DHI Group at Sidoti Conference: Strategic Insights for 2025

On Wednesday, 20 August 2025, DHI Group (NYSE:DHX) presented at the Sidoti Micro Cap Virtual Conference, offering a strategic overview of its operations and future plans. The discussion, led by CFO Greg Skippers, was a balanced mix of optimism about growth opportunities and caution regarding current market challenges.

Key Takeaways

• DHI reported $142 million in revenue for 2024, with a 6% CAGR since 2020.
• The company is targeting a 26% adjusted EBITDA margin for 2025.
• ClearanceJobs is poised for double-digit growth, supported by a robust defense budget.
• Dice faces challenges but is expected to recover by mid-2026.
• Over 90% of DHI’s revenue is recurring, thanks to subscription-based services.

Financial Results

• 2024 revenue stood at $142 million, with bookings of $141 million.
• Adjusted EBITDA was $35 million, representing a 25% margin.
• Operating cash flow reached $21 million, while capital expenditures were $14 million.
• Net debt was $28 million, less than one times leverage.
• ClearanceJobs contributed $54 million to 2024 revenue; Dice added $88 million.

Operational Updates

• DHI operates two main platforms: ClearanceJobs and Dice.
• Cost reductions totaling $35 million were achieved through restructuring.
• ClearanceJobs’ Q2 bookings were flat, affected by budget uncertainties.
• Dice’s Q2 bookings fell 16% due to a tough hiring environment.
• The acquisition of Agile ATS for $2 million aims to bolster ClearanceJobs.

Future Outlook

• Revenue growth is not anticipated until mid-2026.
• ClearanceJobs is expected to achieve double-digit growth soon.
• DHI targets free cash flow at 10% of revenue over time.
• The company plans to repurchase up to $5 million of common stock by February 2026.

Q&A Highlights

• AI is viewed as an opportunity, despite causing a temporary hiring pause.
• ClearanceJobs benefits from a $1.1 trillion defense budget.
• Approximately 6 to 8 million candidates are active on DHI’s platforms.
• Dice’s average contract size is around $16,000 per year.

Readers are encouraged to refer to the full transcript for more detailed insights.

Full transcript - Sidoti Micro Cap Virtual Conference:

Anja Sodysrom, Senior Equity Analyst, Sidoti: Okay. So welcome to the Sidoti virtual micro cap conference, and thank you for joining us today. I’m Anja Sodysrom, a senior equity analyst here at Sidoti. And as I mentioned, next up, we have DHI Group.

It’s trades on the New York Stock Exchange under the ticker DHX. And with me today, I have Greg Greg Shippers. He’s the CFO. This is gonna be conducted as a presentation by Greg and then followed by q and a. So if you would like to participate, you can do so in the q and a function at the bottom of your screen, and we will address your questions, after the presentation.

And with that, I’ll hand it over to you, Greg. Welcome.

Greg Skippers, CFO, DHI Group: Thank you, Andrea. Good afternoon. I’m Greg Skippers, CFO here at DHI Group. I’ll be going through our investor presentation and then I’ll be available for Q and A afterwards. DHI Group is listed on the New York Stock Exchange 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 two tech oriented recruiting platforms named ClearanceJobs and Dice. We create platforms that allow our clients who are recruiters and hiring managers to connect with tech candidates. These are two sided marketplaces that by definition serve both clients and candidates in order to succeed. You may think this sounds pretty commonplace with the likes of Indeed and ZipRecruiter constantly advertising on TV, but we have two key differentiators that make us a necessary tool for recruiters and hiring managers looking specifically for technology professionals.

First, we have built special search algorithms to find candidates based on their tech skills. And secondly, we have spent literally decades attracting the highest quality talent to our platforms. We have 8,000,000 tech professionals profiled on our two brands representing two thirds of the total skilled technologists in The United States. That is the true benefit of being around for 34. We make money by charging our clients for subscription contracts that allow them to access our platforms.

Over 90% of our revenue is recurring as a result. Here’s a summary overview of our 2024 annual financial performance and five year CAGR trends. I’ll be providing quarterly performance later in the presentation. DHI drove up $142,000,000 in revenue and $141,000,000 in bookings last year. The five year CAGRs for each are 6% for both measures.

Our adjusted EBITDA was $35,000,000 delivering a 25% adjusted EBITDA margin. We delivered $21,000,000 in operating cash flow and spent $14,000,000 on CapEx. Almost all of our CapEx is capitalized labor used in software development. We reinstituted our share buyback program in January, which had been suspended since the 2023 to focus on debt reduction. As a result, we ended 2024 with net debt of $28,000,000 equating to less than one times leverage.

The $2,000,000 of share repurchases indicated here was for net settlement of employee grant vesting. The US has become a tech oriented economy and has grown the tech workforce by approximately 3% each year over the past twenty five years. 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 LinkedIn with up to date profiles. When they are found on these other platforms, the majority of profiles are out of date and do not include a resume or contact information.

ClearanceJobs is the dominant leader in its market for delivering access to technology professionals with a government clearance. LinkedIn doesn’t 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 the target of foreign spies. Tech professionals are well compensated. The average salary for a tech worker in The US was a $111,000 last year, whereas the average worker in The United States made around $50,000.

As a company, you have basically two choices when hiring tech workers, use a recruiter or do it yourself. If you use a recruiter, you will generally be charged between 2025% of first year salary. The alternative is to pay dice or clearance jobs roughly 8 to $10,000 for an entry level year long subscription and find and engage with the tech talent yourself. Even one hire easily pays for itself compared to paying an external recruiting agency. We target companies that plan for at least five 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 as the number one career site for tech and IT jobs. The elevated interest rate environment has clearly suppressed hiring demand. That was the Federal Reserve’s intended result. But as the famous quote goes, every company is a software business now because of our reliance on technology and automation in general to drive our business models. For that reason, the Bureau of Labor Statistics and CompTIA Association forecast that over the next ten years, the tech work workforce will grow by at least 18%, a growth rate that is twice as fast as the overall employment growth rate.

If you see all the small point font on the right side of the slide, you will find that the growth is coming from the interest and skills that you would logically suspect. The need for ever more data scientists and engineers to implement and manage AI and more cybersecurity engineers to protect us from ever increasing threats. A focus on skills is an important reason why our two platforms are very unique. LinkedIn and other career sites create a user profile based on titles and their concept of skills or soft skills like public speaking. Our special sauce comes from the way we profile and search for 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 US patent for skills taxonomy several years ago and it’s the heart of our value proposition. We win in the market for tech talent because we are a specialist in technology skills and not a generalist recruiting platform. Here are two case studies of the great relationships we have with our clients on both platforms. Leidos has been a client of ClearanceJobs for over ten years and has continuously increased its spend with us.

Likewise, Montefiore Healthcare System, operating in New York City, has also been a client of Dice for over ten years and has more than doubled their spend with us over that time. Mafiori’s case study also illustrates an important point about Dice. Most investors think that we focus on software and tech clients. We do, but in many cases, our value proposition is actually stronger for companies and other sectors because they are less visible to the tech community. We have a large TAM for each of our 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 a facility clearance and allowing them to conduct business with cleared personnel. 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 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 our financial performance, I will give you 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 a candidate to register, create a profile, and start using the platform. As I indicated earlier, because we are a subscription based service with a one year minimum contract, over 90% of revenue is recurring. Over 90% of our contracts include an auto renewal clause with an automatic price escalator.

We kept the number of profile views for each subscription contract based on the number of recruiters in that company that intend to use it and the number of tech professionals the company intends to hire in the next year. Robert Half has a much larger profile view number than a 100 person tech firm. We allow unlimited emails and texts on our platform, which is another key competitive differentiator. We encourage the recruiter and the candidate to engage in conversations. That’s how they both win and a reason for them to come back to our platforms again.

DHI bookings, which represent the value of our contracts that will be recognized as revenue within twelve 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 2023 and in 2024, we reduced costs through restructurings in the 2023, the 2024, and in January and June of this year. Together, these restructurings have reduced our operating cost by approximately $35,000,000.

The restructure earlier this year also separated our Dice and Clarence Jobs 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 win in the market for tech talent because we are excuse me. We have, however, managed our cost structure to grow our adjusted EBITDA margin to 25% in 2024 and are projecting 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 up for 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 includes 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 $20,000,000 and the strong markets in 2021 and 2022 driving operating cash flows to $29,000,000 and $36,000,000 respectively. DHI’s capitalized development costs, which are the part of fixed asset purchases in our cash flow statement, primarily represent the cost of our internal labor to build the products and features on the clearance jobs and DICE sites.

With lower internal headcount resulting from the restructurings, capitalized development costs are expected to be 7,000,000 to $8,000,000 in 2025 as compared to $12,000,000 in 2024. DHI’s free cash flow, which is operating cash flows less capital expenditures, is driven by adjusted EBITDA levels and capitalized development costs. Over time, we are targeting free cash flow at 10% of revenue. We suspended our share repurchase program in the 2023 to focus on paying down debt. Our debt at the 2024 was $32,000,000 resulting in leverage at 0.91 times our adjusted EBITDA levels.

We generally maintain approximately $2,000,000 of cash on hand and utilize our $100,000,000 revolver to manage liquidity. Since 2019, DHI has repurchased nearly 19,000,000 shares and has reduced shareholder dilution by approximately 3,000,000 shares or 6%. Earlier this year, we announced a new buyback program, which allows us to repurchase up to $5,000,000 of common stock through February 2026. Our ClearanceJobs brand operates in the Govtech space and is a dual sided marketplace with 2024 revenue of $54,000,000 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 uncertainties surrounding the defense budget impeded CJ bookings in the second quarter. Even with these headwinds, CJ’s renewal rate for the fourth quarter was 87% and its retention rate was 103%. CJ revenue has a five year CAGR of 16% with the 2025 being up 1% year over year.

CJ is very profitable with adjusted EBITDA margin above 40% and low spend on capitalized development. Dice is also a dual sided marketplace that drove $88,000,000 of revenue in 2024, and it’s comprised of 4,400 subscription clients in the market with roughly 100,000 client opportunities between the commercial and SRC accounts. This 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, Fidus Healthcare, 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, q two 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 continued 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 adjusted EBITDA margin has been approximately 20% with the most recent quarter at 23%. Dice capitalized development costs have steadily decreased since q two of last year.

McKinsey and other economists predict tech hiring to grow in double digits over the next ten years, and DHI is at the intersection of fueling the tech economy. Our pool of millions of candidate profiles coupled with our platform enabled proprietary matching algorithms allow for efficient and effective identification of talent and hiring. Agile ATS is an applicant tracking system built specifically for recruiting and hiring clear professionals in the GovTech space. We continue to look for m and a opportunities adjacent to CJ. In summary, DHI is well prepared to capture growth and tech hiring in the coming years.

With that, I’m happy to take questions.

Anja Sodysrom, Senior Equity Analyst, Sidoti: Thank you so much. That was a good overview. And, for the audience, if you would like to participate in the q and a, you can submit your question at the bottom of your screen. And first, I’m just curious, how does AI play into your business? Is that an opportunity or or a threat, do you think?

Greg Skippers, CFO, DHI Group: Yeah. Good question. AI is definitely an opportunity. We have nearly 70% of all the technologists’ resumes and candidates in our profile. And technologists are quickly, essentially taking on new skills to to compete in the AI environment.

And and we’re, you know, we’re poised to take advantage of that. I will say that there has been some pausing on certain companies out there as AI is being implemented because they’re not exactly sure how many developers and engineers they’re going to need. So that has been a headwind for Dice. But long term, we expect AI to be just another tool in the technologist toolkit and that we will be able to take advantage of that.

Anja Sodysrom, Senior Equity Analyst, Sidoti: Okay. Thank you. And you recently released your second quarter results, and you scaled back on on the revenue guidance, but you expanded the EBITDA target. Can you just speak to that? And also, seems like The Street is expecting revenues to continue to decline in 2026.

So when do you expect to return to growth?

Greg Skippers, CFO, DHI Group: Yeah. That’s that another good question, and we get a lot. So we would not anticipate returning to growth until probably the middle of next year. There are certainly some strong tailwinds for ClearanceJobs. ClearanceJobs actually is growing, but ClearanceJobs with the $1,100,000,000,000 defense budget, the acquisition of Agile ATS, which expands its offerings, we certainly expect ClearanceJobs to be able to get to double digit growth very soon.

Dice is more challenged for the reasons we just talked about, But, we do expect that, you know, that the technology market will return in hiring and that, you know, by the middle of next year, Dice has a good opportunity to return to growth.

Anja Sodysrom, Senior Equity Analyst, Sidoti: Okay. Thank you. And another question here from the audience is, can you discuss the level of candidates available and if that has changed much much since the beginning of the year?

Greg Skippers, CFO, DHI Group: Sure. I would say it’s pretty steady. There know, you we have 6 to $8,000,000 million candidates on our our sites, and they they continue to be out there, especially on the clearance shop site. They interact frequently. So I I think it’s been pretty pretty steady.

Clearly, some of the younger candidates, people directly out of college are having a little tougher time finding jobs because of the AI nuance that we have just talked about. But, candidates continue to be, quite active.

Anja Sodysrom, Senior Equity Analyst, Sidoti: Okay. And what is the client retention on each platform? Can you discuss recent trends in new client ads, and what is pricing on contracts like these days?

Greg Skippers, CFO, DHI Group: Yep. So on Dice, our average contract size and annual subscription for Dice is around $16,000 a year. And as far as the renewal rate, so we disclose our renewal rate on revenue. The Dice renewal rate has been challenged. We spoke in our in our conference call a week ago about a couple of large customers in particular for Dice.

One that went out of business and one that is a large consulting firm that had a lot of contracts with the federal government and, you know, a lot of those contracts were pulled by Doge. And they did not renew with Dice. That amounted to about a million 1 of of annual contract value. So that was definitely a headwind for Dice. Clearance jobs clearance jobs customers had some impact from Doge is a common question we get.

And particularly, you know, in the first half of this year, Doge had a much larger impact, but we expect that to wane and, to be, you know, not a big factor going forward with this new defense budget.

Anja Sodysrom, Senior Equity Analyst, Sidoti: Okay. Thank you. And can you share historical pricing trends? It seems that there is room for greater pricing relative to alternatives.

Greg Skippers, CFO, DHI Group: Yep. Yeah. I’ll speak about each each brand. So so ClearanceJobs ClearanceJobs doesn’t really have a viable competitor in the marketplace. On I mentioned in the briefing here that, you know, a a person with The US security clearance can’t put that on LinkedIn.

They’re not able to advertise themselves for jobs on LinkedIn as a result. So there is pricing opportunity for sure within ClearanceJobs, and you can see that if you look at our average revenue per customer on ClearanceJobs, you can see that trickling up over time. And on Dice, Dice is the pricing opportunity on Dice is a little more challenging because it moves more with the macroeconomics of the business. That said, we are looking at ways to basically have a unit level pricing for dice and cleaners shops for that matter, but would essentially charge more for a resume view, let’s say, for a for a job that is is much more hard to find, an appropriate candidate for versus, you know, a standard Java coder or something. So, that sort of pricing opportunity will allow us to, increase our, you know, our our revenue.

Anja Sodysrom, Senior Equity Analyst, Sidoti: Okay. And another questionnaire, have you begun to see any hiring activity which has been driven by AI adoption or potential implementation?

Greg Skippers, CFO, DHI Group: Yeah. Over 35% pushing 40% of the jobs on Dice today require AI skills, and that’s a jump from 10% at the beginning of last year. So we’re definitely seeing it and, you know, we are definitely the place to find AI talent. And the as I mentioned, you know, the candidates are are retooling to get those skill sets as quickly as as they possibly can. And employers are looking for that, especially those with with enhanced skill sets and understanding of processes.

So more seasoned candidates in many cases to come in and actually implement AI and understand how a marketing, you know, process should work and also have the AI skills to implement something. So that’s really driving demand for, people with, you know, more experience than just those directly out of school.

Anja Sodysrom, Senior Equity Analyst, Sidoti: Okay. Thank you. And are there any client verticals or industries which are leading the way in activity levels?

Greg Skippers, CFO, DHI Group: Yeah. Definitely, the consulting firms are are, you know, seeing upticks now driven by AI. And also, you know, just from uncertainty that had at least prevailed around, government budgets and other things like that that created uncertainty in the overall marketplace. But rather than hiring some of these folks and trying to train them yourself, a lot of companies are going to third parties and consulting firms to get to get that talent and try to understand how best to implement AI within their businesses.

Anja Sodysrom, Senior Equity Analyst, Sidoti: Okay. Thank you. And also, can you discuss the agile ATS acquisition, such as how that achieved and the valuation levels?

Greg Skippers, CFO, DHI Group: Yeah. Yeah. So agile ATS so an applicant tracking system, essentially, you know, is is the it’s like a CRM for the HR team and the recruiting process. And so this fits really perfectly into ClearanceJobs and expands ClearanceJobs footprint within the the the higher the total hiring process. Right?

Instead of just being in kind of the middle section of the continuum where we are sourcing talent and then putting the talent in front of the hiring managers. Now all I want is your tool from from posting the job and understanding the requirements all the way through to the interview process and the onboarding process and tracking all that is in the middle. This this particular ATS is specifically designed for the hiring of security cleared individuals, and it has certain fields for it and so forth. And it’s made so you if you have an audit of your process from the federal government that, you know, you have all the information you need. And from a value equation standpoint, you know, it was a it was a $2,000,000 acquisition, which we disclosed, million and half upfront, and then 500,000 on an earn out.

There was not a lot of revenue. This was essentially a recognized need by one of the founders. They built a product for their for their internal use and then, you know, move moved on from that into some other endeavors. And, you know, we acquired the business and now we can sell it over our customer base and others using our, you know, more advanced sales team and so forth.

Anja Sodysrom, Senior Equity Analyst, Sidoti: Okay. And I’m gonna squeeze one last question in there. How does the acquisition pipeline look? And can you share your appetite as well as debt comfort levels?

Greg Skippers, CFO, DHI Group: K. I I’m assuming the acquisition pipeline is m and a related. So we we are actively continuing to look for tuck in acquisitions for ClearanceJobs specifically. And I can’t really comment on anything to come there, but we are looking at opportunities to expand ClearanceJobs and its footprint in the recruiting, specifically in the the clear professional space.

Anja Sodysrom, Senior Equity Analyst, Sidoti: Okay. Thank you. And I wanna thank you so much for for joining us today and everyone in the audience who participated. If you have any further questions, any follow ups, I’m sure the management team can make themselves available. They have a pretty full one on one schedule.

But, if you reach out to us, we’ll we’ll put you in touch with them and and and, make sure you you get in front of them. And with that, I’ll hand it over to you, Greg, for some closing remarks.

Greg Skippers, CFO, DHI Group: Alright. Thank you, Ashwin. Thank you everyone for attending, and, look forward to talking with, with all of you individually. So please reach out to, if you’d like to do that. Thanks again.

Anja Sodysrom, Senior Equity Analyst, Sidoti: Thank you,

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