Hudson Global 2025 Q1 Earnings Narrowed Net Loss by 37.9% Despite Revenue Drop

Hudson Global (HSON) reported its fiscal 2025 Q1 earnings on May 13th, 2025. Revenue dropped 6% to $31.87 million, down from $33.89 million in Q1 2024. Despite this, the company managed to reduce its losses, showcasing a significant improvement. The earnings per share (EPS) were below expectations, with a loss of $0.46 per share compared to a consensus estimate of $0.06, indicating a miss. However, Hudson Global has exceeded consensus EPS estimates twice in the past four quarters, suggesting potential for future earnings surprises. The company maintained a positive outlook for adjusted net revenue growth.

Revenue
Hudson Global's total revenue for Q1 2025 was $31.87 million, marking a 6% decrease from the previous year. In terms of segment performance, the Recruitment Process Outsourcing (RPO) division contributed $15.74 million, while the Contracting segment added $16.12 million. This diversification in revenue streams highlights the company's efforts to mitigate challenges in specific sectors.

Earnings/Net Income
Hudson Global narrowed its losses to $0.59 per share in 2025 Q1, down from $0.95 per share in 2024 Q1, reflecting a 37.9% improvement. The net loss was reduced to $1.76 million, a 39.4% decrease compared to the $2.90 million loss in the previous year. Despite the improvement, the EPS performance still indicates challenges.

Post-Earnings Price Action Review
The strategy of buying Hudson Global (HSON) when revenues miss expectations and holding for 30 days is seen as high-risk but potentially high-reward. The company's underperformance compared to the broader market, with a 23.3% decline since the start of the year against the S&P 500's 0.6% drop, may create buying opportunities if the market is overly pessimistic about the company's future. Although the recent EPS missed consensus estimates, Hudson Global has previously exceeded these expectations twice in the last four quarters, indicating potential for future earnings beats. Revenue was below the consensus estimate, possibly causing the stock price to drop and presenting a buying opportunity if the market overreacts. Diversification in revenue streams, particularly in healthcare and consumer industries, offers some protection against sector-specific downturns. CEO Jeff Eberwein's optimism about winning new business, especially in healthcare and manufacturing, could lead to a stock price rebound if the market views these strategic shifts as growth indicators. Investors should be aware of the company's inconsistent financial performance and be prepared for possible further stock price declines, setting a stop-loss level to limit potential losses.

CEO Commentary
Hudson Global, Inc. Chief Executive Officer Jeff Eberwein noted the company's revenue of $31.9 million, a 3.3% decline year-over-year, alongside a 2.2% increase in adjusted net revenue to $16.4 million. Despite macroeconomic challenges affecting the talent environment, Eberwein expressed confidence in Hudson RPO's ability to outperform competitors. The CEO emphasized strategic priorities, including operational efficiency and leveraging new business opportunities, while maintaining an optimistic outlook for future growth despite uncertainties.

Guidance
Hudson Global expects a positive trajectory in adjusted net revenue growth, building on recent improvements. CEO Jeff Eberwein highlighted a robust sales pipeline, aiming to convert these opportunities into actual sales, depending on market stabilization. While specific quantitative targets were not provided, the CEO conveyed strong optimism for growth, focusing on operational enhancements and better market positioning.

Additional News
Hudson Global continues to strengthen its market position with strategic initiatives. The company announced the launch of a Digital Division, aiming to enhance its digital capabilities and enterprise strategies. This move is part of Hudson Global's broader "Land and Expand" strategy, focusing on extending geographic reach and service offerings. Additionally, the company remains committed to its share repurchase program, with $2.1 million remaining from the original $5 million authorization. This buyback plan reflects management's confidence in the company's value proposition despite current market challenges. Hudson Global's leadership also underscores the importance of their U.S. NOL carryforwards, valued at $240 million, as a significant asset for shareholders, reinforcing strategic measures to protect and utilize this asset effectively.