Release Date: May 07, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- DHI Group Inc (DHX, Financial) reported an adjusted EBITDA of $7 million, representing a 22% margin, despite a 10% decline in total revenue.
- ClearanceJobs, one of DHI Group Inc (DHX)'s brands, delivered strong profitability with an adjusted EBITDA of $5.7 million and a 43% margin.
- The company has successfully removed over $20 million in operating costs through restructurings since May 2023.
- DHI Group Inc (DHX) has aligned its operations around two distinct brands, ClearanceJobs and Dice, to enhance focus and accountability.
- The tech hiring demand is gradually returning to normal levels, with a 16% increase in new tech job postings in Q1 2025 compared to the previous year.
Negative Points
- Total revenue for DHI Group Inc (DHX) decreased by 10% year-over-year, and bookings were down 14%.
- Dice, another brand of DHI Group Inc (DHX), faced a challenging environment with bookings down 20% year-over-year.
- The company reported a net loss of $9.4 million, impacted by a $7.4 million impairment to Dice goodwill and a $2.3 million restructuring charge.
- ClearanceJobs experienced a 1% decline in bookings year-over-year due to uncertainty around the Dodge initiative.
- Dice's revenue renewal rate was 70%, and its retention rate was 92%, indicating challenges in maintaining customer relationships.
Q & A Highlights
Q: What is the reason behind ClearanceJobs having an adjusted EBITDA margin more than twice that of Dice?
A: Arthur Zeile, CEO: The primary reason is the revenue per employee. ClearanceJobs generates about $700,000 per employee, whereas Dice generates about half of that. Dice has required more effort to update legacy code and bring its features up to par with ClearanceJobs, resulting in a larger team and higher tech spend for Dice.
Q: Can you clarify the corporate expenses for DHI Group?
A: Greg Schippers, CFO: Our corporate expenses, excluding unusual items, are approximately $7 million annually. This includes a small group of employees and public company costs.
Q: How did the lower demand impact Dice's bookings, which were down 20%?
A: Greg Schippers, CFO: The decline was partly due to multiyear contracts from high-demand periods in 2022 and 2023. As demand decreased, customers adjusted their contract spend, leading to reduced bookings.
Q: Have contractors started seeing funds from EU defense spending?
A: Arthur Zeile, CEO: While there was initial fear of contract terminations, the situation has stabilized. Although no significant funding changes have occurred yet, the ongoing discussions about increasing defense budgets suggest potential future opportunities.
Q: How did the Dodge initiative impact ClearanceJobs in the quarter?
A: Arthur Zeile, CEO: The Dodge initiative created uncertainty, particularly affecting smaller military contractors and new business bookings. However, larger contractors remained confident, and the situation is expected to improve with the proposed defense budget increases.
Q: Will ClearanceJobs maintain its 40% EBITDA margin, or is there room for increased marketing spend?
A: Arthur Zeile, CEO: ClearanceJobs aims to maintain a 40% EBITDA margin. Marketing spend will be targeted and accretive to the margin, focusing on areas like the Western U.S. where there is growth potential.
Q: What is the current new business environment for Dice?
A: Arthur Zeile, CEO: The environment remains challenging for commercial accounts, but staffing and recruiting agencies have exceeded expectations. Companies view hiring through agencies as a less risky option, making it a variable expense rather than a structural one.
Q: Should we expect operating expenses as a percentage of sales to remain steady throughout the year?
A: Greg Schippers, CFO: Yes, expenses should remain relatively flat compared to Q1 2025. However, capitalized development costs will trend down, providing direct cash savings not reflected in EBITDA.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
