PART I. FINANCIAL INFORMATION This section presents the unaudited condensed consolidated financial statements, management's discussion and analysis, market risk disclosures, and controls and procedures for the reporting period [Item 1. Unaudited Financial Statements](index=2&type=section&id=Item%201.%20Unaudited%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements of DHI Group, Inc. for the three months ended March 31, 2023 and 2022, including balance sheets, statements of operations, comprehensive income, stockholders' equity, and cash flows, along with detailed notes explaining the basis of presentation, new accounting standards, fair value measurements, revenue recognition, leases, investments, intangible assets, goodwill, indebtedness, commitments, equity transactions, stock-based compensation, earnings per share, and income taxes [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section provides a snapshot of the company's financial position, detailing assets, liabilities, and equity as of March 31, 2023, and December 31, 2022 Condensed Consolidated Balance Sheets (March 31, 2023 vs. December 31, 2022) | Metric (in thousands) | March 31, 2023 | December 31, 2022 | | :-------------------- | :------------- | :---------------- | | Total assets | $233,009 | $226,704 | | Total liabilities | $131,757 | $120,465 | | Total stockholders' equity | $101,252 | $106,239 | | Cash | $5,368 | $3,006 | | Accounts receivable, net | $24,980 | $20,494 | | Deferred revenue (current) | $58,079 | $50,121 | | Long-term debt | $46,000 | $30,000 | - Total assets increased by **$6.3 million**, primarily driven by an increase in cash and accounts receivable[10](index=10&type=chunk) - Total liabilities increased by **$11.3 million**, mainly due to a **$16.0 million** increase in long-term debt and an **$8.0 million** increase in deferred revenue, partially offset by a decrease in accounts payable and accrued expenses[10](index=10&type=chunk) - Total stockholders' equity decreased by **$5.0 million**, influenced by treasury stock repurchases and a decrease in accumulated earnings[10](index=10&type=chunk) [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section details the company's financial performance over the three months ended March 31, 2023 and 2022, including revenues, operating expenses, and net income Condensed Consolidated Statements of Operations (Three Months Ended March 31, 2023 vs. 2022) | Metric (in thousands, except per share) | 2023 | 2022 | Change ($) | Change (%) | | :------------------------------------ | :------ | :------ | :--------- | :--------- | | Revenues | $38,620 | $34,334 | $4,286 | 12% | | Total operating expenses | $38,047 | $33,706 | $4,341 | 13% | | Operating income | $573 | $628 | $(55) | (9)% | | Income (loss) before income taxes | $(54) | $538 | $(592) | (110)% | | Net income | $460 | $1,301 | $(841) | (65)% | | Basic earnings per share | $0.01 | $0.03 | $(0.02) | (67)% | | Diluted earnings per share | $0.01 | $0.03 | $(0.02) | (67)% | - Revenues increased by **12%** year-over-year, driven by strong performance in both Dice and ClearanceJobs brands[12](index=12&type=chunk) - Net income decreased significantly by **65%** due to higher operating expenses, increased interest expense, and a lower income tax benefit[12](index=12&type=chunk) [Condensed Consolidated Statements of Comprehensive Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) This section presents the company's comprehensive income, including net income and other comprehensive income components, for the three months ended March 31, 2023 and 2022 Condensed Consolidated Statements of Comprehensive Income (Three Months Ended March 31, 2023 vs. 2022) | Metric (in thousands) | 2023 | 2022 | | :------------------------------ | :--- | :--- | | Net income | $460 | $1,301 | | Foreign currency translation adjustment | $150 | $8 | | Total other comprehensive income | $150 | $8 | | Comprehensive income | $610 | $1,309 | - Comprehensive income decreased by **53%** year-over-year, primarily reflecting the decrease in net income, despite a higher foreign currency translation adjustment in 2023[14](index=14&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) This section outlines the changes in stockholders' equity, including net income, stock-based compensation, and treasury stock transactions, for the three months ended March 31, 2023 Changes in Stockholders' Equity (Three Months Ended March 31, 2023) | Item (in thousands) | Amount | | :------------------------------ | :----- | | Balance at December 31, 2022 | $106,239 | | Net income | $460 | | Other comprehensive income | $150 | | Stock-based compensation | $2,887 | | Treasury stock purchases | $(3,521) | | Treasury stock for tax obligations | $(5,295) | | Cumulative-effect of new accounting principle | $332 | | Balance at March 31, 2023 | $101,252 | - Stockholders' equity decreased from **$106.2 million** at December 31, 2022, to **$101.3 million** at March 31, 2023, primarily due to significant treasury stock repurchases for stock repurchase plans and tax obligations, partially offset by net income and stock-based compensation[16](index=16&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section reports the company's cash inflows and outflows from operating, investing, and financing activities for the three months ended March 31, 2023 and 2022 Condensed Consolidated Statements of Cash Flows (Three Months Ended March 31, 2023 vs. 2022) | Activity (in thousands) | 2023 | 2022 | Change ($) | | :------------------------------ | :------ | :------ | :--------- | | Operating activities | $11 | $9,218 | $(9,207) | | Investing activities | $(4,833) | $(4,091) | $(742) | | Financing activities | $7,184 | $(1,701) | $8,885 | | Net change in cash | $2,362 | $3,426 | $(1,064) | | Cash, end of period | $5,368 | $4,966 | $402 | - Net cash from operating activities significantly decreased from **$9.2 million** in Q1 2022 to **$0.01 million** in Q1 2023, primarily due to higher headcount, timing of bonus payments, and changes in working capital[19](index=19&type=chunk)[138](index=138&type=chunk) - Cash used in investing activities increased due to higher purchases of fixed assets, mainly capitalized development costs[19](index=19&type=chunk)[139](index=139&type=chunk) - Cash from financing activities turned positive in Q1 2023, driven by **$16.0 million** in net proceeds from long-term debt, offsetting **$8.8 million** in share repurchases[19](index=19&type=chunk)[140](index=140&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements, covering accounting policies, fair value measurements, revenue, leases, investments, and other financial items [1. BASIS OF PRESENTATION](index=8&type=section&id=1.%20BASIS%20OF%20PRESENTATION) This note describes the basis for preparing the unaudited condensed consolidated financial statements in accordance with U.S. GAAP and SEC rules, and the company's single reportable segment - The unaudited condensed consolidated financial statements are prepared in accordance with U.S. GAAP and SEC rules, with all adjustments consisting of normal and recurring accruals[22](index=22&type=chunk) - The Company operates as a single reportable segment, 'Tech-focused,' encompassing Dice and ClearanceJobs brands, with all operations located in the United States[24](index=24&type=chunk) [2. NEW ACCOUNTING STANDARDS](index=8&type=section&id=2.%20NEW%20ACCOUNTING%20STANDARDS) This note details the adoption of new accounting standards, specifically ASU No. 2016-13, and its impact on the company's financial statements - Effective January 1, 2023, the Company adopted ASU No. 2016-13, 'Financial Instruments - Credit Losses (Topic 326),' resulting in a **$0.3 million** cumulative-effect adjustment to increase accumulated earnings and reduce the allowance for doubtful accounts[25](index=25&type=chunk) [3. FAIR VALUE MEASUREMENTS](index=8&type=section&id=3.%20FAIR%20VALUE%20MEASUREMENTS) This note explains the company's use of a three-tier fair value hierarchy for financial instruments and the non-recurring fair value measurements of certain assets - The Company uses a three-tier fair value hierarchy (Level 1, 2, 3) for financial instruments, with long-term debt estimated using Level 2 inputs[26](index=26&type=chunk)[28](index=28&type=chunk) - Certain assets like equity investments, operating lease ROU assets, goodwill, and intangible assets are measured at fair value on a non-recurring basis, subject to impairment adjustments[29](index=29&type=chunk) [4. REVENUE RECOGNITION](index=9&type=section&id=4.%20REVENUE%20RECOGNITION) This note outlines the company's revenue recognition policies, disaggregated revenue by brand, and contract balances for recruitment services and advertising - Revenue is recognized ratably over the service period from recruitment packages, advertising, classifieds, and event booth rentals[30](index=30&type=chunk) Disaggregated Revenue by Brand (Three Months Ended March 31, 2023 vs. 2022) | Brand | 2023 (in thousands) | 2022 (in thousands) | | :------------ | :------------------ | :------------------ | | Dice | $26,910 | $24,634 | | ClearanceJobs | $11,710 | $9,700 | | Total | $38,620 | $34,334 | Contract Balances (March 31, 2023 vs. December 31, 2022) | Metric (in thousands) | March 31, 2023 | December 31, 2022 | | :-------------------------------- | :------------- | :---------------- | | Receivables | $24,980 | $20,494 | | Short-term contract liabilities (deferred revenue) | $58,079 | $50,121 | | Long-term contract liabilities (deferred revenue) | $765 | $743 | - The Company recognized **$22.987 million** in revenue in Q1 2023 from amounts included in contract liabilities at the beginning of the period, up from **$20.940 million** in Q1 2022[35](index=35&type=chunk) [5. LEASES](index=10&type=section&id=5.%20LEASES) This note provides information on the company's operating leases for office space and equipment, including lease costs and related balance sheet information - The Company has operating leases for corporate office space and equipment, with terms ranging from one to eight years, some including renewal options[37](index=37&type=chunk) Lease Costs (Three Months Ended March 31, 2023 vs. 2022) | Metric (in thousands) | 2023 | 2022 | | :-------------------- | :--- | :--- | | Operating lease cost | $603 | $509 | | Sublease income | $(130) | $(123) | | Total lease cost | $473 | $386 | Supplemental Balance Sheet Information Related to Leases (March 31, 2023 vs. December 31, 2022) | Metric (in thousands) | March 31, 2023 | December 31, 2022 | | :-------------------------------- | :------------- | :---------------- | | Operating lease right-of-use-assets | $6,088 | $6,581 | | Total operating lease liabilities | $8,007 | $8,533 | | Weighted Average Remaining Lease Term (years) | 6.0 | 5.8 | | Weighted Average Discount Rate | 4.4% | 4.4% | [6. INVESTMENTS](index=11&type=section&id=6.%20INVESTMENTS) This note details the company's equity investments, including a convertible promissory note conversion, sale of Rigzone interest, and equity method accounting for eFC - A **$3.0 million** convertible promissory note was converted into preferred shares (**4.9%** ownership, later **4.1%**) in a values-based career destination company in September 2022, resulting in a **$2.3 million** impairment loss[43](index=43&type=chunk)[44](index=44&type=chunk)[46](index=46&type=chunk) - The Company sold its **40%** interest in Rigzone for **$0.3 million** in Q2 2022, recognizing a gain on sale[47](index=47&type=chunk) - The **40%** common share interest in eFC is accounted for under the equity method, contributing **$0.2 million** in income for the three months ended March 31, 2023 and 2022[49](index=49&type=chunk) [7. ACQUIRED INTANGIBLE ASSETS, NET](index=13&type=section&id=7.%20ACQUIRED%20INTANGIBLE%20ASSETS,%20NET) This note describes the company's indefinite-lived acquired intangible asset related to Dice trademarks and brand name, and the absence of impairment - The Company holds an indefinite-lived acquired intangible asset of **$23.8 million** related to the Dice trademarks and brand name as of March 31, 2023 and December 31, 2022[53](index=53&type=chunk) - No impairment was recorded for the Dice trademarks and brand name during the three months ended March 31, 2023 and 2022, with projections approximating those used in the October 1, 2022 analysis[53](index=53&type=chunk)[54](index=54&type=chunk) [8. GOODWILL](index=13&type=section&id=8.%20GOODWILL) This note reports the goodwill allocated to the Tech-focused reporting unit and confirms no impairment was recorded during the period - Goodwill allocated to the Tech-focused reporting unit remained at **$128.1 million** as of March 31, 2023 and December 31, 2022[56](index=56&type=chunk) - No goodwill impairment was recorded during the three months ended March 31, 2023 and 2022, as the fair value of the reporting unit was substantially in excess of its carrying value[57](index=57&type=chunk) [9. INDEBTEDNESS](index=14&type=section&id=9.%20INDEBTEDNESS) This note details the company's revolving credit facility, borrowing terms, outstanding debt, and compliance with financial covenants - The Company entered into a Third Amended and Restated Credit Agreement in June 2022, providing a **$100 million** revolving loan facility (maturing June 2027) with a **$50 million** expansion option[61](index=61&type=chunk) - Borrowings bear interest at SOFR or a base rate plus a margin (**2.00%-2.75%** for SOFR/SONIA, **1.00%-1.75%** for base rate), plus an additional **0.10%** spread[62](index=62&type=chunk) Long-term Debt and Available Borrowing (March 31, 2023 vs. December 31, 2022) | Metric (in thousands) | March 31, 2023 | December 31, 2022 | | :-------------------------------- | :------------- | :---------------- | | Long-term debt under revolving credit facility | $46,000 | $30,000 | | Available to be borrowed | $54,000 | $70,000 | | Actual interest rates (weighted average) | 6.90% | 6.67% | - As of March 31, 2023, the Company was in compliance with all financial covenants under the Credit Agreement[63](index=63&type=chunk) [10. COMMITMENTS AND CONTINGENCIES](index=15&type=section&id=10.%20COMMITMENTS%20AND%20CONTINGENCIES) This note addresses the company's exposure to various claims, lawsuits, and other contingencies in the ordinary course of business - The Company is subject to various claims from taxing authorities, lawsuits, and other complaints in the ordinary course of business, with management believing final resolution will not materially affect financial condition[71](index=71&type=chunk) [11. EQUITY TRANSACTIONS](index=15&type=section&id=11.%20EQUITY%20TRANSACTIONS) This note provides information on the company's stock repurchase programs, including shares repurchased and remaining authorization - The Board approved a new **$10.0 million** stock repurchase program in February 2023, valid through February 2024, with **$8.2 million** remaining as of March 31, 2023[76](index=76&type=chunk)[77](index=77&type=chunk) Stock Repurchases (Three Months Ended March 31, 2023 vs. 2022) | Metric | 2023 | 2022 | | :-------------------------- | :-------- | :---------- | | Shares repurchased | 742,536 | 1,302,226 | | Average purchase price per share | $4.76 | $5.78 | | Dollar value of shares repurchased (in thousands) | $3,536 | $7,525 | [12. STOCK-BASED COMPENSATION](index=16&type=section&id=12.%20STOCK-BASED%20COMPENSATION) This note details the stock-based compensation expense, unrecognized compensation, and status of restricted stock and PSU awards - Total stock-based compensation expense was **$2.9 million** for Q1 2023, up from **$2.2 million** in Q1 2022[85](index=85&type=chunk) - As of March 31, 2023, **$20.8 million** of unrecognized compensation expense related to unvested awards is expected to be recognized over approximately **1.6 years**[85](index=85&type=chunk) Restricted Stock Awards Status (Three Months Ended March 31, 2023 vs. 2022) | Metric | 2023 Shares | 2022 Shares | | :---------------------- | :---------- | :---------- | | Non-vested at beginning | 2,639,286 | 3,371,832 | | Granted | 1,107,000 | 932,500 | | Vested | (962,178) | (1,098,127) | | Non-vested at end | 2,780,108 | 3,124,491 | PSU Awards Status (Three Months Ended March 31, 2023 vs. 2022) | Metric | 2023 Shares | 2022 Shares | | :---------------------- | :---------- | :---------- | | Non-vested at beginning | 2,086,932 | 1,593,775 | | Granted | 1,357,587 | 1,553,332 | | Vested | (1,236,074) | (928,717) | | Non-vested at end | 2,208,445 | 2,125,049 | [13. EARNINGS PER SHARE](index=18&type=section&id=13.%20EARNINGS%20PER%20SHARE) This note presents the calculation of basic and diluted earnings per share, reflecting net income and weighted-average shares outstanding Earnings Per Share (Three Months Ended March 31, 2023 vs. 2022) | Metric (in thousands, except per share) | 2023 | 2022 | | :------------------------------------ | :------ | :------ | | Net income | $460 | $1,301 | | Weighted-average basic shares outstanding | 43,886 | 44,702 | | Weighted-average diluted shares outstanding | 45,240 | 47,170 | | Basic earnings per share | $0.01 | $0.03 | | Diluted earnings per share | $0.01 | $0.03 | - Diluted EPS decreased from **$0.03** in Q1 2022 to **$0.01** in Q1 2023, driven by lower operating income and increased interest expense[93](index=93&type=chunk)[127](index=127&type=chunk) [14. INCOME TAXES](index=18&type=section&id=14.%20INCOME%20TAXES) This note outlines the company's income tax benefit and effective tax rate, primarily influenced by share-based compensation awards Income Taxes (Three Months Ended March 31, 2023 vs. 2022) | Metric (in thousands, except percentages) | 2023 | 2022 | | :-------------------------------------- | :------- | :------- | | Income (loss) before income taxes | $(54) | $538 | | Income tax benefit | $(514) | $(763) | | Effective tax rate | 951.9% | (141.8)% | - The effective tax rate for Q1 2023 was **952%** (vs. **-142%** in Q1 2022), primarily due to tax benefits from the vesting of share-based compensation awards (**$0.5 million** in 2023, **$0.8 million** in 2022)[94](index=94&type=chunk)[126](index=126&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=19&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the Company's financial condition and results of operations for the three months ended March 31, 2023, compared to the same period in 2022, covering business overview, revenue/expense drivers, financial performance, non-GAAP measures, and liquidity [Overview](index=20&type=section&id=Overview) This section provides an overview of DHI Group, Inc.'s business, focusing on its career marketplaces for technologists and government-cleared professionals through Dice and ClearanceJobs brands - DHI Group, Inc. provides software products, online tools, and services, operating career marketplaces for technologists and professionals with government security clearances through its Dice and ClearanceJobs brands[100](index=100&type=chunk) - The Company specializes in employment categories with high demand for skilled professionals and operates as a single 'Tech-focused' reportable segment[101](index=101&type=chunk)[102](index=102&type=chunk) [Our Revenues and Expenses](index=20&type=section&id=Our%20Revenues%20and%20Expenses) This section details the primary sources of revenue from recruitment packages and resume database access, along with key expense categories like personnel and marketing - The majority of revenues come from customer fees for job postings and access to resume databases, with fees varying by user count, job posting type, and package terms[104](index=104&type=chunk) Recruitment Package Customers and Average Annual Revenue (March 31, 2023 vs. 2022) | Metric | March 31, 2023 | March 31, 2022 | Change (%) | | :-------------------------------------- | :------------- | :------------- | :--------- | | Dice Recruitment Package Customers | 6,171 | 6,249 | (1)% | | ClearanceJobs Recruitment Package Customers | 2,078 | 1,928 | 8% | | Dice Average Annual Revenue per Customer | $15,672 | $14,112 | 11% | | ClearanceJobs Average Annual Revenue per Customer | $20,520 | $18,408 | 11% | - Dice customer count decreased due to macroeconomic conditions, but average annual revenue per customer increased due to strong renewal and retention rates among larger recurring customers[106](index=106&type=chunk) - ClearanceJobs saw increases in both customer count and average annual revenue per customer, driven by high demand for government-cleared professionals and consistent product enhancements[107](index=107&type=chunk) Deferred Revenue and Backlog (March 31, 2023 vs. Prior Periods) | Metric (in thousands) | March 31, 2023 | Dec 31, 2022 | YoY Change (%) | QoQ Change (%) | | :-------------------- | :------------- | :----------- | :------------- | :------------- | | Deferred Revenue | $58,844 | $50,864 | 4% | 16% | | Contractual commitments not invoiced | $65,389 | $66,391 | 33% | (2)% | | Backlog | $124,233 | $117,255 | 17% | 6% | - Backlog increased by **17%** year-over-year and **6%** quarter-over-quarter, attributed to a strong technology recruitment market, bookings growth, focus on multi-year contracts, and sales/marketing investments[109](index=109&type=chunk) - Key expenses include personnel costs (salaries, benefits, incentive compensation) and marketing and sales expenditures (online advertising, brand promotion, lead generation)[114](index=114&type=chunk) [Three Months Ended March 31, 2023 Compared to the Three Months Ended March 31, 2022](index=22&type=section&id=Three%20Months%20Ended%20March%2031,%202023%20Compared%20to%20the%20Three%20Months%20Ended%20March%2031,%202022) This section provides a detailed comparative analysis of the company's revenues, operating expenses, and profitability for the three months ended March 31, 2023, versus the prior year [Revenues](index=22&type=section&id=Revenues) This section analyzes the company's revenue performance by brand, highlighting growth drivers for Dice and ClearanceJobs Revenue by Brand (Three Months Ended March 31, 2023 vs. 2022) | Brand (in thousands) | 2023 | 2022 | Increase ($) | Change (%) | | :------------------- | :------ | :------ | :----------- | :--------- | | Dice | $26,910 | $24,634 | $2,276 | 9% | | ClearanceJobs | $11,710 | $9,700 | $2,010 | 21% | | Total revenues | $38,620 | $34,334 | $4,286 | 12% | - Total revenue increased by **12%**, with Dice revenue up **9%** due to strong renewal/retention rates, and ClearanceJobs revenue up **21%** driven by high demand for government-cleared professionals and product enhancements[116](index=116&type=chunk) [Cost of Revenues](index=22&type=section&id=Cost%20of%20Revenues) This section details the changes in cost of revenues, primarily driven by compensation-related costs and headcount adjustments Cost of Revenues (Three Months Ended March 31, 2023 vs. 2022) | Metric (in thousands) | 2023 | 2022 | Increase ($) | Change (%) | | :-------------------- | :------ | :------ | :----------- | :--------- | | Cost of revenues | $4,912 | $4,099 | $813 | 20% | | Percentage of revenues | 12.7% | 11.9% | | | - Cost of revenues increased by **20%**, primarily due to a **$0.7 million** increase in compensation-related costs from higher headcount, partially offset by increased capitalized labor[117](index=117&type=chunk) [Product Development Expenses](index=22&type=section&id=Product%20Development%20Expenses) This section examines the increase in product development expenses, mainly due to higher compensation costs and capitalized labor Product Development Expenses (Three Months Ended March 31, 2023 vs. 2022) | Metric (in thousands) | 2023 | 2022 | Increase ($) | Change (%) | | :-------------------- | :------ | :------ | :----------- | :--------- | | Product development | $4,694 | $3,942 | $752 | 19% | | Percentage of revenues | 12.2% | 11.5% | | | - Product development expenses increased by **19%**, driven by a **$1.1 million** increase in compensation-related costs from higher headcount, partially offset by increased capitalized labor[119](index=119&type=chunk) [Sales and Marketing Expenses](index=23&type=section&id=Sales%20and%20Marketing%20Expenses) This section discusses the increase in sales and marketing expenses, attributed to higher compensation costs from increased headcount and quota attainment Sales and Marketing Expenses (Three Months Ended March 31, 2023 vs. 2022) | Metric (in thousands) | 2023 | 2022 | Increase ($) | Change (%) | | :-------------------- | :------ | :------ | :----------- | :--------- | | Sales and marketing | $16,060 | $13,941 | $2,119 | 15% | | Percentage of revenues | 41.6% | 40.6% | | | - Sales and marketing expenses increased by **15%**, primarily due to a **$1.9 million** increase in compensation-related costs from higher headcount and quota attainment[120](index=120&type=chunk) [General and Administrative Expenses](index=23&type=section&id=General%20and%20Administrative%20Expenses) This section analyzes the changes in general and administrative expenses, influenced by stock-based compensation and headcount costs General and Administrative Expenses (Three Months Ended March 31, 2023 vs. 2022) | Metric (in thousands) | 2023 | 2022 | Increase ($) | Change (%) | | :-------------------- | :------ | :------ | :----------- | :--------- | | General and administrative | $8,208 | $7,766 | $442 | 6% | | Percentage of revenues | 21.3% | 22.6% | | | - General and administrative expenses increased by **6%**, driven by a **$0.7 million** increase in stock-based compensation due to higher achievement against PSU targets, partially offset by lower headcount compensation costs[121](index=121&type=chunk) [Depreciation](index=23&type=section&id=Depreciation) This section explains the increase in depreciation expense, primarily due to higher capitalized internal development costs Depreciation Expense (Three Months Ended March 31, 2023 vs. 2022) | Metric (in thousands) | 2023 | 2022 | Increase ($) | Change (%) | | :-------------------- | :------ | :------ | :----------- | :--------- | | Depreciation | $4,173 | $3,958 | $215 | 5% | | Percentage of revenues | 10.8% | 11.5% | | | - Depreciation expense increased by **5%**, driven by higher capitalized internal development costs in 2022 and Q1 2023[122](index=122&type=chunk) [Operating Income](index=23&type=section&id=Operating%20Income) This section details the decrease in operating income and margin, resulting from increased operating costs and investments Operating Income (Three Months Ended March 31, 2023 vs. 2022) | Metric (in thousands) | 2023 | 2022 | Decrease ($) | Change (%) | | :-------------------- | :------ | :------ | :----------- | :--------- | | Operating income | $573 | $628 | $(55) | (9)% | | Operating margin | 1.5% | 1.8% | | | - Operating income decreased by **9%** and operating margin declined from **1.8%** to **1.5%**, primarily due to higher operating costs from investments in product and sales/marketing headcount, partially offset by increased revenues[123](index=123&type=chunk) [Income from Equity Method Investment](index=25&type=section&id=Income%20from%20Equity%20Method%20Investment) This section reports the income recognized from the company's equity method investment in eFC Income from Equity Method Investment (Three Months Ended March 31, 2023 vs. 2022) | Metric (in thousands) | 2023 | 2022 | | :-------------------------------- | :--- | :--- | | Income from equity method investment | $171 | $155 | - The Company recorded **$0.2 million** of income from its proportionate share of eFC's net income for both periods, recognized three months in arrears[124](index=124&type=chunk) [Interest Expense and Other](index=25&type=section&id=Interest%20Expense%20and%20Other) This section explains the significant increase in interest expense due to higher outstanding debt and rising interest rates Interest Expense and Other (Three Months Ended March 31, 2023 vs. 2022) | Metric (in thousands) | 2023 | 2022 | | :-------------------- | :--- | :--- | | Interest expense and other | $798 | $245 | - Interest expense and other increased significantly by **226%**, primarily due to higher outstanding debt on the revolving credit facility and increased interest rates[125](index=125&type=chunk) [Income Taxes](index=25&type=section&id=Income%20Taxes) This section analyzes the company's income tax benefit and effective tax rate, primarily influenced by share-based compensation awards Income Tax Benefit and Effective Tax Rate (Three Months Ended March 31, 2023 vs. 2022) | Metric (in thousands, except percentages) | 2023 | 2022 | | :-------------------------------------- | :------- | :------- | | Income (loss) before income taxes | $(54) | $538 | | Income tax benefit | $(514) | $(763) | | Effective tax rate | 951.9% | (141.8)% | - The effective tax rate for Q1 2023 was **951.9%**, compared to **(141.8)%** in Q1 2022, primarily influenced by tax benefits from share-based compensation awards[126](index=126&type=chunk) [Earnings per Share](index=25&type=section&id=Earnings%20per%20Share) This section details the decrease in diluted earnings per share, driven by lower operating income and increased interest expense Diluted Earnings Per Share (Three Months Ended March 31, 2023 vs. 2022) | Metric (in thousands, except per share) | 2023 | 2022 | | :------------------------------------ | :---- | :---- | | Net Income | $460 | $1,301 | | Diluted earnings per share | $0.01 | $0.03 | - Diluted earnings per share decreased from **$0.03** in Q1 2022 to **$0.01** in Q1 2023, driven by lower operating income and increased interest expense[127](index=127&type=chunk) [Non-GAAP Financial Measures](index=26&type=section&id=Non-GAAP%20Financial%20Measures) This section presents and reconciles non-GAAP financial measures, including Adjusted EBITDA and Adjusted EBITDA Margin, used to assess operating performance and cash flow generation - The Company uses non-GAAP measures like Adjusted EBITDA and Adjusted EBITDA Margin to assess operating performance, internal monitoring, planning, and compensation, as they provide insights into cash flow generation for debt service, capital expenditures, and future growth[128](index=128&type=chunk)[129](index=129&type=chunk)[131](index=131&type=chunk) Adjusted EBITDA and Adjusted EBITDA Margin (Three Months Ended March 31, 2023 vs. 2022) | Metric (in thousands, except percentages) | 2023 | 2022 | | :-------------------------------------- | :------ | :------ | | Net income | $460 | $1,301 | | Adjusted EBITDA | $8,054 | $6,930 | | Net income margin | 1% | 4% | | Adjusted EBITDA Margin | 21% | 20% | - Adjusted EBITDA increased by **16.2%** to **$8.1 million** in Q1 2023, and Adjusted EBITDA Margin improved to **21%** from **20%** in Q1 2022[134](index=134&type=chunk) [Liquidity and Capital Resources](index=29&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's financial liquidity, capital sources, cash flow activities, debt, and future capital requirements [Cash Flows](index=29&type=section&id=Cash%20Flows) This section summarizes the company's cash flows from operating, investing, and financing activities, and the overall change in cash balance Summary of Cash Flows (Three Months Ended March 31, 2023 vs. 2022) | Activity (in thousands) | 2023 | 2022 | | :------------------------------ | :------ | :------ | | Cash from operating activities | $11 | $9,218 | | Cash used in investing activities | $(4,833) | $(4,091) | | Cash from (used in) financing activities | $7,184 | $(1,701) | | Cash, end of period | $5,368 | $4,966 | - The Company's cash balance increased to **$5.4 million** at March 31, 2023, from **$3.0 million** at December 31, 2022[136](index=136&type=chunk) [Liquidity](index=29&type=section&id=Liquidity) This section outlines the company's principal liquidity sources, including cash, operating cash flow, and available borrowing capacity, and management's assessment of sufficiency - Principal liquidity sources are cash, operating cash flow, and **$54.0 million** in borrowing capacity under the **$100.0 million** Credit Agreement as of March 31, 2023[137](index=137&type=chunk) - Management believes existing cash, operating cash flow, and available borrowings are sufficient for anticipated cash requirements for at least the next 12 months[137](index=137&type=chunk) [Operating Activities](index=29&type=section&id=Operating%20Activities) This section details the significant decrease in net cash flows from operating activities, attributed to higher headcount, bonus timing, and working capital changes - Net cash flows from operating activities decreased by **$9.2 million** to **$0.01 million** in Q1 2023, compared to **$9.2 million** in Q1 2022, due to higher headcount, timing of bonus payments, and changes in working capital[138](index=138&type=chunk) [Investing Activities](index=29&type=section&id=Investing%20Activities) This section explains the increase in cash used in investing activities, primarily due to higher purchases of fixed assets and capitalized development costs - Cash used in investing activities increased to **$4.8 million** in Q1 2023 from **$4.1 million** in Q1 2022, driven by higher purchases of fixed assets, primarily capitalized development costs[139](index=139&type=chunk) [Financing Activities](index=29&type=section&id=Financing%20Activities) This section describes the positive cash flow from financing activities, driven by net proceeds from long-term debt partially offset by share repurchases - Cash from financing activities was **$7.2 million** in Q1 2023, driven by **$16.0 million** in net proceeds from long-term debt, partially offset by **$8.8 million** in share repurchases[140](index=140&type=chunk) [Financing and Capital Requirements](index=31&type=section&id=Financing%20and%20Capital%20Requirements) This section outlines the company's revolving credit facility, available borrowing capacity, and anticipated capital expenditures for new product development and leasehold improvements - The Company has a **$100 million** revolving credit facility maturing in June 2027, with **$46.0 million** borrowed and **$54.0 million** available as of March 31, 2023[141](index=141&type=chunk) - Anticipated capital expenditures for 2023 are **$20 million** to **$22 million**, an increase over prior periods, primarily for new product development and leasehold improvements, funded by operating cash flows[146](index=146&type=chunk) [Contractual Obligations](index=31&type=section&id=Contractual%20Obligations) This section provides information on the company's operating lease right-of-use assets and lease liabilities - As of March 31, 2023, the Company's operating lease right-of-use asset was **$6.1 million** and lease liability was **$8.0 million**[142](index=142&type=chunk) [Other Capital Requirements](index=31&type=section&id=Other%20Capital%20Requirements) This section discusses unrecognized tax benefits and the remaining availability under the stock repurchase plan - The Company recorded **$0.8 million** in unrecognized tax benefits as liabilities, with a possibility of recognizing up to **$0.2 million** in the next 12 months[144](index=144&type=chunk) - As of March 31, 2023, **$8.2 million** remained available for repurchase under the current stock repurchase plan[145](index=145&type=chunk) [Cyclicality](index=31&type=section&id=Cyclicality) This section addresses the historical cyclicality of the labor market and its potential impact on the company's revenues and recruitment activity - The labor market and industries served by the Company have historically experienced short-term cyclicality, with online career websites providing strategic value[147](index=147&type=chunk) - Slowdowns in recruitment activity can negatively impact revenues, while decreases in unemployment or labor shortages generally have a positive impact, though with a lag in revenue recognition[148](index=148&type=chunk)[149](index=149&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=28&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section outlines the Company's exposure to financial market risks, specifically foreign currency exchange rates and interest rates, and how these risks are managed or impact the financial position [Foreign Exchange Risk](index=33&type=section&id=Foreign%20Exchange%20Risk) This section assesses the company's exposure to foreign currency exchange rate fluctuations, primarily through its equity method investment - The Company's primary operations are within the United States, limiting direct foreign exchange risk, but its equity method investment in eFC (functional currency British Pound Sterling) introduces foreign exchange risk, though not expected to be significant[152](index=152&type=chunk) [Interest Rate Risk](index=33&type=section&id=Interest%20Rate%20Risk) This section details the company's exposure to interest rate risk, primarily from variable-rate borrowings under its credit agreement - Interest rate risk primarily relates to borrowings under the Credit Agreement, which bear variable interest rates (SOFR or base rate plus a margin)[153](index=153&type=chunk) - As of March 31, 2023, with **$46.0 million** outstanding, a hypothetical **1.0%** increase in variable rates would increase interest expense by approximately **$0.1 million** for the three months ended March 31, 2023[153](index=153&type=chunk) [Item 4. Controls and Procedures](index=28&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details the evaluation of the Company's disclosure controls and procedures and reports on any changes in internal controls over financial reporting [Evaluation of Disclosure Controls and Procedures](index=33&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) This section reports management's conclusion on the effectiveness of the company's disclosure controls and procedures as of March 31, 2023 - Management, with CEO and CFO participation, concluded that the Company's disclosure controls and procedures were effective as of March 31, 2023, providing reasonable assurance that required information is recorded, processed, summarized, and reported timely[154](index=154&type=chunk)[156](index=156&type=chunk) [Changes in Internal Controls](index=34&type=section&id=Changes%20in%20Internal%20Controls) This section confirms that no material changes occurred in the company's internal controls over financial reporting during the quarter - No material changes in internal controls over financial reporting occurred during the quarter ended March 31, 2023[157](index=157&type=chunk) PART II. OTHER INFORMATION This section includes information on legal proceedings, risk factors, equity security sales, and other required disclosures [Item 1. Legal Proceedings](index=30&type=section&id=Item%201.%20Legal%20Proceedings) This section addresses the Company's involvement in legal disputes and litigation - The Company is not currently a party to any material pending legal proceedings, beyond those noted in the financial statements[159](index=159&type=chunk) [Item 1A. Risk Factors](index=30&type=section&id=Item%201A.%20Risk%20Factors) This section refers to the risk factors that could materially affect the Company's business, financial condition, or results of operations - There have been no material changes to the risk factors previously disclosed in the Company's Annual Report on Form 10-K as of May 10, 2023[160](index=160&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=30&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section provides information on the Company's stock repurchase programs and related equity security transactions - The Board approved a new **$10.0 million** stock repurchase program in February 2023, valid through February 2024[162](index=162&type=chunk) Stock Repurchases During Q1 2023 | Period | Total Shares Purchased | Average Price Paid per Share | | :-------------------------- | :--------------------- | :--------------------------- | | January 1 through January 31, 2023 | 500,280 | $5.74 | | February 1 through February 28, 2023 | 360,027 | $5.30 | | March 1 through March 31, 2023 | 268,340 | $3.86 | | Total | 1,128,647 | | - Total shares purchased in Q1 2023 included **0.7 million** shares under stock repurchase plans and **0.4 million** shares withheld for employee income tax obligations[164](index=164&type=chunk) - As of March 31, 2023, approximately **$8.2 million** remained available for purchase under the current stock repurchase plan[164](index=164&type=chunk) [Item 5. Other Information](index=32&type=section&id=Item%205.%20Other%20Information) This section indicates that there is no other information to report - No other information is reported in this section[166](index=166&type=chunk) [Item 6. Exhibits](index=33&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Form 10-Q - The exhibits include corporate governance documents (Certificate of Incorporation, By-laws), specimen stock certificate, certifications from CEO and CFO (Sarbanes-Oxley Act Sections 302 and 906), and XBRL-related documents[167](index=167&type=chunk)

Financial Performance and Metrics - Net income for 2022 was $4.176 million, compared to a net loss of $29.742 million in 2021 and $30.015 million in 2020[439] - Basic earnings per share from continuing operations were $0.09 in 2022, compared to a loss of $0.01 in 2021 and $0.67 in 2020[439] - Diluted earnings per share from continuing operations were $0.09 in 2022, compared to a loss of $0.01 in 2021 and $0.67 in 2020[439] - Weighted-average shares outstanding for basic EPS were 44.274 million in 2022, 46.333 million in 2021, and 48.278 million in 2020[439] - 2.6 million shares were excluded from diluted EPS calculation in 2021 and 1.3 million in 2020 due to net losses from continuing operations[439] - Accumulated other comprehensive loss for 2022 was $481 thousand, compared to $61 thousand in 2021 and $28.5 million in 2020[413] - The company reclassified $28.1 million of currency translation adjustments to the Statements of Operations in 2021[413] - Foreign currency translation adjustment was a loss of $420 thousand in 2022, compared to a gain of $395 thousand in 2021 and $729 thousand in 2020[413] - The company contributed $2.1 million, $1.7 million, and $1.6 million to the employee savings plan for 2022, 2021, and 2020 respectively[438] Customer and Market Growth - Dice recruitment package customers increased from 5,150 in 2020 to 6,311 in 2022, while ClearanceJobs customers grew from 1,718 to 2,064 over the same period[87] - The company serves approximately 10,800 diversified customers, with no single customer accounting for more than 10% of 2022 revenues[56] - ClearanceJobs revenue more than doubled over the past five years, driven by its unique franchise in the cleared professionals market[46] - ClearanceJobs had approximately 67,000 job postings and an average of 630,000 monthly users in 2022[34] - The U.S. unemployment rate for computer-related occupations was 1.8% in December 2022, compared to the national average of 3.5%[36] Product Development and Innovation - Dice launched new products in 2022, including a New Job Page, TalentSearch Auto Talent Alerts, and iOS Messaging[47] - ClearanceJobs introduced Company Pages, Scheduled Broadcast Messages, and Live Video in 2022[47] - The company is investing in engineering talent to increase the pace of innovation and improve product delivery quality and speed[48] - Marketing efforts are focused on driving traffic to Dice, increasing qualified leads, and growing visible profiles with lower costs[48] - The company is incorporating AI into its offerings, which presents risks such as flawed algorithms, biased datasets, and potential reputational harm if AI systems cause harm or controversy[104] Financial Liabilities and Debt - The company had $30.0 million in outstanding indebtedness as of December 31, 2022, with an additional borrowing capacity of $70.0 million under its Credit Agreement[99] - The company’s Credit Agreement includes restrictive covenants and financial ratio requirements, with non-compliance potentially leading to default and accelerated repayment obligations[102] - The company expects interest payments of $2.0 million per year from 2023 to 2026 and $1.0 million in 2027, based on an interest rate of 6.67%[258] - The actual interest rates on LIBOR rate loans were 6.67% and 1.88% as of December 31, 2022 and 2021, respectively, with interest margins of 2.35% and 1.75% for the same periods[394] - The company's revolving credit facility had borrowings of $30,000 and $23,000 as of December 31, 2022 and 2021, respectively, with available capacity of $70,000 and $67,000 for the same periods[394] Operational Risks and Challenges - The company faces intense competition from generalist job boards, specialist job boards, and emerging competitors with new business models[81] - The company faces challenges in maintaining website performance, including potential disruptions, outages, and capacity constraints, which could negatively impact user engagement and customer acquisition[105] - Capacity constraints and system failures could significantly impact the company's ability to maintain service quality, potentially leading to decreased usage and attractiveness of its services[106] - The company relies heavily on Amazon Web Services for hosting its websites, and any disruptions in these services could harm its business and reputation[116] - Cyber-attacks and security breaches could result in significant financial and reputational damage, despite existing security measures[109][110] - The company's business depends on the collection and use of personal and professional data, which is subject to increasing regulatory scrutiny and potential legal liabilities[117][119] - Changes in search engine algorithms or competitors' SEO efforts could negatively impact user engagement and growth[113][114] - The company faces risks from third-party data aggregation and copycat websites, which could harm its brand and business[115] - Regulatory changes, such as the California Consumer Privacy Act (CCPA) and California Privacy Rights Act (CPRA), could increase compliance costs and restrict business operations[119][120] - Internet-wide incidents or changes in industry standards could result in regulatory penalties and deter users from using the company's services[118] - The company is subject to U.S. government regulations on the Internet, including potential taxes and restrictions on communication methods, which could adversely affect its business[121] - Changes in laws or regulations, including net neutrality, could decrease demand for the company's services and increase business costs[122] - The company faces risks from potential discriminatory or anti-competitive practices by local network operators, which could impede growth and increase expenses[123] - Global internet regulations or prosecutions for unintentional violations could harm the company's business and financial condition[124] - The company's performance depends on retaining key executives and personnel, with potential adverse effects from employee turnover or competition[126] - Economic downturns, such as the 2001 recession, could lead to revenue declines, as seen with a 29% drop in 2009 compared to 2008[127][128] - The COVID-19 pandemic caused a 37.8 million impairment charge in 2020 due to reduced recruitment activity and economic instability[129] - The company's stock price volatility and potential delisting from the NYSE could negatively impact liquidity and market value[141][142] - Failure to maintain effective internal control over financial reporting could harm the company's business and stock price[143] - The company faces risks from intellectual property infringement claims, which could result in costly litigation or business modifications[132] - Climate change, natural disasters, and public health issues could disrupt operations and negatively impact financial performance[135] Goodwill and Intangible Assets - Goodwill and intangible assets as of December 31, 2022, were $128.1 million and $23.8 million, representing 57% and 10% of total assets, respectively[80] - Impairment charges totaling $37.8 million were recorded in 2020 due to COVID-19 impacts on future earnings and cash flows[80] - The remaining useful life of the Dice.com trademarks and brand name was determined to be indefinite, with an annual impairment test performed on October 1 of each year[373] Capital Expenditures and Investments - Capital expenditures for 2023 are anticipated to be between $20 million and $22 million, driven by investments in new product development[263] - The company repurchased 3.3 million shares for $18.6 million in 2022, with $2.1 million remaining under the current repurchase plan[262] - The company sold a minority interest in a technology company for $1.2 million in 2021, resulting in a realized gain[360] - The company received $2.1 million from a legal settlement with a former employee in Q4 2022[365] - The company's equity in net assets of eFC as of June 30, 2021 was $2.2 million, with a recorded fair value of $3.6 million on the same date[368] - The company recorded $1.6 million and $0.2 million of income related to its proportionate share of eFC's net income for the years ended December 31, 2022 and 2021, respectively[368] Leases and Real Estate - The company's lease right-of-use asset was valued at $6.6 million and lease liability at $8.5 million as of December 31, 2022[259] - Operating lease costs for 2022 were $2.1 million, with total lease costs of $1.6 million after sublease income[352] - The company recorded a $1.9 million impairment charge on right-of-use assets in 2021 due to COVID-19 impacts on real estate markets[357] Accounts Receivable and Tax Valuation - The company's reserve for uncollectible accounts receivable was $1,374, $733, and $1,001 as of December 31, 2022, 2021, and 2020, respectively[465] - The company's deferred tax valuation allowance was $5,694, $5,139, and $5,305 as of December 31, 2022, 2021, and 2020, respectively[465] Share Repurchases and Equity Plans - The company repurchased shares with associated costs of $65,990, $55,780, and $71,217 as of December 31, 2022, 2021, and 2020, respectively[405] - The company had 2,086,933, 1,593,775, and 1,352,438 non-vested PSUs as of December 31, 2022, 2021, and 2020, respectively[422] - No dividends were declared during the years ended December 31, 2022, 2021, or 2020 due to limitations in the Credit Agreement[412] - The company approved the 2022 Omnibus Equity Award Plan on July 13, 2022, replacing the expired 2012 Omnibus Equity Award Plan[414]

DHI Group, Inc. (NYSE:DHX) Q4 2022 Results Conference Call February 7, 2023 5:00 PM ET Company Participants Todd Kehrli - MKR Investor Relations Art Zeile - Chief Executive Officer Kevin Bostick - Chief Financial Officer Conference Call Participants Zach Cummins - B. Riley Securities Eric Martinuzzi - Lake Street Capital Kevin Liu - K. Liu & Company Anja Soderstrom - Sidoti & Co. Operator Hello and welcome to the DHI Group's Fourth Quarter and Full Year 2022 Financial Results Conference Call. All participan ...

DHI Group, Inc. (NYSE:DHX) Q3 2022 Earnings Conference Call November 2, 2022 5:00 PM ET Company Participants Todd Kehrli - MKR Investor Relations Art Zeile - Chief Executive Officer Kevin Bostick - Chief Financial Officer Conference Call Participants Zach Cummins - B. Riley Securities Eric Martinuzzi - Lake Street Gary Prestopino - Barrington Research Kevin Liu - K. Liu & Company LLC Operator Good day, and welcome to the DHI Group, Inc. Third Quarter 2022 Financial Results Conference Call. All participants’ ...

PART I. FINANCIAL INFORMATION [Unaudited Financial Statements](index=3&type=section&id=Item%201.%20Unaudited%20Financial%20Statements) Presents DHI Group's unaudited condensed consolidated financial statements for Q3 and YTD 2022, showing revenue growth and a shift to net income driven by continuing operations Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | Sep 30, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | **Total Assets** | **$222,786** | **$221,578** | | Total Current Assets | $26,588 | $24,456 | | Goodwill | $128,100 | $128,100 | | **Total Liabilities** | **$117,452** | **$105,216** | | Deferred Revenue (Current) | $51,455 | $45,217 | | Long-term Debt, net | $30,000 | $22,730 | | **Total Stockholders' Equity** | **$105,334** | **$116,362** | Condensed Consolidated Statements of Operations Highlights (in thousands, except per share data) | Metric | Three Months Ended Sep 30, 2022 | Three Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | **Revenues** | **$38,527** | **$30,758** | **$109,918** | **$86,155** | | Operating Income (Loss) | $1,218 | $(2,215) | $2,751 | $(1,911) | | Income (Loss) from Continuing Operations | $(926) | $(2,434) | $1,825 | $(634) | | **Net Income (Loss)** | **$(926)** | **$(2,434)** | **$1,825** | **$(29,974)** | | Diluted EPS | $(0.02) | $(0.05) | $0.04 | $(0.64) | Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Cash Flow Activity | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | | :--- | :--- | :--- | | Net cash flows from operating activities | $28,686 | $25,623 | | Net cash flows used in investing activities | $(13,073) | $(15,460) | | Net cash flows used in financing activities | $(13,305) | $(14,327) | | **Net change in cash and cash equivalents** | **$2,308** | **$(4,154)** | - The company operates as a **single reportable segment**, "Tech-focused," including the Dice and ClearanceJobs brands, with all operations in the United States following the deconsolidation of the eFinancialCareers ("eFC") business[27](index=27&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes detail accounting policies, revenue recognition, eFC deconsolidation, investment impairment, credit agreement, and equity transactions - On June 30, 2021, the Company transferred majority ownership of its eFinancialCareers (eFC) business, retaining a **40% interest**, now treated as a **discontinued operation** and accounted for under the **equity method**[26](index=26&type=chunk)[35](index=35&type=chunk)[56](index=56&type=chunk) Disaggregated Revenue by Brand (in thousands) | Brand | Three Months Ended Sep 30, 2022 | Three Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | Dice | $27,342 | $22,272 | $78,799 | $61,906 | | ClearanceJobs | $11,185 | $8,486 | $31,119 | $24,249 | | **Total** | **$38,527** | **$30,758** | **$109,918** | **$86,155** | - In Q3 2022, a subordinated convertible promissory note was converted into preferred shares, resulting in a recognized impairment loss of **$2.3 million**[54](index=54&type=chunk) - In June 2022, the company entered into a new Third Amended and Restated Credit Agreement, increasing its revolving loan facility to **$100 million**, with **$30 million** outstanding as of September 30, 2022[70](index=70&type=chunk)[78](index=78&type=chunk) - The company repurchased **2.65 million shares** for **$15.0 million** during the nine months ended September 30, 2022, with an additional **$5.7 million** remaining available for repurchase under the current plan[83](index=83&type=chunk)[84](index=84&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=24&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q3 and YTD 2022 financial results, highlighting strong revenue growth, increased operating expenses, and liquidity [Revenues and Key Metrics](index=26&type=section&id=Our%20Revenues%20and%20Expenses) Revenue from recruitment packages showed positive trends with double-digit growth in customers and average revenue per customer, increasing backlog Recruitment Package Customers (as of Sep 30) | Brand | 2022 | 2021 | % Change | | :--- | :--- | :--- | :--- | | Dice | 6,409 | 5,770 | 11% | | ClearanceJobs | 2,030 | 1,816 | 12% | Average Annual Revenue per Recruitment Package Customer (Three Months Ended Sep 30) | Brand | 2022 | 2021 | % Change | | :--- | :--- | :--- | :--- | | Dice | $14,868 | $13,656 | 9% | | ClearanceJobs | $19,308 | $17,052 | 13% | - Total backlog, including deferred revenue and un-invoiced contractual commitments, increased to **$102.9 million** at September 30, 2022, a **29% increase** from **$79.9 million** at September 30, 2021, driven by strong bookings and multi-year contracts[116](index=116&type=chunk)[117](index=117&type=chunk) [Results of Operations](index=28&type=section&id=Results%20of%20Operations) Results show strong top-line growth for Q3 and YTD 2022, with total revenues up 25% and 28%, and operating income improving significantly Revenue Growth (Three Months Ended Sep 30) | Brand | 2022 (in thousands) | 2021 (in thousands) | % Change | | :--- | :--- | :--- | :--- | | Dice | $27,342 | $22,272 | 23% | | ClearanceJobs | $11,185 | $8,486 | 32% | | **Total** | **$38,527** | **$30,758** | **25%** | Revenue Growth (Nine Months Ended Sep 30) | Brand | 2022 (in thousands) | 2021 (in thousands) | % Change | | :--- | :--- | :--- | :--- | | Dice | $78,799 | $61,906 | 27% | | ClearanceJobs | $31,119 | $24,249 | 28% | | **Total** | **$109,918** | **$86,155** | **28%** | - Operating expenses **increased** across all categories for the three and nine-month periods, primarily due to higher compensation-related costs from increased headcount and sales quota attainment, and increased discretionary marketing spend to support sales growth[126](index=126&type=chunk)[127](index=127&type=chunk)[129](index=129&type=chunk)[130](index=130&type=chunk) - Operating income for the nine months ended September 30, 2022, was **$2.8 million**, a significant improvement from an operating loss of **$1.9 million** in the same period of 2021, driven by higher revenues partially offset by investments in product, sales, and marketing[151](index=151&type=chunk) [Liquidity and Capital Resources](index=38&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains solid liquidity, financed by operations and a credit facility, with increased operating cash flow and capital deployed for growth Reconciliation of Net Income (Loss) to Adjusted EBITDA (in thousands) | Line Item | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | | :--- | :--- | :--- | | Net income (loss) | $1,825 | $(29,974) | | Interest expense | $990 | $517 | | Income tax benefit | $(937) | $(511) | | Depreciation | $12,594 | $12,030 | | Non-cash stock-based compensation | $7,188 | $5,592 | | Loss from discontinued operations, net of tax | — | $29,340 | | Other Adjustments | $892 | $1,221 | | **Adjusted EBITDA** | **$22,852** | **$19,085** | - Adjusted EBITDA for the nine months ended September 30, 2022, was **$22.9 million** (**21% margin**), compared to **$19.1 million** (**22% margin**) for the same period in 2021[169](index=169&type=chunk)[171](index=171&type=chunk) - The company anticipates capital expenditures for the full year 2022 to be approximately **$19 million**, an increase over prior periods due to investments in new product development[185](index=185&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=44&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate exposure from its variable-rate credit facility, with minimal foreign exchange risk - As of September 30, 2022, the company had **$30.0 million** in outstanding borrowings under its variable-rate Credit Agreement, where a hypothetical **1.0%** increase in interest rates would increase annual interest expense by approximately **$0.3 million**[194](index=194&type=chunk) - Subsequent to the deconsolidation of the eFC business on June 30, 2021, the company's operations are conducted entirely within the United States, significantly reducing its exposure to foreign exchange risk[193](index=193&type=chunk) [Controls and Procedures](index=45&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were effective as of September 30, 2022, with no material changes to internal controls during the quarter - The CEO and CFO concluded that as of September 30, 2022, the company's disclosure controls and procedures were **effective** at a reasonable assurance level[195](index=195&type=chunk) - There were **no changes** in internal controls over financial reporting during the quarter ended September 30, 2022, that have materially affected, or are reasonably likely to materially affect, these controls[196](index=196&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=46&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently a party to any material pending legal proceedings, beyond ordinary course claims - The company is **not currently a party to any material pending legal proceedings**[198](index=198&type=chunk) [Risk Factors](index=46&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K - As of November 2, 2022, there have been **no material changes** from the risk factors previously disclosed in the company's Annual Report on Form 10-K[199](index=199&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=46&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's common stock repurchase activity during Q3 2022, executing its board-authorized program monthly Share Repurchases (Quarter Ended Sep 30, 2022) | Period | Total Shares Purchased (shares) | Average Price Paid per Share ($) | Shares Purchased as Part of Announced Programs (shares) | Approx. Dollar Value Remaining for Purchase ($) | | :--- | :--- | :--- | :--- | :--- | | July 2022 | 311,353 | $5.03 | 235,173 | $8,240,843 | | August 2022 | 264,598 | $5.17 | 264,598 | $6,871,835 | | September 2022 | 220,006 | $5.55 | 220,006 | $5,651,565 | | **Total** | **795,957** | **-** | **719,777** | **-** | [Other Information](index=47&type=section&id=Item%205.%20Other%20Information) No other information is reported for this item - None[202](index=202&type=chunk) [Exhibits](index=48&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with Form 10-Q, including CEO/CFO certifications and XBRL data files

DHI Group, Inc. (NYSE:DHX) Q2 2022 Earnings Conference Call August 3, 2022 5:00 PM ET Company Participants Todd Kehrli - MKR Investor Relations Art Zeile - Chief Executive Officer Kevin Bostick - Chief Financial Officer Conference Call Participants Zach Cummins - B. Riley Securities Max Michaelis - Lake Street Capital Markets Anja Soderstrom - Sidoti & Co., LLC Kevin Liu - K. Liu & Company LLC Operator Good afternoon, and welcome to DHI Group Inc. Second Quarter 2022 Financial Results. [Operator Instruction ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarter ended June 30, 2022 ______________________________________________ OR ☐ TRANSITION PERIOD PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO Commission File Number: 001-33584 ____________________________________________ DHI Group, Inc. (Exac ...

Financial Data and Key Metrics Changes - Total revenue for Q1 2022 was $34.3 million, representing a 29% year-over-year increase and a 2% sequential increase [27] - Total bookings for the quarter were $50.7 million, up 32% year-over-year [27] - Adjusted EBITDA for the first quarter was $6.9 million, with a margin of 20%, compared to $5.6 million and a margin of 21% in the prior year [35] - Income from continuing operations was $1.3 million or $0.03 per diluted share, compared to $2 million or $0.04 per diluted share a year ago [33] Business Line Data and Key Metrics Changes - Dice revenue was $24.6 million, up 29% year-over-year, with bookings of $36.8 million, also up 32% year-over-year [28] - ClearanceJobs revenue was $9.7 million, up 27% year-over-year, with bookings of $13.9 million, up 31% year-over-year [30] - Dice customer count increased to 6,249, a 20% year-over-year growth [28] - ClearanceJobs customer count reached 1,928, a 10% year-over-year increase [30] Market Data and Key Metrics Changes - U.S. employers posted 1.1 million tech jobs, a 43% increase from the previous year [10] - Average tech salaries increased by 6.9% from 2020 to 2021 [10] - The total addressable market for Dice and ClearanceJobs is estimated to exceed $1 billion annually [17][22] Company Strategy and Development Direction - The company is focusing on expanding its sales team and increasing marketing spend to capture growth opportunities in the technology recruitment market [18][32] - The strategy includes targeting commercial accounts and staffing firms, with a significant addressable market identified [15][22] - The company aims to maintain adjusted EBITDA margins at or near 20% while investing in growth [40] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong demand for technologists and the positive momentum in bookings, expecting revenue growth of 20% to 22% for the full year [39] - The company anticipates that the ongoing digital transformation across industries will sustain demand for tech talent, even in a potentially challenging macroeconomic environment [60] - Management noted that the defense budget increase due to geopolitical tensions could benefit ClearanceJobs [59] Other Important Information - Deferred revenue at the end of the quarter was $56.8 million, up 27% year-over-year [37] - The company repurchased approximately 1.3 million shares for $7.5 million during the quarter [38] Q&A Session Summary Question: What is the key driver behind the upward revision to the guidance? - Management indicated that strong bookings and positive momentum in the commercial accounts division are key drivers for the revised guidance [43][44] Question: How should the long-term profitability outlook be viewed? - Management believes that margins could reach the 30% range over the next three to four years, consistent with other SaaS models [46] Question: What investments have been successful in Q1? - The marketing investment aimed at brand awareness campaigns resulted in a 50% increase in traffic to the Dice site [55] Question: Has there been any incremental demand for ClearanceJobs due to the conflict in Ukraine? - Management noted that increased defense budgets during wartime typically lead to higher demand for cleared professionals [59] Question: How is the overall demand for tech talent expected to evolve? - Management expects continued demand for technologists due to the acceleration of digital strategies across businesses [60] Question: What is the mix of recurring versus non-recurring revenues? - The company maintains a consistent 90-10 mix of recurring to non-recurring revenues across both business lines [51]

[PART I. FINANCIAL INFORMATION](index=2&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents DHI Group, Inc.'s unaudited financial statements and management's analysis for Q1 2022 [Item 1. Unaudited Financial Statements](index=3&type=section&id=Item%201.%20Unaudited%20Financial%20Statements) This section presents DHI Group, Inc.'s unaudited condensed consolidated financial statements for Q1 2022 and 2021, with accompanying detailed notes - Financial statements are unaudited and prepared in accordance with SEC rules and U.S. GAAP, with adjustments consisting of normal and recurring accruals[25](index=25&type=chunk) - Operating results for the three-month period ended March 31, 2022, are not necessarily indicative of full-year results[25](index=25&type=chunk) - The eFinancialCareers (eFC) business was deconsolidated as of **June 30, 2021**, and is reflected as a discontinued operation, with ongoing operations focused on the **Tech-focused** segment (Dice and ClearanceJobs) in the United States[27](index=27&type=chunk)[28](index=28&type=chunk) [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section presents the Company's condensed consolidated balance sheets as of March 31, 2022, and December 31, 2021 | Metric | March 31, 2022 (in thousands) | December 31, 2021 (in thousands) | Change (vs Dec 31, 2021) | | :-------------------------------- | :---------------------------- | :------------------------------- | :----------------------- | | Total Assets | $228,419 | $221,578 | +$6,841 | | Total Liabilities | $120,214 | $105,216 | +$14,998 | | Total Stockholders' Equity | $108,205 | $116,362 | -$8,157 | | Cash and cash equivalents | $4,966 | $1,540 | +$3,426 | | Accounts receivable, net | $22,205 | $18,385 | +$3,820 | | Deferred revenue (current) | $55,787 | $45,217 | +$10,570 | | Long-term debt, net | $32,767 | $22,730 | +$10,037 | [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section presents the Company's condensed consolidated statements of operations for Q1 2022 and 2021, detailing revenues, expenses, and net income | Metric | Three Months Ended March 31, 2022 (in thousands) | Three Months Ended March 31, 2021 (in thousands) | YoY Change | YoY % Change | | :--------------------------------- | :--------------------------------------- | :--------------------------------------- | :--------- | :----------- | | Revenues | $34,334 | $26,676 | +$7,658 | +28.7% | | Total Operating Expenses | $33,706 | $26,860 | +$6,846 | +25.5% | | Operating Income (Loss) | $628 | $(184) | +$812 | -441.3% | | Income before income taxes | $538 | $2,134 | -$1,596 | -74.8% | | Net Income | $1,301 | $2,671 | -$1,370 | -51.3% | | Basic EPS - continuing operations | $0.03 | $0.04 | -$0.01 | -25.0% | | Diluted EPS - continuing operations | $0.03 | $0.04 | -$0.01 | -25.0% | | Basic EPS | $0.03 | $0.06 | -$0.03 | -50.0% | | Diluted EPS | $0.03 | $0.05 | -$0.02 | -40.0% | [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20%28Loss%29) This section presents the Company's condensed consolidated statements of comprehensive income (loss) for the three months ended March 31, 2022, and 2021 | Metric | Three Months Ended March 31, 2022 (in thousands) | Three Months Ended March 31, 2021 (in thousands) | YoY Change | YoY % Change | | :---------------------------- | :--------------------------------------- | :--------------------------------------- | :--------- | :----------- | | Net Income | $1,301 | $2,671 | -$1,370 | -51.3% | | Foreign currency translation adjustment | $8 | $297 | -$289 | -97.3% | | Total other comprehensive income | $8 | $297 | -$289 | -97.3% | | Comprehensive Income | $1,309 | $2,968 | -$1,659 | -55.9% | [Condensed Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity) This section presents the Company's condensed consolidated statements of stockholders' equity for Q1 2022 and December 31, 2021 | Metric | March 31, 2022 (in thousands) | December 31, 2021 (in thousands) | Change | | :-------------------------------- | :---------------------------- | :------------------------------- | :----- | | Total Stockholders' Equity | $108,205 | $116,362 | -$8,157 | | Additional Paid-in Capital | $244,065 | $241,854 | +$2,211 | | Accumulated Earnings | $25,530 | $24,229 | +$1,301 | | Treasury Stock | $(162,099) | $(150,398) | -$11,701 | - Net income for the period was **$1.301 million**[21](index=21&type=chunk) - Stock-based compensation added **$2.235 million** to additional paid-in capital[21](index=21&type=chunk) - Purchase of treasury stock under stock repurchase plan amounted to **$7.499 million**[21](index=21&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section presents the Company's condensed consolidated statements of cash flows for the three months ended March 31, 2022, and 2021 | Metric | Three Months Ended March 31, 2022 (in thousands) | Three Months Ended March 31, 2021 (in thousands) | YoY Change | | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | :--------- | | Net cash flows from operating activities | $9,218 | $6,424 | +$2,794 | | Net cash flows used in investing activities | $(4,091) | $(3,703) | -$388 | | Net cash flows used in financing activities | $(1,701) | $(3,012) | +$1,311 | | Net change in cash and cash equivalents | $3,426 | $(321) | +$3,747 | | Cash and cash equivalents, end of period | $4,966 | $7,319 | -$2,353 | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures for the condensed consolidated financial statements, covering accounting policies, fair value, revenue, and equity - The Company operates as a single reportable segment, **"Tech-focused,"** comprising Dice and ClearanceJobs brands, with all operations now in the United States following the deconsolidation of eFinancialCareers (eFC)[28](index=28&type=chunk) - Management believes all adjustments (normal and recurring accruals) have been made to fairly present the financial position, results of operations, and cash flows[25](index=25&type=chunk) [Note 1. BASIS OF PRESENTATION](index=8&type=section&id=Note%201.%20BASIS%20OF%20PRESENTATION) This note outlines the basis of presentation for the unaudited condensed consolidated financial statements, including GAAP and segment reporting - Unaudited condensed consolidated financial statements prepared under SEC rules and U.S. GAAP, with normal and recurring accruals[25](index=25&type=chunk) - eFinancialCareers (eFC) business was deconsolidated on **June 30, 2021**, and is now reflected as a discontinued operation[27](index=27&type=chunk) - The Company operates as a single **"Tech-focused"** reportable segment, including Dice and ClearanceJobs, with all operations in the United States[28](index=28&type=chunk) [Note 2. NEW ACCOUNTING STANDARDS](index=8&type=section&id=Note%202.%20NEW%20ACCOUNTING%20STANDARDS) This note discusses the Company's evaluation of new accounting standards and their potential impact on financial statements - The Company is evaluating the expected impact of ASU No. 2016-13 (Financial Instruments - Credit Losses) on its consolidated financial statements, effective for Smaller Reporting Companies for fiscal years beginning after **December 15, 2022**[29](index=29&type=chunk) [Note 3. FAIR VALUE MEASUREMENTS](index=8&type=section&id=Note%203.%20FAIR%20VALUE%20MEASUREMENTS) This note details the Company's fair value measurements for financial instruments, including the hierarchy of inputs used for valuation - Fair value hierarchy (**Level 1, 2, 3**) is used for financial instruments[31](index=31&type=chunk) - Carrying amounts of cash, receivables, payables, and long-term debt approximate fair values[32](index=32&type=chunk) - Investments (non-current) at fair value use **Level 3** inputs (discounted cash flow based on probability of outcomes), while long-term debt fair value uses **Level 2** inputs (present value techniques and market-based rates)[32](index=32&type=chunk) - The **40%** interest in eFC was valued using a combination of discounted cash flow and market approach, with a **19.0%** discount rate[34](index=34&type=chunk) [Note 4. DISCONTINUED OPERATIONS](index=9&type=section&id=Note%204.%20DISCONTINUED%20OPERATIONS) This note provides details on the eFinancialCareers (eFC) business, which was deconsolidated and is now reflected as a discontinued operation - Majority ownership of eFinancialCareers (eFC) was transferred on **June 30, 2021**, and its financial results are reflected as discontinued operations[35](index=35&type=chunk) Discontinued Operations Financial Summary | Metric | 2021 (in thousands) | | :------------------------- | :----- | | Revenues | $5,957 | | Operating expenses | $(5,275) | | Operating income | $682 | | Net income | $659 | Discontinued Operations Cash Flow Items | Metric | 2021 (in thousands) | | :------------------------ | :----- | | Depreciation | $465 | | Purchases of fixed assets | $124 | [Note 5. REVENUE RECOGNITION](index=10&type=section&id=Note%205.%20REVENUE%20RECOGNITION) This note explains the Company's revenue recognition policies, including how revenue is generated and recognized from contracts with customers - Revenue is recognized when control of the promised goods or services is transferred, net of discounts, ratably over the service period[39](index=39&type=chunk) - Revenue is primarily generated from recruitment packages, advertising, classifieds, and event booth rentals[39](index=39&type=chunk) Revenue by Brand | Brand | Three Months Ended March 31, 2022 (in thousands) | Three Months Ended March 31, 2021 (in thousands) | YoY Change (in thousands) | YoY % Change | | :------------ | :-------------------------------- | :-------------------------------- | :--------- | :----------- | | Dice | $24,634 | $19,051 | +$5,583 | +29.3% | | ClearanceJobs | $9,700 | $7,625 | +$2,075 | +27.2% | | Total | $34,334 | $26,676 | +$7,658 | +28.7% | Contract Balances | Metric | March 31, 2022 (in thousands) | December 31, 2021 (in thousands) | | :-------------------------------- | :------------- | :---------------- | | Receivables | $22,205 | $18,385 | | Short-term deferred revenue | $55,787 | $45,217 | | Long-term deferred revenue | $999 | $929 | Revenue from Contract Liability | Period | 2022 (in thousands) | 2021 (in thousands) | | :-------------------------------------------------- | :----- | :----- | | Revenue from contract liability at beginning of period | $20,940 | $17,296 | Remaining Performance Obligations | Period | Tech-focused (in thousands) | | :------------------------ | :----------- | | Remainder of 2022 | $52,404 | | 2023 | $4,092 | | 2024 | $274 | | 2025 | $16 | | Total | $56,786 | [Note 6. LEASES](index=11&type=section&id=Note%206.%20LEASES) This note describes the Company's operating leases for corporate office space and equipment, including lease costs and liabilities - The Company has operating leases for corporate office space and equipment, with terms from one to eight years, some with renewal options[45](index=45&type=chunk) Lease Costs | Metric | Three Months Ended March 31, 2022 (in thousands) | Three Months Ended March 31, 2021 (in thousands) | | :------------------- | :-------------------------------- | :-------------------------------- | | Operating lease cost | $509 | $564 | | Sublease income | $(123) | $(180) | | Total lease cost | $386 | $384 | Lease Balances and Rates | Metric | March 31, 2022 (in thousands) | December 31, 2021 (in thousands) | | :-------------------------------- | :------------- | :---------------- | | Operating lease right-of-use assets | $6,445 | $6,888 | | Total operating lease liabilities | $8,784 | $9,370 | | Weighted Average Remaining Lease Term (in years) | 3.4 | 3.6 | | Weighted Average Discount Rate | 3.81% | 3.80% | Operating Lease Maturities | Period | Operating Leases (in thousands) | | :-------------------------------- | :--------------- | | April 1, 2022 through Dec 31, 2022 | $2,029 | | 2023 | $2,451 | | 2024 | $1,965 | | 2025 | $1,946 | | 2026 | $992 | | 2027 and thereafter | $85 | | Total lease payments | $9,468 | | Less imputed interest | $684 | | Total | $8,784 | [Note 7. INVESTMENTS](index=12&type=section&id=Note%207.%20INVESTMENTS) This note details the Company's investments, including equity securities, convertible promissory notes, and equity method investments in Rigzone and eFC - The Company recognized a **$2.5 million** unrealized gain on an equity security investment in **Q1 2021**, which was sold in **Q3 2021**, resulting in a **$1.2 million** realized gain for the nine months ended September 30, 2021[51](index=51&type=chunk) - A **$3.0 million** investment was made in **Q3 2021** via a subordinated convertible promissory note in a values-based career destination company, recorded at fair value (**$3.0 million**) as a trading security[53](index=53&type=chunk) - The Company retains a **40%** common share interest in Rigzone and eFC, accounted for under the equity method[54](index=54&type=chunk)[56](index=56&type=chunk) - Rigzone investment is recorded at **zero** due to approximately zero accumulated earnings[56](index=56&type=chunk) - For eFC, the Company recorded **$0.2 million** of income in **Q1 2022** from its proportionate share of net income, net of currency translation and basis difference amortization[56](index=56&type=chunk) [Note 8. ACQUIRED INTANGIBLE ASSETS, NET](index=14&type=section&id=Note%208.%20ACQUIRED%20INTANGIBLE%20ASSETS%2C%20NET) This note discusses the Company's acquired intangible assets, primarily the Dice.com trademarks and brand name, and related impairment assessments - The Dice.com trademarks and brand name are an indefinite-lived acquired intangible asset valued at **$23.8 million** as of March 31, 2022, and December 31, 2021[61](index=61&type=chunk) - No impairment was recorded for indefinite-lived acquired intangible assets during the three-month periods ended March 31, 2022, and 2021[61](index=61&type=chunk) - The fair value of Dice trademarks and brand name was determined using a relief from royalty rate method (**4.0%** royalty rate, **12.5%** discount rate) in the October 1, 2021 analysis[62](index=62&type=chunk) [Note 9. GOODWILL](index=14&type=section&id=Note%209.%20GOODWILL) This note provides information on the Company's goodwill, specifically for the Tech-focused reporting unit, and its annual impairment testing - Goodwill for the Tech-focused reporting unit remained at **$128.1 million** as of March 31, 2022, with no changes from December 31, 2021[64](index=64&type=chunk) - The annual impairment test as of **October 1, 2021**, indicated the fair value of the Tech-focused reporting unit substantially exceeded its carrying value[64](index=64&type=chunk) - No quantitative impairment test was performed as of March 31, 2022, as results exceeded projections, and no impairment was recorded in **Q1 2022** or **Q1 2021**[65](index=65&type=chunk) - The October 1, 2021 analysis used a discount rate of **11.5%** for the Tech-focused reporting unit[68](index=68&type=chunk) [Note 10. INDEBTEDNESS](index=15&type=section&id=Note%2010.%20INDEBTEDNESS) This note details the Company's indebtedness, primarily its revolving loan facility, and compliance with financial covenants - The Company has a **$90 million** revolving loan facility under a Credit Agreement maturing in **November 2023**[70](index=70&type=chunk) Revolving Credit Facility Details | Metric | March 31, 2022 (in thousands) | December 31, 2021 (in thousands) | | :------------------------------------------------------------------------------------------------------- | :------------- | :---------------- | | Revolving credit facility | $33,000 | $23,000 | | Long-term debt, net | $32,767 | $22,730 | | Available to be borrowed under revolving facility, subject to certain limitations | $57,000 | $67,000 | Interest Rates | Metric | March 31, 2022 | December 31, 2021 | | :---------------- | :------------- | :---------------- | | LIBOR rate loans: Interest margin | 1.75% | 1.75% | | Actual interest rates | 2.25% | 1.88% | | Commitment fee | 0.30% | 0.30% | - The Company was in compliance with all financial covenants under the Credit Agreement as of **March 31, 2022**[72](index=72&type=chunk) [Note 11. COMMITMENTS AND CONTINGENCIES](index=16&type=section&id=Note%2011.%20COMMITMENTS%20AND%20CONTINGENCIES) This note outlines the Company's commitments and contingencies, including routine legal claims and management's assessment of their impact - The Company is subject to various claims from taxing authorities, lawsuits, and other complaints arising in the ordinary course of business[76](index=76&type=chunk) - Management believes the final resolution of these legal matters will not have a material effect on the Company's financial condition, operations, or liquidity[76](index=76&type=chunk) - Provisions for losses are recorded when claims are probable and estimable[76](index=76&type=chunk) [Note 12. EQUITY TRANSACTIONS](index=16&type=section&id=Note%2012.%20EQUITY%20TRANSACTIONS) This note describes the Company's equity transactions, including stock repurchase programs and shares repurchased - The Board approved a new stock repurchase program in **February 2022**, authorizing the purchase of up to **$15 million** of common stock through **February 2023**[78](index=78&type=chunk) - As of **March 31, 2022**, **$13.1 million** remained available for repurchase under the current plan[80](index=80&type=chunk) Stock Repurchases | Metric | Three Months Ended March 31, 2022 (in thousands) | Three Months Ended March 31, 2021 (in thousands) | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Shares repurchased | 1,302,226 | 589,899 | | Average purchase price per share | $5.78 | $2.62 | | Dollar value of shares repurchased | $7,525 | $1,546 | Shares Repurchased Upon Vesting | Metric | Three Months Ended March 31, 2022 (in thousands) | Three Months Ended March 31, 2021 (in thousands) | | :-------------------------------------------------------------------------------- | :-------------------------------- | :-------------------------------- | | Shares repurchased upon restricted stock/PSU vesting | 773,048 | 508,899 | | Average purchase price per share | $5.44 | $2.64 | | Dollar value of shares repurchased upon restricted stock/PSU vesting | $4,202 | $1,343 | [Note 13. STOCK-BASED COMPENSATION](index=17&type=section&id=Note%2013.%20STOCK-BASED%20COMPENSATION) This note provides details on the Company's stock-based compensation expense and the status of non-vested awards - Total stock-based compensation expense was **$2.2 million** for **Q1 2022**, up from **$1.8 million** in **Q1 2021**[85](index=85&type=chunk) - Unrecognized compensation expense related to unvested awards was **$18.1 million** as of **March 31, 2022**, expected to be recognized over approximately **1.5 years**[85](index=85&type=chunk) Restricted Stock Units (RSUs) Activity | Metric | Three Months Ended March 31, 2022 (Shares) | Three Months Ended March 31, 2021 (Shares) | | :---------------------------- | :--------------------------------------- | :--------------------------------------- | | Non-vested at beginning of period | 3,371,832 | 3,877,853 | | Granted | 932,500 | 1,468,223 | | Forfeited | (81,714) | (204,175) | | Vested | (1,098,127) | (1,034,684) | | Non-vested at end of period | 3,124,491 | 4,107,217 | Performance Stock Units (PSUs) Activity | Metric | Three Months Ended March 31, 2022 (Shares) | Three Months Ended March 31, 2021 (Shares) | | :---------------------------- | :--------------------------------------- | :--------------------------------------- | | Non-vested at beginning of period | 1,593,775 | 1,352,438 | | Granted | 1,553,332 | 990,000 | | Forfeited | (93,341) | (105,656) | | Vested | (928,717) | (339,111) | | Non-vested at end of period | 2,125,049 | 1,897,671 | - No stock options were granted during the three months ended March 31, 2022, and 2021[91](index=91&type=chunk) [Note 14. EARNINGS PER SHARE](index=19&type=section&id=Note%2014.%20EARNINGS%20PER%20SHARE) This note presents the Company's basic and diluted earnings per share calculations for continuing and discontinued operations Earnings Per Share Calculation | Metric | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--------------------------------------- | :-------------------------------- | :-------------------------------- | | Net income (in thousands) | $1,301 | $2,671 | | Weighted-average shares outstanding—diluted (in thousands) | 47,170 | 48,606 | | Diluted earnings per share - continuing operations | $0.03 | $0.04 | | Diluted earnings per share - discontinued operations | $0.00 | $0.01 | | Diluted earnings per share | $0.03 | $0.05 | - Diluted EPS decreased from **$0.05** in **Q1 2021** to **$0.03** in **Q1 2022**, primarily due to an unrealized gain on equity securities in 2021[139](index=139&type=chunk) [Note 15. INCOME TAXES](index=20&type=section&id=Note%2015.%20INCOME%20TAXES) This note provides information on the Company's income tax expense (benefit) and effective tax rates for the periods presented Income Tax Details | Metric | Three Months Ended March 31, 2022 (in thousands) | Three Months Ended March 31, 2021 (in thousands) | | :----------------------- | :-------------------------------- | :-------------------------------- | | Effective tax rate | (141.8)% | 5.7% | - The effective tax rate for **Q1 2022** was **(142)%** due to a **$0.8 million** tax benefit from share-based compensation awards[96](index=96&type=chunk)[137](index=137&type=chunk) - The effective tax rate for **Q1 2021** was **6%** due to a **$0.5 million** tax benefit from the release of a valuation allowance on capital loss carryforward[96](index=96&type=chunk)[137](index=137&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's analysis of the Company's financial condition and results of operations for Q1 2022 versus Q1 2021, covering revenue, expenses, liquidity, and Adjusted EBITDA - The Company's strategy is **tech-focused**, with Dice and ClearanceJobs brands serving specialized technology and security-cleared professions in the U.S.[104](index=104&type=chunk)[105](index=105&type=chunk) - The eFinancialCareers (eFC) business was transferred to management on **June 30, 2021**, and is now a discontinued operation[106](index=106&type=chunk) - Key metrics for business analysis include total recruitment package customers and average revenue per customer[109](index=109&type=chunk) [Overview](index=21&type=section&id=Overview) This section provides an overview of DHI Group, Inc.'s business, focusing on its tech-focused career marketplaces in the U.S. - DHI Group, Inc. provides software products, online tools, and services for career marketplaces in the U.S., focusing on technology and government security clearance professionals through its Dice and ClearanceJobs brands[104](index=104&type=chunk) - The Company specializes in employment categories with long-term scarcity of highly skilled professionals[105](index=105&type=chunk) - eFinancialCareers (eFC) business was transferred on **June 30, 2021**, making all ongoing DHI operations (Dice and ClearanceJobs) U.S.-based[106](index=106&type=chunk) - The Company operates as a single reportable segment, **"Tech-focused"**[107](index=107&type=chunk) [Our Revenues and Expenses](index=21&type=section&id=Our%20Revenues%20and%20Expenses) This section discusses the Company's revenue generation from job postings and resume databases, and the primary components of its operating expenses - Majority of revenues are derived from fees for job postings and access to resume databases, varying by customer based on user count, job postings, and package terms[109](index=109&type=chunk) Recruitment Package Customers | Brand | March 31, 2022 (customers) | March 31, 2021 (customers) | Increase (Decrease) (customers) | Percent Change | | :------------ | :------------- | :------------- | :------------------ | :------------- | | Dice | 6,249 | 5,200 | 1,049 | 20% | | ClearanceJobs | 1,928 | 1,753 | 175 | 10% | Average Revenue Per Customer | Brand | 2022 (in thousands) | 2021 (in thousands) | Increase (Decrease) (in thousands) | Percent Change | | :------------ | :----- | :----- | :------------------ | :------------- | | Dice | $14,112 | $13,536 | $576 | 4% | | ClearanceJobs | $18,408 | $16,476 | $1,932 | 12% | - Dice customer increase driven by strong renewal rates and new business activity; ClearanceJobs increase due to high demand for cleared professionals and product enhancements[113](index=113&type=chunk) Deferred Revenue and Backlog | Metric | March 31, 2022 (in thousands) | December 31, 2021 (in thousands) | Change (vs Dec 31, 2021) (in thousands) | % Change (vs Dec 31, 2021) | March 31, 2021 (in thousands) | Change (vs Mar 31, 2021) (in thousands) | % Change (vs Mar 31, 2021) | | :-------------------------------- | :------------- | :---------------- | :----------------------- | :------------------------- | :------------- | :----------------------- | :------------------------- | | Deferred Revenue | $56,786 | $46,146 | $10,640 | 23% | $44,835 | $11,951 | 27% | | Contractual commitments not invoiced | $49,262 | $46,497 | $2,765 | 6% | $25,931 | $23,331 | 90% | | Backlog | $106,048 | $92,643 | $13,405 | 14% | $70,766 | $35,282 | 50% | - Backlog growth attributed to strong technology recruitment market, bookings growth at Dice and ClearanceJobs, focus on multi-year contracts, and investments in sales and marketing[115](index=115&type=chunk) - The Company continues to develop new software products and features to attract and engage qualified professionals and match them with employers[117](index=117&type=chunk) - Largest components of expenses are personnel costs and marketing/sales expenditures[122](index=122&type=chunk) [Critical Accounting Estimates](index=23&type=section&id=Critical%20Accounting%20Estimates) This section confirms no material changes to critical accounting estimates compared to the prior fiscal year's Annual Report on Form 10-K - No material changes to critical accounting estimates compared to the Annual Report on Form 10-K for fiscal year ended **December 31, 2021**[123](index=123&type=chunk) [Three Months Ended March 31, 2022 Compared to the Three Months Ended March 31, 2021](index=23&type=section&id=Three%20Months%20Ended%20March%2031%2C%202022%20Compared%20to%20the%20Three%20Months%20Ended%20March%2031%2C%202021) This section provides a detailed comparative analysis of the Company's financial performance for Q1 2022 versus Q1 2021, covering revenues, operating expenses, operating income, and EPS - Overall revenue increased by **$7.7 million** (**29%**) year-over-year[124](index=124&type=chunk) - Operating income improved by **$0.8 million**, moving from a loss to a positive margin, driven by higher revenues despite increased operating costs[132](index=132&type=chunk) - Net income decreased by **$1.37 million**, primarily due to a **$2.5 million** unrealized gain on an equity security in **Q1 2021** that did not recur in **Q1 2022**[14](index=14&type=chunk)[135](index=135&type=chunk) [Revenues](index=23&type=section&id=Revenues) This section analyzes the Company's revenue performance for Q1 2022 compared to Q1 2021, broken down by Dice and ClearanceJobs brands | Metric | Three Months Ended March 31, 2022 (in thousands) | Three Months Ended March 31, 2021 (in thousands) | Increase (in thousands) | Percent Change | | :---------------- | :-------------------------------- | :-------------------------------- | :------- | :------------- | | Dice | $24,634 | $19,051 | $5,583 | 29% | | ClearanceJobs | $9,700 | $7,625 | $2,075 | 27% | | Total revenues | $34,334 | $26,676 | $7,658 | 29% | - Dice revenue growth (**29%**) was due to improved renewal rates, new business activity, and increasing customer counts[124](index=124&type=chunk) - ClearanceJobs revenue growth (**27%**) was driven by high demand for government-cleared professionals and consistent product releases[124](index=124&type=chunk) [Cost of Revenues](index=23&type=section&id=Cost%20of%20Revenues) This section details the changes in the Company's cost of revenues for Q1 2022 compared to Q1 2021 | Metric | Three Months Ended March 31, 2022 (in thousands) | Three Months Ended March 31, 2021 (in thousands) | Increase (in thousands) | Percent Change | | :----------------- | :-------------------------------- | :-------------------------------- | :------- | :------------- | | Cost of revenues | $4,099 | $3,702 | $397 | 11% | | Percentage of revenues | 11.9% | 13.9% | | | - Increase in cost of revenues (**11%**) was primarily due to higher compensation-related costs from increased headcount and a decrease in capitalized labor[125](index=125&type=chunk) [Product Development Expenses](index=24&type=section&id=Product%20Development%20Expenses) This section analyzes the changes in product development expenses for Q1 2022 compared to Q1 2021 | Metric | Three Months Ended March 31, 2022 (in thousands) | Three Months Ended March 31, 2021 (in thousands) | Increase (in thousands) | Percent Change | | :-------------------- | :-------------------------------- | :-------------------------------- | :------- | :------------- | | Product development | $3,942 | $3,602 | $340 | 9% | | Percentage of revenues | 11.5% | 13.5% | | | - Product development expenses increased by **$0.3 million** (**9%**) due to higher compensation-related costs, partially offset by increased capitalized labor[127](index=127&type=chunk) [Sales and Marketing Expenses](index=24&type=section&id=Sales%20and%20Marketing%20Expenses) This section details the changes in sales and marketing expenses for Q1 2022 compared to Q1 2021 | Metric | Three Months Ended March 31, 2022 (in thousands) | Three Months Ended March 31, 2021 (in thousands) | Increase (in thousands) | Percent Change | | :-------------------- | :-------------------------------- | :-------------------------------- | :------- | :------------- | | Sales and marketing | $13,941 | $9,771 | $4,170 | 43% | | Percentage of revenues | 40.6% | 36.6% | | | - Sales and marketing expenses increased by **$4.2 million** (**43%**) due to higher compensation costs from increased headcount and quota attainment, a **$1.4 million** increase in discretionary marketing, and a **$0.4 million** increase in operational costs as COVID-19 restrictions eased[128](index=128&type=chunk) [General and Administrative Expenses](index=24&type=section&id=General%20and%20Administrative%20Expenses) This section analyzes the changes in general and administrative expenses for Q1 2022 compared to Q1 2021 | Metric | Three Months Ended March 31, 2022 (in thousands) | Three Months Ended March 31, 2021 (in thousands) | Increase (in thousands) | Percent Change | | :----------------------------- | :-------------------------------- | :-------------------------------- | :------- | :------------- | | General and administrative | $7,766 | $6,154 | $1,612 | 26% | | Percentage of revenues | 22.6% | 23.1% | | | - General and administrative expenses increased by **$1.6 million** (**26%**) due to a **$0.6 million** increase in stock-based compensation (higher PSU achievement), a **$0.5 million** increase in compensation-related costs, and a **$0.4 million** increase in operational costs[129](index=129&type=chunk) [Depreciation](index=24&type=section&id=Depreciation) This section details the changes in depreciation expense for Q1 2022 compared to Q1 2021 | Metric | Three Months Ended March 31, 2022 (in thousands) | Three Months Ended March 31, 2021 (in thousands) | Increase (in thousands) | Percent Change | | :----------------- | :-------------------------------- | :-------------------------------- | :------- | :------------- | | Depreciation | $3,958 | $3,631 | $327 | 9% | | Percentage of revenues | 11.5% | 13.6% | | | - Depreciation expense increased by **$0.3 million** (**9%**) due to increasing capitalized development costs throughout 2021 and projects being placed into service[130](index=130&type=chunk) [Operating Income (Loss)](index=26&type=section&id=Operating%20Income%20%28Loss%29) This section analyzes the Company's operating income (loss) for Q1 2022 compared to Q1 2021 | Metric | Three Months Ended March 31, 2022 (in thousands) | Three Months Ended March 31, 2021 (in thousands) | Increase (in thousands) | Percent Change | | :-------------------- | :-------------------------------- | :-------------------------------- | :------- | :------------- | | Operating income (loss) | $628 | $(184) | $812 | -441% | | Percentage of revenues | 1.8% | (0.7)% | | | - Operating income improved by **$0.8 million**, moving from a loss to a positive margin, driven by higher revenues, partially offset by increased operating costs for future growth[132](index=132&type=chunk) [Income from Equity Method Investment](index=26&type=section&id=Income%20from%20Equity%20Method%20Investment) This section discusses income from the Company's equity method investment for Q1 2022 compared to Q1 2021 | Metric | Three Months Ended March 31, 2022 (in thousands) | Three Months Ended March 31, 2021 (in thousands) | Increase (in thousands) | Percent Change | | :--------------------------------------- | :-------------------------------- | :-------------------------------- | :------- | :------------- | | Income from equity method investment | $155 | $0 | $155 | n/a | | Percentage of revenues | 0.5% | 0% | | | - The Company recorded **$0.2 million** of income in **Q1 2022** from its proportionate share of eFC's net income[133](index=133&type=chunk) [Interest Expense and Other](index=26&type=section&id=Interest%20Expense%20and%20Other) This section details the Company's interest expense and other income/expense for Q1 2022 compared to Q1 2021 | Metric | Three Months Ended March 31, 2022 (in thousands) | Three Months Ended March 31, 2021 (in thousands) | Increase (in thousands) | Percent Change | | :----------------------- | :-------------------------------- | :-------------------------------- | :------- | :------------- | | Interest expense and other | $245 | $195 | $50 | 26% | | Percentage of revenues | 0.7% | 0.7% | | | - Interest expense and other remained approximately flat year-over-year[134](index=134&type=chunk) [Gain on Investment](index=26&type=section&id=Gain%20on%20Investment) This section analyzes the gain on investment for Q1 2022 compared to Q1 2021, noting the non-recurrence of a prior year gain | Metric | Three Months Ended March 31, 2022 (in thousands) | Three Months Ended March 31, 2021 (in thousands) | Decrease (in thousands) | Percent Change | | :----------------- | :-------------------------------- | :-------------------------------- | :------- | :------------- | | Gain on investment | $0 | $2,513 | $(2,513) | -100% | | Percentage of revenues | 0% | 9.4% | | | - The **$2.5 million** unrealized gain in **Q1 2021** was related to an equity security investment that became publicly traded. This gain did not recur in **Q1 2022**[135](index=135&type=chunk) [Income Taxes](index=27&type=section&id=Income%20Taxes) This section details the Company's income tax expense (benefit) and effective tax rates for Q1 2022 compared to Q1 2021 | Metric | Three Months Ended March 31, 2022 (in thousands) | Three Months Ended March 31, 2021 (in thousands) | | :------------------------- | :-------------------------------- | :-------------------------------- | | Income before income taxes | $538 | $2,134 | | Income tax expense (benefit) | $(763) | $122 | | Effective tax rate | (141.8)% | 5.7% | - The **Q1 2022** effective tax rate was **(141.8)%** due to a **$0.8 million** tax benefit from share-based compensation[137](index=137&type=chunk) - The **Q1 2021** effective tax rate was **5.7%** due to a **$0.5 million** tax benefit from releasing a valuation allowance on capital loss carryforward[137](index=137&type=chunk) [Income from discontinued operations, net of tax](index=27&type=section&id=Income%20from%20discontinued%20operations%2C%20net%20of%20tax) This section reports income from discontinued operations for Q1 2022 compared to Q1 2021, reflecting the eFC transfer | Metric | Three Months Ended March 31, 2022 (in thousands) | Three Months Ended March 31, 2021 (in thousands) | | :--------------------------------------- | :-------------------------------- | :-------------------------------- | | Income from discontinued operations, net of tax | $0 | $659 | | Percentage of revenues | 0% | 2.5% | - Income from discontinued operations in **Q1 2021** represented eFC's earnings before its transfer on **June 30, 2021**[138](index=138&type=chunk) [Earnings per Share](index=27&type=section&id=Earnings%20per%20Share) This section presents the Company's diluted earnings per share for Q1 2022 compared to Q1 2021, for both continuing and discontinued operations | Metric | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--------------------------------------- | :-------------------------------- | :-------------------------------- | | Net income (in thousands) | $1,301 | $2,671 | | Weighted-average shares outstanding - diluted (in thousands) | 47,170 | 48,606 | | Diluted earnings per share - continuing operations | $0.03 | $0.04 | | Diluted earnings per share - discontinued operations | $0.00 | $0.01 | | Diluted earnings per share | $0.03 | $0.05 | - Diluted EPS decreased from **$0.05** in **Q1 2021** to **$0.03** in **Q1 2022**, primarily due to the non-recurrence of the unrealized gain on equity securities from 2021[139](index=139&type=chunk) [Liquidity and Capital Resources](index=28&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the Company's cash flows, liquidity, capital resources, and non-GAAP financial measures like Adjusted EBITDA - Principal internal sources of liquidity are cash and cash equivalents and cash flow from operations[152](index=152&type=chunk) - The Company had **$5.0 million** in cash and cash equivalents and **$57.0 million** in available borrowing capacity under its **$90.0 million** revolving credit facility as of **March 31, 2022**[151](index=151&type=chunk)[152](index=152&type=chunk) - Management believes existing liquidity sources will be sufficient for anticipated cash requirements for at least the next **12 months** and the foreseeable future[152](index=152&type=chunk) [Non-GAAP Financial Measures](index=28&type=section&id=Non-GAAP%20Financial%20Measures) This section explains the Company's use of non-GAAP financial measures, such as Adjusted EBITDA and Adjusted EBITDA Margin, and their definitions - Non-GAAP financial measures like Adjusted EBITDA and Adjusted EBITDA Margin are provided as additional information for operating results, not as alternatives to GAAP measures[141](index=141&type=chunk) - Management uses these measures for internal monitoring, planning, investment analysis, and performance comparisons[142](index=142&type=chunk) - Adjusted EBITDA is defined as net income adjusted for interest, taxes, depreciation, amortization, non-cash stock-based compensation, certain gains/losses, and other non-recurring items[142](index=142&type=chunk) - Adjusted EBITDA Margin is computed as Adjusted EBITDA divided by Revenues[143](index=143&type=chunk) [Adjusted EBITDA and Adjusted EBITDA Margin](index=28&type=section&id=Adjusted%20EBITDA%20and%20Adjusted%20EBITDA%20Margin) This section presents the reconciliation of net income to Adjusted EBITDA and Adjusted EBITDA Margin for Q1 2022 and Q1 2021 Adjusted EBITDA Reconciliation | Metric | Three Months Ended March 31, 2022 (in thousands) | Three Months Ended March 31, 2021 (in thousands) | | :--------------------------------------- | :-------------------------------- | :-------------------------------- | | Net income | $1,301 | $2,671 | | Interest expense | $245 | $188 | | Income tax expense (benefit) | $(763) | $122 | | Depreciation | $3,958 | $3,631 | | Non-cash stock-based compensation | $2,235 | $1,604 | | Income from equity method investment | $(155) | $0 | | Gain on investment | $0 | $(2,513) | | Severance and related costs | $109 | $562 | | Income from discontinued operations, net of tax | $0 | $(659) | | Adjusted EBITDA | $6,930 | $5,611 | Adjusted EBITDA Margin | Metric | Three Months Ended March 31, 2022 (in thousands) | Three Months Ended March 31, 2021 (in thousands) | | :------------------------ | :-------------------------------- | :-------------------------------- | | Revenues | $34,334 | $26,676 | | Net Income | $1,301 | $2,671 | | Net Income Margin | 4% | 10% | | Adjusted EBITDA | $6,930 | $5,611 | | Adjusted EBITDA Margin | 20% | 21% | - Adjusted EBITDA increased by **$1.3 million** (**23.5%**) year-over-year, while Adjusted EBITDA Margin slightly decreased from **21%** to **20%**[148](index=148&type=chunk) [Cash Flows](index=30&type=section&id=Cash%20Flows) This section summarizes the Company's cash flows from operating, investing, and financing activities for Q1 2022 and Q1 2021 Cash Flow Summary | Metric | Three Months Ended March 31, 2022 (in thousands) | Three Months Ended March 31, 2021 (in thousands) | | :--------------------------------------- | :-------------------------------- | :-------------------------------- | | Cash from operating activities | $9,218 | $6,424 | | Cash used in investing activities | $(4,091) | $(3,703) | | Cash used in financing activities | $(1,701) | $(3,012) | - Cash and cash equivalents at **March 31, 2022**, were **$5.0 million**, up from **$1.5 million** at **December 31, 2021**[151](index=151&type=chunk) [Liquidity](index=30&type=section&id=Liquidity) This section discusses the Company's primary liquidity sources, including cash, cash equivalents, and available credit facility - The Company's primary liquidity sources are cash and cash equivalents and cash flow from operations[152](index=152&type=chunk) - As of **March 31, 2022**, **$57.0 million** was available under the **$90.0 million** revolving credit facility[152](index=152&type=chunk) - Management anticipates sufficient liquidity for the next **12 months** and foreseeable future, but acknowledges risks like lender refusal, covenant violations, or inability to refinance debt[152](index=152&type=chunk) [Operating Activities](index=30&type=section&id=Operating%20Activities) This section analyzes the Company's net cash flows from operating activities for Q1 2022 compared to Q1 2021 - Net cash flows from operating activities increased by **$2.8 million** to **$9.2 million** in **Q1 2022**, compared to **$6.4 million** in **Q1 2021**[153](index=153&type=chunk) - The increase was primarily due to strong billings and collections from customers[153](index=153&type=chunk) [Investing Activities](index=30&type=section&id=Investing%20Activities) This section analyzes the Company's net cash flows used in investing activities for Q1 2022 compared to Q1 2021 - Cash used in investing activities increased to **$4.1 million** in **Q1 2022** from **$3.7 million** in **Q1 2021**[154](index=154&type=chunk) - The increase was due to higher internal development costs, mainly from increased product development headcount[154](index=154&type=chunk) [Financing Activities](index=30&type=section&id=Financing%20Activities) This section analyzes the Company's net cash flows used in financing activities for Q1 2022 compared to Q1 2021 - Cash used in financing activities decreased to **$1.7 million** in **Q1 2022** from **$3.0 million** in **Q1 2021**[155](index=155&type=chunk) - **Q1 2022** activities were driven by **$10.0 million** net proceeds on long-term debt and **$11.7 million** in share repurchases[155](index=155&type=chunk) - **Q1 2021** activities were primarily driven by share repurchases[155](index=155&type=chunk) [Financing and Capital Requirements](index=31&type=section&id=Financing%20and%20Capital%20Requirements) This section outlines the Company's financing and capital requirements, including its revolving credit facility and estimated interest payments - The Company has a **$90 million** revolving credit facility maturing in **November 2023**, with **$33.0 million** borrowed and **$57.0 million** available as of **March 31, 2022**[157](index=157&type=chunk) - Interest payments on current borrowings are estimated at **$0.6 million** in **2022** and **$0.8 million** in **2023**, assuming a **2.25%** interest rate[157](index=157&type=chunk) - The Company was in compliance with all financial covenants under the Credit Agreement as of **March 31, 2022**[157](index=157&type=chunk) [Contractual Obligations](index=31&type=section&id=Contractual%20Obligations) This section details the Company's contractual obligations, primarily operating lease liabilities for office space and equipment - Operating lease obligations for corporate office space and equipment totaled **$6.4 million** as of **March 31, 2022**[158](index=158&type=chunk) - No significant long-term obligations to purchase fixed or minimum amounts from online advertising vendors[159](index=159&type=chunk) [Other Capital Requirements](index=31&type=section&id=Other%20Capital%20Requirements) This section discusses other capital requirements, including unrecognized tax benefits, share repurchases, and anticipated capital expenditures - Approximately **$0.9 million** of unrecognized tax benefits were recorded as liabilities as of **March 31, 2022**, with **$0.2 million** potentially recognized in the next **12 months**[160](index=160&type=chunk) - **$13.1 million** remained available for share repurchases under the current plan as of **March 31, 2022**[161](index=161&type=chunk) - Anticipated capital expenditures for **2022** are approximately **$20 million**, an increase over prior periods, primarily for new product and feature development, to be funded by operating cash flows[162](index=162&type=chunk) [Impact of COVID-19 on our Business](index=31&type=section&id=Impact%20of%20COVID-19%20on%20our%20Business) This section discusses the impact of the COVID-19 pandemic on the Company's business, including recruitment activity and operational adjustments - COVID-19 caused an economic downturn and slowed recruitment activity in **2020** and early **2021**, impacting revenues and operating cash flows[163](index=163&type=chunk) - The Company is not anticipating a significant long-term impact on its business, but the situation is uncertain and rapidly changing[163](index=163&type=chunk)[165](index=165&type=chunk) - The Company has adopted work-from-home policies and temporary office closures to protect employee health and safety[163](index=163&type=chunk) [Cyclicality](index=32&type=section&id=Cyclicality) This section addresses the historical cyclicality of the labor market and its potential impact on the Company's recruitment services - The labor market and industries served have historically experienced short-term cyclicality, but online career websites continue to provide economic and strategic value[166](index=166&type=chunk) - Slowdowns in recruitment activity (e.g., COVID-19 in **2020-early 2021**) can negatively impact revenues and results[167](index=167&type=chunk)[168](index=168&type=chunk) - Decreased unemployment or labor shortages generally lead to increased demand for recruitment services and positive revenue impact, though with a lag due to revenue recognition over contract length[167](index=167&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=32&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section outlines the Company's exposure to financial market risks, including foreign currency exchange rates and interest rates - The Company has exposure to financial market risks, including changes in foreign currency exchange rates and interest rates[169](index=169&type=chunk) [Foreign Exchange Risk](index=32&type=section&id=Foreign%20Exchange%20Risk) This section discusses the Company's foreign exchange risk, primarily related to its equity method investment in eFC after deconsolidation - Post-**June 30, 2021**, the Company's direct operations are solely within the United States, eliminating direct foreign exchange risk[170](index=170&type=chunk) - The Company's **40%** equity method investment in eFC (British Pound Sterling functional currency) subjects it to foreign exchange risk, but the impact on its share of eFC's net income is not expected to be significant[170](index=170&type=chunk) [Interest Rate Risk](index=32&type=section&id=Interest%20Rate%20Risk) This section details the Company's interest rate risk, primarily from borrowings under its Credit Agreement, and the impact of rate changes - Interest rate risk primarily relates to borrowings under the Credit Agreement, which bear interest at a LIBOR or base rate plus a margin[171](index=171&type=chunk) - As of **March 31, 2022**, **$33.0 million** was outstanding under the Credit Agreement. A **1.0%** increase in interest rates would increase **2022** interest expense by approximately **$0.2 million**[171](index=171&type=chunk) - The Company is monitoring the planned phasing out of USD LIBOR tenors by **June 30, 2023**, and is working with lenders to minimize impact[174](index=174&type=chunk) [Item 4. Controls and Procedures](index=33&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details the evaluation of the Company's disclosure controls and procedures and reports on changes in internal control - Disclosure controls and procedures were evaluated as of **March 31, 2022**, and deemed effective by the CEO and CFO to provide reasonable assurance that required information is recorded, processed, summarized, and reported timely[175](index=175&type=chunk) [Evaluation of Disclosure Controls and Procedures](index=33&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) This section reports on the CEO and CFO's conclusion regarding the effectiveness of the Company's disclosure controls and procedures - CEO and CFO concluded that disclosure controls and procedures are effective as of **March 31, 2022**, ensuring timely and accurate reporting of information[175](index=175&type=chunk) [Changes in Internal Controls](index=33&type=section&id=Changes%20in%20Internal%20Controls) This section reports that no material changes occurred in internal control over financial reporting during Q1 2022 - No changes in internal control over financial reporting occurred during the quarter ended **March 31, 2022**, that materially affected or are reasonably likely to materially affect internal control over financial reporting[176](index=176&type=chunk) [PART II. OTHER INFORMATION](index=34&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section provides additional information, including legal proceedings, risk factors, equity sales, and exhibits [Item 1. Legal Proceedings](index=34&type=section&id=Item%201.%20Legal%20Proceedings) This section states that the Company is involved in routine legal disputes but has no material pending legal proceedings - The Company is subject to various claims and lawsuits in the ordinary course of business[178](index=178&type=chunk) - No material pending legal proceedings are currently a party to, beyond what is noted in Part 1, Item 1[178](index=178&type=chunk) [Item 1A. Risk Factors](index=34&type=section&id=Item%201A.%20Risk%20Factors) This section refers readers to the comprehensive risk factors in the Annual Report on Form 10-K, noting no material changes as of **May 4, 2022** - No material changes to risk factors have occurred as of **May 4, 2022**, compared to those disclosed in the Annual Report on Form 10-K[179](index=179&type=chunk) - Readers should carefully consider all risk factors, as additional unknown or immaterial risks could adversely affect the business[179](index=179&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=34&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the Company's stock repurchase programs, including the **$15 million** program approved in **February 2022**, and summarizes shares repurchased in Q1 2022 - The Board approved a new stock repurchase program in **February 2022**, authorizing the purchase of up to **$15 million** of common stock through **February 2023**[180](index=180&type=chunk) Stock Repurchase Program Activity | Period | Total Number of Shares Purchased (1) | Average Price (2) Paid per Share | Total Shares Purchased as Part of Publicly Announced Programs (3) | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in thousands) | | :--------------------------------- | :----------------------------------- | :------------------------------- | :---------------------------------------------------------------- | :--------------------------------------------------------------------------------------- | | January 1 through January 31, 2022 | 943,036 | $5.69 | 742,286 | $1,504,702 | | February 1 through February 28, 2022 | 543,371 | $5.73 | 327,407 | $14,499,672 | | March 1 through March 31, 2022 | 232,533 | $5.84 | 232,533 | $13,142,226 | | Total | 1,718,940 | $5.72 | 1,302,226 | | - The total number of shares purchased includes those under the stock repurchase plan and shares withheld for income tax from employee restricted stock/PSU vesting[180](index=180&type=chunk) [Item 5. Other Information](index=35&type=section&id=Item%205.%20Other%20Information) This section states that there is no other information to report - No other information to report[182](index=182&type=chunk) [Item 6. Exhibits](index=36&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including certifications and XBRL documents - Includes Certifications of CEO and CFO pursuant to Sarbanes-Oxley Act Sections **302** and **906**[184](index=184&type=chunk) - XBRL Instance Document, Taxonomy Extension Schema, Calculation Linkbase, Definition Linkbase, Label Linkbase, and Presentation Linkbase Documents are filed[184](index=184&type=chunk) - Cover Page Interactive Data File is formatted as inline XBRL[184](index=184&type=chunk) [SIGNATURES](index=37&type=section&id=SIGNATURES) This section contains the official signatures of DHI Group, Inc.'s President and CEO, and CFO, certifying the report - The report is duly signed on behalf of DHI Group, Inc. by **Art Zeile** (President and CEO) and **Kevin Bostick** (CFO) on **May 4, 2022**[187](index=187&type=chunk)

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ______________________________________________ FORM 10-K ______________________________________________ (Mark One) ☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 ______________________________________________ OR ☐ TRANSITION PERIOD PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO C ...