Recruiter.com Group, Inc.

Good afternoon, ladies and gentlemen, and welcome to Recruiter.com's second quarter 2022 financial results conference call. At this time, all participants have been placed on a listen-only mode, and the floor will be open for questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Mr. Kieran Smith with PCG Advisory. Kieran, over to you.

Thank you, Operator. Good afternoon. Welcome to Recruiter.com's second quarter earnings conference call. As a reminder, this call is being recorded and all participants are in a listen-only mode. We'll open the call for questions and answers following the presentation. On the call today are Recruiter.com's Chairman and CEO, Evan Song, CFO, Judy Crandall, and President and COO, Miles Jennings. The company would like to remind everyone that various remarks about future expectations, plans, and prospects made on today's call constitute forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Recruiter.com cautions that these forward-looking statements are subject to risks and uncertainties and may cause its actual results to differ materially from those indicated, including risks described in the company's violence with the SEC. Any forward-looking statements made on this conference call speak only as of today's date, Monday, August 15, 2022. 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 today's conference call will be available through the Investor Relations section of Recruiter.com's website at investors.recruiter.com. With that, I'd like to turn the call over to Recruiter.com's Chairman and CEO, Evan Sohn, for opening comments. Please go ahead, Abby.

Thank you, Kieran, and welcome everyone to the call today. I will start the call today with a few high-level comments and then hand it off to Judy to review the financials. Miles will then go into some more details on our core business operations and client composition. After that, we will open it up to questions from the audience. For those new to the company, a brief overview of our company. Recruiter.com is reinventing the $120 billion talent acquisition industry with two key offerings, on-demand recruiting services, matching independent recruiters across all industry sectors and experience levels with customer needs and our software platform, artificial intelligence software to proactively engage passive candidates and career communities to attract active candidates. The old way, of either paying a headhunter 30% of the yearly salary or just finding the talent yourself has forever been changed. Paying a headhunter fee of 30% made sense when the employee was planning to stay with the company for five years, but does not work so well when people stay at jobs for just six to 18 months. Finding your own talent made sense when you're hiring one person every few months, but can you handle the workload of having to hire every four to five weeks? This is the new space that we're inventing. a combination of on-demand software and services to meet the demand of the new job economy. I am very pleased with our performance this past quarter as we continue to execute against our 2022 objectives and plans and set ourselves up to scale our business in 2023 and beyond. In the second quarter, we delivered 62% year-over-year revenue growth and sequential quarterly growth of 3.5%. Gap revenue was $7.11 million, which does not include about $323,000 in new deferred revenue. We have prioritized the most scalable and greatest potential components of our business, which we consider software and on-demand services. We're very pleased that our strategy to transition the company to higher margin products is unfolding as planned. We saw our software platform grow year over year by 393%, and grow sequentially quarter-over-quarter by 14%. Our on-demand services business grew year-over-year by 160% and grew quarter-over-quarter by 11%. We achieved that growth more efficiently than in any other quarter with adjusted gross margins of 41.2%. This margin improvement validates our plans to scale our most efficient product lines only as we shift technology-enabled solutions that require fewer operating resources. We more than doubled our gross margins year over year, driven by increases in our recruiters on-demand segment of our recruiting software product, which now collectively represents more than 80% of our business. We also achieved a 70% quarter-over-quarter improvement in adjusted EBITDA by controlling costs and improving margins. We should note that we began capitalizing our product development in Q2, but even accounting for this, we had an 11% sequential improvement in adjusted EBITDA. In line with our plans we discussed on the prior earnings call, we are projecting to cross the break-even mark and achieve positive adjusted monthly EBITDA this year. Again, I am very pleased with our performance this past quarter as we continue to execute against our 2022 objectives and plans. I cannot be prouder of the entire Recruiter.com team, which continues to push every aspect of our business forward. Judy will now go through the numbers, and then Miles will go into some more specifics around how we are seeing the business develop. Judy, please go ahead.