DHI GROUP, INC. (DHX)·Q4 2024 Earnings Summary

Executive Summary

• Q4 2024 revenue was $34.8M, down 7% year over year; adjusted EBITDA was $9.2M with a 26% margin (down 1pt YoY), while GAAP diluted EPS was $0.02; ClearanceJobs grew 7% YoY to $13.8M, offset by Dice down 14% YoY to $21.0M .
• Management guided FY 2025 revenue to $131–$135M and Q1 2025 revenue to $32–$33M, with a full-year adjusted EBITDA margin target of 24% .
• Bookings were $32.9M, down 9% YoY, with ClearanceJobs flat and Dice down 14% YoY; backlog rose 3% YoY to $111.3M, while deferred revenue declined 9% YoY to $45.5M .
• The Board authorized a new $5M stock repurchase program through February 2026, adding a capital return catalyst amid a profit-focus and cost reductions .

What Went Well and What Went Wrong

What Went Well

• ClearanceJobs segment strength: revenue +7% YoY to $13.8M, revenue renewal rate 93%, retention rate 111% in Q4; AARPRPC up 15% YoY to $25,148, reflecting strong pricing power and value proposition .
• Margin resilience and cash conversion: adjusted EBITDA margin held at 26% in Q4 (vs. 27% YoY), with capitalized development costs cut 23% YoY to $2.7M, aiding free cash flow improvement for FY 2024 ($7.1M vs $1.1M in FY 2023) .
• Strategic reorg to dedicated brand leadership (Dice vs ClearanceJobs) and ongoing product initiatives (CJ Verify by end of Q1; candidate subscription services; Dice web store) provide medium-term growth levers and operational focus .

Quote (CEO, Art Zeile): “We anticipate that companies across industries are beginning to renew their investment in technology initiatives like AI… expected to drive increased demand for our solutions…” .

What Went Wrong

• Dice contraction persists: revenue down 14% YoY to $21.0M; bookings down 14% YoY; recruitment package customers down 14% YoY to 4,711, reflecting continued churn among smaller customers .
• Q4 profitability softer YoY: net income fell to $1.0M (vs $2.1M), GAAP diluted EPS $0.02 (vs $0.05), and operating income down to $1.7M (vs $3.5M) .
• Q4 operating cash flow decreased to $4.4M (from $7.6M), and total bookings fell 9% YoY, highlighting near-term demand headwinds despite improving job posting trends .

Financial Results

Consolidated Financials

Notes:

• Sequential revenue down ~1% vs Q3 per management .
• Non-GAAP EPS: $0.07 in Q4 2024 (vs $0.08 in Q4 2023) .

Segment Revenue

Bookings

KPIs

Balance Sheet and Cash Flow Highlights

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• Prepared remarks (CEO): “We have navigated this challenging macroeconomic environment with resilience… companies… beginning to renew their investment in technology initiatives like AI… expected to drive increased demand for our solutions” .
• Prepared remarks (CEO): Emphasized restructuring into two distinct brands to tailor strategy and unlock long-term opportunities; dedicated leadership for Dice and ClearanceJobs .
• Prepared remarks (CFO): FY 2025 guidance $131–$135M revenue; Q1 2025 $32–$33M revenue; 24% adjusted EBITDA margin target; focus on sustainable growth and customer acquisition .

Selected quotes:

• CEO (Q4 call): “Revenue renewal rates for both brands improved at the end of the quarter… While the number of new tech job postings is approximately 70% of normal, we believe we are starting the New Year off with a positive trajectory.” .
• CFO (Q4 call): “Following the restructurings, we expect further reductions to our capitalized development costs in 2025… targeting total capital expenditures in 2025 to range between $10 million and $11 million.” .

Q&A Highlights

• Staffing vs. commercial demand: Staffing renewals/new business appear to be stabilizing and leading recovery vs. commercial accounts; aligns with SIA’s +5% 2025 forecast for tech staffing revenue .
• ClearanceJobs exposure: Minimal exposure to non-cleared agencies; primary exposure to intelligence/defense community (CIA, FBI, DIA, NSA) where budgets are expected to remain robust .
• Expense reductions and margin trajectory: ~$20M cumulative cash savings (split between cap dev and OpEx) from restructurings across 2023–2025; more savings will flow through in 2025 given timing .
• Dice outlook and bookings: Conservative stance—no bookings growth assumed until tech hiring normalizes; some YoY improvement expected intra-2025; transactional (nonrecurring) revenue not assumed to improve in guidance .
• Capital allocation: New $5M repurchase program (Feb 2025–Feb 2026) underscores confidence; leverage ~0.9x and target ~1x .

Estimates Context

• Wall Street consensus (S&P Global) for Q4 2024/FY 2025 could not be retrieved due to a temporary SPGI request limit; therefore, comparisons to consensus are unavailable at this time [SPGI data unavailable].
• Implication: Given management’s FY 2025 revenue guidance ($131–$135M) and 24% adjusted EBITDA margin target, estimate revisions may hinge on the pace of tech hiring normalization and CJ strength .

Key Takeaways for Investors

• ClearanceJobs resilience and pricing power continue to offset Dice cyclicality; CJ’s strong renewal and retention profile underpins recurring revenue quality .
• FY 2024 margin beat (25% vs. 24% targeted) and ongoing cap dev reductions position DHX to support free cash flow conversion into 2025 despite top-line pressure .
• Guidance implies cautious first-half 2025 with gradual improvement as postings recover; watch CJ bookings growth and signs of Dice stabilization in recession-resistant sectors .
• Backlog up 3% YoY and long-term backlog +42% YoY indicates medium-term revenue visibility despite near-term deferred revenue declines .
• New $5M buyback provides a capital return tailwind and potential support to shares amid a soft hiring backdrop .
• Monitor execution of CJ Verify/candidate subscriptions and Dice web store; successful rollout could broaden TAM and improve monetization per user .
• Risk factors: Prolonged tech hiring weakness and continued churn in small Dice customers could delay bookings recovery; government spending dynamics remain key for CJ .