DHI (DHX) 12 Nov 242024 Q3 Earnings call transcript

Good day, and welcome to the DHI Group, Inc.

Third Quarter 2024 Financial Results Conference Call. [Operator Instructions] Please note this 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 third Group's earnings Good today's CEO, are CFO, me call With on DHI's Raime Art Leeby. and Zeile;

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

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

our and state call. Thank labor time conference We you, on market, afternoon, a let's today financial our and tech Todd. which update an we begin, our earnings quarter Good of discuss to third the everyone, appreciate XXXX our your quarter for outlook. To encouraging the growth tech serves CompTIA, steady current a as increase X% as the indicator increase point provide address performance tech over quarter welcome key were new that starting standout for third labor in job of XXXX, see business. One trajectory postings. According year-over-year. to signal for is demand. We're postings XXX,XXX created a job tech positive in to the to new trends marking

highlight confidence half, which and expect previous decisions the decrease analysts, staffing next highlighting revenue. by September, by These year. Over spend, staffing numbers for the XX% recruiting new October. finance recently workforce growth cut. released their improved the market in X.X% at interviews strategy of senior end industry with growth on shows a unemployment million emerging at in Our financial XXX,XXX of I for staffing as in U.S. on addition performance that recently being broader starting such rate rate, signs industry. Other this well, increase postings, recovery based tech annual across interest over a more predicting that from year-over-year influencing marking positive labor signals currently XXXX, or RGP, anticipate makers services are of in also investments is the a its by the These recently with tech $XXX and research data forecast to increase XX% findings transformation were at fall which collective forecast firm, rising surveyed is findings XX% company sector positive stands released extensive take decision end the align and X% XX% survey place digital while to October our These are believe recent tech a metric year-over-year are professional a companies' influenced as XXXX. Global executives with over job there jobs, representing reflects the And In growth X mid-XXXX. This year. year. first tech firms increase. the positive are and XXX,XXX from new in the based released encouraging decisions Fed's key investment organizations of of XXX the challenges,

from strong suggests a recruiters tech postings. Another job uptick small early in more September, recruiter demand Hiring [ the ], tech tracks Lightcast albeit From XXX%, base. comes professionals. a postings a demand year signal which tech new surged over from for future this to

ClearanceJobs top platforms As our be businesses talent ramp and as tech initiatives technology up their essential from investment database X.X of tools will like technology Dice for such professionals. million in AI, employers seeking

Head Global continues right the said on said hear considers Bank Dice secret Mellon's gold that talent. who We candidates other a that be continue front York for of our to not sourcing or Network, are to of DISH of clients, has of whose get to us from Dice stories New talent leading supervisor mine like she success in Sourcing, platforms, acquisition a solution

aligned engaged for value calls positions job technical recent trust As I online for a X-sided In important a site. experience set with continues skill have program received strategic to any survey, other the search on is told Reinforcing my be and equally a Dice more both recruiters marketplace, brands. than our us, from to candidate candidates of a platform manager priority the on success. our

month IT Dice differentiator. a Forbes in job at overall top the once is named employers also skills we Loved Our were ability standings. to Newsweek year, in July, Most where for Magazine, efficiently key last with And match named in seekers. Magazine We featured proprietary of using #XX one again coming website the top our algorithm candidates mapping Workplaces the this were in

me the into XXXX. and the let of increase while performance saw Now quarter, for X% of quarter ahead of Dice third decrease In a our the saw third remainder we XX%. what during an total dig bit more ClearanceJobs see revenue year-over-year. declined X%, a

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

were to its in its the in what pace million is which increased second revenue turn, continued demand at growth third than down we year-over-year a ClearanceJobs the tech be in our pressure professionals bookings military This, total the will X% government our though bookings saw CJ over trend funding, which dominant for ClearanceJobs cleared with awards. There year-over-year, line. third marketplace matching slower growing more contract tech is delays last will third quarter, quarter professionals. continues for bookings quarter fuel in year-over-year clearances the we believe for projects. the the ultimately where Looking in result quarter, increased X% due performance, historical to slightly X.X still government at below quarter. in with

need it. professionals has cleared secured With Equinix, and over During several Accrete.AI. in significant of CJ quarter, Annapolis growth tech employers tech agencies and Systems also CJ cleared of over XX,XXX including professionals, ahead Micro XXX of a government customers, new the opportunity

the lower transactional business quarter, customers to quarter declined this Dice firms. staffing new its year-over-year budget several the D.R. several business Dice's well continued notable bookings was both due performance, XX% secured over quarters -- to year-over-year within as Dice Perdue bookings third lower due constraints and Origin, at constrained past including renewals for revenue revenue. Nevertheless, budget and Farms Looking as and lower employers Horton. Blue

aerospace, financial education. the services we On new to focus business healthcare, consulting, continue and front, recession-resistant sectors business on like

renewals, revenue respectively. and and retention XXX% XX% and and renewal were of rates CJ XX%, for terms Dice In were Dice And our CJ rates XX%, respectively.

lower of couple the a levels Dice staffing given saw which larger environment, usage at we quarter, the renewal our customers demand impacted rate. weak renew During

renewal XX%. improved However, accounts actually to revenue our our for rate commercial

approximately approach contract the the XX% we their fourth we year, engaging up XXXX to clients subscription and with all of gather of in insights revenue the renewal quarter. are end hiring on first actively for As budgets with

line, And margin, bottom year-over-year million $X.X last operating costs our our EBITDA by ago. year. On quarter, to $X.X to during total delivered we've Year-to-date, X% compared adjusted and year from was million slightly XX% optimize third the a down the spend. flow operating cash marketing a XX% continue and we reduced technology

touch quickly on our we're me let adoption Now, X increased to drive brands. of what doing

a called Verify [ working For charges ascertain that to to are ] security status. ClearanceJobs, their a individual government members fee we on product currently

tech leading is all further with marketplace. up our our the third million monthly job more Dice, one solidifying applications. In engagement growth, to and of value applications, engaged posting drive continues candidates X.X Dice year-over-year, our XX% Providing averaged propositions. as actively primary quarter, Dice candidate the job initiative For clients jobs career

our for expand site identify our efforts production. both We Dice to account-based tool a spend further help are high marketing the expanding with quarter we lead leads. us this to fine-tune visitors potential that will launched and analyze to allow This marketing also and new

Our rate job business quarter, In all continue the to to traction. company XX% subscription XX% unlimited retention comprehensive and third of of packages customer an gain comprehensive and package subscription postings, renewed XXX%. deals packages, converted these signed new average which in with the were include accounts pages boosts, job of

slow and are beginning continue steady we return with not bookings to while a ahead, to Looking postings recovery next job growth expect improve, to to tech year. until likely

X% we in For for hiring anticipate a year, revenue demand in with will of a year-over-year decline X%. forecasts. increased interest the next X% of fourth and to AI-related decline to rates a bookings SIA We in and tech that hiring lower project quarter, XX% line provide tailwind

positioned Our our strategy be this and focus to increase well our go-to-market demand. on in products expected remains enhancing for

continue delivering also a year. margin EBITDA full our focused on the and shareholders strong XX% are for target to for profits adjusted We

new and enhanced and of are on this to at Officer, and of be that Leeby, finance the the us to her for Finally, to year. on opportunity our and has Chief the she's she working accounting a while significantly has Raime culture end I'd see been worked Raime leaving sad Raime for behind CFO team with, this comment like that accountability go, exceptional well-deserved will past exciting stepping afternoon the a will most Financial process, her our leaves she it's previously has role be moving an had we company that And terms with. pleasure with in over happy she week. I've announcement of the into.

Greg highest hand excellent Following skills analytical and finance am role. Raime, him I of expertise her role. to demonstrated XX departure, this and in Group we acumen, expertise CFO. this our step as will a and commitment the financial detail transparency strong strategic managing he and integrity. to rigorous make upholding essential budgets, takes new years has DHI certainly has fit and attention areas for on standards will Finance confident Vice sound leadership an as his operational will next I'll but Greg's to to financial over are exceptional Interim financial with and in chapter you, brings your our of Schippers, decision-making. of the thrilled questions. experience in we'll oversight miss in you that, the call career. With current through for for financials, CFO, President He Controller, over in planning, floor Greg then efficiencies open for optimizing this walk Raime? a up including Raime shown and

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

X,XXX revenue greater customers, which down slight $XX,XXX and CJ up year-over-year X% recurring X% and on sequentially. the package revenue quarter. accounts $XX.X million, our was $XX.X was year-over-year. to X% basis mentioned, up ClearanceJobs' the reduction and churn X% Art XX% increased total year-over-year has versus annual Bookings revenue a than with year. As is spending up up attributable recruitment We quarter was third This prior is CJ whereas with customers, third smaller were down of sequentially. ended in the recurring for X% million, X% CJ number

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

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

which attributable rate down to X,XXX from sequentially. The XX% than bookings retention XX% This For is X% package was year-over-year. which quarter value at spending ended per and $XX.X less delivers revenue Dice CJ the million, strong were XX% demonstrates reduction quarter, cleared year-over-year churn year-over-year. down We million, the continued is Dice with retention quarter was recruitment customers rate last XX% recruitment down with customers, X% smaller rate of professionals. Dice CJ's the year. $XX,XXX CJ's in and XXX%. was outstanding down the revenue $XX.X renewal was and

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

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

For quarter, rate Dice our our down the and ago, ago down the was renewal XX%, from was XX%, year from XX% Dice revenue in retention a XX% year rate quarter.

expenses. Turning to operating

to quarter associated quarter, year million with offset ago Third when initiatives restructuring $XX.X expenses cost million in quarter. by operating the down were the current savings the X% to XXXX, the in XXXX and partially $XX.X reflecting charge in restructuring compared

focus operational efficiency. continue our We on to

before $XXX,XXX. For a the and quarter, income tax we taxes of loss expense had of $XX,XXX

diluted net a per quarter. to for of Our expense quarter tax compensation rate share for rate the on or due the $XXX,XXX tax vesting from share-based $X.XX of reported the the third awards. We loss statutory differed

we net $X quarter, income of diluted year or share. prior million the reported per For $X.XX

share to ago. Diluted Our quarter year. Operating the the per $X.X a million margin million decreased year the outstanding share compared in million third quarter share compared EBITDA year to last XX% for XX% diluted $XX.X of $X.XX in Adjusted million to the third quarter diluted for cash was the margin quarter. X% $X.X $X.X non-GAAP shares prior was per million to same a per of in $X.XX were to million, compared prior quarter the for current earnings year for or flow a the period. compared $X.X $XX.X quarter

our in million quarter related costs the third for from last $XXX,XXX. Capitalized of million company building to costs in development a costs features primarily year, compared $X decline capitalized third on of were to the platforms. products quarter $X.X Our new development are the incurred and

$X.X Total at the the We quarter the the expect $X last quarter, of quarter $XX.X to in our $XX perspective, in revolver. prior the million at $XXX quarter decreased We be year. the debt million down from of we during between the million a and third liquidity cash year. From $X million revenue year end $XX.X of debt our X% for and the million had leverage. Deferred finished million Xx versus under of million year-over-year. end $XX CapEx total million quarter and under was $XX the million,

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

purchased During were share awards under the we did the related quarter, share-based not purchase shares to of our buyback program minimal. and shares vesting

Moving on Many continue environment. be to during employers very budget conscious economic to uncertain guidance. this

result, next growth a to our total return bookings expect not we until do year. to As

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

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

The from question comes Riley. today Zach with [Operator first Cummins Instructions] B.

of with It pleasure working next you. best was luck Raime, in opportunity. your a

renewals in kind this go got key in that as the your view renewal renewed rate staffing say, with Just terms through you quarters? in about dynamic And sort contract? do risk of the, can some clients, you the the of of downtick major you talk as with any starting of just the couple of season over off, that you next

for The long still off. staffing we've it's we're shaking our been comforted at our say we if the so QX renewal Well, firms. is that small because I them business larger larger think majority smaller risk, staffing December by always to platform, renewals, about do revenue that idea go QX. that rate decide a the we've there's of change shaken customers majority you large the line however, into question. I usage in that firms up an contract am have as of of year, does count to last the on revenue staffing consistent a the with I But, category or that that can place actually excellent of diminish and the point think think in I of it, that over that churn still couple, always some with fact January the our But and all you've Zach, especially renewal concerned kind valid to it takes even the is these their improve of of and calendar figure. firms these for asked renewal their sequentially, materially seen year. call tree most base book,

necessarily technology there's until take a advantage kind do concerned bumping in kind you it but again, on I'll that. that signal positive forecast like have strong, ask the kind We of feels is additional steady we're but not if thoughts the it, a or forecast. terms we're us, But of. about Raime, counting it of can guidance fundamentally So in for believe SIA increase everybody bottom also along demand any we're of on any just of

mute, reset. Raime think let her we'll is I on but

it's say I add, Thanks, anything Zach, to don't working likewise, been to together. have wanted Art. pleasure but a

just your the and And bookings really positive Obviously, point returning at potentially industry environment Art, towards some staffing to my is, growth incrementally signals next returning with the follow-up year. overall confidence in some geared growth. to question,

to bottom the year? just the kind curious back towards on and So what's getting side we're the growth returning confidence next bookings of driving of that to here

has X% years, dot-com interesting. that meaning exception some itself points is was take industry with XXXX, data also the feel back is XXXX the trend XXXX, pointed is out would also fundamentally a of bigger X% kind we COVID. We grown of picture in last XX for step that per the implosion, It's say Great which year, the going fundamentally tech direction. is that tech workforce which show the right I the and which much at to the pretty the Recession the and

to So is workforce underperformance see kind the tech of of kind for unusual. this in a of us condition

to X so I they drive our that think things need that we change demand. fundamentally do see

growth is initiatives. I of first growth a initiatives. talk definitely lot to And There's growth require The people. are be Growth think initiatives. initiatives that more there going about

years, technology And propels workers over voluntary our the have thing business with economy other because suspicion. The attrition. view to they that move most last been reluctant the is X.X

that of out. what some concept this to tech lot play recruiters, up almost damn ready of of Group, DHI is from ready inside there to nevertheless, kind we're own including a that so break is [ is of ] our And picking

reasons optimism So a like I for is of for lot XXXX. there feel

Liu with The Company. from Liu Kevin next comes question K. &

on are outside do renewal renewal QX in how new Maybe big your into us going And expect of here if of trends seen of bookings customer commentary a kind you've a Just could early on since is pretty QX base? of flow with of quarter? staffing, year and you that renewals typical the the this enterprise quick how terms activity kind some also kind to quarter the you give expectations. question

Dice to similar This and to QX to Raime. forward we look very expect looking we saw QX what Yes, in is CJ. for QX, both

are say, as but our shoots, green We we Art some would seeing, conservative, mentioned, I QX outlook. with were

we're when fairly way it that the projected X the and rate in see. seeing seeing now election reductions, But QX seen start to view QX. we'll be activity mirror, the signaling what we're we've going think I has Fed the remains line uptick made the in and with is to that also is rear bookings and

curve the does the as think sense as how willingness into see start margins the 'XX? to bookings do And to invest renewed changed Any booking you to the some we your manage want need new before of ahead expense again? we side growth the of to for prospects go to drive Or on of impact trend renewed that kind growth? year and up kind you how that here, to marketing for we

be we would incremental I need would significant And before actual Yes. we're sales we cautious. place -- perspective, bookings my we to made investments from say, in, intend resources. example, take demand for see that to

we qualified we on can to take right the with we see team that that and capacity upswing leads. count marketing in is to that, maintain the fact, I poised more so we sales trend There we're itself. place the that is, spend So margins. can that our evidence want to essentially really also on in opportunity now, advantage of would have think Again, that

Max The next question Street. Lake Michaelis comes with from

I am this way the year-over-year about further expecting it, XX% going is just be I I this I it's breakdown, wrong? we interpreting in when degradation of similar does Or we segment the to Dice look QX that, this you for bookings segment at If -- guide contraction to to in thinking that think go want X% But to like mentioned here. bookings? back and I'm look QX. to the at mean, terms a

similar. it's again, would I Yes. very say,

we our then thinking So new business. and about saw similar we for QX into to business about what And renewal in rates break our thinking expectations are QX.

lower contracts of initiated this in as they're XXXX-XXXX at with their they've frame, slightly large environment. renewing the and specifically, tech we levels their do handful need have time Dice customers multiyear hiring who evaluated For a

And a healthy and tech It So the it's positive next and not is contraction. continues in reset, growth to hiring churn year, as slight necessarily. the expect is top-ups. this grow we

we've strong we happening As previous you with over in accounts anticipate environments, about historically recall, that top-ups and those talked time.

XXXX creep XXXX? how comments continues And about bookings to up this down positive, we Dice growth a me? growth. a -- stay 'XX? on second in in like Or your expect Like and that of I is positive, we starts for into then little it? to the out mean, half that Is X% look breakeven, half ClearanceJobs that but that towards can maybe of how think break we should kind bit you second

Yes.

quarters, that I in guidance we But provide with in clear about growth more expect will, We way continued you're that in it Dice. on and we a thinking XXXX. CJ, perspective expect is the incremental reasonable improvements upcoming think

in terms at where your And the M&A into buying, then we're target? in XX,XXX-foot trend or a are kind the maybe just is guys and I maybe going as kind and have of guess there side of maybe mean, in the out can just I kind there the of question anything specific more we given Is that after market XXXX, of I a vertical been bookings maybe that anything go mean, here. Or thoughts looking platform? there? M&A on of potential market you what out

out higher for performance opportunity necessarily some make private that, getting maximum thinking we we both make wouldn't acquisition are quite lot I away our strategy, and that the acquisitions I of the that say now. platforms, CJ for sense take would time, frankly. that thought from Dice. actually I'd would Sure. of in we ironically, us that markets about mean foresee a the have particular any do opportunities don't sure quite on that haven't and think the fundamentally really current right horizon are multiples us I to

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

operator, and thank us you, today. joining for you, Thank all,

company a day. with please help to to us. Thanks, great at a meeting and questions or speak our DHI out have Group, will yourself if As he the like in your for always, about team, for you MKR, management would and Todd interest everyone, any arrange have reach Kehrli

The concluded. presentation. conference for today's now has Thank attending you

You now may disconnect.