DHI(DHX) - 2025 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Total revenue for the first quarter of 2025 was $32.3 million, a 10% decline year over year and a 7% decline sequentially [23] - Adjusted EBITDA for the quarter was $7 million, representing a margin of 22%, down from $8.6 million and a margin of 24% in the prior year [29] - The company recorded a net loss of $9.4 million or $0.21 per diluted share, compared to a net loss of $1.5 million or $0.03 per diluted share in the prior year [29] Business Line Data and Key Metrics Changes - ClearanceJobs (CJ) revenue was $13.4 million, up 3% year over year but down 3% sequentially, with adjusted EBITDA of $5.7 million and a margin of 43% [23][30] - Dice revenue was $18.9 million, down 18% year over year and down 10% sequentially, with adjusted EBITDA of $3.4 million and a margin of 18% [26][30] - CJ's average annual revenue per recruitment package customer increased by 12% year over year to $25,800, while Dice's was up 2% year over year to $16,400 [25][27] Market Data and Key Metrics Changes - New tech job postings increased by 16% year over year in Q1, averaging 215,000 new postings each month [12] - The tech staffing sector's growth forecast for 2025 was revised to a 2% year over year increase, down from an original forecast of 5% [12] - Tech recruiter job postings increased by 36% year over year, indicating a forthcoming rise in demand for hiring tech professionals [13] Company Strategy and Development Direction - The company has realigned operations around two distinct brands, ClearanceJobs and Dice, to enhance profitability and unlock growth opportunities [7] - Focus on recession-resistant sectors such as consulting, healthcare, financial services, and education for new business [18] - Continued investment in product innovation to drive customer engagement and future growth [22] Management's Comments on Operating Environment and Future Outlook - Management noted a gradual return to normal levels of tech hiring demand, with consistent year-over-year increases in job postings since August 2024 [11] - The company reiterated its full-year revenue guidance of $131 million to $135 million, with a target adjusted EBITDA margin of 24% [20][33] - Management expressed confidence in the long-term growth potential of ClearanceJobs and Dice as tech hiring demand normalizes [21] Other Important Information - The company has implemented cost reductions through restructuring, achieving a reduction of approximately $20 million in annual operating expenses [28] - A $5 million share repurchase program was announced, reflecting confidence in the strength of the brands and commitment to shareholder value [20][33] - Deferred revenue at the end of the quarter was $50.7 million, down 9% year over year [32] Q&A Session Summary Question: What gives ClearanceJobs a significantly higher adjusted EBITDA margin than Dice? - Management indicated that ClearanceJobs has a higher revenue per employee, approximately $700,000, compared to Dice's lower figure, necessitating more effort to enhance Dice's capabilities [37] Question: What is the current state of corporate expenses? - Corporate expenses are expected to run about $7 million annually, with a small team managing public company costs [40] Question: Can you explain the lower demand impacting Dice's bookings? - The decline in bookings was attributed to multi-year contracts from previous high-demand periods being adjusted due to current lower demand [43][45] Question: Has there been any impact from EU defense spending? - Management noted that while there was initial fear regarding contract terminations, larger contractors have not experienced significant changes, and discussions around increased defense budgets are promising [47][48] Question: How is the new business environment for Dice? - Management observed that while uncertainty remains for commercial accounts, bookings for staffing and recruiting agencies have exceeded expectations [59]