Star Equity Holdings, Inc.STRR
Star Equity Holdings, Inc. Segments Disclosure
SEGMENT AND GEOGRAPHIC DATA
Segment Reporting
The Company manages its business primarily on a geographic basis, with three reportable segments: the Hudson regional businesses of Americas, Asia Pacific, and EMEA. The reportable segments are consistent with management's approach to segment reporting used by the Global Chief Executive Officer of Hudson Global Inc. and the Global Chief Executive Officer of Hudson RPO, who both serve as the Company’s Chief Operating Decision Maker, to assess segment performance and allocate resources. The Americas segment includes the United States and Canada. The EMEA segment includes the United Kingdom and countries across Continental Europe and the United Arab Emirates, while the Asia Pacific segment comprises Australia, New Zealand, and other countries in Asia. The Company evaluates the performance of its reportable segments using an EBITDA metric which is defined as earnings before interest, income taxes, depreciation, and amortization. In addition, certain corporate-related costs are not allocated to the segments. Each reportable segment generates its revenue through RPO services, consisting of recruitment and contracting solutions tailored to the individual needs of primarily mid-to-large-cap multinational companies.
Corporate expenses are reported separately for the three reportable segments and pertain to certain functions, such as executive management, corporate governance, investor relations, legal, accounting, tax, and treasury. A portion of these expenses are attributed to the reportable segments for providing the above services to them, and have been allocated to the segments as management service expenses, and are included in the segments’ non-operating other income (expense). We have disclosed for each reportable segment the significant expense that are reviewed by CODM in the tables below with no additional significant expenses beyond those presented. Segment information is presented in accordance with ASC 280, “Segment Reporting.” This standard is based on a management approach that requires segmentation based upon the Company’s internal organization and disclosure of revenue and certain expenses based upon internal accounting methods. The Company’s financial reporting systems present various data for management to run the business, including internal profit and loss statements prepared on a basis not consistent with U.S. GAAP. Accounts receivable and long-lived assets are the only significant assets separated by segment for internal reporting purposes.
| Americas | Asia Pacific | EMEA | Corporate | Inter-segment elimination | Total | ||||||||||||||||||||||||||||||
| For the Year Ended December 31, 2024 | |||||||||||||||||||||||||||||||||||
| Revenue, from external customers | $ | 27,894 | $ | 86,704 | $ | 25,458 | $ | — | $ | — | $ | 140,056 | |||||||||||||||||||||||
| Inter-segment revenue | 210 | 4 | 41 | — | (255) | — | |||||||||||||||||||||||||||||
| Total revenue | $ | 28,104 | $ | 86,708 | $ | 25,499 | $ | — | $ | (255) | $ | 140,056 | |||||||||||||||||||||||
Adjusted net revenue, from external customers (a) | $ | 25,144 | $ | 29,416 | $ | 15,592 | $ | — | $ | — | $ | 70,152 | |||||||||||||||||||||||
| Inter-segment adjusted net revenue | 206 | (226) | 19 | — | 1 | — | |||||||||||||||||||||||||||||
| Total adjusted net revenue | $ | 25,350 | $ | 29,190 | $ | 15,611 | $ | — | $ | 1 | $ | 70,152 | |||||||||||||||||||||||
| Salaries and related | $ | (19,603) | $ | (23,773) | $ | (13,567) | $ | (1,366) | $ | — | $ | (58,309) | |||||||||||||||||||||||
EBITDA (loss), unaudited (b) | $ | 339 | $ | 482 | $ | 298 | $ | (3,588) | $ | — | $ | (2,469) | |||||||||||||||||||||||
| Depreciation and amortization | (1,163) | (161) | (26) | (11) | — | (1,361) | |||||||||||||||||||||||||||||
| Interest income, net | — | 9 | — | 351 | — | 360 | |||||||||||||||||||||||||||||
| Intercompany interest (expense) income, net | — | (529) | — | 529 | — | — | |||||||||||||||||||||||||||||
| Provision for income taxes | (126) | (364) | (752) | (58) | — | (1,300) | |||||||||||||||||||||||||||||
| Net loss | $ | (950) | $ | (563) | $ | (480) | $ | (2,777) | $ | — | $ | (4,770) | |||||||||||||||||||||||
| As of December 31, 2024 | |||||||||||||||||||||||||||||||||||
| Accounts receivable, net | $ | 4,740 | $ | 9,254 | $ | 6,099 | $ | — | $ | — | $ | 20,093 | |||||||||||||||||||||||
Long-lived assets, net of accumulated depreciation and amortization (c) | $ | 6,640 | $ | 1,744 | $ | 26 | $ | 26 | $ | — | $ | 8,436 | |||||||||||||||||||||||
| Total assets | $ | 14,455 | $ | 21,425 | $ | 9,393 | $ | 7,310 | $ | — | $ | 52,583 | |||||||||||||||||||||||
| Americas | Asia Pacific | EMEA | Corporate | Inter-segment elimination | Total | ||||||||||||||||||||||||||||||
| For the Year Ended December 31, 2023 | |||||||||||||||||||||||||||||||||||
| Revenue, from external customers | $ | 31,254 | $ | 103,857 | $ | 26,227 | $ | — | $ | — | $ | 161,338 | |||||||||||||||||||||||
| Inter-segment revenue | 326 | — | (27) | — | (299) | — | |||||||||||||||||||||||||||||
| Total revenue | $ | 31,580 | $ | 103,857 | $ | 26,200 | $ | — | $ | (299) | $ | 161,338 | |||||||||||||||||||||||
Adjusted net revenue, from external customers (a) | $ | 30,141 | $ | 33,675 | $ | 16,451 | $ | — | $ | — | $ | 80,267 | |||||||||||||||||||||||
| Inter-segment adjusted net revenue | 326 | (208) | (84) | — | (34) | — | |||||||||||||||||||||||||||||
| Total adjusted net revenue | $ | 30,467 | $ | 33,467 | $ | 16,367 | $ | — | $ | (34) | $ | 80,267 | |||||||||||||||||||||||
| Salaries and related | $ | (25,224) | $ | (23,467) | $ | (12,848) | $ | (1,320) | $ | — | $ | (62,859) | |||||||||||||||||||||||
EBITDA (loss), unaudited (b) | $ | (704) | $ | 5,859 | $ | 1,582 | $ | (3,074) | $ | — | $ | 3,663 | |||||||||||||||||||||||
| Depreciation and amortization | (1,282) | (146) | (29) | (10) | — | (1,467) | |||||||||||||||||||||||||||||
| Interest income, net | — | 2 | (1) | 371 | — | 372 | |||||||||||||||||||||||||||||
| Intercompany interest (expense) income, net | — | (505) | — | 505 | — | — | |||||||||||||||||||||||||||||
| (Provision for) benefit from income taxes | 83 | (1,524) | 724 | 347 | — | (370) | |||||||||||||||||||||||||||||
| Net income (loss) | $ | (1,903) | $ | 3,686 | $ | 2,276 | $ | (1,861) | $ | — | $ | 2,198 | |||||||||||||||||||||||
| As of December 31, 2023 | |||||||||||||||||||||||||||||||||||
| Accounts receivable, net | $ | 5,502 | $ | 9,280 | $ | 4,928 | $ | — | $ | — | $ | 19,710 | |||||||||||||||||||||||
Long-lived assets, net of accumulated depreciation and amortization (c) | $ | 7,773 | $ | 1,954 | $ | 33 | $ | 38 | $ | — | $ | 9,798 | |||||||||||||||||||||||
| Total assets | $ | 17,632 | $ | 23,604 | $ | 11,064 | $ | 8,658 | $ | — | $ | 60,958 | |||||||||||||||||||||||
(a) Adjusted net revenue are net of the Direct contracting costs and reimbursed expenses caption on the Consolidated Statements of Operations. Direct contracting costs and reimbursed expenses include the direct staffing costs of salaries, payroll taxes, employee benefits, travel expenses, and insurance costs for the Company’s contractors and reimbursed out-of-pocket expenses and other direct costs. The region where services are provided, the mix of RPO and contracting, and the functional nature of the staffing services provided can affect operating income and EBITDA. The
salaries, commissions, payroll taxes, and employee benefits related to recruitment professionals are included under the caption “Salaries and related” in the Consolidated Statements of Operations.
(b)SEC Regulation S-K 229.10(e)1(ii)(A) defines EBITDA as earnings before interest, taxes, depreciation and amortization. EBITDA is presented to provide additional information to investors about the Company’s operations on a basis consistent with the measures that the Company uses to manage its operations and evaluate its performance. Management also uses this measurement to evaluate working capital requirements. EBITDA should not be considered in isolation or as a substitute for operating income and net income prepared in accordance with U.S. GAAP or as a measure of the Company’s profitability.
(c)Comprised of property and equipment, intangible assets and goodwill, net of accumulated depreciation and amortization.
Geographic Data Reporting
A summary of revenues for the years ended December 31, 2024 and 2023 and net assets by geographic area as of December 31, 2024 and 2023 were as follows:
| Information by geographic region | Australia | United Kingdom | United States | Other | Total | ||||||||||||||||||||||||
| For the Year Ended December 31, 2024 | |||||||||||||||||||||||||||||
Revenue (a) | $ | 70,674 | $ | 22,900 | $ | 26,577 | $ | 19,905 | $ | 140,056 | |||||||||||||||||||
| For the Year Ended December 31, 2023 | |||||||||||||||||||||||||||||
Revenue (a) | $ | 92,505 | $ | 24,810 | $ | 29,333 | $ | 14,690 | $ | 161,338 | |||||||||||||||||||
| As of December 31, 2024 | |||||||||||||||||||||||||||||
Long-lived assets, net (b) | $ | 20 | $ | 16 | $ | 6,667 | $ | 1,733 | $ | 8,436 | |||||||||||||||||||
| Net assets | $ | 7,788 | $ | 3,076 | $ | 17,066 | $ | 12,498 | $ | 40,428 | |||||||||||||||||||
| As of December 31, 2023 | |||||||||||||||||||||||||||||
Long-lived assets, net (b) | $ | 49 | $ | 33 | $ | 7,811 | $ | 1,905 | $ | 9,798 | |||||||||||||||||||
| Net assets | $ | 9,634 | $ | 5,084 | $ | 22,585 | $ | 11,251 | $ | 48,554 | |||||||||||||||||||
(a) Revenue by geographic region disclosed above is net of any inter-segment revenue and, therefore, represents only revenue from external customers according to the location of the operating subsidiary.
(b) Comprised of property and equipment, intangible and goodwill, net of accumulated depreciation and amortization.
About Segments Disclosures
Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.
Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.