended September 30, 2025, was $37.0 million, a 1% increase compared to the same period in 2024[252] - Total gross profit for Business Services was $18.6 million for the three months ended September 30, 2025, with a gross profit margin of 50%[259] Strategic Initiatives and Future Outlook - The company plans to explore strategic alternatives to enhance market position and profitability, including organic growth and selective acquisitions[228] - The company aims to introduce new services in the Building Solutions division, including logistics and on-site installation[234] - The Company acknowledges that all statements other than historical facts are forward-looking statements, subject to various risks and uncertainties[308] - Key risks include global economic fluctuations, potential acquisition-related risks, and competition in the Company's markets[308] - The Company emphasizes the importance of strategic initiatives and the ability to achieve anticipated benefits from proposed mergers[308] Cash Flow and Liquidity - Net cash used in operating activities for the nine months ended September 30, 2025, was $3.4 million, a decrease of $1.4 million from $4.8 million in the same period in 2024[294] - Net cash provided by investing activities for the nine months ended September 30, 2025, was $6.2 million, compared to $1.1 million in 2024, primarily due to cash received from the acquisition of Star Operating Companies[295] - As of September 30, 2025, cash and cash equivalents totaled $18.5 million, an increase from $17.7 million as of December 31, 2024[293] - As of September 30, 2025, the Company had cash and cash equivalents on hand of $15.4 million, indicating sufficient liquidity for at least the next 12 months[298] Risks and Challenges - There are concerns regarding the impact of rising inflationary pressures and interest rates on quarterly operating results[308] - The Company faces risks related to the loss of business with major customers and the ability to maintain client relationships[308] - The Company is dependent on key management personnel and skilled professionals for its operations[308] - Cybersecurity threats and attacks pose significant risks to the Company's operations and client service[308] - The Company is exposed to international operational risks, including foreign currency fluctuations and geopolitical events[308] - The Company must manage costs effectively to maintain acceptable levels of operation[308]