In This Article:
Release Date: May 08, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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BGSF Inc (NYSE:BGSF) reported a sequential increase in professional revenues by 5.6% from the December quarter.
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The company signed 23 new logos in the first quarter of 2025, a 60% increase from the previous year.
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BGSF Inc (NYSE:BGSF) was officially awarded the Workday Application Management Service Partnership, expected to expand support sales.
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The company's permanent placement business showed strong momentum in early 2025.
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BGSF Inc (NYSE:BGSF) implemented significant cost reductions, resulting in improved operating income despite a decline in revenue.
Negative Points
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Total revenues for the first quarter of 2025 were down 8% compared to the prior year.
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Property management revenues declined by over 14% on both a sequential and year-over-year basis.
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The company was not in compliance with its financial covenants at the end of 2024 and required amendments with lenders.
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Gross profit margins decreased to 33.1% from 34.1% in the year-ago period.
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Macroeconomic uncertainties, including trade policy changes, continue to pose challenges for BGSF Inc (NYSE:BGSF) and its clients.
Q & A Highlights
Q: Could you provide more context on the 60% year-over-year increase in new logos, including average deal size and project commencement timelines? A: Beth Garvey, CEO: Several contracts were signed in March, but specific data on deal sizes isn't available at the moment. We can follow up with more details later.
Q: Are you seeing discussions with existing clients about potential pent-up demand once tariff uncertainties are resolved? A: Beth Garvey, CEO: Yes, there is pent-up demand in both segments. Clients are cautious due to ongoing tariff discussions, but conversations are happening, indicating potential movement once uncertainties are settled.
Q: Is the technology platform fully rolled out, or are there more go-lives expected? A: Beth Garvey, CEO: The platform is fully rolled out. We conduct two-week sprints for efficiency improvements and have seen positive results from these enhancements.
Q: Are the expense reductions from last year fully reflected in the first quarter, and are there more reductions planned? A: Keith Schrader, CFO: About 65-70% of the reductions were reflected in Q1, with full impact expected in Q2. We continuously seek cost-effectiveness improvements.
Q: Can you update us on the competitive dynamics within property management and progress on preferred partner agreements? A: Beth Garvey, CEO: The competitive environment remains unchanged. Our team is adept at adapting to competition. We continue to secure strategic agreements, with a significant one closed recently.