Hudson Global(US:HSON)2023-03-30 17:22Financial Data and Key Metrics Changes - In Q4 2022, the company reported revenue of $44 million and adjusted net revenue of $22.2 million, with SG&A costs at $19.7 million, adjusted EBITDA of $2.4 million, net income of $0.1 million or $0.02 per share, and adjusted net income of $0.33 per share compared to $1.02 a year ago [3][4][78] - The company ended Q4 with $27.5 million in cash and restricted cash, and day sales outstanding increased to 50 days from 43 days year-over-year [59][78] Business Line Data and Key Metrics Changes - Revenue and adjusted net revenue for the Americas business decreased by 12% in constant currency, with adjusted EBITDA dropping to $0.5 million from $2.7 million year-over-year [4] - Asia Pacific revenue decreased by 7% year-over-year in constant currency, while adjusted net revenue grew by 17% in constant currency, with adjusted EBITDA decreasing to $2.1 million from $2.4 million [4] - EMEA business saw revenue growth of 14% and adjusted net revenue growth of 33% in constant currency, with adjusted EBITDA slightly increasing [76] Market Data and Key Metrics Changes - The company noted a significant slowdown in the technology sector, which has been the weakest area since the second half of the previous year, while enterprise RPO work, comprising approximately 80% of the business, continues to perform well [7][98] - The tech sector's contribution to total revenue decreased from approximately 30% a year ago to about 15% by the end of the year, split evenly between tech and project work [27] Company Strategy and Development Direction - The company is focused on maintaining a flexible cost structure, with SG&A costs expected to normalize around 70% of adjusted net revenue over time [91][94] - The company continues to invest in sales, marketing, and technology to drive growth, believing it operates in a growth business despite current economic challenges [18][86] - The company is actively looking for acquisition opportunities but remains patient for the right fit and valuation [29][33] Management's Comments on Operating Environment and Future Outlook - Management highlighted a mixed macroeconomic environment, with some sectors and countries performing well while others, particularly in tech, are experiencing significant weakness [17][86] - The company anticipates that Q1 will be the slowest quarter due to seasonal factors and expects to see improvements in Q3 and Q4 as year-over-year comparisons become easier [23][43] Other Important Information - The company generated $4.4 million in cash flow from operations during Q4 [77] - The company has made a small acquisition in India, which positions it well for future growth despite current challenges in the tech sector [49] Q&A Session Summary Question: Update on new business wins and macro environment - Management noted that new business wins are being driven by a mix of sectors, with healthcare showing particular strength, while the tech sector remains weak [68][86] Question: Impact of SG&A cuts on earnings - Management confirmed that SG&A costs declined by over $1 million in Q4 compared to Q3, and adjustments can be made as needed [21][41] Question: Trends in RPO and pricing environment - Management indicated that pricing remains positive, following wage rates, and that enterprise RPO continues to be a strong area for growth [81][86] Question: Future acquisition strategy amid economic uncertainty - Management stated that they are always looking for acquisition opportunities but are cautious and focused on finding the right fit [29][100]