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]

Financial Performance - In Q2 2025, the company generated revenue of $24,042, comprising $18,000 in dividend income from Music Royalties Inc. and $6,042 in music royalty income [3] - Operating expenses totaled $68,625, resulting in an operating loss of $44,583, compared to a loss of $39,027 in the prior year [3] - A non-cash foreign exchange gain of $156,357 led to a net income of $111,774 for the quarter, contrasting with a net loss of $46,642 in Q2 2024 [3] - For the six-month period, the company reported a net income of $78,176, compared to a loss of $87,308 in the previous year [3] Asset and Investment Update - As of June 30, 2025, total assets increased to $1.8 million from $1.25 million at the end of 2024, reflecting a $500,000 investment in Music Royalties Inc. [4] - The company completed an additional equity swap post-quarter, raising its holdings in Music Royalties Inc. to 4,000,000 shares valued at $2 million, which is expected to generate $144,000 in annual dividends [4] Legal Developments - The company achieved a significant legal victory on June 16, 2025, with a court judgment confirming its entitlement to a 2% net smelter royalty on concessions at Capstone Copper's Cozamin Mine [5] - Capstone has appealed this decision to the Supreme Court of Zacatecas, delaying the resolution [5] - The company estimates that the disputed 2% NSR could represent approximately $1.5 million per year based on production since 2019 [8][9] Strategic Focus - The company maintains a 100% interest in the Bilbao silver-zinc-lead project while exploring opportunities to monetize this project for cash-flowing royalties [10] - The chairman and CEO emphasized the importance of the legal victory and strategic investment in driving the company towards profitability and unlocking shareholder value [11]

Financial Data and Key Metrics Changes - The company reported a revenue growth of 12.4% year on year and an adjusted EBITDA increase of 11.2% year on year for Q2 2025 [8][17] - The adjusted EBITDA margin for Q2 2025 was 47.3%, slightly down from 47.8% in Q2 2024 [18] - The net debt to LQA adjusted EBITDA ratio decreased from 6.6 times at the end of Q1 2025 to 6.1 times at the end of Q2 2025 [23][24] Business Line Data and Key Metrics Changes - Gross new bookings in Q2 2025 were 23,000 square meters, primarily from traditional internet and cloud businesses [10] - The gross moving during Q2 2025 was around 20,000 square meters, consistent with the previous five quarters, with a utilization rate reaching 77.5% [9] Market Data and Key Metrics Changes - The company achieved a significant milestone with the successful completion of its C REITs IPO, with units trading on the Shanghai Stock Exchange at an implied cap rate of below 5% [8] - The company noted that AI demand was relatively quiet due to uncertainties in chip supply in China, affecting customer decisions [11] Company Strategy and Development Direction - The company is focusing on asset monetization strategies, having completed the first data center ABS transaction and the first data center REITs IPO in China [14][20] - The company has around 900 megawatts of power land held for future development in Tier one markets, anticipating a wave of AI demand primarily for inference [12][13] - The company aims to maintain a flexible approach to asset monetization, targeting a net debt to EBITDA ratio of around five times while exploring new investment opportunities [31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in AI-driven demand over the medium to long term, despite current uncertainties [11] - The company expects to deliver 35% of its total current backlog in 2025, indicating solid operational performance [10] - Management acknowledged that the market price for services has been stable since mid-last year, which is satisfactory given the broader economic context [43] Other Important Information - The company raised net proceeds of $676 million through the issuance of convertible bonds and equity, strengthening its balance sheet [8] - DayOne, the company's equity investment, added 246 megawatts of new commitments in Q2 2025, bringing its total power committed to over 780 megawatts [15][27] Q&A Session Summary Question: Future strategy regarding asset monetization in China - Management indicated that asset monetization remains highly accretive for shareholders, with attractive new investment opportunities on the horizon [30][31] Question: Development targets for DayOne - Management targets adding at least 500 megawatts annually, with a commitment to the market of at least 300 megawatts [34][35] Question: Customer profile and workloads for new orders - The customer profile includes traditional internet companies and cloud service providers, with a mix of GPU and CPU workloads [41] Question: Impact of deconsolidation on guidance - Management maintained FY 2025 revenue and adjusted EBITDA guidance unchanged despite the deconsolidation of C REIT assets [26][62] Question: Growth expectations for the second half of the year - Management expects a reacceleration in revenue and EBITDA growth in Q2 and Q3 of next year, driven by significant capacity deliveries [70]

Financial Data and Key Metrics Changes - Revenue increased by 12.4% year on year, while adjusted EBITDA grew by 11.2% [7][17] - Adjusted EBITDA margin for Q2 2025 was 47.3%, down from 47.8% in Q2 2024 [18] - Net debt to LQA adjusted EBITDA decreased from 6.6 times at the end of Q1 2025 to 6.1 times at the end of Q2 2025 [24][25] Business Line Data and Key Metrics Changes - Gross new bookings in Q2 2025 were 23,000 square meters, primarily from traditional internet and cloud businesses [10] - DayOne added 246 megawatts of new commitments in Q2 2025, bringing total power committed by customers to over 780 megawatts [15][28] Market Data and Key Metrics Changes - The utilization rate reached 77.5% in Q2 2025 [8] - The implied cap rate for the C REITs IPO was below 5%, indicating favorable market conditions for asset monetization [8] Company Strategy and Development Direction - The company is focusing on asset monetization strategies, having successfully completed a C REITs IPO and a data center ABS transaction [8][14] - The company aims to develop 900 megawatts of power land for future development in Tier one markets, anticipating significant AI-driven demand [12][13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in AI-driven demand over the medium to long term, despite current uncertainties in chip supply [11] - The company is prepared for future growth opportunities and has established a strong capital recycling strategy [14][75] Other Important Information - The company raised net proceeds of $676 million through convertible bonds and equity offerings, strengthening its balance sheet [7] - CapEx guidance was adjusted down from RMB 4.3 billion to RMB 2.7 billion due to proceeds from the Sea REIT transaction [22][23] Q&A Session Summary Question: Future strategy in asset monetization in China - Management indicated that asset monetization remains highly accretive for shareholders and is essential for future growth opportunities [31][32] Question: Development targets for DayOne - The company targets adding at least 500 megawatts annually, with a commitment to the market of at least 300 megawatts [35][36] Question: Customer profile and workloads - The customer base includes traditional internet companies and cloud service providers, with a mix of CPU and GPU workloads [40][41] Question: Impact of deconsolidation on guidance - Management acknowledged that deconsolidation of the C REIT will materially impact EBITDA but chose not to adjust revenue and EBITDA guidance at this time [63][64] Question: Growth expectations for next year - The company expects a reacceleration in revenue and EBITDA growth in Q2 and Q3 next year, driven by significant capacity deliveries [68][70] Question: AI orders and chip supply - Management noted that chip supply issues are currently limiting stronger bookings, but they remain optimistic about future demand [72][75]

Financial Data and Key Metrics Changes - TELUS achieved total mobile and fixed customer growth of 198,000 in Q2 2025, driven by mobile phone and connected device additions of 167,000 and fixed customer additions of 31,000 [5][6] - TTEC EBITDA growth, including TELUS Health, was up 4%, consistent with Q1 results, while mobile phone net additions were 55,000 and connected device net additions were 112,000 [6][7] - Free cash flow increased by CAD 535 million, an 11% rise compared to the same period last year, driven by higher EBITDA and lower capital expenditures [21][23] Business Line Data and Key Metrics Changes - TELUS Health reported an extraordinary growth in operating revenue and adjusted EBITDA of 1629% respectively, with a significant increase in global lives covered to almost 160 million [8][19] - Fixed data services revenue grew by 3%, marking the eighteenth consecutive quarter of positive growth, supported by subscriber ARPU growth in Internet and security services [18][19] - Mobile network revenue saw a slight decline due to lower mobile phone ARPU, which decreased by 3.3% amid competitive pressures [17] Market Data and Key Metrics Changes - The Canadian market is showing signs of stabilization, with improvements in ARPU trends across new activations and customer renewals [17][39] - TELUS is committed to expanding broadband services in Ontario and Quebec with a CAD 2 billion investment, reflecting confidence in the Canadian market [4][5] Company Strategy and Development Direction - TELUS is focusing on bundling wireless and wireline broadband services, aiming to differentiate itself through innovative offerings such as AI-driven smart home solutions and next-generation healthcare [4][5] - The company is pursuing a strategy of monetizing its tower infrastructure through a partnership with Akeis, which will enhance financial flexibility and support balance sheet deleveraging [11][24] - TELUS is leveraging its existing assets for new opportunities, particularly in AI and data centers, to drive long-term value creation [79][99] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the operating environment, noting that the market is transitioning from irrational pricing to more sustainable pricing models [39][41] - The company anticipates continued improvements in its leverage ratio, aiming for a net debt to EBITDA ratio of three times by 2027 [22][24] - Management emphasized the importance of customer experience and product differentiation as key drivers for future growth [44][46] Other Important Information - TELUS Friendly Future Foundation raised over CAD 2.6 million to support student bursaries, reflecting the company's commitment to community support [15] - The company is actively working on real estate rationalization and copper monetization, with significant opportunities identified in these areas [71][73] Q&A Session Summary Question: Strategic shift regarding the proposed privatization of TIAXT - Management clarified that the move is related to supporting deleveraging goals and should not be interpreted as a change in monetization strategy for other tech ventures [28][29] Question: Financial details on the tower entity - Management did not disclose specific EBITDA figures but confirmed that all towers will operate at fair market value rent, ensuring positive cash flow [30][31] Question: Long-term impact of tower deal and deployment of more towers - The demand for data is increasing, and the partnership with Terion will allow for continued tower construction and co-location opportunities, enhancing cash flow [36][38] Question: Sustainability of recent pricing improvements in wireless - Management noted that while certainty is not guaranteed, the current trend is encouraging, and the market must shift from irrational pricing to rational pricing for sustainability [39][41] Question: Update on fixed data growth sustainability - Management expressed confidence in the sustainability of fixed data growth, supported by diverse service offerings and strong customer experience [66][68] Question: Plans for new data center construction - TELUS has already invested in world-class data centers and is leveraging these assets for AI initiatives, minimizing the need for additional capital investment [97][99]

Financial Data and Key Metrics Changes - In Q1 2025, the company achieved a revenue growth of 12% year on year and adjusted EBITDA growth of 16%, marking the highest growth rate in the past two years [8][19] - The adjusted EBITDA margin for Q1 2025 was 48.6%, compared to 46.9% in Q1 2024, primarily due to lower operating costs [19][68] - The company realized a gain on deconsolidation of subsidiaries sold to the ABS of over RMB1 billion, which was not included in adjusted EBITDA [19] Business Line Data and Key Metrics Changes - The gross move-in during Q1 2025 was approximately 20,000 square meters, all in Tier one markets, with a utilization rate of 75.7% [8] - The company added 70 MW of new commitments in Q1 2025, bringing the total power committed to over 530 MW, with expectations to exceed 750 MW soon [15][25] Market Data and Key Metrics Changes - The demand environment has improved significantly due to AI developments, particularly in Tier one markets, with a notable mega deal signed in Q1 2025 [9][10] - The company holds around 900 MW of capacity for future developments in Tier one markets, indicating strong positioning to capture upcoming AI demand [12][13] Company Strategy and Development Direction - The company is focused on backlog delivery and new orders with faster-moving schedules, anticipating that around 40% of the current backlog will be delivered by year-end [9] - The asset monetization program is progressing well, providing financing flexibility and options to capitalize on new projects [14][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong demand for AI-related services, particularly in Tier one markets, and noted that the demand for AI inferencing is expected to grow significantly [9][33] - There are uncertainties regarding AI chip supply in China in the short term, but management believes that as supply stabilizes, demand will increase [11][12] Other Important Information - The company is making good progress with the establishment of an onshore listed Sea REIT, which is expected to create a valuation benchmark for stabilized data centers in China [21][64] - The company maintains its guidance for total revenue and adjusted EBITDA unchanged despite the ABS deconsolidation [23] Q&A Session Summary Question: Update on China demand from hyperscalers and chipset supply - Management noted that demand remains strong, particularly driven by AI inference, and they are well-positioned with 900 MW held for future development [33][34] Question: Financial guidance expectations post-ABS deconsolidation - The impact of the ABS transaction closing at the end of Q1 is expected to reduce full-year EBITDA by around RMB130 million, adjusting the growth rate from 11% to 8.5% [35][36] Question: Comparison of IRR profile or EBITDA yield across different markets - The development yield in new markets is in the low teens, which is higher than current yields in China, indicating a different supply-demand balance [42][43] Question: When will the China business be self-funding? - The company is currently break-even in terms of free cash flow before financing and expects to generate sufficient cash flow to cover annual CapEx [46] Question: Pricing outlook for the China business - The pricing for new business in China is stable across major markets, with confidence in maintaining this stability [68]

Financial Data and Key Metrics Changes - For Q4 2024, the company expects net income available to common shareholders to be between $48 million and $68 million, including approximately $236 million to $247 million from discontinued operations related to the divestiture of Great American businesses [30][31] - Diluted net income per share is projected to be between $1.57 and $2.22, with a net loss from continuing operations estimated at $178 million to $187 million, primarily due to impairment charges and trading losses [31][32] - Operating adjusted EBITDA from continuing operations is expected to be between $12 million and $14 million, with total debt reported at $1.78 billion, a decline of $221 million from the previous quarter [32][33] Business Line Data and Key Metrics Changes - The company established a joint venture with Oaktree Capital Management, contributing its appraisal and valuation services, which resulted in approximately $203 million in cash and a 44% ownership interest in the new entity [9][10] - The Wealth Management business is expected to manage approximately $15 billion in client assets after the sale of a portion of its traditional W-2 business to Stifel Financial Corp [12][23] - GlassRatner, the advisory services business, had a record year in 2024, indicating strong performance in its core expertise areas [24][42] Market Data and Key Metrics Changes - The company reported a strong December for its broker-dealer segment, which is positioned as a top provider to the middle market segment, with expectations of substantial operating EBITDA in a normalized environment [20][21] - The telecom business continues to provide steady cash flow and EBITDA, contributing positively to the overall financial health of the company [46] Company Strategy and Development Direction - The company aims to focus on its core businesses, including B. Riley Securities, Wealth Management, and advisory services, while monetizing non-core assets to strengthen its balance sheet [17][16] - The strategic partnership with Oaktree is expected to enhance the company's ability to deliver financial products and services, leveraging Oaktree's expertise and scale [10][11] - The company plans to continue exploring strategic opportunities to unlock value within its core business segments [22][42] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about emerging from a period of asset monetization and debt reduction, positioning the company as a more nimble and focused entity [17][66] - The management acknowledged the challenges faced due to principal investments but emphasized the potential for recovery and growth in core operations [27][66] - The company is committed to investing in its business and addressing outstanding debt maturities while limiting dilution for shareholders [36][38] Other Important Information - The company completed the full redemption of its February 2025 senior notes, retiring its only significant maturity for that year [14] - A new $160 million senior secured credit facility was established with Oaktree, providing greater financial flexibility [15] Q&A Session Summary Question: What are the plans for liquidity and balance sheet improvement in the next six months? - Management indicated a focus on investing in core businesses and proactively aligning the balance sheet, with ongoing asset monetization efforts [36][37] Question: Can you provide insights on the core business's EBITDA and cash flow potential? - Management highlighted the historical performance of core businesses and expressed confidence in their ability to generate operating EBITDA, despite recent challenges [38][42] Question: What is the current state of the Wealth Management business after the recent sale? - The remaining Wealth Management group now manages approximately $15 billion in assets, down from $24 billion prior to the sale [58] Question: Will future asset monetization primarily come from the Principal Investment Group? - Management confirmed a careful approach to monetizing non-core assets while focusing on growing core businesses [60][61]