DHI Group, Inc.

Good afternoon, everyone, and welcome to the DHI Group Incorporated Third 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 and then one. To withdraw your questions, you may press star and two. Please also note today's event is being recorded. At this time, I'd like to turn the conference call over to Todd Curley with MKR Investor Relations. Sir, please go ahead.

Thank you, Operator. Good afternoon and welcome to DHI Group's Fiscal 2020 Third Quarter Financial Results Conference Call. With me on today's call are DHI's CEO, Art Daly, and Chief Financial Officer, Kevin Bostick. 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 fiscal 2020 third quarter 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 and 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 be referring 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 GAAP measures are available in our earnings release and on our website at dhigroupinc.com in the Investor Relations section. I now turn the call over to Art Zaley, CEO of DHI Group.

Thank you, Todd. Good afternoon, everyone, and welcome to our fiscal 2020 third quarter earnings conference call. As always, we appreciate your interest in DHI. Let me first start with a quick update on our operation status as it relates to the COVID-19 pandemic. Our foremost concern at DHI is to ensure the health and safety of our DHI community. As such, the majority of our employees continue to work from home during the quarter, using the best possible remote communication and collaboration tools. And our team members, including sales and support, marketing, and product development, continue to be highly effective. We currently have several offices open, though we have made the return to office optional for all of our employees. We are looking forward to having more of our employees back in the office when it's safe. But rest assured, we are taking significant precautions to make sure we maintain the safety of our employees, whether they are in the office or working from home. Now let's jump into our view of the quarter. While the pandemic continues to challenge the way we all live and work, we actually saw job postings stabilize during the summer, although they were lower in total than the year before. The sentiment is that many companies paused their hiring during this time as they reformulated their hiring plans based on their view of the economic recovery to come. However, in September, we saw sentiment change for the better as evidenced by a notable uptick in job posting as well as an increase in our bookings. Based on our Burning Glass feed, there are over 2,200 companies that have more than 20 open tech job postings right now. Companies like Amazon, Microsoft, and JPMorgan Chase have over 1,000 active tech jobs posted today. Both the Staffing Industry Analysts and TechServe Alliance, industry research firms that focus on tech-centric staffing and recruiting firms, are forecasting a bounce back in the IT staffing market in 2021 to almost pre-pandemic levels. The SIA is forecasting year-over-year market growth of 7%, which would get the market back to 98% of 2019 IT staffing revenue levels, representing an almost complete rebound. As I mentioned last quarter, a report released by Microsoft in July predicts that the worldwide digital jobs will grow from 41 million in 2020 to 190 million in 2025. Of the 149 million new digital jobs to be created, 98 million are forecast to be in software development. It's clear that our collective future will be more online and businesses will accelerate their efforts to digitize. These efforts will, of course, require technologists. As we continue to execute on our plan to create the best tech-focused career marketplaces using our technology skills data model, we stand ready to capitalize on these trends. Now let me provide some detail regarding our product development efforts during the quarter. Our product development team continued to deliver its usual high pace of product innovation. With the release of Dice and Telesurge-based job alerts, job alerts are automatically generated based on the specific skill set and location found in a candidate's profile. This creates a virtuous circle that encourages candidates to register and keep their profiles up to date. This new feature illustrates how our patent-pending tech skills data model can be used in several high-impact use cases within our platform. Dice Recruiter Profile, which we delivered last quarter, experienced the fastest adoption rate the company has ever seen from any of its product releases in the past two years. During the third quarter, one third of all Dice recruiters completed their new Dice Recruiter Profile. Dice Recruiter Profile allows our clients to enrich their profiles with photos, personal information, details about corporate brand and culture, news and latest hires, upcoming events, and future hiring needs, all of which create more transparency and personalized the recruiter behind the role. Dice Recruiter Profile was the first major release in Dice's transformation from a job board to a full-scale career marketplace. With the Dice marketplace, we're creating a trusted environment where recruiters and candidates can learn much more about each other to facilitate more effective career discussions. During the quarter, we also launched Career Clearance Jobs Client Team Dashboard, which allows clients to have a full view of their recruitment team activity on the site, linking activities to successful hiring patterns. Clearance Jobs continues to be DHI's testbed for key market-leading features. We also launched new features on eFinancial Careers called Follow, Voice, and Video. The Follow feature allows candidates to follow recruiters and get a news feed of their content on a weekly basis. Voice and video allow finance and tech professionals and recruiters to connect virtually with video and voice calling, as well as instant messaging through the EFC platform, all of which are highly relevant in the work-from-home environment. These capabilities were delivered as we announced the completion of the first iteration of the fully functional EFC marketplace, a huge milestone for the company. EFC follows CJ as the second brand to complete the transformation from job board to full-scale career marketplace. We have many new product releases planned for the fourth quarter. Dice is completing the design for its own messaging system with an expected launch at year end. Recruiters and candidates will be able to message each other within the platform in the same pattern as Facebook Messenger. This is the second critical ingredient ingredient for full marketplace capability and creates in-platform engagement and stickiness. Protecting our clients' and candidates' information is incredibly important to us. Therefore, in the fourth quarter, Dice has already released a new authentication and authorization system, which moves it to an industry standard secure login protocol. This feature is a stepping stone to multi-factor authentication in early 2021. We are also working on delivering calendar and schedule integration for clearance jobs, which will allow for recruiters and candidates to seamlessly schedule meetings and communicate in general from a system built into the platform and will connect to the user's native email application. Lastly, EFC has already released IntelliSearch-based job alerts in the fourth quarter, similar to what I just described for Dice. Now let me touch briefly on our sales performance for each brand before I turn it over to Kevin. As I've said before, I believe we're experiencing a checkmark-shaped recovery versus a V-shaped recovery. As I mentioned earlier, we saw a notable uptick in sentiment and bookings in September. We had several sales teams reach or exceed their pre-pandemic bookings production for the quarter as a result of the rebound, including both CJ's new business and account management teams, as well as Dice's staffing and recruiting new business team. Renewal rates for all account management teams improved during the month. Dice Commercial Accounts continues to be affected by the current environment due to the uncertainty around hiring plans. As an example, we have worked with one very large enterprise that has dramatically changed their hiring plan four times in the past four months. The good news is that our sales team's pipeline of deal activity has continued to grow. despite sales cycles lengthening. We continue to see increased engagement from candidates in the current work from home environment. In addition, on the client side, we saw an increase in marketing qualified leads through the contact me form fills on our Dice site, which is a leading indicator of pipeline growth. The rebound in Dice's staffing and recruiting new business highlights that Dice is a necessity for staffing and recruiting firms focused on tech. And as I mentioned before, the need for technologists is expected to grow strongly in the new post-pandemic economy. Due to the success that we're seeing in CJ and Dice's staffing and recruiting new business teams, we have shifted several sales reps from Dice's commercial accounts team to these two teams with the mantra, sell to those who are buying now. Clearance jobs has been relatively unaffected by the pandemic. as its performance is generally correlated to the U.S. Department of Defense budget, which remains relatively predictable. We continue to work hard on expanding CJ's addressable market through direct sales to U.S. government agencies and expect clearance jobs to add more government customers as we close out the remainder of this year. Finally, eFinancial Careers remains our most challenged brand. It is still being affected by the protests in Hong Kong, uncertainty around a hard Brexit in its largest market, the UK, and the expected longer recession for the global banking industry as credit quality remains uncertain and under continuous reassessment. There is no question that the uncertainty in the banking industry has weighed down EFC's performance to date and will continue to do so for the foreseeable future. As I conclude my remarks, I want to reiterate that we are successfully executing on our plan to build career marketplaces for matching tech professionals with employers, and we are doing so while exceeding our adjusted EBITDA targets. We believe we have created a better online platform than our competitors for matching companies with the highest quality tech professionals, and believe we can capitalize on the millions of new technologists' jobs expected over the next five years. While this growth won't happen overnight, and COVID-19 certainly presents uncertainty, we are confident in our business plan and the continued progress we are making towards achieving our goal of returning to growth. 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?