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spk07: Good day, and welcome to the DHI Group, Inc. Third Quarter 2022 Financial Results Conference Call. 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 on your touchtone phone. To withdraw from the question queue, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to Todd Curley of MKR Investor Relations. Please go ahead.
spk03: Thank you, Operator. Good afternoon and welcome to DHI Group's Fiscal 2022 Third Quarter Earnings Conference Call. With me on today's call are DHI's CEO, Art Zaley, 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 2022 third quarter financial results. The 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 of 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 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 adjusted 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 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 call over to Art Zaley, CEO of DHI Group.
spk01: Thank you, Todd. Good afternoon, everyone, and welcome to our fiscal 2022 third quarter earnings conference call. Thank you for joining us today. First, DHI is proud to be certified by Great Place to Work, a trustworthy authority on workplace culture with a mission to help organizations become great workplaces for all. This prestigious award is based entirely on what our current employees say about their experience working at DHI. 92% of employees said DHI is a great place to work, 35 percentage points higher than the average U.S. company. The passion of our employees shows in our overall success. We are pleased to report another strong quarter with total bookings growth of 19% year-over-year and total revenue growth of 25% as more employers are using our subscription-based offering. We did this while maintaining an adjusted EBITDA margin of 21% for the quarter, making us once again a rule of 40-plus company. With the significant supply-demand gap created by the increasing demand for technologists, more employers need access to our growing community of 6 million-plus tech candidates and our sophisticated toolset to find, attract, engage, and hire the highest-quality tech professionals. During the third quarter, U.S. employers posted over 1.1 million tech jobs up 18% year-over-year according to information technology trade group CompTIA. Even in this current macro environment, we continue to see strong demand for technologists. In fact, the unemployment rate for technologists remains near an all-time low of 2.1%. Open tech job postings are about two times the number of tech workers looking for employment. Our two subscription-based offerings, Dice and Clearance Jobs, are both tech-focused career marketplaces that attract the highest quality tech professionals and enable employers to find and engage these skilled candidates as they look to fill these hundreds of thousands of open tech job postings. Dice has over 5 million technologist members, while Clearance Jobs has 1.4 million. And we continue to grow the number of candidates for both brands each quarter. Both sites use our proprietary tech skills mapping taxonomy that has recently been granted a patent by the US Patent and Trademark Office. Our search algorithms allow our subscribers to find and engage the best tech candidates for their open positions and provides a substantial competitive advantage for both Dice and CJ. Our marketplaces are solely focused on serving the technology sector, where candidates are measured by the technology skills they have acquired over their career and not job titles. Now let me dig further into our brand's performance during the quarter. Starting with Dice, bookings increased 17% year over year in the third quarter, and revenue renewal and retention rates remained strong at 98% and 110%. resulting in Dice revenue for the quarter increasing 23% year over year. Dice Commercial Accounts continues to be our largest opportunity for growth, with over 80,000 companies in the U.S. meeting our ideal customer criteria. These companies cross every industry vertical, and during the quarter, our new business team signed several new Commercial Accounts customers, including Western Union, Dominion Energy, Boston Scientific, and Scholastic Books. The staffing and recruiting industry also continues to be a large growth opportunity for DICE, with over 18,000 staffing and recruiting firms operating in the United States. Today we service just a fraction of them, leaving us with a significant opportunity for growth as we continue to expand into this market as well. In the third quarter, Our DICE customer base grew sequentially for the seventh consecutive quarter, adding 23 net new clients. While the number of net new customers is lower than last quarter, we added approximately the same number of net new customers with annual recruitment packages of $10,000 or more, as we did last quarter. We saw a lower number of net new customers with annual contracts below 10,000, consistent with our focus of moving up market to increase our average annual contract value. We continue to see strong demand for DICE among new business prospects in both the commercial accounts and SRC market segments, and with their combined total addressable market value of over $1 billion annually, we are just scratching the surface as the demand for technologists continues to grow. Similar to Dice, we also have two substantial growth opportunities for CJ. The first is the government contractor market, where we currently have over 2,000 contractor clients, but know that there are approximately 10,000 cleared employers that can use our services. CJ's second opportunity for growth is selling its subscription offering directly to the multitude of U.S. government agencies that are in need of highly qualified technologists and are competing against the private sector for these candidates. We continue to advance our relationships with both government contractors and U.S. government agencies, adding several new clients during the quarter, including Teledyne Technologies and Symantec AI. During the third quarter, our bookings for CJ increased 23% year over year, and our revenue renewal and retention rates remain strong, coming in at 97% and 110%. All of this resulted in our CJ revenue for the quarter increasing 32% year over year. CJ continues to reach record new candidate registrations, record candidate profiles, record posted jobs, and record messages sent on the platform. And its sales and marketing teams continue to further penetrate these two market opportunities, adding 54 net new clients during the quarter. Congress has proposed a historic increase to the National Defense Budget for fiscal year 2023, which we believe will have a beneficial impact on CJ as government contractors and agencies look to hire more technologists to staff newly funded federal programs. During our recent Analyst Day presentation, Ari Konofsky, our Chief Revenue Officer, highlighted our five key levers for driving continued double-digit sales growth and operational efficiency in both our brands. Our Analyst Day webcast is available for replay on our IR website. Since profitable revenue growth is our core strategy, I wanted to quickly review these five levers. The first lever is to continue executing on our baseline growth strategy, which includes include selling multi-year contracts that include year-over-year price increases, as well as contracts with auto renewal clauses. Since the launch of this initiative, approximately 19% of our customers have signed contracts for two or more years, and 94% of all customers have accepted a contract with an auto renewal clause with an annual price increase built into it. These automatic price increases are a predictable driver of continued sustainable revenue growth. Our second lever for growth is our increased focus on year one client renewals. Last year, we launched a white glove customer experience team we call our new account special handling team. This team has a singular focus on ensuring our first year customers have an amazing experience with us. This first-year client experience is critical, as we have found that if a customer stays with DHI longer than one year, our renewal rates are significantly higher. With this special handling team, we now have a deeper understanding of our customers' challenges and success criteria, helping us to deliver clear ROI for each and every one of them. As a result of establishing this new team, we have experienced a significant uptick in our customer renewal and retention rates. which lay the foundation for continued revenue growth. Our third lever for growth focuses on our continued evolution to create holistic solutions for our clients. A key additional service we deliver is corporate branding, allowing companies to tell their story of their mission, values, and culture. Our year-to-date branding bookings have increased 87% from last year We are seeing similar momentum with our sourcing services and career events products. This evolution towards solution selling has contributed to growing our average deal size year over year. The fourth lever for growth is to continue to add headcount to the new business teams and target the large amount of prospective customers that sit in the billion-dollar-plus total addressable market I mentioned earlier. During the third quarter, we continued to add new sales reps to our team at a 20% plus annualized rate. And our marketing team continued to deliver high-quality leads to support them. Our last strategic lever for continued growth really ties everything together by providing continuous training and coaching for our sales team. Over the past couple of years, we've built a best-in-class learning and development organization that has a specific focus of making our reps better each and every day. These five levers not only help us deliver the continued strong results we report today, but more importantly, are the foundation for our continued growth in the quarters and years to come. In addition to successfully driving new bookings through our execution of these five levers, we also continue to expand our technologist community through our Dice brand advertising campaigns. With these brand awareness campaigns, we continue to see strong reach and engagement metrics on Dice, adding more than 50,000 new Dice members each month to our community. Adding tech professionals to our marketplaces attracts more and more clients, which in turn makes our platforms more valuable to tech professionals. So in summary, As we have said, despite current macroeconomic concerns, the demand for technologists continues to be strong. As such, we continue to execute on our proven sales and marketing engine to capitalize on this trend. We have large target addressable markets for both Dice and CJ, and as I just spelled out, we have several levers to drive sustained double-digit bookings and revenue growth well into the future. On that note, 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?
spk02: Thank you, Art, and good afternoon, everyone. Let me go into a bit more detail on our third quarter financial results. We reported total revenue of $38.5 million, which was up 4% sequentially and 25% year over year. Total bookings for the quarter were $36.5 million, up 19% year over year. Dice revenue was $27.3 million, which was up 2% on a sequential basis and up 23% year over year. Dice bookings were $25 million, up 17% year over year. We ended the quarter with 6,409 Dice recruitment package customers which is up slightly from last quarter and up 11% year-over-year. Our average annual revenue for DICE recruitment package customer was up 4% sequentially and 9% year-over-year to $14,868. Approximately 85% of DICE revenue is recurring and comes from annual or multi-year contracts. Our DICE revenue renewal and retention rates remained strong during the quarter, with the revenue renewal rate at 98% and the retention rate at 110%. These metrics continue to demonstrate the value of the DICE products in recruiting technology professionals. Clearance jobs revenue was $11.2 million, up 9% sequentially and 32% year over year. Bookings for CJ were $11.5 million, up 23% year over year. We ended the third quarter with 2,030 CJ recruitment package customers, which is up 3% from the second quarter and 12% year over year. Our average annual revenue per CJ recruitment package customer was up 3% over last quarter and up 13%, year over year to $19,308. Approximately 90% of CJ revenue is recurring and comes from annual contracts. For the quarter, our CJ revenue renewal rate was 97% and CJ's retention rate was 110%. These strong renewal rates demonstrate the continued value CJ delivers in the recruitment of cleared professionals. Now let's turn to operating expenses. Third quarter operating expenses were $37.3 million compared to $33 million in the year-ago quarter. We are continuing to grow our sales team and are increasing our third-party marketing spend to drive increases in marketing-qualified leads to support the additional salespeople. In addition, we continue to invest in our broader brand awareness campaigns to drive technologist growth on our platforms. During the third quarter, the company recorded an impairment of $2.3 million related to its investment in the MUSE. For the quarter, we had an income tax benefit of $12,000 on a loss before taxes of $938,000. Our tax rate for the quarter differed from our normal expected rate of 25%, primarily due to a valuation allowance related to the impairment I just mentioned. We recorded a net loss of $900,000 or two cents per diluted share compared to net income of 1.8 million or four cents per diluted share a year ago. Adjusted diluted earnings per share for the quarter was two cents compared to a loss of one cent for the prior year quarter. Diluted shares outstanding for the quarter were 44.2 million compared to 45.8 million shares in the prior year quarter. Adjusted EBITDA for the third quarter was $8.1 million, a margin of 21%, compared to $6.4 million, which was also a margin of 21% in the third quarter a year ago. We generated $9.2 million of operating cash flow in the third quarter, compared to $6.3 million in the prior year quarter. Our free cash flow in the third quarter, which represents operating cash flows, less capital expenditures, was $4.4 million compared to $2.4 million in the year-ago quarter. From a liquidity perspective, at the end of the quarter, we had $3.8 million in cash and total debt of $30 million under our $100 million revolver. Deferred revenue at the end of the quarter was $52.3 million, up 20% from the third quarter of last year. Our total committed contract backlog at the end of the quarter was $102.9 million, which was up 29% from the end of the third quarter last year. Short-term backlog was $84.2 million at the end of the third quarter, an increase of $16.4 million, or 24% year over year. Long-term backlog, that is revenue to be recognized in 13 or more months, was $18.7 million at the end of the quarter, an increase of $6.5 million, or 54%, from the prior year. During the quarter, under our share repurchase program, we repurchased approximately 700,000 shares for $3.8 million, an average price of $5.25 per share. As a reminder, our current share buyback program includes a $15 million authorization through February of 2023. Of the $15 million authorized, $5.7 million remains available under the program at the end of the quarter. Looking forward, based on our strong bookings performance, we expect fourth quarter revenue to be in the range of $38.5 to $39.5 million, a growth rate of 14% to 17% year over year. For the full year 2022, we are raising our range to $148.5 to $149.5 million in total revenue, a growth rate of between 24% and 25% for the full year over 2021. As we look ahead to 2023, we continue to anticipate revenue growth for the full year approaching 20%. From a profitability perspective, we will continue to operate the business to adjusted EBITDA margins at or near 20% in the fourth quarter as we balance our strong financial performance with increased sales and marketing investment to drive continued long-term revenue growth. We are excited by the continued positive momentum we are seeing in bookings and believe our investments in sales and marketing will drive strong, sustainable, double-digit bookings and revenue growth rates going forward. And with that, let me turn the call back to Art.
spk01: Thank you, Kevin. I'd like to close by once again thanking all our employees for their hard work this quarter. Your hard work every day is paying off. It is a pleasure to be part of such a great team. With that, we're happy to take your questions.
spk07: Thank you. We will now begin the question and answer session. To ask a question, you may press star, then one on your touchtone phone. If you're using a speaker phone, please pick up your handset before pressing the key. To withdraw your question, please press star, then two. At this time, we will pause momentarily to assemble our roster. Our first question comes from Zach Cummings with B Reilly Securities. Please go ahead.
spk00: Hi, good afternoon, Art and Kevin. Congrats again on another solid quarter, and thanks for taking my questions. Art, just starting off, pretty noticeable shift in average revenue per recruitment package in Dice. It sounds like you've been proactively shifting upmarket to customers that are generating at least $10,000 in annual contract value. Is that something that we should expect to continue going forward, or how should we think about the balance between continued customer growth and expansion of that average recruitment package to drive growth in DICE moving forward?
spk01: I think it's a combination of both. I mean, we would love to have additional customers, clearly, but we want to make sure that as we move forward in kind of an uncertain time that we're getting strong customers right from the get-go. What we've found is that our attrition is associated with our smaller customers, so we certainly don't want to invite future attrition. And so we've really kind of reinforced this idea that we should make sure that those customers that we're prospecting are very strong. just the size of the contract itself is at least one indicator of that. We do have an ideal customer profile that indicates the size of the customer in terms of the number of employees, the number of positions that they're hiring for currently. But as a proxy, that $10,000 mark seems to be a safety zone for us.
spk00: Understood. And nice to hear the strong momentum that you're seeing in your corporate branding product. Can you give us a sense of the penetration rate that you've had with that product thus far and kind of what is the sense of the available run rate for growth there within just the existing base?
spk01: I'd say it's small in terms of the penetration rate today. I don't have the exact figures, but I would surmise that it's less than 10%. We haven't been overly selling it because we're waiting for clearance jobs to essentially deliver their new company page literally within weeks. and then Dice doing the same thing in the first half of next year. So what we're seeing is that there's this really strong interest as shown by that increase in year-over-year demand, but I'd say the real campaigns to sell CJ and Dice branding products are to come. CJ by the end of this year, Dice first half of next year.
spk00: Understood, and final question for me is just really around the implied 4Q guidance. I think you beat the midpoint of the Q3 guidance by about a million dollars, but raised the full year by about $500,000. Just curious of some of the dynamics that you're factoring in when setting Q4 expectations.
spk02: Sure, and this is Kevin Zak. As you know, as we enter any quarter, we are close to high 80% of our revenue is already known the way these contracts are booked and then the value of the contract is amortized. For the balance of the revenue, we actually spend a fair bit of time looking at the type of contracts that we have, the amortization of the expected contracts to sign, close rates, all of that. So all of that factors into to the guidance that we provide. The KPIs that we're seeing in the business are relatively consistent with what we've seen previously. So all of those things go into setting up the guidance for any quarter, and then also, you know, in this case for 2022, we had provided full-year guidance as well.
spk00: Understood, and that's helpful. Well, thanks again for taking my questions, and congrats again on the strong results.
spk01: Thank you very much, Zach. Appreciate it.
spk07: Our next question comes from Eric Martin with Lake Street. Please go ahead.
spk05: Yeah, my congratulations on the quarter as well and also on the great place to work recognition that is definitely differentiated versus the average. I'm curious to know, I had a question regarding the average annual revenue per recruitment package customer. Just the increase in the Wondering how much is due to seat increase versus price increase on that growth on the DICE side.
spk02: Yeah, it is mostly, it is larger customer contracts, and I would say it's weighted more towards seat increases, Eric. And as Art mentioned, we are focused on larger size deals. So that's effectively what we're seeing is that we're selling more seats relative to the smaller size deals.
spk05: Okay. All right. And then as we look out to the pipeline that you've got to work, and I'm specifically referring to the commercial side on DICE, what do the leads look like now versus, say, 90 days ago?
spk01: We're seeing a consistent pipeline. That's a very astute and very appropriate question. Obviously, pipeline being a leading indicator of future booking success. But we have seen a pattern that is very consistent with what we saw 90 days ago. So we still see very encouraging pipeline and bookings trends.
spk05: Okay. And then just if I could go a layer deeper on the customer size and the verticals that you're working with. Were there any, just on the Q3 backward-looking, any cracks appearing on particular verticals? Because, you know, obviously the headlines we see is, you know, big tech is either freezing or contracting in their technologist headcount. And I'm just wondering if you're seeing maybe on a vertical basis some signs of weakness in the pipeline.
spk01: So I'll tell you that... As we indicated at our Investor Day presentation, we tracked a number of verticals on the order of like 15 different verticals. And surprisingly enough, the software vertical is actually the fourth largest vertical, at least it was in that time frame and remains so. I would say that we are not seeing the same kind of headline news associated with these larger tech companies. You can still go to Meta's career site as well as Facebook, Amazon, they're all hiring technologists in large numbers like thousands or tens of thousands. Very fortunately, we have not focused on the smaller seed stage, venture stage companies that are in tech. In fact, there was a recent article by the New York Times that stated that there was a 53% drop in venture funding for Q3 this year versus last year That's a space that we have not really played in, mostly because it doesn't meet our ideal customer profile, which demands a certain size of company, a certain size of number of hires in the next year, and because those firms are generally more frugal in the way that they go to market to try to attract talent. So again, even across this big tech segment, we're not seeing the trends that are playing out in the news cycle, and we have never really focused on the smaller companies that are in tech. So I guess that's a long way of saying we haven't seen any major craps. I mean, I would imagine, you know, if we were selling to a mortgage-based business, you know, the beginning of this year, we're not selling to mortgage-based businesses right now is one example, but we haven't tracked it at that level. It's not a very large vertical for us, real estate in general.
spk05: Understand. Thanks for taking my questions.
spk01: Absolutely, Eric. Appreciate it.
spk07: Our next question comes from Gary Estopino with Barrington Research. Please go ahead.
spk04: Hi. Good afternoon, Art. Most questions have been answered. Really good quarter here. But, Art, in your initial dialogue, you said tech postings, job postings were 1.1 million in Q3, and you gave some kind of a increase year over year? I didn't get that increase, Dan. Do you have that handy?
spk01: Yes, that was an 18% increase, and it was tied to these press releases that are issued by CompTIA, which is a tech industry association. They're issued every third or fourth day of the following month, and that tracks almost exactly to the increase that we saw year over year at DICE. We saw a 19% increase. CompTIA saw an 18% increase. And we just used the CompTIA figures because they're universal. They're based on BLS statistics that are published. So we feel like those are a little bit more of an independent view than our own platform. But our own platform is showing the exact same trend.
spk04: Okay. And then referring to the other question with the headlines here about job cuts at some of these major firms like Twitter, Facebook, or meta, whatever they call it now. I mean, are you, you're not seeing the demand for technologists slow there. So are we to assume that a lot of these cutbacks would be non-technology related personnel?
spk01: I personally think that they're situation specific. In fact, we've been answering questions about this literally since the beginning of the first quarter of this year. So we've answered, you know, hey, do you have Robinhood as a customer? Do you have Rocket Mortgage as a customer. Do you have Meta as a customer? We do have Meta as a customer. But we aren't seeing the slowdown that's indicated in the news headlines. I do believe that many of those individual companies have their own situation-specific reasons for either having a layoff or a pause or a slowdown in hiring, all of which those scenarios affect us differently if they're customers. Okay.
spk04: So then another scenario I don't want to know is your sales force going out and selling or maintaining existing accounts. Are they finding that it's getting through the industry that dice and clearance jobs are really a must-have? And one of the reasons why as resources become less and less, if they do become less and less for attracting candidates in terms of manpower because we're going into a recession or whatever, that these entities are really looking to you to more so fill that need for attracting clients or members for their job postings?
spk01: So it's interesting you use the words must-have because that's, for 2023, our strategic initiative, which is to establish ourselves as the must-have tool for our customers And so I would say that our job isn't done. The job differs based on whether it's clearance jobs or DICE. I think we're spending more time making that pitch on DICE, that we're the unique spot for finding technology talent across all verticals in the United States. Just to let you know, clearance jobs has established a track record over the last 20 years of being completely delinked from the economy. And so it's really correlated, its success is correlated to the defense budget of the United States. That's why I mentioned that we're on the precipice of hopefully having a defense budget approved by Congress that is a very large increase from a historical perspective, obviously because of the war in Ukraine, but also the idea that we have a lot of challenges in the future fighting against other adversaries in Asia.
spk04: Okay. Thank you very much.
spk01: Thank you very much. Really appreciate it. Take care.
spk07: Our next question comes from Kevin Liu with K. Liu and Company LLC. Please go ahead.
spk06: Hi. Good afternoon, guys. I know this has been kind of talked about a number of different ways in terms of potential slowdowns in the economy or what sort of impact that has. So I wanted to try a different angle, maybe just you know, get your sense on sell cycles and whether they're still pretty consistent with what you guys saw earlier in the year, if there's any sort of change in decision-making, and also just kind of the appetite for things like multi-year contracts or some of the built-in price increases you guys have within your contracts?
spk01: Those are excellent questions. And I would say that, first and foremost, we've seen a little bit of a sales cycle increase over the course of the year. And when I say a little bit, it's a matter of like days. So we're not really worried about that signal at this point in time. I mean, if we had a doubling or a 50% increase in our sales cycle, we would be worried. But right now we're seeing almost a minor increase, but we're still tracking it religiously every single week, every single month. As it pertains to multi-year contracts, we have not seen any change in the pattern. We're still able to more or less convince our customers, the ones that are willing to engage in the discussion, that multi-year can be to their benefit as well in terms of locking in price increases right now as opposed to experiencing larger than expected price increases in future years.
spk06: Great. And maybe just with respect to some of the kind of less recurring sources, you talked in your script about being able to attach or seeing good strength in things like sourcing and virtual affairs and the like. What sort of attachment do you guys have on your subscription base today? And where do you think that can go, especially once you start to sell the new corporate branding offering more aggressively?
spk02: Sure. I'll take that, Kevin. Right now, we are seeing what I would say is a somewhat small attachment rate for both virtual career events and sourcing services. Ultimately, it's not so much the attach rate on the front end, but it's after people see how the product is used, notably for sourcing, we then try to sell them our product so that they can use it on their own. I would say virtual career events have a higher attach rate to products because it is another way for them to attract candidates, so it goes hand in hand with the platform. Branding right now is also, to Art's point earlier, does not have a very high attach rate, but that is something that we're focusing on next year and actually do want to sell that with the platform products, with the annual recruitment package. so that those are actually purchased together. And we expect a much higher attachment rate. As Art mentioned, right now it's being launched for CJ and kind of the Q2, Q1, Q2 of next year for Dice.
spk06: Got it. And just lastly, it seems like there's still kind of a willingness to invest in the business here. In terms of kind of the increases in expenses going forward, should we expect a similar pacing to what we've seen over the past few quarters? Or is there any reason that would either accelerate or decelerate as we move into next year?
spk02: I would say for everything except sales and marketing, it will be a normal course increase year over year. So kind of in that 3%, 4%, 5% range, we are fully staffed across the company with the exception of sales. And it's not that we're not fully staffed in sales. To the point Art makes, we continue to add sales headcount. And so I would expect those costs will continue to go up on a dollar basis over the course of 2023. The marketing spend then will be correlated to the number of salespeople we have because that is really driven by the number of new business salespeople and the support we provide them through the form of MQLs. So I would say for product and IT and G&A, it's just going to be ordinary course increases. Sales and marketing will increase somewhat in line with bookings. And then our cost of revenue is probably somewhere in between because there is a component there that our cost of revenue does increase, although not linearly, with the increase in bookings for our business.
spk06: Great. That's very helpful. I appreciate you taking the questions and congrats as well on the strong quarter.
spk01: Really appreciate it, Kevin. Thank you.
spk07: This concludes our question and answer session. I would now like to turn the call back over to management for any closing remarks.
spk01: Thank you so much. Before we wrap up, I want to let you all know that DHI management will be attending the Benchmark Conference on December 1st in New York City. We hope to see some of you at that conference, and thank you very much for your interest in DHI Group today. Hope you have a wonderful day and week to come.
spk07: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.
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