BGSF(US:BGSF)2025-05-08 14:00Financial Data and Key Metrics Changes - Total revenues for Q1 2025 were $63.2 million, down 8% from the prior year, with professional services down 4.2% and property management down 14.9% [6][13] - Adjusted EBITDA was $2.4 million with an EBITDA margin of 3.8%, showing improvement from $1.4 million or 2.2% in the previous quarter [15] - Adjusted EPS was $0.05 per share, while the GAAP loss was $0.07 per diluted share [15] Business Line Data and Key Metrics Changes - Professional segment revenues increased sequentially by 5.6% compared to the previous quarter, despite a year-over-year decline of 4.2% [6][13] - Property management revenues declined over 14% on both a sequential and year-over-year basis, but there are signs of improvement with revenues per billing day increasing [14][10] Market Data and Key Metrics Changes - The U.S. apartment rental rates are starting to elevate again, which is expected to improve the economics for property management companies [11] - The company signed 23 new logos in Q1 2025, up over 60% from 14 in Q1 2024, indicating positive momentum [10] Company Strategy and Development Direction - The company is focused on strategic alternatives and restructuring initiatives to recalibrate costs and improve efficiency [5] - There is a commitment to growth initiatives and managing controllable factors amidst macroeconomic uncertainties [19] - The company aims to leverage prior investments in technology and processes to drive long-term shareholder value [19] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding consulting projects and business spending, despite uncertainties in trade policies [7][18] - The labor market remains solid, with job additions indicating potential for future growth [19] - Management is optimistic about the property management segment as rental rates improve, but acknowledges ongoing challenges [12][11] Other Important Information - The company entered into waivers and amendments with lenders due to non-compliance with financial covenants at the end of 2024 [16] - The company is continuously looking for ways to improve cost effectiveness and operational efficiency [28] Q&A Session Summary Question: Could you provide context around the new logos and average deal size? - Management indicated that several contracts were signed in March, and they would follow up with specific data [22][23] Question: Are there discussions regarding pent-up demand due to tariff uncertainties? - Management believes there is pent-up demand, but clients are currently in a cautious "wait and see" mode [24][25] Question: Is the technology platform fully rolled out? - The technology platform is fully rolled out, with ongoing improvements being made to enhance efficiency [26][27] Question: How much of the expense reductions were factored into Q1 results? - Approximately 65% to 70% of the expense reductions were realized in Q1, with full benefits expected in Q2 [28] Question: What is the competitive dynamic within property management? - The competitive environment remains stable, and the company continues to secure preferred partner agreements [29][30] Question: When might property management return to year-over-year stability? - Management is working towards regaining growth trajectory and is seeing positive signs [31] Question: How comfortable is management with street estimates? - Management beat estimates for Q1 but has not yet reviewed Q2 estimates [37] Question: How does the company reconcile the cautious mindset of customers with the increase in new logos? - It varies by sector, with some sectors showing movement while others remain cautious [44] Question: Is there a shift in professional services performance? - Professional segment revenues increased in Q1 compared to Q4, indicating a positive trend [46][47] Question: What is the historical behavior in spending post-recession? - Historically, the industry rebounds quickly, but current conditions are unique, with cautious spending observed [54]