DHI(DHX) - 2025 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Total revenue for the third quarter of 2025 was $32.1 million, down 9% year-over-year and roughly flat compared to the second quarter [14] - Total bookings for the quarter were $25.4 million, down 12% year-over-year [14] - Total recurring revenue decreased by 11% compared to the prior year, with bookings driving recurring revenue down 13% for the quarter [14] - The company recorded a net loss of $4.3 million, or $0.10 per diluted share, compared to a net loss of $200,000, or $0.00 per diluted share, in the prior year [18] - Adjusted EBITDA for the third quarter was $10.3 million, with a margin of 32%, compared to $8.6 million and a margin of 24% in the prior year [19] Business Line Data and Key Metrics Changes - ClearanceJobs revenue was $13.9 million, up 1% year-over-year and up 2% sequentially, with bookings down 7% year-over-year [14] - Dice revenue was $18.2 million, down 15% year-over-year and down 1% sequentially, with bookings down 17% year-over-year [15] - ClearanceJobs had an average annual revenue per customer of $26,600, up 7% year-over-year [15] - Dice's average annual revenue per customer was $15,727, down 4% year-over-year [16] Market Data and Key Metrics Changes - The number of new tech job postings on Dice remained around 70% of normal levels, indicating a mixed macro backdrop [11] - Approximately 10% of job postings on Dice required at least one AI skill at the beginning of 2024, which has now risen above 50% [8] - The defense budget for fiscal year 2026 is proposed at $1.1 trillion, marking a 13% increase over the previous year, which is expected to benefit ClearanceJobs significantly [9] Company Strategy and Development Direction - The company focuses on providing software tools for employers and recruiters to find tech talent, with over 90% of revenue coming from subscriptions [5] - The integration of Agile ATS with ClearanceJobs aims to enhance the hiring workflow for cleared professionals [10] - The company is optimistic about future growth driven by the defense budget and increasing investments in technology initiatives across industries [23] Management's Comments on Operating Environment and Future Outlook - Management noted that tech hiring has stabilized despite remaining under historical levels, with a significant trend towards AI-related job postings [7] - The company anticipates that the record-breaking defense budget will drive growth for ClearanceJobs, while technology investments will create opportunities for both brands [23] - Management expressed confidence in the resilience of their subscription model and margin structure [13] Other Important Information - The company repurchased 741,000 shares for $2.1 million under its stock repurchase program [22] - The company is targeting total capital expenditures in 2025 to range between $7 million and $8 million, down from $13.9 million last year [21] Q&A Session Summary Question: What is driving the Dice margin expansion? - Management indicated that the margin expansion was due to headcount vacancies being backfilled and efficient cost allocation to capitalized development costs [28] Question: What was the $9 million write-off related to? - The write-off was related to the Dice trade name, which experienced revenue declines [31] Question: How is the government shutdown impacting bookings? - Management noted that smaller and mid-sized defense contractors have become more conservative, but larger firms remain bullish due to their stronger balance sheets [39] Question: What is the status of the new Dice platform migration? - Over half of the customers have migrated to the new platform, and management does not foresee churn risk with the remaining customers [41] Question: How is the company addressing customer acquisition costs with the new platform? - The introduction of a monthly subscription option has made it easier for customers to sign up, leading to an increase in new customer signings [56]