DHI Group, Inc. Q2 FY2025 earnings call

Overview

• DHI Group owns ClearanceJobs and Dice, platforms for connecting employers with tech talent. ClearanceJobs is for cleared professionals, Dice for non-cleared. Acquired AgileATS, an applicant tracking system for cleared recruiting, to be integrated into ClearanceJobs.

Performance Details

• ClearanceJobs showed strong profitability with adjusted EBITDA margin of 45%, but faced headwinds from budget uncertainty. Dice faced a challenging environment with bookings down 16% Y/Y, but cost restructuring was implemented to improve margins.

Market Trends

• Tech job postings stabilized, with AI driving demand. AI skills required in job postings increased from 10% in early 2024 to over 38% by June 2025. Defense spending increases in US and worldwide are expected to drive ClearanceJobs growth.

ClearanceJobs generated revenue of $13.6 million, up 1% year-over-year and 2% sequentially, with an adjusted EBITDA of $6.1 million and a 45% adjusted EBITDA margin. Dice had revenue of $18.4 million, down 18% year-over-year and 3% sequentially, with an adjusted EBITDA of $4.2 million and a 23% adjusted EBITDA margin. ClearanceJobs accounted for a portion of the company's revenue, while Dice's performance was impacted by the challenging market environment.

• Reduced annual revenue guidance from $131-135 million to $126-128 million.
• Expect third quarter revenue to be in the range of $31-32 million.
• Raised full-year adjusted EBITDA margin guidance to 26% due to cost management and operational efficiency.

• Factors affecting forward-looking statements include economic uncertainty, which impacts tech hiring activity. Also, risks related to the company's periodic reports on Form 10-K and 10-Q and other SEC filings that could cause actual results to differ from forward-looking statements.

Q: Talk about ClearanceJobs' bookings performance in Q2 and confidence in bookings returning to growth in the second half.

A: ClearanceJobs had choppy renewals and new business activity due to budget process psychology. Now that the budget is approved, psychology is more stable, and improvement could be seen in Q3.

Q: Speak to the acquisition of AgileATS, what hole it plugs in the ClearanceJobs platform and its impact on customer acquisition and retention.

A: AgileATS is an applicant tracking system for cleared recruiting, a natural extension for ClearanceJobs. It can be sold to existing ClearanceJobs customers and Dice customers, with potential to accelerate new customer acquisition and expansion within the existing base.

Q: On Dice, how to stabilize the business and timeline for go-to-market motion refinement.

A: Dice's business is seeing signs of stabilization with staffing recruiting consulting segment showing positive signs. Demand environment has stabilized, and improvements are expected as the economy and staffing segment improve.