DHI Group, Inc.

Good day and welcome to the DHI Group, Inc. Second Quarter 2024 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 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, MKR Investor Relations. Please go ahead.

Thank you, Operator. Good afternoon and welcome to DHI Group's 2024 Second Quarter Earnings Conference Call. With me on today's call are DHI's CEO, Art Zaley, and CFO, Rainey Levy. 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 2024 second 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 the federal securities laws. 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 the 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 non-GAAP 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, a copy of which you can find on our website at dhigroupinc.com in the Investor Relations section. I'll now turn the call over to Art Zailey, CEO of DHI Group.

Thank you, Todd. Good afternoon, everyone, and welcome to our 2024 second quarter earnings conference call. We appreciate your time today as we discuss our financial performance and provide an update on our outlook. First, let's discuss the current state of the tech labor market, which is one of the main growth drivers for our business. Although our bookings are not where we hoped they would be throughout the quarter, we continue to see a slow rise in new tech job postings, with May's total of 209,000 reported by CompTIA marking the highest number since June of 2023. While we haven't yet returned to the pre-pandemic average of 300,000 new job postings per month, there are signs of improvement as more employers are coming off the sidelines. AI initiatives are increasingly driving the demand for tech professionals, particularly with consulting firms being the initial focus for corporations. Notably, IBM recently announced that it had already booked $1 billion in AI-related business so far in 2024. And McKinsey & Company said it anticipates at least 40% of its projects this year will involve AI. We view this as an early indication of growing AI demand as companies test initiatives with consulting firms before launching broader projects. Additionally, Lightcast reports that the percentage of all US tech job postings requiring AI skills jumped from 15% in January to 27% in June of this year. Tech is the second largest long-term occupational growth trend in the United States, behind healthcare, and is projected to grow twice as fast as the overall U.S. workforce as the U.S. becomes a more digital economy over time. As businesses ramp up their investment in technology, clearance jobs in DICE will be essential tools for employers looking to find the ideal candidates for their open tech job postings from the 8.5 million technologist profiles we manage. Our clients continue to see increased success in attracting and hiring top tech talent using our platforms. One recent example is American National Insurance, who stated, Dice has paid for itself already as we made one hire that we could not find anywhere else. Our team also has found great value in leveraging the database to source for talent and has found quality candidates. Our client Coca-Cola mentioned seeing an increase in referral traffic from Dice, which has had a positive impact on their ability to source candidates further validating the value of the platform for companies hiring for their own tech talent. As evidenced by this feedback, our secret sauce is the ability to efficiently deliver to employers the highest quality candidates using our proprietary skills mapping technology to match the specific tech skills an employer is looking for to the exact candidates that have them. This is one of the reasons Forbes Magazine announced Dice as the number one website for tech and IT jobs just days ago. Now let's dig into the performance during the second quarter and what we see ahead for the remainder of 2024. In the second quarter, our total revenue declined 7% year-over-year. TJ revenue increased 8%, while Dice revenue decreased 14%. Excluding transactional revenue, our total recurring revenue declined 6% year over year. Clearance jobs continued revenue growth was encouraging, as government agencies and contractors are driving increased hiring of cleared tech professionals, while the decrease in DICE revenue was due to lower new business bookings and renewals over the past several quarters, as well as less transactional revenue. Looking at our bookings performance, our total bookings were down 7% year over year in the second quarter, a 200 basis point improvement from the 9% decline in the first quarter. Clearance jobs bookings for the second quarter increased 9% year over year, which is still below its trend line, but improving. During the second quarter, CJ secured several new customers, including Texas Research Institute, Iridium Satellite, and Nighthawk Flight Systems. We continue to be optimistic about the short and long-term growth prospects for CJ, although we know that even military contractors remain cautious this year. With over 10,000 employers of cleared tech professionals and over 100 government agencies that also need cleared tech professionals, clearance jobs has a significant growth opportunity ahead of it. DICE bookings for the second quarter declined 15% year over year, as many employers continue to be very budget conscious in this uncertain economic environment. Despite these headwinds, Dice secured several notable customers this quarter, including Prudential Financial, AYA Healthcare, and Blue Origin, as it continued to focus on those industries and companies hiring tech professionals, even in this weakened economic state. The data continues to indicate that these industries include aerospace, business consulting, health care, financial services, and education. Moving on to account management. Our CJ and DICE revenue renewal rates were 96% and 78%, respectively, in the second quarter. Retention rates for CJ and DICE were 113% and 99%, respectively. During the second quarter, we delivered a 25% adjusted EBITDA margin, which was up from 23% a year ago. Our operating cash flow was $9.1 million for the quarter versus $8.1 million in the year-ago quarter. We continue to focus on operating our business efficiently, as evidenced by our 12% year-over-year reduction in total operating expenses this past quarter. Now let me quickly touch on what we are doing to drive increased adoption of our two brands. At the end of last year, we released comprehensive subscription packages that combined unlimited job postings, a company page, and selected job boosts for harder to fill positions. During the first half of 2024, almost all of our new business bookings across both brands were sold in this format, highlighting the value our prospects see in this combination of services. Importantly, for the second quarter, the new subscription package pricing has improved our average contract value by approximately 4% versus last year's average ACV, which included legacy pricing. For our existing customers, we also have started to see increased adoption, with 12% of our renewals choosing the new comprehensive subscription package in the second quarter. We also continue to deliver product innovation for both clearance jobs and DICE. For CJ, the big development during the quarter was our selection as the official partner of the US Department of Labor's Employment Navigator and Partnership Program. The ENPP provides one-on-one assistance connecting transitioning service members with career resources as they explore and plan for post-military life. After separating from the military, veterans' security clearances generally stay current for three years. As an ENPP partner, clearance jobs will help veterans utilize their security clearance following their service with the US military. With clear job openings and demand for clear talent at record highs, A security clearance can be a valuable asset for service members in their job search. Adding clearance jobs as a resource for transitioning service members will have a big impact on the lives of veterans and will help fill the roles vital to our nation's security and defense. For DICE, the DICE All Jobs Initiative continues to deliver an increased number of job postings, which in turn is driving increased job applications from candidates. During the second quarter, the number of jobs posted on Dice increased 30% year over year. And Dice averaged 1.6 million monthly job applications, an increase of over 85% year over year. Increased applications can serve as a barometer for sentiment in the tech community. In a recent survey, one tech professional said, the primary reason I rated Dice a 10 out of 10 is because of its extensive database of job listings user-friendly interface, and robust search filters that make it easy for job seekers to find relevant opportunities in their field. Additionally, Dice offers valuable resources and tools for career development, networking, and skill enhancement, making it a comprehensive platform for professionals in the tech industry. Providing clients with an active and engaged candidate community and candidates with the ideal jobs they're seeking is essential to further establishing Dice as a trusted career marketplace. Before I turn the call over to Ramey, let me touch on our expectations for the rest of 2024. As I stated earlier, we believe there are emerging signs that the demand for tech professionals is improving, as evidenced by the increasing number of tech job postings during the second quarter. However, as I have said before, this recovery does not appear to be V-shaped, but rather a slow and steady one. As such, while we expect our bookings performance in the second half of the year to continue to improve, we do not expect total bookings to return to growth until next year, as many employers continue to be very budget conscious during this uncertain economic environment. We expect our third quarter bookings to be down between 4% to 6% year over year. And we expect our revenue for the third quarter to be down 4% to 6% year over year, with total revenue for the full year declining in the mid single-digit percentage range. We continue to focus on improving our products and our go-to-market execution so that we are ready to capitalize on the anticipated increased demand for our tools, while at the same time delivering strong profits for our shareholders. From a profitability perspective, we continue to target an adjusted EBITDA margin of 24% for the full year. In conclusion, as businesses ramp up their investment in technology, including the surge in new AI initiatives, we believe our subscription-based offerings, which include 8.5 million technologist profiles and our unique tech skills mapping and search algorithms, will be essential tools for employers looking to find the ideal candidates for their open tech job postings. On that note, let me turn the call over to Rami, who will take you through our financials, and then we'll take any questions you may have. Rami?