DHI Group, Inc. Q3 FY2025 earnings call

• Company mission: Help employers find tech professionals through ClearanceJobs and Dice, with over 90% of revenue from annual/multiyear subscriptions.
• ClearanceJobs: Leading marketplace for cleared professionals, serving over 1,800 customers, margins over 40%, defense budget increase and NATO spending as growth opportunities, integrated Agile ATS with ClearanceJobs, beta testing premium candidate subscription.
• Dice: Impacted by macro headwinds, 70% of normal job postings, new platform rolled out with monthly subscriptions to reduce operating expenses, onboarded notable clients like HighIQ Robotics.
• Cost reductions: Restructurings reduced annual operating and capitalized development costs by approximately $35 million; operating expenses excluding $9.6 million impairment of intangible assets declined $7.6 million or 22% for the quarter.

ClearanceJobs: Revenue was $13.9 million, up 1% year over year and up 2% sequentially. Bookings were $12 million, down 7% year over year. Approximately 43.3% of total revenue. Dice: Revenue was $18.2 million, down 15% year over year and down 1% sequentially. Bookings were $13.4 million, down 17% year over year. Approximately 56.7% of total revenue. ClearanceJobs ended the third quarter with 1,822 recruitment package customers, down 8% year over year. Dice ended the quarter with 4,239 recruitment package customers, down 13% year over year. ClearanceJobs' average annual revenue per recruitment package customer was up 7% year over year to $26,600. Dice's average annual revenue per recruitment package customer was down 4% year over year to $15,727.

• Reiterated annual revenue guidance of $126 million to $128 million.
• Expected fourth quarter revenue in the range of $29.5 million to $31.5 million.
• Raised full-year adjusted EBITDA margin guidance to 27%.

• Macro headwinds including tariffs, budget uncertainty, higher interest rates affecting Dice.
• Churn in smaller customers for both segments, with Dice's renewal rate at 69% and ClearanceJobs' at 85%.
• Impairment of Dice trade name due to revenue declines.
• Uncertainty around government shutdowns impacting ClearanceJobs' smaller defense contractor customers.

Q: About Dice margin expansion and the $9 million write-off A: Dice margin expansion had true-ups due to headcount backfilling and expense true-ups; the $9 million write-off was for the Dice trade name impairment due to revenue declines Q: Impact of government shutdown on ClearanceJobs A: Smaller defense contractors were more challenged, but bigger customers are bullish; pent-up demand could materialize if defense bill is passed Q: New Dice platform impact A: Monthly subscriptions are increasing new customer sign-ups, with an advertising campaign upcoming Q: Percentage of AI-related job postings A: Over 50% of job postings on Dice were related to AI projects as of October Q: Buyback program A: Board authorized a new $5 million stock repurchase program, targeting one times leverage