DHI Group (NYSE:DHX) released first-quarter financial results and hosted an earnings call on Tuesday. Read the complete transcript below.
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Summary
DHI Group reported increased demand for AI-related skills, validating its strategic focus on offering a deep skills-based model for tech hiring.
Financially, the company generated strong free cash flow and adjusted EBITDA growth, despite a year-over-year decline in total revenue and bookings.
DHI Group’s board approved a $10 million share repurchase program, reflecting confidence in the company’s long-term value.
Clearance Jobs showed 5% revenue growth, while Dice experienced a 17% revenue decline, attributed to churn among smaller clients.
Strategic acquisitions, like Point Solutions Group, are expected to enhance growth, with defense spending seen as a key driver for Clearance Jobs.
The company maintains a cautious approach to increasing sales and marketing investments, awaiting clearer signs of tech hiring recovery.
Full Transcript
OPERATOR
Long term driver as of March 2026, 67% or 2/3 of US tech job postings required AI related skills, more than double the 29% we saw a year ago. Over that same period, job postings requiring machine learning skills have increased 167%. We view this as a powerful validation of our strategy. Rather than reducing the need for talent, AI is increasing demand for highly skilled technical professionals. Dice is well positioned here with a deep skills based model that allows employers to identify candidates based on more than 360 distinct AI related skills. Rather than treating AI as a single generic category, Dice enables employers to identify and match candidates based on specific skill sets, an increasingly critical capability as AI roles become more specialized. We have also made it easier for candidates to access Dice job postings by being the first career platform with a Claude Connector. This is only one of many Dice features that implement an AI model solution. As you recall, we enabled two self service options for Dice like late last year and we are already seeing a steady progression of transactions as we ramp our marketing campaign spend. While near term performance will depend on the pace of recovery in the broader tech hiring market, we believe Dice is strategically well positioned, especially as demand for AI related skills continues to grow. From a financial perspective, DHI Group continues to generate strong free cash flow supported by our subscription model and disciplined cost structure. This allows us to take a balanced approach to capital allocation, investing in growth initiatives, pursuing strategic acquisitions and returning capital to shareholders through an active share repurchase program. As a reminder, our board approved a $10 million share repurchase program in the first quarter, demonstrating our confidence in the company’s long term value. In summary, we believe DHI Group is uniquely positioned at the intersection of two powerful and durable trends increasing global defense spending and growing demand for highly specialized technology talent, particularly in AI clearance jobs, continues to demonstrate strong growth and expanding opportunity as government and contractor development demand accelerates, while Dice is well positioned to benefit from an eventual recovery in tech hiring supported by our differentiated skills based approach and continued product innovation. At the same time, we are successfully extending our platforms into adjacent services, creating new monetization opportunities and deepening our relationships with customers. Importantly, our highly recurring revenue model and strong free cash flow give us the flexibility to invest for growth while continuing to return capital to shareholders. Taken together, we believe we are building a more durable high growth business with multiple levers for value creation. With that, I’ll turn the call over to Greg to walk you through the financial results in more detail.
Greg
Thank you Art and good afternoon everyone. I’ll start with a brief overview of our first quarter results before walking through each of the segments in more detail. While total revenue and bookings declined year over year, our results reflect the continued strength of clearance jobs which delivered both revenue and bookings growth, as well as the benefits of the actions we’ve taken to improve efficiency across the business. Importantly, we delivered solid adjusted EBITDA growth and margin expansion in the quarter along with strong free cash flow generation. Overall, our performance highlights the durability of our subscription based model, the growth opportunity in clearance jobs and the significantly improved profitability we are seeing in Dice as we position the business for an eventual recovery. With that context, let’s turn to our segment performance starting with clearance jobs. Clearance jobs revenue was $14.0 million, up 5% year over year and roughly flat compared to the prior quarter. Bookings for ClearanceJobs were $18.0 million, up 7% year over year. PSG Point Solutions Group, acquired at the end of February, contributed $700,000 of revenue and bookings in the quarter for ClearanceJobs. We ended the first quarter with 1,741 ClearanceJobs recruitment package customers which was down 8% on a year over year basis and down 2% on a sequential basis. ClearanceJobs account spending greater than $15,000 in annual recurring revenue increased versus the prior year. Our average annual revenue per ClearanceJobs recruitment package customer was up 6% year over year and and roughly flat on a sequential basis to $27,286. Approximately 90% of ClearanceJobs revenue is recurring and comes from annual or multi year contracts. For the quarter, ClearanceJobs’s revenue renewal rate was 88% and ClearanceJobs’s retention rate was 105%. The revenue renewal rate was negatively impacted by a customer with annual spend over $500,000 that did not renew in the quarter but is expected to return later this year. The solid retention rate demonstrates the continued value ClearanceJobs delivers in the recruitment of cleared professionals. Dice revenue was $15.7 million which was down 17% year over year and down 10% sequentially. Dice bookings were $20.2 million, down 20% year over year. We ended the quarter with 3,832 Dice recruitment package customers which is down 7% from the last quarter and down 15% year over year. Dice revenue renewal rate was 71% for the quarter and its retention rate was 100%. The reduction in customer count and Dice’s renewal rate from the prior year quarter continues to be attributable to churn with smaller customers spending less than $15,000 per year representing 80% of the total churn on count and who are more likely to be impacted by the difficult macro environment and uncertainty. We believe the introduction of our new Dice platform, which offers customers the flexibility of monthly subscriptions, will offset the churn among smaller accounts by lowering upfront commitment and improving affordability. Our average annual revenue per Dice recruitment package customer was $15,466, down 6% year over year and and down 1% sequentially. As with ClearanceJobs, approximately 90% of Dice revenue is recurring and comes from annual or multi year contracts. Deferred revenue at the end of the quarter was $44.5 million, down 12% from the first quarter of last year. Our total committed contract backlog at the end of the quarter was $99.0 million, which was down 8% from the end of the first quarter last year. Short term backlog was $77.2 million at the end of the quarter and long term backlog, I.e. revenue to be recognized in 13 or more months was $21.8 million. Both brands onboarded notable clients in the first quarter. For ClearanceJobs, this includes Akamai Intelligence, Synthbee and Michigan Technological University. While Dice landed Avrah Health fourth, you get Tech and Parkland center for Clinical Innovation as customers in Q1. Now let’s move to operating expenses. For the quarter, our operating expenses decreased $15.0 million, or 36% to $26.6 million when compared to $41.6 million in the …
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