Hudson Global(US:HSON)2021-11-05 20:24Financial Data and Key Metrics Changes - For Q3 2021, the company reported revenue of $45 million, a 72% increase year-over-year in constant currency [5] - Adjusted net revenue was $18 million, up 93% year-over-year in constant currency [5] - SG&A costs were $15.1 million, a 51% increase compared to the same period last year in constant currency [5] - Adjusted EBITDA was $3 million, up from an adjusted EBITDA loss of $700,000 a year ago [6] - Net income was $1.5 million, or $0.49 per diluted share, compared to a net loss of $1.2 million or $0.41 per diluted share in the same period last year [6] - Adjusted net income per diluted share was $0.78, versus an adjusted net loss per share of $0.38 a year ago [6] Business Line Data and Key Metrics Changes - Asia Pacific business grew revenues by 58% and adjusted net revenue by 54% in constant currency, with adjusted EBITDA of $2.2 million, up from $900,000 a year ago [8] - Americas business saw revenue and adjusted net revenue growth of 280% and 315% in constant currency, respectively, with over 40% of this growth attributed to organic results [8] - EMEA business grew revenue by 39% and adjusted net revenue by 22% in constant currency, with adjusted EBITDA of $0.2 million compared to breakeven adjusted EBITDA in Q3 of last year [9] Market Data and Key Metrics Changes - The company ended Q3 with $26.5 million in cash and restricted cash, with days sales outstanding at 39 days, consistent with the previous year [11] - Working capital, excluding cash, increased to $5.7 million in Q3 2021 from $4.5 million at the end of 2020 [12] Company Strategy and Development Direction - The company aims to grow adjusted EBITDA before corporate percentage of adjusted net revenue to 20% over the long term [10] - The acquisition of COIT Group has significantly outperformed expectations, and the recent acquisition of Karani is expected to enhance global delivery capabilities and open new business opportunities [17] - The company is focused on expanding its offerings in India and the Philippines and strengthening its expertise in technology recruitment [18] Management's Comments on Operating Environment and Future Outlook - Management noted a strong rebound in activity levels globally, capitalizing on the resurgence in demand for services [14] - The company recorded its strongest levels of growth and profitability since its reorganization in early 2018 [16] - There is confidence in the sustainability of revenue growth, with expectations of 15% annual growth in the RPO business in a normal economic environment [41][42] Other Important Information - The company generated $2.3 million in cash flow from operations during Q3 [13] - The integration of Karani is expected to be seamless, with existing clients and revenue already established [21] Q&A Session Summary Question: Timeline for integrating Karani and revenue profile - Management expects a seamless integration with existing clients and revenue, with Karani having around 150 clients [21] Question: Sectors with the most end market demand - Strong growth is seen in technology and life sciences sectors, particularly in the Americas [24] Question: Pricing environment and wage inflation impact - Wage inflation is a significant issue due to a lack of available talent, impacting recruitment and contracting businesses [32] Question: Sustainability of revenue and capital allocation - Management is confident in the sustainability of revenue, with a focus on both buybacks and acquisitions as capital allocation strategies [50][56]