DHI Group Q4 2024 Earnings Report

DHI Group EPS Results

• Actual EPS: $0.07
• Consensus EPS: $0.03
• Beat/Miss: Beat by +$0.04
• One Year Ago EPS: N/A

DHI Group Revenue Results

• Actual Revenue: N/A
• Expected Revenue: $34.11 million
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

DHI Group Announcement Details

• Quarter: Q4 2024
• Date: 2/5/2025
• Time: After Market Closes
• Conference Call Date: Wednesday, February 5, 2025
• Conference Call Time: 5:00PM ET

DHI Group (NYSE:DHX) provides data, insights, and employment connections through specialized services for technology professionals and other select online communities in the United States. Its solutions include talent profiles; job postings; employer branding; and other services comprising virtual and live career events, sourcing services, and content and data services that provides tailored content to help professionals manage their careers and provide employers insight into recruiting strategies and trends. The company operates Dice that offers job postings of technology and non-technology companies for industries, such as positions for software engineers, big data professionals, systems administrators, database specialists, project managers, and various other technology and engineering professionals; and ClearanceJobs, an online career community, which matches security-cleared professionals with employers in a secure and private environment to fill the jobs that safeguard its nation. It serves small, mid-sized, and large direct employers; staffing companies; recruiting agencies; staffing and consulting firms; and marketing departments of companies, as well as direct hiring companies. The company offers its products and services primarily through its direct sales force and agency partner channel. The company was formerly known as Dice Holdings, Inc. and changed its name to DHI Group, Inc. in April 2015. DHI Group, Inc. was founded in 1990 and is headquartered in Centennial, Colorado.

DHI Group Q4 2024 Earnings Call Transcript

Presentation

[Operator]

Please note, this event is being recorded. I would now like to turn the conference over to Todd Curley of Pondo Wilkinson Investor Relations.

[Operator]

Please go ahead.

[Todd Kehrli, PondelWilkinson, IR at DHI Group]

Thank you, operator. Good afternoon, and welcome to DHI Group's twenty twenty four fourth quarter and full year earnings conference call. With me on today's call are DHI's CEO, Art Zaley and CFO, Greg Skars. Before I turn the call over to Art, I'd like to cover a few quick items. This afternoon, DHI issued a press release announcing its twenty twenty four fourth quarter and full year financial results.

[Todd Kehrli, PondelWilkinson, IR at DHI Group]

The release is available on the company's website at dhigroupinc.com. This call is being broadcast live over the Internet for all interested parties and the webcast will be archived on the Investor Relations page of the company's website. I want to remind everyone that during today's call, management will make forward looking statements that involve risks and uncertainties. Please note that except for the historical information, statements on today's call may constitute forward looking statements within the meaning of the federal securities laws. These forward looking statements reflect DHI Group's current views concerning future events and financial performance and are subject to risks and uncertainties, and actual results may differ materially from the outcomes contained in any forward looking statements.

[Todd Kehrli, PondelWilkinson, IR at DHI Group]

Factors that could cause these forward looking statements to differ from actual results include the risks and uncertainties discussed in the company's periodic reports on Form 10 K and 10 Q and other filings with the Securities and Exchange Commission. DHI undertakes no obligation to update or revise any forward looking statements. Lastly, during today's call, management will be referring to specific financial measures, including adjusted EBITDA, adjusted EBITDA margin, free cash flow and non GAAP earnings per share that are not prepared in accordance with U. S. GAAP.

[Todd Kehrli, PondelWilkinson, IR at DHI Group]

Information about and reconciliations of these non GAAP measures to the most directly comparable GAAP measures are available in our earnings release, a copy of which you can find on our website at dhigroupinc.com in the Investor Relations section. I'll now turn the call over to Art Zaley, CEO of DHI Group.

[Art Zeile, President , CEO & Director at DHI Group]

Thank you, Todd. Good afternoon, everyone, and welcome to our twenty twenty four fourth quarter earnings conference call. We appreciate your time today as we review our financial performance for the fourth quarter and the full year and provide our outlook for 2025. Let's begin with an overview of our performance and the actions we've taken to strengthen our position moving forward. Despite a 7% revenue decline in 2024, we delivered full year adjusted EBITDA of $35,300,000 a margin of 25%, up from a margin of 24% a year ago.

[Art Zeile, President , CEO & Director at DHI Group]

During the year and including our recently announced restructuring, we have reduced our total operating costs by over $10,000,000 while enhancing our product offerings and strengthening our sales and marketing organization. The savings are approximately evenly split between operating expenses and capitalized development costs. These actions position us well for return to a normal tech hiring environment and increased demand for our solutions. As part of our restructuring conducted three weeks ago, we split our operations into two distinct brands of Dice and ClearanceJobs. This reorganization provides dedicated leadership for each brand, enabling tailored strategies that enable and align with their unique market dynamics and different customer bases.

[Art Zeile, President , CEO & Director at DHI Group]

It also establishes a line of business structure that aligns sales, marketing, product and development functions under a brand leader, while maintaining centralized support for human resources, finance and technology operations to efficiently manage employees, business systems and public company obligations. Ultimately, the restructure enhances profitability, while at the same time unlocking greater long term strategic opportunities for each brand. It also sets us up to provide more specific brand financial reporting this year. Now, let's dig into the current state of the tech labor market, which is a key growth indicator for our business. Encouragingly, we are starting to see green shoots of increased demand.

[Art Zeile, President , CEO & Director at DHI Group]

Revenue renewal rates for both brands improved at the end of the quarter and we've seen solid new business bookings in our staffing and recruiting business. While the number of new tech job postings is approximately 70% of normal, we believe we are starting the new year off with a positive trajectory. A promising sign of recovery, albeit slowly, is the steady rise in new tech job postings. According to CompTIA, these postings experienced a notable rebound in the second half of twenty twenty four compared to the first half. During the first half of the year, new tech job postings fell 28% year over year, but momentum shifted in the latter half showing a 12% increase.

[Art Zeile, President , CEO & Director at DHI Group]

In December alone, which is traditionally a slow month, more than 165,000 new tech job postings were created, representing a 16% year over year increase. We believe this trend signals a steady, albeit gradual recovery is taking shape for the tech hiring demand. Additionally, the tech unemployment rate remained low at approximately 2% in December, highlighting a tight labor market for tech talent. These positive trends align with projections from staffing industry analysts, which forecasts a 5% growth in tech staffing hiring or revenue, I should say, in 2025. This follows a 7% decline in 2024 and a 10% drop in 2023, suggesting a shift towards recovery in the tech staffing market.

[Art Zeile, President , CEO & Director at DHI Group]

This optimistic outlook was developed through extensive interviews with staffing recruiting firms reflecting a shared confidence in the industry's improved performance in the year ahead. Another encouraging demand signal comes from LightCast, which tracks new tech recruiter job postings. In the second half of twenty twenty four, tech recruiter job postings increased 22% year over year. An increase in hiring of tech recruiters often precedes a broader rise in demand for tech professionals. As businesses ramp up their investment in technology initiatives such as AI, platforms like ClearanceJobs and Dice will be essential tools for employers seeking top tech talent from our database of 9,000,000 tech professionals.

[Art Zeile, President , CEO & Director at DHI Group]

We continue to hear success stories from our clients like Zions Bank Corporation's corporate recruiter who said, being able to search for active and engaged IT candidates is a huge asset. Dice is a must have tool in your tool belt if you are a technology recruiter. Now, let me dig into our performance during the fourth quarter and what we see ahead for 2025. In the fourth quarter, total revenue declined 7% year over year. ClearanceJobs saw an increase of 7%, while Dice saw a decrease of 14%.

[Art Zeile, President , CEO & Director at DHI Group]

Excluding transactional revenue, our total recurring revenue declined 5% year over year. Looking at our bookings performance, our total bookings were down 9% year over year in the fourth quarter. ClearanceJobs bookings for the fourth quarter was flat year over year. The defense budget continuing resolution and uncertainty due to a possible government shutdown as well as the change of administration impeded our CJ bookings, but we believe that a one party government now favors a more consistent defense contracting environment. Defense spending remains a high priority for Congress and we believe that CJ will benefit as a result.

[Art Zeile, President , CEO & Director at DHI Group]

During the quarter, CJ secured several new customers including Hughes Network Solutions, Trillion Technology Solutions and Innovion Solutions. With CJ serving approximately 2,000 of the more than 10,000 employers hiring cleared tech professionals and over 100 government agencies also in need, there is a significant growth opportunity ahead for CJ. Looking at Dice's business performance, its bookings for the fourth quarter declined 14% year over year due to the budget constraints imposed by employers and staffing firms in 2024. Nevertheless, Dice secured several notable customers this quarter, including Doctor. Horton, the U.

[Art Zeile, President , CEO & Director at DHI Group]

S. Bureau of Diplomatic Technology and General Motors. On the new business front, we continue to focus on recession resistant sectors like consulting, aerospace defense, healthcare, financial services and education. In terms of renewals, CJ and Dice revenue renewal rates were 9377% respectively, and our retention rates for CJ and Dice were one hundred and eleven percent and ninety seven percent respectively. On the bottom line during the fourth quarter, we delivered a 26% adjusted EBITDA margin, slightly down from 27% a year ago.

[Art Zeile, President , CEO & Director at DHI Group]

However, as mentioned earlier, our capitalized development expenses declined by 23% year over year contributing to free cash flow conversion. Now, let me quickly touch on what we're doing to drive increased adoption of our two brands. For ClearanceJobs, we are preparing to launch CJ Verify by the end of the first quarter. As discussed on our last conference call, this product enables individual members to ascertain their government security status for a fee. CJ is also developing a paid candidate subscription service similar to LinkedIn Premium that will offer enhanced functionality beyond the standard candidate experience.

[Art Zeile, President , CEO & Director at DHI Group]

We plan to launch this offering by mid year and if successful we'll explore introducing a similar subscription model for Dice. For Dice, our all jobs initiative continues to fuel job posting growth, driving higher candidate engagement and application activity. In 2024, Dice averaged 1,600,000 monthly job applications, marking a 30% year over year increase and further reinforcing its position as the leading tech career marketplace. We believe in the virtuous cycle where increased candidate activity attracts more recruiters, strengthening our subscriber base. Candidate success on Dice is integral to maintaining a balanced two sided marketplace and advancing our mission of connecting tech professionals with meaningful careers.

[Art Zeile, President , CEO & Director at DHI Group]

A recent candidate testimonial underscores this impact commenting, I have found all my jobs on Dice. I'd also like to highlight the success of our comprehensive subscription packages, which include unlimited job postings, company pages and job boosts, not to mention a higher average selling price. Since its launch in November of twenty twenty three, '90 '8 percent of all new business deals were signed in these packages and 10% of our renewed customer accounts converted to this comprehensive subscription package with an average retention rate of 106%. In 2025, our key project product initiative for Dice is a total reimagination of the Dice Web Store aimed at boosting customer adoption among individual recruiters and small and medium sized businesses in a self serve manner. Recruiters will be able to purchase individual Dice services directly through our site using a credit card, paving the way for broader market engagement.

[Art Zeile, President , CEO & Director at DHI Group]

With over 30 beta customers currently testing the early functionality of the platform today, we are on track to be fully launched by the end of the year. Moving on to guidance. While tech job postings are showing signs of improvement, we anticipate a slow and steady recovery. For the full year 2025, we expect CJ bookings to grow. However, we do not expect total bookings growth to resume until tech hiring normalizes.

[Art Zeile, President , CEO & Director at DHI Group]

As a result, we anticipate revenue of $131,000,000 to $135,000,000 for the full year. In the first quarter, we expect revenue of $32,000,000 to $33,000,000 As tech hiring gradually improves throughout the year, we anticipate growing demand for our tech hiring solutions driving increased momentum. In the meantime, we are focused on delivering strong profits for our shareholders and are targeting a 24% adjusted EBITDA margin for the full year 2025. As a result, our Board approved a new $5,000,000 stock buyback program a couple of weeks ago as it believes as we do that our shares are trading below their intrinsic value due to the soft tech hiring environment. Before I wrap up, I'm pleased to announce that Greg Skippers is no longer serving as our Interim CFO, but has officially been appointed our Chief Financial Officer.

[Art Zeile, President , CEO & Director at DHI Group]

As noted during our last earnings call, Greg brings over a decade of experience with DHI Group and has consistently demonstrated exceptional financial expertise in key areas vital to this role, including strategic financial planning, rigorous fiscal oversight and sound decision making. He has shown outstanding leadership in budget management, operational efficiency optimization and maintaining the highest standards of financial integrity. Greg's sharp analytical skills, attention to detail and commitment to transparency make him an excellent choice for this position. I am confident in his abilities and look forward to his continued success in this role. In closing, we have strengthened our business over the past year and are well positioned to capitalize on a steadily improving tech hiring environment.

[Art Zeile, President , CEO & Director at DHI Group]

We remain committed to delivering greater value for our shareholders and look forward to sharing updates on our progress in the months ahead. With that, I'll hand the call over to Greg to walk you through our financials and then we'll open up the floor for questions. Greg?

[Greg Schippers, CFO at DHI Group]

Thank you, Art, and good afternoon, everyone. Before I begin, I want to express how excited I am to take on the role of CFO and how energized I feel about contributing to the growth of this business. I also look forward to building relationships with our shareholders and the analysts who cover DHI. Now let me take you through our financial results for the quarter. Please note that in the fourth quarter, we reclassified our career events bookings and revenue, which had previously been included in Dice, to allocate them between ClearanceJobs and Dice based on the nature of the event.

[Greg Schippers, CFO at DHI Group]

Bookings and revenue were recast by quarter beginning with the first quarter of twenty twenty two and can be found in our investor presentation, which will be posted to the Investor Relations tab on the DHI Group website shortly after this call. We reported total revenue of $34,800,000 which was down 7% on a year over year basis and down 1% versus the third quarter. Total bookings for the quarter were $32,900,000 down 9% down 9% year over year. Our total recurring revenue was down 5% for both the fourth quarter and for the full year, and the bookings that drive our recurring revenue were down 11% for the fourth quarter and 6% for the full year. ClearanceJobs revenue was $13,800,000 up 7% year over year but down 1% sequentially.

[Greg Schippers, CFO at DHI Group]

Bookings for CJ were $14,200,000 flat year over year. We ended the fourth quarter with nineteen forty nine CJ recruitment package customers, which was down 5% on a year over year basis and down 2% on a sequential basis. This reduction is attributable to churn with smaller customers, whereas the number of CJ accounts spending greater than $15,000 in annual recurring revenue has increased and is up approximately 15% versus prior year. Our average annual revenue per CJ recruitment package customer was up 15 year over year and up 2% sequentially to $25,148 Approximately 90% of CJ revenue is recurring and comes from annual or multi year contracts. For the quarter, CJ's revenue renewal rate was up sequentially to 93% and CJ's retention rate was strong at 111%.

[Greg Schippers, CFO at DHI Group]

The outstanding retention rate demonstrates the continued value CJ delivers in the recruitment of cleared professionals. Dice revenue was $21,000,000 which was down 14% year over year and down 2% sequentially. Dice bookings were $18,700,000 down 14% year over year. We ended the quarter with 4,711 DICE recruitment package customers, which is down 3% from last quarter and down 14% year over year. This reduction is attributable to churn with smaller customers spending less than $15,000 per year.

[Greg Schippers, CFO at DHI Group]

Our average annual revenue per Dice recruitment package customer was up slightly compared to the third quarter and up 4% year over year to $16,380 As with CJ, ninety percent approximately 90% of Dice revenue is recurring and comes from annual or multi year contracts. For the quarter, our Dice revenue renewal rate was 77% and its retention rate was 97%. Turning to operating expenses. Fourth quarter operating expenses were down 2% to 33,100,000 when compared to $33,800,000 in the year ago quarter. Our fourth quarter operating expenses reflect the cost savings associated with our restructuring in the third quarter of twenty twenty four.

[Greg Schippers, CFO at DHI Group]

Because of the more difficult market conditions in 'twenty three and 2024, we reduced costs through restructurings in the second quarter of twenty twenty three, in the third quarter of twenty twenty four and again in January of this year. Together, these restructurings have reduced our annual operating expenses and capitalized development costs by approximately $20,000,000 We continue to focus on our operational efficiency. For the quarter, we had an income tax benefit of $50,000 on income before taxes of $972,000 Our tax rate for the quarter differed from our approximate statutory rate of 25% due primarily to the reversal of liabilities for uncertain tax positions as federal and state statutes expired. We also remain committed to preserving our capital loss carry forward, which exceeds $100,000,000 and is an important asset for maximizing shareholder value. To safeguard this asset, we implemented a Section three eighty two rights plan last week.

[Greg Schippers, CFO at DHI Group]

This plan is designed to protect our capital loss carryforward, ensuring we can offset any potential future capital gains tax. Moving on to the bottom line, we recorded net income of $1,000,000 or $0.02 per diluted share in the fourth quarter. For the prior year quarter, we reported a net income of $2,100,000 or $0.05 per diluted share. Non GAAP earnings per share for the quarter was $0.07 compared to $0.08 for the prior year quarter. Diluted shares outstanding for the quarter were $45,900,000 compared to 44,600,000.0 shares in the prior year quarter.

[Greg Schippers, CFO at DHI Group]

Adjusted EBITDA for the fourth quarter decreased 9% to $9,200,000 a margin of 26 compared to $10,100,000 or a margin of 27% in the fourth quarter a year ago. Operating cash flow for the fourth quarter was $4,400,000 compared to $7,600,000 in the prior year period. Free cash flow, which is operating cash flows less capital expenditures, was $1,600,000 for the fourth quarter compared to $2,400,000 in the fourth quarter of last year. Our capital expenditures primarily consist of capitalized development costs, which were $2,700,000 in the fourth quarter compared to $3,600,000 in the fourth quarter last year, a savings of $800,000 or 23%. For the full year, operating cash flows were $21,000,000 which approximated the $20.23 level.

[Greg Schippers, CFO at DHI Group]

Free cash flow for the current year was $7,100,000 a $6,000,000 increase over the prior year, which included a $3,900,000 decrease in capitalized development costs year over year. Over time, we are targeting free cash flow at 10% of annual revenue. Following the restructurings, we expect further reductions to our capitalized development costs in 2025. We are targeting total capital expenditures in 2025 to range between $10,000,000 and $11,000,000 as compared to $13,900,000 last year. By consolidating our tech organization to a smaller number of teams with subject matter expertise in adjacent areas, we are expecting to accelerate our product release schedule and enhance our overall efficiency.

[Greg Schippers, CFO at DHI Group]

From a liquidity perspective, at the end of the quarter, we had $3,700,000 in cash and our total debt was $32,000,000 under our $100,000,000 revolver, resulting in leverage at 0.9 times our adjusted EBITDA. Total debt outstanding decreased $6,000,000 from $38,000,000 at the end of last year. We continue to target one times leverage for the business. Deferred revenue at the end of the quarter was $45,500,000 down 9% from the fourth quarter of last year. Our total committed contract backlog at the end of the quarter was $111,300,000 which was up 3% from the end of the fourth quarter last year.

[Greg Schippers, CFO at DHI Group]

Short term backlog was $85,200,000 at the end of the fourth quarter, a decrease of $4,600,000 or 5% year over year. Long term backlog, that is revenue to be recognized in thirteen or more months, was $26,000,000 at the end of the quarter, an increase of $7,700,000 or 42% from the prior year quarter. During the quarter, we did not purchase shares under our share buyback program. For the year, we repurchased 800,000.0 shares for $1,900,000 to cover income tax withholdings associated with the vesting of employee shares. As Art mentioned, our Board recently approved a new $5,000,000 stock repurchase program, which will begin this month and will run through February 2026.

[Greg Schippers, CFO at DHI Group]

Adding to the guidance that Art provided, we are targeting an adjusted EBITDA margin of 24% for the full year as lower capitalized development costs contribute to free cash flow. Our focus remains on achieving long term sustainable revenue growth and we are well positioned to drive customer acquisition and capitalize on opportunities when tech hiring returns to normal levels. To wrap up, while the hiring environment over the past two years has impacted our growth, we anticipate that companies across all industries will steadily increase their investment in technology initiatives in 2025 and beyond. We believe this will drive greater demand for our products and services. In the meantime, we remain focused on enhancing our industry leading offerings, optimizing our go to market execution and doing so efficiently, ensuring we are well positioned to capitalize on this opportunity.

[Greg Schippers, CFO at DHI Group]

And with that, let me turn the call back to Art.

[Art Zeile, President , CEO & Director at DHI Group]

Thank you, Greg. I want to thank all of our employees again for their hard work and one team effort this past year. It is a pleasure to be part of such a great team. With that, we're happy to answer your questions.

[Operator]

We will now begin the question and answer session. Our first question today is from Zack Cummins with B. Riley FBR. Please go ahead.

[Zach Cummins, Senior Research Analyst at B. Riley Securities]

Hi, good afternoon, Art, and congrats, Greg, on appointment to the permanent CFO position. Art, I just wanted to ask you about Dice and the business prospects as you're thinking about 2025. It seems like you're assuming a slow and steady recovery as we move throughout the year. I'm just curious what you're hearing from your staffing side of the business versus maybe what you're hearing from the commercial accounts?

[Art Zeile, President , CEO & Director at DHI Group]

We've that's a great question, Zack. And we've always had this thesis that staffing would have a return to kind of normalcy before our commercial accounts. And it seems like that's happening right now. In fact, it seemed like the turning point was really the end of last year when a lot of people were deciding their budgets and it feels a lot more bullish, a lot more positive. I'd say that the one area that feels like it's firming up and stabilizing is both the renewal activity associated with our staffing accounts as well as new business activity.

[Art Zeile, President , CEO & Director at DHI Group]

And that is consistent with that SIA report that indicates that we're going to see or it's forecasting that we're going to see 5% revenue growth for 2025.

[Zach Cummins, Senior Research Analyst at B. Riley Securities]

Understood. And my one follow-up question is more towards CJ. Just given all the efficiency initiatives within the current administration, any concerns for CJ's prospects as we move throughout the year amidst these different organizations?

[Art Zeile, President , CEO & Director at DHI Group]

That's another great question. A number of our investors have asked us that same question as to what we're hearing about whether or not contract activity will be cut or that there will be a view to reduce the defense budget. Right now, we are not seeing that in terms of the activity levels for CJ new business as well as account renewals. And we do believe that Congress is firmly committed to the existing and enhanced defense budget. So we haven't seen any direct impact to activities like Doge, but it remains to be seen, obviously, in the weeks and months to come.

[Zach Cummins, Senior Research Analyst at B. Riley Securities]

Understood. Well, thanks for taking my questions and congrats on the stabilizing results in Q4.

[Art Zeile, President , CEO & Director at DHI Group]

Really appreciate that, Zack.

[Greg Schippers, CFO at DHI Group]

Thank you.

[Art Zeile, President , CEO & Director at DHI Group]

Thank you.

[Operator]

The next question is from Gary Prestopino with Barrington Research. Please go ahead.

[Gary Prestopino, Vice President & Senior Research Analyst at Barrington Research Associates]

Hi, good afternoon, Art and Greg. A couple of questions here. First of all, in terms of the cash, I'm just looking at it and if you hadn't paid down debt, you used cash throughout the year to pay down debt, I guess, is what I'm getting. And if you hadn't paid down debt, the cash on hand would have been much higher in Q4. Is that kind of a correct assumption?

[Greg Schippers, CFO at DHI Group]

Yes. We used approximately $6,000,000 of cash to pay down debt and then almost $2,000,000 to repurchase shares under share vestings from our share programs with employees.

[Gary Prestopino, Vice President & Senior Research Analyst at Barrington Research Associates]

All right. And then I guess I'm just having just a little bit of problem reconciling some of this here. You said you've cut your expenses by about $20,000,000 or your expenses including $10,000,000 of OpEx and $10,000,000 of capitalized expenses. I realize in the capitalized expenses, they get amortized over a year or two, right, or two years. But is your P and L not going to feel the full effect of that $10,000,000 decline in operating expenses?

[Gary Prestopino, Vice President & Senior Research Analyst at Barrington Research Associates]

Because of why wouldn't it, I guess, is what I'm getting at, that would cause your EBITDA margin to not be a little bit higher.

[Greg Schippers, CFO at DHI Group]

Yes. No, that makes complete sense, Gary. So you're correct, it's roughly a fifty-fifty split between capitalized development costs and OpEx. So you can think about $20,000,000 of cash savings, but the timing of that flowing through, those savings started with the bigger chunk of it being in 2023 in that restructuring, which was $8,000,000 to $10,000,000 million dollars the last two that we did in the middle of last year and then just now we're each call it approximately $5,000,000 in the $4,000,000 to $6,000,000 range for each one. So you'll see more of those savings coming through in 2025 if you get the full year impact of the cash savings.

[Greg Schippers, CFO at DHI Group]

Otherwise, it was kind of amortized in, if you will, over time because they were staggered over six to eight months in between.

[Gary Prestopino, Vice President & Senior Research Analyst at Barrington Research Associates]

And then, Art, when or will you be doing more in-depth segment reporting in terms of either operating income or adjusted EBITDA

[Greg Schippers, CFO at DHI Group]

our intention is to dive into that immediately following actually, our intention is to dive into that immediately following actually our earnings process here. And our finance team will have the goal of getting there in the first half of this year. And we'll have more to come on that here in the next couple of months.

[Gary Prestopino, Vice President & Senior Research Analyst at Barrington Research Associates]

Okay. That's great. That's all I need to know. Thank you.

[Greg Schippers, CFO at DHI Group]

You're welcome.

[Art Zeile, President , CEO & Director at DHI Group]

Thanks, Gary.

[Operator]

The

[Operator]

next question is from Max Michalis with Lake Street Capital Markets. Please go ahead.

[Max Michaelis, Research Analyst at Lake Street Capital Markets, LLC]

Hey, guys. Just a couple from me. Thanks for taking my questions. And Greg, congrats on the promotion.

[Greg Schippers, CFO at DHI Group]

Thank you.

[Max Michaelis, Research Analyst at Lake Street Capital Markets, LLC]

When we look at bookings in 2025, I know you guys don't expect bookings growth. You do expect clearance jobs growth. But I guess, just wondering if you could help me out a little bit just with Dice contracting 15% in the year. I mean, from current internal, when you guys look out to 2025 and internally when you guys look at bookings growth or decline, whatever you want to call it, I mean, are you expecting an improvement in 2025 from 2024, I guess, on both segments, maybe Dice from the decline of 15% and ClearanceJobs from 4% growth in 2024? Or are you kind of just holding back?

[Greg Schippers, CFO at DHI Group]

Yes. So we are expecting, as we mentioned kind of on the call here that we do expect some growth at CJ and continues to have strong demand and with the government having one political party kind of in charge will help with the defense budget, getting that certainty in place. But DICE, yes, DICE continues, we're not expecting anything and we're not budgeting for anything to improve in the market at this point. We're staying on the conservative side of that. That said, from a year over year basis as you go through the year, we do expect some improvement throughout the four quarters of twenty twenty five on a year over year basis in bookings.

[Max Michaelis, Research Analyst at Lake Street Capital Markets, LLC]

Okay. That's

[Max Michaelis, Research Analyst at Lake Street Capital Markets, LLC]

it for me guys. Thanks.

[Art Zeile, President , CEO & Director at DHI Group]

Thanks Max.

[Operator]

The next question is from Kevin Liu with K. Liu and Company. Please go ahead.

[Kevin Liu, Founder & CEO at K. Liu & Company LLC]

Hey, good afternoon guys. Maybe just to revisit the C. J. Part of the business, wanted to clarify whether you guys feel you have any exposure today to either the Department of Education or other agencies that may potentially be on the chopping block here or if all of your exposure there is primarily tied to defense budget activity?

[Art Zeile, President , CEO & Director at DHI Group]

That's a great question, Kevin. And I would say that we really don't have any exposure from the kind of non cleared agencies that are operating. I would say it's always the intelligence community and those that are associated with defense that are interested and have the wherewithal and the ability to directly license with ClearanceJobs. So, if you think of it this way that if there are major changes with that with the intelligence community agencies like CIA, FBI, DIA, NSA that could affect us. But otherwise, we're not necessarily exposed to the broader number of agencies that operate under the government.

[Art Zeile, President , CEO & Director at DHI Group]

And that's not to say that we're out of the woods or that they won't be targeting those agencies, but it seems less likely, though not impossible.

[Kevin Liu, Founder & CEO at K. Liu & Company LLC]

Got it. No, I appreciate that. And just as it relates to Dice, I'm wondering as we look at your forecast for revenue for the year, what are the expectations around kind of the non recurring portion of the business versus the recurring? And then just related to that with kind of the new Dice story coming out, what exactly is kind of different about what you guys are introducing there versus what you've done historically?

[Greg Schippers, CFO at DHI Group]

I'll take the first part of that, Kevin. So from a recurring and non recurring business, so that's basically our annual packages on the recurring side. We don't we're not anticipating improvement in that transactional or non recurring business in 2025. If the tech recruiting market really picks up, as we mentioned, then do we have the opportunity for some upside there, but it's at this point, we're not seeing it. And so we're going to project out that we're similar to how we were in 2024.

[Greg Schippers, CFO at DHI Group]

And just for purposes of kind of what that relates, it's about 90% recurring and less than 10% non recurring. And we project that into 2025 as well.

[Art Zeile, President , CEO & Director at DHI Group]

Yes. And Kevin, I'll follow-up by saying that we believe that those transactional products are generally associated with hiring urgency. So if we do see those transactional products become more needed by our customer base, that would be a very good thing because it would say that the market is tightening significantly and people are having a harder time finding tech talent. The second part of your question is a good one. What are we envisioning for Dice's future and how we want to reestablish its brand?

[Art Zeile, President , CEO & Director at DHI Group]

We are embracing this idea of a new Dice web store. It's been a development that's been underway for at least a year, probably more like a year and a half when you think about the planning period. And it will embrace what's called product led growth. It will allow individual recruiters to, for example, buy a subscription package on their own using a credit card. They'll be able to, in the future, buy a number of profile views if they have a real problematic position and they're trying to find more resumes to fulfill that position.

[Art Zeile, President , CEO & Director at DHI Group]

And the hope is that by getting a taste of Dice, they'll convince their HR leader that they need a larger subscription for the whole team. So it's kind of a way of getting a foot in the door for new organizations that we can't necessarily talk to every day just because we have limited sales capacity.

[Kevin Liu, Founder & CEO at K. Liu & Company LLC]

Yes. Makes sense. And then just lastly for me, as we think about kind of the marketing spend for this year, is it expected to be pretty steady throughout the year or are there certain periods where you expect it to be more pronounced than others?

[Art Zeile, President , CEO & Director at DHI Group]

Yes. So I could tell you that marketing spend is seasonal in a sense. We know that recruiters and candidates are taking vacations in the summertime. They're also enjoying the holidays in November and December. And we tailor the spend in those two periods downward as a result because we're just not going to see the eyeballs that we expected through our regular digital marketing campaign effort.

[Kevin Liu, Founder & CEO at K. Liu & Company LLC]

Got it. That's all for me. Good luck as you guys make your way through this year.

[Art Zeile, President , CEO & Director at DHI Group]

Well, I really appreciate it, Kevin. Thank you.

[Operator]

This concludes our question and answer session. I would like to turn the conference back over to Art Zalief for any closing remarks.

[Art Zeile, President , CEO & Director at DHI Group]

Thank you, Gary, and thank you for all of you joining us today. As always, if you have any questions about our company or would like to speak with management, please reach out to Todd and he will help arrange a meeting. Thank you for your interest in DHI Group and have a wonderful day and week.

[Operator]

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

Participants

Executives

• Todd Kehrli, PondelWilkinson, IR
• Art Zeile, President , CEO & Director
• Greg Schippers, CFO

Analysts

• Zach Cummins, Senior Research Analyst at B. Riley Securities
• Gary Prestopino, Vice President & Senior Research Analyst at Barrington Research Associates
• Max Michaelis, Research Analyst at Lake Street Capital Markets, LLC
• Kevin Liu, Founder & CEO at K. Liu & Company LLC