Hudson Global(US:HSON)2022-08-11 18:56Financial Data and Key Metrics Changes - For Q2 2022, the company reported revenue of $51 million, a 37% increase in constant currency [6] - Adjusted net revenue was $27.3 million, up 91% year-over-year in constant currency [6] - SG&A costs were $21.6 million, an increase of 68% compared to the same period last year [6] - Adjusted EBITDA was $5.7 million, an increase of $1.7 million from a year ago [7] - Net income was $3.1 million, or $0.98 per share, compared to a net loss of $100,000 or $0.04 per share in the same period last year [7] - Adjusted net income per diluted share was $1.25 in Q2 versus $0.15 a year ago [7] Business Line Data and Key Metrics Changes - The Americas business grew revenue and adjusted net revenue by 169% and 177% in constant currency, respectively [8] - Asia Pacific business revenue grew by 12% in constant currency, with adjusted net revenue increasing by 42% [9] - EMEA business revenue grew by 34% and adjusted net revenue by 49% in constant currency [9] - Adjusted EBITDA for the Americas was $3.4 million, up from $0.5 million a year ago [9] - Adjusted EBITDA for Asia Pacific was $2.6 million, an increase from $1.4 million a year ago [9] - EMEA adjusted EBITDA was $0.8 million, up from $0.6 million in Q2 of last year [9] Market Data and Key Metrics Changes - The company ended Q2 with $26.2 million in cash and restricted cash [11] - Day sales outstanding increased to 52 days at June 2022, up from 41 days at June 2021 [11] - Working capital excluding cash increased to $8 million in Q2 2022 from $7.8 million at the end of 2021 [12] - Cash flow from operations was $7.6 million during the second quarter [12] Company Strategy and Development Direction - The company continues to invest in organic growth and evaluate potential bolt-on acquisition opportunities [15] - The focus remains on maintaining operational leverage to achieve long-term goals of growing adjusted EBITDA as a percentage of adjusted net revenue to 20% [10] - The company is actively hiring and adding to its team globally, focusing on centers of excellence [37] - The company is looking for acquisition targets that can provide significant value and accelerate growth [41] Management's Comments on Operating Environment and Future Outlook - Management noted strong activity levels and demand for services across all regions [14] - Despite macroeconomic uncertainties, the majority of clients, particularly large Fortune 500 companies, continue to experience a talent shortage and maintain hiring momentum [29] - Management indicated that the second half of the year is not expected to be radically different from the first half, although seasonality in hiring activity is acknowledged [30] - There is some weakness observed in medium-sized tech companies, but larger tech companies remain strong [27][29] Other Important Information - The company has a share repurchase authorization with 1.7 million shares left [23] - Management emphasized the importance of providing high levels of customer service to maintain pricing power [50][52] Q&A Session Summary Question: Why file a shelf given the balance sheet? - Management explained that having a shelf on file is prudent for potential future opportunities, even if there are no immediate plans to issue securities [20] Question: Why not buy back stock despite strong earnings? - Management acknowledged the board's discussions on stock buybacks and indicated that they are aware of the share creep but have not found suitable opportunities to buy back stock [24] Question: What is driving organic growth? - Management stated that organic growth is driven by existing customers, new customers, and occasionally winning business from competitors [56][58] Question: How do NOLs impact geographic growth decisions? - Management clarified that while NOLs are considered, the primary focus is on making the best business decisions first, with tax optimization as a secondary consideration [63]