DHI(US:DHX)2024-08-07 20:30Customer Metrics - As of June 30, 2024, ClearanceJobs had 2,009 recruitment package customers, a decrease of 60 customers or 3% from 2,069 in the prior year[83] - Dice had 5,031 recruitment package customers as of June 30, 2024, a decrease of 976 customers or 16% from 6,007 in the prior year[83] - Average annual revenue per recruitment package customer for ClearanceJobs increased by $3,433, or 16%, while for Dice it increased by $760, or 5%[84] Revenue and Financial Performance - Total revenue for the three months ended June 30, 2024, decreased by $2.7 million, or 7%, compared to the same period in 2023, with ClearanceJobs revenue increasing by $1.0 million, or 8%[91] - For the six months ended June 30, 2024, the company reported revenue of $71.858 million, a decrease from $77.158 million in the same period of 2023, representing a decline of approximately 6.8%[130] - The net income for the six months ended June 30, 2024, was a loss of $569,000 compared to a profit of $333,000 in 2023, indicating a significant downturn in profitability[130] Expenses and Cost Management - Personnel costs and marketing expenditures are the largest components of the company's expenses, impacting overall financial performance[90] - Cost of revenue increased by $0.2 million, or 5%, driven by lower capitalized labor, resulting in a cost of revenue percentage of 14.5% for the three months ended June 30, 2024[92] - Product development expenses rose by $0.6 million, or 14%, from the prior year, accounting for 13.2% of total revenue[93] - Sales and marketing expenses decreased by $2.7 million, or 18%, primarily due to lower compensation-related costs and discretionary marketing expenses[94] - General and administrative expenses decreased by $1.2 million, or 14%, driven by reductions in operational costs and compensation-related costs[95] Operating Income and Profitability - Operating income for the three months ended June 30, 2024, was $2.0 million, with an operating margin of 5.6%, compared to zero operating income in the same period in 2023[99] - Operating income for the six months ended June 30, 2024, was $4.0 million, a margin of 5.5%, compared to $0.5 million and a margin of 0.7% in 2023, an increase of $3.4 million[112] - Adjusted EBITDA for the same period was $17.541 million, an increase from $16.799 million in 2023, reflecting a growth of approximately 4.4%[130] - The Adjusted EBITDA Margin improved to 24% for the six months ended June 30, 2024, compared to 22% in the prior year, indicating enhanced operational efficiency[130] Cash Flow and Capital Expenditures - Cash from operating activities increased by $3.1 million to $11.2 million for the six months ended June 30, 2024, compared to $8.1 million in 2023[121] - Cash used in investing activities decreased to $7.9 million for the six months ended June 30, 2024, from $9.2 million in 2023[122] - Cash used in financing activities was $4.5 million for the six months ended June 30, 2024, driven by $3.0 million of net payments on long-term debt[123] - The company anticipates capital expenditures for the fiscal year ending December 31, 2024, to be approximately $14 million to $16 million, funded by operating cash flows[136] Tax and Interest - The effective tax rate for the three months ended June 30, 2024, was 28.9%, compared to an effective tax rate of 84.2% in the same period in 2023[102] - The effective tax rate for the six months ended June 30, 2024, was 127.3%, compared to 138.8% in 2023[116] - Interest expense and other remained relatively flat at $0.845 million, a decrease of 4% from the prior year[101] - Interest payments on current borrowings are expected to be $1.3 million from July 1, 2024, to December 31, 2024, and $2.7 million in each of 2025 and 2026[133] Investments and Future Outlook - The company continues to invest in new software products and features to attract and engage qualified professionals[88] - Major product releases in 2023 included enhancements to Dice and ClearanceJobs platforms, aimed at improving user engagement and employer connections[89] - The company was in compliance with all financial covenants under the Credit Agreement as of June 30, 2024[133] - The company recorded approximately $1.1 million of unrecognized tax benefits as liabilities, with a possibility of recognizing up to $0.2 million in the next 12 months[135] - The company has no stock repurchase programs as of June 30, 2024, as all previously approved programs have expired[136] Market Conditions - A decrease in the unemployment rate or a labor shortage could lead to increased job postings and positively impact revenues[138] - Historical trends indicate that improvements in labor markets and the need for services generally lag behind overall economic improvements[138] - Market slowdowns can lead to lower demand for recruiting technologists and security cleared professionals, negatively impacting revenues[139]