DHI Group at Noble Capital: Strategic Growth Amidst Challenges

On Thursday, 09 October 2025, DHI Group (NYSE:DHX) presented its strategic insights at the Noble Capital Markets Emerging Growth Virtual Investor Conference. The company showcased robust growth in its AI-powered career marketplaces, despite economic headwinds impacting tech hiring. While revenue growth remained steady, challenges in tech recruitment posed hurdles.

Key Takeaways

• DHI Group reported $142 million in revenue for 2024, with a 6% five-year CAGR.
• Adjusted EBITDA reached $35 million, with a margin of 25%.
• ClearanceJobs experienced a 15% bookings CAGR over five years, outpacing Dice’s 2%.
• Operating costs were reduced by $35 million through restructurings.
• A $1.1 trillion defense budget could boost ClearanceJobs significantly in 2026.

Financial Results

DHI Group’s financial performance in 2024 was marked by steady growth and strategic cost management.

• Revenue and bookings both stood at $142 million and $141 million, respectively, with a 6% CAGR.
• Adjusted EBITDA was $35 million, representing a 25% margin, with a target of 26% for 2025.
• Operating cash flow was $21 million, and capital expenditures were $14 million, primarily for software development.
• The company ended the year with net debt of $28 million and repurchased $2 million in shares.

Operational Updates

The company undertook significant restructuring to streamline operations and reduce costs.

• Restructurings in recent years reduced operating costs by $35 million.
• ClearanceJobs, focusing on GovTech, served 1,900 clients, while Dice had 4,400 subscription clients.
• Dice faced a 16% decline in bookings due to a challenging hiring environment.

Future Outlook

DHI Group is positioned for growth, leveraging large addressable markets and strategic acquisitions.

• The U.S. tech workforce is expected to grow by 18% over the next decade.
• Increasing demand for AI and cybersecurity skills is anticipated.
• A potential $1.1 trillion defense budget for 2026 could significantly benefit ClearanceJobs.

Q&A Highlights

During the Q&A, management addressed market positioning and competitive landscape.

• The ideal customer profile includes companies hiring five or more tech professionals annually.
• Dice’s primary competitor is LinkedIn, while ClearanceJobs faces no direct competition.
• A shift towards profitability over growth is evident in hiring trends.

In conclusion, DHI Group’s strategic initiatives and financial resilience position it well for future growth. Readers are encouraged to refer to the full transcript for a detailed account of the conference call.

Full transcript - Noble Capital Markets Emerging Growth Virtual Investor Conference:

Joe, Analyst: The provider of AI-powered career marketplaces that focus on technology roles. DHI’s two brands, Dice and ClearanceJobs, enable recruiters and hiring managers to efficiently search for and connect with highly skilled technology professionals based on the skills requested. With us today from the company is Art Zeile, President and Chief Executive Officer, and Greg Schippers, CFO. The floor is yours, Art.

Art Zeile, President and Chief Executive Officer, DHI Group: Thank you very much, Joe. Greatly appreciate it. Once again, I’m Art Zeile, CEO of DHI Group, and we have Greg Schippers, our CFO, as well. We are going to go through our investor presentation and then be available, as we indicated, for Q&A. We’ve included our standard forward-looking statements waiver with normal caveats. Just to put things right out from the beginning, DHI Group is listed on the NYSE under the symbol DHX, and we are headquartered in Denver, Colorado. Our ClearanceJobs and Dice brands are the leading platforms for employers to find and engage with top tech talent. DHI is a holding company for these two tech-oriented recruiting platforms. We create platforms that allow our clients, who are recruiters and hiring managers, to connect with technology professionals.

These are two-sided marketplaces that, by definition, have to serve both the clients as well as the candidates in order to succeed. You might think that these sound pretty commonplace with the likes of Indeed and ZipRecruiter that are constantly advertising on TV, but we actually have two key differentiators that make us a necessary tool for recruiters and hiring managers looking specifically to find technology professionals. First, we have built-in search algorithms that find candidates based on their tech skills. Secondly, we have spent literally decades attracting the highest quality talent to both of our platforms. We have more than 8 million professionals profiled on our two brands, representing two-thirds of the total skilled technologists in the U.S. That is the benefit of being around for about a third of a century, in the case of Dice.

We are constantly evolving our offering to be much more relevant to our community. This year, we created a brand new self-service option to buy and manage Dice subscriptions online. We are testing our new ClearanceJobs Premium Candidate subscription, the first opportunity for us to monetize our candidate experience. Currently, it is free for all candidates across Dice and ClearanceJobs to use both platforms. Because we have found that our clients on both the platforms sometimes need a little bit of help with more complicated assignments, we created a talent solutions division that offers both recruiting as well as staffing solutions. The bottom line is today we make money by charging our clients subscription contracts that allow them to access our platforms, and over 90% of our revenue is recurring as a result. Here is a summary overview of our 2024 annual financial performance and our five-year CAGR trends.

Greg will be providing quarterly performance later in the presentation. DHI drove $142 million of revenue last year and $141 million of bookings. The five-year CAGR for both are 6%. Our adjusted EBITDA was $35 million, delivering a 25% adjusted EBITDA margin. We delivered $21 million in operating cash flow and spent $14 million on CapEx. Almost all of our CapEx, incidentally, is capitalized labor used in software development. Greg will brief you on how we’ve radically reduced that figure for CapEx this year. We reinstituted our share buyback program in January, which had been suspended since the middle of 2023 to focus on debt reduction. As a result of this new program, we ended 2024 with net debt of $28 million, equating to less than one times leverage.

The $2 million of share repurchases indicated here includes shares repurchased under both our buyback program, while it still existed in 2024, as well as net settlement of employee grant vesting. Taking a step back, the U.S. has become a tech-oriented economy and has grown the tech workforce by approximately 3 to 4% each year over the past 25 years. For both of our platforms, we have a very unique pool of candidates that cannot be found on other career sites. Based on our research, roughly 20 to 30% of our candidates can be found on alternative career sites like CareerBuilder, Monster, ZipRecruiter, Indeed, and even LinkedIn, with up-to-date profiles. That means that the other 70 to 80% are not found on these other profiles.

The majority of the profiles found on our competitors are relatively out of date, and they do not include a resume nor contact information as they do for both Dice and ClearanceJobs, which are obviously extremely relevant if you’re a recruiter trying to engage with the talent and make sure that you can go through your hiring process. ClearanceJobs is the dominant leader in its market for delivering access to technology professionals with a government clearance, meaning secret, top secret. There are about 15 different government clearances in existence today. LinkedIn does not offer a solution to find cleared candidates. A LinkedIn profile has no field for government clearance, and government workers and military contractors are restricted from using the site because it is known to be a target of foreign spies. Tech professionals are well compensated. The average salary for a tech worker in the U.S.

was $111,000 last year. That’s salary alone, whereas the average worker in the U.S. made around $50,000 in salary. As a company, you basically have two choices when hiring tech workers. You could use a recruiter, an external recruiter, or do it yourself. If you use an external recruiter, you will generally be charged anywhere between 20% and 25% of the first year’s salary for that particular position. The alternative is to pay Dice and/or ClearanceJobs roughly $8,000 to $15,000 for our entry-level year-long subscription and find and engage that tech talent yourself. Even one hire easily pays for itself compared to paying an external recruiting agency. We target companies that actually plan to hire at least five or more hires over the next year, driving an even more compelling return on investment.

Our value to the tech industry was validated by Forbes Magazine in July 2024 when it announced Dice is the number one career site for tech and IT jobs. The elevated interest rate environment has clearly suppressed hiring demand over the last two years. That was the Federal Reserve’s intended result. As the famous quote goes, every company is a software company now because of our reliance on technology and automation in general to drive our business models. For that reason, the U.S. Bureau of Labor Statistics and CompTIA Association forecasts that over the next 10 years, the tech workforce will grow by at least 18%, a growth rate that is twice as fast as the overall employment growth rate for the U.S.

If you look at the small point font, very small point on the right side of the slide, you will find that the growth is coming from interest in skills that you would logically suspect, the need for ever more data scientists and engineers to implement and manage AI, and more cybersecurity professionals to protect us from ever-increasing threats. A focus on skills is an important reason why our two platforms are very, very unique. LinkedIn and other career sites create a user profile based on titles, and their concept of skills are soft skills like public speaking. Our special sauce comes from the way that we profile and search for our candidates. We have spent over a decade perfecting a taxonomy that categorizes over 100,000 different tech skills that candidates identify with their profile. We received a U.S.

patent for skills taxonomy several years ago, and it’s really truly the heart of our value proposition. We win in our market for tech talent because we’re a specialist in technology skills and not a generalist recruiting platform. Here are two case studies of great relationships that we’ve had with our clients on both platforms. Leidos has been a client of ClearanceJobs for over 10 years and has continuously increased its spend with us. Likewise, the Montefiore Healthcare System in New York City has also been a client for Dice for 10 years and has more than doubled its spend with us over time. Montefiore’s case study also illustrates an important point about Dice. Most investors think that we focus on software and the tech giants, and we do have them as our clients.

In many cases, our value proposition is actually stronger for those companies in other sectors because they are less visible and maybe less glamorous to the technology community, but still have a strong need for technology innovation in their business models. We have a very large total addressable market for each one of these platforms. In the case of ClearanceJobs, we have approximately 1,900 subscription customers today. The government has publicly stated that there are over 10,000 contractors that hold what’s known as a facility clearance, allowing them to conduct business with cleared personnel inside of that building or facility. We also know that there are over 100 government agencies that we can directly contract with as well. For Dice, we have approximately 4,400 subscription clients and know that tens of thousands more fit our ideal customer profile.

There are also thousands of additional staffing and recruiting firms that we can target as well. Before I transition to Greg, I will leave you with this quick summary of how we make money and have strong visibility into future revenue. First and foremost, clients pay for the opportunity to access each platform. There is no charge for candidates to register, create a profile, and start using the platform. Although, as I indicated, we’re going to have a premium candidate subscription that’s coming out for ClearanceJobs beginning of next year. They will be paying for that premium candidate subscription. As I indicated earlier, because we are a subscription-based service with one-year minimum contracts, over 90% of our revenue today is recurring in nature. These contracts, for the most part, include an auto-renewal clause with an automatic price escalator.

We cap the number of profile views for each subscription contract based on the number of recruiters in that company and their intended use of the platform and the number of tech professionals that the company intends to hire for the next year. Robert Half obviously has a much larger profile view cap than a 100-person tech firm. We allow, however, unlimited emails and texts on our platform, which is a key differentiator, especially against LinkedIn, that caps the number of InMails that you get. We encourage the recruiter and candidate engagement in conversations because that’s the nature of getting hired in the United States today. They both win if they engage on our platform. We encourage that engagement, and it’s a reason for them to come back time and time again to our platforms.

With that, I’d like to introduce Greg, who will take us through the rest of the presentation.

Greg Schippers, CFO, DHI Group: Good afternoon. Thank you, Art. I’ll share some additional financial data and insights with you. DHI bookings, which represent the value of our contracts that will be recognized as revenue within 12 months of the contract start date, has risen at a 6% CAGR since 2020, and revenue has also risen at a 6% CAGR over the same period. With over 90% of our bookings and revenue recurring, DHI has a very predictable revenue model with approximately 50% of each year’s revenue already under contract at the start of each year. DHI adjusted EBITDA margin has expanded since 2019 to 25% in 2024. Because of the more difficult market conditions in the last two plus years, we reduced costs through restructurings in the second quarter of 2023, in the third quarter of 2024, and in both January and June of this year.

Together, these restructurings have reduced our operating costs by approximately $35 million. The restructure earlier this year also separated our Dice and ClearanceJobs organizations, which is designed to better deliver results for our shareholders, maximize profitability, and provide stronger long-term strategic options. We are targeting a 26% adjusted EBITDA margin for 2025. As previously mentioned, challenging market conditions in the HR tech space have persisted in 2025, with bookings and revenue declining on a year-over-year basis. We have, however, managed our cost structure to grow our adjusted EBITDA margin to 25% in 2024 and continue to project 26% for 2025. Our subscription-based business creates predictable revenue, with revenue generally being recognized ratably over the annual contract term as services are delivered to our customers.

This slide depicts how our committed contracts at the start of 2024, shown as backlog, become revenue over the year, and then how our customers’ upper renewal during the year drive revenue as the year progresses. The remainder of our revenue comes from our new business efforts and transactional business, which primarily include short-term job postings, career events, and our talent sourcing products. DHI produces strong operating cash flows with the low points for operating cash flows over the past five years, approximating $20 million, and the strong markets in 2021 and 2022 driving operating cash flows to $29 million and $36 million. DHI’s capitalized development costs, which are part of our fixed asset purchases in our cash flow statement, primarily represent the costs of our internal labor to build the products and features on the ClearanceJobs and Dice sites.

With lower internal headcount resulting from the restructurings, capitalized development costs are expected to be $7 to $8 million in 2025 as compared to $12 million in 2024. DHI’s free cash flow, which is operating cash flows less CapEx, is driven by adjusted EBITDA levels and capitalized development costs. Over time, we’re targeting free cash flow at 10% of revenue. As Art mentioned, we suspended our share repurchase program in the middle of 2023 to focus on paying down debt. Our debt at the end of 2024 was $32 million, resulting in leverage at 0.9 times our adjusted EBITDA levels. We generally maintain approximately $2 million of cash on hand and utilize our $100 million revolver to manage our liquidity. Since 2019, DHI has repurchased nearly 19 million shares and has reduced stockholder dilution by approximately 3 million shares, or around 6%.

Earlier this year, we announced a new buyback program, which allows us to repurchase up to $5 million of common stock through February of next year. Our ClearanceJobs brand operates in the GovTech space and is a dual-sided marketplace with 2024 revenue of $54 million, comprised of 1,900 clients. The overall market has over 10,000 cleared employers and over 100 government agencies. These logos represent a sampling of our CJ customer base. CJ’s quarterly bookings have seasonality, with the first quarter being the largest of the year. CJ bookings have a five-year CAGR of 15%, and most recently, Q2 bookings were flat year over year as DOGE and uncertainty surrounding the defense budget impeded CJ bookings in the second quarter. Even with these headwinds, CJ’s renewal rate for the quarter was 87%, and its retention rate was 103%.

CJ revenue has a five-year CAGR of 16%, with the second quarter of 2025 being up 1% year over year. CJ is very profitable with an adjusted EBITDA margin over 40% and low spend on capitalized development. Dice is also a dual-sided marketplace that drove $88 million of revenue in 2024 and is comprised of 4,400 subscription clients in a market with roughly 100,000 client opportunities between the commercial and SRC accounts. The slide shows a handful of notable Dice customer logos. Our market opportunity in commercial is comprised of companies across various industries such as General Motors, Montefiore Healthcare System, the CIA, and Capital One, who aren’t traditionally tech companies but certainly hire many tech professionals every year and leverage our platform for their tech hiring needs. Dice’s quarterly bookings also have seasonality, with the first quarter being the largest of the year.

Dice bookings have a five-year CAGR of 2%, and most recently, Q2 bookings decreased 16% year over year as the HR tech hiring environment has remained challenged. Dice’s renewal rate for the second quarter was 75%, while its retention rate was 102%, demonstrating the continuing need of Dice’s services by its core customers. Dice revenue has a five-year CAGR of 2%, with the most recent quarter being down 18% year over year. Dice’s adjusted EBITDA margin has been approximately 20%, with the most recent quarter at 23%. Looking ahead, Dice and ClearanceJobs are positioned for growth in a normalized demand environment supported by large total addressable markets, subscription price escalators, our contract talent solutions offering, and Dice’s new employer experience. Our recent acquisition of Agile ATS further strengthens our portfolio and sets the stage for future talent acquisition opportunities for ClearanceJobs.

Together, these initiatives create a clear path for sustainable growth. Agile ATS is an applicant tracking system built specifically for recruiting and hiring cleared professionals in the GovTech space. We do continue to look for M&A opportunities that are adjacent to ClearanceJobs. In summary, DHI Group Inc. is well prepared to capture growth in tech hiring in the coming years, and with that, we’re happy to take any questions.

Thanks, gentlemen. Great insightful presentation. Let’s turn to some questions here. You touched on it briefly, but you know who are your target market customers and how do you attract companies to your offering? Similarly, how do you attract candidates to your sites?

Art Zeile, President and Chief Executive Officer, DHI Group: Great question, Joe. I can answer that one or take a first crack at it. Ideal candidate customer profile, I should say, consists of those people that are hiring at least five or more technology professionals over the next 12 months. There are a wide swath of companies in the United States economy that fit that description. I would say that they comprise all different types of industries. It’s not just software and technology companies that are hiring folks that are required for technology innovation inside of their business models. There are companies like General Motors, there’s Disney, there’s Bloomberg. A lot of the financial services industry is trying to move away from a retail in-person environment to an online environment. Any company that effectively is looking for five or more hires, I would say that that really resolves to a lot of different types of industries for Dice.

For ClearanceJobs, it is companies that are essentially military contractors. They’re looking for people that are cleared in the sense that they have a security at the level of secret or more, and they need to staff their projects because they’ve just won an award with the government and they don’t get paid until they staff up and are able to bill on either a firm fixed price basis or a time and material basis.

Thank you for that. Who are your direct competitors? Who would you comp yourself against?

That’s a great question, too. I’ll answer that one as well. For Dice, the competition really consists of LinkedIn. There are other platforms out there, Indeed, ZipRecruiter, Monster, plus CareerBuilder. They really do not play in our space, especially with regard to high-end white-collar tech talent. A lot of CFOs, however, really believe that they can essentially achieve the same goals with LinkedIn as they can with Dice. The argument to them is Dice is a lot different. It’s focused on technology. You can use LinkedIn for sales and marketing professionals and everybody else, but if you’re looking for tech, you really need to go to this community that’s been around for 35 years and has the majority of the candidates in the United States active on the platform. It’s a lot different experience than LinkedIn.

We have to make that argument to the CFOs that we talk to all the time for Dice. We do not have any natural competition for ClearanceJobs. The reason for that is that LinkedIn does not have a field for clearance level. There’s no way to identify whether or not a person has a clearance on LinkedIn. The other reason why they’re not a competitor is that years ago, there was an executive order that was issued that says that if you have a clearance in the United States, you’re not supposed to use LinkedIn because it’s known to be a place where North Korean, Russian, Chinese, and Iranian spies are trying to essentially find people that have this information in the United States. If you know people that are highly cleared in the United States, it’d be very unusual to find them on LinkedIn.

Okay, thank you. What trends are you seeing in tech hiring right now? I guess bigger picture, you know what do you think needs to occur in the economy to start driving tech hiring again?

Sure, very relevant question. I would say that hiring is diminished across all occupations, all sectors. That was the intent of the Federal Reserve, increasing interest rates radically in the back half of 2022. They did that so that you would essentially see less hiring and therefore less wage pressures that could evidence themselves in inflation. They achieved that goal. We’re at a very low point in terms of hiring. I would say what do we need to see? Two things for an inflection point. The first is that companies collectively believe that they should be incentivized to essentially grow. We have not seen that for the last two and a half years. Companies have been incentivized largely by their investors to think about profitability first, not growth.

Once we flip to that growth mentality, we believe that companies will embark on growth initiatives, which means investment, generally investment in people, and more specifically, investment in tech talent, because most of the growth initiatives in corporate America today require technology professionals. I think we’re starting to see that right now because even with a suppressed environment for hiring, in our platform for Dice, we went from about 10% of our job postings at the beginning of last year requiring AI skills to 50% last week. Half of the job postings on our site need one or more AI-related skills because if companies are hiring right now, they’re generally trying to understand this whole phenomena around AI, and they’re trying to AI-enable their business model. We’re seeing that on the Dice site very dramatically right now.

I think it just takes people feeling confident about the future economy to essentially feel good about getting back to investing for growth.

An area where there seems to be a lot of growth potential is the defense area. We got the $1.1 trillion defense budget for fiscal year 2026. How do you think that impacts the ClearanceJobs business?

It will be a huge tailwind when it’s actually signed into law. Specifically, both the Senate and the House have passed their versions of this $1.1 trillion defense budget. Now they have to go to reconciliation. They have to then send that bill to the president to be signed. That hasn’t happened. Right now, we’re obviously in a government shutdown, and it’s poised to essentially go into continuing resolution, which means we’re frozen at the 2025 levels. Once we see the impact of that $1.1 trillion defense budget, it should be an enormous tailwind for ClearanceJobs because it’s a 14% increase year over year. You have to understand that over the last 30 years, we’ve generally seen like 3% to 4% increases per year if we’ve seen increases. A 14% jump in one year is enormous. It’s the largest in peacetime history.

Great, thanks for that. Art and Greg, we’ve come to the end of our allotted time. We covered a lot of ground today and got significant insight into what DHI Group does, its markets, and opportunities. We appreciate you taking the time to participate in our conference, and we wish you and the company the best in the future. Thanks again.

Thank you, Joe.

Greg Schippers, CFO, DHI Group: Thank you.

Appreciate it.

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