Hudson Global(HSON) - 2024 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - In Q4 2024, the company reported revenue of $33.6 million, down 2% year over year in constant currency, while adjusted net revenue was $17.6 million, up 5.7% year over year in constant currency [7] - Adjusted EBITDA for Q4 2024 was $0.9 million, an increase from $0.1 million a year ago [7] - The company reported a net loss of $0.6 million, or $0.20 per diluted share, compared to net income of $0.7 million, or $0.23 per diluted share in the same period last year [8] Business Line Data and Key Metrics Changes - Revenue for the Americas business increased 18% in Q4 2024, with adjusted net revenue up 5% year over year in constant currency [10] - Asia Pacific revenue decreased 10%, while adjusted net revenue increased 6% year over year in constant currency, attributed to a decline at a large MSP client [11] - EMEA revenue increased 7% versus the prior quarter in constant currency, with adjusted net revenue up 5% [12] Market Data and Key Metrics Changes - The company generated $2.0 million of cash flow from operations in Q4 2024, down from $3.3 million in Q4 2023 [13] - The working capital, excluding cash, was $11.9 million compared to $12.0 million at December 31, 2023 [13] Company Strategy and Development Direction - The company has restructured its organization and streamlined operations, investing $3.4 million in sales, marketing, and technology to enhance future growth [15][17] - A focus on M&A for geographical and product portfolio expansion is part of the growth strategy [27] - The launch of a digital division aims to improve digital capabilities and enhance client service [17][32] Management's Comments on Operating Environment and Future Outlook - Management noted a modest improvement in Q4 2024 results despite challenges from low global hiring activity and low attrition rates [6] - There is a positive outlook on the sales pipeline, with expectations of converting this into actual sales as market conditions improve [20] - Management acknowledged ongoing uncertainty in the market affecting client hiring initiatives but noted a more positive viewpoint compared to the previous year [24] Other Important Information - The company has received multiple recognitions, including being ranked among the top enterprise RPO providers for the sixteenth consecutive year [18] - The attrition rate is currently low at about 4%, with expectations of normalizing to higher levels in the future [58][60] Q&A Session Summary Question: Demand environment and geographical differentiation - Management noted an uptick in client behavior and hiring activity, with some hesitation due to market uncertainty [24] Question: Future growth investments and CapEx levels - The growth strategy includes M&A and enhancing the sales team to support geographical expansion [27] Question: Acquisition pipeline and valuation levels - The company prioritizes internal growth projects and is always looking for acquisition opportunities, though there is a gap in valuation expectations [36][38] Question: Lead time trends with RPO - The sales cycle remains consistent, with expectations for more decisions in 2025 as previous initiatives were put on hold [44] Question: Growth targets in America and EMEA markets - Management confirmed that these markets are key growth targets, with significant opportunities for expansion [50][51] Question: New logo wins and renewals - There is optimism for increasing new logo wins as the market picks up, alongside a strong position for renewals and expansions [56] Question: Share repurchase goals for 2025 - The company aims for a soft goal of share repurchases, contingent on market conditions and opportunities [70][72]