DHI Group, Inc.

Good day and welcome to the DHI Group, Inc., fourth quarter and year-end 2020 financial results. All participants will be in 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. Please note that this event is being recorded. I would now like to turn the conference over to Todd Curley, MKR Investor Relations. Please go ahead.

Thank you, operator. Good afternoon and welcome to DHI Group's fiscal 2020 fourth quarter and year-end financial results conference call. With me on today's call are DHI's CEO, Art Daley, 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 fourth quarter and full year 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 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 of an 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 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. With that, I'll now turn the conference over to Art Zailey, CEO of DHI Group.

Thank you, Todd. Good afternoon, everyone, and welcome to our fiscal 2020 fourth quarter and year-end earnings conference call. Thank you for joining us today. I hope that everyone is staying safe and healthy. I'd like to start my comments by providing some detail around how we finished the year and some of the accomplishments we achieved during 2020. After that, I'll provide an update on what we're seeing now and how our efforts this past fiscal year have more effectively positioned us to grow our business going forward. Starting with the fourth quarter, I'm pleased to report that we finished the year with strong bookings for DICE in December and followed performance with continued momentum in January. December and January are our two largest renewal months for DICE, In combined, they represent almost 30% of our total bookings for DICE in any given year. We also saw our DICE revenue renewal rate increase significantly from 66% last quarter to 75% this quarter, with that rate increasing further still towards the end of the quarter. This gives us increased confidence in the rebound for our business as we enter the new year. Surveys during the fourth quarter from two independent industry research firms, the Staffing Industry Analysts, SIA, and the TechServe Alliance, reflect the continuing recovery trend throughout the staffing sector and confidence that tech hiring will continue to rebound in 2021. Also, CompTIA, using Bureau of Labor Statistics data, reported that the tech industry showed job growth of 391,000 positions in December, even as the US as a whole lost 140,000 jobs. Several commentators are calling 2021 the year of the great rehiring. It's clear that the worldwide effort to digitize and move businesses online will require technologists. And there is no doubt these efforts will result in a worldwide surge in digital jobs over the next several years. According to a Microsoft survey released last summer, Worldwide digital jobs are expected to grow from 41 million in 2020 to 190 million in 2025. Companies and the staffing and recruiting firms that service these companies will need tools such as ours to find qualified candidates to fill these new tech jobs. As we continue to execute on our plan to create the best tech-focused career marketplaces using our technology skills data model, we stand well-positioned to capitalize on this explosion in hiring of technologists over the next several years. Now let me quickly recap some of our accomplishments this past fiscal year. During 2020, we continued our fast pace of innovation. We launched several marquee product releases across Dice, Clearance Jobs, and EFC, bringing best-in-class marketplace features to all three brands. Our continued innovation is driving our product leadership in the space and has resulted in solid increases in technologist engagement, including 11% growth year-over-year in visible candidate profiles and 47% growth year-over-year in candidate applications on the Dice platform. We also implemented new sales processes, methodologies, and forecasting, driving improvements to better address market opportunities and our clients' needs. We increased our focus on client success through new leadership and technology in the second and third quarters, which has resulted in higher renewal rates with our existing customers in the fourth quarter. Last but not least, we were able to reset our entire financial budget within weeks of the start of the pandemic so we could maintain our EBITDA goals throughout 2020. Team members globally united to implement expense management policies to ensure achievement of our cost savings goals, while at the same time not losing sight of executing on our long-term growth plan. As we enter the new year, we believe we have emerged from 2020 a better company. We have invested smartly in our products and sales resources to allow us to capitalize on the multiple growth opportunities in front of us. And as I will discuss later, we are planning to accelerate our investment in sales and marketing in 2021 to drive long-term revenue growth. Now let me touch briefly on our sales performance during the fourth quarter. Bookings were slow at the beginning of the fourth quarter, but as I mentioned earlier, they improved dramatically at the end. And this strong performance was followed by continued positive momentum in January. We saw a significant rebound in our renewal rates, and two of our three new business teams reached or exceeded their pre-pandemic level of bookings production for the quarter. One of those teams was our DICE SRC, or Staffing, Recruiting, and Consulting new business team. As I mentioned before, the need for technologists is expected to grow significantly in the new post-pandemic economy, and a rebound in Dice's SRC business in the fourth quarter is a positive indicator of that trend. We believe Dice is a necessity for staffing and recruiting firms focused on serving the tech industry. SRC market opportunity for Dice remains significant. While Dice has over 4,000 SRC customers today, there are over 18,000 staffing and recruiting firms in the U.S. alone, leaving us significant room for growth. As such, we shifted sales reps to Dice's SRC new business team in the fourth quarter to capitalize on this opportunity. And while these new reps are still ramping up, we are excited about their contribution in the quarters to come as we look to further penetrate the large SRC market. On the Dice commercial accounts front, our team continues to experience longer sales cycles as many large enterprises went into a cost-cutting mode during the last three quarters of 2020 and are still solidifying their hiring plans for 2021. With that said, the Dice commercial team's pipeline of deal activity has continued to grow. In both the fourth quarter of 2019 and the first 10 weeks of the first quarter of 2020, the commercial accounts new business team exceeded their bookings plan. And we believe they will once again be a growth driver as the economy further Commercial accounts still represents our largest opportunity for growth as there are tens of thousands of companies in the United States that fit our ideal prospect profile. Based on our burning glass feed, there are about 2,000 companies that have more than 20 open tech job postings right now. Companies like Amazon, Anthem Blue Cross, Ernst & Young, Fiserv, and General Dynamics all have over 1,000 active tech jobs posted today. We are focusing our commercial accounts team on these companies that are growing in the current economy. Clearance Jobs is the other that outperformed their bookings quota during the quarter, and we also added sales resources to this team during the fourth quarter. Clearance Jobs has been relatively unaffected by the pandemic, as evidenced by its full year revenue growth of 17% yearly. We continue to work hard on expanding CJ's addressable market by moving beyond our government contractor customers and making direct sales to U.S. government agencies. CJ signed several initial deals with government customers in 2020, and we expect them to add more in 2021. The market opportunity for CJ with government agencies is largely untapped, and we see it as a significant growth opportunity as we move forward. Lastly, our e-financial careers brand continues to be challenged. It is still being affected by the protests and security laws imposed by China in Hong Kong, which had been its fastest growing market. Also, there is continued uncertainty in the UK, EFC's largest market, because the Brexit agreement that was recently signed did not address the future of the financial services industries. There is no question that this uncertainty has weighed down EFC's performance to date and will continue to do so for the foreseeable future. As such, during the quarter, we took action to reduce the size of our EFC organization and start the process of spinning out this business to the EFC management team, which is expected to officially take place around mid-year. We believe this strategy will allow us to show positive revenue growth we expect to see with our remaining Dice and CJ brands, as well as allow EFC to be a nimbler, more entrepreneurial competitor in its markets. Looking forward, due to the success we are seeing in both Dice and CJ staffing and recruiting new business teams, we're planning to begin hiring even more new sales reps for these two teams this quarter. With our industry-leading product offerings, we believe the time is right to add more sales resources to these teams as we look to capitalize on the expected growth in technology jobs over the next several years. We are also planning to focus more of our marketing spend in 2021 on generating more marketing-qualified leads to fuel our new business team's growth. During the fourth quarter, we started by shifting the mix of our marketing spend from candidate generation to to focus more on creating marketing-qualified leads, and we were able to successfully scale our MQL production across all of our new business teams during the quarter. Now that we've built industry-leading marketplaces for tech professionals, we also plan on launching targeted brand awareness campaigns in 2021. In 2019 and 2020, we built a better product. 2021 will be the year we capitalize on that product innovation through increased sales and marketing efforts. Before I turn the call over to Kevin, I would like to highlight the continued high pace of product innovation from our product development teams during the fourth quarter. Significantly, only four months after the release of Dice's Ripple file, approximately half of our 30,000 active recruiters on the platform have created their own profile. This is great validation of the value of our marketplace concept. Additionally, during the fourth quarter, we took another major step in the evolution of the Dice Marketplace, introducing Dice Instant Messaging, a comprehensive and flexible platform through which recruiters and candidates can rapidly and confidently communicate in real time. Instant messaging replaced connection tools to help recruiters drive continual engagement with candidates for current and future roles and for candidates to have direct and private conversations with recruiters. Launched in late November 2020, over 30,000 messages have already been sent through the Dice instant messaging platform, and this number continues to grow exponentially. As always, clearance jobs also had important new releases in the quarter, with the launch of Self-Serve Brand Amp, which allows employers to customize the branding of their jobs in real time. CJ also released Candidate Search Cast Messages Upgrades, where employers can search and find prospects or broadcast messages by adding tags. Tags are critically important to recruiter workflows and are the brains behind CJ's suite of talent pipelining and messaging tools. Students' Jobs continues to be our testbed for innovation. As I conclude my remarks, I want to reiterate that we have created industry-leading online marketplaces for matching companies with the highest quality tech professionals. And with these marketplaces, we believe we can capitalize on the millions of new technologist jobs expected over the next five years. We are confident in our business plan and the continued progress we are making towards achieving our goal of driving revenue growth. And we look forward to sharing our progress throughout the rest of 2021. 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?