Q2 '25 Earnings Preview
DHI Group, Inc. (DHX) reports Q2 ’25 results next Wednesday, August 6, after the market closes. From a macro standpoint, we believe economic conditions during the quarter largely mirrored those exiting Q1 with marginal improvement as the quarter progressed. Recent data from the U.S. Bureau of Labor Statistics (BLS) Job Openings and Labor Turnover Survey reflects a modest sequential and Y/Y increase in the average number of new job openings during Q2, while CompTIA’s analysis indicates new technology job postings dipped slightly from March to April and increased in each month thereafter, exiting the quarter at levels similar to Q1. Commentary from staffing and recruiting companies so far this earnings season also corroborates these trends with many pointing to stabilization on a sequential basis and guiding for more of the same in the near term. Against this backdrop, we expect DHI Group’s Q2 results to largely track Street expectations. As for the remainder of the year, recall that DHI Group announced a 25% workforce reduction last month, which is expected to result in annualized cost savings of $14.0-$16.0 million. We therefore believe an increase in management’s FY ’25 adjusted EBITDA guidance is forthcoming even if revenue is guided slightly lower due to persistent economic uncertainty. Our price target remains $5.00 based on a FY ’25 EV/Sales multiple of 2x.
Exhibit I: Our Estimates Versus Consensus
Sources: K. Liu & Company LLC; FactSet Estimates
By and large, we remain comfortable with the assumptions underlying our Q2 and FY ’25 projections. That said, we acknowledge that lingering fears of an economic slowdown and the residual impact of DOGE on government spending decisions could weigh on DHI Group’s non-recurring revenue streams and ClearanceJobs bookings performance. Conversely, management’s focus on expanding margins at Dice is likely to yield upside on the adjusted EBITDA line, certainly for the full year if not in Q2. For Q2, our estimates include revenue, adjusted EBITDA and EPS of $32.4 million, $7.6 million and $0.01, respectively. By segment, our estimates call for Dice revenue of $18.6 million and ClearanceJobs revenue of $13.7 million. We assume a 6% Y/Y decline in bookings, primarily reflecting a 17% Y/Y decline at Dice, partially offset by 11% growth at ClearanceJobs. Given the combination of ongoing economic uncertainty and the company’s organizational restructuring last month, we expect management to guide Q3 revenue flat to down on a sequential basis while raising its adjusted EBITDA expectations for FY ’25.
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.