Q1 '25 Earnings Preview
DHI Group, Inc. (DHX) reports Q1 ’25 results next Wednesday, May 7, after the market closes. Commentary from staffing and recruiting companies thus far this earnings season suggests the increased economic optimism early in the new year subsided as the quarter progressed due to uncertainty over the impact of tariffs on the global economy. Data from the U.S. Bureau of Labor Statistics (BLS) Job Openings and Labor Turnover Survey paints a similar portrait with new job openings increasing sequentially from December to January before declining in each of the past two months. Combined with the onslaught of DOGE-related cuts to various government workforces and programs, it’s no wonder why shares of DHX have sold off along with the broader market. That said, we believe the dour economic headlines are masking more positive data points that bode well for both the Dice and ClearanceJobs platforms moving forward. Regarding the former, we note that CompTIA’s analysis of the BLS data reveals that new technology job postings rose sequentially from Q4 to Q1 and increased 12% Y/Y in March. For the latter, we point to commentary from ASGN noting that its Federal Government segment posted strong bookings in Q1 and its expectations that defense and national security programs will remain priorities moving forward. Considering House Republicans recently proposed a $150 billion increase in the defense budget to over $1 trillion for fiscal 2025, we are inclined to agree with that assessment and believe this portends heightened demand for the cleared candidates available on ClearanceJobs.
Exhibit I: Our Estimates Versus Consensus
Sources: K. Liu & Company LLC; FactSet Estimates
All this considered, we expect DHI Group to report Q1 results in line or better than our estimates, which largely mirror the consensus. For Q1, we project revenue of $32.4 million, adjusted EBITDA of $7.0 million and EPS of $(0.00). By segment, our estimates call for Dice revenue of $18.7 million and ClearanceJobs revenue of $13.6 million. We assume a 13% Y/Y decline in bookings, primarily reflecting ongoing declines at Dice, partially offset by modest growth at ClearanceJobs. Given the broader economic uncertainty at present, we expect management to provide conservative guidance for Q2, likely flattish revenue on a sequential basis, while reaffirming prior FY ’25 expectations for $131.0-$135.0 million in revenue and an adjusted EBITDA margin of 24%. Our price target remains $5.00 based on a FY ’25 EV/Sales multiple of 2x.
Exhibit II: U.S. Job Openings in Thousands
Source: U.S. Bureau of Labor Statistics Job Openings and Labor Turnover Survey
Exhibit III: U.S. Quits in Thousands
Source: U.S. Bureau of Labor Statistics Job Openings and Labor Turnover Survey
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.