Hudson Global, Inc (NASDAQ:HSON) Q2 2019 Earnings Conference Call Transcript

Aug 14, 2019 • 10:00 am ET

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Hudson Global, Inc (NASDAQ:HSON) Q2 2019 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good morning, and welcome to the Hudson Global Conference Call for the Second Quarter of 2019. Our call this morning will be led by Chief Executive Officer, Jeff Eberwein; and VP of Finance Matthew Diamond.

Please be advised that the statements made during the presentation 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. The 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.

During the course of this conference call, references will be made to non-GAAP terms such as adjusted EBITDA. An adjusted EBITDA reconciliation is included in our earnings release and quarterly slides, both posted on our website hudsonrpo.com. I encourage you to access our earnings material at this time as they will serve you as the helpful reference guide during our call.

I will turn the call over to Jeff Eberwein.

Executive
Jeffrey Eberwein

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 second quarter 2019 highlights. Matt Diamond our VP of Finance will then provide some additional details on our second quarter 2019 results. I will then give some perspective on our RPO business, Hudson's corporate costs and review the outlook for 2019.

In the second quarter of 2019, we reported revenue of $26.4 million, up 60% year-over-year in constant currency, gross profit of $11.7 million increased 13% year-over-year in constant currency, as we saw strong growth throughout our businesses in Asia, Europe and the Americas.

SG&A costs were $12 million in the second quarter, up 7% versus the same period last year in constant currency. We reported that adjusted EBITDA loss of $300,000 compared to an adjusted EBITDA loss of $1.1 million a year ago. Q2, 2019 adjusted EBITDA includes $700,000 of non-recurring expenses, compared to $600,000 of non-recurring expenses in Q2, 2018. Importantly, we generated positive adjusted EBITDA in Q2, 2019 excluding these non-recurring expenses, a watershed event for our company.

I want to thank all our highly dedicated employees for their hard work so far this year. It is beginning to show through in our operating results. We believe our business has strong momentum, and we're excited about continuing to improve our operating and financial results going forward.

During the quarter, I met with many clients and employees in the Asia-Pacific region, and was impressed with the satisfaction of our clients, the robustness of our sales pipeline, as well as our market position and reputation in that region. Earlier this year, market experts ranked Hudson RPO among the very top RPO providers in APAC. We have an incredibly strong presence in Australia and China, and a growing presence in Southeast Asia via our Singapore base of operations.

Turning to regional