Q3 2023 DHI Group Inc Earnings Call

Speaker 1: Good afternoon everyone and welcome to the DHI Group Incorporated 3rd quarter 2023 Financial Results Conference Call.

Good afternoon, everyone and welcome to the D. H I grew up incorporated third quarter 20, twenty-three financial results conference call.

Speaker 1: All participants will be in a list and only mode. Should you need assistance, please see Noelle Conference Specialist by pressing the star key followed by zero.

All participants will be in a listen only mode.

If you need assistance. Please they know a conference specialists by pressing the Starkey followed by zero.

Speaker 1: After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star and then one using a touch-tone telephone. Withdraw your questions. You may press

After today's presentation, there will be an opportunity to ask questions.

To ask a question you May press Star and then one you usually get a touchtone telephone.

Withdraw your questions you May press star and too.

Speaker 1: So I'll also note today's event is being recorded. At this time I'd like to turn the floor over to Todd Curley of MKR Investor Relations. Sir, please go ahead.

Just a note today's the vet is being recorded at this time I'd like to turn the floor over to talk currently of M. K R Investor Relations. Sir. Please go ahead.

Speaker 2: Thank you, operator. Good afternoon and welcome to DHI Group's 2023 third quarter earnings conference call. With me on today's call are DHI's CEO , Art Zaley and Julie Roby, DHI's SVP of SP&A.

Thank you operator, good afternoon, and welcome to do which I groups 2023 third quarter earnings Conference call with me on today's call. Her D. H is C O R daily.

Julie Roby D. H is S. B P of S. P N I.

Speaker 2: Before I turn the call over to Art and Julie, I'd like to cover a few quick items. This afternoon, DHI issued a press release announcing as 2023 third quarter financial results. The releases available on the company's website at dhaggroupink.com. This call is being broadcast live over the internet for all interested parties. And the webcast will be archived on the Invest Relations page or the company's website.

Before I turn the call over to art Julia I'd like to cover a few quick items. This afternoon D. H I issued a press release announcing that's 2023 third quarter financial results.

<unk> available on the company's website at H I V.

<unk> Dot com. This call is being broadcast live over the Internet for all interested parties and the webcast will be archived up an investor relations page of the company's web site.

Speaker 2: I want to remind everyone that during today's call, management will make code looking statements that involve risks and uncertainties. Please note that except for the historical information, statements on today's call, make constitute for looking statements within the meaning of the federal security's law.

I want to remind everyone to drink today's call management will make forward looking statements that involve risks and uncertainties. Please note that except for the historical information statements on today's call may constitute forward looking statements within the meaning.

The federal Securities laws.

Speaker 2: These forward-looking statements reflect the age of management's current views concerning future events and financial performance, and are subject to risks and uncertainty in actual results made different materially from the outcomes contained in any forward-looking state.

Is forward looking statements reflect management's current views concerning the future events on financial performance.

Subject to risks and uncertainties and actual results may differ materially from the outcomes.

Looking statements.

Speaker 2: factors that could cause these for looking statements differ from actual results include risks and uncertainties discussed in the company's periodic reports on form 10k and 10q and other filings with the securities and exchange to mission.

Factors that could cause these forward looking statements differ from actual results include risks and uncertainties discussed in the company's periodic reports on Form 10-K N.

Q and other filings with the Securities and Exchange Commission.

Speaker 2: DHI undertakes no obligation to update or revise any forward-looking...

C H I undertake no obligation to update or revised any forward looking statements.

Speaker 2: Lastly, during today's call management, we'll be referring to specific financial measures, including adjusted EBITDA, adjusted EBITDA margin, adjusted diluted earnings per share, that are not prepared in accordance with US GAP. Information about endoconfillations, of these non- GAAP measures to the most directly comparable GAAP measures are available in our earnings release, a copy of which you can find on our website at DHIGgroup.com in the Industrial Relations section.

Lastly, during today's call management will be referring to specific financial measures, including adjusted EBITDA adjusted EBITDA margin adjusted diluted earnings per share.

Not prepared in accordance with the U S gap.

Information about and reconciliation does these non-GAAP measures to the most directly comparable GAAP measures are available in our earnings release.

Copy of what you can find on our website at <unk> Dot Com and Investor Relations section.

Speaker 2: With that, I'm now to the call over to ArtZali, CEO of DHIG Group. Heart.

With that I'll never turn the call over to art Zaley's C O P H I <unk> art.

Speaker 3: Thank you Todd. Good afternoon everyone and welcome to our 2023 third-order earnings conference call. We appreciate your time today as we discuss our financial performance and future outlook.

Thank you Todd.

Good afternoon, everyone and welcome to our 2023 third quarter earnings Conference call.

We appreciate your time today, as we discuss our financial performance and future outlook.

Speaker 3: First, let's discuss the state of the market. There is no doubt that the ongoing uncertainty in the economy continues to suppress most tech hiring plans.

First let's discuss the state of the market.

There is no doubt that the ongoing uncertainty in the economy continues to suppress most tech hiring plans.

Speaker 3: As of the end of September , ComPTI is analysis of the tech workforce indicates a net reduction of 116,000 positions year to date across the economy compared to a 335,000 expansion of tech positions for the same period in 2022.

The end of September copy his analysis of the tech workforce indicates a net reduction of 116000 positions year to date across the economy compared to a 335000 expansion of tech positions for the same period in 2022.

Speaker 3: This coincided with a decline in actual tech job postings with third quarter numbers significantly lower than in the previous year and the pre-pandemic average.

This coincided with a decline in actual tech job postings with third quarter numbers significantly lower than in the previous year and the pre pandemic average.

Speaker 3: While this downturn in hiring continues to impact our revenue and bookings, we believe there remains a long-term secular trend for adding more tech workers in the United States.

While this downturn in hiring continues to impact our revenue in bookings. We believe there remains a longterm secular trend for adding more tech workers in the United States.

Speaker 3: In a study focused on the impact of AI on the US workforce released this past July , McKinsey Global Institute predicted that demand for STEM workers will grow 23% from the year 2022 to the year 2030. McKinsey believes tech jobs will grow at that high rate because it will be technologists who will be implementing AI for all industries and digitizing our economy.

In a study focused on the impact of AI on the U S workforce released this past July.

Kinzey Global Institute predicted that demand for stem workers will grow 23% from the year 2022 to the year 2030.

Mckinzie believes tech jobs will grow at that high rate because it will be technologists will be implementing AI for all industries and digitizing our economy.

Speaker 3: This theme is consistent with KPMG's annual CEO survey released just a few weeks ago, which confirms that 72% of U.S. CEOs say that generative AI is a top investment priority.

This theme is consistent with K P. M. G. As annual CEO Survey released just a few weeks ago, which confirms that 72% of U S. C E O's, David generative AI is a top investment priority.

Speaker 3: The question is when will we see this turn around and hiring actually start to occur?

The question is when will we see this turnaround in hiring actually start to occur.

Speaker 3: The staffing industry analysts, most recent forecasts predicts a 3% contraction in the IT segment of the staffing industry this year with a return to growth and a 5% expansion next year.

The staffing industry analysts most recent forecast predicts a three per cent contraction and the I T segment of the staffing industry. This year with a return to growth and a 5% expansion next year.

Speaker 3: We believe that as businesses have a collective sense of confidence that we are past a recession scenario, they will accelerate their investment in technology initiatives, and they will meet our platforms to do so.

We believe that as businesses have a collective sense of confidence that we are past a recession scenario they will accelerate their investment in technology initiatives and they will meet our platforms to do so.

Speaker 3: Our two subscription offerings, dice and clearance jobs, provide staffing and recruiting firms, large enterprises, and government agencies with the tools necessary to find, attract, and hire the best technologists for their job openings from our 7.8 million candidate profiles.

Two subscription offerings dice and clearance jobs provide staffing and recruiting firms large enterprises and government agencies with the tools necessary to find attract and hire the best technologists for their job openings from our 7.8 million candidate profiles.

Speaker 3: While we wait for tech hiring to return, we will continue to improve our industry-leading product offerings in our Go-to-Market engine, while doing so in a more efficient and profitable manner as evidenced by our significantly increased adjusted EBITDA margin. Now let me dig into our process.

While we wait for tech hiring to return, we will continue to improve our industry, leading product offerings and our go to market engine, while doing so in a more efficient and profitable manner as evidenced by her significantly increased adjusted EBITDA margin.

Now, let me dig into our performance during the quarter.

Speaker 3: In the third quarter, our total revenue declined 3% year over year. Dice revenue for the quarter decreased 9% year over year, while CJ revenue increased 13%.

In the third quarter or total revenue declined 3% year over year die.

<unk> revenue for the quarter decreased 9% year over year, while CJ revenue increased 13% the.

Speaker 3: The decrease in dice revenue was the result of lower new business bookings and renewals over the past several quarters, as well as significantly lower one-time transactional revenue, all of which are a reflection of the uncertain economic environment we have faced during that time.

The decrease in dice revenue was the result of lower new business bookings and renewables over the past several quarters as well as significantly lower one time transactional revenue.

All of which are a reflection of the uncertain economic environment, we have faced during that time.

Speaker 3: Having said that, excluding one time transactional revenue, our total recurring revenue was up 5% year over year.

Having said that excluding one time transactional revenue or total recurring revenue was up 5% year over year.

Speaker 3: Nice new business teams continue to see smaller pipeline volume and more intense deal scrutiny. However, we remain laser focused on those verticals with significant tech hiring needs right now because their technology roadmaps are less likely to be impacted by the economy.

Now this new business teams continue to see smaller pipeline volume and more intense deal scrutiny. However, we remain laser focused on those verticals with significant tech hiring needs right now because they're technology roadmaps are less likely to be impacted by the economy.

Speaker 3: Those industries include aerospace, business consulting, healthcare, financial services, and new to the list, education. We continue to shift new business resources to focus on where clients are buying, which includes the staffing or recruiting vertical, as well as the CJ new business team.

Those industries include aerospace business consulting health care financial services, and New New list education week.

We continue to shift new business resources to focus on where clients are buying which includes the staffing recruiting vertical as well as the C J new business team.

Speaker 3: DICE secured several new clients this quarter, including Hogan-Level's Law Group, Cornell University, and the Idaho National Engineering Laboratory.

Dice secured several new clients this quarter, including Hogan levels La group Cornell University, and the Idaho National Engineering Laboratory.

Speaker 3: Guys also piloted it launched pilots with several Fortune 500 companies.

Also piloted.

Pilots with several fortune 500 companies.

Speaker 3: Claire's jobs bookings for the quarter increased 5% year over year. As we mentioned last quarter, CJ was affected by the debt ceiling negotiations in Q2 and its implied threat of the government delaying payment to military contract.

Clearest jobs bookings for the quarter increased 5% year over year.

As we mentioned last quarter C. J was affected by the debt ceiling negotiations in queue too and it's implied threat of the government delaying payment to military contractors in.

Speaker 3: In the third quarter, we expected to see government contractors and agencies start to re-engage in a more significant manner with this issue behind us.

In the third quarter, we expected to see government contractors and agency start to Reengage in a more significant manner with this issue behind us. However.

Speaker 3: However, the looming government shutdown suppressed their activity as contractors worried about the suspension of payments during a potential shutdown.

However, the looming government shutdown suppress their activity as contractors worried about the suspension of payments during a potential shut down.

Speaker 3: As a result, our CJ Bookings growth during the quarter was less than we expect.

As a result, or CJ bookings growth during the quarter was less than we expected.

Speaker 3: Despite this, TJ secured several new clients this quarter, including global technical systems, information security corporation, and loft orbital. We expect the larger fiscal year 2023 defense budget to positively impact the volume of government projects and the corresponding demand for cleared tech professionals to fill it up.

Despite this DJ secured several new clients this quarter, including global technical systems.

Information Security Corporation, and laughed orbital we.

We expect the larger fiscal year 2023 defense budget to positively impact the volume of government projects and the corresponding demand for cleared tech professionals professionals to fill up.

Speaker 3: Moving on to account management, the difficult economic environment impacted our revenue renewal rates in the third quarter.

Moving onto account management, the difficult economic environment impacted our revenue renewal rates in the third quarter.

Speaker 3: For the quarter, our DICE and CJ revenue renewal rates were at 78% and 94%, respectively.

For the quarter, our data and CJ revenue renewal rates were 78% and 94% respectively.

Speaker 3: Retention rates for the corridor for dice and clearance jobs were 99% and 112% respectively.

Retention rates for the quarter for dice and clearance jobs work, 99% and 112% respectively.

Speaker 3: As I mentioned last quarter, many of our clients ran out of profile views in their subscriptions and had to top up during the second and third quarters of last year, which created a difficult comparison for these metrics.

As I mentioned last quarter, many of our clients ran out of profile views and their subscriptions and had to pop up during the second and third quarters of last year, which created a difficult comparison for these metrics. This.

Speaker 3: This year, we are seeing our customers return to a consumption pattern consistent with the lower number of tech job postings, which has impacted our renewal rate.

This year, we are seeing our customers returned to a consumption pattern consistent with a lower number of tech job postings, which has impacted our renewal rates.

Speaker 3: Our customer attrition was notably larger than in previous quarters, but continues to be concentrated with smaller clients that have been more impacted by the macroeconomic environment than our larger accounts. And spend less than $10,000 a year with them.

Our customer attrition was notably larger than previous quarters, but continues to be concentrated with smaller clients that have been ah more impacted by the macro economic environment than our larger accounts and spend less than $10000 a year with us.

Speaker 3: Moving on to earnings. During the third quarter, we delivered a 25% adjusted EBITOM Argin, which was up significantly from 21% a year ago. In the third quarter, we saw the full benefit of the organizational restructuring we announced earlier this year, which included a 10% reduction in workforce that streamlined our team structure and improved our operating margin.

Moving onto earnings during the third quarter, we delivered a 25% adjusted EBITDA margin, which was up significantly from 21% a year ago.

In the third quarter, we saw the full benefit of the organizational restructuring we announced earlier this year, which included a 10% reduction in workforce that streamlined our team structure and improve our operating margins.

Speaker 3: While it is always a difficult decision to reduce headcount, we are confident that we have the right talent in place to capitalize on the opportunity ahead of us and to do so in a more efficient and profitable manner.

While it is always a difficult decision to reduce headcount, we're confident that we have the right talent in place to capitalize on the opportunity ahead of us and to do so in a more efficient and profitable manner.

Speaker 3: The restructuring is expected to generate annual cost savings of approximately $8 to $10 million.

Restructuring is expected to generate annual cost savings of approximately $8 million to $10 million.

Speaker 3: During the third quarter, we continue to focus on strengthening our industry-leading product offerings to better penetrate our large market opportunities. For Dice, we announced the release of

During the third quarter, we continue to focus on strengthening our industry, leading product offerings to better penetrate our large market opportunities.

For dice, we announced the release of dice connections.

Speaker 3: Technologists and recruiters can now form connections with each other through their respective profiles and see a list of those connections through their network dashboard.

Technologist and recruiters can now form connections with each other through their respective profiles and see a list of those connections through their network dashboard.

Speaker 3: Connecting with technologists helps recruiters build a pipeline of relevant candidates, making it easier to attract the right person for their current and future postage.

Connecting with technologists help helps recruiters build a pipeline of relevant candidates, making it easier to attract the right person for their current and future postings.

Speaker 3: Following the close of the third quarter, DICE also released a new feature called Expressed Interest.

Following the close of the third quarter Dice also released a new feature called expressed interest.

Speaker 3: This feature allows a candidate to show interest in a job without going through the formal application process. They wave a hand and if the recruiter likes their experience, they engage directly with that candidate.

This feature allows a candidate to show interest in a job without going through the formal application process.

Wave, a hand, and if the recruiter likes their experience they engage directly with that candidate.

Speaker 3: As you may recall, CJ announced this feature a couple of quarters ago and it has already been used hundreds of thousands of times over the last several months. This is an excellent example of our ability to use CJ as a testbed for innovation and fast follow with a Dice deployment.

As you May recall CJ announced this feature a couple of quarters ago and it has already been used hundreds of thousands of times over the last several months. This is an excellent example of our ability to U C. J as a testbed for innovation and fast follow with a dice deployment.

Speaker 3: We expect the express interest feature to have the same success on the dice platform.

We expect the expressed interest feature to have the same success on the dice platform.

Speaker 3: For ClearS jobs, its candidate mobile app is now available for download on the Apple app store. This is CJ's first native mobile app and comes after a year and a half of development. It has already been downloaded several thousands of times and represents a new engagement channel for candidates that participate in our cleared network.

For Claris jobs, it's candidate mobile App is now available for download on the Apple App store.

This is cj's first native mobile App and comes after a year and a half of development.

It has already been downloaded several thousands of times and represents a new engagement channel for candidates that participate in our cleared network.

Speaker 3: We are also proud to announce that during the third quarter, DHI Group was named to Newsweek's list of the top 100 most loved workplaces for 2023.

We're also proud to announce that during the third quarter <unk> group was named to Newsweek's list of the top 100, most loved workplaces for 2023.

Speaker 3: VHI was ranked 47th overall. The results were determined after surveying more than two million employees from businesses with workforces varying in size from 50 to more than 100,000 employees.

D. H I was ranked 47th overall.

The results were determined after surveying more than 2 million employees from businesses with workforces varying in size from 50 to more than 100000 employees.

Speaker 3: The list recognizes companies that have created a workplace where employees feel respected, inspired and appreciated.

The list recognises companies that have created a workplace where employees feel respected inspired and I appreciate it.

Speaker 3: It is a testament to the entire DHI team that we have been named to this prestigious list.

It is a testament to the entire D. H I team that we have been named to this prestigious list.

Speaker 3: Lastly, earlier this week we announced the addition of Ramey Levy as our new Chief Financial Officer.

Lastly earlier this week announced we announced the addition of rainy Levy as our new Chief Financial Officer.

Speaker 3: When impressed us most about Raney is a versatile skillspad including direct responsibility for FPNA, financial operations, tax, treasury, and MNA functions, but also the multitude of times in her career where she solved tough business challenges by taking on additional responsibilities in operations, fails, and strategy roles.

When impressed us most about rainy is a versatile skill set including direct responsibility for F. P. In a financial operations tax Treasury and M&A functions, but also the multitude of times in her career, where she solve tough business challenges by taking on additional responsibilities and operations.

<unk> and strategy roles.

Speaker 3: We're thrilled to have her start with DHI in early December and look forward to introducing her on our next earnings call.

We're thrilled to have her to start with the H I in early December and look forward to introducing her on our next earnings call.

Speaker 3: In summary, while the difficult economic environment is impacting us in the short term, there remains a long-term secular trend for adding more tech workers in the United States. And as the economy improves, and as companies across all industries continue their investment in technology initiatives, we expect increased demand for our tools, which enable companies to attract, find, and hire the right technology professionals for their open position.

In summary, while the difficult economic environment is impacting us in the short term there remains a longterm secular trend for adding more tech workers in the United States and as the economy improves and as companies across all industries continue their investment in technology initiatives, we expect increased demand for our tools, which.

<unk> companies to attract fine and hire the right technology professionals for their open positions.

Speaker 3: Until then, we will continue to focus on improving our products and our execution and doing so in a more efficient and profitable manner.

Until then we will continue to focus on improving our products and our execution and doing so in a more efficient and profitable manner.

Speaker 3: On that note, let me turn the call over to Julie, who will take you through our financials and our guidance, and then we'll take any questions you may have. Julie?

On that note, let me turn the call over to Julie who will take you through our financials and our guidance and then we'll take any questions you may have Julie.

Speaker 4: Thank you, Art, and good afternoon everyone. Let me take you through our financial results for the quarter. We reported total revenue of $37.4 million, which was down 3% both on a sequential and year-over-year basis.

Thank you and good.

Everyone. Let me take you to our financial results for the corner. We report a total revenue of 37.4, $9, which was down three per cent.

And year over year basis.

Speaker 4: Total bookings for the quarter were $31.2 million, down 15% year over year.

Totally looking for the corner or $31.2 million down 15% every year.

Speaker 4: DICE revenue was $24.8 million, which was down 6% sequentially and down 9% year-over-year. DICE bookings were $19.1 million, down 23% year-over-year.

Revenue was $24.8 million, which was down 6% sequentially.

9% year over year.

Bookings or 19, one $9 down 23% year over year.

Speaker 4: We ended the quarter with 5,752 dice recruitment package cuts.

Ended the quarter with 5752 diet recruitment package customers, which is down 4% from last quarter and down 10% every year.

Speaker 4: which is down 4% from last quarter and down 10% year-over-year. Our average annual revenue per dice recruitment package customer was flat sequentially and up 4% year-over-year to $15,531. Approximately 90% of dice revenue is recurring and comes from annual or multi-year contract.

Annual revenue per dice recruitment package customer with flat sequentially and at 4% year over year two.

$215531 approximately 90 per cent of dice revenue is recurring and kind of an annual are multiyear contracts for the corner or dice revenue renewal rate was 78% and our retention rate was 99%.

Speaker 4: For the quarter, our dice revenue renewal rate was 78%, and our retention rate was 99%.

Speaker 4: Clarence Jobs revenue was $12.7 million, up 3% sequentially and 13% year-over-year. Bookings for CJ were $12.1 million, up 5% year-over-year. We ended the third quarter with 2054 CJ recruitment package customers, which was down 1% on a sequential basis and up 1% year-over-year.

Jobs are avenue at 12.7, $9 up 3% sequentially and 13% year over year.

Bookings for C J or 12.1 $9 five per cent.

We ended the third quarter with 2054, CJ recruitment package customers, which was down 1%.

And up one per cent.

Speaker 4: Our average annual revenue per CJEC recruitment package customer was up 3% over last quarter and up 11% year-over-year to $21,422.

Our average annual revenue Percy Jake recruitment package customers at three per cent over last quarter.

7% year over year $21422.

Speaker 4: Approximately 90% of CJA revenue is recurring and comes from annual contracts.

<unk> 90 per cent S. D J, rather new is recurring and comes from annual contract.

Speaker 4: For the quarter, both CJ's revenue renewal rate and retention rate were up sequentially. CJ's revenue renewal rate was 94% and CJ's retention rate was strong at 112%. The outstanding retention rate demonstrates the continued value CJ delivers in the recruitment of cleared professionals.

First quarter, both CJS revenue renewal rate Andrea <unk>, we're up sequentially CJS revenue vanilla right like 94 per cent in few days retention rate withdrawn at 112% the outstanding retention rate demonstrates the continued value did you delivered in the recruitment of Claire.

Yeah.

Turning to operating expenses.

Speaker 4: Third quarter operating expenses were down 6% to $35.2 million, when compared to $37.3 million in the year ago quarter. This quarter includes $300,000 in restructuring charges.

Third quarter operating expenses were down 6% to $35.2 million when compared to 37.3 million in a year ago.

Quarter includes $300000 in restructuring charges.

Speaker 4: Our third quarter operating expenses reflect a full quarter of the cost savings associated with the May restructuring, which included a reduction of our workforce by approximately 10%, and is expected to generate annual cost savings of approximately $8 to $10 million.

Our third quarter operating expenses reflect a full quarter at the cost savings associated with restructuring, which included a reduction of our workforce by approximately 10% and and is expected to generate annual cost savings of approximately $8 million to $10 million.

Speaker 4: During the quarter, we sold a portion of our ownership interest in eFinancial careers for $4.9 million and recognized a gain of $600,000, which reduced our ownership interest from 40% to 10%.

During the quarter, we sold a portion of our ownership interests.

Answer careers for 4.9, $9 and recognize the gang of $600000, which would need our ownership interest from 40% to 10%.

Speaker 4: For the quarter, we had income tax expense of $759,000 on income before taxes of $1.8 million. Our tax rate for the quarter differed from our normal expected rate of 25% due primarily to the deduction limitations on executive compensation and evaluation allowance related to the impairment of an investment.

The quarter, we had income tax expense of $759000 in income.

Before taxes at $1.8 million or.

Tax rate for the corner differed from our normal expected rate of 25 per cent due primarily to the deduction limitations on executive compensation and evaluation allowance related to the impairment of an investment.

Speaker 4: We recorded net income of $1 million or $2 cents per diluted share. For the prior year quarter, we reported a net loss of $900,000 or $2 cents per diluted share. Adjust the diluted earnings per share for the quarter with $3 cents compared to $2 cents for the prior year quarter.

We recorded net income of $1 million or two cents per diluted sure for the <unk>.

Prior year quarter, we reported.

At $900000 or two cents per diluted share.

Justin diluted earnings per share for the quarter was three cents compared to two cents for the prior year choir diluted shares outstanding for the quarter were $44.3 million compared to $44.2 million in the prior year quarter adjusted EBITDA for the third quarter increased 16% to $9.4 million a margin of <unk>.

Speaker 4: Diluted shares outstanding for the quarter were $44.3 million compared to $44.2 million in the prior year quarter. Adjusted EBITDA for the third quarter increased 16% to $9.4 million, a margin of 25% compared to $8.1 million or a margin of 21% in the third quarter a year ago.

85% compared to $8.1 million or a margin of 21% in the third quarter a year ago.

Speaker 4: operating cash flow for the quarter was $5.6 million compared to $9.2 million in the prior year period. The reduction in cash flow from operations in the third quarter was due to severance paid of $900,000 and lower bookings from the current uncertain economic environment.

Operating cash flow for the quarter was $5.6 million compared to $9.2 million in the prior year period.

Operator: Good afternoon, everyone, and welcome to the DHI Group Incorporated 3rd quarter, 2023 Financial Results Conference Call. All participants will be in the list and only mode. Should you need assistance, please say no to a conference specialist by pressing the STAR key followed by zero.

Reduction in cash flow from operations in the third quarter was due to severance paid at $900000 and order bookings from the current uncertain economic environment.

Speaker 4: From a liquidity perspective, at the end of the quarter, we had $3.7 million in cash and total debt of $40 million under our $100 million revolver. Total debt outstanding decreased $3 million from the $43 million at the end of the second quarter. We continue to target approximately one times leverage for the business.

From the liquidity perspective at the end of the quarter, we had 3.7 $9 in cash and total data of $49 under 100 million dollar revolver total debt outstanding decreased to $3 million from the 43 nine at the end of the second quarter, we continued to target approximately one times leverage for them.

Operator: After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press STAR and then one, using a touch-tone telephone. Withdraw your questions, you may press STAR and two. So note today's event is being recorded.

Todd Kehrli: At this time, I'd like to turn the floor over to Todd Kehrli of MKR Investor Relations. Sir, please go ahead.

Speaker 4: Deferred revenue at the end of the quarter was $48.8 million, down 7% from the third quarter of last year. Our total committed contract backlog at the end of the quarter was $108.4 million, which was up 5% from the end of the third quarter last year.

Deferred revenue at the end of the quarter was $48.8 million down 7% from the third quarter of last year.

Todd Kehrli: Thank you operator, good afternoon, and welcome to DHI Group's 2023 3rd quarter earnings conference call. With me on today's call are DHI's CEO, Art Zeile, and Julie Roby, DHI's SVP of SPNA. Before I turn the call over to Art and Julie, I'd like to cover a few quick items. This afternoon, DHI issued a press release announcing its 2023 3rd quarter financial results. The releases available on the company's website at DHI Group Inc.com.

Total committed contract backlog at the end of the corridor with $108.4 million, which was up 5% from the end of the third quarter last year.

Speaker 4: Short-term backlog was 87.8 million at the end of the third quarter, an increase of 3.6 million or 4 percent year-over-year. Long-term backlog, that is, revenue to be recognized in 13 or more months, was 20.6 million dollars at the end of the quarter, an increase of 1.9 million or 10 percent from the prior year.

Backlog was 87.8 million at the end of the third quarter, an increase of 3.6 million or 4% year over year longterm.

Longterm backlog that is revenue to be recognized and 13 or more man was $20.6 million at the end of the quarter, an increase of 1.9 million or 10% from the prior year.

Todd Kehrli: This call is being broadcast live over the internet for all interested parties, and the webcast will be archived on the Investor Relations page or the company's website. I want to remind everyone that during today's call, management will make code looking statements that involve risks and uncertainties. Please note that, except for the historical information, statements on today's call, make constitute for looking statements within the meaning of the federal securities laws. These for looking statements reflect DHI management's current views concerning future events and financial performance, and are subject to risks and uncertainties and actual results made different materially from the outcomes contained in any for looking statements.

Speaker 4: During the quarter, we did not purchase shares under our share by that program. However, we purchased approximately 218,000 shares for $800,000 at an average price of $3.76 per share related to employee stock best.

During the quarter, we did not purchase shares under our share buyback program. However, we purchased approximately 218000, Sharon for $800000 at an average price of $3.76 per share related to employee stock bad thing.

Todd Kehrli: Factors that could cause the for looking statements differ from actual results include risks, and uncertainties discuss in the company's periodic reports on form 10K and 10Q, and other filings with the Securities and Exchange Commission. DHI undertakes no obligation to update or revise any for looking statements. Lastly, during today's call, management will be referring to specific financial measures, including adjusted EBITDA, adjusted EBITDA margin, adjusted diluted earnings per share that are not prepared in accordance with U.S. GAAP. Information about and reconciliation, though these non-GAP measures to the most directly comparable GAAP measures are available in our earnings release, a copy of which you can find on our website at DHIgroup.com in the DHI Group.

Speaker 4: Here to date, we have repurchased 2.8 million shares for $13.1 million under our repurchased programs. As a reminder, our current $10 million program began in the first quarter and runs through February 2024. Of the $10 million authorized, $4.8 million remained at the end of the program at the end of the quarter.

To date, we every purchase 2.8 million shares for $13.1 million under our repurchase programs.

As a reminder, our current 10 million dollar program began in the first quarter and runs through February 2024.

10, nine authorized 4.8 million dollar remained at the end and under the program at the end of the quarter.

Speaker 4: As Art mentioned, the current economic uncertainty continues to impact our new business.

As art mentioned the current economic uncertainty continues to impact your new business team <unk>. We now expect our full year 2023 total revenue to grow in the range of flat to 1% year over year given the current environment. We will continue to manage our expenses closely as we focus on EBITDA and casually generation.

Speaker 4: As such, we now expect our full year 2023 total revenue to grow in the range of flat to 1% year over year. Given this current environment, we will continue to manage our expenses closely as we focus on EBITDA and cash flow generation and paying down debt for the balance of the year.

<unk> for the balance of the year for.

Speaker 4: For the fourth quarter, we expect adjusted even a margins of approximately 25%. To wrap up, while the current hiring environment is impacting our growth, we expect companies across all industries to continue their investment in technology initiatives, which will drive increased demand for our product and services as the economy improves. In the meantime, we are focused on improving our industry leading offerings and our go-to-market execution while doing so in a more efficient and profitable manner. And with that, let me turn the call back to Art.

For the fourth quarter, we expect adjusted EBITDA margin of approximately 25 per cent.

To wrap up while the current hiring environment is in packing up Groundspeed expect companies across all industries to continue their investment in technology initiative, which will drive increased demand for our products and services as the economy improves.

In the meantime, we are focused on improving our industry, leading offerings and our go to market execution, while doing so in a more efficient and profitable manner and with that let me turn the call back to art.

Speaker 3: Thank you Julie. I'd like to thank all of our employees again for their hard work this past quarter. It is a pleasure to be part of such a great team. With that, we're happy to take your questions.

Thank you Julie I'd like to thank all of our employees again for their hard work. This past quarter. It is a pleasure to be part of such a great team with that we're happy to take your questions.

Art Zeile: Thank you, Todd. Good afternoon, everyone, and welcome to our 2023 third-quarter earnings conference call. We appreciate your time today as we discuss our financial performance and future outlook.

Speaker 1: Ladies and gentlemen, at this time, we'll begin the question and answer session. To ask a question, you may press star and then one using a touch-tone telephone. If you are using a speakerphone, we do ask that you please pick up the handset prior to pressing the keys to ensure the best sound quality. To withdraw your questions, you may press star and two. Once again, that is star and then one to join the call.

Ladies and.

Gentlemen at this time will begin the question and answer session.

To ask a question you May press Star and then one using a touchtone telephone.

Art Zeile: First, let's discuss the state of the market. There is no doubt that the ongoing uncertainty in the economy continues to suppress most tech hiring plans. As of the end of September, CompTIA's analysis of the tech workforce indicates a net reduction of 116,000 positions year-to-date across the economy compared to a 335,000 expansion of tech positions for the same period in 2022. This coincided with a decline in actual tech job postings with third quarter numbers significantly lower than in the previous year and the pre-pandemic average.

If you are using a speaker phone we do ask you. Please pick up the handset prior to pressing the keys to ensure the best sound quality.

He was draw your questions you May press starting to.

Once again that is star and then wanting to join the question queue.

Will paused momentarily to settle the roster.

Speaker 1: Our first question today comes from Zach Cummings from B Reilly. Please go ahead with your question.

Our first question today comes from is that coming from be Riley. Please go ahead with your question.

Speaker 5: Hi, this is Ethan Whiteel calling in for Zach Cummins. Thanks for taking my question. I'm going to start.

Hi, This is Ethan white doll, calling in for Zack come in thanks for taking my question to start.

Alright.

Speaker 5: We can speak a little further to the uptick and turn with Dyson McHorter and what areas are experiencing the greatest pressure there.

Can you speak a little further to the uptick in churn with dice in the corner and uhm what areas are experiencing the greatest pressure there.

Art Zeile: While this downturn in hiring continues to impact our revenue and bookings, we believe there remains a long-term secular trend for adding more tech workers in the United States. In a study focused on the impact of AI on the US workforce released this past July, McKinsey Global Institute predicted that demand for STEM workers will grow 23% from the year 2022 to the year 2030. McKinsey believes tech jobs will grow at that high rate because it will be technologists who will be implementing AI for all industries and digitizing our economy. This theme is consistent with KPMG's annual CEO survey released just a few weeks ago which confirms that 72% of US CEOs say that generative AI is a top investment priority.

Speaker 3: I would say that, systemically, we're seeing the same pattern of turn just at a more elevated rate. And what I've described in past quarters is that we've examined our turn profile, or those customers that are more apt to leave us, and they're generally smaller staffing from.

I would say that systemically, we're seeing the same pattern of turn just add a more elevated rate and what I've described in past quarters is that we've examined our churn profile are those customers that.

More apt to lead us and they're generally smaller staffing firms and so think of these as firms that are anywhere between one and 20 employees. There. The staffing firms that are most at risk in this kind of an economic uncertain condition.

Speaker 3: And so think of these as firms that are anywhere between one and 20 employees, they're staffing firms that are most at risk in this kind of an economic, uncertain condition.

Speaker 3: And that's what we're seeing, but I would say at a higher pace.

And that's what we're seeing but I would say at a higher pace.

Thanks, and then.

Speaker 5: What are you hearing from tech hiring managers in the current environment? And what's the focus for the new business team?

What are you hearing from tech hiring managers in the current environment and what's the focus for.

Art Zeile: The question is, when will we see this turn around at hiring actually start to occur? The staffing industry analysts most recent forecast predicts a 3% contraction in the IT segment of the staffing industry this year with a return to growth in a 5% expansion next year. We believe that as businesses have a collective sense of confidence that we are past a recession scenario, they will accelerate their investment in technology initiatives and they will meet our platforms to do so.

The new business team.

Speaker 3: So I'd say the interesting thing about our situation right now is that there is a widespread acknowledgement that generative AI will fundamentally reshape business models across the United States economy.

So I'd say the interesting thing about our situation right. Now is that there is a widespread acknowledgement that generative AI will fundamentally reshape business models across the United States economy, I would say most executives understand that and are preparing for it.

Speaker 3: Executives understand that and are preparing for it. But right now in the current environment, we've seen a pretty significant downshift in the number of tech job postings. We specifically look at the Comp-Kia monthly report that's generally published about three to four days, business days after the end of any particular month.

<unk> right now in the current environment, we've seen a pretty significant downshift and the number of tech job postings, we specifically look at the comp to your monthly report. That's generally published about three to four days business days. After the end of any particular month and it shows as of September we had 180.

Art Zeile: Our two subscription offerings, dice and clearance jobs provide staffing and recruiting firms, large enterprises and government agencies with the tools necessary to find, attract and hire the best technologists for their job openings from our 7.8 million candidate profiles.

Speaker 3: And it shows as of September we had 184,000 tech job posting.

4000 tech job postings and a normal month, let's say in a non Aboriginal you're like 2019 or pre pandemic in general we would see on the order of 300000 to 350000.

Speaker 3: In a normal month, let's say in a non-abracional year, like 2019 or pre-pandemic in general, we would see on the order of 300,000 to 350,000 tech job posts.

Art Zeile: While we wait for tech hiring to return, we will continue to improve our industry leading product offerings and our go-to-market engine while doing so in a more efficient and profitable manner as evidence by our significantly increased adjusted EBITDA margin.

Speaker 3: So again, the environment has slowed down dramatically in terms of demand for tech hiring right now, but there's this acknowledged longer term hiring horizon that acknowledges that we will need more tech workers to implement generative and other AI solutions.

Tech job postings. So again the environment has slowed down dramatically in terms of demand for tech hiring right now, but there's this acknowledged longer term hiring horizon that acknowledges that we will need more tech workers to implement generative and other AI solutions.

Art Zeile: Now let me dig into our performance during the quarter. In the third quarter, our total revenue declined 3% year over year. DICE revenue for the quarter decreased 9% year over year while CJA revenue increased 13%.

Speaker 5: Thank you, and then if I can squeeze in a third one, of course what are the expectations for clearance jobs in the near term and doing to state that you'll see an impact from the uncertainty surrounding a potential government shutdown?

Thank you and then if I can squeeze in a third one of course, what are the expectations for clearance jobs in the near term and do you anticipate that you'll see an impact from the uncertainty surrounding a potential government shutdown.

Art Zeile: The decrease in DICE revenue was the result of lower new business bookings and renewals over the past several quarters, as well as significantly lower one-time transactional revenue. All of which are a reflection of the uncertain economic environment we have faced during that time. Having said that, excluding one-time transactional revenue, our total recurring revenue was up 5% year over year. DICE new business teams continue to see smaller pipeline volume and more intense deal scrutiny.

Speaker 3: The answer to the first part of that question is we still think that clearance jobs will definitely continue to grow, generally speaking, in the double digit revenue range. It has done that historically over the last 10 plus years. I would say that we did see conservatism in terms of the sales cycle in third quarter associated with getting closer to that government shutdown date.

The answer to the first part of that question is we still think that Clarence jobs will definitely continue to grow generally speaking and the double digit revenue range. It has done that historically over the last 10 plus years I would say that we did see conservatism.

In terms of the sales cycle and third quarter associated with getting closer to that government shutdown date, and we would anticipate that unless politics can change radically we're gonna probably see the same thing happening and as we get closer to the middle of November we do know that the fear that's there for the milk.

Art Zeile: However, we remain laser focused on those verticals with significant tech hiring needs right now because their technology roadmaps are less likely to be impacted by the economy. Those industries include aerospace, business consulting, health care, financial services, and new to the list, education. We continue to shift new business resources to focus on where clients are buying, which includes the staffing and recruiting vertical, as well as the CJA new business team. Dice secured several new clients this quarter, including Hogan-Level's Law Group, Cornell University, and the Idaho National Engineering Laboratory. Dice also piloted, it launched pilots with several Fortune 500 companies. Claire's jobs bookings for the quarter increased 5% year-over-year.

Speaker 3: And we would anticipate that unless the politics can change radically, we're going to probably see the same thing happen as we get closer to the middle of November . We do know...

Speaker 3: The fear that's there for the military contractors is that they get slow paid or delayed paid. They will ultimately be caught up, but the point of the matter is it does affect their cash flow pretty dramatically if we do go into a government shutdown. The other thing that happens is that contract officers, and there are literally tens of thousands of contract officers that are managing contracts for the government and especially establishing new contracts for the government, they're all furloughed.

Terry contractors is that they get slow paid or delayed paid they will ultimately be caught up but the point of the matter is it does affect their cash flow pretty dramatic dramatically. If we do go into a government shut down the other thing that happens is that contract officers and there are literally tens of.

A contract officers that are managing contracts for the government and especially establishing new contracts with the government. They're all furloughed. So you you can't have any amendments to existing contracts and you can't essentially launch new projects. If the government goes into a shut down that's the other impairment that we would see in that scenario.

Speaker 3: So you can't have any amendments to existing contracts and you can't essentially launch new projects if the government goes into a shutdown. That's the other impairment that we would see in that scenario.

Art Zeile: As we mentioned last quarter, CJ was affected by the debt ceiling negotiations in Q2 and its implied threat of the government delaying payment to military contractors. In the third quarter, we expected to see government contractors and agencies start to re-engage in a more significant manner with this issue behind us.

Understood. Thanks for the color.

Thank you Ethan.

Speaker 1: Our next question comes from Eric Martin-Zunie from Lake Street. Please go ahead with your question.

Our next question comes from Eric <unk>.

Do you need from Lake Street. Please go ahead with your question.

Speaker 1: Yet I wanted to focus on the bookings of the dice off 23% in Q3 and then CJ, you characterize the 5% growth as slightly disappointing. I was given a recall of this Q4 of 2022 when the economic had went sort of...

Art Zeile: However, the looming government shutdown suppressed their activity as contractors worried about the suspension of payments during a potential shutdown. As a result, our CJ bookings growth during the quarter was less than we expected. Despite this, CJ secured several new clients this quarter, including global technical systems, information security corporation, and loft orbital.

Yeah, I wanted to focus on the booking of a <unk> of 23 per cent in Q3, and then C. J you characterize the five per cent growth is slightly disappointing.

I seem to recall a is Q4 of 2022, when the economic headwinds sorta caught up to D. H I and I was curious to know what's your expectation. So just on a year over year bookings Pearl trader interaction Ray what's your expectation for <unk> C. J Q4.

Speaker 6: caught up to DHI, and I was curious to know what's your expectation, just on a year-over-year bookings growth rate or contraction rate, what's your expectation for DICE and CJ Q4 versus Q3? Well, I'd say that we...

Art Zeile: We expect the larger fiscal year 2023 defense budget to positively impact the volume of government projects and the corresponding demand for cleared tech professionals to fill them. Moving on to account management, the difficult economic environment impacted our revenue renewal rates in the third quarter. For the quarter, our DICE and CJ revenue renewal rates were 78% and 94% respectively. Retention rates for the quarter for DICE and clearance jobs were 99% and 112% respectively.

Verses Q3.

Well I'd say that we continue to see a negative bookings right, meaning that we're going to see a decline four dice and the bookings are of course, a combination of renewal rates for existing customer contracts, but also a new business activity I think that renewal rates are gonna.

Speaker 3: a negative bookings rate, meaning that we're going to see a decline for dice. And the bookings are, of course, a combination of renewal rates for existing customer contracts, but also new business activity.

Speaker 3: I think that renewal rates are going to still hover around the 80% mark for our DICE customers.

Still hover around the 80 per cent mark for our dice customers and that's because again, we're still shaking out some of those smaller staffing and recruiting firms from our customer base and we are still seeing an impairment specifically to commercial accounts new business bookings, we are seeing and improve.

Speaker 3: And that's because again, we're still shaking out some of those smaller staffing recruiting phones from our customer base.

Art Zeile: As I mentioned last quarter, many of our clients ran out of profile views in their subscriptions and had to top up during the second and third quarters of last year, which created a difficult comparison for these metrics. This year, we were seeing our customers return to a consumption pattern consistent with the lower number of tech job postings, which has impacted our renewal rates. Our customer attrition was notably larger than previous quarters, but continues to be concentrated with smaller clients that have been more impacted by the macroeconomic environment than our larger accounts, and spend less than $10,000 a year with us.

Speaker 3: And we are still seeing an impairment specifically to commercial accounts new business book.

Speaker 3: We are seeing an improvement. You'd say slightly over the course of time with the staffing recruiting new business team. So I hope I give you at least a qualitative sense that we do expect that there is going to be a decline in bookings.

<unk> you would say slightly over the course of time with the staffing recruiting new business team. So I hope I can give you at least a qualitative sense that we do expect that there was going to be a decline in bookings from Q4 of last year 224, but this year for days and the mechanism behind that C.

Speaker 3: from Q4 of last year to Q4 of this year for dice and the mechanism behind that. CJ is different. I still think that the jury is out just as I described in my answer to Ethan, the last caller who, and we talked about the fact that there is a looming government shutdown. Anytime that happens, and specifically we saw at least in the last month that it happened pretty dramatically, where contractor activity

James different I still think that the jury is out just as I described in my answer to Ethan the last caller, who.

Art Zeile: Moving on to earnings. During the third quarter, we delivered a 25% adjusted EBITOM margin, which was up significantly from 21% a year ago. In the third quarter, we saw the full benefit of the organizational restructuring we announced earlier this year, which included a 10% reduction in workforce that streamlined our team structure and improved our operating margins. While it is always a difficult decision to reduce headcount, we are confident that we have the right talent and place to capitalize on the opportunity ahead of us and to do so in a more efficient and profitable manner. The restructuring is expected to generate annual cost savings of approximately 8 to 10 million dollars.

We talked about the fact that there is a looming government shutdown anytime that happens and specifically we saw at least in the last month that it happened pretty dramatically where contractor activity slowed down because the contractors are waiting to see what scenario exists whether or not they're gonna get paid whether or not.

Speaker 3: slowed down because the contractors are waiting to see what scenario exists, whether or not they're going to get paid, whether or not there's going to be a short government shutdown or an extended one.

There's gonna be a <unk>, a short government shut down or an extended one.

Speaker 3: So I still believe that CJ is such an absolutely vital tool to find cleared professionals that even those folks that are continuing forward with their existing platforms, they need clearance jobs, but the new business bookings are affected when there is the prospect of a government shutdown.

So I still believe that C. J as such uhm, absolutely vital tool to find cleared professionals that even those folks that are continuing forward with their existing platforms Damien clearance jobs, but the new business bookings are affected when there is the prospect of a government shutdown.

Art Zeile: During the third quarter, we continue to focus on strengthening our industry-leading product offerings to better penetrate our large market opportunities. For dice, we announced the release of dice connection. Technology and Recruiters can now form connections with each other through their respective profiles and see a list of those connections through their network dashboard. Connecting with technologists helps recruiters build a pipeline of relevant candidates, making it easier to attract the right person for their current and future postings.

Speaker 6: Okay, you kind of got me halfway there on the bookings trend. I guess maybe it's something that you're not comfortable putting to find a point on, but I guess my, I was hoping to, you know, is there any sense of a troughing that things, you know, we don't expect to get worse from in Q4 version?

Okay, you kind of got me halfway there on the bookings trend I guess, maybe it's something that you're not comfortable putting too fine point on but I guess my my.

I was hoping to you know is there any sense of of Troughing that things so well.

Well, we don't expect I'll get.

Worst from and K four verses Q3, I would say qualitatively, we saw a little bit worse uhm bookings performance. In Q3, then two two but I feel like we're going through the trough right now I think that we're not seeing a pick up in activity, but we're not seeing a significant decrease in activity and.

Speaker 3: I would say qualitatively, we saw a little bit worse bookings performance in Q3 than Q2, but I feel like we're going through the trough right now. I think that we're not seeing a pickup in activity, but we're not seeing a significant decrease in activity. And...

Art Zeile: Following the close of the third quarter, DICE also released a new feature called Expressed Interest. This feature allows a candidate to show interest in a job without going through the formal application process. They wave a hand and if the recruiter likes their experience, they engage directly with that candidate. As you may recall, CJ announced this feature a couple of quarters ago and has already been used hundreds of thousands of times over the last several months. This is an excellent example of our ability to use CJ the testbed for innovation and fast follow with a DICE deployment. We expect the Express Interest feature to have the same success on the DICE platform.

Speaker 3: The reason why I talk about Q4 of last year versus Q4 of this year is of course

The reason why I talked about two four of last year versus Q4 of this year of course Q4 is our biggest or one of the two biggest quarters for our renewable bookings most of our customers have termination dates in their contracts of either December or January and that's.

Speaker 3: Q4 is our biggest or one of the two biggest quarters for our renewable bookings. Most of our customers have...

Speaker 3: termination dates in their contracts of either December or January . And that's why I wanted to bring out the point of seasonality. Thank you, Chad.

Why I wanted to bring up the point of seasonality.

Gotcha.

That's that's helpful.

The.

Speaker 7: I guess the ARPU on the contracts dice up about 4% and then CJA up about 11%. How much of that is kind of a sea driven versus price increase?

I guess the <unk> on the contract Ah dice up about 4% and then C J up about 11%.

Art Zeile: For Claire's jobs, its candidate mobile app is now available for download on the Apple App Store. This is CJ's first native mobile app and comes after a year and a half of development. It has already been downloaded several thousands of times and represents a new engagement channel for candidates that participate in our cleared network.

Much of that is kind of see driven versus price increase.

Speaker 3: I would say that that is probably price increase almost entirely, but I would also say that we're currently shaking the tree pretty hard in these less stable customers. The ones that are less than $10,000 in annual spend are the ones that are dropping out of our customer count. And so that also makes the difference in terms of how we mechanically look, we get to that average ARPU figure.

I would say that that is probably price increase almost entirely but I would also say that we're currently shaking the tree pretty hard and these less stable customers. The ones that are less than $10000. In annual spend are the ones that are dropping out of our customer account and so.

Art Zeile: We are also proud to announce that during the third quarter, DICE Group was named to Newsweek's list of the top 100 most loved workplaces for 2023. VHI was ranked 47th overall. The results were determined after surveying more than 2 million employees from businesses with workforces varying in size from 50 to more than 100,000 employees. The list recognizes companies that have created a workplace where employees feel respected, inspired and appreciated. It is a testament to the entire DHI team that we have been named to this prestigious list.

<unk> that also makes a difference in terms of how we mechanically what we get to that average <unk> figure.

Mhm.

Mmk.

Speaker 6: And then, you know, for the 27% of DICE contracts that are choosing to not renew, you know, where are they going, or is it just fewer seats?

And then you know for the 27 per cent of dice contracts that are choosing to not renew.

Where where are they going or is it just fewer seats, what's what's the alternative for them if they don't renew with diet.

Speaker 3: What's the alternative for that if they don't renew or die? What we've found again, this is the cohort of customers that are effectively not renewing their dice.

What we've found again this is the cohort of customers that are effectively not renewing their dice.

Art Zeile: Lastly, earlier this week announced, we announced the addition of Rainy Levy as our new Chief Financial Officer. What impressed us most about Rainy is a versatile skillset including direct responsibility for FPNA, financial operations, tax, treasury and MNA functions, but also the multitude of times in her career where she solved tough business challenges by taking on additional responsibilities in operations, fails, and strategies. We are thrilled to have her start with DHI in early December and look forward to introducing her on our next earnings call.

Speaker 3: licenses and they are very, very small firms. So they've generally either gone out of business or they've suspended a lot of their expense structure as they're waiting for the demand environment to improve. They're not getting the orders on their side to essentially staff, certain customers that they've had in the past.

Licenses and they are very very small firms. So they generally either gone out of business or they've suspended a lot of their expense structure is there waiting for the demand environment to improve their they're not getting the orders on their side to essentially.

Staff certain customers that they've had in the past.

Speaker 7: Okay, and then lastly, the, you know, it's good work on the 25% of the EBITDA margin. You've also given an outlook for 25% on the just EBITDA margin for Q4. Does that imply any further restructuring or cuts or is the kind of the cost structure relatively stable?

Gotcha, Okay, and then lastly, the.

Yeah, let's get work on the 25% adjusted EBITDA margin.

You've also given an outlook for 25 per cent on the adjusted EBITDA margin for Q4 does that imply any further restructuring or cuts or is the kind of the the cost structure relatively stable now.

Art Zeile: In summary, while the difficult economic environment is impacting us in the short term, there remains a long-term secular trend for adding more tech workers in the United States. As the economy improves and as companies across all industries continue their investment in technology initiatives, we expect increased demand for our tools, which enable companies to attract, find and hire the right technology professionals for their open positions. Until then, we will continue to focus on improving our products and our execution and doing so in a more efficient and profitable manner.

Speaker 3: The cost of structure is stable at this point in time. We do have the ability to...

The cost structure is stable at this point in time, we do have the ability to.

Speaker 3: Make marketing, digital marketing campaign changes almost literally daily. And so we have the ability to use that as a significant lever. But I would say that in general, our expense structure is where we want it to be from here moving forward.

Make a marketing digital marketing campaign changes almost literally daily and so we have the ability to use that as a significant lever, but I would say that in general are expense structure is where we want it to be from here moving forward.

Speaker 6: Yeah. Well, congrats on getting your CFO candidate at a report to connecting with her when she starts in December . Thanks for taking my question. As a

Yeah, well congrats on getting your your C. F O Canada to look forward to connecting with her when she starts in December thanks for taking my question.

Julie Roby: On that note, let me turn the call over to Julie, who will take you to our financials and our guidance, and then we'll take any questions you may have. Julie?

Absolutely. Thank you.

Julie Roby: Thank you, Art, and good afternoon everyone. Let me take you through our financial results for the quarter. We reported total revenue of $37.4 million, which was down 3% both on a sequential and year-over-year basis. Total book, bookings for the quarter were $31.2 million, down 15% year-over-year. Dice revenue was $24.8 million, which was down 6% sequentially and down 9% year-over-year. Dice bookings were $19.1 million, down 23% year-over-year. We ended the quarter with 5,752 Dice recruitment package customers, which is down 4% from last quarter and down 10% year-over-year.

Speaker 1: And our next question comes from Kevin Liu from K.Loo and Company. Please go ahead with your question.

And our next question comes from Kevin Lou from K Lou Ann Company. Please go ahead with your question.

Speaker 2: Hi, good afternoon. I wanted to start with just the DICE bookings growth trajectory here. You talked about kind of the top-up impact over the past two quarters here. Any way you can quantify, you know, how big of a drag that's been on the bookings? And then as you move into kind of your stronger and more typical renewal periods, wondering if that impact just kind of naturally abates since clients generally wouldn't be topping up then?

Hi, good afternoon, Uhm when did it start with just the dice bookings growth trajectory here Uhm, you can talk to about kind of the top up impact over the past two quarters here any way you can quantify how big of a drag that's been on the bookings and then as you move into kind of your stronger and more typical renewable periods wondering if that in fact.

Kind of naturally a bet since claims generally wouldn't be talking up then.

Speaker 3: I think that's a great question, and I'm going to ask Julie to respond to that. She's the one that's been hip deep in looking at these trends. So, Julie, do you want to speak to that?

I think that's a great question and I'm Gonna ask Julie to respond to that she's the one that's been.

Hip deep in looking at these trends so Julie do you want to speak to that.

Speaker 4: Yeah, so the topping up of our customers probably impacted our renewal rates by a few percentage points each quarter. So for our larger staffing and recruiting firms, that was a drag on our overall renewal rate. But again, as art was talking to before, it was our renewal rate was also impacted by the smaller customers that were.

Yeah, so the topic up as our customer is probably impacted.

Julie Roby: Our average annual revenue per Dice recruitment package customer was flat sequentially and up 4% year-over-year to $15,531. Approximately 90% of Dice revenue is recurring and comes from annual or multi-year contracts. For the quarter, our Dice revenue renewal rate was 78% and our retention rate was 99%. Clarence jobs revenue was $12.7 million, up 3% sequentially and 13% year-over-year. Bookings for CJ were $12.1 million, up 5% year-over-year. We ended the third quarter with 2,054 CJ recruitment package customers, which was down 1% on a sequential basis and up 1% year-over-year.

Lower rates by a few percentage points each corner, so for our staffing and recruiting firms that was a drag on our overall right now alright, but again with talking to you before it was.

Renewal rate was also impacted by the smaller customers that returning.

Speaker 2: And this is it relates to kind of a Q4 and Q1 renewal period. Do you guys typically have the top of impact to work through still or since those are more usual time frames, does that kind of headwind go away?

And just as it relates to kind of a Q4 and Q1 renewable periods do you guys typically have that type of impact to work through still or <unk> usual timeframes does does that kind of headwind go away.

Speaker 4: Yeah, I would say that that headwind goes away. But we saw more of the customers popping up in the third quarter of last year. And so that is moving behind us as we go forward and our customers have normalized their contract to the demand that was.

Yeah, I would say that that headwind goes away.

A customer is popping up.

Alright, second and third quarter of last year, and so that is moving behind us as we go forward and our customers have uhm normalize their contract to the demand that we're saying today.

Julie Roby: Our average annual revenue per CJ recruitment package customer was up 3% over last quarter and up 11% year-over-year to $21,422. Approximately 90% of CJ revenue is recurring and comes from annual contracts. For the quarter, both CJ's revenue renewal rate and retention rate were up sequentially. CJ's revenue renewal rate was 94% and CJ's retention rate was strong at 112%.

Speaker 2: Great, that's helpful. And then just for both dice and clearance, as you look at the top of the funnel and your marking qualified leads, have those continued to grow? Or have you seen any sort of declines there as well as just as you pair back on some of your marketing events?

Okay. That's helpful. And then just for both Dyson clearance. So if you look at the top of the funnel and you're looking qualified leads uhm have those continued to grow <unk> have you seen any sort of declines there as well just pay back on some of your marketing investments.

Speaker 3: I would say that we've seen a pretty steady state of marketing qualified leads, although, you know, coincident with the lower demand for tech job postings in general, I'd say that we see less commercial accounts marketing qualified leads as part of the mix.

I would say that we've seen a pretty steady state of marketing qualified leads although you know.

Coincident with the lower demand for tech job postings in general I'd say that we see less commercial accounts marketing qualified leads as part of the mix. So when we say marketing qualified leads were talking about all the leads to come in that service both the dice.

Julie Roby: The outstanding retention rate demonstrates the continued value CJ delivers in the recruitment of cleared professionals, turning to operating expenses. Third quarter operating expenses were down 6% to $35.2 million when compared to $37.3 million in the year-go quarter. This quarter includes $300,000 in restructuring charges. Our third quarter operating expenses reflect a full quarter of the cost savings associated with the May restructuring, which included a reduction of our workforce by approximately 10%. And is expected to generate annual cost savings of approximately 8 to $10 million.

Speaker 3: So when we say marketing qualified leads, we're talking about all the leads that come in that service both the DICE new business teams, the commercial accounts and the staff and recruiting team. And proportionally, we've seen more staff and recruiting leads come in, but the same total amount.

<unk> new business teams, the commercial accounts and the staffing and recruiting team and proportionately we've seen more staff in recruiting leads come in but the same total amount and I think that that is consistent with the view that a lot of companies have decided to use staffing recruiting more frequently this year because.

Speaker 3: And I think that that is consistent with the view that a lot of companies have decided to use staffing recruiting more frequently this year because it means less risk to them. It means that a person's not on their payroll directly.

That means less risk to them it means that a person's not on their payroll directly.

Julie Roby: During the quarter, we sold a portion of our ownership interest in e-financial careers for $4.9 million and recognize a gain of $600,000, which reduced our ownership interest from 40% to 10%. For the quarter, we had income tax expense of $759,000 on income before taxes of $1.8 million. Our tax rate for the quarter differed from our normal expected rate of 25% due primarily to the deduction limitations on executive compensation and evaluation allowance related to the impairment of an investment.

Speaker 2: Understood and all right you mentioned kind of a see a forecast for kind of a return to positive growth and IT staffing next year As you kind of look out and I know it's still early here. How are you guys thinking about that forecast and whether you know You would want to start the you know, really some of the investments either in the commercial account team or elsewhere in the business

Understood Alright, you mentioned and kind of see four cats for kind of a return to positive growth 90, stuffing next year I'm just <unk>.

Kind of look out and I know, it's still early here until you guys thinking about that forecast the weather you know.

Would want to start to.

We need some other investments either in the commercial account to you what else were in the business.

Speaker 3: Yeah, I think that right now, obviously, we don't have the crystal ball like any...

Yeah, I think that right now obviously you don't we don't have the first of all like any more so than anybody else does but I would say it is positive to see that they have adjusted their forecast upward for 2020.

Speaker 3: more so than anybody else does, but I would say it is positive to see that they have adjusted their forecast upward for 2023. I'm sorry, 2024.

Julie Roby: We recorded net income of $1 million or $2 cents per diluted share. For the prior year quarter, we reported a net loss of $900,000 or $2 cents per diluted share. Adjust the diluted earnings per share for the quarter with $3 cents compared to $2 cents for the prior year quarter. Diluted shares outstanding for the quarter were $44.3 million compared to $44.2 million in the prior year quarter. Adjusted EBITDA for the third quarter increased 16% to $9.4 million, a margin of 25% compared to $8.1 million or a margin of 21% in the third quarter a year ago.

23.

Sorry 2024.

Speaker 3: Now with that said, you know, a really big growth driver for us last year was our commercial accounts team. And I view that as a big driver for growth for the future in general. So I think we come back to what I would consider to be a normal economic growth rate for dice once we see that commercial accounts interest in demand improve.

Now with that said you know a really big growth driver for US last year was our commercial accounts team and I view that as a big driver for growth for the future in general So I think we come back to what I would consider to be a.

A normal economic growth rate for dice once we see that commercial accounts interest and demand improve.

Alright, I appreciate you taking the questions.

Well, thank you Kevin.

Speaker 1: And ladies and gentlemen, with that, we'll be ending today's question and answer session. I'd like to turn the 4-Backover 2 Management for any closing room.

And ladies and gentlemen, with that will be ending today's question and answer session I like to turn the floor back over to management for any closing remarks.

Julie Roby: Operating cash flow for the quarter was $5.6 million compared to $9.2 million in the prior year period. The reduction in cash flow from operations in the third quarter was due to severance paid of $900,000 and lower bookings from the current uncertain economic environment. From a liquidity perspective, at the end of the quarter, we at $3.7 million in cash and total debt of $40 million under our $100 million revolver. Total debt outstanding decreased $3 million from the $43 million at the end of the second quarter.

Speaker 3: Well, thank you, Jamie, and thank you for everyone for joining us today. As always, if you have any questions about our company or would like to speak with management, please reach out to Todd Curley and he will help arrange a meeting. Thanks, everyone, for your interest in DHI Group and have a great day.

Well, thank you Jamie and thank you for everyone for joining us today as always if you have any questions about our company or would like to speak with management. Please reach out the card currently and he will help to arrange a meeting thanks, everyone for your interest and D. H I group and have a great day.

Speaker 1: Ladies and gentlemen with that, we'll conclude today's conference call-in presentation. We thank you for joining. You may now disconnect your line.

Ladies and gentlemen, with that will conclude today's conference call in presentation. We thank you for joining you may now disconnect your lines.

Julie Roby: We continue to target approximately one times leverage for the business. Deferred revenue at the end of the quarter was $48.8 million down 7% from the third quarter of last year. Our total committed contract backlog at the end of the quarter was $108.4 million, which was up 5% from the end of the third quarter last year. Short term backlog was $87.8 million at the end of the third quarter, an increase of 3.6 million or 4% year over year. Long term backlog, that is, revenue to be recognized in 13 or more months was $20.6 million at the end of the quarter, an increase of 1.9 million or 10% from the prior year.

Julie Roby: During the quarter, we did not purchase shares under our share-by-back program. However, we purchased approximately 218,000 shares for $800,000 at an average price of $3.76 per share related to employee stock besting. Here to date, we have repurchased $2.8 million shares for $13.1 million under our repurchased programs. As a reminder, our current $10 million program began in the first quarter and runs through February 2024. Of the $10 million authorize $4.8 million remained at the end of the quarter.

Julie Roby: As Art mentioned, the current economic uncertainty continues to impact our new business teams. As such, we now expect our full year 2023 total revenue to grow in the range of flat to 1% year over year. Given this current environment, we will continue to manage our expenses closely as we focus on EBITDA and cash flow generation and paying down debt for the balance of the year. For the fourth quarter, we expect adjusted even a margins of approximately 25%.

Julie Roby: To wrap up, while the current hiring environment is impacting our growth, we expect companies across all industries to continue their investment in technology initiatives, which will drive increased demand for our product and services as the economy improves.

Julie Roby: In the meantime, we are focused on improving our industry-leading offerings and our go-to-market execution while doing so in a more efficient and profitable manner.

Art Zeile: And with that, let me turn the call back to Art. Thank you, Julie. I'd like to thank all her employees, again, for their hard work this past quarter.

Operator: It is a pleasure to be part of such a great team. With that, we're happy to take your questions. Please, in gentlemen, at this time we'll begin the question and answer session. To ask a question, you may press star and then one using a touch to your telephone. If you are using a speaker phone, we do ask you please pick up the handset, prior to pressing the keys to ensure the best sound quality. To withdraw your questions, you may press star and two. Once again, that is star and then one to join the question queue. We'll pause them materially to assemble the roster.

Ethan Widell: Our first question today comes from Zach Cummings from Be Riley. Please go ahead with your question. Hi, this is Ethan Widell, calling in for Zach Cummings. Thanks for taking my question. I'm going to start.

Art Zeile: We can speak a little further to the uptick and turn with Dyson the quarter and what areas are experiencing the greatest pressure there? I would say that, systemically, we're seeing the same pattern of turn just at a more elevated rate. What I've described in past quarters is that we've examined our turn profile, those customers that are more apt to leave us, and they're generally smaller staffing firms. And so think of these as firms that are anywhere between one and 20 employees, they're staffing firms that are most at risk in this kind of an economic uncertain condition. And that's what we're seeing, but I would say at a higher pace. Thanks.

Art Zeile: And then what are you hearing from tech hiring managers in the current environment? And what's the focus for the new business team? So I'd say the interesting thing about our situation right now is that there is a widespread acknowledgement that generative AI will fundamentally reshape business models across the United States economy. I would say most executives understand that and are preparing for it, but right now in the current environment, we've seen a pretty significant downshift in the number of tech job postings.

Art Zeile: We specifically look at the comp Kia monthly report, that's generally published about three to four days, business days after the end of any particular month. And it shows as of September, we had 184,000 tech job postings in a normal month, let's say in a non abracional year, like 2019 or pretty pandemic in general, we would see on the order of 300,000 to 350,000 tech job postings. So again, the environment has slowed down dramatically in terms of demand for tech hiring right now, but there's this acknowledged longer term hiring horizon that the acknowledges that we will need more tech workers to implement generative and other AI solutions.

Art Zeile: Thank you, and then if I can squeeze in a third one, of course, what are the expectations for clearance jobs in the near term and doing to state that you'll see an impact from the uncertainty surrounding a potential government shutdown. The answer to the first part of that question is we still think that clearance jobs will definitely continue to grow, generally speaking, in the double digit revenue range. It has done that historically over the last 10 plus years.

Art Zeile: I would say that we did see conservatism in terms of the sales cycle in third quarter associated with getting closer to that government shutdown date. And we would anticipate that unless the politics can change radically, we're going to probably see the same thing happening as we get closer to the middle of November. We do know that the fear that's there for the military contractors is that they get slow paid or delayed paid.

Art Zeile: They will ultimately be caught up, but the point of the matter is it does affect their cash flow pretty dramatically if we do go into a government shutdown. The other thing that happens is that contract officers, and there are literally tens of thousands of contract officers that are managing contracts for the government and especially establishing new contracts for the government, they're all furloughed. So you can't have any amendments to existing contracts and you can't essentially launch new projects if the government goes into a shutdown. That's the other impairment that we would see in that scenario. I just did thanks for the color. Thank you Ethan.

Eric Martin-Zoonie: Our next question comes from Eric Martin-Zoonie from Lake Street. Please go ahead with your question. I wanted to focus on the bookings of the dice of 23% in Q3 and then CJ, you characterize the 5% growth as slightly disappointing.

Art Zeile: I received a recall of Q4 of 2022 when the economic Edwin caught up to DHI. I was curious to know what your expectation just on a year over your bookings growth rate or contraction rate, what's your expectation for dice and CJ, Q4 versus Q3? I'd say that we continue to see a negative bookings rate meaning that we're going to see a decline for dice and the bookings are of course a combination of renewal rates for existing customer contracts but also a new business activity.

Art Zeile: I think that renewal rates are going to still hover around the 80% mark for our dice customers and that's because again we're still shaking out some of those smaller staffing recruiting firms from our customer base and we are still seeing an impairment specifically to commercial accounts new business bookings. We are seeing an improvement, you'd say slightly over the course of time with the staffing recruiting new business team so I hope I give you at least a qualitative sense that we do expect that there is going to be a decline in bookings from Q4 of last year to Q4 of this year for dice and the mechanism behind that.

Art Zeile: CJ is different. I still think that the jury is out just as I described in my answer to Ethan, the last caller who and we talked about the fact that there is a looming government shutdown anytime that happens and specifically we saw at least in the last month that it happened pretty dramatically where contractor activity slowed down because the contractors are waiting to see what scenario exists whether or not they're going to get paid, whether or not there's going to be a short government shutdown or an extended one.

Art Zeile: So I still believe that CJ is such an absolutely vital tool to find cleared professionals that even those folks that are continuing forward with their existing platforms, they need clearance but the new business bookings are affected when there is the prospect of a government shutdown. Okay, you kind of got me halfway there on the bookings trend. I guess maybe it's something that you're not comfortable putting to find a point on, but I guess my I was hoping to, you know, is there any sense of a trapping that things, you know, we don't expect to get worse from in Q4 versus Q3.

Art Zeile: But I feel like we're going through the trough right now. I think that we're not seeing a pickup in activity, but we're not seeing a significant decrease in activity. And the reason why I talk about Q4 of last year versus Q4 of this year is, of course, Q4 is one of the two biggest quarters for our renewable bookings. Most of our customers have termination dates in their contracts of either December or January.

Art Zeile: And that's why I wanted to bring out the point of seasonality. Gotcha. That's helpful. The, I guess the, the ARPU on the contracts dice up about 4% and then CJ up about 11%. How much of that is kind of see driven versus price increase? I would say that that is probably price increase almost entirely, but I would also say that we're currently shaking the tree pretty hard in these less stable customers.

Art Zeile: The ones that are less than $10,000 in annual spend are the ones that are dropping out of our customer count. And so that also makes the difference in terms of how we mechanically look, we get to that average ARPU figure. Okay. And then, you know, for the 27% of dice contracts that are choosing to not renew, you know, where, where are they going? Or is it just fewer seats? What's the alternative for that if they don't renew with dice?

Art Zeile: What we've found again, this is the cohort of customers that are effectively not renewing their dice licenses, and they are very, very small firms. So they've generally either gone out of business or they've suspended a lot of their expense structure as they're waiting for the demand environment to improve. They're not getting the orders on their side to essentially staff certain customers that they've had in the past. Gotcha. Okay. And then lastly, the, you know, it's good work on the 25% adjusted EBITDA margin.

Art Zeile: You've also given an outlook for 25% on the adjusted EBITDA margin for Q4. Does that imply any further restructuring or cuts or is the kind of the cost structure relatively stable now? The cost structure is stable at this point in time. We do have the ability to make marketing digital marketing campaign changes almost literally daily. And so we have the ability to use that as a significant lever, but I would say that in general, our expense structure is where we want it to be from here moving forward.

Eric Martin-Zoonie: Well, congrats on getting your CFO candidate to look forward to connecting with her when she starts in December. Thanks for taking my question. Absolutely, Eric. Thank you.

Kevin Liu: And our next question comes from Kevin Liu from K. Liu and company. Please go ahead with your question.

Julie Roby: Good afternoon. One minute to start with the dice bookings growth trajectory here. We've talked about kind of the top up impact over the past two quarters here. Anyway, you can quantify how big of a drag that's been on the bookings. And then as you move into kind of your stronger and more typical renewal periods, wondering if that impact is kind of naturally a bait since clients generally wouldn't be topping up then.

Julie Roby: I think that's a great question and I'm going to ask Julie to respond to that. She's the one that's been hip deep and looking at these trends. So, Julie, do you want to speak to that? Yeah. So the topping up of our customers probably impacted our renewal rates by a few percentage points each quarter. So for our larger staffing and recruiting firms, that was a drag on our overall renewal rate. But again, as Art was talking to before, our renewal rate was also impacted by the smaller customers that were turning.

Julie Roby: And this is it relates to kind of a Q4 and Q1 renewal period. Do you guys typically have the top up impact to work through still or since those are more usual time frames, does that kind of headwind go away? Yeah, I would say that headwind goes away. We saw more of the customers topping up in the third quarter of last year and so that is moving behind us as we go forward and our customers have normalized their contracts to the demand that we're seeing today.

Art Zeile: Great, that's helpful. And then just for both dice and clearance, as you look at kind of the top of the funnel and your marking qualified leads, have those continued to grow? Or have you seen any sort of declines there as well, because you've paired back on some of your marketing investments? I would say that we've seen a pretty steady state of marking qualified leads, although coincident with the lower demand for tech job postings in general, I'd say that we see less commercial accounts marketing qualified leads as part of the mix.

Art Zeile: So when we say marketing qualified leads, we're talking about all the leads that come in that service both the dice new business teams, the commercial accounts and the staff and recruiting team, and proportionally we've seen more staff and recruiting leads come in, but the same total amount. And I think that that is consistent with the view that a lot of companies have decided to use staffing, recruiting more frequently this year, because it means less risk to them and means that a person's not on their payroll directly.

Art Zeile: Understood. All right, you mentioned kind of the SEA forecast for kind of a return to positive growth and IT staffing next year. As you kind of look out, and I know it's still early here, how are you guys thinking about that forecast and whether you would want to start the, you know, really some of the investments, either in the commercial account team or elsewhere in the business? Yeah, I think that right now, obviously we don't have the crystal ball like any more so than anybody else does, but I would say it is positive to see that they have adjusted their forecast upward for 2023.

Art Zeile: I'm sorry, 2024. Now, with that said, you know, a really big growth driver for us last year was our commercial account team, and I view that as a big driver for growth for the future in general. So I think we come back to what I would consider to be a normal economic growth rate for dice once we see that commercial accounts interest in demand interest.

Kevin Liu: Great.

Art Zeile: Appreciate you taking the question. Well, thank you, Kevin. And, ladies and gentlemen, with that, we'll be ending today's question and answer session. I'd like to turn the floor back over to management for any closing remarks. Well, thank you, Jamie, and thank you for everyone for joining us today. As always, if you have any questions about our company or would like to speak with management, please reach out to Todd Kehrli and he will help arrange a meeting. Thanks, everyone, for your interest in DHI Group and have a great day.

Operator: Ladies and gentlemen, with that, we'll conclude today's conference call-and-presentation. We thank you for joining.

Operator: You may now disconnect your line.