Hudson Global Reports Decline in Q2 2024 Earnings

Hudson Global, Inc. has announced a decline in both revenue and earnings for the second quarter of 2024, attributed to reduced hiring activity and a challenging market landscape. The recruitment process outsourcing (RPO) firm reported revenues of $35.7 million, representing a year-over-year decrease of 20% when adjusted for constant currency.

Adjusted net revenue experienced a 22% decline, falling to $17.6 million. The company’s adjusted EBITDA decreased to $0.7 million from $2.6 million in the same quarter last year. Additionally, Hudson Global reported a net loss of $0.4 million, or $0.15 per diluted share, compared to a net income of $0.6 million, or $0.18 per diluted share, during Q2 of the previous year. The adjusted net income per diluted share was recorded at $0.04, down from $0.36 in Q2 2023.

### Key Takeaways
– Revenue for Q2 2024 decreased by 20% year-over-year in constant currency.
– Adjusted EBITDA fell to $0.7 million from $2.6 million in Q2 2023.
– The company reported a net loss of $0.4 million, or $0.15 per diluted share.
– Adjusted net income per diluted share was $0.04, compared to $0.36 in the prior year.
– Cash flow from operations was negative $4.3 million, down from the $2.6 million generated in Q2 2023.
– Over 150,000 shares were repurchased for $2.5 million under its share repurchase program.

### Outlook for the Company
Despite the current hiring downturn, Hudson Global remains optimistic due to positive client feedback and new business acquisitions. The company anticipates that internal adjustments and cost-cutting measures will bolster financial results in the upcoming quarters.

### Bearish Insights
– The decreased hiring activity by Hudson Global’s clients has adversely affected its financial performance.
– The company’s accounts receivable collection period increased to 59 days, indicating slower collection times.

### Bullish Insights
– Hudson Global extended its reach and service offerings by acquiring Striver, a talent acquisition firm based in the UAE.
– The company has successfully implemented its land-and-expand strategy, enhancing key existing client relationships.

### Misses
– Revenue and adjusted net revenue declined across the Americas, Asia Pacific, and EMEA regions compared to last year.
– The company experienced a greater cash outflow in operations compared to the second quarter of the previous year.

### Q&A Highlights
During the earnings call, executives discussed client behavior, noting a market hesitancy characterized by smaller project scopes and extended timelines for larger deals. Despite these conditions, Hudson Global has not noticed significant shifts in client interest toward RPO services.

The second quarter of 2024 has been challenging for Hudson Global, with diminished hiring activity among clients. However, with strategic acquisitions and a commitment to deepening client relationships, the company is working to navigate these market challenges and enhance future performance. The ongoing share repurchase program underscores Hudson Global’s confidence in its stock value.

In summary, Hudson Global’s second quarter performance reflects ongoing struggles in a tough market, but proactive measures and strategic opportunities may help to improve the company’s outlook moving forward.