DHI Group First Quarter Revenue Increases 12% Year Over Year as Renewal and Retention Rates Remain Strong
CENTENNIAL, Colorado, May 10, 2023 - DHI Group, Inc. (NYSE: DHX) (“DHI” or the “Company”) today announced financial results for the first quarter ended March 31, 2023.
First Quarter 2023 Financial Highlights(1)
▪Total revenue was $38.6 million, up 12% year over year.
▪Total bookings were $53.6 million, up 6% year over year.
▪Net income was $0.5 million, or $0.01 per diluted share, a net income margin of 1%, compared to net income of $1.3 million, or $0.03 per diluted share, a net income margin of 4%, in the year-ago quarter. Adjusted Diluted Earnings Per Share for the quarter was $0.00, versus $0.01 in the year-ago quarter.
▪Adjusted EBITDA was $8.1 million, up 16% year over year, and Adjusted EBITDA Margin was 21%, up from 20% in the year-ago quarter.
▪Cash flow from operations was $0.0 million.
▪Cash was $5.4 million and total debt was $46.0 million at quarter end.
(1) See definition of bookings and see "Notes Regarding the Use of Non-GAAP Financial Measures" related to Adjusted EBITDA, Adjusted EBITDA Margin, and Adjusted Diluted Earnings Per Share later in this press release.
Commenting on the first quarter, Art Zeile, President and CEO of DHI Group, said:
"For the first quarter, employers in the U.S. posted job openings for approximately 813,000 tech jobs, and the tech unemployment rate for April remained near all-time lows at 2.3%, with approximately two job openings for every one tech worker looking for employment. Even in this difficult macro environment, there continues to be significant demand for technologists across all industries as companies continue to invest in technology initiatives.
"Our first quarter results highlight the fact that our existing customers continue to find value in our subscription offerings as they rely on our offerings to find, attract and hire the best technologists for their job openings. Our revenue renewal rates for Dice and ClearanceJobs remained strong in the mid-90s, and our retention rates remained over 100% as we continued to expand within existing customers. In fact, our average annual revenue per recruitment package customer for both Dice and ClearanceJobs increased in the first quarter, both sequentially and year over year in the first quarter.
"While our new business teams are still seeing longer sales cycles as a result of the current uncertainty in the U.S. economy, we did sign on several large new customers during the first quarter, including Edward Jones, Bechtel, and the Department of Transportation, highlighting the value proposition for our offering among non-tech companies that are looking to hire tech professionals.
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"During the quarter, we continued to invest in our industry-leading products, as the total addressable market for our subscription-based offerings remains at over $1 billion in annual spend, and we believe we are just scratching the surface."
Commenting on the first quarter and 2023 guidance, Kevin Bostick, CFO of DHI Group, said:
"As Art mentioned, the current economic uncertainty continues to lengthen our sales cycles and impact our Dice new business. As such, for 2023, we now expect total revenue for the year to grow 5% - 6%, with second quarter revenue expected to grow 4% - 5% year over year. With the current economic environment, we are focusing on the expense side of our business and expect our Adjusted EBITDA margin to increase in the second half of the year and reach 25% as we exit the year. We also expect to reduce our debt outstanding throughout the year."
Conference Call Information
Art Zeile, President and Chief Executive Officer, and Kevin Bostick, Chief Financial Officer, will host a conference call today, May 10, 2023, at 5:00 p.m. Eastern Time to discuss the Company’s financial results and recent developments.
The call can be accessed by dialing 844-890-1790 (in the U.S.) or 412-380-7407 (outside the U.S.). Please ask to be placed into the DHI Group, Inc. call. A live webcast of the call will simultaneously be available through the Investor Relations section of the Company’s website, https://www.dhigroupinc.com, and available for replay after the call ends.
About DHI Group, Inc.
DHI Group, Inc (NYSE: DHX) is a provider of AI-powered career marketplaces that focus on technology roles. DHI’s two brands, Dice and ClearanceJobs, enable recruiters and hiring managers to efficiently search for and connect with highly skilled technology professionals based on the skills requested. The Company’s patented algorithm manages over 100,000 unique technology skills. Additionally, our marketplaces allow tech professionals to find their ideal next career opportunity, with relevant advice and personalized insights. Learn more at www.dhigroupinc.com.
Forward-Looking Statements
This press release and oral statements made from time to time by our representatives contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. You should not place undue reliance on those statements because they are subject to numerous uncertainties and factors relating to our operations and business environment, all of which are difficult to predict and many of which are beyond our control. Forward-looking statements include, without limitation, information concerning our possible or assumed future financial condition, liquidity and results of operations, including expectations (financial or otherwise), our strategy, plans, objectives, expectations (financial or otherwise) and intentions, growth potential, and statements regarding our 2023 financial outlook. These statements often include words such as “may,” “will,” “should,” “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate” or similar expressions. These statements are based on assumptions that we have made in light of our experience in the industry as well as our perceptions of historical trends, current conditions, expected future developments and other factors we believe are appropriate under the circumstances. Although we believe that these forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect our actual financial results
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or results of operations and could cause actual results to differ materially from those in the forward-looking statements. These factors include, but are not limited to, our ability to execute our tech-focused strategy, competition from existing and future competitors in the highly competitive markets in which we operate, failure to adapt our business model to keep pace with rapid changes in the recruiting and career services business, failure to maintain and develop our reputation and brand recognition, failure to increase or maintain the number of customers who purchase recruitment packages, cyclicality or downturns in the economy or industries we serve, uncertainty in respect to the regulation of data protection and data privacy, failure to attract qualified professionals to our websites or grow the number of qualified professionals who use our websites, failure to successfully identify or integrate acquisitions, U.S. and foreign government regulation of the Internet and taxation, our ability to borrow funds under our revolving credit facility or refinance our indebtedness and restrictions on our current and future operations under such indebtedness. These factors and others are discussed in more detail in the Company’s filings with the Securities and Exchange Commission, all of which are available on the Investors page of our website at www.dhigroupinc.com, including the Company’s most recently filed periodic reports on Form 10-K and Form 10-Q and subsequent filings under the headings “Risk Factors,” “Forward-Looking Statements” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” You should keep in mind that any forward-looking statement made by the Company or its representatives herein, or elsewhere, speaks only as of the date on which it is made. New risks and uncertainties come up from time to time, and it is impossible to predict these events or how they may affect us. We have no obligation to update any forward-looking statements after the date hereof, except as required by applicable federal securities laws.
Investor Contact
Todd Kehrli or Jim Byers
MKR Investor Relations, Inc.
212-448-4181
ir@dhigroupinc.com
Media Contact
Rachel Ceccarelli
VP of Engagement
212-448-8288
media@dhigroupinc.com
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Notes Regarding the Use of Non-GAAP Financial Measures
The Company has provided certain non-GAAP financial information as additional information for its operating results. These measures are not in accordance with, or alternatives to, measures in accordance with generally accepted accounting principles in the United States (“GAAP”) and may be different from similarly titled non-GAAP measures reported by other companies. The Company believes that its presentation of non-GAAP measures, such as Adjusted EBITDA, Adjusted EBITDA Margin, and Adjusted Diluted Earnings Per Share provides useful information to management and investors regarding certain financial and business trends relating to its financial condition and results of operations. In addition, the Company’s management uses these measures for reviewing the financial results of the Company and for budgeting and planning purposes. Non-GAAP results exclude the impact of items that management believes affect the comparability or underlying business trends in our condensed consolidated financial statements in the periods presented. The non-GAAP measures apply to consolidated results or other measures as shown within this document. The Company has provided required reconciliations to the most comparable GAAP measures elsewhere in the document.
Adjusted Diluted Earnings Per Share
Adjusted Diluted Earnings Per Share is a non-GAAP performance measure that management believes is useful to investors and management in understanding our ongoing operations and in the analysis of operating trends. Adjusted Diluted Earnings Per Share is computed as diluted earnings per share plus or minus the impacts of certain non-cash and other items, including impairments, costs related to reorganizing the Company, including severance and related costs, gains or losses on investments, proceeds from settlement, and discrete tax items.
Adjusted Diluted Earnings Per Share is not a measurement of our financial performance under GAAP and should not be considered as an alternative to diluted earnings per share, net income, or any other performance measures derived in accordance with GAAP as a measure of our profitability.
Adjusted EBITDA and Adjusted EBITDA Margin
Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP measures used by management to measure operating performance. Management uses Adjusted EBITDA and Adjusted EBITDA Margin as performance measures for internal monitoring and planning, including preparation of annual budgets, analyzing investment decisions and evaluating profitability and performance comparisons between us and our competitors. The Company also uses these measures to calculate amounts of performance based compensation under the senior management incentive bonus program. Adjusted EBITDA represents net income plus (to the extent deducted in calculating such net income) interest expense, income tax expense, depreciation and amortization, and items such as non-cash stock-based compensation, losses resulting from certain dispositions outside the ordinary course of business including prior negative operating results of those divested businesses, certain write-offs in connection with indebtedness, impairment charges with respect to long-lived assets, expenses incurred in connection with an equity offering or any other offering of securities by the Company, extraordinary or non-recurring non-cash expenses or losses, losses from equity method investments, transaction costs in connection with the credit agreement, deferred revenues written off in connection with acquisition purchase accounting adjustments, write-off of non-cash stock-based compensation expense, severance and retention costs related to dispositions and reorganizations of the Company, and losses related to legal claims and fees that are unusual in nature or infrequent, minus (to the extent included in calculating such net income) non-cash income or gains, including income from equity method investments, interest income, business interruption insurance proceeds, and any income or gain resulting from certain dispositions outside the ordinary course of business, including prior positive
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operating results of those divested businesses, and gains related to legal claims that are unusual in nature or infrequent.
Adjusted EBITDA Margin is computed as Adjusted EBITDA divided by Revenues.
We also consider Adjusted EBITDA and Adjusted EBITDA Margin, as defined above, to be important indicators to investors because they provide information related to our ability to provide cash flows to meet future debt service, capital expenditures, working capital requirements, and to fund future growth. We present Adjusted EBITDA and Adjusted EBITDA Margin as supplemental performance measures because we believe that these measures provide our board of directors, management and investors with additional information to measure our performance, provide comparisons from period to period by excluding potential differences caused by variations in capital structures (affecting interest expense) and tax positions (such as the impact on periods or companies of changes in effective tax rates or net operating losses), and to estimate our value.
We understand that although Adjusted EBITDA and Adjusted EBITDA Margin are frequently used by securities analysts, lenders and others in their evaluation of companies, Adjusted EBITDA and Adjusted EBITDA Margin have limitations as analytical tools, and you should not consider them in isolation, or as a substitute for analysis of our liquidity or results as reported under GAAP. Some limitations are:
•Adjusted EBITDA and Adjusted EBITDA Margin do not reflect our cash expenditures, or future requirements for capital expenditures or contractual commitments;
•Adjusted EBITDA and Adjusted EBITDA Margin do not reflect changes in, or cash requirements for, our working capital needs;
•Adjusted EBITDA and Adjusted EBITDA Margin do not reflect interest expense, or the cash requirements necessary to service interest or principal payments on our debt;
•Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized often will have to be replaced in the future, and Adjusted EBITDA and Adjusted EBITDA Margin do not reflect any cash requirements for such replacements; and
•Other companies in our industry may calculate Adjusted EBITDA and Adjusted EBITDA Margin differently than we do, limiting their usefulness as comparative measures.
To compensate for these limitations, management evaluates our liquidity by considering the economic effect of excluded expense items independently, as well as in connection with its analysis of cash flows from operations and through the use of other financial measures, such as capital expenditure budget variances, investment spending levels and return on capital analysis.
Adjusted EBITDA and Adjusted EBITDA Margin are not measurements of our financial performance under GAAP and should not be considered as an alternative to revenue, operating income, net income, net income margin, cash provided by operating activities, or any other performance measures derived in accordance with GAAP as a measure of our profitability or liquidity.
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| DHI GROUP, INC. | ||||||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| (in thousands, except per share amounts) | ||||||||||||||||||||
| For the three months ended March 31, | ||||||||||||||||||||
| 2023 | 2022 | |||||||||||||||||||
| Revenues | $ | 38,620 | $ | 34,334 | ||||||||||||||||
| Operating expenses: | ||||||||||||||||||||
| Cost of revenues | 4,912 | 4,099 | ||||||||||||||||||
| Product development | 4,694 | 3,942 | ||||||||||||||||||
| Sales and marketing | 16,060 | 13,941 | ||||||||||||||||||
| General and administrative | 8,208 | 7,766 | ||||||||||||||||||
| Depreciation | 4,173 | 3,958 | ||||||||||||||||||
| Total operating expenses | 38,047 | 33,706 | ||||||||||||||||||
| Operating income | 573 | 628 | ||||||||||||||||||
| Income from equity method investment | 171 | 155 | ||||||||||||||||||
| Interest expense and other | (798) | (245) | ||||||||||||||||||
| Income (loss) before income taxes | (54) | 538 | ||||||||||||||||||
| Income tax benefit | (514) | (763) | ||||||||||||||||||
| Net income | $ | 460 | $ | 1,301 | ||||||||||||||||
| Basic earnings per share | $ | 0.01 | $ | 0.03 | ||||||||||||||||
| Diluted earnings per share | $ | 0.01 | $ | 0.03 | ||||||||||||||||
| Weighted-average basic shares outstanding | 43,886 | 44,702 | ||||||||||||||||||
| Weighted-average diluted shares outstanding | 45,240 | 47,170 | ||||||||||||||||||
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| DHI GROUP, INC. | |||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||||||||
| (Unaudited) | |||||||||||||||||
| (in thousands) | |||||||||||||||||
| Three Months Ended March 31, | |||||||||||||||||
| 2023 | 2022 | ||||||||||||||||
| Cash flows from (used in) operating activities: | |||||||||||||||||
| Net income | $ | 460 | $ | 1,301 | |||||||||||||
| Adjustments to reconcile net income to net cash flows from (used in) operating activities: | |||||||||||||||||
| Depreciation | 4,173 | 3,958 | |||||||||||||||
| Deferred income taxes | (848) | (1,823) | |||||||||||||||
| Amortization of deferred financing costs | 36 | 37 | |||||||||||||||
| Stock-based compensation | 2,887 | 2,235 | |||||||||||||||
| Income from equity method investment | (171) | (155) | |||||||||||||||
| Change in accrual for unrecognized tax benefits | 60 | 93 | |||||||||||||||
| Changes in operating assets and liabilities: | |||||||||||||||||
| Accounts receivable | (4,153) | (3,820) | |||||||||||||||
| Prepaid expenses and other assets | 279 | 386 | |||||||||||||||
| Capitalized contract costs | 683 | (483) | |||||||||||||||
| Accounts payable and accrued expenses | (11,382) | (3,941) | |||||||||||||||
| Income taxes receivable/payable | 247 | 954 | |||||||||||||||
| Deferred revenue | 7,981 | 10,640 | |||||||||||||||
| Other, net | (241) | (164) | |||||||||||||||
| Net cash flows from operating activities | 11 | 9,218 | |||||||||||||||
| Cash flows from used in investing activities: | |||||||||||||||||
| Purchases of fixed assets | (4,833) | (4,091) | |||||||||||||||
| Net cash flows used in investing activities | (4,833) | (4,091) | |||||||||||||||
| Cash flows from (used in) financing activities: | |||||||||||||||||
| Payments on long-term debt | (3,000) | (4,000) | |||||||||||||||
| Proceeds from long-term debt | 19,000 | 14,000 | |||||||||||||||
| Payments under stock repurchase plan | (3,521) | (7,499) | |||||||||||||||
| Purchase of treasury stock related to vested restricted and performance stock units | (5,295) | (4,202) | |||||||||||||||
| Net cash flows from (used in) financing activities | 7,184 | (1,701) | |||||||||||||||
| Net change in cash and cash equivalents for the period | 2,362 | 3,426 | |||||||||||||||
| Cash and cash equivalents, beginning of period | 3,006 | 1,540 | |||||||||||||||
| Cash and cash equivalents, end of period | $ | 5,368 | $ | 4,966 | |||||||||||||
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| DHI GROUP, INC. | |||||||||||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||||||||||
| (Unaudited) | |||||||||||||||||
| (in thousands) | |||||||||||||||||
| ASSETS | March 31, 2023 | December 31, 2022 | |||||||||||||||
| Current assets | |||||||||||||||||
| Cash and cash equivalents | $ | 5,368 | $ | 3,006 | |||||||||||||
| Accounts receivable, net | 24,980 | 20,494 | |||||||||||||||
| Prepaid and other current assets | 3,815 | 4,294 | |||||||||||||||
| Total current assets | 34,163 | 27,794 | |||||||||||||||
| Fixed assets, net | 21,879 | 21,252 | |||||||||||||||
| Capitalized contract costs | 8,994 | 9,677 | |||||||||||||||
| Operating lease right-of-use assets | 6,088 | 6,581 | |||||||||||||||
| Investments | 5,968 | 5,646 | |||||||||||||||
| Acquired intangible assets | 23,800 | 23,800 | |||||||||||||||
| Goodwill | 128,100 | 128,100 | |||||||||||||||
| Other assets | 4,017 | 3,854 | |||||||||||||||
| Total assets | $ | 233,009 | $ | 226,704 | |||||||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||||||||
| Current liabilities | |||||||||||||||||
| Accounts payable and accrued expenses | $ | 12,403 | $ | 23,818 | |||||||||||||
| Deferred revenue | 58,079 | 50,121 | |||||||||||||||
| Income taxes payable | 280 | 34 | |||||||||||||||
| Operating lease liabilities | — | 105 | |||||||||||||||
| Total current liabilities | 70,762 | 74,078 | |||||||||||||||
| Deferred revenue | 765 | 743 | |||||||||||||||
| Operating lease liabilities | 8,007 | 8,428 | |||||||||||||||
| Long-term debt, net | 46,000 | 30,000 | |||||||||||||||
| Deferred income taxes | 4,667 | 5,515 | |||||||||||||||
| Accrual for unrecognized tax benefits | 829 | 769 | |||||||||||||||
| Other long-term liabilities | 727 | 932 | |||||||||||||||
| Total liabilities | 131,757 | 120,465 | |||||||||||||||
| Total stockholders’ equity | 101,252 | 106,239 | |||||||||||||||
| Total liabilities and stockholders’ equity | $ | 233,009 | $ | 226,704 | |||||||||||||
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Supplemental Information and Non-GAAP Reconciliations
On the pages that follow, the Company has provided certain supplemental information that we believe will assist the reader in assessing our business operations and performance, including certain non-GAAP financial information and required reconciliations to the most comparable GAAP measure. A statement of operations and statement of cash flows for the three-month periods ended March 31, 2023 and 2022 and balance sheets as of March 31, 2023 and December 31, 2022 are provided elsewhere in this press release.
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| DHI GROUP, INC. | ||||||||||||||||||||||||||
| NON-GAAP & SUPPLEMENTAL DATA | ||||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||
| (in thousands, except per share and customer data) | ||||||||||||||||||||||||||
| Revenue | ||||||||||||||||||||||||||
| Q1 2023 | Q1 2022 | $ Change | % Change | |||||||||||||||||||||||
Dice1 | $ | 26,910 | $ | 24,634 | $ | 2,276 | 9% | |||||||||||||||||||
| ClearanceJobs | 11,710 | 9,700 | 2,010 | 21% | ||||||||||||||||||||||
| Total Revenues | $ | 38,620 | $ | 34,334 | $ | 4,286 | 12% | |||||||||||||||||||
Net income2 | $ | 460 | $ | 1,301 | ||||||||||||||||||||||
Net income margin3 | 1 | % | 4 | % | ||||||||||||||||||||||
Diluted earnings per share2 | $ | 0.01 | $ | 0.03 | ||||||||||||||||||||||
Adjusted diluted earnings per share4 | $ | — | $ | 0.01 | ||||||||||||||||||||||
Adjusted EBITDA4 | $ | 8,054 | $ | 6,930 | ||||||||||||||||||||||
Adjusted EBITDA margin3 4 | 21 | % | 20 | % | ||||||||||||||||||||||
| (1) Includes Dice and Career Events | ||||||||||||||||||||||||||
| (2) Net income and diluted earnings per share for the three months ended March 31, 2023 includes the net positive impact of income from investments and severance and related costs, all net of tax, and discrete tax items of $0.3 million, or $0.01 per diluted share. For the three months ended March 31, 2022, the Company recorded income from investments, severance and related costs, all net of tax, and discrete tax items that positively impacted net income by $0.8 million, or $0.02 per diluted share. | ||||||||||||||||||||||||||
(3) Net income margin and Adjusted EBITDA Margin are calculated by dividing the respective measure by that period's revenues. | ||||||||||||||||||||||||||
(4) See "Notes Regarding the Use of Non-GAAP Financial Measures" elsewhere in this press release. | ||||||||||||||||||||||||||
Bookings1 | |||||||||||||||||||||||
| Q1 2023 | Q1 2022 | $ Change | % Change | ||||||||||||||||||||
| Dice | $ | 37,618 | $ | 36,819 | $ | 799 | 2 | % | |||||||||||||||
| ClearanceJobs | 15,948 | 13,865 | 2,083 | 15 | % | ||||||||||||||||||
| Total Bookings | $ | 53,566 | $ | 50,684 | $ | 2,882 | 6 | % | |||||||||||||||
(1) Bookings represent the value of all contractually committed services in which the contract start date is during the period and will be recognized as revenue within 12 months of the contract start date. For contracts that extend beyond 12 months, the value of those contracts beyond 12 months is recognized as bookings on each annual anniversary of each contract start date valued as the amount of revenue that will be recognized within 12 months of the respective anniversary date. | |||||||||||||||||||||||
Average Annual Revenue per Recruitment Package Customer1 | |||||||||||||||||||||||
| Q1 2023 | Q1 2022 | $ Change | % Change | ||||||||||||||||||||
| Dice | $ | 15,672 | $ | 14,112 | $ | 1,560 | 11 | % | |||||||||||||||
| ClearanceJobs | $ | 20,520 | $ | 18,408 | $ | 2,112 | 11 | % | |||||||||||||||
(1) Calculated by dividing recruitment package customer revenue by the daily average count of recruitment package customers during each month, adjusted to reflect a 30-day month. The simple average of each month is used to derive the amount for each period and then annualized to reflect 12 months. | |||||||||||||||||||||||
| Renewal Rates | |||||||||||
| Renewal Rate on Revenue: | Q1 2023 | Q1 2022 | |||||||||
| Dice | 92 | % | 104 | % | |||||||
| ClearanceJobs | 95 | % | 104 | % | |||||||
| Renewal Rate on Count: | |||||||||||
| Dice | 82 | % | 86 | % | |||||||
| ClearanceJobs | 83 | % | 87 | % | |||||||
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| DHI GROUP, INC. | ||||||||||||||||||||||||||
| NON-GAAP & SUPPLEMENTAL DATA (CONTINUED) | ||||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||
| (in thousands, except per share and customer data) | ||||||||||||||||||||||||||
Retention Rates1 | |||||||||||
| Q1 2023 | Q1 2022 | ||||||||||
| Dice | 105 | % | 114 | % | |||||||
| ClearanceJobs | 109 | % | 115 | % | |||||||
| (1) For customers that renewed their annual recruitment packages during the period, the retention rate represents the total contract value renewed, relative to the previous total contract value. | |||||||||||
| Recruitment Package Customers | |||||||||||||||||||||||
| March 31, 2023 | March 31, 2022 | Change | % Change | ||||||||||||||||||||
| Dice | 6,171 | 6,249 | (78) | (1) | % | ||||||||||||||||||
| ClearanceJobs | 2,078 | 1,928 | 150 | 8 | % | ||||||||||||||||||
Deferred Revenue and Backlog1 | |||||||||||||||||||||||||||||||||||||||||
| Comparison to Prior Year End | Comparison Year Over Year | ||||||||||||||||||||||||||||||||||||||||
| March 31, 2023 | December 31, 2022 | $ Change | % Change | March 31, 2022 | $ Change | % Change | |||||||||||||||||||||||||||||||||||
| Deferred Revenue | $ | 58,844 | $ | 50,864 | $ | 7,980 | 16 | % | $56,786 | $ | 2,058 | 4 | % | ||||||||||||||||||||||||||||
| Contractual commitments not invoiced | 65,389 | 66,391 | (1,002) | (2) | % | 49,262 | 16,127 | 33 | % | ||||||||||||||||||||||||||||||||
| Backlog | $ | 124,233 | $ | 117,255 | $ | 6,978 | 6 | % | $106,048 | $ | 18,185 | 17 | % | ||||||||||||||||||||||||||||
(1) Backlog consists of deferred revenue plus customer contractual commitments not invoiced representing the value of future services to be rendered under committed contracts. | |||||||||||||||||||||||||||||||||||||||||
| Adjusted Diluted Earnings per Share | |||||||||||
| Q1 2023 | Q1 2022 | ||||||||||
| Reconciliation of Diluted Earnings per Share to Adjusted Diluted Earnings per Share: | |||||||||||
| Diluted earnings per share | $ | 0.01 | $ | 0.03 | |||||||
| Severance and related costs, net of tax | 0.01 | — | |||||||||
| Discrete tax items | (0.01) | (0.02) | |||||||||
Other1 | (0.01) | — | |||||||||
| Adjusted diluted earnings per share | $ | 0.00 | $ | 0.01 | |||||||
| Weighted average shares- diluted and adjusted diluted earnings per share | 45,240 | 47,170 | |||||||||
| (1) Adjusts, as applicable, for the share impact of common stock equivalents, where dilutive. | |||||||||||
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| DHI GROUP, INC. | ||||||||||||||
| NON-GAAP & SUPPLEMENTAL DATA (CONTINUED) | ||||||||||||||
| (Unaudited) | ||||||||||||||
| (in thousands, except per share and customer data) | ||||||||||||||
| Adjusted EBITDA Reconciliations | ||||||||||||||
| Q1 2023 | Q1 2022 | |||||||||||||
| Reconciliation of Net Income to Adjusted EBITDA: | ||||||||||||||
| Net income | $ | 460 | $ | 1,301 | ||||||||||
| Interest expense | 798 | 245 | ||||||||||||
| Income tax benefit | (514) | (763) | ||||||||||||
| Depreciation | 4,173 | 3,958 | ||||||||||||
| Non-cash stock-based compensation | 2,887 | 2,235 | ||||||||||||
| Income from equity method investment | (171) | (155) | ||||||||||||
| Severance and related costs | 421 | 109 | ||||||||||||
| Adjusted EBITDA | $ | 8,054 | $ | 6,930 | ||||||||||
| Reconciliation of Operating Cash Flows to Adjusted EBITDA: | ||||||||||||||
| Net cash provided by operating activities | $ | 11 | $ | 9,218 | ||||||||||
| Interest expense | 798 | 245 | ||||||||||||
| Amortization of deferred financing costs | (36) | (37) | ||||||||||||
| Income tax benefit | (514) | (763) | ||||||||||||
| Deferred income taxes | 848 | 1,823 | ||||||||||||
| Change in accrual for unrecognized tax benefits | (60) | (93) | ||||||||||||
| Change in accounts receivable | 4,153 | 3,820 | ||||||||||||
| Change in deferred revenue | (7,981) | (10,640) | ||||||||||||
| Severance and related costs | 421 | 109 | ||||||||||||
| Changes in working capital and other | 10,414 | 3,248 | ||||||||||||
| Adjusted EBITDA | $ | 8,054 | $ | 6,930 | ||||||||||
Guidance
Earlier in this press release, the Company provided guidance for Adjusted EBITDA margin, which is a non-GAAP financial measure. We are unable to reconcile expected Adjusted EBITDA margin to its nearest GAAP measure without unreasonable efforts because we are unable to predict with a reasonable degree of certainty the actual impact of items such as non-cash stock-based compensation, impairments, income tax expense, gains or losses from equity method investments, severance and retention costs, and legal claims and fees. By their very nature, these items are difficult to anticipate with precision because they are generally associated with unexpected and unplanned events that impact our company and its financial results. Therefore, we are unable to provide a reconciliation of this non-GAAP financial measure.
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