LD Micro Meeting Takeaways

We met with DHI Group’s (DHX) CEO Art Zeile at the LD Micro Main Event Investor Conference last week. Top of mind for us was the impact of the government shutdown on ClearanceJobs. Next was the trajectory of the recovery at Dice. Finally, we discussed the implications of both these factors on DHI Group’s marketing spend. All told, we think the uncertainty created by the prolonged government shutdown warrants a more conservative stance with respect to our bookings assumptions for this year. As our model is still predicated on a reopening of the government this quarter, the revisions to our estimates for this year and next are fairly modest at this juncture. We therefore maintain our price target of $5.00 based on an unchanged FY ’26 EV/Sales multiple of approximately 2x.

In recent years, even the threat of a potential government shutdown has negatively impacted new business bookings for ClearanceJobs during the affected periods. Considering the current shutdown commenced on October 1, 2025, we believe deal closures in Q3 ’25 were almost certainly impacted, and we expect the delays to persist until a resolution is achieved. The more worrisome dynamic this time around, however, is that Q4 marks the largest renewal period of the year. In this regard, we surmise that a prolonged shutdown could prompt defense contractors to let expiring ClearanceJobs subscriptions lapse until there is greater visibility into the timing of future awards. As such, we lower our 2H ’25 bookings assumptions for ClearanceJobs and assume both new business bookings and renewal rates rebound in Q1 ’26. Looking past the shutdown, we continue to believe the proposed $1.1 trillion defense budget for the new government fiscal year will support a return to double-digit growth rates for ClearanceJobs once passed. The launch of a candidate subscription offering for ClearanceJobs early next year could also provide upside to our current estimates if successful. Finally, the integration of AgileATS has been better than expected thus far from management’s standpoint, which bodes well for expanding wallet share with existing customers in FY ’26 and beyond.

As for Dice, the macro environment remains generally consistent with recent quarters, effectively stabilizing at approximately 70% of post-COVID highs. We were pleased to hear that demand from sourcing and recruiting companies remains on an upward trajectory. We believe this portends an uptick in hiring activity among commercial customers over the coming quarters. Similar to commentary provided last quarter, much of the churn at Dice remains concentrated among smaller entities, but one-off losses of larger customers still occur from time to time. Given that these dynamics were already reflected in our prior expectations, we left our FY ’25 and FY ’26 projections for Dice intact. Our revised estimates for the company as a whole appear at the end of this report and reflect only adjustments to our ClearanceJobs assumptions.

In light of the government shutdown and relatively tepid pace of hiring for technologists, we wondered whether DHI Group would make any adjustments to marketing plans. As the shutdown is expected to be resolved in due course and optimism remains high around the impact of a significantly increased defense budget, there has been no change to the number of marketing events or planned expenses thus far. We also asked about the performance of recent marketing qualified leads (MQLs) given the AI-generated summaries now prevalent in response to search queries. Interestingly, the company already has a project underway for Generative Engine Optimization to ensure better recognition and promotion of its platforms in generative AI responses. That said, the number and quality of MQLs resulting from performance-based marketing initiatives remain unaffected by AI to date.

Exhibit I: Estimate Revisions

Source: K. Liu & Company LLC

Our report with model and disclosures is available here.

Disclosure(s):

K. Liu & Company LLC (“the firm”) receives or intends to seek compensation from the companies covered in its research reports. The firm has received compensation from DHI Group, Inc. (DHX) in the past 12 months for “Sponsored Research.”

Sponsored Research produced by the firm is paid for by the subject company in the form of an initial retainer and a recurring monthly fee. The analysis and recommendations in our Sponsored Research reports are derived from the same process and methodologies utilized in all of our research reports whether sponsored or not. The subject company does not review any aspect of our Sponsored Research reports prior to publication.