Q4 2024 DHI Group Inc Earnings Call
Yeah.
Speaker Change: Good afternoon, and welcome to the D. H I group fourth quarter and full year 'twenty 'twenty four financial results conference call.
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Todd currently: I would now like to turn the conference over to Todd currently of Ponto Wilkinson Investor Relations. Please go ahead.
Speaker Change: Thank you operator, good afternoon, and welcome to D. H I group's 2020 for fourth quarter and full year earnings Conference call with me on today's call are <unk>, CEO art daily and CFO Greg.
Speaker Change: Before I turn the call over to art I'd like to cover a few quick items. This afternoon.
Speaker Change: Issued a press release announcing its 2020 for fourth quarter and full year financial results.
Speaker Change: The release is available on the company's website at <unk> Dot Com. This call is being broadcast live over the Internet for all interested parties and the webcast will be archived on the industrial relations page of the company's website.
Speaker Change: I want to remind everyone that during 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 of the federal Securities laws.
Speaker Change: These forward looking statements reflect ehi groups.
Speaker Change: Current views concerning future events and future financial performance and are subject to risks and uncertainties and actual results may differ materially from the outcomes contained in any forward looking statements.
Speaker Change: Factors that could cause these forward looking statements to differ from actual results include the risks and uncertainties discussed in the company's periodic reports on forms 10-K, and 10-Q and other filings with the Securities and Exchange Commission.
Speaker Change: <unk> undertakes no obligation to update or revise any forward looking statements lastly.
Speaker Change: Lastly, during today's call management will be referring to specific financial measures, including adjusted EBITDA adjusted EBITDA margin free cash flow and non-GAAP earnings per share that are not prepared in accordance with U S. GAAP information about and reconciliations of these non-GAAP measures to the most directly.
Speaker Change: Comparable GAAP measures.
Speaker Change: Available in our earnings release, a copy of which you can find on our website at D. H I Group, Inc. Dot com in the Investor Relations section.
Speaker Change: I'll now turn the call over to our Daily C. L. G HN group.
CLGN group: Thank you Todd good afternoon, everyone and welcome to our 2024 fourth quarter earnings Conference call. We appreciate your time today as we review our financial performance for the fourth quarter and the full year and provide our outlook for 2025.
CLGN group: Let's begin with an overview of our performance and the actions we've taken to strengthen our position moving forward.
CLGN group: Despite a 7% revenue decline in 'twenty 'twenty four we delivered full year adjusted EBITDA of $35 3 million a margin of 25%.
CLGN group: From a margin of 24% a year ago.
CLGN group: During the year and including our recently announced restructuring we have reduced our total operating costs by over $10 million, while enhancing our product offerings and strengthening our sales and marketing organization.
CLGN group: The savings are approximately evenly split between operating expenses and capitalized development costs.
CLGN group: These actions position us well for return to a normal tech hiring environment and increased demand for our solutions.
CLGN group: As part of our restructuring conducted three weeks ago, we split our operations into two distinct brands of dice and clearance jobs.
CLGN group: This reorganization provides dedicated leadership for each brand, enabling tailored strategies and enable and align with their unique market dynamics and different customer basis.
CLGN group: It also establishes a line of business structure that aligns sales marketing product and development functions under a brand leader, while maintaining centralized support for human resources finance and technology operations to efficiently manage employees business systems and pump public company obligations.
CLGN group: Ultimately the restructuring enhances profitability, while at the same time unlocking greater long term strategic opportunities for each brand.
CLGN group: It also sets us up to provide more specific brand financial reporting this year.
Now, let's dig into the current state of the Tech labor market, which is a key growth indicator for our business.
CLGN group: Encouragingly, we are starting to see green shoots of increased demand.
CLGN group: Revenue renewal rates for both brands improved at the end of the quarter and we've seen solid new business bookings in our staffing and recruiting business.
CLGN group: While the number of new tech job postings as approximately 70% of normal. We believe we are starting the new year off with a positive trajectory.
CLGN group: A promising sign of recovery, albeit slowly is the steady rise in new tech job postings. According to comp Tia. These postings experienced a notable rebound in the second half of 2024 compared to the first half during.
CLGN group: During the first half of the year, New Tech job postings fell 28% year over year, but momentum shifted in the latter half showing a 12% increase.
CLGN group: In December alone, which is traditionally a slow month more than 165000, new tech job postings were created representing a 16% year over year increase.
CLGN group: We believe this trend signals a steady, albeit gradual recovery is taking shape for the tech hiring demand.
CLGN group: Additionally, the tech unemployment rate remained low at approximately 2% in December highlighting a tight labor market for tech talent.
CLGN group: These positive trends align with projections from staffing industry analysts, which forecasts a 5% growth in tech staff hiring stuffing hiring or I should say in 2025. This follows a 7% decline in 'twenty 'twenty, four and a 10% drop in 2023.
CLGN group: Suggesting a shift towards recovery and the tech staffing market.
CLGN group: This optimistic outlook was developed through extensive interviews with staffing recruiting firms, reflecting a shared confidence and the industry's improved performance.
Speaker Change: Your head.
Speaker Change: Another encouraging demand signal comes from light cast, which tracks new Tech recruiter job postings.
Speaker Change: In the second half of 'twenty 'twenty four tech recruiter job postings increased 22% year over year increase in hiring of tech recruiters, often precedes a broader rise in demand for tech professionals.
Speaker Change: As businesses ramp up their investment in technology initiatives, such as AI platforms like clearance jobs in dice will be essential tools for employers seeking top tech talent from our database of $9 million Tech professionals.
Speaker Change: We continue to hear success stories from our clients like Zions Bank corporations, corporate recruiter, who said being able to search for active and engaged I T. Candidates is a huge asset dice as a must have tool in your tool belt. If you were a technology recruiter.
Speaker Change: Now, let me dig into our performance during the fourth quarter and what we see ahead for 2025.
Speaker Change: In the fourth quarter total revenue declined 7% year over year.
Speaker Change: <unk> saw an increase of 7% while dice saw a decrease of 14%.
Speaker Change: Excluding transactional revenue our total recurring revenue declined 5% year over year.
Speaker Change: Looking at our bookings performance, our total bookings were down 9% year over year in the fourth quarter.
Speaker Change: Clearance jobs bookings for the fourth quarter was flat year over year defense budget, continuing resolution and uncertainty due to a possible government shutdown as well as the change of administration impeded our C. J bookings, but we believed that a one party government now favors a more consistent defense contracting.
Speaker Change: Environment.
Speaker Change: Defense spending remains a high priority for Congress and we believe that C. J will benefit as a result.
Speaker Change: During the quarter C. J secured several new customers, including Hughes network solutions, Trillium technology solutions and <unk> solutions.
With C. J, serving approximately 2000 of the more than 10000 employers hiring cleared tech professionals and over 100 government agencies also need theres a significant growth opportunity ahead for C. J.
Speaker Change: Looking at <unk> business performance its bookings for the fourth quarter declined 14% year over year due to the budget constraints imposed by employers and staffing firms in 'twenty 'twenty four.
Speaker Change: Nevertheless, dice secured several notable customers this quarter, including D. R. Horton the U S Bureau of diplomatic technology and General Motors.
Speaker Change: On the new business front, we continue to focus on recession resistant sectors like consulting Aerospace defense health care financial services and education.
Speaker Change: In terms of renewals T J and dice revenue renewal rates were 93% and 77%, respectively, and our retention rates for C J and dice were 111% and 97% respectively.
Speaker Change: On the bottom line during the fourth quarter, we delivered a 26% adjusted EBITDA margin slightly down from 27% a year ago.
Speaker Change: However, as mentioned earlier, our capitalized development expenses declined by 23% year over year contributing to free cash flow conversion.
Speaker Change: Now, let me quickly touch on what we're doing to drive increased adoption of our two brands.
Speaker Change: For clearance jobs, we are preparing to launch C. J verified by the end of the first quarter as discussed on our last conference call. This product enables individual members to ascertain their government security status for a fee.
Speaker Change: C. J is also developing a paid candidates subscription service similar to Linkedin premium that will offer enhanced functionality beyond the standard candidate experience.
Speaker Change: We plan to launch this offering by mid year, and if successful will explore introducing a similar subscription model for dice.
Speaker Change: For dice are all jobs initiative continues to fuel job posting growth driving higher candidate engagement and application activity in 2024 days averaged one 6 million monthly job applications, marking a 30% year over year increase and further reinforcing its.
Speaker Change: Position as the leading tech career marketplace.
Speaker Change: We believe in the virtuous cycle, where increased candidate activity attracts more recruiters strengthening our subscriber base.
Speaker Change: Candidates success on dice is integral to maintaining a balanced two sided marketplace and advancing our mission of connecting tech professionals with meaningful careers are recent candidate testimonial underscores this impact commenting I have found all my jobs on dice.
Speaker Change: I'd also like to highlight the success of our comprehensive subscription packages, which include unlimited job postings.
Speaker Change: Many pages and job boosts not to mention a higher average selling price.
Speaker Change: Since its launch in November of 2023, 98% of all new business deals were signed in these packages and 10% of our renewed customer accounts converted to this comprehensive subscription package with an average retention rate of 106%.
Speaker Change: In 2025, our key project product initiative for dice is a total re imagination of the dice web store aimed at boosting customer adoption, among individual recruiters and small and medium sized businesses and a self serve manner.
Speaker Change: Recruiters will be able to purchase individual dice services directly through our site using our credit card paving the way for broader market engagement.
Speaker Change: With over 30 beta customers currently testing the early functionality of the platform today, we are on track to be fully launched by the end of the year.
Speaker Change: Moving onto guidance, while tech job postings are showing signs of improvement, we anticipate a slow and steady recovery.
Speaker Change: For the full year 2025, we expect C. J bookings to grow however, we do not expect total bookings growth to resume until tech hiring normalizes.
Speaker Change: As a result, we anticipate revenue of $131 million to $135 million for the full year.
Speaker Change: In the first quarter, we expect revenue of $32 million to $33 million.
Speaker Change: As tech hiring gradually improves throughout the year, we anticipate growing demand for our tech hiring solutions driving increased momentum.
Speaker Change: In the meantime, we are focused on delivering strong profits for our shareholders and are targeting a 24% adjusted EBITDA margin for the full year 2025.
As a result, our board approved a new $5 million stock buyback program a couple of weeks ago as it believes as we do that our shares are trading below their intrinsic value due to the soft tech hiring environment.
Speaker Change: Before I wrap up I am pleased to announce that Greg skippers is no longer serving as our interim CFO, but has officially been appointed our chief financial Officer.
Speaker Change: As noted during our last earnings call Greg brings over a decade of experience with D. A shy group and has consistently demonstrated exceptional financial expertise in key areas vital to this role, including strategic financial planning rigorous finding physical oversight and sound decision, making.
Speaker Change: He has shown outstanding leadership and budget management operational efficiency optimization, and maintaining the highest standards of financial integrity.
Speaker Change: Greg's sharp analytical skills attention to detail and commitment to transparency make him an excellent choice for this position.
Speaker Change: I am confident in his abilities and look forward to his continued success in this role.
Speaker Change: In closing, we have strengthened our business over the past year and are well positioned to capitalize on a steadily improving tech hiring environment.
Speaker Change: We remain committed to delivering greater value for our shareholders and look forward to sharing updates on our progress in the months ahead.
Speaker Change: With that I'll hand, the call over to Greg to walk you through our financials and then we'll open up the floor for questions Greg.
Greg Skippers: Thank you art and good afternoon, everyone.
Greg Skippers: Before I begin I want to express how excited I am to take on the role of CFO and how energized I feel about contributing to the growth of this business. I also look forward to building relationships with our shareholders and the analysts who cover DHA.
Greg Skippers: Now let me take you through our financial results for the quarter. Please.
Greg Skippers: Please note that in the fourth quarter, we reclassified our career events bookings and revenue, which had previously been included in dice to allocate them between clearance jobs and base based on the nature of the event.
Greg Skippers: Bookings and revenue were recast by quarter, beginning with the first quarter of 2022 and can be found in our investor presentation, which we posted to the Investor Relations tab on the D. H I group website. Shortly after this call.
Greg Skippers: We reported total revenue of $34 $8 million, which was down 7% on a year over year basis, and down 1% versus the third quarter.
Greg Skippers: Total bookings for the quarter were $32 $9 million down 9% year over year.
Our total recurring revenue was down 5% for both the fourth quarter and for the full year and the bookings that drive our recurring revenue were down 11% for the fourth quarter and 6% for the full year.
Greg Skippers: Clearance jobs revenue was $13 $8 million up 7% year over year, but down 1% sequentially.
Greg Skippers: Bookings for C J were $14 $2 million flat year over year.
Greg Skippers: We ended the fourth quarter with 1949 C. J recruitment package customers, which was down 5% on a year over year basis and down 2% on a sequential basis.
Greg Skippers: This reduction is attributable to churn with smaller customers, whereas the number C. J account spending greater than $15000 in annual recurring revenue has increased and is up approximately 15% versus prior year.
Greg Skippers: Our average annual revenue per C. J recruitment package customer was up 15% year over year and up 2% sequentially to $25148.
Greg Skippers: Approximately 90% of C. J revenue is recurring and comes from annual or multiyear contracts.
Greg Skippers: For the quarter C. J's revenue renewal rate was up sequentially to 93% and C. J as our retention rate was strong at 111%.
Greg Skippers: The outstanding retention rate demonstrates the continued value C. J delivers in the recruitment of cleared professionals.
Greg Skippers: Dice revenue was $21.0 million, which was down 14% year over year and down 2% sequentially.
Greg Skippers: <unk> bookings were $18 $7 million down 14% year over year.
Greg Skippers: We ended the quarter with 4711 dice recruitment package customers, which is down 3% from last quarter and down 14% year over year.
Greg Skippers: This reduction is attributable to churn with smaller customers spending less than $15000 per year.
Greg Skippers: Our average annual revenue per dice recruitment package customer was up slightly compared to the third quarter and up 4% year over year to $16380.
Greg Skippers: As with C. J, 90% approximately 90% of dice revenue is recurring and comes from annual or multiyear contracts.
Greg Skippers: Yeah.
Greg Skippers: For the quarter, our dice revenue renewal rate was 77% and its retention rate was 97%.
Greg Skippers: Turning to operating expenses.
Greg Skippers: Fourth quarter operating expenses were down 2% to $33 $1 million, when compared to $33 $8 million in the year ago quarter.
Greg Skippers: Our fourth quarter operating expenses reflect the cost savings associated with our restructuring in the third quarter of 2024.
Greg Skippers: Because of the more difficult market conditions in 'twenty, three and 'twenty 'twenty four we reduce costs through restructurings in the second quarter of 2023 in the third quarter of 'twenty 'twenty four and again in January of this year.
Greg Skippers: Together these restructurings have reduced our annual operating expenses and capitalized development costs by approximately $20 million.
Greg Skippers: We continue to focus on our operational efficiency.
Greg Skippers: Yeah.
Greg Skippers: For the quarter, we had an income tax benefit of $50000 on income before taxes of $972000.
Greg Skippers: Our tax rate for the quarter differed from our approximate statutory rate of 25% due primarily to the reversal of liabilities for uncertain tax positions as federal and state statutes expired.
Greg Skippers: We also remain committed to preserving our capital loss carry forward, which exceeds $100 million and is an important asset for maximizing shareholder value.
Greg Skippers: The safeguard this asset we implemented a section 382 rights plan last week.
Greg Skippers: This plan is designed to protect our capital loss carryforward, ensuring we can offset any potential future capital gains tax.
Greg Skippers: Moving onto the bottom line.
Greg Skippers: We recorded net income of $1.0 million or <unk> <unk> per diluted share in the fourth quarter.
Greg Skippers: For the prior year quarter, we reported a net income of $2 $1 million or five cents per diluted share.
Greg Skippers: non-GAAP earnings per share for the quarter was seven cents compared to eight for the prior year quarter.
Greg Skippers: Diluted shares outstanding for the quarter were $45 9 million compared to 44 6 million shares in the prior year quarter.
Greg Skippers: Adjusted EBITDA for the fourth quarter decreased 9% to $9 2 million, a margin of 26% compared to $10 $1 million or a margin of 27% in the fourth quarter a year ago.
Greg Skippers: Operating cash flow for the fourth quarter was $4 $4 million compared to $7 $6 million in the prior year period.
Greg Skippers: Free cash flow, which is operating cash flows less capital expenditures was $1 $6 million for the fourth quarter compared to $2 $4 million in the fourth quarter of last year.
Greg Skippers: For capital expenditures, primarily consist of capitalized development costs, which were $2 $7 million in the fourth quarter compared to $3 $6 million in the fourth quarter of last year, a savings of zero point $8 million or 23%.
Greg Skippers: For the full year.
Greg Skippers: Operating cash flows were 21.0 million, which approximated the 2023 level.
Greg Skippers: Free cash flow for the current year was $7 $1 million, a six points here $1 million increase over the prior year, which included a $3 $9 million decrease in capitalized development costs year over year.
Greg Skippers: Over time, we are targeting a free cash flow at 10% of annual revenue.
Greg Skippers: Following the restructurings, we expect further reductions to our capitalized development costs in 2025.
Greg Skippers: We are targeting total capital expenditures in 2025 to range between $10 million and $11 million as compared to $13 $9 million last year.
Greg Skippers: By consolidating our tech organization.
Greg Skippers: Smaller number of teams with subject matter expertise in adjacent areas, we're expecting to accelerate our product release schedule and enhance our overall efficiency.
Greg Skippers: From a liquidity perspective at the ended the quarter, we had $3 $7 million in cash and our total debt was $32.0 million under our $100 million revolver, resulting in leverage at 0.9 times, our adjusted EBITDA.
Greg Skippers: Total debt outstanding decreased $6 million from $38 million at the end of last year.
Greg Skippers: We continue to target one times leverage for the business.
Greg Skippers: Deferred revenue at the end of the quarter was $45 $5 million down 9% from the fourth quarter of last year.
Greg Skippers: Our total committed contract backlog at the end of the quarter was $111 3 million, which was up 3% from the end of the fourth quarter last year.
Greg Skippers: Turn backlog was $85 $2 million at the end of the fourth quarter, a decrease of $4 $6 million or 5% year over year.
Greg Skippers: Long term backlog that is revenue to be recognized in 13 or more months. It was $26.0 million at the end of the quarter, an increase of $7 $7 million or 42% from the prior year quarter.
Greg Skippers: During the quarter, we did not purchase shares under our share buyback program.
Greg Skippers: For the year, we repurchased 0.8 million shares for $1 $9 million to cover income tax withholdings associated with the vesting of employee shares.
Speaker Change: As art mentioned, our board recently approved a new $5 million stock repurchase program, which will begin this month and will run through February 2026.
Speaker Change: Adding to the guidance that art provided we are targeting an adjusted EBITDA margin of 24% for the full year as lower capitalized development cost contribute to free cash flow.
Speaker Change: Our focus remains on achieving long term sustainable revenue growth and we are well positioned to drive customer acquisition and capitalize on opportunities when tech hiring returns to normal levels.
Speaker Change: To wrap up while the hiring environment over the past two years has impacted our growth we anticipate that companies across all industries will steadily increase their investment in their technology and she lives in 2025 and beyond.
Speaker Change: We believe this will drive greater demand for our products and services and.
Speaker Change: In the meantime, we remain focused on enhancing our industry, leading offerings optimizing our go to market execution and doing so efficiently, ensuring we're well positioned to capitalize on this opportunity.
Art: And with that let me turn the call back to art.
Art: Thank you Greg I want to thank all of our employees again for their hard work and one team effort. This past year. It is a pleasure to be part of such a great team with that we're happy to answer your questions.
Art: We will now begin the question and answer session.
Speaker Change: To ask a question you May press Star then one on your telephone keypad.
Speaker Change: If you were using a speakerphone please pick up your handset before pressing the keys to withdraw your question. Please press Star then two at this time, we will pause momentarily to assemble our roster.
Speaker Change: Our first question today is from Zach Cummins with B Riley FBR. Please go ahead.
Yeah, Hi, good afternoon, and congrats Greg appointment to the permanent CFO position.
Speaker Change: Alright.
Speaker Change: I just wanted to ask you about dice and the business prospects of Youre thinking about 2025, it seems like you're assuming a slow and steady recovery as we move throughout the year.
Speaker Change: Curious what you're hearing from your staffing side of the business versus maybe what youre hearing from the commercial accounts.
Speaker Change: Yeah, that's a great question Zach and we've always had this thesis that staffing well would have a return to kind of normalcy before our commercial accounts and it seems like that's happening right now in fact, it seemed like the turning point was really the end of last year when a lot of people were deciding their budgets.
And it feels a lot more bullish a lot more positive I would say that the one area that feels like it's.
Speaker Change: Firming up and stabilizing as both the renewal activity associated with our staffing accounts as well as new business activity.
Speaker Change: And that is consistent with that S. I a report that indicates that we're going to see where it's forecasting that we're going to see 5% revenue growth for 2025.
Speaker Change: Understood and my one follow up question is more towards C. J.
Speaker Change: Given all of the efficiency initiatives within the current administration.
Speaker Change: Concerns for CJS prospects as we move throughout the year amidst these different organizations.
Speaker Change: That's another great question, a number of our investors have asked us that same question as to what we're hearing about whether or not a contract activity will be cut or that there'll be a view to reduce the defense budget right. Now we are not seeing that in terms of the activity.
Speaker Change: Levels for C. J on new business as well as account renewals and we do believe that Congress is firmly committed to the existing and enhanced defense budget.
So we haven't seen any direct impact to activities like Doge, but it remains to be seen obviously in the weeks and months to come.
Speaker Change: Understood well, thanks for taking my questions and congrats on the stabilizing results in Q4.
Speaker Change: Really appreciate that thank you.
Speaker Change: The next question is from Gary pressed to Pino with Barrington Research. Please go ahead.
Speaker Change: Yeah.
Speaker Change: Hi, Good afternoon art, Greg a couple of questions here.
Speaker Change: First of all.
Speaker Change: In terms of the cash I'm, just looking at it and if you hadn't paid down debt.
Speaker Change: You use cash throughout the year to pay down debt I guess is what I'm getting at if you had to pay down debt and cash on hand would have been much higher.
Speaker Change: In Q4 or is that kind of a correct assumption.
Speaker Change: Yeah, we we used approximately $6 million of cash to pay down debt and then almost $2 million to repurchase shares under our share vesting from our.
Speaker Change: Sure programs and with employees.
Speaker Change: Alright, and then I guess just having.
Speaker Change: Just a little bit of a problem reconciling some of those here.
Speaker Change: You said you've cut your expenses by about 20 million or you're out you're your expenses included 10 million of Opex.
Speaker Change: And 10 million of capitalized expenses.
Speaker Change: I realize when the capitalized expenses, they get amortized over a year or two right or two years.
Speaker Change: But.
Speaker Change: Is your P&L not going to feel the full effect of that $10 million decline in operating expenses.
Speaker Change: Because why wouldnt. It I guess is what I'm getting at that would close your EBITDA margins should not be a little bit higher.
Speaker Change: Yeah, no that makes complete sense Gerry so.
So you are correct, it's roughly a 50 50 split between capitalized development costs and Opex. So you can think about $20 million of cash savings, but the timing of that flowing through.
Speaker Change: Those savings started with the bigger chunk of it being in 2023 and that restructuring, which was eight to 10 are the last two that we did in the.
Speaker Change: Middle of last year, and then just know where each called approximately $5 million of the four to six range for each one so.
Speaker Change: So you'll see more of those savings coming through in 2025, if you get the full year impact of the cash savings otherwise it was a it was kind of.
Amortized in if you will over time, because they they were staggered over six.
Speaker Change: Eight months in between.
Speaker Change: And then.
Speaker Change: Lynn.
Speaker Change: Or will you be doing more in depth segment reporting in terms of either operating income our adjusted EBITDA like brand this year.
Speaker Change: Yeah, Gary I'll take that one as well a good question and we do get that a lot since our since we announced the restructuring and our intention is to dive into that immediately following actually you know our earnings process here and our finance team will.
Speaker Change: Have the goal of getting there in the first half of this year and you know well.
Speaker Change: I'll have more to come on that here in the next couple of months.
Speaker Change: Okay. That's great. That's all I need to know thank you.
Gary: Youre welcome Thanks, Gary.
Speaker Change: The next question is from Max Mccallum with Lake Street Capital markets. Please go ahead.
Max Mccallum: Hey, guys just a couple from me thanks for taking my questions and Greg Congrats on the promotion.
Max Mccallum: When we look at bookings and 2025.
Speaker Change: Guys don't expect bookings growth do you do expect clearance jobs growth, but I guess I was wondering if you could help me out a little bit just with dice contracting 15% in the year I mean from current internal when you guys look out.
Speaker Change: To 2025 and internally when you guys look at bookings growth or decline, maybe you want to call. It I mean are you expecting an improvement in 2025 from 'twenty to 'twenty four.
Speaker Change: I guess on both segments I'm, maybe dice from the decline of 15% and clearance jobs from 4% growth in 'twenty 'twenty four or are you kind of just holding back.
Speaker Change: Yeah. So.
Speaker Change: We are expecting as we mentioned on the call here that we do expect some growth at T. J and continue continues to have strong demand and with the the government having won a political party in charge will help with the defense budget getting.
Speaker Change: That certainty in place for.
Speaker Change: For dice dice.
Speaker Change: <unk> you know, we're not we're not expecting anything and we're not budgeting for anything to improve in the market. At this point, we're staying on the conservative side of that that said from a year over year basis. As you go through the year, we do expect some improvement.
Speaker Change: Throughout the four quarters of 2025 on a year over year basis and bookings.
Speaker Change: Okay.
Speaker Change: That's it from me guys. Thanks.
Speaker Change: Thanks Max.
Speaker Change: Again, if you have a question. Please press Star then one.
Speaker Change: The next question is from Kevin Liu with Kayla and company. Please go ahead.
Kevin Liu: Hey, good afternoon, guys, maybe just to revisit the CJ part of the business I wanted to clarify whether you guys feel you have any exposure today to the department of education or other agencies that may potentially.
Speaker Change: On the top and block here.
Speaker Change: Or if all of your exposure there primarily tied to defense budget activity.
Speaker Change: Oh, that's a great question, Kevin and I would say that we really don't have any exposure from the kind of non cleared agencies that are operating I would say, it's always the intelligence community and those that are associated with defense that are interested and have the wherewithal and the ability to directly license with <unk>.
Speaker Change: With clearance jobs. So you can think of it this way that if there are major changes with that with the intelligence community agencies like CIA F. B I D. I a N S a that could affect us.
Speaker Change: But otherwise we're not necessarily exposed to the broader number of agencies that operate under the government and that's not to say that we're out of the woods or that they won't be targeting those agencies, but it seems less likely.
Speaker Change: Though not impossible.
Speaker Change: Got it no appreciate that and.
Speaker Change: As it relates to the dice I'm wondering you know as we look at the year.
Speaker Change: Cost to revenue.
Speaker Change: For the year.
Speaker Change: What are the expectations around kind of the nonrecurring portion of the business versus the recurring.
Speaker Change: And just related to that with kind of the new dice story coming out.
Speaker Change: What exactly is kind of different about what you guys are introducing there versus what you've done historically.
Kevin Liu: Oh I'll take the first part of that Kevin So.
Kevin Liu: From a recurring and nonrecurring business. So that's basically our annual packages on the recurring side.
Kevin Liu: We don't we're not anticipating.
Kevin Liu: The improvement in that transactional or nonrecurring business in 2025.
Kevin Liu: If the tech recruiting market really picks up as we mentioned then you know you know do we have an opportunity for some upside there, but it's a at this point, we're not seeing it and so we're going to.
Kevin Liu: Reject out that were similar to how we were in 2024.
Kevin Liu: And just you know for our purposes.
Kevin Liu: Purposes of kind of what that relates it's about 90% recurring.
Kevin Liu: And less than 10% nonrecurring and we project that into 2025 as well.
Speaker Change: Yes, Kevin I'll follow up by saying that we believe at those transactional products are generally associated with hiring Virgin C. So if we do see those transactional products become more.
Speaker Change: Needed by our customer base that would be a very good thing because it would say that the market is tightening significantly and people are having a harder time finding tech talent on the second part of your question's a good one what are we envisioning for Dices.
Speaker Change: Its future and how we want to reestablish its brand we are embracing this idea of a new dice web store, it's been a development that's been underway.
Speaker Change: At least a year, probably more like a year and a half when you think about the planning period and it will embrace what's called product led growth it'll allow individual recruiters to for example, buy a subscription package on their own using a credit card there'll be able to in the future by a number of profile.
Speaker Change: Hughes, if they have a real problematic position and they're trying to find more resumes to fulfill that position and the hope is that by getting a taste of dice they'll convinced there HR leader that they need a larger subscription for the whole team. So it's kind of a way of getting a foot in the door for new organizations that.
Speaker Change: We can't necessarily talk to everyday just because we have limited sales capacity.
Speaker Change: Yeah makes sense and then just lastly for me.
Speaker Change: Think about kind of the marketing spend for this year.
Speaker Change: Expected to be pretty steady throughout the year are there certain periods, where you expect it.
Speaker Change: Pronounced than others.
Speaker Change: Yes, so I can tell you that our marketing spend is seasonal in a sense, we know that.
Speaker Change: Recruiters and candidates are taking vacations in the summertime there also.
Speaker Change: Join the holidays in November and December and we tailor the spend in those two periods downward as a result, because we're just not going to see the eyeballs that we expected through our regular digital marketing campaign effort.
Speaker Change: Yeah.
Speaker Change: Got it that's all for me good luck as you guys make your way through this.
Speaker Change: Well I really appreciate it Kevin here. Thank you.
Speaker Change: This concludes our question and answer session I would like to turn the conference back over to art Daly for any closing remarks.
art Daly: Thank you Gary and thank you for all of you joining us today as always if you have any questions about our company would like to speak with management. Please reach out to Todd and he will help arrange a meeting. Thank you for your interest in D. H I group and have a wonderful day and week.
art Daly: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
art Daly: Yeah.
art Daly: [music].
art Daly: Okay.
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art Daly: Yes.
art Daly: Yeah.
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art Daly: Yeah.
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