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HRT NYSE· HireRight Holdings Corp
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HRT NYSE· HireRight Holdings Corp
Earnings report Q3 2023

HRT Reports Decrease in Revenues for Q3 2023

Segments of Revenue

HRT's total revenues for the three months ended September 30, 2023, amounted to $188.3 million, reflecting a decrease of $22.0 million or 10.5% compared to the same period last year. The decline in revenues was primarily driven by lower order volumes from existing customers, who downsized their workforces in response to macroeconomic pressures and uncertainties. Within the company's technology and services verticals, revenues decreased by $12.1 million, contributing significantly to the overall decline. Revenues from other customer groups also experienced a net decrease of $9.9 million for similar reasons. From a geographical perspective, international revenues decreased by $2.6 million or 16.0%, while revenues from the United States decreased by $19.4 million or 10.0% during the quarter.

Strengths

Despite the decrease in revenues, HRT demonstrated resilience in navigating the challenging macroeconomic environment. The company's management highlighted that the decline in revenues was primarily due to lower order volumes from existing customers who were rightsizing their workforces. This indicates that the decrease in revenues was not a result of losing customers or market share, but rather a temporary impact of macroeconomic factors. Additionally, HRT's technology and services verticals were particularly affected, suggesting that other segments of the company's business may have performed relatively better.

Challenges

HRT faced several challenges in the latest quarter, resulting in a decline in revenues. The downsizing efforts by existing customers in response to macroeconomic pressures and uncertainties had a significant impact on order volumes, leading to lower revenues. The decrease in revenues from the technology and services verticals, especially in the APAC and India regions, further contributed to the overall decline. Additionally, the company experienced a decrease in revenues from both international and United States regions, with the strengthening of the U.S. dollar against other currencies negatively impacting international revenues.

Noteworthy

It is worth noting that HRT's revenues for the nine months ended September 30, 2023, also decreased by $75.5 million or 12.0% compared to the prior year period. Similar to the quarterly results, the decline in revenues was primarily driven by lower order volumes from existing customers, particularly in the technology and services verticals. Revenues from international regions decreased by $6.2 million or 12.9%, while revenues from the United States decreased by $69.2 million or 11.9% during the nine-month period. The unfavorable impact of the strengthening U.S. dollar against other currencies further contributed to the decline in international revenues.

Summary

HRT faced a challenging quarter with a decrease in revenues of $22.0 million or 10.5% compared to the same period last year. The decline was primarily driven by lower order volumes from existing customers who downsized their workforces in response to macroeconomic pressures. The technology and services verticals were particularly affected, and revenues from international and United States regions also decreased. Despite these challenges, HRT demonstrated resilience by maintaining its customer base and market share. The company's management attributed the decline in revenues to temporary macroeconomic factors rather than underlying issues with the business.

Source documents

Form 10-Q  filed on Nov 07, 2023
7 pages scanned

Reference data

Company financials Q3 revenue 188M
Analyst estimates Q3 EPS beat by 6.93%
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