Recruiter.com Group, Inc.

Good afternoon, ladies and gentlemen, and welcome to the Recruiter.com second quarter 2021 earnings call. At this time, all participants have been placed on a listen-only mode, and we will open the floor for your questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Chairman and CEO, Evan Sohn. Sir, the floor is yours.

Thank you, Operator. On the call today are Recruiter.com's CSO, Judy Crandall, and President and CLO, Miles Jennings. The company would also like to remind everyone that various remarks about future expectations, plans, and prospects constitute forward-looking statements for the purposes of safe harbor provision under the Private Securities Litigation Reform Act of 1995. Recruiter.com cautions that these forward-looking statements are subject to risks and uncertainties that may cause their actual results to differ materially from those indicated, including risks described in the company's filings with the SEC. Any forward-looking statements made on this conference call speak only of today's date, Wednesday, August 18, 2021, and Recruiter.com does not intend to update any of these forward-looking statements to reflect events or circumstances that occur after today. A replay of the conference call will also be available on Recruiter.com's website. And thank you again, operator, for the introduction. And to everyone on the call today, welcome to our first quarterly earnings call as a NASDAQ-listed company. It's been a very exciting time for us. In addition to completing our uplist on June 30th, we had a very successful oversubscribed uplist round led by Gunner & Associates, raising approximately $13.8 million to fuel our overall growth moving forward. Before we get into some of the specific details of our Q2 performance, I'd like to take a step back and provide an overview of Recruiter.com for those that are new to our story. Recruiter.com is at the epicenter of all that is going on in the talent acquisition market. When you think of recruiting, you might have used a headhunter to help fill a role, paying them 20% of the salary, or you may have seen ads on television for Indeed.com or ZipRecruiter that are focused more on the do-it-yourself job posting model. When companies are hiring, they really figure out if they want to recruit on their own or if they want to have someone help them. We give them a total solution. We have the largest network of on-demand recruiters that can help companies hire, and we offer our cutting-edge recruiting software so that companies recruit talent faster. So we provide people, recruiters on an on-demand basis. Think of it like Uber for recruiting. We currently have over 200 recruiters on assignment, ranging from large Fortune 100 companies to small businesses and everything in between. We also provide tools and technology solutions, to complement our network, and these tools are used by everyone from startup companies to some of the largest Fortune 100-type enterprises. During the second quarter, we continued our shift towards software and on-demand recruiting, reorienting the company toward high-margin, growth-oriented business. We are excited to report that our on-demand recruiting service grew 88% quarter over quarter in Q2, while a new software subscription delivered over $175,000 in recurring revenue. We expect strong growth throughout the second half of 2021 and beyond as we advance our mission of revolutionizing recruiting and talent acquisition into a rapid on-demand service. I will now turn the call over to our CFO, Judy Crandall, to go over our financial highlights in more detail. Judy?

Thanks, Evan. Our revenue for the second quarter of 2021 was $4.4 million, an increase of 38% from the first quarter of 2021, an increase of 136% from the prior year period. This increase resulted primarily from growth in our recruiters on demand business and the introduction of software subscriptions. Recruiters on demand now represented 41% of our revenue in the second quarter, up from only 3% of our revenue in the prior year period. Software subscriptions were 4% of our total revenue in the quarter. Our gross profit in the second quarter was $1.4 million, or a gross margin of 32.8%. This compares to 28.7% gross margins in the first quarter of 2021, and 23.5% gross margins in the second quarter of 2020. The increase in gross margin reflects the shift in the mix in sales for the period as our recruiters on demand revenue and software subscriptions have higher gross margins than our staffing revenue. We had total operating expense of 3.9 million in the second quarter, up from 1.9 million in the second quarter of 2020. The increase in operating expense was primarily due to the higher general and administrative expense, as well as higher amortization of intangibles expense. Our general administrative expense was $3.1 million in the second quarter, and it did include $1.1 million of non-cash stock-based compensation. The year-over-year increase in G&A was primarily attributable to increased compensation supporting and related to the growth of our recruiters' on-demand business and the addition of employees from our recent acquisitions of Scouted, Upsider, and OneWire. Net income in the second quarter of 2021 was $3.5 million, or 99 cents per share, which did include $7.5 million in non-cash income. After adjusting for bad debt expense, the gain in fair value of derivatives and stock-based compensation, our adjusted EBITDA loss was $776,000 for the quarter. As Evan mentioned, we completed our up-list capital raise in early July, and as of August 11th, our cash balance was $8.9 million. This concludes the summary of our second quarter results, and I would now like to turn the call back over to Evan.