DHI Group Q2 2023 Earnings Call Transcript

Quartr
Provided by Quartr
August 2, 2023

There are 7 speakers on the call.

Operator

Afternoon, and welcome to the DHI Group Incorporated Second Quarter 2023 Financial Results Conference Call. All participants will be in listen only mode. After today's presentation, there will be an opportunity to ask questions. Please note, this event is being recorded. I would now like to turn the conference over to Todd Kehrli of MKR Investor Relations.

Operator

Please go ahead.

Speaker 1

Thank you, operator. Good afternoon, and welcome to DHI Group's 2023 Second Quarter Earnings Conference Call. Listening on today's call are DHI's CEO, Art Zehle and CFO, Kevin Bostik. 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 2023 Second Quarter Financial Results.

Speaker 1

The release is available on the company's website at dhigroup inc.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.

Speaker 1

Factors that could cause these forward looking statements to differ from actual results DHI undertakes no obligation to update or revise any forward looking statements. Lastly, during today's call, management will be referring to 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 atdhngroupinc.com in the Investor Relations section. I'll now turn the call over to Art Zehle, CEO of DHN Group.

Speaker 2

Thank you, Todd. Good afternoon, everyone, and welcome to our 2023 We appreciate your time today as we discuss our financial performance and future outlook. First, let's discuss the state of the market. According to CompTIA, the tech sector's unemployment rate was 2.3% in June, demonstrating continued demand for technology professionals. This coincided with a decline in actual tech job postings, with 2nd quarter numbers significantly lower than in the previous year.

Speaker 2

The ongoing uncertainty in the economy continues to suppress most hiring plans. Despite the challenging current environment, the longer term view suggests companies will continue to invest in technology initiatives. Our 2 subscription offerings, Dice and ClearanceJobs, provide staffing and recruiting firms, large enterprises and government agencies with the tools necessary to find, attract and hire the best technologists for their job openings from our 7,400,000 candidate profiles. Now let me dig into our performance during the Q2. In the Q2, our total revenue grew by 4%, a slower pace compared to the 12% growth we achieved in the 1st quarter.

Speaker 2

Dice revenue for the quarter decreased 2% year over year, while CJ revenue increased 20%. The decrease in Dice revenue was the result of lower new business bookings over the past three quarters and significantly lower transactional revenue, which we believe is a reflection of the uncertain economic environment we have faced during that time. Excluding transactional revenue, Recurring Dice revenue increased in the 2nd quarter. Dice new business teams continue to see smaller pipeline volume and more intense deal scrutiny in the sales cycle. We remain laser focused on those firms that have significant tech hiring needs right now because their technology roadmaps are less likely to be impacted by the economy.

Speaker 2

The 4 industries that have elevated technology job postings today Our Aerospace, Business Consulting, Financial Services and Healthcare. In the Q2, we brought on new Dice clients like Federal Emergency Management Agency or FEMA, Rutgers University and Global Accounting Network. Additionally, Dice landed 1 of the oldest and largest automotive manufacturers in the United States And the automotive giant is now part of our new account special handling program. Our average Dice Annual contract value increased 9% year over year and was down 1% sequentially. This is a challenging economic environment today, but we expect companies across all industries to increase their investment in technology initiatives over the long run.

Speaker 2

ClearanceJobs bookings for the quarter were negatively affected by the debt ceiling negotiations and its implied threat of the government delaying payment to military contractors. Nevertheless, during the quarter, CJ added several new clients, including Korn Ferry, Tria Federal and Rocket Communications. We continue to expect the larger fiscal 2023 defense budget to have a positive impact on the volume of government projects and the corresponding demand for cleared tech professionals to fulfill them. Moving on to account management, our revenue renewal rates in the 2nd quarter slipped from the high 90s we reported last year. For the quarter, our Dice and CJ revenue renewal rates were 84% 90%, respectively.

Speaker 2

Retention rates for the quarter for Dice and CJ were 101% 110%, respectively. Last year, many of our clients ran out of profile views in their subscriptions and had to top up during the Q2, which created a tough comparable for these metrics. We are seeing our customers return to a profile consumption pattern consistent with the lower number of tech job postings. The attrition we have seen continues to be concentrated on clients with less than $10,000 in annual spend. These are generally smaller firms.

Speaker 2

Moving on to EBITDA. During the second Quarter, we delivered a 23% adjusted EBITDA margin and announced an organizational restructuring intended to streamline our team structure and improve our operating margins. The net result was a reduction of our workforce by approximately 10%. This restructuring primarily targeted mid level management, including sales and engineering positions, which tend to have higher compensation. The restructuring is expected to generate annual cost savings of approximately $8,000,000 to $10,000,000 and those savings will be evident in our 3rd quarter results.

Speaker 2

We continue to focus on strengthening our industry leading product offerings to better penetrate our large market opportunities. In which job postings are displayed to candidates to promote those postings that have a lower number of applications. We believe this new feature will benefit both the clients and candidates alike. For ClearanceJobs, we introduced We are also excited to announce that our CJ native mobile app will be available in the Q3 after a year and a half of development. The timing is ideal to launch this app as professionals in the security space are now more receptive to managing their careers on mobile devices than at any time in the past.

Speaker 2

During the Q2, We also continue to focus on expanding our tech professional community through our brand advertising campaigns. These campaigns helped drive roughly 45,000 new Dice candidate registrations each month during the quarter. As a result, We have 6,100,000 Dice members and they made 1,700,000 visits each month to our platform. Adding tech professionals to our marketplaces attracts more employers, which in turn makes our platforms more valuable to tech professionals, creating a virtuous circle. During the Q2, we also announced the arrival of our new Chief Marketing Officer, Amy Hiderstock.

Speaker 2

Amy brings a wealth of experience as a hands on forward thinking marketer in B2B software companies and 2 sided marketplaces. She previously served as the CMO at Persado, Alteryx and CareerBuilder earlier in her career. We look forward to Amy's leadership in taking our product positioning, go to market strategy and brand development to the next level of sophistication. In summary, we acknowledge the challenges posed by the uncertain economic landscape, but remain confident in our ability to adapt and grow. With our strong market position, ongoing product enhancements and effective expense management, we are well positioned to navigate the current economy and continue our path to higher growth as the macroeconomic environment improves.

Speaker 2

On that note, let me turn the call over to Kevin, We'll take you through our financials and our guidance and then we'll take any questions you may have. Kevin?

Speaker 3

Thank you, Art, and good afternoon, everyone. Let me take you through our financial results for the quarter. We reported total revenue of 38 point Quarter were $32,300,000 down 9% year over year. Dice revenue was $26,300,000 which was down 2% both sequentially and year over year. Dice bookings were $21,800,000 down 15% year over year.

Speaker 3

We ended the quarter with 6,007 Dice recruitment package customers, which is down 3% from last quarter and down 6% year over year. Our average annual revenue per Dice recruitment package customer was down 1% sequentially and up 9% year over year to $15,534 Approximately 90% of Dice revenue is recurring and comes from annual or multi year contracts. For the quarter, our Dice revenue renewal rate was 84% and our retention rate was 101%. ClearanceJobs revenue was $12,300,000 up 5% sequentially and 20% year over year. Bookings for CJ were $10,500,000 up 8% year over year.

Speaker 3

We ended the 2nd quarter with 2,0 Our average annual revenue per CK recruitment package customer was up 2% over last quarter and up 11% year over year to $20,842 Approximately 90% of CJ revenue is recurring and comes from annual contracts. For the quarter, our CJ revenue renewal rate was 90% and CJ's retention rate was strong at 110%. The outstanding retention rate demonstrates the continued value CJ delivers in the recruitment of cleared professionals. Turning to operating expenses. 2nd quarter operating expenses were $38,600,000 compared to $36,200,000 in the year ago quarter.

Speaker 3

This quarter includes $2,100,000 in restructuring charges. The restructuring included a reduction of our workforce by approximately 10% and is expected to generate annual cost savings of approximately 8 to $10,000,000 Excluding the restructuring charges, operating expenses were approximately flat year over year. We estimate that total restructuring charges will be approximately related to the acceleration of share based awards. Approximately $600,000 of the $2,000,000 in severance and benefits was paid in the Q2 with the remaining $1,400,000 to be paid through the remainder of 2023. We anticipate the full effect of the restructurings will be visible when we announce our Q3 results.

Speaker 3

For the quarter, we had an income tax benefit of $677,000 on a loss before taxes of $804,000 Our tax rate for the quarter differed from our normal expected rate of 25% due primarily to a tax benefit from research tax We recorded a net loss of $127,000 or $0.00 per diluted share. For the prior year quarter, we reported net income of $1,500,000 or $0.03 per diluted share. Adjusted diluted earnings per share for the quarter was $0.02 compared to $0.01 for the prior year quarter. Diluted shares outstanding for the quarter were 43,500,000 compared to 47,000,000 in the prior year quarter. Adjusted EBITDA for the 2nd quarter increased 12% to $8,700,000 a margin of 23% compared to $7,800,000 and a margin of 21% in the Q2 a year ago.

Speaker 3

Operating cash flow for the Q2 was $8,100,000 which was $2,200,000 lower than the prior year period. From a liquidity perspective, at the end of the quarter, we had $2,700,000 in cash and total debt of $43,000,000 outstanding under our $100,000,000 revolver. Total debt outstanding decreased $3,000,000 from the $46,000,000 at the end of the Q1. We continue to target approximately 1x leverage for the business. Deferred revenue at the end of the quarter was $53,400,000 down 1% from the Q2 of last year.

Speaker 3

Our total committed contract backlog at the end of the quarter was $118,000,000 which was up 13% from the end of the second quarter last year. Short term backlog was $93,200,000 at the end of the second quarter, an increase of $7,000,000 or 8% year over year. Long term backlog that is revenue to be recognized in 13 or more months was $24,600,000 at the end of the quarter, an increase of $6,700,000 or 37% from the prior year. During the quarter, under our share buyback program, we purchased approximately 920,000 shares for $3,400,000 at an average price of $3.69 per share. As a reminder, our current $10,000,000 program began in the Q1 and runs through February 2024.

Speaker 3

Of the $10,000,000 authorized, dollars 4,800,000 remained available under the program at the end of the quarter. As Art mentioned, the current economic uncertainty continues to impact our new business teams. As such, we now expect our full year 2023 total revenue to grow in the range of 3% to 4% with 3rd quarter revenue expected to be flat year over year. Given the current environment, we will continue to manage our expenses closely as we focus on EBITDA and cash flow for the balance of the year. For the Q3, we expect adjusted EBITDA margins of approximately 24% with margins expected to expand to 25% as we exit the year.

Speaker 3

To wrap up, While the current hiring environment is impacting our growth, we expect companies across all industries to continue their investment in technology initiatives, which will drive increased demand for our products and services as the economy improves. In the meantime, we are focused on improving our industry leading offerings and our go to market execution, while doing so in a more efficient and profitable manner. And with that, let me turn the call back to Art.

Speaker 2

Thank you, Kevin. I'd like to thank all of our employees again for their hard work this past quarter. It is a pleasure to be part of such a great team. With that, We're happy to take your questions.

Operator

Our first question comes from Zach Cummins with B. Riley. Please go ahead.

Speaker 4

Hi. Can you guys hear me?

Speaker 3

We sure can. Yes.

Speaker 4

Yes. Thanks for taking my question. And I was wondering if you could Provide additional disclosure about the bookings and the renewal assumptions for the Q3 going forward?

Speaker 3

We don't provide the specific bookings or renewal assumptions. We do provide revenue guidance, which is that Roughly flat year over year revenue growth?

Speaker 4

Yes, yes. Okay. Thank you. You're welcome. And do you mind also discuss a little bit about the feedbacks that you've been hearing from customers regarding the tech hiring needs and how going forward the sentiment is going to change?

Speaker 4

Thank you.

Speaker 2

Absolutely. So I'll take that one. And the answer is, if you looked at the CompTIA job posting statistics For the first half of twenty twenty three and compared them to the exact same period last year, you would see that The number of tech postings is down 49%. It's actually larger in terms of that dip For the Q2, it's 52%. I do believe that a lot of companies are Scrutinizing their hiring plans in general, but especially for technology professionals because they're relatively expensive.

Speaker 2

If you looked at our salary report In January of this year, you'd note that the average tech professional salary compensation is about $111,000 So I think that people are being cautious. I do believe that the comps become easier over the course of the rest of this year in terms of That swing of tech job postings, but our job really is to make sure that we're focused on those industries that are still hiring aggressively. And as I mentioned in my portion of the discussion, We believe those continue to be aerospace, business consulting, banking and also the healthcare industry. And we have seen hiring patterns continue aggressively in those industries. It's just that it's not all of the 16 industries that we normally track.

Speaker 2

And I'd say that our overall pipeline volume is down compared to last year. So again, that's how I would describe the overall environment. I do believe that as we get closer to the end of the year, companies start to solidify their plans for Their budgets and therefore they start to hire again according to those plans. So we have to wait and see How people view 2024, but it seems to be getting better from the economic statistics that are rolling in each day. Sorry for my long winded answer.

Speaker 4

Got it. Got it. Thank you. Thanks for the answer. And my last question will be, You mentioned a little bit about the structure changes to your sales team.

Speaker 4

And I was wondering if you could talk a little bit about how that is going to change The growth in the company or the model moving forward? And that's it. Thank you.

Speaker 2

I think, well, I appreciate that question. As part of our restructure, We did terminate, eliminate certain sales positions. They were for the most part all in Dice Commercial accounts, new business teams. And that's because we were seeing a softening a significant softening of demand in that Team specifically, we have 3 different new business teams. Those are the ClearanceJobs new business team, Dice Commercial Accounts new business team and the Dice Staffing, Recruiting, Consulting, new business team.

Speaker 2

I think there might have been a couple of terminations that were to those other teams, but it was almost entirely focused on the commercial accounts team again because of the softness in pipelines, Softness in demand that we're seeing in the environment currently.

Speaker 4

Got it. Thank you.

Speaker 2

Thank you.

Operator

Excuse me. The next question is from Gary Prestopino with Barrington Research. Please go ahead.

Speaker 5

Hi, Art and Kevin.

Speaker 2

How are you? Hey, great. Fantastic. How about yourself, Gary?

Speaker 5

No, just trying to get through earnings season It's Brian. Anyway, interesting statistics that postings were down 49%, I believe you are 52% in Q2 for TechJobs. Correct. And it looks like if I I'm

Speaker 3

sorry?

Speaker 2

It was at a real peak last year. There was a real, I'd say, aggressive push to hire technology professionals coming out of COVID. I mean, it's kind of hard COVID effects of the economy and a big push in the 2nd quarter where even in the month of May, which was the peak, we almost got to 700,000 Tech job postings and that compares to roughly bumping around in 200,000 to 250,000 tech job postings this year each month.

Speaker 5

So I guess the question I would have is all the metrics that you give, I mean, I'm looking at them, Dice was down 15% in bookings, Postings were down 52%. I mean, does that infer that Despite what's going on here, you are still gaining market share in a market that for the time being is drastically declining. And then the other question I would have is or dramatically declining, I'm sorry. The other question I have, how much of this is really The accounts that are $10,000 or less, you did mention that the Dice recurring revenue was up And more of the program revenue was the one that hit you. So I know there's a lot there to unpack, but could you maybe comment on that?

Speaker 2

No, those are the right questions. I'll tell you that the way I look at it is that we have gained some market share during this period of time, like You said comparing our booking statistics to the number of tech postings that have declined year over year. I'd say the bigger kind of drivers for our business model have been our recurring Account management team's ability to renew customers, so it's a lot easier and you see those it Show up in the statistics to renew a customer when they've already experienced, dice or clearance jobs. Our revenue renewal rates are fairly, I'd say, very reasonable and our retention rates are very reasonable. Really, the part Of the business that's being repressed, depressed is the new business activity and specific to commercial accounts.

Speaker 2

I think it's a lot more difficult to sell a CFO and the CFOs are getting involved with these discussions this year When the item hasn't been budgeted in 2023 and you have to show that there is your value proposition without them having So that's really the phenomena that we're seeing today. We're seeing account management Successfully renewing customers that have enjoyed Dice service for years, it's a lot tougher to Convince a new customer that's not experienced Dice that you should be on the platform and it solves an immediate urgent need. I'd also say one of the things that is very apparent from this quarter's bookings is that we lost about half of our Traditional transactional revenue that we would book in a quarter. I view transactional revenue, and that is Those dollars associated with pilots and sourcing services, our career events to be Problem solving revenues revenue and transactional revenue that is associated with urgency and there's just less urgency in terms of hiring right now. So again, we also saw a dip in transactional revenue that affected our performance and results

Speaker 3

That we're releasing today. Okay.

Speaker 5

And then in terms of the expense recapture, How does that how is that going to run Kevin? I mean, if you do $8,000,000 should we look at it $2,000,000 next quarter, dollars 2,000,000 in Q4 and then $2,000,000 in the 1st 2 quarters of this year. Is that a good way to think about it?

Speaker 3

Yes, it is because the vast majority of that restructuring was related to Reducing headcount and so that's exactly it, dollars 8,000,000 to $10,000,000 a year would be $2,000,000 to $2,500,000 a quarter. So that's exactly right.

Speaker 5

Okay. And then lastly for me, it's always hard when companies go through these kind of things. Believe me, I've been through a lot of them myself. As far as the sales force outside of the new business teams or new business team, Are you still allowing the sales people to go out, travel, meet with the clients? Has anything changed there except maybe staying at less expensive hotels, for instance, things of that nature?

Speaker 2

No, we are absolutely allowing our sales team to visit customers, visit prospects and we encourage it. And there really has been a shift in mentality, I'd say, with a lot of customers and prospects where they would Hey, this has worked in the last couple of years just doing this virtually, so don't you don't have to make the extra effort. But we strongly encourage our sales To make that extra effort, we believe that these in person meetings allow for a much richer discussion and better relationships ultimately.

Speaker 3

Okay. Thank you.

Speaker 2

Thank you, Gary. Really appreciate it.

Operator

The next question is from Kevin Manthey with Lake Street Capital. Please go ahead.

Speaker 5

Hey, guys. Thanks for taking my questions. Maybe going back to the first one on the renewal rates, And I know you can't you don't give guidance around that, but was there a cadence you saw in the quarter on the 85% 90% of those get better as the quarter progressed or they kind of Maintained those rates throughout the quarter.

Speaker 3

They were pretty much consistent with Each month throughout the quarter, we had talked about it last quarter that we started to see a little bit of a dip towards the end of the quarter. So kind of that March to April to May to June, It was pretty consistent across the months.

Speaker 5

Okay. Thanks. And then I guess secondarily on clearance jobs in the opening remarks You guys have talked about potential benefits from the increased defense spending and alike. Have you started to see that? Or is that still Months or quarters away or is that something you've seen in the past where the spending goes up and then the green shoots follow or help me understand that a little more?

Speaker 2

So, yes, that's a great question. And let me break it down by saying the big picture is that ClearanceJobs has traditionally not been correlated with GBV growth. It's just been correlated with the status of the defense budget. So if the defense budget traditionally grew at about 3% to 4%, We knew that ClearanceJobs still had strong growth prospects built into that next sales year. In this particular case, we had a situation where the defense budget was actually signed by President Biden in December.

Speaker 2

So it took a little while for it to actually get signed. When it did, Congress overrode the President's Request for a budget and basically doubled it, saying that, no, we'd like you to spend 10% more this next year. Now that all sounds great. We came into 2023 feeling pretty good. The procurement process had to kind of startup at that point.

Speaker 2

And nevertheless, what we saw was Even though projects were now being let to contractors, they were being put out for bid. The contractors were very cautious about their hiring plans in advance of getting these projects signed with the government. And the reason being is that They all believe that if the debt negotiations stalled out, the government would take the action of Slow pain, the contractors because that's one way that they could have preserved their funds. And we believe that, that's Turning right now, are we seeing start evidence of it? No, I still think it's a little bit slow compared to where it should be.

Speaker 2

But we do believe that ultimately contracts are going to win awards. They're going to need cleared professionals to fulfill the work And that's the basis of our value proposition. So again, it really comes down to the question of When are these contracts awarded? If we see a spurt in the award of the contracts, that really means that ClearanceJobs becomes An invaluable tool to bring the people on and then paradoxically, they're going to want people immediately. It's almost a binary function.

Speaker 2

Contractors, when they win a new award, they generally want tens to hundreds of Individuals as quickly as they can because they're under the clock now to essentially deliver on whatever service or product that Day 1 is part of the procurement cycle.

Speaker 5

Understood. Thanks a lot guys.

Speaker 2

Thank you. Excellent question, Kevin. I really appreciate it.

Operator

The next question is from Kevin Liu with K. Liu and Company. Please go ahead.

Speaker 6

Hey, good afternoon guys. I actually wanted to follow-up on that clearance job topic. Art, you also mentioned that the debt ceiling negotiations did have an impact in the quarter. Was that related more to what you were just speaking about now in terms of the contractors not moving aggressively with hiring? Or did you guys see any sort of impact

Speaker 2

A pipeline that grew over the quarter that people were not willing to sign the contracts. And they were waiting for The debt negotiations to be done and or for the projects that they were bidding on to be awarded. And so We do believe that the pipeline itself is very healthy. And now it's a matter of getting these projects won so that we can effectively go to the Winning bidder and say we've got a solution for how to staff up that particular project and move forward with the program.

Speaker 6

Understood. Were there any renewal opportunities in there that were impacted or does this all relate to kind of new business for CJ?

Speaker 2

No, I'd say that the renewal rate really held up very well. And I would say retention rate, which is the contract value post the renewal Activity actually was 110%. We consider that to be very, very strong In terms of performance, so I would say existing customers stayed with us and they took Larger contracts as they have done traditionally over the past several quarters. So renewal activity is really associated with ongoing projects And new business is associated with new awarded projects, and that's where we were seeing a little bit of a deficit.

Speaker 6

Makes sense. And then switching over to the Dice side, obviously, it's a challenging environment out there. I was wondering if The softness is more pronounced with kind of your IT staffing base versus your commercial accounts or if you're seeing more pronounced weakness in either of those groups?

Speaker 2

That's a great question. I would say it is definitely affecting the Commercial Accounts new business team much more so than Staff Recruiting Consulting new business team. And in fact, we didn't perform to our intended levels for the staffing recruiting New business team, but I describe it as one of the better performing new business teams when I talk about it internally. And I think It logically makes sense that if you're a commercial accounts customer, and you want to take less risk In terms of your hiring plans, you can go to a staffing recruiting agency and that person would show up in 1 to 2 weeks and you can Either retain that person through the staffing recruiting agency or decide to dismiss them if you get into any kind of trouble. So it's a way of derisking your Hiring in general in an uncertain time.

Speaker 2

And so again, we've seen relatively stronger performance for the staffing recruiting new business team, Even in Q2.

Speaker 6

Understood. And then just in terms of the new corporate branded offering that you guys have announced over This year, I was wondering how the pipeline has built up for that and kind of customers' appetite to move forward with opportunities as this year progresses?

Speaker 2

So I'd say that the customers' appetite still remains strong. And nevertheless, because of the caution that's in the environment in the hiring cycle, What we've done is we've started to bundle these branding products in with a basic subscription. And we're not seeing the, I would say the subscription price that we wanted for branding itself and company profiles, but we think that that's the right thing to do at this point to make sure that people see the value of it. And then as the economic cycle and expansion happens in the future, We could essentially adjust those prices upward to where they should be.

Speaker 6

Great. And then just lastly for me, it looked like Cash deployment was pretty evenly split between buybacks and debt pay downs this quarter. Can you just talk about

Speaker 3

Sure. Our Buyback program is grid based and it's also based on average daily trading volume. So it's really dictated by the market and how the stock performs. So we will Continue to evaluate the volatility of our stock. We're also very aware that The cost of debt has gone up 2.5, 3 fold versus 18 months ago.

Speaker 3

And so We look at that, I would say, on a very frequent basis as far as what the best use of capital is in this environment, paying back debt We're buying back shares and we don't have any specific plan other than we do evaluate it frequently and we will allocate to what we think has the highest ROI.

Speaker 6

Understood. Thanks for taking the question.

Speaker 2

Thank you, Kevin.

Operator

The next question is a follow-up from Gary Prestopino with Barrington Research.

Speaker 5

I just kind of looked at your guidance for revenues and what And back of the envelope, it doesn't really look like at least I have to lower my EBITDA numbers for the year. I guess the question I have and again these are my numbers, but just in terms of how you're going to run the company on a go forward basis, I It always seems you had the ability to flex the margins with your expenditures. I mean, are you taking another tack on here that When things turn around that possibly you could do more with less and maybe look at the expense Structure a little more stringently to try and drive more margin expansion?

Speaker 2

Yes, absolutely. I think that's a perfect interpretation. We believe that the restructuring that we did in the month of May actually makes us more efficient as a Technology organization and technology was really 75, threefour of the restructuring that we did in terms of the people count. And so we have actually experienced a better team dynamic. We've experienced a more efficient release process.

Speaker 2

And so we do believe that, that is very, very possible to move forward with that expense structure as we grow the company again.

Speaker 5

Thank you. Thank you, Gary.

Operator

This concludes our question and answer session. I would like to turn the Back over to Art Zayle for any closing remarks.

Speaker 2

Yes. Thank you. And thanks To everyone for joining us today. As always, if you have any questions about our company or would like to speak with management, please reach out to Todd Kehrli and he will help arrange a meeting. Thanks for your interest in DHI Group, and have yourself a great day.

Operator

The conference is now concluded. Thank you for attending today's presentation. You may now

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DHI Group Q2 2023
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