DHI (DHX) 8 May 242024 Q1 Earnings call transcript

Good day, and welcome to the DHI Group First Quarter 2024 Financial Results Conference Call. (Operator Instructions) Please note today's event is being recorded. I would now like to turn the conference over to Todd Kehrli of MKR Investor Relations. Please go ahead.

Thank you, Operator. to XXXX welcome Conference Quarter and Call. afternoon, DHI First Group's Earnings Good today's CEO, are CFO, me call With on DHI's Raime Art Leeby. and Zeile

any the Factors statements views securities forward-looking and federal in meaning forward-looking actual and statements the may uncertainties, discussed actual Form DHI events future results that subject undertakes concerning DHI like call results the reflect the webcast Relations The quick and periodic that to and and management financial risks statements. dhigroupinc.com. being be Before cover company's differ Securities statements outcomes archived company's for announcing I forward-looking from statements. Commission. issued note Exchange website Investor its parties, within all turn and the at forward-looking obligation contained the quarter constitute over This remind involve the call, are Internet available will release differ on of forward-looking Art, I the broadcast financial uncertainties. any materially performance on forward-looking and information, and statements Please first results. company's on during and that other management's uncertainties page may no could call update XX-Q website. These today's statements a interested press is a laws. cause and will make is on live This to current in XX-K items. today's I'd few XXXX the afternoon, release except include these over of DHI from call revise or the risks risks historical to reports everyone filings for to to want to that the with the

prepared our non-GAAP measures dhigroupinc.com which GAAP to including the adjusted release, the adjusted Lastly, of during I'll Relations our that the of to CEO copy Investor comparable not website these turn GAAP. and Zeile, measures, are Art at available margin, are be non-GAAP earnings in specific measures that, earnings today's to a Group. EBITDA on in per accordance Information EBITDA, now about With in with over call reconciliation of and management will financial directly referring find U.S. share can call, most you DHI section.

Thank our Todd. time XXXX your today welcome everyone, Good quarter conference provide afternoon, our and outlook. you, call. discuss financial and we first appreciate update to on performance as an earnings We our

First, of business. tech of our is the let's drivers which market, for the labor state discuss main growth one the

in The low of in tech the While increasing of demand suffered to to been from postings we XXXX, CompTIA. from more small X yet, year, we XXX,XXX back March was see point month slump average hiring first but last months in aren't December XXX,XXX by with a pre-pandemic we XXXX per so a have job as in of postings signs improvement. job XXX,XXX reported promising normal

postings in uptick a AI implement job AI-related We also which Corporate business of seeing March demand the to as in year-over-year. contained in America starts models. an all of is XX% their skilled for generative significant are professionals AI increase our skills,

and We that rates, is Accenture, firms elevated projected more indicating is others, U.S. that seeing a becoming the with the the fast trend growth at in workforce like Tech largest United economy behind over as and are to actively tech are as grow occupational hiring overall second companies are twice States time. the Deloitte, long-term also healthcare IBM professionals and prototyping large digital AI consulting piloting solutions. U.S.

profiles. will to As over from and job our million perfect need Gen proprietary X posting businesses the accelerate our of investment algorithms offerings their search their match in initiatives, implementation including the technologist they find technology for subscription-based AI,

talent tech seen the end One our a at became have clients client platform. top leading Dice provider of using and hiring who mission-critical example in a for Our increased facilities M.C. XXXX. success Dean, is attracting

week Within of platform. first through they coming their onboard, the made a hire Dice

has that check-in, already for paid XX-day told Dice itself. their During they us

absolutely using talent one In to A Another of staffing consistently New I'm our above the annual example told best. in firms report Beacon is and very us us final also tech and Montefiore, return premier support Staffing, candidate call to average an example largest of our keep Hill that the solutions our branding is delivers grateful recent York's track United a a of employer that cost academic systems they in attract who the investment. Beacon on told they recruiting environment. the is Hill unequivocally on that is team basis, one team, the health with per Dice competitive States.

decrease quarter Now XX%. quarter, increased let quarter was during performance and previous see ahead a renewals The we decreased difficult our due declined as XXXX. me total the environment. business and revenue revenue lower to new transactional first our bookings lower remainder of dig the onetime the the market In and revenue what X% Dice year-over-year. revenue for Dice CJ in result XX%, while into of first revenue

our transactional revenue, declined recurring total X% Excluding revenue year-over-year.

approximately The the we strong the of improvements a quarter by these Looking the bookings services aerospace, in Notably, quarter and we of we weakened continue tech consulting, ClearanceJobs renewal several in continues in secured said a First market. quarter, November on focus X% platforms. for both did include customers in Bank, of environment. data place those healthcare, view we Coca-Cola, first signed is continuing quarter. the indicate CJ, into leading first and January first contracts and and the year-over-year, tech signed as takes December bookings demand its President see while XXXX March, financial below to increased our economic Kansas started bookings in of potential the actual full that month Dice total of Dice shutdown for education. was In job transactional with XX% the lot the down the quarter a performance, City of notable law hiring appropriations as believe as XXXX sequential the package. activity threat improvement at bookings this fiscal for and the before we which line. City of X% year-over-year our in even We indicator including book during business see of the suppressed were that companies which National in professionals industries to majority trend in past, an have year our the quarter, government to the this industries booking first

see Despite these first Rocket headwinds, new bookings place, improve. we Cushman during Ascendiant, to Wakefield, Incorporated. quarter & our CJ CJ secured With the the certainty and of government several funding in including Lab expect customers,

our XXX%, significant management, revenue and respectively, for Dice respectively. CJ were in Moving are Dice and CJ XX%, both on were renewal first These ClearanceJobs. quarter. the XXX% and XX% Dice to rates sequential for and Retention account and rates improvements

is XX% During the year first quarter, we ago. margin, delivered up a EBITDA from XX% a which adjusted

flow million in for cash versus the $X $X.X was operating the year-ago quarter Our quarter.

year-over-year. our by total We continue operating operating expenses efficiently reduction XX% our to focus on as evidenced in business

the Several can drive send at what Now to evaluation Dice brands. of let A industry, their touch have discover on announced of preferences. company paid Dice to since tried that our Candidates career location, work now technologists with Discover of Companies, of tens policies, candidates' on and a the our easily Dice resumes that experience their and better experience Dice company, the service. service companies align of aspirations. size of also free TopResume hiring. quarter. alert or also X on me new to release we're partnership this increased the whether browse doing now profile they Dice within a new the technologist thousands are based from with to adoption of a beginning a a and job view that opportunities launch the for tailored launched TopResume job candidates displays enables more evaluation. announced advanced remote quickly can actively profiles

applications candidate of successfully our and result year-over-year target for platform delivering many XX the in new were subscription the up are Dice engagement we job of over posting per features, quarter, our total customers. on a applications first As XX%

into product the ClearanceJobs streamed of Live catalog produce engage content allows We their target to employers better innovation also and end going video the at to Live to deliver CJ with continue in candidates. production quarter. CJ with

At We job harder-to-fill unlimited selected have new end already of released signed service. last up company the combine the comprehensive year, page, boosts this job we also over XXX for recruiters CJ positions. to for packages postings, subscription and a

almost quarter, our services. our bookings this all were sold first all across see During the value this format, our combination of highlighting in business in new prospects the teams

package subscription quarter-over-quarter. Importantly, sold improved pricing the average has contract new value

XXXX. about Raime, to I Before for turn I call the of want our talk expectations the rest to over

evidenced there is earlier, number as stated emerging tech demand for I As we that by the believe signs tech of are professionals increasing the job postings. improving

us, the companies best the professionals increasingly has as demand heats past climbs, and their as hire tech tech need digital As initiatives. to attract up, the for intensifies. competition professionals competition our for skilled will platforms this find, And shown talent for

forecast to year maintain in growth a We EBITDA return second XX% the continue margin. a full adjusted and to commitment to bookings our half year-over-year XXXX of

take call move note, anticipated On turn forward, our through you our are go-to-market we'll Raime we our focus financials, increased we have. then to the and who for we so may products demand to capitalize over that Raime? questions me our take will execution As on to you continue that the improving ready and on tools. any let

quarter. you, million, let $XX.X a through prior $XX down bookings our the and for X% the Total Jumping everyone. versus revenue basis and quarter. We good year-over-year. the was financial down were X% you take afternoon, quarter for results total X% reported Thank on me of million, Art, year-over-year which in, right

Dice was mentioned, $XX which year-over-year. Art down the We from Dice which and with recruitment Dice customers, down was quarter. year-over-year. As million, year-over-year ended package down was recurring the and total down were our X% X% last X,XXX XX% bookings down X% first $XX.X sequentially. XX% quarter revenue quarter revenue million, is for XX% down

package sequentially Our to per was customer Dice up average up X% revenue and year-over-year X% annual recruitment $XX,XXX.

came of was and recurring XX% multiyear over quarter, the During or revenue contracts. annual from Dice

up our revenue fourth quarter, the XXX%, quarter, XX% quarter. rate the X% from XX% was in in For ClearanceJobs and from Dice fourth was the renewal up million, Dice up up $XX.X our year-over-year revenue rate XX% retention and XX%, million, up the was $XX.X and reduction sequentially. were slight with to X% year-over-year. X% on Bookings recruitment quarter churn a year-over-year X% sequentially. which customers. customers, was CJ package down We CJ is first smaller attributable X,XXX for This with ended basis

was average CJ XX% revenue and Our X% package sequentially recruitment to year-over-year annual $XX,XXX. up customer per up

recurring XX% annual multiyear or CG quarter, the comes and from is During over revenue of contracts.

in the strong XX% revenue was CJ's retention value rate the retention outstanding of rate continued and delivers professionals. recruitment For rate The CJ's renewal the quarter, XXX%. was cleared CJ demonstrates at

Turning to with in expenses operating $XX XXXX. quarter, ago expenses, savings initiatives million reflecting first the year to down compared were $XX.X XX% in operating when associated to quarter million cost restructuring

also spend drove in integrated of drove efficiencies marketing these more program the through first targeted in campaigns. our quarter. We Both our lower expenses operating initiatives and

tax $X.X the income of income million of For expense taxes $XXX,XXX. we on quarter, had before

rate a compensation state awards and statutory due expense, loss tax quarter from $X.X by a for research $X.XX of $X.X We expenditures. of differed impact to loss discussed. diluted from million per I million the $XXX,XXX as tax previously which net driven rate or from related Our share-based the tax the tax taxes was and to of development recorded expense share, of

of income net have $X.XX For earnings past, the reported non-GAAP prior adjusted we of per measure diluted earnings titled diluted a the $XXX,XXX we share. share. per year provided or In quarter,

the of $X.X of in fixed approximately fourth non-GAAP million the we are finished shares building at million we believe were provides share quarter ago. on Diluted year. million $XX.X increased at cash a primarily quarter for XX% were Operating products XXX or the compared million quarter costs related $XX million from under total and of Adjusted $X.X down of and at current expense, forward, to purchases by million to We a year the results titling was for quarter $X in $X.X the X% our from primarily a assets prior our performance million from both platform. of $X.X the company million to a of Capitalized in compensation the measure this revolver. last Total first back liquidity year. development of new compared million fixed quarter asset compared our purchases Moving to to year per million quarter year in in non-GAAP for debt quarter, development million, outstanding million compared which to $XXX $XX are the first the increased perspective, end period, prior debt capitalized of had $X.X From EBITDA Included the and compared more the QX the Total increase cash end first payroll-related while to million and $X.X features quarter. of $X.X costs that quarter transparent earnings seasonal per of said, first for quarter margin last group. share comparable first add are was $X.X this X to million view in a the current million the X.Xx an earnings prior basis this costs in year diluted from the $XX quarter quarter. expenses. XX%, of the leverage. year our due debt margin we for incurred measure to With $XX.X points quarter noncash stock-based was $X.XX our and flow prior peer was share per quarters. revising to

to continue Deferred approximately first last We the quarter was $XX.X from business. end for target revenue at X% of Xx of down the leverage million, quarter the year. the

of the next and committed Roughly million, $XXX.X the end will XX of as considered was end total quarter the backlog recognized backlog was months. X% the from be which year. contract is short-term Our the last revenue down XX% first at in quarter of the

During did shares share under not buyback the quarter, purchase we our program.

awards. purchase vesting we share-based related However, the did shares to of

withholdings tax the of year. with vesting million For compares the for in awards. for the to shares $X.X income XXX,XXX XXX,XXX shares of cover of employee repurchases share $X.X associated quarter, quarter This million to we repurchased first last

guidance. to on Moving

quarter bookings returning We with of expect our bookings in second performance growth to the total half the second in improve the in year.

tech acceleration quarter, targeting single-digit a quarter total our on second margin growth impacting are revenue, their to we low of customer our will economic to for And percentage our current full drive focused increased the offerings our growth, as companies technologists Art. from profitability expect companies remain increase the in to positioned returns we call which year, revenue year perspective, with EBITDA is me adjusted follow. more revenue to ready To are hiring In up, generative services AI XX%. range. the across to back business believe their the From a and long-term industries sustainable models, focused and improving declining let we similar on all as on driving the implement expect to with will meantime, our industry-leading for we for look be We the are full and environment tech levels. wrap products hiring. go-to-market For investment technology demand we in perspective revenue well normal the first will are that, a execution, capitalize into while we of still initiatives as turn so acquisition demand

hard part of our such thank your to like I'd It we of to quarter. be employees With work great all pleasure again is past that, a happy team. answer are you, questions. to Raime. this Thank a for their

Riley. from (Operator with Instructions) Cummins Zach comes Today's first question B.

Ethan Widell in Cummins. phoning Zach for

you Just my one little your maybe takes any bundling to? end. there on can CJ? strategy you color Are that and a gives point there give incremental with and on Dice Could

pleased more booked job were bookings. and a in I in company subscription found And was level no our job XXX%. have which as will well virtually that for endemic number of associated move with that so job combination accounts the success business also close say slots combination penetration at it our existing of you our We're the not see customers. new to almost XXX%. that postings, all is this really if did mentioned as of nevertheless, new concept this unlimited deals We industry, this we and our Yes. manner, same to boosts there's those with would a We rate business as and bundle, really drives page, of to large almost

when the a price because compared package. move of before in that's is little price to think bit the -- I terms to after you it before higher the this

You get little but more lot a expensive. value, it's a bit more

next question from Street Michaelis with Lake Max comes Our Capital Markets.

for should rate for you segment and guess we just bookings half the then outlook level, segment second improving? expect If the your XX% on growth and I a return half? bookings in Dice to down growth? then rate one Dice growth that Are First the for was lower contracting Dice Or this second of we a Dice what total returning growth think quarter. improvement ClearanceJobs to from assuming and ClearanceJobs, is implying year. to you about are

take our we brands. can and comps it's perspective, hiring year seeing those interest QX rates our And do are versus ease we're 'XX, in transactional to business. QX discussed improvement strengthening packages, renewal the I environment. and that's Sure. comparison a macro new And subscription When throughout in tech both bookings Including the booking difficult a think 'XX expect prior and From just year. we brands. are seeing about year still stabilization was progressive very strengthening fueling still to we strong Art as the one. additional We a as bookings that the retention in our show as related year year-on-year packages both in across revenue brand-specific expecting throughout well as prior.

seeing are it's actually I on look value for as an be, number get as quarter-over-quarter, actual see growth kind this guess then retention product? ATVs and up new sharing guys bundling pricing Like a idea us an good help price we're my standpoint. I to numbers well of you ATV new guess what contract we at And will would next this question if Okay. that bundle, be

or I take fact but not separately, interested to to that of break appreciate themselves. understanding going bundles out in we're that something can is performance whether actively definitely we're the under that everybody consideration. That's debating that as We'll the the

right. All

last did And up, I'll I that guess trend it's but good to XXX May, in I and how that tech into through see guess December. into May? XXX still I from guess good. April? one, are early so queue, now April It's postings Sounds jump back and guess I

that April. definitely it's a it month-over-month. that get we month, our of climbing new with kicked associated comparative as benefit of below the flat a including of wanted of is Ultimately, We're trend we just do to AI, to a because statistically bit X X purposes. that. the seeing level comparison a interesting But amount, activity. March, of days pretty It's job jobs, so baseline business are new more I AI-related I it report April, we to do that XX% say skills. same I'd way job XX% up the March with We're insignificant. have was considerable meaning didn't March. as in postings. into seeing little April towards level mention for think that's kind still this and figure, about AI our I about use all tech

comes Kevin Instructions) Liu next K. Our from with (Operator question Company, Liu & LLC.

And Maybe interest the the about guys little end doing your much how just that? of really a could AI to then standpoint? into driving are from here, Dice platform discussion kind is you bit on talk capitalize a anything on you customer continuing AI

our site And associated with interest articles reports seeing of that activity month. terms we as last job a well a on can are our AI the think issued that you I great lot in question, Kevin. I as tell that's we X of

they a candidates. attend a skilled that have their should interest to how as skills sure of of the that's future. candidates in really candidate career long-format they e-books, think have and what out tremendous then a and as informing terms to about a geared question right AI also can AI AI have we these report put And the how clients a X seen to amount recruit for we've result. the of make report We We that features how to towards or

would you growth hear. to in to question for confidence leads, you some etc., the threat you the of CJ know, quarters, maybe rate bounce maybe on of be second to the ultimately, I of expect in that had for of there just still terms XX% your the obviously, good specific That's outlook? plus things renewed pipeline half side of seeing side growth in back bookings don't year. to kind growth then has in of that but going around. that of government kind What And give the in business? equation, the are that guys? we've Or And shutdown limit the confidence you impact that kind that seen are But would environment

matter. one that uncertainty still is half feel I feel guidance really signals by second Yes. Kforce in passed above. that indicated over that staffing in can signal Robert to we to improving it funding be we specifically speak our the kind we're We can existing is do the the tell ahead I you government other in I and terms year we believe firms of are good a tell also clearly can the clear believe tell would XXXX booking of what also was for seeing tailwind week associated defense pipeline believe I of bullish over their We us budget. growth like March. believe the range. has defense the year. should budget. in pipeline about Half, recruiting month, CJ at do looking for suppressed what that that pipelines. I has That is also fiscal with for confidence us can the of the least seeing growth at in is say for of double-digit you all you very give that of month there That week are division technology again. Robert Half, and that

budget up actually went by you If XX%. that remember,

been result projects, as the not the of the a awards, into system have All of that worked budget.

the because of means of increase budget size what in if going call I for and it think there a will be snake of it projects. kind of ball will you through that the years that golf

lastly right. in and all the there those you to for And just incremental to could of aspects? marketing about spending? on opportunities to then needed Is hear. either half, a lot back That's capitalize the that's of me, second sales trajectory All investments kind talk these the get good of just of on positive and growth

roughly target what this us and right the year. is we're to maintaining of marketing marketing in position The marketing anticipating Hi, And terms our is Raime. the sales in in efficiencies year-on-year that's campaigns. hitting as and XX% XXXX think to spend Kevin, investments spend well down to we sales future, we in I the believe throughout growth is restructuring anticipate related that the what hitting and this on Sure. At marketing mentioned addition that and QX point, based year the in did earlier our QX spend. we throughout EBITDA level the that yet as we're for in sales

larger that spend, we our we levels mechanisms pretty There's anticipate and the we importantly, B candidates see effectively, the as that on going so incrementally team be moderate in kind would I tech this view recovery a be we long, terms team. spend planning headcount. recovery. recovery. We step to not add meaning that to to BXC, very of interest go a that the Kevin, be don't We're or further, of significantly have can to one do sales job we a platforms. maintain our to have It's don't say ability steady to cautious terms And of activity in to V-shape shift slow, most

And like ladies back concludes and to question-and-answer conference over remarks. to I'd turn the this closing gentlemen, management for our session.

thank and for Operator, us all you you, today. thank Well, joining

As meeting. Thank will out our please always, a and management, for DHI would in great you about a if with Todd, to company like Group, and arrange he to you speak have reach any interest or day. help your have questions

for Thank concludes call. you, today's you presentation. This all thank conference attending today's We sir.

disconnect now a may have and wonderful your You lines, day.