DHI Group Q1 Earnings Call Highlights

DHI Group NYSE: DHX reported first-quarter 2026 results that reflected continued growth at ClearanceJobs and improved profitability, even as total company revenue and bookings declined year-over-year due to ongoing weakness at Dice. Management pointed to signs of stabilization in the tech hiring market, strong free cash flow generation, and momentum tied to increased defense spending as key themes in the quarter.

Management highlights: ClearanceJobs growth and early traction on new initiatives

CEO Art Zeile said DHI’s strategy centers on connecting employers with highly skilled tech professionals through two platforms: ClearanceJobs, focused on professionals with active U.S. security clearances, and Dice, a skills-based platform for broader tech recruiting.

Zeile described ClearanceJobs as DHI’s “primary growth engine,” reporting first-quarter revenue growth of 5% and bookings growth of 7% year-over-year. He also cited a 40% adjusted EBITDA margin for the segment. Zeile said customer sentiment improved after the U.S. defense budget passed in late January, noting that hiring activity typically lags budget approval but that engagement and demand trends were strengthening.

Zeile highlighted the “$1 trillion U.S. defense budget for fiscal year 2026” and said NATO countries’ plans to increase defense spending could create additional demand for cleared talent. He added that ClearanceJobs’ large candidate base and long-standing contractor relationships create what he called a meaningful opportunity as contractors staff new projects.

During the quarter, DHI acquired Point Solutions Group (PSG), which Zeile said supports its “Expand the Mission” strategy to move into adjacent services. He said early results were encouraging, including increases in contractors deployed and growth in active contracts with major prime contractors, though he emphasized it is still early in the integration.

Zeile also discussed progress in other initiatives:

• AgileATS: Zeile said the business remains modest in scale but is “consistently adding customers,” with increased sales investment to support growth.
• Premium candidate subscription (ClearanceJobs): Zeile said adoption has “surpassed expectations” since its mid-February launch, with “quick growth in paid subscribers,” though near-term revenue impact is modest.

Dice: stabilization signals, but bookings recovery not yet evident

On Dice, Zeile said the company is “beginning to see the signs of stabilization in the tech hiring market,” pointing to improving leading indicators like job postings and customer activity. He cited CompTIA data indicating more than 537,000 tech job postings in March, including 254,000 new postings, up 19% year-over-year.

However, Zeile said DHI was “not yet seeing a recovery in Dice bookings,” though he called trend lines encouraging. He also framed artificial intelligence as a key long-term demand driver, stating that as of March 2026, 67% of U.S. tech job postings required AI-related skills, up from 29% a year earlier, and that postings requiring machine learning skills increased 167% over the same period.

Zeile said Dice’s skills-based model helps employers identify candidates based on more than 360 AI-related skills, rather than treating AI as one category. He also noted product work tied to AI, including Dice being “the first career platform with a Claude connector.”

In the Q&A, Zeile said the job-posting data is a leading indicator and suggested bookings improvement could “play out over the course of the year,” with renewals later in 2026 potentially factoring in improving demand. He also referenced staffing industry commentary that IT staffing is “turning the corner,” and said employers may increasingly favor temporary hires through staffing firms over permanent hiring in the current environment.

Financial results: segment performance, profitability, and cash flow

CFO Greg Schippers said that while total revenue and bookings declined year-over-year, results showed “solid adjusted EBITDA growth and margin expansion,” supported by ClearanceJobs growth and improved efficiency.

ClearanceJobs: Schippers reported revenue of $14.0 million (up 5% year-over-year) and bookings of $18.0 million (up 7%). PSG contributed $700,000 of revenue and bookings in the quarter. The company ended the quarter with 1,741 ClearanceJobs Recruitment Package customers, down 8% year-over-year and down 2% sequentially. Average annual revenue per customer rose 6% year-over-year to $27,286. Schippers said the segment’s revenue renewal rate was 88% and retention rate was 105%, noting the renewal rate was pressured by a customer with annual spend above $500,000 that did not renew in the quarter but is expected to return later in the year.

Dice: Dice revenue was $15.7 million, down 17% year-over-year and down 10% sequentially, while bookings were $20.2 million, down 20% year-over-year. Customer count ended at 3,832 Dice recruitment package customers, down 7% sequentially and down 15% year-over-year. Schippers said Dice’s revenue renewal rate was 71% and retention rate was 100%. He attributed churn primarily to smaller customers spending less than $15,000 annually, which he said represented 80% of churn on count and are more exposed to macro uncertainty. He said a newer Dice platform with monthly subscriptions is intended to lower upfront commitment and improve affordability for smaller accounts.

Schippers also reported deferred revenue of $44.5 million (down 12% year-over-year) and total committed contract backlog of $99.0 million (down 8%), including $77.2 million of short-term backlog and $21.8 million of long-term backlog.

On expenses, Schippers said operating expenses decreased $15.0 million, or 36%, to $26.6 million, citing efficiency improvements and cost actions taken during the difficult market environment.

DHI reported net income of $1.5 million, or $0.04 per diluted share, compared with a net loss of $9.8 million, or $0.21 per diluted share, in the year-ago quarter. Schippers noted the prior-year quarter included a $7.8 million Dice goodwill impairment charge and a $2.3 million restructuring charge. Non-GAAP earnings per share was $0.08 versus $0.04 a year earlier.

Adjusted EBITDA was $8.1 million (27% margin), up from $7.0 million (22% margin) a year ago. By segment, Schippers reported ClearanceJobs adjusted EBITDA of $5.7 million (40% margin) and Dice adjusted EBITDA of $4.3 million (28% margin), up from $3.4 million (18% margin) last year.

Cash generation improved sharply. Operating cash flow was $8.4 million versus $2.2 million a year earlier, and free cash flow was $6.8 million versus $88,000 in the prior-year quarter. Capital expenditures were $1.6 million, which Schippers said consisted primarily of capitalized development costs.

Balance sheet, buybacks, and acquisition impact

Schippers said DHI ended the quarter with $3.0 million in cash and total debt of $33 million, up $3 million sequentially. He noted the quarter included $5 million of cash outlay for PSG and $4.7 million for repurchasing 2 million shares. Leverage was 0.91x adjusted EBITDA, and Schippers reiterated the company’s target of 1x leverage.

Management also discussed capital returns. Zeile reminded investors the board approved a $10 million share repurchase program in the first quarter, and Schippers said $6.4 million remained available at quarter-end.

In response to an analyst question about PSG’s expected contribution, Schippers said the full-year revenue guidance implies an uplift of roughly $6 million for the 10-month period following the end-of-February closing.

Guidance: bookings growth expected at ClearanceJobs, Dice recovery dependent on tech hiring

Looking ahead, Schippers said the company continues to expect ClearanceJobs bookings to grow in 2026, while Dice bookings growth is not expected to resume until tech hiring improves.

For full-year 2026, DHI guided to revenue of $124 million to $128 million, with second-quarter revenue expected to be $30 million to $32 million. By segment, DHI expects both ClearanceJobs and Dice to deliver $62 million to $64 million of revenue for the full year, and each to generate $15 million to $16 million in the second quarter.

On profitability, Schippers said DHI continues to target a full-year adjusted EBITDA margin of 25%, including 40% for ClearanceJobs and 22% for Dice, and aims for free cash flow averaging “at or above 10% of revenues.”

In the Q&A, Zeile said DHI is remaining conservative on sales and marketing investments, though he indicated ClearanceJobs would be the more likely area for incremental hiring and marketing spend given the defense budget signal. Schippers added that the company has additional marketing investment planned for Dice tied to its self-service platform and digital experience efforts later in the year.

About DHI Group NYSE: DHX

DHI Group, Inc NYSE: DHX is a specialized professional recruitment and career development company that operates digital platforms connecting technology and security-cleared professionals with employers worldwide. Founded in 1990 as a niche job board for technology talent, the company completed its initial public offering in 2007 and trades on the New York Stock Exchange under the ticker symbol DHX.

The company's primary offerings include Dice.com, a careers platform designed for technology professionals, and ClearanceJobs, a specialized service catering to candidates holding U.S.

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