Hudson Global (HSON) Investor Presentation summary

Company overview and business model

• Operates as a global total talent solutions provider, specializing in Recruitment Process Outsourcing (RPO) and related human capital management services.

• Focuses on mid-market clients with hiring needs between 50-1,000 per year, offering end-to-end and project-based RPO, MSP, executive search, and talent advisory services.

• Maintains a strong financial position with $15.3M in cash, no debt, and $302M in usable NOL carryforwards as of mid-2024.

• Board and management own about 19% of shares, emphasizing an owner mindset and maximizing shareholder value through investments, acquisitions, and buybacks.

• Recognized as a top RPO provider globally, with 14 consecutive years on HRO Today's Baker's Dozen list and strong client retention.

Market position and growth strategy

• Global RPO market projected to grow at a 13%-15% CAGR from 2024 to 2028, with a 2028E market size of $9.45-$9.55B.

• Aims to exceed market growth by deepening relationships with existing clients, expanding geographically, and investing in people and technology.

• Pursues disciplined acquisitions to expand capabilities and geographic footprint, focusing on profitable, high-margin, asset-light businesses.

• Recent acquisitions include Coit Group (US tech sector), Karani (India/Philippines), Hunt & Badge (India), Hudson Singapore, Executive Solutions (UAE), and Striver (UAE executive search).

• Maintains low corporate costs and targets an adjusted EBITDA margin of 25% at the RPO level, with a long-term focus on maximizing EPS.

Financial performance

• LTM 6/30/2024: $143.0M revenue, $69.9M adjusted net revenue, $(0.38) adjusted EPS, $1.3M adjusted EBITDA.

• Revenue and adjusted net revenue have fluctuated since 2020, with a peak in 2022 and a decline in 2023 and LTM 2024.

• Adjusted net revenue by region (2023): Americas 38%, APAC 42%, EMEA 20%.

• Profit margins improved significantly post-2019, with ongoing efforts to reduce salaries and corporate costs as a percentage of revenue.

• Ongoing share repurchase programs have reduced shares outstanding by 14% since 2018.