Hudson Global Inc.
08/08/2025 | Press release | Distributed by Public on 08/08/2025 15:07
Quarterly Report for Quarter Ending June 30, 2025 (Form 10-Q)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") should be read in conjunction with the Condensed Consolidated Financial Statements and the notes thereto, included in Part I of this Form 10-Q. The reader should also refer to the Condensed Consolidated Financial Statements and notes of Hudson Global, Inc. and its subsidiaries (the "Company") filed in its Annual Report on Form 10-K for the year ended December 31, 2024. This MD&A contains forward-looking statements. Please see "FORWARD-LOOKING STATEMENTS"for a discussion of the uncertainties, risks and assumptions associated with these statements. This MD&A also uses the non-generally accepted accounting principle measure of earnings before interest, taxes, depreciation and amortization ("EBITDA"). See Note 14 to the Condensed Consolidated Financial Statements in Part I, Item 1 of this Form 10-Q for EBITDA segment reconciliation information. The tables and information in this MD&A were derived from exact numbers and may have immaterial rounding differences.
This MD&A includes the following sections:
•Executive Overview
•Results of Operations
•Liquidity and Capital Resources
•Contingencies
•Recent Accounting Pronouncements
•Critical Accounting Estimates
•Forward-Looking Statements
Executive Overview
The Company's objective is to increase value to the Company's stockholders by providingglobal Recruitment Process Outsourcing ("RPO") solutions to customers. With direct operations in fifteen countries and relationships with specialized professionals and organizations around the globe, the Company brings a strong ability to match talent with opportunities by assessing, recruiting, developing, and engaging highly successful people for the Company's clients. The Company combines broad geographic presence, world-class talent solutions and a tailored, consultative approach to help businesses and professionals achieve maximum performance. The Company seeks to continually upgrade its service offerings and delivery capability tools to make the Company and candidates more successful in achieving clients'business requirements.
The Company's proprietary frameworks, assessment tools, and leadership development programs, coupled with its global footprint, allow the Company to design and implement regional and global outsourced recruitment solutions that the Company believes greatly enhance the quality and efficiency of its clients'hiring.
To meet the Company's objective, the Company engages in the following initiatives:
•Facilitating growth and development of the global RPO business through strategic investments in people, innovation, and technology;
•Building and differentiating the Company's brand through its unique outsourcing solutions offerings; and
•Improving the Company's cost structure and efficiency of its support functions and infrastructure.
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We continue to explore all strategic alternatives to maximize value for the Company's stockholders, including without limitation, improving the market position and profitability of our services in the marketplace, and enhancing our valuation. We may pursue our goals through organic growth, strategic initiatives, or other alternatives. Additionally, we will continue to monitor capital markets for opportunities to repurchase shares, and consider other actions designed to enhance value to our stockholders, as well as review information regarding potential acquisitions or combinations, both within the RPO business line as well as other businesses, and provide information to third parties regarding potential dispositions of assets or business lines, from time to time.
This MD&A discusses the results of the Company's business for the three and six months ended June 30, 2025 and 2024.
Pending Merger
On May 21, 2025, the Company, HSON Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of the Company ("Merger Sub"), and Star Equity Holdings, Inc., a Delaware corporation ("Star"), entered into an Agreement and Plan of Merger (the "Merger Agreement"), pursuant to which, among other matters, and subject to the satisfaction or waiver of the conditions set forth in the Merger Agreement, Merger Sub will merge with and into Star, with Star continuing as the surviving corporation of the merger (the "Merger"), and a wholly owned subsidiary of the Company. Subject to the terms and conditions of the Merger Agreement, upon the closing of the Merger and the other transactions contemplated by the Merger Agreement, each then-outstanding share of Star common stock will be converted into the right to receive 0.23 shares of Hudson common stock calculated in accordance with the terms of the Merger Agreement and each then-outstanding share of Star Series A preferred stock will be converted into the right to receive one (1) share of newly created Company Series A preferred stock in accordance with the terms of the Merger Agreement. The Company intends to seek the approval of its stockholders for the issuance of Company common stock at its next annual meeting, currently scheduled for August 21, 2025. Additional information regarding the proposed Merger and the upcoming stockholder meeting is set forth in the Company's Current Report on Form 8-K dated May 22, 2025, the Company's registration statement on Form S-4 (File No. 333-288531) declared effective by the SEC on July 22, 2025 and the Company's joint proxy statement/prospectus dated July 23, 2025.
If the Merger is consummated, the nature of the Company's business will change materially. Following the closing, the Company intends to operate as a diversified holding company, with its business activities primarily consisting of managing and operating a portfolio of businesses, including Hudson RPO. The Company anticipates that its future operations, financial condition, and results of operations will be significantly different from its historical operations. The consummation of the Merger is subject to the satisfaction or waiver of conditions set forth in the Merger Agreement, including the approval of the stockholders of both Star and the Company. Consequently, there can be no assurance that the Merger will be completed as proposed or at all.
Current Market Conditions
Our clients' demands for RPO and contracting services largely depend on the market conditions and the strength of the labor markets in the countries where we operate. In the first half of 2025, the market conditions remained challenging due to persistent inflation, higher interest rates, market uncertainty related to disruptions in trade and decreased demand for labor in certain markets. We anticipate that these challenging market conditions will continue into the next quarter of 2025.
Economic conditions in most of the world's major markets continued to slow down throughout 2024. Higher than expected inflation in most markets and rising interest rates have led to significant market disruption, including further wage inflation, increased operating costs, staffing challenges, reduced consumer confidence, and limited capital market accessibility that impact our business. In addition, in connection with the challenging business environment, some of our customers have reduced demand, and certain other customers have eliminated our services on a temporary or permanent basis. These conditions and expected future inflation and potential interest rate increases could have material adverse impacts on various aspects of our business in the future.
The continued economic uncertainty has also resulted in volatility in global currencies. Stronger foreign currencies in other markets compared to the U.S. dollar during a reporting period cause local currency results of the Company's foreign operations to be translated into more U.S. dollars.
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The following is a summary of the Company's financial performance highlights for the three and six months ended June 30, 2025 and 2024. This summary should be considered in the context of the additional disclosures in this MD&A which further highlight Company results by segment.
Summary of Financial Performance Highlights for the Three Months Ended
June 30, 2025
June 30, 2025
•Revenue was $35.5 million for the three months ended June 30, 2025, compared to $35.7 million for the same period in 2024, a decrease of $0.2 million, or 0.5%. The decrease in revenue was principally driven by declines in Australia.
◦On a constant currency basis, the Company's revenue decreased $0.1 million, or 0.2%, primarily due to an increase in contracting revenue of $0.4 million, or 2.3%, which was offset by a decrease in RPO revenue of $0.5 million, or 2.7%, compared to the same period in 2024.
•Adjusted net revenue was $18.6 million for the three months ended June 30, 2025, compared to $17.6 million for the same period in 2024, an increase of $1.0 million, or 5.8%.
◦On a constant currency basis, adjusted net revenue increased $0.9 million, or 5.1%,due to an increase in contracting adjusted net revenue of $0.8 million, or 105.6%, and an increase in RPO adjusted net revenue of $0.1 million, or 0.6%compared to the same period in 2024.
•Selling, general and administrative expenses (including salaries and related expenses) and other non-operating income (expense) ("SG&A and Non-Op") was $18.8 million for the three months ended June 30, 2025, compared to $17.6 million for the same period in 2024, an increase of $1.2 million, or 6.7%.
◦On a constant currency basis, SG&A and Non-Op increased $1.1 million, or 6.2%, as compared to the same period in 2024. SG&A and Non-Op as a percentage of revenue was 52.9% for the three months ended June 30, 2025, compared to 49.7% for the same period in 2024.
•EBITDA loss was $0.2 million for the three months ended June 30, 2025, compared to EBITDA of $0.0 million for the same period in 2024, an increase in EBITDA loss of $0.2 million. On a constant currency basis, EBITDA loss also increased $0.2 million.
•Net loss was $0.7 million for the three months ended June 30, 2025, compared to net loss of $0.4 million for the same period in 2024, an increase in net loss of $0.2 million. On a constant currency basis, net loss increased $0.3 million.
Summary of Financial Performance Highlights for the Six Months Ended
June 30, 2025
June 30, 2025
•Revenue was $67.4 million for the six months ended June 30, 2025, compared to $69.6 million for the same period in 2024, a decrease of $2.2 million, or 3.2%. The decrease in revenue was principally driven by a decline in Australia.
◦On a constant currency basis, the Company's revenue decreased $1.2 million, or 1.7%, due to a decrease in contracting revenue of $0.9 million, or 2.4%, coupled with a decrease in RPO revenue of $0.3 million, or 1.0%, compared to the same period in 2024.
•Adjusted net revenue was $35.0 million for the six months ended June 30, 2025, compared to $33.9 million for the same period in 2024, an increase of $1.1 million, or 3.2%.
◦On a constant currency basis, adjusted net revenue increased $1.2 million, or 3.7%, due to an increase in contracting revenue of $0.9 million, or 58.6%, while RPO adjusted net revenue increased by $0.3 million, or 0.9%, compared to the same period in 2024.
•SG&A and Non-Op was $36.7 million for the six months ended June 30, 2025, compared to $36.6 million for the same period in 2024.
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◦On a constant currency basis, SG&A and Non-Op increased $0.3 million, or 0.9%, as compared to the same period in 2024. SG&A and Non-Op as a percentage of revenue was 54.4% for the six months ended June 30, 2025, compared to 53.0% for the same period in 2024.
•EBITDA loss was $1.7 million for the six months ended June 30, 2025, compared to EBITDA loss of $2.7 million for the same period in 2024, a decrease in EBITDA loss of $1.0 million. On a constant currency basis, EBITDA loss decreased $1.0 million.
•Net loss was $2.4 million for the six months ended June 30, 2025, compared to net loss of $3.3 million for the same period in 2024, a decrease in net loss of $0.9 million. On a constant currency basis, net income also decreased $0.9 million.
Constant Currency (Non-GAAP Financial Measure)
The Company operates on a global basis, with the majority of its revenue generated outside of the U.S. Accordingly, fluctuations in foreign currency exchange rates can affect the Company's results of operations. For the discussion of reportable segment results of operations, the Company uses constant currency information. Constant currency compares financial results between periods as if exchange rates had remained constant period-over-period. The Company defines the term "constant currency" to mean that financial data for a previously reported period is translated into U.S. dollars using the same foreign currency exchange rates that were used to translate financial data for the current period. Constant currency metrics should not be considered in isolation or as a substitute for reported results prepared in accordance with generally accepted accounting principles ("GAAP") in the U.S. The Company's management reviews and analyzes business results in constant currency and believes these results better represent the Company's underlying business trends. Changes in foreign currency exchange rates generally impact only reported earnings.
Changes in revenue, adjusted net revenue, SG&A and Non-Op, operating income (loss), net income (loss), and EBITDA (loss) include the effect of changes in foreign currency exchange rates. The tables below summarize the impact of foreign currency exchange adjustments on the Company's operating results for the three and six months ended June 30, 2025 and 2024.
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|
Three Months Ended June 30, |
Six Months Ended June 30, |
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| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||||||||||||||||||||
| As | As | Currency | Constant | As | As | Currency | Constant | ||||||||||||||||||||||||||||||||||||||||
| $ in thousands | reported | reported | translation | currency | reported | reported | translation | currency | |||||||||||||||||||||||||||||||||||||||
| Revenue: | |||||||||||||||||||||||||||||||||||||||||||||||
| Americas | $ | 7,138 | $ | 6,972 | $ | (4) | $ | 6,968 | $ | 13,990 | $ | 12,966 | $ | (22) | $ | 12,944 | |||||||||||||||||||||||||||||||
| Asia Pacific | 21,570 | 22,649 | (427) | 22,222 | 40,697 | 44,158 | (1,289) | 42,869 | |||||||||||||||||||||||||||||||||||||||
| EMEA | 6,833 | 6,091 | 347 | 6,438 | 12,720 | 12,479 | 294 | 12,773 | |||||||||||||||||||||||||||||||||||||||
| Total | $ | 35,541 | $ | 35,712 | $ | (84) | $ | 35,628 | $ | 67,407 | $ | 69,603 | $ | (1,017) | $ | 68,586 | |||||||||||||||||||||||||||||||
|
Adjusted net revenue (a):
|
|||||||||||||||||||||||||||||||||||||||||||||||
| Americas | $ | 6,299 | $ | 6,344 | $ | (4) | $ | 6,340 | $ | 12,279 | $ | 12,149 | $ | (21) | $ | 12,128 | |||||||||||||||||||||||||||||||
| Asia Pacific | 8,839 | 7,627 | (79) | 7,548 | 16,050 | 14,173 | (304) | 13,869 | |||||||||||||||||||||||||||||||||||||||
| EMEA | 3,497 | 3,644 | 206 | 3,850 | 6,704 | 7,623 | 167 | 7,790 | |||||||||||||||||||||||||||||||||||||||
| Total | $ | 18,635 | $ | 17,615 | $ | 123 | $ | 17,738 | $ | 35,033 | $ | 33,945 | $ | (158) | $ | 33,787 | |||||||||||||||||||||||||||||||
|
SG&A and Non-Op (b):
|
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| Americas | $ | 6,139 | $ | 6,001 | $ | (15) | $ | 5,986 | $ | 12,349 | $ | 12,725 | $ | (63) | $ | 12,662 | |||||||||||||||||||||||||||||||
| Asia Pacific | 7,345 | 7,310 | (75) | 7,235 | 14,185 | 14,410 | (315) | 14,095 | |||||||||||||||||||||||||||||||||||||||
| EMEA | 4,199 | 3,528 | 175 | 3,703 | 8,042 | 7,232 | 136 | 7,368 | |||||||||||||||||||||||||||||||||||||||
| Corporate | 1,104 | 771 | - | 771 | 2,121 | 2,255 | - | 2,255 | |||||||||||||||||||||||||||||||||||||||
| Total | $ | 18,787 | $ | 17,610 | $ | 85 | $ | 17,695 | $ | 36,697 | $ | 36,622 | $ | (242) | $ | 36,380 | |||||||||||||||||||||||||||||||
| Operating income (loss): | |||||||||||||||||||||||||||||||||||||||||||||||
| Americas | $ | 290 | $ | 252 | $ | (5) | $ | 247 | $ | 82 | $ | (900) | $ | (4) | $ | (904) | |||||||||||||||||||||||||||||||
| Asia Pacific | 1,611 | 465 | (4) | 461 | 1,994 | (55) | 6 | (49) | |||||||||||||||||||||||||||||||||||||||
| EMEA | (586) | 221 | 37 | 258 | (1,105) | 491 | 36 | 527 | |||||||||||||||||||||||||||||||||||||||
| Corporate | (1,526) | (1,125) | - | (1,125) | (2,906) | (2,763) | - | (2,763) | |||||||||||||||||||||||||||||||||||||||
| Total | $ | (211) | $ | (187) | $ | 28 | $ | (159) | $ | (1,935) | $ | (3,227) | $ | 38 | $ | (3,189) | |||||||||||||||||||||||||||||||
| Net loss, consolidated | $ | (688) | $ | (441) | $ | 22 | $ | (419) | $ | (2,444) | $ | (3,339) | $ | 40 | $ | (3,299) | |||||||||||||||||||||||||||||||
|
EBITDA (loss) (c):
|
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| Americas | $ | 228 | $ | 402 | $ | (4) | $ | 398 | $ | 87 | $ | (462) | $ | (7) | $ | (469) | |||||||||||||||||||||||||||||||
| Asia Pacific | 1,427 | 224 | - | 224 | 1,710 | (377) | 18 | (359) | |||||||||||||||||||||||||||||||||||||||
| EMEA | (701) | 149 | 33 | 182 | (1,339) | 417 | 33 | 450 | |||||||||||||||||||||||||||||||||||||||
| Corporate | (1,106) | (770) | - | (770) | (2,122) | (2,255) | - | (2,255) | |||||||||||||||||||||||||||||||||||||||
| Total | $ | (152) | $ | 5 | $ | 29 | $ | 34 | $ | (1,664) | $ | (2,677) | $ | 44 | $ | (2,633) | |||||||||||||||||||||||||||||||
(a)Represents Revenue less the Direct contracting costs and reimbursed expenses caption on the Condensed Consolidated Statements of Operations.
(b)SG&A and Non-Op is a measure that management uses to evaluate the segments' expenses, which include the following captions on the Condensed Consolidated Statements of Operations: Salaries and related, Office and general, Marketing and promotion, and Other expense, net. Corporate management service allocations are included in the segments' other income (expense).
(c)See EBITDA reconciliation in the following section.
Use of EBITDA (Non-GAAP Financial Measure)
Management believes EBITDA is a meaningful indicator of the Company's performance that provides useful information to investors regarding the Company's financial condition and results of operations. Management considers EBITDA to be the best indicator of operating performance and most comparable measure across the regions in which the Company operates. Management uses this measure to evaluate capital needs and working capital requirements. EBITDA should not be considered in isolation or as a substitute for operating income, or net income prepared in accordance with U.S. GAAP or as a measure of the Company's profitability. EBITDA is derived from net income adjusted for the provision for (benefit from) income taxes, interest expense (income), and depreciation and amortization.
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The reconciliation of EBITDA to the most directly comparable GAAP financial measure is provided in the table below:
| Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
| June 30, | June 30, | |||||||||||||||||||||||||
| $ in thousands | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||
| Net loss | $ | (688) | $ | (441) | $ | (2,444) | $ | (3,339) | ||||||||||||||||||
| Adjustments to Net loss | ||||||||||||||||||||||||||
| Provision for income taxes | 345 | 253 | 377 | 165 | ||||||||||||||||||||||
| Interest (expense) income, net | (54) | (94) | (125) | (187) | ||||||||||||||||||||||
| Depreciation and amortization expense | 245 | 287 | 528 | 684 | ||||||||||||||||||||||
| Total adjustments from net loss to EBITDA | 536 | 446 | 780 | 662 | ||||||||||||||||||||||
| EBITDA (loss) | $ | (152) | $ | 5 | $ | (1,664) | $ | (2,677) | ||||||||||||||||||
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Results of Operations
Americas (reported currency)
Revenue - Americas
|
Three Months Ended June 30, |
Six Months Ended June 30, |
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| 2025 | 2024 | Change in amount | Change in % | 2025 | 2024 | Change in amount | Change in % | ||||||||||||||||||||||||||||||||||||||||
| $ in millions | As reported | As reported | As reported | As reported | |||||||||||||||||||||||||||||||||||||||||||
| Americas | |||||||||||||||||||||||||||||||||||||||||||||||
| Revenue | $ | 7.1 | $ | 7.0 | $ | 0.2 | 2 | % | $ | 14.0 | $ | 13.0 | $ | 1.0 | 8 | % | |||||||||||||||||||||||||||||||
For the three months ended June 30, 2025, contracting revenue increased by $0.8 million, or 472%, while RPO revenue decreased by $0.6 million, or 9%, compared to the same period in 2024. The increase in contracting revenue was driven by new client wins, while the decline in RPO revenue reflected lower demand from existing clients.
For the six months ended June 30, 2025, contracting revenue increased by $1.7 million, or 478%, driven by continued growth from new client engagements, while RPO revenue decreased by $0.7 million, or 6%, as compared to the same period in 2024, due to lower demand from existing clients.
Adjusted Net Revenue - Americas
|
Three Months Ended June 30, |
Six Months Ended June 30, |
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| 2025 | 2024 | Change in amount | Change in % | 2025 | 2024 | Change in amount | Change in % | ||||||||||||||||||||||||||||||||||||||||
| $ in millions | As reported | As reported | As reported | As reported | |||||||||||||||||||||||||||||||||||||||||||
| Americas | |||||||||||||||||||||||||||||||||||||||||||||||
| Adjusted net revenue | $ | 6.3 | $ | 6.3 | $ | - | (1) | % | $ | 12.3 | $ | 12.1 | $ | 0.1 | 1 | % | |||||||||||||||||||||||||||||||
| Adjusted net revenue as a percentage of revenue | 88 | % | 91 | % | N/A | N/A | 88 | % | 94 | % | N/A | N/A | |||||||||||||||||||||||||||||||||||
For the three months ended June 30, 2025, RPO adjusted net revenue decreased by $0.2 million, or 3%, while contracting adjusted net revenue increased by $0.1 million, or 599%. The decline in RPO adjusted net revenue was due to lower demand from existing clients, while the increase in contracting adjusted net revenue was due to new client wins. For the six months ended June 30, 2025, contracting adjusted net revenue increased by $0.4 million, or 726%, driven by continued growth from new client engagements, while RPO adjusted net revenue decreased by $0.3 million, or 2%, reflecting the lower demand from existing clients, compared to the same period in 2024.
For the three months ended June 30, 2025 and 2024, total adjusted net revenue as a percentage of revenue was 88%, compared to 91% for the same period in 2024. The decrease in total adjusted net revenue as a percentage of revenue was attributed to the lower mix of RPO to contracting revenue.
For the six months ended June 30, 2025, total adjusted net revenue as a percentage of revenue was 88%, compared to 94% for the same period in 2024. The decrease in total adjusted net revenue as a percentage of revenue was due to the same factor noted above.
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SG&A and Non-Op -Americas
|
Three Months Ended June 30, |
Six Months Ended June 30, |
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| 2025 | 2024 | Change in amount | Change in % | 2025 | 2024 | Change in amount | Change in % | ||||||||||||||||||||||||||||||||||||||||
| $ in millions | As reported | As reported | As reported | As reported | |||||||||||||||||||||||||||||||||||||||||||
| Americas | |||||||||||||||||||||||||||||||||||||||||||||||
| SG&A and Non-Op | $ | 6.1 | $ | 6.0 | $ | 0.1 | 2 | % | $ | 12.3 | $ | 12.7 | $ | (0.4) | (3) | % | |||||||||||||||||||||||||||||||
| SG&A and Non-Op as a percentage of revenue | 86 | % | 86 | % | N/A | N/A | 88 | % | 98 | % | N/A | N/A | |||||||||||||||||||||||||||||||||||
For the three months ended June 30, 2025, SG&A and Non-Op increased $0.1 million, or 2%, compared to the same period in 2024, while SG&A and Non-Op as a percentage of revenue decreased slightly.
For the six months ended June 30, 2025, SG&A and Non-Op decreased $0.4 million, or 3%, compared to the same period in 2024, while SG&A and Non-Op as a percentage of revenue declined from 98% to 88%. The decrease in SG&A and No-Op was primarily due to lower staff costs, partly offset by higher travel and entertainment cost and foreign exchange losses. The decrease in SG&A and Non-Op as a percentage of revenue was primarily due to the decline in staff costs.
Operating (Loss) Income and EBITDA -Americas
|
Three Months Ended June 30, |
Six Months Ended June 30, |
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| 2025 | 2024 | Change in amount | Change in % | 2025 | 2024 | Change in amount | Change in % | ||||||||||||||||||||||||||||||||||||||||
| $ in millions | As reported | As reported | As reported | As reported | |||||||||||||||||||||||||||||||||||||||||||
| Americas | |||||||||||||||||||||||||||||||||||||||||||||||
| Operating income (loss) | $ | 0.3 | $ | 0.3 | $ | - | 15 | % | $ | 0.1 | $ | (0.9) | $ | 1.0 | 109 | % | |||||||||||||||||||||||||||||||
| EBITDA (loss) | $ | 0.2 | $ | 0.4 | $ | (0.2) | (43) | % | $ | 0.1 | $ | (0.5) | $ | 0.5 | 119 | % | |||||||||||||||||||||||||||||||
| EBITDA (loss) as a percentage of revenue | 3 | % | 6 | % | N/A | N/A | 1 | % | (4) | % | N/A | N/A | |||||||||||||||||||||||||||||||||||
For the three months ended June 30, 2025, operating income was $0.3 million increasing slightly from 2024, and EBITDA was $0.2 million, compared to EBITDA of $0.4 million in 2024.
For the six months ended June 30, 2025, operating income was $0.1 million, compared to operating loss of $0.9 million in 2024, and EBITDA was $0.1 million, compared to EBITDA loss of $0.5 million in 2024.
The changes in operating income and EBITDA for the three and six months ended June 30, 2025, were due to the lower staff costs as a percentage of revenue noted above.
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Asia Pacific (constant currency)
Revenue - Asia Pacific
|
Three Months Ended June 30, |
Six Months Ended June 30, |
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| 2025 | 2024 | Change in amount | Change in % | 2025 | 2024 | Change in amount | Change in % | ||||||||||||||||||||||||||||||||||||||||
| $ in millions |
As reported |
Constant currency |
As reported |
Constant currency |
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| Asia Pacific | |||||||||||||||||||||||||||||||||||||||||||||||
| Revenue | $ | 21.6 | $ | 22.2 | $ | (0.7) | (3) | % | $ | 40.7 | $ | 42.9 | $ | (2.2) | (5) | % | |||||||||||||||||||||||||||||||
For the three months ended June 30, 2025, contracting revenue decreased by $1.3 million, or 9%, while RPO revenue increased $0.6 million, or 9%, compared to 2024, as discussed below.
In Australia, revenue decreased $1.3 million, or 7%, for the three months ended June 30, 2025, compared to the same period in 2024. The decrease was primarily driven by contracting revenue, which declined by $1.8 million, or 13% driven by reduced demand from existing clients. RPO revenue increased by $0.5 million, or 12%, compared to 2024, due to higher demand from existing clients.
In Asia, revenue increased $0.7 million, or 17%, for the three months ended June 30, 2025, compared to the same period in 2024. The increase for the three months ended June 30, 2025 was due to higher demand from existing clients.
For the six months ended June 30, 2025, contracting revenue decreased by $3.7 million, or 12%, while RPO revenue increased by $1.5 million, or 11%, as discussed below.
In Australia, revenue declined $3.6 million, or 10%, for the six months ended June 30, 2025, compared to the same period in 2024. The decrease was primarily in contracting revenue, which decreased by $4.6 million, or 17%, partially offset by a $1.0 million, or 12% increase in RPO revenue, compared to 2024. The decline in contracting revenue was mainly due to reduced demand from existing clients, while increase in RPO revenue was driven by stronger demand from existing clients.
In Asia, revenue increased $1.6 million or 23%, for the six months ended June 30, 2025, compared to 2024. The increase for the six months ended June 30, 2025 was due to higher demand from existing clients.
Adjusted net revenue - Asia Pacific
|
Three Months Ended June 30, |
Six Months Ended June 30, |
||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | Change in amount | Change in % | 2025 | 2024 | Change in amount | Change in % | ||||||||||||||||||||||||||||||||||||||||
| $ in millions |
As reported |
Constant currency |
As reported |
Constant currency |
|||||||||||||||||||||||||||||||||||||||||||
| Asia Pacific | |||||||||||||||||||||||||||||||||||||||||||||||
| Adjusted net revenue | $ | 8.8 | $ | 7.5 | $ | 1.3 | 17 | % | $ | 16.0 | $ | 13.9 | $ | 2.2 | 16 | % | |||||||||||||||||||||||||||||||
| Adjusted net revenue as a percentage of revenue | 41 | % | 34 | % | N/A | N/A | 39 | % | 32 | % | N/A | N/A | |||||||||||||||||||||||||||||||||||
For the three months ended June 30, 2025, RPO adjusted net revenue increased by $0.7 million, or 10%, while contracting adjusted net revenue increased $0.6 million or 100%, compared to the same period in 2024.
In Australia, adjusted net revenue increased by $0.9 million, or 19%, for the three months ended June 30, 2025, compared to the same period in 2024. The growth was primarily driven by a $0.5 million, or 13%, increase in RPO adjusted net revenue, along with a $0.4 million, or 64%, increase in contracting adjusted net revenue, compared to 2024.
In Asia, adjusted net revenue increased by $0.4 million, or 14%, for the three months ended June 30, 2025, compared to the same period in 2024.
Total adjusted net revenue as a percentage of revenue was 41% for the three months ended June 30, 2025, compared to 34% for the same period in 2024. The increase in total adjusted net revenue as a percentage of revenue was attributed to a greater mix of higher margin RPO revenue to contracting revenue.
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For the six months ended June 30, 2025, RPO adjusted net revenue increased by $1.5 million, or 12%, while contracting adjusted net revenue increased by $0.6 million or by 51%, compared to the same period in 2024.
In Australia, adjusted net revenue increased by $1.3 million, or 15%, for the six months ended June 30, 2025, compared to the same period in 2024. The growth was primarily driven by a $1.0 million, or 13%, increase in RPO adjusted net revenue, along with a $0.3 million, or 27%, increase in contracting adjusted net revenue.
In Asia, adjusted net revenue increased by $0.9 million, or 18%, for the six months ended June 30, 2025, compared to the same period in 2024. The increase for the six months ended June 30, 2025 was due to higher demand from existing clients.
Total adjusted net revenue as a percentage of revenue was 39% for the six months ended June 30, 2025, compared 32% for the same period in 2024. The increase in total adjusted net revenue as a percentage of revenue was attributed to a greater mix of higher margin RPO revenue to contracting revenue.
SG&A and Non-Op - Asia Pacific
|
Three Months Ended June 30, |
Six Months Ended June 30, |
||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | Change in amount | Change in % | 2025 | 2024 | Change in amount | Change in % | ||||||||||||||||||||||||||||||||||||||||
| $ in millions |
As reported |
Constant currency |
As reported |
Constant currency |
|||||||||||||||||||||||||||||||||||||||||||
| Asia Pacific | |||||||||||||||||||||||||||||||||||||||||||||||
| SG&A and Non-Op | $ | 7.3 | $ | 7.2 | $ | 0.1 | 2 | % | $ | 14.2 | $ | 14.1 | $ | 0.1 | 1 | % | |||||||||||||||||||||||||||||||
| SG&A and Non-Op as a percentage of revenue | 34 | % | 33 | % | N/A | N/A | 35 | % | 33 | % | N/A | N/A | |||||||||||||||||||||||||||||||||||
For the three months ended June 30, 2025, SG&A and Non-Op increased $0.1 million, or 2%, compared to the same periods in 2024, while SG&A and Non-Op as a percentage of revenue increased from 33% to 34%. The increase in SG&A and No-Op was primarily due to higher travel and entertainment and advertising and marketing expenses, partly offset by lower foreign exchange losses.
For the six months ended June 30, 2025, SG&A and Non-Op increased $0.1 million, or 1%, compared to the same periods in 2024, while SG&A and Non-Op as a percentage of revenue increased from 33% to 35%. The increase in SG&A and No-Op was primarily due to higher advertising and corporate allocation costs, partly offset by lower foreign exchange losses. The increase was principally due to the lower mix of contracting revenue, where the majority of costs are reflected in adjusted net revenue.
Operating Income and EBITDA - Asia Pacific
|
Three Months Ended June 30, |
Six Months Ended June 30, |
||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | Change in amount | Change in % | 2025 | 2024 | Change in amount | Change in % | ||||||||||||||||||||||||||||||||||||||||
| $ in millions |
As reported |
Constant currency |
As reported |
Constant currency |
|||||||||||||||||||||||||||||||||||||||||||
| Asia Pacific | |||||||||||||||||||||||||||||||||||||||||||||||
| Operating income | $ | 1.6 | $ | 0.5 | $ | 1.2 | 251 | % | $ | 2.0 | $ | (0.1) | $ | 2.0 | N/M | ||||||||||||||||||||||||||||||||
| EBITDA (loss) | $ | 1.4 | $ | 0.2 | $ | 1.2 | N/M | $ | 1.7 | $ | (0.4) | $ | 2.1 | N/M | |||||||||||||||||||||||||||||||||
| EBITDA (loss) as a percentage of revenue | 7 | % | 1 | % | N/A | N/A | 4 | % | (1) | % | N/A | N/A | |||||||||||||||||||||||||||||||||||
N/M = not meaningful
For the three months ended June 30, 2025, operating income was $1.6 million, compared to operating income of $0.5 million in 2024, and EBITDA was $1.4 million, or 7% of revenue, compared to EBITDA of $0.2 million, or 1% of revenue, in 2024. The increases in operating income and EBITDA were principally due to the increase in adjusted net revenue, as described above.
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Index
For the six months ended June 30, 2025, operating income was $2.0 million, compared to operating loss of $0.1 million in 2024, and EBITDA was $1.7 million, or 4% of revenue, compared to EBITDA loss of $0.4 million, or 1% of revenue, in 2024. The increases in operating income and EBITDA were principally due to the increase in adjusted net revenue, as described above.
Europe, Middle East, and Africa ("EMEA") (constant currency)
Revenue - EMEA
|
Three Months Ended June 30, |
Six Months Ended June 30, |
||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | Change in amount | Change in % | 2025 | 2024 | Change in amount | Change in % | ||||||||||||||||||||||||||||||||||||||||
| $ in millions |
As reported |
Constant currency |
As reported |
Constant currency |
|||||||||||||||||||||||||||||||||||||||||||
| EMEA | |||||||||||||||||||||||||||||||||||||||||||||||
| Revenue | $ | 6.8 | $ | 6.4 | $ | 0.4 | 6 | % | $ | 12.7 | $ | 12.8 | $ | (0.1) | - | % | |||||||||||||||||||||||||||||||
For the three months ended June 30, 2025, contracting revenue increased by $0.9 million or 36%, while RPO revenue decreased by $0.5 million or 12%, compared to the same period in 2024, as further discussed below.
In the U.K., for the three months ended June 30, 2025, revenue increased $0.4 million, or 7%. The change was driven by an increase in contracting revenue of $0.9 million, or 36%, due to higher demand from existing clients, which was partially offset by a decrease in RPO revenue of $0.5 million, or 14%, compared to the same period in 2024.
In Continental Europe, total revenue was $0.5 million for the three months ended June 30, 2025, a decrease of $0.1 million, or 19% compared to 2024. The decrease was primarily due to lower demand from existing clients.
In the Middle East, total revenue and RPO revenue was $0.1 million for the three months ended June 30, 2025.
For the six months ended June 30, 2025, RPO revenue decreased by $1.1 million, or 14%, while contracting revenue increased by $1.1 million, or 22%, compared to the same period in 2024.
In the U.K., for the six months ended June 30, 2025 revenue decreased by $0.2 million, or 1%, compared to the same period in 2024. The decrease was driven by RPO revenue, which declined $1.2 million, or 18%, while contracting revenue increased by $1.1 million, or 22%.
In Continental Europe, total revenue was $1.0 million for the six months ended June 30, 2025, a decrease of $0.1 million, or 9%, compared to the same period in 2024. The decrease was primarily due to lower demand from existing clients.
In the Middle East, total revenue and RPO revenue was $0.2 million for the six months ended June 30, 2025.
Adjusted Net Revenue - EMEA
|
Three Months Ended June 30, |
Six Months Ended June 30, |
||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | Change in amount | Change in % | 2025 | 2024 | Change in amount | Change in % | ||||||||||||||||||||||||||||||||||||||||
| $ in millions |
As reported |
Constant currency |
As reported |
Constant currency |
|||||||||||||||||||||||||||||||||||||||||||
| EMEA | |||||||||||||||||||||||||||||||||||||||||||||||
| Adjusted net revenue | $ | 3.5 | $ | 3.8 | $ | (0.4) | (9) | % | $ | 6.7 | $ | 7.8 | $ | (1.1) | (14) | % | |||||||||||||||||||||||||||||||
| Adjusted net revenue as a percentage of revenue | 51 | % | 60 | % | N/A | N/A | 53 | % | 61 | % | N/A | N/A | |||||||||||||||||||||||||||||||||||
For the three months ended June 30, 2025, adjusted net revenue decreased by $0.4 million, or 9%, primarily driven by a decrease in RPO adjusted net revenue of $0.4 million, or 10%, while contracting adjusted net revenue increased slightly, or 22%, compared to the same period in 2024, as further discussed below.
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Index
In the U.K., total adjusted net revenue for the three months ended June 30, 2025 decreased by $0.3 million, or 10%, compared to 2024. The decrease was driven by RPO adjusted net revenue, which declined by $0.4 million, or 11%, compared to 2024.
In Continental Europe, total adjusted net revenue was $0.5 million for the three months ended June 30, 2025, a decrease of $0.1 million, or 21% compared to 2024. The decrease was primarily due to lower demand from existing clients.
In the Middle East, total adjusted net revenue and RPO adjusted net revenue was $0.1 million for the three months ended June 30, 2025.
For the six months ended June 30, 2025, adjusted net revenue decreased by $1.1 million, or 14%, driven by a decrease in RPO revenue, which declined $1.0 million, or 13%, compared to the same period in 2024.
In the U.K., total adjusted net revenue for the six months ended June 30, 2025 decreased by $1.2 million, or 18%, compared to the same period in 2024, driven by a decrease in RPO adjusted net revenue of $1.1 million, or 17%.
In Continental Europe, for the six months ended June 30, 2025, total adjusted net revenue decreased by $0.1 million, or 11%, compared to the same period in 2024, due to new client wins.
In the Middle East, total adjusted net revenue and RPO adjusted net revenue was $0.2 million for the six months ended June 30, 2025.
SG&A and Non-Op - EMEA
|
Three Months Ended June 30, |
Six Months Ended June 30, |
||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | Change in amount | Change in % | 2025 | 2024 | Change in amount | Change in % | ||||||||||||||||||||||||||||||||||||||||
| $ in millions |
As reported |
Constant currency |
As reported |
Constant currency |
|||||||||||||||||||||||||||||||||||||||||||
| EMEA | |||||||||||||||||||||||||||||||||||||||||||||||
| SG&A and Non-Op | $ | 4.2 | $ | 3.7 | $ | 0.5 | 13 | % | $ | 8.0 | $ | 7.4 | $ | 0.7 | 9 | % | |||||||||||||||||||||||||||||||
| SG&A and Non-Op as a percentage of revenue | 61 | % | 58 | % | N/A | N/A | 63 | % | 58 | % | N/A | N/A | |||||||||||||||||||||||||||||||||||
For the three months ended June 30, 2025, SG&A and Non-Op increased $0.5 million, or 13%, compared to the same period in 2024. The increase in SG&A and Non-Op was primarily the result of higher consultant staff costs in the current year.
For the six months ended June 30, 2025, SG&A and Non-Op increased $0.7 million, or 9%, compared to the same period in 2024. The increase in SG&A and Non-Op was primarily the result of higher consultant staff costs in the current year.
For the three months ended June 30, 2025, SG&A and Non-Op as a percentage of revenue was 61%, compared to 58%, respectively, in 2024. The increase in SG&A and Non-Op as a percentage of revenue was primarily due to the higher consultant staff costs described above.
For the six months ended June 30, 2025, SG&A and Non-Op as a percentage of revenue was 63%, compared to 58%, in 2024. The increase in SG&A and Non-Op as a percentage of revenue was primarily due to the higher consultant staff costs described above.
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Index
Operating Income and EBITDA - EMEA
|
Three Months Ended June 30, |
Six Months Ended June 30, |
||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | Change in amount | Change in % | 2025 | 2024 | Change in amount | Change in % | ||||||||||||||||||||||||||||||||||||||||
| $ in millions |
As reported |
Constant currency |
As reported |
Constant currency |
|||||||||||||||||||||||||||||||||||||||||||
| EMEA | |||||||||||||||||||||||||||||||||||||||||||||||
| Operating income | $ | (0.6) | $ | 0.3 | $ | (0.8) | (327) | % | $ | (1.1) | $ | 0.5 | $ | (1.6) | (310) | % | |||||||||||||||||||||||||||||||
| EBITDA (loss) | $ | (0.7) | $ | 0.2 | $ | (0.9) | (486) | % | $ | (1.3) | $ | 0.5 | $ | (1.8) | (398) | % | |||||||||||||||||||||||||||||||
| EBITDA (loss) as a percentage of revenue | (10) | % | 3 | % | N/A | N/A | (11) | % | 4 | % | N/A | N/A | |||||||||||||||||||||||||||||||||||
For the three months ended June 30, 2025, operating loss was $0.6 million, compared to operating income of $0.3 million for the same period in 2024, and EBITDA loss was $0.7 million, or 10% of revenue, compared to EBITDA of $0.2 million, or 3% of revenue, for the same period in 2024.
For the six months ended June 30, 2025, operating loss was $1.1 million, compared to operating income of $0.5 million for the same period in 2024, and EBITDA loss was $1.3 million, or 11% of revenue, compared to EBITDA of $0.5 million, or 4% of revenue, for the same period in 2024.
The following are discussed in reported currency
Corporate Expenses, Net of Corporate Management Expense Allocations
Corporate expenses were $1.1 million for the three months ended June 30, 2025 as compared to $0.8 million for the same period in 2024, representing an increase of $0.3 million. The increase in corporate expenses was primarily due to higher professional fees partially offset by investment-related income.
For the six months ended June 30, 2025, corporate expenses were $2.1 million compared to $2.3 million for the same period in 2024, a decrease of $0.1 million. The decrease was primarily due to higher corporate allocations, investment-related income partially offset by higher professional fees.
Depreciation and Amortization Expense
Depreciation and amortization expense was $0.2 million and $0.5 million for the three and six months ended June 30, 2025, compared to $0.3 million and $0.7 million for the same periods in 2024, respectively.
Interest (expense) income, Net
Interest (expense) income, net was $0.1 million for each of the three and six months ended June 30, 2025, compared to other expense of $0.1 million and $0.2 million for the same periods in 2024. During the second quarter of 2025, the Company earned $0.1 million of dividend income, which was recorded in Interest (expense) Income, net, from its investment in a short-term U.S. Treasury securities fund, which replaced a prior interest-bearing investment.
Other Income (expense), Net
Other expense was $0.2 million and $0.3 million for the three and six months ended June 30, 2025, respectively, as compared to other expense of $0.1 million and $0.1 million for the same periods in 2024.
Provision for Income Taxes
The provision for income taxes for the six months ended June 30, 2025 was $0.4 million on $2.1 million of pre-tax loss, compared to a provision for income tax of $0.2 million on $3.2 million of pre-tax loss for the same period in 2024. The effective tax rates for the six months ended June 30, 2025 and 2024 were negative 18% and negative 5%, respectively. For the six months ended June 30, 2025, the effective tax rates differed from the U.S. Federal statutory rate of 21% primarily due to pretax losses for which no tax benefit can be recognized, foreign tax rate differences, and non-deductible expenses. For the six months ended June 30, 2024, the effective tax rates differed from the U.S. Federal statutory rate of 21% primarily due to
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Index
changes in valuation allowances in the U.S. and certain foreign jurisdictions, which reduces or eliminates the effective tax rate on current year profits or losses, foreign tax rate differences, and non-deductible expenses. The current year-to-date effective tax rate differs significantly from the prior period effective tax rate primarily due to the interaction of rate reconciliation items, including changes in valuation allowance.
Net Loss
Net loss was $0.7 million for the three months ended June 30, 2025, compared to net loss of $0.4 million for the three months ended June 30, 2024, an increase in net loss of $0.2 million. Basic and diluted loss per share were both $0.23 for the three months ended June 30, 2025, compared to basic and diluted loss per share of $0.15 for the same period in 2024.
Net loss was $2.4 million for the six months ended June 30, 2025, compared to net loss of $3.3 million for the same period in 2024, a decrease in net loss of $0.9 million. Basic and diluted loss per share were $0.82 for the six months ended June 30, 2025, compared to basic and diluted loss per share of $1.10, for the same period in 2024.
Liquidity and Capital Resources
As of June 30, 2025, cash and cash equivalents and restricted cash totaled $17.5 million, compared to $17.7 million as of December 31, 2024. The following table summarizes the Company's cash flow activities for the six months ended June 30, 2025 and 2024:
| For the Six Months Ended June 30, | ||||||||||||||
| $ in millions | 2025 | 2024 | ||||||||||||
| Net cash used in operating activities | $ | (0.7) | $ | (6.1) | ||||||||||
| Net cash (used in) provided by investing activities | - | 1.1 | ||||||||||||
| Net cash used in financing activities | - | (2.6) | ||||||||||||
| Effect of exchange rates on cash, cash equivalents, and restricted cash | 0.6 | (0.3) | ||||||||||||
| Net decrease in cash, cash equivalents, and restricted cash | $ | (0.1) | $ | (7.9) | ||||||||||
Cash Flows from Operating Activities
For the six months ended June 30, 2025, net cash used in operating activities was $0.7 million, compared to $6.1 million during the same period in 2024, resulting in a $5.4 million decrease in net cash used. The improvement was driven by more favorable working capital comparisons to the prior year, coupled with a lower net loss in 2025.
Cash Flows from Investing Activities
For the six months ended June 30, 2025, net cash provided by investing activities was $0.0 million compared to $1.1 million of net cash provided by investing activities in 2024. Net cash provided by investing activities in 2024 reflects cash received from benefit payouts of $1.1 million.
Cash Flows from Financing Activities
For the six months ended June 30, 2025, net cash used in financing activities was $0.0 million, compared to net cash used in financing activities of $2.6 million in 2024. The decrease in net cash used was attributed to prior year repurchases of shares of common stock of $2.6 million in 2024, including cash paid for tax withholdings.
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Index
Invoice Finance Credit Facility
On April 8, 2019, the Company's Australian subsidiary ("Australian Borrower") entered into an invoice finance credit facility agreement (the "NAB Facility Agreement") with National Australia Bank Limited ("NAB"). The NAB Facility Agreement provides the Australian Borrower with the ability to borrow funds based on a percentage of eligible trade receivables up to a maximum of $4 million Australian dollars. No receivables have terms greater than 90 days, and any risk of loss is retained by the Australian Borrower. The interest rate is calculated as the variable receivable finance indicator rate, plus a margin of 1.60% per annum. Borrowings under this facility are secured by substantially all of the assets of the Australian Borrower. The NAB Facility Agreement does not have a stated maturity date and can be terminated by either the Australian Borrower or NAB upon 90 days written notice. As of June 30, 2025, there were no amounts outstanding under the NAB Facility Agreement. Interest expense and fees incurred on the NAB Facility Agreement were $4 and $8 for the three and six months ended June 30, 2025, respectively, and $5 and $9 for the three and six months ended June 30, 2024, respectively. The Australian Borrower was in compliance with all financial covenants under the NAB Facility Agreement as of June 30, 2025.
On May 25, 2022, Hudson Global Resources (Singapore) Pte. Ltd. ("Singapore Borrower"), which the Company acquired on October 31, 2023 (see Note 5 to the Consolidated Financial Statements in Item 8), and the Hong Kong and Shanghai Banking Corporation Limited ("HSBC"), entered into an invoice finance credit facility agreement (the "HSBC Facility Agreement"). The HSBC Facility Agreement allows the Singapore Borrower to borrow funds up to a maximum of 1 million Singapore dollars, based on a percentage of eligible trade receivables. All receivables have a term of no more than 60 days, and any risk of loss is borne by the Singapore Borrower. The interest rate is calculated as the bank's external cost of capital, plus a margin of 3.5% per annum. The Company ended the HSBC Facility Agreement in May 2024. As a result, no interest expense or fees were incurred during the three and six months ended June 30, 2025. Interest expense and fees incurred on the HSBC Facility Agreement were $2 and $6 for the six months ended June 30, 2024.
Liquidity and Capital Resources Outlook
As of June 30, 2025, the Company had cash and cash equivalents on hand of $16.8 million. The Company also has the capability to borrow an additional 4 million Australian dollars under the NAB Facility Agreement. Other than as described above, the Company has no financial guarantees, outstanding debt or other lease agreements or arrangements that could trigger a requirement for an early payment or that could change the value of our assets. The Company believes that it has sufficient liquidity to satisfy its needs through at least the next 12 months, based on the Company's financial position as of June 30, 2025. The Company's near-term cash requirements during 2025 are primarily related to the funding of the Company's operations.
As of June 30, 2025, $8.8 million of the Company's cash and cash equivalents noted above were held in the U.S. and the remainder were held outside the U.S., primarily in Australia ($3.0 million), the U.K. ($1.6 million), Hong Kong ($0.9 million), Philippines ($0.9 million), Singapore ($0.7 million), and India ($0.4 million). The majority of the Company's offshore cash is available to it as a source of funds, net of any tax obligations or assessments.
Off-Balance Sheet Arrangements
The Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.
Contingencies
From time to time in the ordinary course of business, the Company is subject to compliance audits by U.S. federal, state, local, and foreign government regulatory, tax, and other authorities relating to a variety of regulations, including wage and hour laws, unemployment taxes, workers' compensation, immigration, and income, value-added, and sales taxes. The Company is also subject to, from time to time in the ordinary course of business, various claims, lawsuits, and other complaints from, for example, clients, candidates, suppliers, landlords for both leased and subleased properties, former and current employees, and regulators or tax authorities. Periodic events and management actions such as business reorganization initiatives can change the number and types of audits, claims, lawsuits, contract disputes, or complaints asserted against the Company. Such events can also change the likelihood of assertion and the behavior of third parties to reach resolution regarding such matters.
The economic conditions in the recent past have given rise to many news reports and bulletins from clients, tax authorities, and other parties about changes in their procedures for audits, payment, plans to challenge existing contracts, and other such matters aimed at being more aggressive in the resolution of such matters in their own favor. The Company believes that it has appropriate procedures in place for identifying and communicating any matters of this type, whether asserted or
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Index
likely to be asserted, and it evaluates its liabilities in light of the prevailing circumstances. Changes in the behavior of third parties could cause the Company to change its view of the likelihood of a claim and what might constitute a trend. Employment laws vary in the markets in which we operate, and in some cases, employees and former employees have extended periods during which they may bring claims against the Company.
For matters that reach the threshold of probable and estimable, the Company establishes reserves for legal, regulatory, and other contingent liabilities. The Company did not have any reserves as of June 30, 2025 and December 31, 2024. Although the outcome of these matters cannot be determined, the Company believes that none of the currently pending matters, individually or in the aggregate, will have a material adverse effect on the Company's financial condition, results of operations or liquidity.
Recent Accounting Pronouncements
See Note 3 to the Condensed Consolidated Financial Statements in Part I, Item 1 of this Form 10-Q for a full description of relevant accounting pronouncements, including the respective expected dates of adoption.
Critical Accounting Estimates
See "Critical Accounting Estimates" under Item 7 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024 filed with the SEC on March 14, 2025 and incorporated by reference herein. There were no changes to the Company's critical accounting policies or estimates during the six months ended June 30, 2025.
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FORWARD-LOOKING STATEMENTS
This Form 10-Q contains statements that the Company believes to be "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact included in this Form 10-Q, including statements regarding the Company's future financial condition, results of operations, business operations and business prospects, are forward-looking statements. Words such as "anticipate," "estimate," "expect," "project," "intend," "plan," "predict," "believe," and similar words, expressions, and variations of these words and expressions are intended to identify forward-looking statements. All forward-looking statements are subject to important factors, risks, uncertainties, and assumptions, including industry and economic conditions that could cause actual results to differ materially from those described in the forward-looking statements. Such factors, risks, uncertainties, and assumptions include, but are not limited to, (1) global economic fluctuations, (2) the Company's ability to successfully achieve its strategic initiatives, (3) risks related to potential acquisitions or dispositions of businesses by the Company, (4) the risk that the conditions to the closing of the proposed Merger are not satisfied, including the failure to timely obtain stockholder approval for the transaction, if at all, (5) uncertainties as to the timing of the consummation of the proposed Merger and the ability of each of Hudson and Star to consummate the proposed Merger, (6) risks related to Hudson's ability to manage its operating expenses and its expenses associated with the proposed Merger pending closing, (7) risks related to the market price of Hudson's common stock relative to the value suggested by the exchange ratio, (8) unexpected costs, charges or expenses resulting from the transaction, (9) potential adverse reactions or changes to business relationships resulting from the announcement or completion of the proposed Merger, (10) risks related to the inability of the combined company to successfully operate as a combined business, (11) risks associated with the possible failure to realize certain anticipated benefits of the proposed Merger, including with respect to future financial and operating results, (12) the Company's ability to operate successfully as a company focused on its RPO business, (13) risks related to fluctuations in the Company's operating results from quarter to quarter due to various factors such as rising inflationary pressures and interest rates, (14) the loss of or material reduction in our business with any of the Company's largest customers, (15) the ability of clients to terminate their relationship with the Company at any time, (16) competition in the Company's markets, (17) the negative cash flows and operating losses that may recur in the future, (18) risks relating to how future credit facilities may affect or restrict our operating flexibility, (19) risks associated with the Company's investment strategy, (20) risks related to international operations, including foreign currency fluctuations, political events, trade wars, natural disasters or health crises, including the Russia-Ukraine war, and potential conflict in the Middle East, (21) the Company's dependence on key management personnel, (22) the Company's ability to attract and retain highly skilled professionals, management, and advisors, (23) the Company's ability to collect accounts receivable, (24) the Company's ability to maintain costs at an acceptable level, (25) the Company's heavy reliance on information systems and the impact of potentially losing or failing to develop technology, (26) risks related to providing uninterrupted service to clients, (27) the Company's exposure to employment-related claims from clients, employers and regulatory authorities, current and former employees in connection with the Company's business reorganization initiatives, and limits on related insurance coverage, (28) the Company's ability to utilize net operating loss carryforwards, (29) volatility of the Company's stock price, (30) the impact of government regulations and deregulation efforts, (31) restrictions imposed by blocking arrangements, (32) risks related to the use of new and evolving technologies, (33) the adverse impacts of cybersecurity threats and attacks and (34) those risks set forth in "Risk Factors in the Company's Annual Report on Form 10-K for the year ended December 31, 2024." The foregoing list should not be construed to be exhaustive. Actual results could differ materially from the forward-looking statements contained in this Form 10-Q. In view of these uncertainties, you should not place undue reliance on any forward-looking statements, which are based on our current expectations. These forward-looking statements speak only as of the date of this Form 10-Q. The Company assumes no obligation, and expressly disclaims any obligation, to update any forward-looking statements, whether as a result of new information, future events or otherwise.
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Hudson Global Inc. published this content on August 08, 2025, and is solely responsible for the information contained herein. Distributed via Edgar on August 08, 2025 at 21:07 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]