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HG

Hudson Global, Inc. (HSON)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 revenue was $31.9M (-6.0% YoY; -3.3% in constant currency), while adjusted net revenue (ANR) rose to $16.4M (+0.4% YoY; +2.2% CC). Adjusted EBITDA loss improved to -$0.7M from -$1.5M in Q1 2024; diluted EPS was -$0.59 and adjusted diluted EPS was -$0.46 .
  • Sequentially vs Q4 2024, ANR declined (Q4 2024: $17.6M; Q1 2025: $16.4M) and adjusted EBITDA fell from +$0.9M to -$0.7M amid macro-driven hiring uncertainty; cash from operations outflow narrowed YoY to -$0.8M, ending cash (incl. restricted) at $17.2M .
  • Asia Pacific led ANR growth (+14% YoY CC, adj. EBITDA +$0.6M), Americas improved (revenue +15% YoY CC, adj. EBITDA +$0.1M), while EMEA ANR fell (-19% YoY CC) and posted adj. EBITDA loss (-$0.5M) .
  • Management emphasized macro caution and client hesitancy but highlighted new business momentum (≈$20M ANR renewals/extensions and ≈$2.4M new logo wins in Q1) and the launch of a proprietary digital suite targeted for end-Q3/beginning-Q4 go-live as future catalysts .
  • No formal quantitative guidance was issued; buybacks remain a capital allocation lever under an existing $5M program (≈$2.1M remaining as of year-end 2024), and management remains open to negotiated repurchases given low liquidity .

What Went Well and What Went Wrong

What Went Well

  • Asia Pacific delivered the strongest regional performance: ANR +14% YoY (CC) and adjusted EBITDA improved to +$0.6M (from -$0.2M), reflecting mix shift away from lower-margin contracting .
  • New business traction: ≈$20M ANR from renewals/extensions plus ≈$2.4M in new logo wins, supporting management’s view that adjusted net revenue growth turned positive in Q4 and slightly positive in Q1 .
  • Strategic progress on digital: appointment of a Chief Digital Officer (Stephanie Edwards) and work toward a proprietary digital suite (Hudson Fusion/Infusion), positioned to enable AI-driven efficiencies and client value; targeted go-live by end-Q3/beginning-Q4 .

What Went Wrong

  • EMEA softness: ANR -19% YoY (CC) and adjusted EBITDA -$0.5M, driven by client and management turnover; management expects recovery following changes but results disappointed in the quarter .
  • Macro and client hesitancy: enterprise clients paused expansions amid uncertainty; regions showing notable pauses included U.S., China/Hong Kong, and (to a lesser extent) Australia, offset by strength in India and Latin America .
  • Sequential profitability pressure: adjusted EBITDA fell from +$0.9M in Q4 2024 to -$0.7M in Q1 2025, with ANR down and continued operating investments ahead of anticipated demand normalization .

Financial Results

MetricQ1 2024Q4 2024Q1 2025
Revenue ($USD Millions)$33.9 $33.6 $31.9
Adjusted Net Revenue ($USD Millions)$16.3 $17.6 $16.4
Adjusted EBITDA ($USD Millions)-$1.5 $0.9 -$0.7
Adjusted EBITDA Margin % (Adjusted EBITDA / ANR)-9.4% (calc from )4.9% (calc from )-4.1% (calc from )
Diluted EPS ($USD)-$0.95 -$0.20 -$0.59
Adjusted Diluted EPS ($USD)-$0.72 -$0.05 -$0.46
Cash & Restricted Cash (end of period, $USD Millions)N/A$17.7 $17.2
Cash Flow from Operations ($USD Millions)-$1.8 $2.0 -$0.8

Regional segment breakdown (Q1 2025):

RegionRevenue ($M)YoY CCAdjusted Net Revenue ($M)YoY CCAdjusted EBITDA ($M)
Americas$6.9 +14.7% $6.0 +3.3% $0.1
Asia Pacific$19.1 -7.4% $7.2 +14.1% $0.6
EMEA$5.9 -7.1% $3.2 -18.6% -$0.5

KPIs and mix (Q1 2025):

KPIValue
Revenue mix by region: Americas / APAC / EMEA22% / 60% / 18%
Adjusted net revenue mix by region: Americas / APAC / EMEA36% / 44% / 20%
Services split (Revenue): Contracting / RPO51% / 49%
Services split (Adjusted Net Revenue): Contracting / RPO6% / 94%
Days Sales Outstanding (DSO)56 days (Mar 31, 2025)

Notes: Margin percentages are calculated from reported adjusted EBITDA and ANR in cited documents.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY/Q1 2025None providedNone providedMaintained (no formal guidance)
EPSFY/Q1 2025None providedNone providedMaintained (no formal guidance)
Adjusted EBITDAFY/Q1 2025None providedNone providedMaintained (no formal guidance)
Share repurchasesOngoing$5M program approved Aug 8, 2023; $2.1M remaining (2024)Program remains active; management open to negotiated buybacksMaintained
Tax / NOLOngoing$240M U.S. NOL at 12/31/2024; 4.99% rights planUnchangedMaintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024, Q4 2024)Current Period (Q1 2025)Trend
Macro/Client Hesitancy“Hurry up and wait” in 2024; pipeline encouraging but decisions delayed Enterprise hesitancy persists; pauses in U.S., China/HK; India and LatAm strong Mixed: cautious near term; selective strength
Adjusted Net Revenue MomentumANR relatively stable across 4Q rolling; Q4 YoY ANR +6.4% Slightly positive YoY in Q1; turned corner Q4/Q1 Improving, albeit modest
Digital/AI EnablementDigital division launched; CDO appointed (Feb 2025) Proprietary suite targeted end-Q3/beginning-Q4 go-live; client interest strong Accelerating build/near-term rollout
Regional StrategyFocus to grow Americas/EMEA; APAC dominant footprint Americas improved; APAC leading; EMEA underperforming but leadership changes made Americas/APAC positive; EMEA repair underway
Capital AllocationSoft goal to buy back stock annually; illiquid trading → negotiated blocks Open to buybacks; program remains; window/timing dependent Opportunistic execution

Management Commentary

  • “For the first quarter of 2025, we reported revenue of $31.9 million… while our adjusted net revenue was $16.4 million… adjusted EBITDA… was a loss of $700,000… net loss of $1.8 million or $0.59 per diluted share… adjusted net loss per share was $0.46.” .
  • “Asia Pac… delivered the strongest results with a 14% increase in adjusted net revenue.” .
  • “We secured approximately $20 million of adjusted net revenue from renewals and extensions… plus approximately $2.4 million in new logo wins.” .
  • “We’re extremely excited to have Stephanie Edwards… building… our proprietary digital solution [Hudson Fusion/Infusion]… AI technology enablement… to compete on the global scale…” .
  • “We think the trend lines for new business will be up and to the right… we finally had positive YoY growth in adjusted net revenue in Q4, slightly positive in Q1.” .

Q&A Highlights

  • Macro caution and demand cadence: management saw pauses in enterprise expansions in Q1; regional detail highlighted strength in India/LatAm and slower conditions in U.S., China/HK; EMEA disappointed but expects recovery post leadership changes .
  • Digital suite timing: proprietary platform targeted to go live end-Q3/beginning-Q4, with pilot clients engaged; intended to reduce integration friction and accelerate client value .
  • Attrition normalization tailwind: attrition trending back toward historical ~15%; extreme lows in 2024 (8–9%) and highs in 2022 (>20%) unlikely to persist, supporting volume recovery .
  • New business seasonality: renewals/extensions tend to be busiest in Q1 due to Australia March fiscal year-end; underlying trend positive barring macro shocks .
  • Capital allocation: buybacks pursued opportunistically (negotiated blocks preferred given illiquidity); acquisitions targeted to fill geographic holes (e.g., Japan) with “1+1=3” fit .

Estimates Context

  • Wall Street consensus via S&P Global Capital IQ was unavailable for HSON at the time of this analysis; therefore, we cannot provide comparisons vs consensus for Q1 2025 revenue/EPS or prior quarters. If consensus becomes available, we will update the recap to reflect beats/misses and estimate revisions. Values retrieved from S&P Global were unavailable for HSON mapping.

Key Takeaways for Investors

  • Mix quality improving: APAC ANR strength (+14% YoY CC) and Americas recovery offset EMEA weakness; consolidated ANR modestly higher YoY despite macro pressure .
  • Near-term profitability volatility: sequential drop in adjusted EBITDA (Q4: +$0.9M → Q1: -$0.7M) reflects demand hesitancy; improving YoY loss metrics suggest incremental resilience .
  • Pipeline/new business traction: ≈$22.4M combined renewals/new logos in Q1 supports management’s expectation of sustained ANR growth as macro stabilizes; seasonality favors Q1 renewals .
  • Digital catalyst: proprietary suite targeted for end-Q3/beginning-Q4 go-live could enhance win rates, margins, and client stickiness; monitor pilot adoption and timeline adherence .
  • Regional execution focus: EMEA remediation and leadership stabilization are key to restoring profitability; India and LatAm expansion present growth levers .
  • Capital allocation optionality: existing repurchase authorization and management’s willingness to execute negotiated blocks provide a potential support in an illiquid stock; timing dependent on windows and counterparties .
  • Watch for formal guidance and estimate visibility: the absence of quantitative guidance and unavailable consensus limits beat/miss framing; track subsequent quarters for clearer estimate anchoring and momentum in ANR/EBITDA.