DHI GROUP, INC. Q1 FY2025 earnings call

Management Statement and Operational Highlights

• The company transitioned to a new business segmentation aligning with ClearanceJobs and Dice brands, each with dedicated leadership.
• Despite a 10% total revenue decline, company-wide adjusted EBITDA was $7 million with a margin of 22%. Over $20 million of operating costs were removed via restructurings since May 2023.
• Tech labor market: New tech job postings increased 16% in Q1 2025 vs prior year, tech recruiter job postings up 36% YOY, and AI driving demand for tech professionals.
• ClearanceJobs initiatives: Innovations like expanded multifactor authentication and live events platform, recognized by White House for cybersecurity workforce.
• Dice initiatives: Launched redesigned hiring page, new dashboard, and job search experience, with average monthly job applications up 15% YOY.

Segment Performance

• ClearanceJobs: Revenue was $13.4 million, up 3% year over year but down 3% sequentially. Adjusted EBITDA was $5.7 million with a margin of 43%. Bookings were $16.8 million, down 1% year over year. Approximately 90% of revenue is recurring from annual or multiyear contracts, renewal rate was 92%, and retention rate was 106%.
• Dice: Revenue was $18.9 million, down 18% year over year and 10% sequentially. Adjusted EBITDA was $3.4 million with a margin of 18%. Bookings were $25.3 million, down 20% year over year. Revenue renewal rate was 70%, retention rate was 92%, and approximately 90% of revenue is recurring from annual or multiyear contracts.

Guidance

• Reiterated full-year revenue guidance of $131 to $135 million.
• Expected second quarter revenue between $32 million and $33 million.
• Targeted adjusted EBITDA margin of 24% for full year 2025.
• Announced a $5 million share repurchase program in January, with $4.3 million remaining at quarter end.

Risks

• Uncertainty surrounding tech hiring and general investments in the economy.
• Doge-related uncertainty impacted ClearanceJobs bookings and renewals.
• Macro environment affecting Dice's smaller customers, leading to churn and lower renewal rates.

Q: For both segments, what gives ClearanceJobs an adjusted EBITDA margin more than twice that of Dice?

A: It's related to revenue per employee. ClearanceJobs runs at about $700,000 per employee, while Dice is lower. Dice has required more work to fix legacy code and align feature sets with ClearanceJobs.

Q: How did Doge impact ClearanceJobs?

A: Doge-related uncertainty scared smaller contractors, leading to some non-renewals and hesitation in new business bookings. Larger contractors were less affected but still saw some reduced contract spend from multiyear contracts.

Q: What's the outlook for Dice's new business?

A: New business for staffing recruiting agencies has exceeded expectations, but commercial accounts remain uncertain due to macro environment and potential tariffs.