- Earnings call transcript Q3 2022

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Operator

Good morning, and welcome to the Hudson Global Conference Call for the Third Quarter of 2022.

Our call today 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, of encourage on as currency, per they this 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 on our our financial thank some give and third you highlights, on you, and Hudson CFO, We an then additional update today. Global details conditions. welcome, for in operator, business everyone. for joining will your reviewing I'll provide quarter results. Matt and XXXX Diamond, will interest us current I by start

XXXX, of in constant reported of up million SG&A revenue We For the currency. million increased in we net were revenue costs year up currency. third year-over-year the $XX last the XX% reported XX% in in currency was and up Adjusted $XX.X million, $XX.X same year in adjusted period versus XX% ago. X% quarter, third EBITDA constant constant year-over-year constant $X of a quarter million, currency. versus

of view X.X repurchased count beginning net the Since we've the the use share of we in per of we and to quarter third $X of $X.XX share reported the versus share share a quarter $X.XX the Also, stock. last repurchases ago. or as versus a million attractive income of million of XX%, period third an continue company's capital. XXXX, reduced net we reported XXXX, we year. addition, or by year approximately In net in income of per same income $X.X diluted $X.XX adjusted $X.XX share million In

to financial our the as the as million program. by Matt our review XX I'll third under XXX,XXX have CFO, from common provide now financial repurchase quarter. turn region, to results details over our call remaining We additional share some well Diamond,

Matthew Diamond

and Thank morning, Jeff, good everyone. you,

Our Americas versus in Asia our $X.X and of year's for business adjusted XX% currency, revenue XX% of constant net EBITDA $X.X and million million. of respectively. Adjusted revenue last grew adjusted increased EBITDA Pacific Revenue year adjusted XX% adjusted from net year-over-year in and of constant currency. EBITDA was business million $X.X Adjusted roughly flat ago. revenue of currency grew constant $X.X a million in decreased EBITDA

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

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

trends. that client wins in XXXX, in credit had RPO in the at I'll finalized more business we to give reminder, growth facility operations as we on during Jeff a on the result current in but back Australia perspective million to the of third a The some a the now nothing in turn facility QX. end review expected new to cash capital of company call April our market, from drawn quarter. needs As working $X.X over support and used this to flow

Jeffrey Eberwein

exhibited EBITDA adjusted our In quarter XXXX, of flat revenue solid quarter, third and adjusted remained while you, net the year-over-year. the revenue Thank Matt. business prior growth year versus

pipeline well. and quarter's favorable well slowdown ability a needs we RPO going continue rates, emphasize like holding at of operational clients temporary less XX% comprises and to very X the remains have clients slowdown. clients foreign results of the exchange did general quarter, is work is and since on on-demand expected these work, abate. recruiter have sector, and approximately up activity at see project activity I'd to to respond positioned our in consists RPO in of in the hiring We're That were impacted to The headwinds, in forward. challenges work third Despite sector year. remaining our work, The which manage robust business, have to which said, of where which our technology the project in environment, enterprise by Further, RPO health focused that a begun the next most a sales to confident we of we begun our which remain is into sector. in XX% our care technology business the heavily to is business, our reduction these for this

profitability market the accordingly these when our position responded to to to Our quickly also business teams these and changes respond reverse. conditions have protect

hard of and working please been all you dedicated for line our Operator, through. and work the to for conditions our and employees thank business flexibility, we've open the their want can to I dedication questions? challenging Importantly, clients highly

Operator

[Operator first question Reilly comes Hutton. from Instructions] Our with Edward EF

Edward Reilly

about can fixed was in variable terms wondering expenses. of in of you maybe currently, structure light Jeff, the first market challenging cost labor talk the company's I if

Jeffrey Eberwein

variable way, over costs. to sales short about all people. equates we the to all rule it have term. use a are but to XX% of in of the costs in because it's thumb medium Probably a way of have term, good our we think be doesn't fixed about A longer to and In is the variable revenue that is that Sure. overhead is marketing management,

if other of $XXX add about So cost. and add revenue, we of words, $XX costs extra variable an in no fixed we

And U.S., is And that's the would increase which enterprise enables Australia. and our us up, And but the cost variable both about of some can pricing us, helpful. than the So have to are to markets tied levels in, professionals comes way that and markets recruitment although ways over I do U.K. up for do particularly clients We it. higher CPI, happens not typically X-year have are to increase was price compensation And look, We going main we given tight, lag. any in typically I time, renewal prices on automatic the we particularly is that's have we're that into about it those until negotiations. forward. contract and we'll one our is pre-COVID. for for think to a escalations think in that are that? fixed different to much RPO versus say, business. most an detail prices how hope enter which costs ability Matt, think with contracts, labor

Matthew Diamond

we've $X several the our significantly years Yes. been consider the had Most we things corporate of that past several bring million over well. one over higher our cost around as fixed down are past And the corporate to the costs, where years. of done mark, is it within

talking to that we variable XX% that's the to flow why Jeff down was that So ability with fairly XX% the about. margin feel of confident continuing in

Edward Reilly

out just coming you. projections might you given from business Got up, maybe opportunistic on Okay. on the of other forward was see I how environment And maybe standpoint, look wondering side? creeping the or maybe unemployment this how an acquisitions the

Jeffrey Eberwein

this and typical down, just about last about This What they really more in And dealt big now COVID, need enterprise company serious the lot typically companies, more lot their And is over are Sure. bigger ramping years, XXX diversity hiring of is you think than marketplace, and seeing has with a tools before then and ever we're like inclusion opportunities of goals. partner RPO, with back companies technology for up. Fortune right bread us the a butter much is dealing business. for see ramping with a our what the X more companies. if

then So we like open to have solution ones are lot much before lot marketplace to can the existing coming especially perform a RPO really who COVID, value done add didn't provider during of of an COVID some opportunities RPO well share. few also there's out or their big more in And companies, a a of take instances the where and ours. and there never are

COVID, new of more and quarter, or And have And of slowdown is there XX% then EBITDA project earlier RPO then enterprise the early, first estimate the -- they're on some in in of seriously by that our down project lag and so no work seen we projects. kind some and projects I those And us that really in $XXX,XXX winning And RPO quite quarter revenue. we in clients thing then cost hurt hurt work we distracted and so is and clients projects that's with out this one -- starting growth busy, do, going to the our sometimes bit that a for just end that up, the considering third those had of a of And XX% have third we but coming about have business. key of is our been now than so carrying kind there's there. and that's was about environment, the be of some we roughly a expected. would sitting time. focus

it's a the this And A but companies lot to their we good will that at project project, pre-IPO, very do still some companies, not rebounds. never that job that a business earlier does to on different that It and about used way specific when there's and peak business and before and have recruit-on-demand, maybe medium-sized unclear will us RPO earlier that in it's year. in RPO a have develop lot door in is work a divisions. contracts, And a the that's hire a the the that And in of pretty time. bit which this enterprise it's of that really of So converting foot is for one relationship, as XX% declined little and or work country of year our then of corn sector, to point. robust more great sea shorter-term as cases, for particular model tech bigger our a from future. a get some significantly team for it technology that focused win, over is business the was and we that's has

companies these a quarter But we point very of around we overdoing rely hiring beginning some of the weak going need kind is next year. lot doesn't the next would And environment but freezes in some us will we'll of are provide. lot it if year. and and value next at in a at those to flexibility a for to of back on like hiring one But first companies, to right going tech improve, do start come because now. it think to the a team they will that there's of tough say and It's and the lot come that lot say, providers and like Our of be it, back the of strong. least that resume are more the clients those time even call, the service

Operator

Marc Riddick Company. comes & question Sidoti from next Our with

Marc Riddick

a forward? to Should the viewing just communicated the around talk your advantage take you any of that? to how But talent enough Could like? activity. maybe could upticks. in to talk little you're So thoughts slowdown that was we and talent some the take I the position to about you up you on a of sort going obviously, bit retention headcount I and I in wondering of of sure follow advantage sort mean, making opportunity be wanted if rebounds about you of near-term do have

Jeffrey Eberwein

fear their what's also And with Really the good out they've clients talent. it. on And meet on have Sure. disadvantage. goals and than right down seeing a turnover. will will put so, competitive and experienced normal levels going and on our And to those then a slowing at miss of higher them a do clients going COVID, and of couple shortage have -- RPO, struggled they enterprise what out question. still they of at now on clients that hiring is a to that there's coming we're own talent, if have what's those talent mentality There's our

we're got talent And pursuing and projects on we and ourselves. that's more so tech our for grow looking enterprise in RPO RPO of that when enterprise sector. are I things pipeline, RPO-type the in it's We're looking particularly always sales work segment. the fewer look to at where going fewer And project

we've for that RPO seeing devices, redeploy able working clients. sciences, redeploy and all, for were to them we're which growth. some the where hasn't enterprise have been So and been technology at always looking we've to for down able that life talent recruiters to we -- of We've still medical we're slowed

And into we like to when so really it and as our hard in we the have shrunk try much business people technology declines them in vertical. that retain has, do But accounts. sector, other redeploy headcount as

Marc Riddick

Okay. just And acquisition know wonder wasn't then on Hunt a and talk bring it maybe Badge, if about that -- you thoughts to multiples don't ago, could overall long speed the in appetite. you but little could up us pipeline & I on I bit

Jeffrey Eberwein

always for seeing interesting acquisition we're market deals sales perhaps done getting over A known surprising looking. and X, and It's their a in are because what little me And a of And acquisitions. expectations number well they've the marketplace, X price year now the we're just there looking we've -- X in the high. are years, that. decent in be and very in general, for last It's that bit a we're X shown Yes, acquirer sure. opportunities years. marketplace. than done of previously of we've kind the But to last the to helpful done more we're

high want for us it. buy be And pay and a worried, so we don't a certainly never at peak, to makes what multiple to could want we something a little

So in in expectations there we've too there's also, before. opportunities out short, there's But general, are we ever than think -- more their seen high.

So continuing look. to we're

think not changing patient criteria have We're we We several being a monitoring go. where. these to And list our and the right of is situations. way

Marc Riddick

as wanted then a And use just guess of one helpful. to the I similar me, last sort vein the of I That's far Okay. cash. for as

in mentioned quarter. You press release during the share some the repurchase activity

well. over share years. talk the could reduced quite as if about a bit and I a have that count you You last little bit wonder appetite few

Jeffrey Eberwein

is to is what value to isn't when the low be. open We asset multiple window is not. Yes, stock it's A lot think the being accretive sure. cheap, we our of stock thing The when or and believe open. it's and net the the buyback very time, below window tricky

opened for It quarter month. window where have was opportunity in in did an while. the a we So third a the open about hadn't been

to that There so buying in do we easier X little to day liquidity, lot much that so significant bit way to buy block preferred back it a holders did big was much during wanted to each to some you back our did different in we bought And ways. back COVID. And it, advantage the as of buy is which to and we've able stock. than were X take block, way the impactful know, of who then, stock and in do were easiest execute And market. trades more a and we a do

you is our stock pretty know, illiquid. As

So we'll opportunistic. be

block buy ever block be has but also if would available, the open. preference a to to becomes window be a Our

think we good share are a So use capital. purchases really of

time more be do to opportunistic. expected we'll over We and

Operator

Instructions] Walter [Operator next question with our Schenker Partners. comes MAZ from

Walter Schenker

seasonally realize quarters somewhat fourth sort to and run Is different half, the third third of seasonality? be quiet quarter, least into overwhelms maybe not other slower just the quarters, well, but first fourth through run of Two lot Europe there tends some the the questions. as you stuff in a is and I Asia, Seasonally, quarter, in at holidays. the the seasonal traditionally it, as than to maybe -- somewhat

Jeffrey Eberwein

is seeing the spun disruption. QX. the part were care another quarter the And that comments slowest One that year. We're said I QX. in business. another the a first the couple with a have Sure. quarters implementing of mention their a Yes. off typically enterprise strongest company that early quarter part We already systems, third operational was I quarter X in of IT usually QX the prepared clients. of caused slower did RPO than the and health the of is and of new there that usually, abate challenges way, fourth -- year, my and is some

it separation And went have both companies. outlook. that X X clients to abate hiring from separate companies think public healthy remain there so the And But company into is good caused QX a public QX. that and being a in news X that we also in also disruption will

that we think different, is worse there's in better laying QX, us So than different, tech but things. quarter for which to on many are sector, there's many each be the technology people. Each sector in in be a QX except is just versus things freeze, off many many, QX year QX, going putting will companies the is hiring

And so -- that's going that's be going pretty slow. to to so

official typically the would the the that lot of giving say to There's guidance So weakness a just down I of clients, look weakest And during optimistic the QX of then companies, still haven't when going the RPO stopped big forward, it's new we to to tech quarter enterprise And and we QX seen any also COVID. is of kind But because flat is sector. changes win. -- probably I in year. seasonality business thing most is versus QX. be there.

looking to unhappy for used aggressively provider we're use companies have pursuing of and looking those their they're or whatever never some and those of RPO over Our and to half life pharmaceuticals, is And sector, new pipeline of for which focused on and first health robust. is I time, typically medical remember us business it the lot are can switch, with RPO sciences, well for care a before reason, the devices is clients.

Walter Schenker

Good.

totally Okay. And just subject. on different a

day one realize and another for shares. there the a that have for whether the regard I is the offset window resources stock to given -- would company, your at our count it if opportunity But periods. and stock. as It's least, that a we to realize company which -- as of to I in balance but almost to goal would shareholder. or buy you are sheet just form XXX shareholder, nice, be like in to -- I I'd to the buyback it creep, is a the share see commend market standard quiet enough every to blocks hope company. over to you at continuing time, through keep constant, the share thought But least every good First, to be has the like bought relatively would

Jeffrey Eberwein

good and Yes. That's thought, a we agree.

Operator

Instructions] [Operator from Edward a Hutton. EF follow-up Our question with next is Reilly

Edward Reilly

Just another one from me.

Just wondering and quarter the if look the health care could the space. few revenue you to given industry this breakdown of quarters, what sales by the particularly us just pipeline, you give in over like within expect a next robust

Jeffrey Eberwein

-- know The the Matt don't hand, you're -- the I is has -- those on question if with my talking off numbers but way revenue? sector?

Edward Reilly

adjusted Or revenue.

Jeffrey Eberwein

Yes.

call everything there. and I consumer it, then the talked hold then other are say, cyclical And we maybe XX%, was lot the than the So it's Those and at year, second and services our a this aspects of have of bit. life X well. XX%, the adjusted fourth collection financial the and XX% care care, above it's sciences, business, in exposure is, sector less so a going don't volatile financial and a has part is quarter, so to of more Unlike about health really in areas our shrunk else services. XX% XX%, biggest was the And financial typically services quarter of a some revenue is XX% It financial and quite be in main services, to our up manufacturing. tech it quarter. third and peak peers, tends or health tech to

Operator

today's turn call will Eberwein over for concludes question-and-answer now That session. remarks. the to Jeff closing I

Jeffrey Eberwein

today Okay. in your using day. on forward at or Good us contact Have look our update found questions, website. press in everybody. to Feel Thank time information our the call. to you and any quarter's free Hudson next release a interest great We for joining Investor Relations for contact Global. us

Operator

Third and investor in the Hudson -- of the will Today's you be Global Call. on our been section recorded for joining available call Conference Quarter hudsonrpo.com. Investors the Thank website, has

Hudson Global (HSON) 13 Nov 222022 Q3 Earnings call transcript