Hudson Global(US:HSON)2025-08-08 15:00Financial Data and Key Metrics Changes - For Q2 2025, the company reported revenue of $35.5 million, a slight decrease year over year in constant currency, while adjusted net revenue increased by 5.1% year over year in constant currency to $18.6 million [5] - Adjusted EBITDA for Q2 was $1.3 million, improving from $700,000 a year ago, while the net loss was $700,000 or $0.23 per diluted share compared to a net loss of $400,000 or $0.15 per diluted share in the same period last year [5] - On an adjusted basis, Q2 2025 adjusted net income per share was $0.12 compared to net income of $0.04 in the second quarter of last year [5] Business Line Data and Key Metrics Changes - Revenue for the Americas business increased by 2%, while adjusted net revenue decreased by 1% year over year in constant currency, with adjusted EBITDA of $700,000 compared to $600,000 last year [7] - Asia Pacific revenue decreased by 3%, but adjusted net revenue increased by 17% year over year in constant currency, with adjusted EBITDA rising to $1.9 million from $800,000 a year ago [7] - EMEA revenue increased by 6% year over year in constant currency, while adjusted net revenue decreased by 9%, resulting in an adjusted EBITDA loss of $400,000 compared to a gain of $300,000 in the previous year [8] Market Data and Key Metrics Changes - The company ended Q2 2025 with $17.5 million in cash, including $700,000 of restricted cash, and reported a cash flow from operations inflow of $100,000 compared to an outflow of $4.3 million in the previous year [10] - Days sales outstanding remained unchanged at 56 days as of June 30, 2025 [9] Company Strategy and Development Direction - The growth strategy focuses on organic expansion, targeted bolt-on acquisitions, and cross-regional service integration initiatives to broaden the client base and extend geographic footprint [6] - Recent strategic transactions include the acquisition of Alpha Consulting Group to enter the Japanese market and the integration of Mackenzie's CMO Group to enhance brand strategy and talent engagement capabilities [13] - The company is committed to investing in high-impact areas that deliver long-term value to clients and shareholders, with a focus on expanding geographical reach and service offerings [14] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the business turning a corner, with expectations for continued growth through the end of 2025 and into 2026 despite a mixed macro environment for talent [6] - The company is well-positioned for strong future growth and aims to outperform peers, with operational improvements expected to strengthen bottom-line performance [15] - Management highlighted the importance of the upcoming merger with Star Equity, which is anticipated to deliver significant value through greater scale and enhanced revenue diversification [15] Other Important Information - The company invested approximately $1.4 million in sales, marketing, and technology above maintenance levels to enhance future growth [6] - The merger with Star Equity is scheduled for a special meeting on August 21, 2025, and shareholders are encouraged to vote in favor [15] Q&A Session Summary Question: What led to higher margins in Asia? - Management indicated that the previous year's revenue was depressed due to a slowdown in hiring in the financial sector, and the current results reflect a return to normal activity levels [20] Question: What contributed to revenue growth in the Americas despite a poor jobs report? - Management attributed growth to new logo sales and a land and expand strategy, which has seen an increase in clients and service offerings [22] Question: What explains the outperformance in Europe? - Management noted traction from investments in the Middle East and an uptick in boutique executive search services, contributing to revenue growth [25] Question: Is the ACG acquisition immediately accretive to the bottom line? - Management expects immediate revenue growth from the ACG acquisition but indicated it would be roughly breakeven initially due to the previous struggles of the acquired business [39] Question: What are the capital allocation priorities post-merger? - The top priority is to make profitable investments in existing businesses, followed by potential bolt-on acquisitions and share buybacks once the merger is completed [57]