DHI GROUP, INC. Q4 FY2024 earnings call

• Restructured operations into two brands: Dice and ClearanceJobs, with dedicated leadership for each to align strategies with market dynamics.
• Tech labor market shows signs of recovery with increased new tech job postings in late 2024, though still at 70% of normal. Tech unemployment rate remained low at ~2% in December.
• In Q4, ClearanceJobs saw 7% revenue growth, while Dice saw 14% decline. Bookings for ClearanceJobs were flat y-o-y, while Dice's bookings declined 14% y-o-y.
• ClearanceJobs secured new customers like Hughes Network Solutions, and Dice secured clients like D.R. Horton and General Motors.
• Plan to launch CJ Verify by end of Q1 and a paid candidate subscription service for ClearanceJobs by midyear; Dice's all jobs initiative drives job posting growth and candidate engagement.
• Reduced total operating costs by over $10 million in 2024, with savings split between operating expenses and capitalized development costs.

In the fourth quarter, total revenue was $34.8 million, down 7% y-o-y. ClearanceJobs revenue was $13.8 million, up 7% y-o-y but down 1% sequentially, with bookings $14.2 million, flat y-o-y. Dice revenue was $21.0 million, down 14% y-o-y and 2% sequentially, with bookings $18.7 million, down 14% y-o-y. Total recurring revenue was down 5% for Q4 and full year. ClearanceJobs had a 93% revenue renewal rate and 111% retention rate. Dice had a 77% revenue renewal rate and 97% retention rate. ClearanceJobs contributed approximately 40% of total revenue ($13.8M out of $34.8M), while Dice contributed approximately 60% ($21.0M out of $34.8M).

• Anticipate revenue of $131 million to $135 million for full year 2025, with Q1 revenue expected at $32 million to $33 million.
• Target adjusted EBITDA margin of 24% for full year 2025 due to lower capitalized development costs contributing to free cash flow.
• Board approved a new $5 million stock buyback program starting this month and running through February 2026.
• Expect slow and steady recovery in tech hiring, with demand for solutions to increase as hiring normalizes.

• Uncertainty in defense budget due to government shutdowns and administration changes impacting ClearanceJobs bookings.
• Tech hiring market conditions not returning to normal as expected, affecting revenue growth.
• Safeguarding capital loss carryforward over $100 million with implementation of Section 382 rights plan to protect against potential future capital gains tax.

Q: Zack Cummins asked about Dice and ClearanceJobs business prospects, specifically hearing from staffing vs commercial accounts.

A: Art Zeile said staffing would return to normalcy before commercial accounts, with renewal and new business activity firming up, aligning with SIA's 5% revenue growth forecast for 2025.

Q: Gary Prestopino asked about cash usage, debt payment, and segment reporting.

A: Greg Schippers said $6 million used to pay down debt and ~$2 million for share repurchases; Greg also mentioned finance team intends to provide in-depth segment reporting on operating income/EBITDA by brand in first half of 2025.

Q: Max Michaelis asked about bookings in 2025.

A: Greg Schippers said expecting growth at ClearanceJobs with defense budget certainty, and Dice expecting improvement throughout 2025 on a y-o-y basis but not budgeting for immediate improvement.

Q: Kevin Liu asked about CJ exposure and Dice's new store.

A: Art Zeile said CJ has minimal exposure to non-Defense intelligence community agencies; Art also explained the new Dice web store will be a product-led growth initiative allowing individual recruiters to buy subscriptions using credit cards.

Q: Kevin Liu asked about marketing spend seasonality.

A: Art Zeile said marketing spend is seasonal, tailored downward in summer and holiday periods due to reduced eyeballs from recruiters and candidates taking vacations.