UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 21, 2024
(Exact name of registrant as specified in charter)
| (State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||||||||||||
(Address of Principal Executive Offices)
Registrant's telephone number, including area code (475 ) 988-2068
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(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c) | |||||
Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the Registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| ITEM 7.01. | REGULATION FD DISCLOSURE. | ||||
Pursuant to Regulation FD, Hudson Global, Inc. (the “Company”) hereby furnishes the presentation and investor fact sheet that the Company will make available on or after May 21, 2024, relating to the Company’s business and operations.
The information furnished by the Company pursuant to this item, including Exhibits 99.1 and 99.2, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”) or otherwise subject to the liability of that section, and shall not be deemed to be incorporated by reference into any Company filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing.
| ITEM 9.01. | FINANCIAL STATEMENTS AND EXHIBITS. | ||||
(d) Exhibits
| EXHIBIT NUMBER | DESCRIPTION | |||||||
| 99.1 | ||||||||
| 99.2 | ||||||||
| 104* | Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document | |||||||
*Filed herewith
1
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.
| HUDSON GLOBAL, INC. (Registrant) | ||||||||
| By: | /s/ JEFFREY E. EBERWEIN | |||||||
| Jeffrey E. Eberwein | ||||||||
| Chief Executive Officer | ||||||||
| Dated: | May 21, 2024 | |||||||
2
Nasdaq: HSON Investor Presentation May 2024 Hudson Global …a leading global total talent solutions provider © 2024 Hudson RPO. All rights reserved. 2 This presentation 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 presentation, 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, global economic fluctuations; the Company’s ability to successfully achieve its strategic initiatives ; risks related to potential acquisitions or dispositions of businesses by the Company; the Company’s ability to operate successfully as a company focused on its RPO business; 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; the loss of or material reduction in our business with any of the Company’s largest customers; the ability of clients to terminate their relationship with the Company at any time; competition in the Company’s markets; the negative cash flows and operating losses that may recur in the future; risks relating to how future credit facilities may affect or restrict our operating flexibility; risks associated with the Company’s investment strategy; risks related to international operations, including foreign currency fluctuations, political events, natural disasters or health crises, including the Russia-Ukraine war, the Hamas-Israel war, and potential conflict in the Middle East; the Company’s dependence on key management personnel; the Company’s ability to attract and retain highly skilled professionals, management, and advisors; the Company’s ability to collect accounts receivable; the Company’s ability to maintain costs at an acceptable level; the Company’s heavy reliance on information systems and the impact of potentially losing or failing to develop technology; risks related to providing uninterrupted service to clients; 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; the Company’s ability to utilize net operating loss carryforwards; volatility of the Company’s stock price; the impact of government regulations; restrictions imposed by blocking arrangements; risks related to the use of new and evolving technologies; and the adverse impacts of cybersecurity threats and attacks. Additional information concerning these, and other factors is contained in the Company's filings with the Securities and Exchange Commission. These forward-looking statements speak only as of the date of this document. 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. Forward-Looking Statements © 2024 Hudson RPO. All rights reserved. 3 • Hudson Global, Inc. (Nasdaq: HSON) (“Hudson Global” or “the Company”) owns Hudson RPO, a pure-play Total Talent Solutions provider • Nasdaq-listed; spun-off from Monster.com in 2003 • Strong financial position: $21.0(3) million of cash and $302(4) million of usable NOL carryforwards • Stock buybacks: initiated a new $5 million program on 8/8/23; repurchased 20,957 shares in the open market and 44,250 shares in a privately negotiated transaction in Q1 2024; shares outstanding reduced by approximately 11% since 12/31/18 • Owner mindset: board and management own approximately 18%(6) of total shares outstanding and expect to own more over time • Maximizing stockholder value: through internal investments in our growing, high-margin RPO business, bolt-on acquisitions, and stock buybacks Hudson Global at a Glance $mm, except per share amounts Stock Price(2) $16.50 Shares Outstanding(5) 2.8M Market Capitalization(2) $ 46.7 Cash(3) $21.0 Debt(3) $0.0 Usable NOL Carryforward(4) $302 # of Employees(7) 1,050 # of Countries 14 (1) Adjusted EBITDA and Corporate Costs are non-GAAP measures. Reconciliations of non-GAAP measures can be found in the appendix to this presentation. (2) As of April 30, 2024. Market Capitalization defined as Shares Outstanding times Stock Price. (3) As of March 31, 2024. Cash includes $0.6m of restricted cash. Debt excludes operating lease obligations. (4) As of December 31, 2023, as disclosed in Earnings Release. NOL carryforward is for U.S. federal and state tax expense. (5) 2.8 million shares outstanding as of April 26, 2024. Does not include unissued or unvested RSUs. (6) Includes unvested share units and share units that will be issued up to 90 days after a director’s/officer’s separation from service. (7) As of December 31, 2023. $mm 2020 2021 2022 2023 LTM Revenue $101.4 $169.2 $200.9 $161.3 $152.2 Adj Net Revenue $39.1 $68.2 $99.2 $80.3 $74.8 Adj EBITDA-RPO(1) $2.9 $13.5 $20.1 $9.6 $6.8 % of Adj Net Revenue 7.5% 19.8% 20.3% 11.9% 9.0% Corp Costs(1) $3.3 $3.4 $3.7 $3.7 $3.6 Adj EBITDA(1) $(0.4) $10.0 $16.4 $5.9 $3.2 © 2024 Hudson RPO. All rights reserved. 4 The new Hudson Global – focused on expanding its global RPO business 1999 – 2001: Hudson Global originated from 67 acquisitions made by TMP Worldwide, which later became Monster Worldwide, Inc. (i.e., Monster.com) 2003: Monster distributed shares of Hudson Global to its stockholders, creating a new, independent, publicly held company 2003-2013: Poor business structure and very poor leadership led to poor operating and financial performance Hudson Global: Our History 2013 – 2018 20202019 2013 – 2014 Current CEO, Jeff Eberwein, invested in HSON shares and gained shareholder representation on the Board to improve performance 2015 BoD implemented a series of measures designed to enhance stockholder rights including: • Declassified the Board – directors elected annually • Allowed stockholders to call special meetings • Eliminated all supermajority voting requirements • Allowed stockholders to act by written consent • Eliminated cash compensation to the Board • Implemented a plan to protect valuable NOL asset 2015 Announced a $10M share purchase plan (completed 6/30/23) 2016 Paid two cash dividends totaling $3.4M 2015 – 2018 BoD initiated a strategic review to enhance stockholder value with a focus on selling non-core businesses; completed three divestitures to exit the agency recruitment business and focus on global RPO business Tender Offer Completed tender offer for 7.7% of total shares outstanding at a purchase price of $15 per share Profitability in Q3 & Q4 Growth in RPO profits and reductions in Corporate Costs enabled Hudson Global to cross over into profitability Share Repurchase Purchased 8.8% of total shares outstanding in two block trades at a purchase price of $8.63 per share 2021 2022 Expanding Through Acquisitions Acquired Coit Group, a San Francisco-based RPO provider, to expand further into tech sector; established office in San Francisco Acquired Karani, LLC, a Chicago- headquartered recruiting services provider that serves mainly U.S.- based customers from its operations in India and the Philippines Acquired Hunt & Badge, expanding Hudson RPO’s footprint further into the India recruitment market with an array of impressive deep client relationships with notable multinational companies Acquired Hudson Singapore, a recruitment services provider based in Singapore, significantly increasing Hudson RPO’s market presence in Southeast Asia Acquired Executive Solutions, a Dubai- based talent solutions company; enters the UAE market and expands further into the Middle East Acquired Striver, a UAE-based executive search firm, solidifying Hudson RPO’s position in the Middle East and enhancing executive search function 2023 Share Repurchase Announced a $5M share purchase plan in Q3 (following the completion of the previous $10 million plan) 2024 Share Repurchase Acquired 107K+ shares in privately negotiated transactions.
© 2024 Hudson RPO. All rights reserved. 5 Supplies its own staff, methodologies, technology, and analytics RPO Assumes ownership of talent solution design and management of recruitment process Assumes client’s staff and work within their technology platform and takes responsibility for the results Services are aligned with client’s long-term objectives and strategic growth plans Offers enterprise-wide and project-based solutions and optimizes client’s talent procurement process Implements an end-to-end recruitment solution, offers efficiencies and value Personnel can be located on-site at the client’s offices or offsite centralized facilities Offshore, shared-service facilities perform work for multiple clients in multiple time zones What is Recruitment Process Outsourcing (RPO)? RPO is in the Business Services sector and part of the Business Process Outsourcing (“BPO”) and Human Capital Management (“HCM”) subsectors RPO involves an employer utilizing an external service provider to perform all or part of its recruitment processes, often replacing work performed by external recruitment agencies and/or in-house teams RPO vs. Traditional Recruiting © 2024 Hudson RPO. All rights reserved. 6 Global RPO Market – Size and Growth(1) (1) Everest Group (2024) Note: Market size in terms of Annualized Contract Value (ACV). Estimated growth rate is based on growth in number of hires $9.45 – $9.55 2028E $5.4 $6.2 $5.4 $5.5 - $5.7 $- $1.0 $2.0 $3.0 $4.0 $5.0 $6.0 $7.0 $8.0 $9.0 $10.0 2021 2022 2023 2024P U S D ( in b ill io n ) 14% -12% 4% - 6% 13% - 15% XX% YoY YY% CAGR E Estimate © 2024 Hudson RPO. All rights reserved. 7 RPO Model vs. Recruitment Agency Model • The RPO industry market worldwide accounted for revenue of $5.4 billion in 2023; projected to grow at a CAGR of 13-15% from 2024 to 2028 (1) • We believe the RPO industry is taking share from traditional recruitment agencies for the reasons below: (1) Everest Group (2024) Factor Location of Service Provider Ownership of Recruitment Process Candidate Quality Candidate Experience Proactive Recruitment Cost to Client Level of Client Engagement Duration of Relationship with Client Depth of Relationship with Client Delivery Model Pricing Model Length of Contract Recurring Revenues Initial Sales Process RPO Model On-Site and Centers of Excellence High Consistently Good High/Brand Ambassadors Strong/Maintain Talent Pools Lower, especially as volume increases Very High (Partnership) Long/Recurring Very Deep and Wide Client-Focused/Subject Matter Expertise Combination of fixed monthly management fees and variable fees Solution-based and typically multi-year with high renewal rates High Long Recruitment Agency Model Never On-Site and No Centers of Excellence Low Uneven Consistency Uneven Low High Transactional Transactional Shallow/Transactional Role-Focused or Candidate-Focused Purely Variable/Transactional Transactional Low Short © 2024 Hudson RPO. All rights reserved. 8 Hudson RPO: Regional Market Observations (1) https://www.hudsonrpo.com/newsroom/hro-today-bakers-dozen-apac/ (2) https://www.hudsonrpo.com/newsroom/hro-today-bakers-dozen-emea/ AMERICAS • Large market size • Particularly strong in Technology, Life Sciences, Healthcare, and Financial Services • Growing presence in Canada and Latin America, especially for large multinationals creating regional hubs • Acquired Coit Group, a San Francisco-based RPO provider specializing in the technology sector (October 2020) • Acquired Karani, LLC, a Chicago-HQ recruiting services provider with clients in the US, but operations in India and the Philippines (October 2021) • Small RPO or MSP companies in this region could become acquisition targets • Center of Excellence in Tampa, FL • Consistently ranked as a top RPO provider in APAC(1) • Strong market adoption for RPO in Australia, China, HK, and Singapore and Hudson RPO has a very strong presence in these markets – Hudson’s first ever RPO project was in 1999 for J&J in Australia and was one of the first RPO projects in history • Growing rapidly in SE Asia via hub in Singapore • Expanded presence in SE Asia through local partnerships in Taiwan, Malaysia, Philippines, Thailand, Vietnam, and South Korea; partnerships allow Hudson RPO to embed teams in these countries as requested by clients • Acquired Hudson Singapore, a recruitment services provider based in Singapore, to significantly increase market presence • Centers of Excellence in India, Manila, Philippines, and Shanghai, China • Ranked among the top RPO providers in EMEA(2) • UK market is large and well-developed • Emerging market in continental Europe with growth from large multinationals benefiting from RPO solutions in the US and UK • Particularly strong in Life Sciences, Financial and Business Services, and Consumer • Smaller RPO or MSP companies in this region could become acquisition targets • Center of Excellence in Edinburgh, Scotland • Acquired Executive Solutions and Striver, UAE- based talent solutions firms; entered and solidified presence in the UAE market and expanded further into the Middle East ASIA-PACIFIC EMEA
© 2024 Hudson RPO. All rights reserved. 9 Hudson RPO: Centers of Excellence (COEs) Tampa, Florida, US Edinburgh, Scotland Manila, Philippines Shanghai, China India © 2024 Hudson RPO. All rights reserved. 10 Hudson RPO’s Strengths FOCUS • Professional Services – comprehensive talent acquisition and total talent solutions for employers needing mission-critical, professional talent • Senior Management to Entry Level – we partner with our clients at every level • Mid-to-Large Sized Corporations – focus on custom-built solutions for all of our clients • Emerging Growth Companies – we partner with clients at every stage of their growth/life cycle • RPO to Total Talent Solutions – grow current RPO solutions, build first generation RPO programs, and offer value-added talent solutions • We focus on clients where acquiring and retaining top talent, and specialized talent, is the key to business success • Our clients partner with us based on value and outcomes given the critical importance of talent to their businesses and the customized nature of our solutions • We immerse ourselves in our clients’ culture, business, and needs so we can deliver the best solutions creating valuable, long-term partnerships • Subject Matter Expertise in each sector is a key differentiator in our client solutions • Disciplined execution delivers efficiencies and effective outcomes to our clients • We have a prestigious client portfolio and a high retention rate because we work diligently to truly partner with our clients and we evolve our solutions to best support our clients’ growth, needs, and objectives • Hudson RPO’s global and regional leadership teams have deep expertise across Human Capital solutions and have high tenure at Hudson RPO and on-site with our clients • Hudson RPO’s teams are committed to a culture of engaged leadership, disciplined execution, and profitable growth • Hudson RPO rates very favorably on service, performance, and results relative to our competition as measured by independent client surveys done via SharedXpertise for the HRO Today’s Baker’s Dozen Program • Hudson RPO was named a Top RPO Provider, ranking #1 overall in APAC and #3 overall in EMEA, on the latest Baker’s Dozen List (1) • Hudson RPO has been recognized on the Baker’s Dozen List for fourteen consecutive years CLIENTS TEAM (1) https://www.hrotoday.com/news/talent-acquisition/rpo-staffing/2023-bakers-dozen-customer-satisfaction-ratings-rpo-emea/ © 2024 Hudson RPO. All rights reserved. 11 Value in implementing Hudson RPO’s HR solutions Customized Technology-Enabled Solutions The Hudson RPO Tech Solution BRAND SOURCE ENGAGE & ASSESS OFFER & ONBOARD POST HIRE RECRUITMENT PROCESS ADMIN PLAN MEASURE TalentMax Automate and Reduce Administration Increase Recruiter Productivity Accelerate Time-To-Fill Reduce Cost-Per-Hire Better & Faster Candidate Screening Facilitate Collaborative Hiring Enhanced Candidate Experience Improve Quality of Hire Increased Process Compliance Enhanced Sales Offering © 2024 Hudson RPO. All rights reserved. 12 Value in implementing Hudson RPO’s HR solutions Comprehensive Technology-Enabled Solutions Automated Overnight Sourcing Mobile Enabled Candidate Engagement Targeted Email Campaigns Candidate Talent Intelligence Integrated Video Interviewing Targeted Text Campaigns Talent Communities & Sharing Driving Engagement Through Technology Hudson RPO’s team: • Works with all HR technologies • Has deep knowledge of leading-edge technology tools • Consults and advises clients every step of the process
Financial Highlights © 2024 Hudson RPO. All rights reserved. 14 FY 2023 Financial Highlights $161.3M Revenue $0.86 Adjusted EPS (Non-GAAP) $80.3M Adjusted Net Revenue $5.9M Adjusted EBITDA (Non-GAAP) © 2024 Hudson RPO. All rights reserved. 15 LTM 3/31/2024 Financial Highlights $152.2M Revenue $(0.05) Adjusted EPS (Non-GAAP) $74.8M Adjusted Net Revenue $3.2M Adjusted EBITDA (Non-GAAP) © 2024 Hudson RPO. All rights reserved. 16 Excludes cost pass-throughs of Contracting Adjusted Net Revenue by Region Full Year 2022 Full Year 2023 Americas 38% EMEA 20% APAC 42% $30.1M $16.5M $33.7M $80.3M Americas 49% EMEA 16% APAC 35% $49.0M $15.9M $34.3M $99.2M
© 2024 Hudson RPO. All rights reserved. 17 Hudson RPO: Improved Margins & Reduced Expenses (1) Before corporate costs of Hudson Global. 0% 5% 10% 15% 20% 25% RPO Adj EBITDA(1) as % of Adjusted Net Revenue (Rolling 4 Quarter Average) Long-term Goal 60% 70% 80% 90% 100% Salaries & Related(1) as % of Adjusted Net Revenue (Rolling 4 Quarter Average) Profit Margin Improvement Salaries & Related Expenses Long-term Goal Significant Reduction in Corporate Costs 5.6 4.1 3.3 3.4 3.7 3.7 2.4 1.1 0.8 0.6 0.3 0.7 $- $1 $2 $3 $4 $5 $6 $7 $8 $9 2018 2019 2020 2021 2022 2023 Non recurring expenses Corporate costs $8.1M $5.2M $4.1M $4.1M $4.0M $4.3M Vision & Growth Strategy © 2024 Hudson RPO. All rights reserved. 19 Our Vision and Mission Our VISION Become top RPO provider of professional roles in the industry Our MISSION Maximize value for our stockholders over the long term © 2024 Hudson RPO. All rights reserved. 20 Business Strategy • Global RPO market expected to grow at a CAGR of 13% - 15% from 2024 to 2028(1) • Hudson RPO’s goal is to exceed market growth rate (i.e., gain share) – Superior service and delivery – Go deeper and broader with existing clients – Grow in existing markets and expand into new markets to support our clients’ needs – Add new clients then “land and expand” • Hudson RPO is investing in people and technology to accelerate its growth • Leverage existing strong reputation by expanding marketing efforts, including social media and website • Reduced complexity left over from legacy businesses • Both corporate and regional • No impact on revenues or growth • Expand capabilities and capacity, not just growth for growth’s sake • Deepen geographic and/or sector presence • Add new talent and skill sets • Immediately accretive • Utilize NOL • Will be opportunistic/price sensitive • Goal is to maximize long-term value per share, not just “return cash” • Balance with acquisition opportunities Grow RPO Keep Overhead Expenses LowInvestigate Acquisition Opportunities Repurchase Stock (1) Everest Group (2024)
© 2024 Hudson RPO. All rights reserved. 21 Financial Goals • Grow profitability over time • Turning profitable in mid-2019 was a watershed event in our Company’s history • Generate high returns on internal growth projects • Adjusted EBITDA margin goal of 25% of Adjusted Net Revenue at RPO level (i.e., pre Corporate Costs) vs. Q1 2024 LTM of 9.0% – Keep Corporate Costs low, even as profits from operating businesses grow – Adjusted EBITDA / Adjusted Net Revenue margins of mid-teens at the corporate level (i.e., after Corporate Costs) • Maximize earnings per share over the long term through: – Growing revenue faster than costs, leading to increasing Adjusted EBITDA margins – Controlling overhead and other fixed costs so these costs will decline as a percentage of revenue over time – Reducing share count through opportunistic stock repurchases PROFITABILITY INTERNAL GROWTH EBITDA MARGIN MAXIMIZE EPS © 2024 Hudson RPO. All rights reserved. 22 Characteristics of Potential Targets: • Easy to understand business model complementary to existing Hudson RPO business; cost and revenue synergies • No start-ups or venture-type businesses • Profitable, high margin, high growth • Low/no capex and high FCF/high cash conversion (excluding cash used for working capital) • Additional bolt-on/roll-up opportunities after initial acquisition • Existing operating management willing to stay, at least initially Possible Examples: • RPO: RPO bolt-ons for Hudson RPO, especially in Americas and EMEA • HCM: businesses adjacent to/complementary to RPO, which could include MSP, Contracting / Staffing, and Talent Advisory (1) Human Capital Management, which includes RPO, MSP (Managed Service Provider), and other talent-related solutions businesses. Disciplined Acquisition Strategy HCM (1) Professional Services All Service Businesses All Asset-Lite Businesses Business Services Focus on core RPO business, or complementary businesses within HCM © 2024 Hudson RPO. All rights reserved. 23 October 2020 • Significantly expanded Hudson RPO’s tech presence in the US; new Hudson office in San Francisco • Established, profitable business with strong client base • Coit’s founders (Joe Belluomini and Tim Farrelly) became co- CEOs of Hudson RPO’s newly formed Technology Group • Combination of cash, shares, promissory note, and earn-out agreements Expanding Capabilities and Geographic Footprint Recent Acquisitions Coit Group Karani Hunt & Badge Hudson Singapore October 2021 • Expanded Hudson RPO’s global delivery capability by adding substantial presence in India and Philippines • Strong partnerships supporting recruitment and staffing firms based in the US • Large and growing client base supported by over 500 employees in India and 125 in the Philippines • Expanded Hudson RPO’s expertise in technology recruitment • All current employees of Karani and its subsidiaries joined Hudson RPO, except for owner and CEO who retired • Combination of cash and promissory note August 2022 • Expanded Hudson RPO’s footprint further into the India recruitment market • Compliments Karani’s offerings with many potential synergies between the two companies • Partners with companies of all sizes, including well- known multinationals, across a variety of industries November 2023 • Has a 30-year track record of senior placements and project recruitment work • Large client base across Southeast Asia including Singapore, Malaysia, the Philippines, Vietnam, Thailand, and Indonesia • Offers Hudson RPO cross- selling services among Hudson Singapore’s diverse, blue chip client base Executive Solutions March 2024 • Established in 2008, has a proven record of assisting organizations with the outsourcing of both long- and short-term volume recruitment, rapid growth projects, special projects, overseas campaigns, and Emiratization • Brings to Hudson RPO entry into the United Arab Emirates market • Expansion of footprint in the Middle East aligns with Hudson RPO clients broadening their Middle Eastern presence Striver April 2024 • Leading Executive Search Firm based in Dubai • Founder and CEO Toby Simpson to lead executive search in the Middle East, joining Hudson RPO as Managing Director, Executive Search • Further strengthens Hudson RPO’s executive search function on a global scale and solidifies position in the Middle East © 2024 Hudson RPO. All rights reserved. 24 Hudson RPO Management Team Paula Nolan Global Managing Portfolio Director • 24 years in industry • 21 years at Hudson RPO Jake Zabkowicz Global CEO • 11 years in industry • Joined Hudson RPO November 2023 Jeff Bettinger Chief Administrative Officer • 20 years in industry • Joined Hudson RPO February 2024 Darren Lancaster CEO Americas & EMEA • 25 years in industry • 12 years at Hudson RPO Bree Walsh Managing Director APAC • 23 years in industry • 16 years at Hudson RPO
© 2024 Hudson RPO. All rights reserved. 25 Corporate Management & Finance Team Hudson Global Jeff Eberwein Hudson Global CEO & Director • Chairman of the Board from 2015 to 2018 • 25 years of Wall Street experience • Formed Lone Star Value Management in 2013 • Former portfolio manager at Soros Fund Management and Viking Global Investors • Chairman of the Board at one other publicly traded company Hudson Global CFO • Formerly Vice President of Finance at Hudson Global prior to assuming CFO role • 25 years of finance experience • Served in variety of finance and control roles at PepsiCo from 2001 to 2018 • Held director roles in Financial Reporting, Financial Analysis, and Technical Accounting and Policy at PepsiCo • Certified Public Accountant Hudson RPO Global Finance Managing Director • Started with Hudson in 2015 • Based in Glasgow heading up the Global Finance shared service function • Previously worked in various Finance roles in UK and the Middle East • FCCA qualified with 24 years of experience in various industries Matt Diamond Seonaid MacMillan © 2024 Hudson RPO. All rights reserved. 26 Mimi Drake Connia Nelson Robert Pearse Board of Directors(1) Hudson Global (1) Independent members Board Chair • Co-CEO of Permit Capital Advisors, LLC • Served as Founding Board Member of 100 Women in Finance Director • SVP & Chief HR Officer of LifeWay Christian Resources • Former SVP – Human Resources of Verizon Communications, Inc. Director • Managing Partner of Yucatan Rock Ventures • Served as a director of several public companies © 2024 Hudson RPO. All rights reserved. 27 ESG Considerations Environmental • Committed to continuous improvement in managing the environmental impact of our business operations Social • “People-first” company with corporate policies in place and a strong global team of individuals that believe in diversity, equity and inclusion • Global Diversity, Equality, and Inclusion (“DEI”) Program, sponsored by the Division CEOs; this program is designed to: – Promote DEI initiatives within the Company such as launching training programs and diagnostic tools – Aid in partnering with our clients to accelerate their DEI recruitment, onboarding, sourcing, and branding efforts as well, helping them to be reflective of their global multicultural customer base • Anti-harassment and non-discrimination training available company wide • Employees’ health and safety was our first priority during COVID-19 Governance • Commitment to accountability and transparency • Strive for diversity among board members, management, and employees – Of 1,050 people employed worldwide, approximately 60% are female – 50% of the Company’s Board being diverse (by race, gender, and ethnic diversity combined) Appendix
© 2024 Hudson RPO. All rights reserved. 29 Last Twelve Months (LTM) Reconciliation of Non-GAAP Financial Measures 1. Represents Revenue less the Direct contracting costs and reimbursed expenses caption on the Condensed Consolidated Statements of Operations. 2. Non-GAAP earnings before interest, income taxes, and depreciation and amortization (“EBITDA”) and non-GAAP earnings before interest, income taxes, depreciation and amortization, non-operating (income) expense, stock-based compensation expense, and other non-recurring severance and professional fees (“Adjusted EBITDA”) are presented to provide additional information about the Company's operations on a basis consistent with the measures which the Company uses to manage its operations and evaluate its performance. Management also uses these measurements to evaluate capital needs and working capital requirements. EBITDA and Adjusted EBITDA should not be considered in isolation or as a substitute for operating income, cash flows from operating activities, and other income or cash flow statement data prepared in accordance with generally accepted accounting principles or as a measure of the Company's profitability or liquidity. Furthermore, EBITDA and Adjusted EBITDA as presented above may not be comparable with similarly titled measures reported by other companies. 3. Represents compensation expense payable per the terms of acquisition agreements. Per Diluted Share Last Twelve Months March 31, 2024 Net income $ (0.34) Non-recurring severance and professional fees (after tax) 0.21 Compensation expense related to acquisitions (after tax) (3) 0.07 Adjusted net income (4) $ (0.05) Reconciliation of Net Income to Adjusted EBITDA, Adjusted EBITDA-RPO, and Corporate Costs (In thousands, unaudited) For The Last Twelve Months Ended March 31, 2024 Americas Asia Pacific Europe RPO Business Corporate Total Revenue, from external customers $ 27,976 $ 98,090 $ 26,091 $ 152,157 $ - $ 152,157 Adjusted net revenue, from external customers (1) $ 27,024 $ 31,762 $ 16,047 $ 74,833 $ - $ 74,833 Net income $ (1,054) Provision for income taxes 421 Interest income, net (401) Depreciation and amortization 1,516 EBITDA (loss) (2) $ (1,138) $ 3,824 $ 1,406 $ 4,092 $ (3,610) 482 Non-operating expense (income), including corporate administration charges (582) 1,058 421 897 (1,538) (641) Stock-based compensation expense 340 286 197 823 551 1,374 Non-recurring severance and professional fees 71 478 163 712 1,026 1,738 Compensation expense related to acquisitions (3) 225 - - 225 - 225 Adjusted EBITDA (loss) (2) $ (1,084) $ 5,646 $ 2,187 $ 6,749 $ (3,571) $ 3,178 © 2024 Hudson RPO. All rights reserved. 30 FY 2023 Reconciliation of Non-GAAP Financial Measures 1. Represents Revenue less direct contracting costs and reimbursed expenses. 2. EBITDA is a non-GAAP measure defined as earnings before interest, income taxes, depreciation and amortization. Adjusted EBITDA is a non-GAAP measure defined as earnings before interest, income taxes, depreciation and amortization, non-operating income, stock-based compensation expense, and other items such as non-recurring severance and professional fees. 3. Represents compensation expense payable per the terms of the Coit acquisition, including a promissory note for $1.35 million payable over three years, and $500k of the Company's common stock vesting over 30 months, as well as earn out payments. In addition, in 2022 represents compensation expense payable in the form of a CFO retention payment per the terms of the Karani acquisition. 4. Adjusted net income or loss per diluted share is a Non-GAAP measure defined as reported net income or loss per diluted share before items such as acquisition-related costs and non-recurring severance and professional fees after tax that is presented to provide additional information about the company's operations on a basis consistent with the measures which the company uses to manage its operations and evaluate its performance. Management also uses these measurements to evaluate capital needs and working capital requirements. Adjusted net income or loss per diluted share should not be considered in isolation or as a substitute for net income or loss per diluted share and other income or cash flow statement data prepared in accordance with generally accepted accounting principles or as a measure of the company's profitability or liquidity. Further, Adjusted net income or loss per diluted share as presented above may not be comparable with similarly titled measures reported by other companies. Per Diluted Share Twelve Months Ended December 31, 2023 Net income $ 0.70 Non-recurring items (after tax) 0.04 Compensation expense related to acquisitions (after tax) (3) 0.11 Adjusted net income (4) $ 0.86 Reconciliation of Net Income to Adjusted EBITDA, Adjusted EBITDA-RPO, and Corporate Costs (In thousands, unaudited) For The Year Ended December 31, 2023 Americas Asia Pacific Europe RPO Business Corporate Total Revenue, from external customers $ 31,254 $ 103,857 $ 26,227 $ 161,338 $ — $ 161,338 Adjusted net revenue, from external customers (1) $ 30,141 $ 33,675 $ 16,451 $ 80,267 $ — $ 80,267 Net income $ 2,198 Provision for income taxes 370 Interest income, net (372) Depreciation and amortization 1,467 EBITDA (loss) (2) $ (704) $ 5,859 $ 1,582 $ 6,737 $ (3,074) 3,663 Non-operating expense (income), including corporate administration charges (528) 1,181 436 1,089 (1,902) (813) Stock-based compensation expense 407 232 216 855 614 1,469 Non-recurring severance and professional fees 105 292 156 553 658 1,211 Compensation expense related to acquisitions (3) 338 - - 338 - 338 Adjusted EBITDA (loss) (2) $ (382) $ 7,564 $ 2,390 $ 9,572 $ (3,704) $ 5,868 © 2024 Hudson RPO. All rights reserved. 31 FY 2022 Reconciliation of Non-GAAP Financial Measures For The Year Ended December 31, 2022 Americas Asia Pacific Europe RPO Business Corporate Total Revenue, from external customers $ 51,639 $ 118,149 $ 31,129 $ 200,917 $ — $ 200,917 Adjusted net revenue, from external customers (1) $ 48,990 $ 34,278 $ 15,942 $ 99,210 $ — $ 99,210 Net income $ 7,129 Provision for income taxes 2,331 Interest income, net (83) Depreciation and amortization 1,378 EBITDA (loss) (2) $ 4,877 $ 7,282 $ 1,501 $ 13,660 $ (2,905) 10,755 Non-operating expense (income), including corporate administration charges 711 1,151 253 2,115 (2,155) (40) Stock-based compensation expense 713 302 282 1,297 1,021 2,318 Non-recurring severance and professional fees 306 86 1 393 324 717 Compensation expense related to acquisitions (3) 2,651 — — 2,651 — 2,651 Adjusted EBITDA (loss) (2) $ 9,258 $ 8,821 $ 2,037 $ 20,116 $ (3,715) $ 16,401 Reconciliation of Net Income to Adjusted EBITDA, Adjusted EBITDA-RPO, and Corporate Costs (In thousands, unaudited) Per Diluted Share Twelve Months Ended December 31, 2022 Net income $ 2.27 Non-recurring items (after tax) 0.23 Compensation expense related to acquisitions (after tax) (2) 0.88 Adjusted net income (3) $ 3.38 1. Represents Revenue less the Direct contracting costs and reimbursed expenses caption on the Consolidated Statements of Operations. 2. Non-GAAP earnings before interest, income taxes, and depreciation and amortization (“EBITDA”) and non-GAAP earnings before interest, income taxes, depreciation and amortization, non-operating (income) expense, stock-based compensation expense, and other non-recurring severance and professional fees (“Adjusted EBITDA”) are presented to provide additional information about the Company's operations on a basis consistent with the measures which the Company uses to manage its operations and evaluate its performance. Management also uses these measurements to evaluate capital needs and working capital requirements. EBITDA and Adjusted EBITDA should not be considered in isolation or as a substitute for operating income, cash flows from operating activities, and other income or cash flow statement data prepared in accordance with generally accepted accounting principles or as a measure of the Company's profitability or liquidity. Furthermore, EBITDA and Adjusted EBITDA as presented above may not be comparable with similarly titled measures reported by other companies. 3. Represents compensation expense payable per the terms of acquisition agreements. © 2024 Hudson RPO. All rights reserved. 32 FY 2021 Reconciliation of Non-GAAP Measures Reconciliation of Net Income to Adjusted EBITDA, Adjusted EBITDA-RPO, and Corporate Costs (In thousands, unaudited) For The Year Ended December 31, 2021 Americas Asia Pacific Europe RPO Business Corporate Total Revenue, from external customers $ 28,797 $ 118,597 $ 21,813 $ 169,207 $ - $ 169,207 Adjusted net revenue, from external customers (1) $ 27,087 $ 28,561 $ 12,509 $ 68,157 $ - $ 68,157 Net income $ 3,227 Provision for income taxes 1,117 Interest income, net (33) Depreciation and amortization 597 EBITDA (loss) (2) $ 1,801 $ 5,452 $ 1,007 $ 8,260 $ (3,352) 4,908 Non-operating expense (income), including corporate administration charges 386 1,399 331 2,116 (2,033) 83 Stock-based compensation expense 556 324 246 1,126 1,298 2,424 Non-recurring severance and professional fees 23 - - 23 637 660 Compensation expense related to acquisitions (3) 1,969 - - 1,969 - 1,969 Adjusted EBITDA (loss) (2) $ 4,735 $ 7,175 $ 1,584 $ 13,494 $ (3,450) $ 10,044 Per Diluted Share Twelve Months Ended December 31, 2021 Net income $ 1.07 Non-recurring items (after tax) 0.22 Compensation expense related to acquisitions (after tax) (2) 0.75 Adjusted net income (3) $ 2.04 (1) Represents Revenue less the Direct contracting costs and reimbursed expenses caption on the Consolidated Statements of Operations. (2) Non-GAAP earnings before interest, income taxes, and depreciation and amortization (“EBITDA”) and non-GAAP earnings before interest, income taxes, depreciation and amortization, non-operating income, stock-based compensation expense, and other non-recurring expenses (“Adjusted EBITDA”) are presented to provide additional information about the company's operations on a basis consistent with the measures which the company uses to manage its operations and evaluate its performance. Management also uses these measurements to evaluate capital needs and working capital requirements. EBITDA and Adjusted EBITDA should not be considered in isolation or as a substitute for operating income, cash flows from operating activities, and other income or cash flow statement data prepared in accordance with generally accepted accounting principles or as a measure of the company's profitability or liquidity. Furthermore, EBITDA and Adjusted EBITDA as presented above may not be comparable with similarly titled measures reported by other companies. (3) Represents compensation expense payable per the terms of acquisition agreements.
© 2024 Hudson RPO. All rights reserved. 33 FY 2020 Reconciliation of Non-GAAP Measures Reconciliation of Net Loss to Adjusted EBITDA, Adjusted EBITDA-RPO, and Corporate Costs (In thousands, unaudited) For The Year Ended December 31, 2020 Americas Asia Pacific Europe RPO Business Corporate Total Revenue, from external customers $ 10,866 $ 75,633 $ 14,949 $ 101,448 $ - $ 101,448 Adjusted net revenue, from external customers (1) $ 9,598 $ 19,814 $ 9,669 $ 39,081 $ - $ 39,081 Net loss $ (1,243) Provision for income taxes 535 Interest income, net (149) Depreciation and amortization 179 EBITDA (loss) (2) $ (1,044) $ 2,877 $ 481 $ 2,314 $ (2,992) (678) Non-operating expense (income), including corporate administration charges and PPP loan forgiveness (1,076) 1,002 (74) (148) (1,641) (1,789) Stock-based compensation expense 88 60 6 154 583 737 Non-recurring severance and professional fees 528 - - 528 755 1,283 Compensation expense related to acquisitions (3) 91 - - 91 - 91 Adjusted EBITDA (loss) (2) $ (1,413) $ 3,939 $ 413 $ 2,939 $ (3,295) $ (356) (1) Represents Revenue less the Direct contracting costs and reimbursed expenses caption on the Consolidated Statements of Operations. (2) Non-GAAP earnings before interest, income taxes, and depreciation and amortization (“EBITDA”) and non-GAAP earnings before interest, income taxes, depreciation and amortization, non-operating income, business reorganization expenses, stock-based compensation expense, and other non-recurring expenses (“Adjusted EBITDA”) are presented to provide additional information about the company's operations on a basis consistent with the measures which the company uses to manage its operations and evaluate its performance. Management also uses these measurements to evaluate capital needs and working capital requirements. EBITDA and Adjusted EBITDA should not be considered in isolation or as a substitute for operating income, cash flows from operating activities, and other income or cash flow statement data prepared in accordance with generally accepted accounting principles or as a measure of the company's profitability or liquidity. Furthermore, EBITDA and Adjusted EBITDA as presented above may not be comparable with similarly titled measures reported by other companies. (3) Represents compensation expense payable per the terms of acquisition agreements. Per Diluted Share Twelve Months Ended December 31, 2020 Net loss $ (0.43) Non-recurring items (after tax) (0.01) Compensation expense related to acquisitions (after tax) (1) 0.06 Adjusted net loss (2) $ (0.38) Questions? Contact us Hudson Global, Inc. Jeffrey E. Eberwein CEO 203-489-9501 / ir@hudsonrpo.com Investor Relations The Equity Group Inc. Lena Cati 212-836-9611 / lcati@equityny.com © 2023 Hudson RPO. All rights reserved.
Factsheet – May 2024 Business Strategy Disciplined Acquisition Strategy Hudson Global at a Glance • Hudson Global, Inc. (Nasdaq: HSON) (“Hudson Global” or “the Company”) owns Hudson RPO, a pure-play Total Talent Solutions provider • Nasdaq-listed; spun-off from Monster.com in 2003 • Strong financial position: $21.0(3) million of cash and $302(4) million of usable NOL carryforwards • Stock buybacks: initiated a new $5 million program on 8/8/23; repurchased 20,957 shares in the open market and 44,250 shares in a privately negotiated transaction in Q1 2024; shares outstanding reduced by approximately 11% since 12/31/18 • Owner mindset: board and management own approximately 18%(6) of total shares outstanding and expect to own more over time • Maximizing stockholder value: through internal investments in our growing, high-margin RPO business, bolt-on acquisitions, and stock buybacks (1) Adjusted EBITDA and Corporate Costs are non-GAAP measures. Reconciliations of non-GAAP measures can be found in the appendix to this presentation; (2) As of April 30, 2024. Market Capitalization defined as Shares Outstanding times Stock Price; (3) As of March 31, 2024. Cash includes $0.6m of restricted cash. Debt excludes operating lease obligations; (4) As of December 31, 2023, as disclosed in Earnings Release. NOL carryforward is for U.S. federal and state tax expense; (5) 2.8 million shares outstanding as of April 26, 2024. Does not include unissued or unvested RSUs; (6) Includes unvested share units and share units that will be issued up to 90 days after a director’s/officer’s separation from service; (7) As of December 31, 2023; (8) Everest Group (2024) $mm, except per share amounts Stock Price(2) $16.50 Shares Outstanding(5) 2.8M Market Capitalization(2) $46.7 Cash(3) $21.0 Debt(3) $0.0 Usable NOL Carryforward(4) $302 # of Employees(7) 1,050 # of Countries 14 $mm 2020 2021 2022 2023 LTM Revenue $101.4 $169.2 $200.9 $161.3 $152.2 Adj Net Revenue $39.1 $68.2 $99.2 $80.3 $74.8 Adj EBITDA- RPO(1) $2.9 $13.5 $20.1 $9.6 $6.8 % of Adj Net Revenue 7.5% 19.8% 20.3% 11.9% 9.0% Corp Costs(1) $3.3 $3.4 $3.7 $3.7 $3.6 Adj EBITDA(1) $(0.4) $10.0 $16.4 $5.9 $3.2 Investigate Acquisition Opportunities • Expand capabilities and capacity, not just growth for growth’s sake • Deepen geographic and/or sector presence • Add new talent and skill sets • Immediately accretive • Utilize NOL Repurchase Stock • Will be opportunistic/price sensitive • Goal is to maximize long-term value per share, not just “return cash” • Balance with acquisition opportunities Grow RPO • Global RPO market expected to grow CAGR of 13%-15% from 2024 to 2028(8) • Hudson RPO’s goal is to exceed market growth rate (i.e., gain share) – Superior service and delivery – Go deeper and broader with existing clients – Grow in existing markets and expand into new markets to support our clients’ needs – Add new clients then “land and expand” • Hudson RPO is investing in people and technology to accelerate its growth(2) • Leverage existing strong reputation by expanding marketing efforts, including website and social media Keep Overhead Expenses Low • Reduced complexity left over from legacy businesses • Both corporate and regional; no impact on revenues or growth Coit Group October 2020 • Significantly expanded Hudson RPO’s tech presence in the US; new Hudson office in San Francisco • Established, profitable business with strong client base • Coit’s founders (Joe Belluomini and Tim Farrelly) became co-CEOs of Hudson RPO’s newly formed Technology Group • Combination of cash, shares, promissory note, and earn-out agreements Karani October 2021 • Expanded Hudson RPO’s global delivery capability by adding substantial presence in India and Philippines • Strong partnerships supporting US recruitment and staffing firms • Large and growing client base supported by over 500 employees in India and 125 in the Philippines • Expanded Hudson RPO’s expertise in technology recruitment • Combination of cash and promissory note Hunt & Badge August 2022 • Expanded Hudson RPO’s footprint further into the India recruitment market • Compliments Karani’s offerings with many potential synergies between the two companies • Partners with companies of all sizes, including well-known multinationals, across a variety of industries Hudson Singapore November 2023 • Has a 30-year track record of senior placements and project recruitment work • Large client base across Southeast Asia including Singapore, Malaysia, the Philippines, Vietnam, Thailand, and Indonesia • Offers Hudson RPO cross-selling services among Hudson Singapore’s diverse, blue chip client base Executive Solutions March 2024 • Established in 2008, has a proven record of assisting organizations with the outsourcing of both long- and short-term volume recruitment, rapid growth projects, special projects, overseas campaigns, and Emiratization • Brings to Hudson RPO entry into the United Arab Emirates market • Expansion of footprint in the Middle East aligns with Hudson RPO clients broadening their Middle Eastern presence Striver April 2024 • Solidifies Hudson RPO’s position in the Middle East • Enhances executive search function Investor Relations The Equity Group Inc. Lena Cati 212-836-9611 lcati@equityny.com Hudson Global, Inc. Jeffrey E. Eberwein CEO 203-489-9501 ir@hudsonrpo.com Contact Us Financial Goals Hudson Global: Significant Reduction in Corporate Costs Hudson RPO: Salaries & Related Expenses (2) Excludes non-recurring expenses. (3) Before corporate costs of Hudson Global. Americas 38% EMEA 20% APAC 42% $80.3M $30.1M $16.5M $33.7M Full Year 2023 Hudson RPO: Profit Margin Improvement 60% 65% 70% 75% 80% 85% 90% 95% 100% 1Q 19 2Q 19 3Q 19 4Q 19 1Q 20 2Q 20 3Q 20 4Q 20 1Q 21 2Q 21 3Q 21 4Q 21 1Q 22 2Q 22 3Q 22 4Q 22 1Q 23 2Q 23 3Q 23 4Q 23 1Q 24 Salaries & Related(3) as % of Adjusted Net Revenue (Rolling 4 Quarter Average) 0% 5% 10% 15% 20% 25% 1Q 19 2Q 19 3Q 19 4Q 19 1Q 20 2Q 20 3Q 20 4Q 20 1Q 21 2Q 21 3Q 21 4Q 21 1Q 22 2Q 22 3Q 22 4Q 22 1Q 23 2Q 23 3Q 23 4Q 23 1Q 24 RPO Adj EBITDA(2) as % of Adjusted Net Revenue (Rolling 4 Quarter Average) 5.6 4.1 3.3 3.4 3.7 3.7 2.4 1.1 0.8 0.6 0.3 0.7 $- $5 $10 2018 2019 2020 2021 2022 2023 Non recurring expenses Corporate costs $8.1M $5.2M $4.1M $4.3M Long-term Goal $4.1M Manila, Philippines Shanghai, China Edinburgh, Scotland Tampa, Florida, US India Centers of Excellence Profitability • Grow profitability over time; turning profitable in mid-2019 was a watershed event in our Company’s history Internal Growth • Generate high returns on internal growth projects EBITDA Margin • Adjusted EBITDA margin goal of 25% of Adjusted Net Revenue at RPO level (i.e., pre Corporate Costs) vs. Q1 2024 LTM of 9.0% – Keep Corporate Costs low, even as profits from operating businesses grow – Adjusted EBITDA / Adjusted Net Revenue margins of mid-teens at the corporate level (i.e., after Corporate Costs) Maximize EPS • Maximize EPS over the long term through: – Growing revenue faster than costs, leading to increasing Adjusted EBITDA margins – Controlling overhead and other fixed costs so these costs will decline as a percentage of revenue over time – Reducing share count through opportunistic stock repurchases Financial Highlights Adjusted Net Revenue by Region (1) (1) Excludes cost pass-throughs of Contracting. $4.0M Americas 49% EMEA 16% APAC 35% $99.2M $15.9M $34.3M Full Year 2022 $49.0M Factsheet – May 2024 $80.3M Adj. Net Revenue $0.86 Adj. Diluted EPS (Non-GAAP) $5.9M Adj. EBITDA (Non-GAAP) FY 2023 Financials Long-term Goal