Hudson Global, Inc.

Good afternoon and welcome to the Hudson Global Conference call for the first quarter of 2022. Our call this afternoon will be led by Chief Executive Officer Jeff Eberwine 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. The company disclaims any obligation to update any forward-looking statements and during the course of this conference call, references will be made to non-GAAP terms such as constant currency, adjusted EBITDA, and adjusted earnings per diluted share. Reconciliations for these measures are included in our earnings release and quarterly slides, both posted on our website, hudsonrpo.com. I encourage you to access our earnings materials at this time, as they will serve as a helpful reference guide during our call. I will now turn the call over to Jeff Eberlein, serve, you may begin.

Thank you, operator, and welcome, everyone. We thank you for your interest in Hudson Global and for joining us today. I'll start by reviewing the first quarter 2022 highlights, and Matt Diamond, our CFO, will provide some additional details on our financial results. I'll then give an update on current business conditions. For the first quarter of 2022, we reported revenue of $51.9 million, of 58% year-over-year in constant currency. Adjusted net revenue was $25.6 million, an increase of 107% year-over-year in constant currency. And I would note that our organic adjusted revenue growth was 86% in constant currency. SG&A costs were $20.3 million in the first quarter, up 74% versus the same period last year in constant currency. and we reported adjusted EBITDA of 5.2 million versus 800,000 a year ago. In addition, we reported net income of 3 million or 97 cents per diluted share versus a net loss of 200,000 or 7 cents of diluted share in the same period last year. We reported adjusted net income for diluted share of $1.23 in first quarter 2022 versus 7 cents a year ago. I'm now going to turn the call over to Matt Diamond, our CFO, to review our financial results by region, as well as some additional financial details from the first quarter.

Thank you, Jeff, and good morning, everyone. Our America's business grew revenue and adjusted net revenue 220% and 226% in constant currency, respectively, with approximately 75% of this growth attributable to organic growth. and the remainder coming from the acquisition of Karani in the fourth quarter of 2021. Adjusted EBITDA of $3.5 million increased versus last year's adjusted EBITDA of $0.2 million. Our Asia-Pacific business grew revenue 30% in constant currency and adjusted net revenue 50%. Adjusted EBITDA of $2.4 million increased from adjusted EBITDA of $1.1 million a year ago. Our EMEA business grew revenue 40% and adjusted net revenue 37% in constant currency. Adjusted EBITDA of $0.3 million in Q1 2022 increased slightly compared to adjusted EBITDA of $0.2 million in Q1 of last year. Lastly, we believe it is important to highlight that adjusted net revenue again grew at a faster rate than SG&A across each of our three regions in Q1. This operational leverage we are seeing is critical to achieving our goal of growing adjusted EBITDA before corporate costs as a percentage of adjusted net revenue to the 20% level over the long term. Turning to some additional financial details from the first quarter, we ended Q1 with $19.5 million in cash and restricted cash. Day sales outstanding was 47 days at March 2022, up from DSO of 41 days at March 2021. In connection with the acquisition of Quik Group in the fourth quarter of 2020 and Karani in the fourth quarter of 2021, our balance sheet as of March 31st, 2022 reflects $4.2 million of goodwill and $5.2 million of net amortizable intangible assets. The company's working capital, xCash, increased to $13.3 million in the first quarter of 2022 from $7.8 million at the end of 2021. As a reminder, In April 2019, we finalized a credit facility in Australia to support the expected growth in working capital needs as a result of new client wins in that market. But we had nothing drawn on this facility at the end of Q1. The company had a cash outflow from operations of $2.4 million during the first quarter. I'll now turn the call back over to Jeff to give some more perspective on our RPO business and to review current trends in our business.