HSON - Earnings call transcript Q4 2021

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Operator

Good morning, and welcome to the Hudson Global Conference Call for the Fourth Quarter of 2021.

Our call this morning will be led by Chief Executive Officer, Jeff Eberwein; and Chief Financial Officer, Matt Diamond. Please be advised that the statements made during the presentation include forward-looking statements under applicable securities laws. Such forward-looking statements involve certain risks and uncertainties that may cause actual results to differ materially from those contained in the forward-looking statements. These risks are discussed in our Form 8-K filed today and in our other filings made with the Securities and Exchange Commission, including our Annual Report on Form 10-K. obligation any any statements. disclaims company to forward-looking update The

adjusted now references our this made constant a I at During our will share. earnings and included of quarterly measures call, for encourage on as currency, per they the will these Reconciliations EBITDA release helpful time as the course call. in such this conference be are guide turn diluted will to terms, our to adjusted slides, and access earnings posted to both as over you website, hudsonrpo.com. serve reference during materials Jeff our call earnings I Eberwein. non-GAAP

Jeffrey Eberwein

the Thank current our our financial thank some an and fourth you highlights; on you, and Hudson CFO, We update give additional on today. Global details welcome, for in operator, conditions. everyone. for joining will your reviewing I’ll provide quarter results. Matt and XXXX Diamond, then interest us business I’ll by start

reported period $X.X net EBITDA ago. year year XXXX million adjusted SG&A same from XX% year-over-year costs XX% made the revenue was in and For was in up reported XXXX, in we million, increased impact net revenue excluding revenue were fourth of XX% constant acquisition up We of the cost of constant currency. $XX.X XX% quarter last the currency. in up Karani in the revenue in XXX,XXX constant the million growth, year-over-year Adjusted the versus fourth Adjusted $XX.X $XX.X of Organic was and currency. in quarter of currency. we growth XX% constant currency. million, fourth a quarter,

share in net of diluted $X.XX as as diluted We per $X.X income income of fourth adjusted last financial per net fourth $X.X the versus details from CFO, by review million, million, region, some period same over the ago. quarter reported $X.XX turn diluted versus our to income per of we $X.XX net quarter. or results Diamond, call reported the of year. or share I’ll the Matt addition, additional XXXX $X.XX well financial year In And a to our in share

Matt Diamond

Thank you, Jeff. Good everyone. morning,

adjusted from a business Our currency. increased of revenue Asia revenue $X.X adjusted million Adjusted XX% XX% ago. constant EBITDA of EBITDA net $X.X million Pacific in year grew and

and Our and revenue Americas million adjusted year’s Adjusted the respectively, fourth EBITDA business loss XXXX. $X.X to of grew attributable currency, organic of EBITDA net growth, of in Karani approximately of million. constant was the while this last remainder XXX% revenue of XX% the adjusted to XXX% $X.X versus with acquisition growth due quarter increased in

XX% EMEA increased XX% million EBITDA to QX QX business and of $X.X XXXX in Adjusted compared constant Our revenue grew of $X.X in million revenue in EBITDA adjusted last year. adjusted of net currency.

the at revenue adjusted grew long-term. over a we Lastly, seeing adjusted XX% as to rate it our to each highlight SG&A QX. EBITDA is that important believe net achieving a level again net to across we faster costs corporate adjusted goal before of operational of are leverage our revenue growing critical in percentage than of the regions is This

XXXX company’s intangible of the assets. acquisition days the as $XX.X some XXXX, December from XX, from days quarter fourth cash at sheet cash, higher The the $X.X details the Karani Group our in quarter QX and excluding ended to $X.X the $X.X XXXX million restricted million capital, quarter XXXX, of DSO of goodwill Turning slightly increased and with of fourth fourth in of XXXX. net end and reflects working to Coit additional than Days of balance XX at outstanding fourth with million In XXXX December million financial of of $X.X million We was of quarter. December sales the cash. XX XXXX. connection in in in

credit a wins finalized we expected XXXX, April that result in in new and a Australia market. capital facility to in of as growth client needs the support reminder, working a As

drawn So the QX. on at we had this end facility nothing of

trends as Our of result the The Karani business. note balance $X.X million sheet million the as our sheet is to liabilities. with quarter. current acquisition, Jeff the balance other included perspective on give from review million company of now as in back RPO the of $X.XX long-term flow shown and December the cash payable promissory to during reflects a a over XX, to turn I’ll more a fourth in $XXX,XXX generated remainder payable current XXXX our $X operations on and business within note call

Jeffrey Eberwein

continue COVID-XX pandemic. we this QX globally, capitalized created our XXXX, our strongly teams rebound offer levels Thank for resurgence the Matt. demand trough you, in And to see services. activity the In by on

Our fourth year. This growth business was in revenue, performed the in in our of the well. fourth revenue to adjusted all reported in proud net EBITDA net of business and where EBITDA Americas, reorganization growth prior adjusted XXXX adjusted the highest revenue three exceptionally adjusted Americas the of its exhibited say very legacy across strong in versus since XXXX. Coit company and I’m business quarter revenue, quarter regions its and the early both XXXX, the the strongest that

increasing Our robust our teams continue by pipeline levels very level I and of sales collaboration to activity be globally. and remain the encouraged across

with its recent with in our of team our RPO. and very has flourished continue expectations be XXXX Hudson Karani, about excited Hudson we’ve Group, integration progress potential inside acquisition, part as the acquisition, pleased very and I’m outperformed been to of technology in the growth RPO. significantly Coit of Our XXXX making

dedication hard challenging employees working through business we’ve in for been to I the flexibility, work highly in and want recent years. Importantly, thank conditions our all clients of and to our dedicated their

being you great line reflected and exciting it’s a financial Operator, efforts the in to We their see team, questions? for have open could our performance. please

Operator

of Instructions] a [Operator Partners. with have Schenker Thank from question line We MAZ you. the Walter

Walter Schenker

provision and U.S. XXbX. them? taxes you no I tax reports of Actually, due to quarter couple in international U.S. and The it’s congratulations NOLs for the or provision some tax, the the astutely tax congratulations even questions. it includes realized quarter And though just buying a first, the that’s all the year, on pay a includes don’t for on stock. the

Matt Diamond

Now it’s is the question. it Because – for of The include NOL, basically in mix you’re the the the of a countries. the taxes Thanks this correct. doesn’t Matt. it’s – U.S., hey, U.S. It’s

Walter Schenker

So those are real taxes.

So not accounting actual are taxes. Those an thing.

Okay.

Matt Diamond

to what – cash where Yeah, you our in are Hong can able file the UK to paid we and when And taxes, there Walter, you’ll come we you three flow some can see Kong, Australia, we are when be we – jurisdictions file see cash cash. the pay XX-K, mind. statement that

Walter Schenker

not backdoor a this lots realized of stuff. I but trying seasonal had to forecast, good very was other there’s a then two you’ve Okay. necessarily And acquisitions. quarter, and patterns But

the quarters again, in parts that so be the in world. this atypical What to happened recoveries not was in You’ve look in in XXXX ballpark? a that for should quarter I got economic broad brush, the very of same broad brush

Matt Diamond

Yeah.

business across sector, out, as So region, really board, business. our great question. doesn’t every and Business is happen every quarters, always like it –QX was seasonality to was pointed you those some strong And one there the where of that.

you fourth And in is that’s just general, weakest example, for of And the quarter. PAC, of in especially the quarter to activity, in kind the that’s most extended have then an odd Australia beach in month quarter is year. than the vacation January quarter, as hiring for Chinese true and due Hong us to but and New in less the almost think the of Asia Kong. China about also first of U.S., in always Year First

year. is the the quarter of slowest typically So

quarter QX to expect wouldn’t the of fourth results. flip equal though, the I So that, side months The the Karani included acquisition. only two of is that QX

really And existing obviously, so the business. getting that in one And we’re months. going to XXXX, our one right and think year strong, business we three starting, now, there. have just business another started But to we’re excited and quarter, And every plus in equals integrating three have good for potential in we’ll XXXX. we’re about is

Walter Schenker

some in the anticipate XXXX? up additional to there places would – to that should so question be some pick you And year the ways growth organic through contracts XXXX world, around

Matt Diamond

yes. word, in Yes, a

I a were trend our at performance, rolling way, trailing quarter there’ll there performance. be XX-month if our – to someone rising think I think in will be to said another look four continue

say same every is quarter thing XXXX. we that year-over-year that growth expect way in to Another

Walter Schenker

fourth ahead, but Okay, start quarter, so some in is that that the annualizing of I mean, the which means have the also you Karani, ways fourth the two-thirds means it for XXXX, tides you which higher anyway. acquisition of quarter

out doing You which even the who knows, expect to growth business the would would fourth year quarter, we but to year-over-year acquisition largely? the annualized a in more is have expect be

Matt Diamond

of to Well, on visibility ton have it’s QX, hard here in March. a

on – of of on half lot visibility next a the have We the year. first the

the for when get let’s going to is year. of a QX, growth thing same confidence QX and for thing we to good So QX probably last QX about Same versus that lot show it. year-over-year QX, closer talk

Walter Schenker

Okay. very Thank much. you

Matt Diamond

for questions. Thanks the

Operator

Thank Okay, with the have you. Will from Hill. coming [Operator Hamilton a line Manatuck Instructions] of question we

Will Hamilton

Hey, good morning, again guys. the Congrats quarter. on

going retention, to where kind couple by I basis were to on ways, questions. that collective in retained if of is that number driven revenue a a you acquisitions The just quick the more grow. is driven have net partly wondering use if But I a Just America that’s of of continues say good to know – that. I’m mainly mid-XXs forward?

Matt Diamond

you talking about about percentages? Yeah. growth? Are talking are margin you Or

Will Hamilton

it costs. that, around. gross costs more by where I’m of that The know talking the I’m less between driven the you is about acquisitions flip are I direct revenues and direct – sorry, difference net in narrowed Americas in there’s well, retain where the your

in if of quarter here is good we I number fourth terms So wondering, percentage use for purposes, forward? saw going to just in that was a modeling that

Matt Diamond

question. because the a grow. That’s thought revenue operating this seeing we gross one is the thought. than leverage as focus But second the is on net of we answering don’t And know exactly I are Well, revenue Yeah. your we lot pass-through more if effect.

no and is, leverage, I So by the on SG&A growing acquisitions, costs it enhances Even as is that’s true. mean that’s I don’t we’d acquisitions if top did And quickly are it the the putting of – operating be leverage grow we operating our some having a then at growing. top as still and think slower operating line what leverage.

Will Hamilton

here. margin the you’re growth Hence seeing Right.

Matt Diamond

That’s right.

Will Hamilton

seeing in also was existing or Can Okay, clients? the terms to it’s terms environment, and for of what fees, speak wondering in you’re of tight clients obviously new very pricing labor. where either you just I

Jeffrey Eberwein

volume financial price. Big predominantly Yeah, there’s especially the sectors of for larger-sized work on to three competition no, for strong a we that a healthcare, it’s environment typically and tech, we talent, general, net services. companies. In question. in and good focus for business companies, both lot

to can much help as struggling need And really are they the clients so acquire as they they need. And talent get.

would I to And so volume our say, price sensitivity is strong less another much us up it and focused you times. way might seeing are that on beating see clients more other just than outcome we’re than it price. summarize

Will Hamilton

me recently, the Right, maybe is speak you just acquisitions paying Last great. have obviously now? right for Yeah, be nicely, Coit is off great. to that’d two one in what you just can pipeline

Jeffrey Eberwein

bar is Sure, the high. look The low, act no, to to is another but good question. bar

not looking add revenue. We’re to just

been incredibly looking the combination where for the than on Hudson the equals attacking going well. we that three been looking really and their inside RPO plus our And at can as part also one successful that of better look with a RPO, really situations, Hudson beyond synergies honestly three, one that’s has valuable those been more best We than what seen We’re market valuable. where Group, lot one gone certainly of think just have acquisition the it going case, together is their that so and the equals target, one much – of it’s Coit to there’s it’s for. to continuing team plus be have Karani team more say And acquisition own. would it’s it’s of we’re jeez we’ve the

plus doing from bolt-on targets time. we do a one similar scenario, So And it’s I lot would one last but the in the of anything. And equals find think, for in the would We’ve terms a year in a we a look of say, looking three, be of to small to we and RPO perfect do two size don’t not but there’s so. to market, helpful in we’re I in the have one it’s a acquisitions. terms looking, ton always learned all industry, acquisition space,

so keep just mad so current our But we do, several would anything that executing And we’ll good don’t a is get fits me. plan. if fine, if But really terms a But about one opportunities were find be we than if more plan, our on done, find our right do at a in criteria size could about the which been right team to year doing pacing and the having of far apart. it’s the there. we’ve we them year two the

Will Hamilton

you. thank Okay,

Operator

this I session. to for remarks. And you. over the today’s turn closing concludes Eberwein Jeff Thank question-and-answer will now call

Jeffrey Eberwein

good you, again, our Global. to Hudson joining us in Well, call. interest We found website. today on look day. good a contact to press questions, Investor have Thank for update contact your forward anytime our using and for everybody. Thanks, Relations the next or Feel us and information release quarter’s free in

Operator

And Hudson thank recorded website on you and Global available for be hudsonrpo.com. the call conference been section Investor call. joining of the quarter fourth will has Today’s our

Hudson Global (HSON) 11 Mar 222021 Q4 Earnings call transcript