DHI Group, Inc.

Good day and welcome to the DHI Group, Inc. First Quarter 2020 Financial Results Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note, this event is being recorded. I would now like to turn the conference over to Todd Curley with MKR Investor Relations. Please go ahead.

Thank you, operator. Good afternoon, and welcome to DHI Group's first quarter fiscal 2020 financial results conference call. With me on today's call are DHI's CEO, Art Zailey, and Chief Financial Officer, Kevin Bostic. Before I turn the call over to Art, I'd like to cover a few quick items. This afternoon, DHI issued a press release announcing its first quarter fiscal 2020 financial results. This release is available on the company's website at dhigroupinc.com. This call is being broadcast live over the Internet for all interested parties, and the webcast will be archived on the investor relations page of the company's website. 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 Section 21E of the Securities Exchange Act of 1934. When used, the words anticipate, believe, expect, intend, future, and other similar expressions identify forward-looking statements. These forward-looking statements reflect DHI management's current views concerning future events and financial performance. and are subject to risks and uncertainties, and actual results may differ materially from the outcomes contained in any forward-looking statements. Factors that could cause these forward-looking statements to differ from actual results include delays in development, marketing or sales, the adverse impact and uncertainty surrounding the COVID-19 pandemic, and other risks and uncertainties discussed in the company's periodic reports on Form 10-K and 10-Q. and other filings with the Securities and Exchange Commission. DHI undertakes no obligation to update or revise any forward-looking statements. Lastly, during today's call, management will refer to specific financial measures including adjusted EBITDA, adjusted EBITDA margin, and net debt that are not prepared in accordance with U.S. GAAP. Information about and reconciliations of these non-GAAP measures to the most directly comparable gap measures are available in our earnings release and on our website at www.dhigroupinc.com. I'll now turn the call over to Art Zailey, CEO of DHI Group.

Thank you, Todd. Good afternoon, everyone, and welcome to our first quarter fiscal 2020 earnings conference call. We appreciate your interest in DHI. I want to begin by saying a few words about the impact of COVID-19 and our response to this global pandemic. First, I want to express our heartfelt concern to all of those who have been impacted. And to everyone listening today, I hope you and your family and friends are staying safe and healthy. In the past several weeks, DHI has jumped into action to aid our community by launching COVID-19 resource centers on each of our brand sites, assisting both clients and candidates alike with information relevant to their needs, in these challenging times. And just last week, we launched a campaign to provide free recruitment services to US hospitals to help them find technologists in fields like electronic medical records, healthcare administration, and computer system processing. As the COVID-19 pandemic continues to unfold, our foremost concern at DHI is to ensure the health and safety of our employees, their families, and our worldwide community. As such, we have taken extraordinary measures to maintain continuity of our operations and to continue to safely operate at full capacity while complying with the local, state, and country mandated protection directives. All of our employees are working from their residences using the best possible remote communication and collaboration tools. And our team members, including sales and support Marketing and R&D continue to be highly effective. DHI has had a video meeting culture for many years, given the global nature of our team. And as a technology company, we have significant experience operating in a remote work environment. Well before this pandemic, 95% of our employees were utilizing company laptops with the ability to work from home. The vast majority of our sales team routinely meets with clients remotely versus in person. And our R&D team uses online DevOps tools to promote code to production. And as a result, we delivered two of our most significant product releases this year while our employees were working from home. While the current environment is certainly challenging the way that we all live and work, DHI's business model gives us some level of protection and stability in these uncertain times. as 90% of our revenues are generated through annual subscription-based contracts. Additionally, our business has a seasonality that has benefited us, with our largest two quarters for bookings being the fourth quarter and first quarter of each year. As a result, as of March 31st, we had already booked over two-thirds of our total revenue for fiscal 2020. Despite the difficult environment, DHI was able to exceed its target of a 20% adjusted EBITDA margin in the first quarter. We also took the precautionary step to ensure sufficient liquidity by drawing down an additional 25 million on our credit facility in early March, while still maintaining a significant cushion to our covenants. As we continue to work through these unprecedented times, with some of our competitors announcing layoffs, I want to emphasize that the strengths of our business model put us in a very different category and much stronger position than many of these other companies. DHI is a specialist, not a generalist. We match clients with technologists and their unique skill sets. DHI is a subscription model, not pay-as-you-go. DHI provides permanent hires, not hourly workers. DHI focuses on the enterprise market less on the SMB space. We believe our unique business model positions us well to weather this storm. Additionally, over the past several weeks, we've seen a stable number of tech job postings as enterprises look to accelerate the use of technology in their business. Now more than ever, businesses realize they need an online business model. a way of delivering services without being face-to-face, and a way to manage their remote employees effectively. As a result, we continue to see a number of businesses looking for technologists to help accelerate these efforts. Every week, we review a report that details the total number of new tech job postings as compiled by scraping the career pages for US corporate websites each night. Over the past several weeks, the total number of job postings has remained in line with the trailing 12-month trend. The types of skills requested have shifted with cybersecurity and systems engineering seeing an increased demand, but the overall volume of postings has remained relatively consistent. Over the longer term, If you look at the US Bureau of Labor Statistics trend line for tech jobs over the past 20 years, including through the dot-com bubble and Great Recession, there has been a constant increase in technologist positions in this country. The market for technologists was at close to zero unemployment level before the pandemic, and we expect this high level of demand for these skill sets to continue. And DHI is well positioned for this opportunity, even in this challenging environment, as a result of the significant progress we made over the past year in building the leading marketplace for matching technologists with our clients. In 2019, we delivered over 20 marquee product releases and dozens of minor releases. During the first quarter, we continued to deliver a high pace of product innovation. including integrating IntelliSearch with our Dice job management console. This marquee release demonstrates the value of our patent pending technology skills data model. When a client posts a new tech job, IntelliSearch automatically generates a list of qualified candidates from our database. The technologist recruitment process is all about gaining access to the right skill sets. And this powerful tool allows our clients to save time in their search process. We also moved 100% of our audience to a new Dice homepage that includes a modern layout and navigation scheme. Additionally, we added a private email feature, which enables Dice candidates to protect their personal email address and only share it with recruiters when they choose. On our path to transform Dice into an indispensable career marketplace, trust is a cornerstone of that experience. Dice Private Email encourages candidates to make their profiles visible and up to date, increasing the breadth of talent visible to our clients. The complete makeover of the Dice client experience over the past year, including IntelliSearch, Candidate Match, Job Management, Job Search, Job Alerts, multi-location search, and now our new Dice homepage and private email are delivering more value every day. We also launched job alerts on EFC in the first quarter. With this release, EFC and Dice are now on a common DHI job search and alerts platform, illustrating our code once, deploy many strategy across our brands. Helping candidates find jobs that fit their skills and interests is the top priority of our job search engineering team. The new job alerts release is a significant step forward towards our objective of having a best in class search experience for our candidates. Finally, we also launched CJ Favorites in the quarter. This feature allows Clearance Jobs clients to keep tabs on top candidate prospects, receive alerts when they are active on the site, and engage when they are receptive to contact. CJ continues to be our test bed for key market-leading features. Looking ahead, we have a clear product roadmap in front of us for each one of our platforms. We are working now to add recruiter profile and remote jobs to Dice and IntelliSearch and Candidate Match to eFinancial Careers. There is no question that the importance of defining and searching for remote jobs has surged in popularity over the past few weeks, and I'm grateful that our team has accelerated the delivery of the remote jobs feature. Simultaneously, we are working on delivering significant workflow automation features in clearance jobs. We expect these additional features to be live in this second quarter. Speaking of clearance jobs, I would like to update you on our progress in pursuing direct government contracts, one of our key growth initiatives we launched last year. Clearance Jobs has done an excellent job growing year over year in the cleared professional market. However, less than 1% of its revenue historically has come from direct contracts with government agencies. Last year, we launched an initiative to identify U.S. government agencies we could be working with and understand more about their hiring needs for technology professionals. As you'd suspect, these government organizations have just as much demand for technologists as the government contractors we serve today. As such, we put together a plan targeting the agencies we wanted to approach first, and we've seen some early success. In a press release issued last week, we announced that we now serve 18 government agencies. We're making excellent headway, and I'm very proud of the effort of the clearance jobs team as they take on this entirely new customer segment. We expect more government agencies to sign on as customers throughout 2020. We are proud to announce that the Department of Defense has recently designated clearance jobs as an essential supplier, which they define as an essential service needed to ensure the continuing operation of government agencies. Now let me briefly touch on the progress we continue to make improving our go-to-market strategy and execution. As I mentioned on our last call, during the fourth quarter, our new chief revenue officer, Ari Konofsky, added top-notch sales leadership to his team, and we created brand new Dice commercial sales teams in both Denver and New York. These teams grew their pipelines very successfully and we signed on many new clients based on their efforts for the first 10 weeks of the quarter. Obviously, the state of the US economy changed dramatically in mid-March, and these teams, which are 100% dedicated to building new business relationships, have seen what we believe is a temporary slowdown in their efforts as a result. The insights we gained in the first 10 weeks of the quarter and the momentum we saw in signing new customers gives us great confidence that our focus on commercial accounts will be the cornerstone for our growth as the business environment normalizes. As I conclude my remarks, I want to reiterate that as a specialist, we have built a better tool than our competitors for companies looking to hire technologists. With our improved product offering and go-to-market strategy, we believe we can grow our revenue at or above the market growth rate over the longer term. While this growth won't happen overnight and COVID-19 presents uncertainty, we are confident in our business plan and the continued progress we are making towards achieving our goal. We remain incredibly excited about the market opportunity in front of us. We believe the investments we made in 2019 and will continue to make in 2020 are positioning DHI as the industry leader in matching technologists with employers. With that, let me turn the call over to Kevin, who will take you through our financials, and then we'll take any questions you may have. Kevin?