DHI GROUP, INC. Q3 FY2024 earnings call

• Tech labor market trends: Encouraging signs like increasing new tech job postings (e.g., 610,000 new tech job postings in Q3 2024, 3% YOY) and decreasing tech unemployment rate (2.6% in Oct 2024).
• Segment details: ClearanceJobs had 6% YOY revenue growth but bookings below historical trend due to government contract delays; Dice saw revenue decline due to lower new business bookings, renewals, and transactional revenue.
• Financial results: Total revenue down 6% YOY, adjusted EBITDA margin 24% (down slightly from 25% YOY), operating cash flow $5.5 million.
• Initiatives: ClearanceJobs working on [Verify] product; Dice's all jobs initiative drove 70% YOY increase in monthly job applications; expanded account-based marketing for Dice.

Total revenue for the third quarter was $35.3 million, down 6% year-over-year. ClearanceJobs saw revenue of $13.4 million, up 6% year-over-year, with bookings of $12.6 million, up 4% year-over-year. Dice had revenue of $21.9 million, down 12% year-over-year, and bookings of $16.3 million, down 15% year-over-year. ClearanceJobs' average annual revenue per recruitment package customer was $24,762, up 16% YOY. Dice's average annual revenue per recruitment package customer was $16,330, flat sequentially but up 5% YOY.

• Q4 bookings expected to be down 8% to 10% YOY, revenue down 7% to 8% YOY.
• Target adjusted EBITDA margin of 24% for full year.
• Anticipate tech hiring demand to increase in 2025 due to lower interest rates and AI-related hiring, though bookings likely to return to growth next year.

• Concerns about renewals, particularly with larger staffing clients potentially reducing usage, which could materially impact revenue renewal rates. Churn in small business staffing firms is a factor, but larger client reductions are a risk.

Q: In terms of renewals with major staffing clients, talk about the dynamic with downtick in renewed contract rate and risk in key renewal season.

A: Art Zeile mentioned concern about renewals, noting majority churn is small business staffing firms but larger clients reducing usage could impact revenue renewal rate; Raime Leeby added no additional specific comments.

Q: Confidence in returning to bookings growth next year.

A: Art Zeile cited tech industry growth trends, growth initiatives, and voluntary attrition as reasons for optimism in 2025.

Q: Q4 bookings guide and segment breakdown.

A: Raime Leeby said Q4 outlook similar to Q3, with Dice having some large multiyear customers renewing at lower levels; expectation of continued growth in ClearanceJobs and incremental improvements in Dice.

Q: M&A thoughts.

A: Art Zeile said no immediate plans for acquisitions, as current platforms are prioritized and private market opportunities don't make sense currently.