DHX

Image source: The Motley Fool. Wednesday, Aug. 5, 2026, at 5 p.m. ET Investor Relations - Todd Kehrli Chief Executive Officer - Art Zeile Chief Financial Officer - Greg Schippers Operator: Good afternoon, and welcome to the DHI Group Second Quarter 2026 Financial Results Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Todd Kehrli, PondelWilkinson, Investor Relations. Please go ahead. Todd Kehrli: Thank you, operator. Good afternoon, and welcome to DHI Group's Second Quarter Earnings Conference Call for 2026. Joining me today are DHI's CEO, Art Zeile; and CFO, Greg Schippers. Before I hand the call over to Art, I'd like to address a few quick items. This afternoon, DHI issued a press release announcing its financial results for the second quarter of 2026. The release is available on the company's website at dhigroupinc.com. This call is being broadcast live over the Internet for all interested parties, and the webcast will be archived on the Investor Relations page of the company's website. I want to remind everyone that during today's call, management will make forward-looking statements that involve risks and uncertainties. Please note that except for the historical information, statements on today's call may constitute forward-looking statements within the meaning of the federal securities laws. These forward-looking statements reflect DHI's current views concerning future events and financial performance and are subject to risks and uncertainties, and actual results may differ materially from the outcomes contained in any forward-looking statements. Factors that could cause these forward-looking statements to differ from actual results include the risks and uncertainties discussed in the company's periodic reports on Form 10-K and 10-Q and other filings with the Securities and Exchange Commission. DHI undertakes no obligation to update or revise any forward-looking statements. Lastly, on today's call, management will reference specific financial measures, including adjusted EBITDA, adjusted EBITDA margin, free cash flow and non-GAAP earnings per share, which are not prepared in accordance with U.S. GAAP. Information regarding these non-GAAP measures and the reconciliations to the most directly comparable GAAP measures are available in our earnings release, which can be found on our website again at dhigroupinc.com in the Investor Relations section. I'll now turn the call over to Art Zeile, CEO of DHI Group. Art Zeile: Thank you, Todd, and good afternoon, everyone. We appreciate you joining us today. At DHI, our mission remains straightforward. We help employers connect with highly skilled technology professionals through our 2 platforms, ClearanceJobs and Dice, each of which plays a critical role in the technology hiring ecosystem. Our exclusive focus on technology occupations, combined with product innovation creates a durable competitive advantage. Today, approximately 5,500 employers, staffing firms and recruiting organizations subscribe to our platforms and roughly 90% of our revenue is recurring. ClearanceJobs is the leading marketplace for professionals with active U.S. security clearances, serving approximately 1,700 customers, including Lockheed Martin, Booz Allen Hamilton, Leidos, Raytheon and many others. During the quarter, ClearanceJobs surpassed the milestone of 2 million cleared candidate profiles, reinforcing our position as the industry's premier destination for cleared technology talent. Dice is the largest technology-focused talent marketplace in the United States, built over more than 35 years with nearly 8 million technology profiles. Unlike generalized professional networking platforms, Dice organizes talent around more than 100,000 distinct technology skills, allowing recruiters to identify candidates based on the precise capabilities they need. Together, these 2 platforms have become essential tools for employers seeking highly specialized technology professionals. This quarter reflects a company executing against the strategy we outlined at the beginning of the year. ClearanceJobs is performing exceptionally well, while Dice is progressing along the recovery path we anticipated, and we continue to invest in products to position us for long-term growth. Let me start with ClearanceJobs, which is the primary growth engine for DHI Group. During the quarter, ClearanceJobs delivered another period of strong performance with bookings up 24% year-over-year and healthy profitability. Even excluding the contribution from our Point Solutions Group acquisition, CJ generated 7% organic bookings growth, demonstrating the underlying strength of the business. Perhaps the most encouraging indicator has been new customer activity. New business sales at ClearanceJobs increased by approximately 75% compared with the prior year quarter, while our pipeline reached its highest level in more than 5 years. We are seeing demand not only from our traditional defense contractor customer base, but also from an expanding group of commercial companies pursuing government contracts for the first time. One example is Shield AI, which became the largest new business customer in ClearanceJobs' history during the quarter. Wins like this reinforce the expanding opportunity for the platform as defense spending increases and the customer base broadens. According to an analysis by the Center for Strategic and International Studies, roughly 10,000 new defense companies have entered the market over the past 2 years. These include venture-backed start-ups, commercial technology companies and other nontraditional defense contractors that are increasingly competing for Department of Defense programs. As these companies grow, they need access to cleared engineers, cybersecurity professionals and other highly specialized talent. That's creating an expanding addressable market for ClearanceJobs beyond the traditional large defense clients. Our existing customer relationships also remain healthy. Revenue retention rates within our mid-market and enterprise customer segments remain strong, demonstrating the value customers place on the platform. Point Solutions Group also exceeded our expectations. Since completing the acquisition earlier this year, revenue has grown sequentially as we expand relationships with major government contractors. PSG remains an important strategic extension of our Expand the Mission strategy, enabling us to deepen customer relationships beyond recruiting into adjacent defense workforce solutions. Our AgileATS business made steady progress as well. We are adding customers at a healthy pace and recently introduced updated pricing and dedicated sales resources to further accelerate adoption over time. We are also encouraged by the adoption of our premium candidate subscription for CJ. While a relatively small contributor to revenue today, subscriber growth accelerated in the quarter following the launch of our mobile experience, particularly among younger professionals. We believe this represents an attractive long-term monetization opportunity that complements our existing employer subscription business. Stepping back, we believe ClearanceJobs is uniquely positioned to benefit from several long-term secular trends, including increased U.S. and allied defense spending, growing cybersecurity requirements and the increasing need for highly specialized cleared technology professionals. With over 10,000 employers and more than a 100 government agencies in need of cleared tech professionals, combined with increased defense spending, CJ has a significant growth opportunity as government contractors look to staff new projects. We believe we are in the early stages of this growth cycle. Turning to Dice. We see encouraging signs that the technology hiring market is improving. Importantly, the business is largely in line with the recovery path we outlined at the beginning of the year. Bookings decline continued to improve sequentially with improved performance from our new business sales organization and increased activity among small and midsized staffing firms supporting AI initiatives. As we move into next year, we expect renewals from our existing customer base to increasingly reflect the improving hiring environment, providing an opportunity for bookings growth as those contracts come up for renewal. While overall revenue reflects the slower hiring environment of recent years, we remain encouraged by improving leading indicators across the market. Technology job postings are strengthening. In the second quarter, new technology job postings increased by about 30% year-over-year, with June approaching the 300,000 monthly posting level that has historically signaled improving hiring conditions. Even more important is the composition of those jobs. Approximately 75% of new technology job postings now require at least 1 AI-related skill, nearly doubling from roughly 38% 1 year ago. This directly challenges one of the most common misperceptions surrounding artificial intelligence. Rather than replacing technology professionals, AI is increasing demand for highly skilled engineers capable of designing, deploying and maintaining AI systems. We see this reinforced by announcements from leading technology companies. Google Cloud recently announced a significant expansion of its AI organization, including substantial investments in forward deployed engineers to help enterprise customers implement agentic AI solutions. Similar hiring initiatives have been announced across the industry. At the same time, a growing number of industry leaders have acknowledged that earlier predictions of the widespread white-collar job displacement have not materialized. Instead, AI is increasingly seen as a productivity multiplier that requires more skilled technology talent, not less. This trend plays directly into Dice's strengths. Because Dice organizes candidates around highly specialized technology skills, including more than 360 individual AI-related skills, it enables employers to identify and match candidates based on specific skill sets, providing significantly greater precision than broad-based networking platforms. We are also expanding our product capabilities. During the quarter, we launched the Dice Model Context Protocol, MCP server, enabling AI assistants such as ChatGPT, Claude and Gemini to interact directly with Dice's job database. This allows candidates to search naturally with AI, creating a more modern and differentiated user experience. We are also making progress with our self-service digital experience offering as marketing initiatives gain traction and customer adoption grows. From a financial perspective, DHI generates healthy free cash flow, providing significant flexibility in how we allocate capital. During the quarter, we reduced debt while repurchasing approximately 700,000 shares under our $10 million authorization, demonstrating our confidence in the company's long-term value. In summary, we believe DHI is uniquely positioned at the intersection of 2 powerful durable trends: rising global defense spending and growing demand for highly specialized technology talent, particularly in AI. ClearanceJobs is delivering strong growth and is benefiting from an expanding market opportunity as demand from government agencies and defense contractors accelerates. Dice is well positioned to benefit from the recovery in tech hiring supported by our differentiated, skills-based approach and ongoing product innovation. At the same time, we are successfully extending our platforms into adjacent services, creating new monetization opportunities and deepening our relationships with customers. Importantly, our highly recurring revenue model and strong free cash flow give us the flexibility to invest in growth while returning capital to shareholders. Taken together, we believe we are building a more durable, high-growth business with multiple levers for value creation. With that, I'll turn the call over to Greg to walk you through our financial results in greater detail. Greg Schippers: Thank you, Art, and good afternoon, everyone. I'll start with a brief overview of our second quarter results before walking through each of the segments in more detail. While total revenue declined year-over-year, ClearanceJobs delivered strong revenue and bookings growth, and our results benefited from the actions we've taken to improve efficiency across the business. Importantly, we delivered solid adjusted EBITDA margin in the quarter, along with strong free cash flow generation. Overall, our performance highlights the durability of our subscription-based model, the growth opportunity in ClearanceJobs and the significantly improved profitability we are seeing in Dice as we position the business for recovery in tech hiring. With that context, let me turn to our segment performance, starting with ClearanceJobs. ClearanceJobs' revenue was $15.6 million, up 14% year-over-year and up 11% compared to the prior quarter. Bookings for CJ were $14.3 million, up 24% year-over-year. PSG acquired at the end of February contributed $2 million of revenue and bookings in the quarter for CJ. We ended the second quarter with 1,735 CJ recruitment package customers, which was down 7% on a year-over-year basis and flat on a sequential basis. CJ accounts spending greater than $15,000 in annual recurring revenue increased versus the prior year. Our average annual revenue per CJ recruitment package customer was up 9% year-over-year and up 4% on a sequential basis to $28,255. For the quarter, CJ's revenue renewal rate was 87% and CJ's retention rate was 110%. The solid retention rate demonstrates the value CJ delivers in the recruitment of cleared professionals. Dice revenue was $15.8 million, which was down 14% year-over-year and up 1% sequentially. Dice bookings were $13.4 million, down 14% year-over-year. We ended the quarter with 3,702 Dice recruitment package customers, which is down 3% from last quarter and down 15% year-over-year. Dice's revenue renewal rate was 66% for the quarter and its retention rate was 98%. The reduction in Dice's customer count and renewal rate from the prior year quarter continues to be attributable to churn with smaller customers spending less than $15,000 per year, representing 80% of the total churn on count and who were more likely to be impacted by the soft tech hiring environment over the past year. We believe the introduction of our new Dice platform, which offers customers the flexibility of monthly subscriptions will offset the churn among smaller accounts by lowering upfront commitment and improving affordability. Our average annual revenue per Dice recruitment package customer was $15,899, up 3%, both year-over-year and sequentially. Deferred revenue at the end of the quarter was $41.5 million, down 12% from the second quarter of last year. Our total committed contract backlog at the end of the quarter was $92.3 million, which was down 9% from the end of the second quarter last year. Short-term backlog was $72.5 million at the end of the quarter and long-term backlog, that is revenue to be recognized in 13 or more months was $19.8 million. Both brands onboarded notable clients in the second quarter. For CJ, this includes Shield AI, York Space Systems and Texas Instruments, while Dice landed Tech Labs, Yada Systems and Kforcetech Solutions as customers in Q2. Now let's move to operating expenses. For the quarter, our operating expenses decreased $5.8 million or 17% to $27.5 million when compared to $33.3 million in the year ago quarter. The decline in operating expenses highlights the improvements to our operating efficiency. For the quarter, we had income tax expense of $500,000 on income before taxes of $3.1 million. Our tax rate for the quarter differed from our approximate statutory rate of 25% due to a $279,000 tax benefit from the vesting of stock-based compensation. Although our income subject to tax has grown, the tax law change in 2025, which allows for the immediate deduction of R&D costs will partially offset our 2026 cash outlay for income taxes. Moving on to the bottom line. We recorded net income of $2.6 million or $0.06 per diluted share in the quarter. For the prior year quarter, we reported a net loss of $800,000 or $0.02 per diluted share, which included a $4.2 million restructuring charge. Non-GAAP earnings per share for the quarter was $0.09 per share compared to $0.07 per share for the prior year quarter. Diluted shares outstanding for the quarter were 42.1 million shares, down 3.3 million shares or 7% from the prior year quarter as we returned cash to shareholders through our share repurchase program. Adjusted EBITDA for the quarter was $8.3 million, a margin of 27% compared to $8.5 million or a margin of 27% a year ago. On a segmented basis, CJ's adjusted EBITDA remained strong at $6 million in the second quarter, representing a 39% adjusted EBITDA margin as compared to adjusted EBITDA of $6.1 million or a margin of 45% in the prior year period. Dice's adjusted EBITDA remained solid at $4.2 million, representing a 26% adjusted EBITDA margin compared to $4.2 million and a 23% margin last year. Operating cash flow for the quarter was $6.1 million compared to $6.9 million in the prior year period. Free cash flow, which is operating cash flows less capital expenditures, was $4.5 million for the second quarter compared to $4.8 million in the same quarter last year. Our capital expenditures, which consist primarily of capitalized development costs were $1.6 million in the second quarter compared to $2 million in the same quarter last year, an improvement of 20%. Capitalized development costs in the second quarter for CJ were $649,000 compared to $306,000 a year ago, while capitalized development costs for Dice were $900,000 this quarter as compared to $1.6 million a year ago. The CJ increase was primarily related to improvements to the AgileATS and premium candidate experience products, which were released in the quarter. For the full year, we continue to expect total capital expenditures of between $6 million and $7 million compared with $7.3 million last year. From a liquidity perspective, at the end of the quarter, we had $3.8 million in cash, and our total debt was $32 million, a decrease of $1 million from the last quarter despite cash outlays in the quarter of $2 million for share repurchases and $600,000 for debt refinancing costs. Leverage at the end of the quarter was 0.89x our adjusted EBITDA, and we continue to target 1x leverage for the business. At the end of the quarter, we had $4.5 million remaining on our $10 million share repurchase program. Moving on to guidance. We expect ClearanceJobs' bookings growth to accelerate in the second half of this year. For Dice, we expect the rate of year-over-year decline to improve, but we do not anticipate Dice bookings growth resuming in 2026. As a result, we expect DHI revenue of $124 million to $128 million for the full year. And for the third quarter, we expect revenue of $30 million to $32 million. For CJ and Dice, we expect each to contribute revenue of $62 million to $64 million for the full year and $15 million to $16 million for the third quarter. From a profitability standpoint, we continue to target a full year adjusted EBITDA margin of 25% for DHI and 40% for CJ, while Dice's margin target is raised to 24%. Our focus remains on delivering long-term sustainable and profitable revenue growth, along with strong free cash flow generation, averaging at or above 10% of revenues. To wrap up, although the hiring environment over the past few years has impacted our revenue growth, we are optimistic about the road ahead. The record-breaking defense budget is a growth driver for CJ and for Dice, and we are seeing companies across all industries steadily increase their investments in technology initiatives, creating strong growth opportunity. We remain focused on strengthening our industry-leading solutions, optimizing our go-to-market strategy and executing with efficiency, ensuring we are well positioned to capitalize on the opportunities that lie ahead. And with that, let me turn the call back to Art. Art Zeile: Thank you, Greg. I want to thank all of our employees once again for their outstanding work this quarter. It is a pleasure to be part of such a great team. And with that said, we are happy to answer your questions. Operator: [Operator Instructions] The first question is from [ Matthew Mouse ] with [ B. Riley Securities ]. Josh Nichols: This is actually Josh Nichols. Really great to see the CJ retention at 110%, highest level yet, at least as far as I could tell. Really, when we look at the driver for that, is it more like seats, some upsells? Or is it pricing? I'm just trying to get a handle on that because it's been quite strong. Art Zeile: I'd say it's a combination of both. I would say more weighted towards profile views. So with any subscription, whether it's Dice or ClearanceJobs, you get a number of seats and then you get a number of profile views. And the real search process comes down to pulling profiles, interacting with those candidates and getting to a shortlist that you hand to your CTO or your CIO or your hiring manager. So the profile views are pretty critical there. Josh Nichols: And then I just want to dig in on the CJ bookings, I mean, up a lot. You did have the tuck-in acquisition that contributed a couple of million of revenue, but you were pretty clear that you expect the second half to be stronger than the first. I think on an organic basis, it was still up 7% year-over-year in 2Q. And on an organic basis, do you expect that to accelerate in the second half from what you just did this quarter? Is that fair? Greg Schippers: Yes. Josh, this is Greg. Yes, that's definitely fair. As we've been saying, we are targeting double-digit revenue growth for ClearanceJobs, and we feel like there's definitely a path towards getting there on an organic basis. Josh Nichols: And then just, of course CJ is performing exceptionally well. Dice, still down year-over-year. But to your point, the rate of decline is attenuating, it looks like a bit, and you're seeing some signs of staffing stabilization. Like I realize you're not giving any outlook for next year. But given what you're seeing, is the expectation that, that business could be like flat to marginally down for next year? Or do you think there's some potential that, that business could actually get back to growth given the demand for AI tech jobs right now? Art Zeile: I think right now, where we sit in the year, we are thinking flat to marginal growth for next year. And Dice does have a very large dependency on the staffing sector. It also has kind of a large amount of renewals that take place in December and January because a lot of these staffing firms have set up their contracts so that the start date on forward contracts are roughly at the end of the year. And that's usually when they also get their budget authorities. So we'll know a lot more towards the end of the year, but we're thinking that the environment itself has become much healthier. In fact, we look at the staffing industry analysts' projections as well as their real-time bullhorn staffing indicator, and they show that we're already in year-over-year growth mode for tech staffing. Josh Nichols: That's good to hear. You could see that maybe coming. Sorry to hog the mic, but I guess last question for me. I just want to touch on the gross margin front. 80% gross margin is still great, but it was down year-over-year and quarter-over-quarter. Is that mostly just attributable to the PSG acquisition? Or how should we generally think about like gross margin in the second half? Art Zeile: Yes. You should think about gross margin based on Q2 is a decent run rate on ClearanceJobs, and it is related to the PSG acquisition. We had a full quarter in Q2 of the labor costs associated with that revenue. So yes, that's a good run rate for you. Operator: The next question is from Bruce Goldfarb with Lake Street Capital Markets. Bruce Goldfarb: You guys have rolled through some internal staffing cuts, including a 50% reduction in the engineering team. How are you continuing to support product innovation? Art Zeile: So I can tell you that we were very focused on the right timing for this restructure that took place in July of last year. By that point in time, we had completed almost I would say, 80% to 90% of what we call digital experience, our self-service platform. So we believe that we could make the cut in the teams and still move forward with important innovation and specifically even feature development on digital experience, the self-service platform. And I think that has been borne out by the actual releases that we just described in the earnings call itself. Bruce Goldfarb: And how are you looking to grow your cleared contractors footprint in CJ? Art Zeile: So it's kind of interesting. I would tell you that there are locations in the United States that have become much more important, and we're putting more resources in our new business team towards those locations. A good example is California because of the concentration of space-based firms in the Los Angeles area as well as lower Silicon Valley Peninsula. And also, I would say there's been a new cohort that we could attend to that we haven't traditionally attended to. And I alluded to that in one of the statistics that I gave that said that there were over 10,000 new defense tech firms that were launched in the last 2 years, largely by private investors. And this is something that we really haven't seen in the past. In the past, I would say Silicon Valley in general or the tech community has been pretty reluctant to engage in government and specifically Department of Defense work, and that has shifted dramatically. We gave an example of Shield AI. They're one of the most important companies, in my opinion, for the future with their autonomous jets. We also have Anduril as a client is another good example of this kind of new defense tech style company and also companies like Palantir. So there is a new, I would say, cohort that we can attend to that in years past, really didn't make a lot of difference, I would say, to the ClearanceJobs branch. Bruce Goldfarb: Those seem like significant greenfield opportunities. And then lastly, I think you touched upon it in the prior analysts, but what are some of the early indicators you're tracking in commercial staffing -- in the commercial and staffing sectors to ensure that you achieve your roughly flat bookings to slightly down by year-end? Art Zeile: So I can tell you that one of the most important indicators is the staffing industry analysts, that's SIA what they call the Bullhorn Staffing Indicator. It's a kind of co-release with Bullhorn, which is a major ATS. And if you go to their page, they look at year-over-year growth in the various forms of staffing. Obviously, we're very attuned to tech staffing, but they also have health care staffing, industrial staffing, administrative staffing. And I could tell you that we turned the corner roughly at the end of last year, and we are in growth territory by virtue of their reporting. We also look at a report that comes from a company called Lightcast, and Lightcast scrapes all of the job postings across tens of thousands of career sites every single night, and they categorize those job postings. So again, we're looking at the tech job postings as well as the staffing job postings, and we can see that rise month-over-month. That gives us a lot of confidence as well. Those are our 2 main lenses into the staffing world and specifically the health of the staffing world. Bruce Goldfarb: Congrats on your results. Operator: The next question is from Kevin Liu with K. Liu & Company. Kevin Liu: A couple of questions just starting on the Dice front. With the new introduction of the Model Context Protocol server, I'm curious if that's monetizable from your perspective and just how you kind of think AI interfaces change your go-to-market or monetization strategy for your platforms? And then beyond that, I also wanted to touch briefly on how impactful the introduction of the Dice self-serve marketplace has been, especially on the lower-end customers. Do you feel that's having any sort of meaningful impact in the way the metrics are coming through and perhaps some of those folks not really coming through your traditional metrics and being more monthly customers? Art Zeile: Yes, those are great questions, as always, Kevin. I can tell you that the model context server, the MCP server is only available to candidates that are, again, using the 3 top LLMs of Claude, OpenAI, ChatGPT that is and Gemini. And so they're searching for job postings. And we believe that this is the future, like a lot of people are going to want to do it that way because they're going to set up a skill or the equivalent of a loop that allows them to see these jobs periodically, and we need to be offering that kind of an experience in a modern fashion that fits our community. Our community obviously, is very high tech in orientation and likes to use these tools. So right now, it's not monetizable. We are thinking about an MCP capability that essentially allows recruiters to review profiles. And we believe that there will be recruiters that are using agents to do so in the future, and that would be monetizable because that would essentially be behind our paywall. And the more profile views that are consumed, the more searches that take place on the Dice site, obviously, that's very positive for us from a revenue perspective and consumption of these contract resources. Then you asked the question of, I believe, where we're going with -- can you repeat the second question? Sorry. Kevin Liu: Yes. Just with respect to the self-serve platform on Dice because some of those customers can kind of come in on a monthly basis and perhaps you could even have smaller folks turn off the core annual subscription and go to self-serve. I'm just wondering if that's having any sort of meaningful impact on the way you guys are reporting the metrics or how those metrics are coming through? Art Zeile: It's not having a meaningful impact on our Q2 financial performance. And that's because we spent most of Q2 training Google on our ideal candidate profile before really launching into meaningful digital marketing campaign spend. I can tell you that it's been the last few weeks that we've really kind of increased that spend. So Q2 was really a matter of us making sure that we are prepared for additional marketing spend to drive eyeballs ultimately to the site and then to put in a credit card and purchase their subscriptions. So it's a little bit too early to talk about the statistics because we just haven't ran those campaigns long enough. Kevin Liu: Got it. And just switching over to CJ for a bit. You mentioned Shield AI and kind of how that was the largest land for you guys. I don't know if that was ever or in recent memory. But I'm curious if that's indicative of what you're seeing elsewhere within the pipeline as well and kind of what's driving these larger initial lands? Art Zeile: Yes. I think that the bottom line is that these contracts are really correlated to the size of the companies themselves. Shield AI has become a very large defense tech company. We're still dealing with a very large broad base. So we have some venture-backed companies that are just 2 dozen people or 3 dozen people or 50 people, whereas Shield is a really massive company with a lot of engineering staff already. So I would say it's a combination. We're seeing some of these bigger deals get done. And obviously, we announced that Shield AI was the biggest in our company's history, almost $100,000 in ACV, but we're still seeing a very large number of these smaller deals that are being done for, let's say, 2 to 3 recruiter subscriptions a piece. Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Art Zeile for any closing remarks. Art Zeile: Thank you, operator, and thank you for joining us today. As always, if you have any questions about our company or would like to speak with the management team, please reach out to Todd Kehrli, and he will assist you in arranging for a meeting. Thanks for your interest in DHI Group today, and have yourself a great rest of your week. Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect. Before you buy stock in DHI Group, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and DHI Group wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. 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Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. ClearanceJobs (CJ) is serving as the primary growth engine, driven by a record-breaking defense budget and an influx of approximately 10,000 new defense-tech firms entering the market. CJ achieved 7% organic bookings growth in the second quarter, while total bookings including the PSG acquisition were up 24% year-over-year., which allows the company to expand into adjacent defense workforce solutions. Dice is progressing along an anticipated recovery path as technology job postings strengthen, with June reaching the 300,000 monthly level historically indicative of improving hiring conditions. Management identifies AI as a productivity multiplier rather than a job displacer, noting that 75% of new tech job postings now require at least one AI-related skill. The company has successfully maintained high margins through improved operating efficiency following a significant engineering team restructure in July 2025. A strategic shift toward 'digital experience' and self-service platforms is intended to capture smaller customers and reduce churn in the soft hiring environment. Management expects ClearanceJobs bookings growth to accelerate in the second half of 2026, targeting double-digit organic revenue growth. Dice is projected to achieve flat to marginal growth in 2027, with a critical renewal window anticipated in December and January as staffing firms receive new budget authorities. The company assumes a full-year 2026 revenue range of $124 million to $128 million, with Dice bookings expected to continue year-over-year declines through the end of the year. Strategic focus is shifting toward monetizing AI interactions, including potential paywalled features for recruiters to review candidate profiles via AI agents. Capital allocation will continue to prioritize debt reduction and share repurchases, supported by a target free cash flow margin of at least 10% of revenues. The Point Solutions Group acquisition contributed $2 million in revenue and bookings during the quarter, representing a key component of the 'Expand the Mission' strategy. Dice customer churn remains concentrated in small accounts spending less than $15,000 annually, which represent 80% of total customer count losses. A 50% reduction in the engineering team last year was timed to follow the completion of 80% to 90% of the new self-service platform development. Shield AI became the largest new business customer in ClearanceJobs' history this quarter, with an annual contract value of almost $100,000. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Growth is driven by a combination of pricing and increased volume of profile views, which are critical for recruiters to shortlist specialized talent. Management noted that profile views are the primary metric for search process intensity on the platform. Management tracks the Bullhorn Staffing Indicator and Lightcast job posting data, both of which show year-over-year growth in tech staffing as of late 2025. The market has 'turned the corner' and is currently in growth territory according to third-party industry reports. The current Model Context Protocol (MCP) server for candidates is not yet monetized as it focuses on modernizing the user experience. Future monetization is planned for recruiter-side AI agents that would operate behind a paywall to review profiles and consume contract resources. The platform had no meaningful impact on Q2 results as the company spent the quarter training Google algorithms on ideal candidate profiles. Meaningful digital marketing spend and campaign-driven adoption only began in the weeks immediately preceding the earnings call.

Interested in DHI Group, Inc.? Here are five stocks we like better. ClearanceJobs remained DHI Group’s main growth driver, with revenue up 14% year over year to $15.6 million and bookings up 24%, helped by the Point Solutions Group acquisition and strong organic sales growth. DHI returned to profitability, reporting $2.6 million in net income and $4.5 million in free cash flow, while maintaining a 27% adjusted EBITDA margin and reducing operating expenses by 17%. Dice showed early signs of recovery as technology job postings rose roughly 30%, though revenue and bookings still declined year over year. Management maintained its 2026 revenue outlook of $124 million to $128 million and expects improving—but not yet positive—Dice bookings growth. Sherwin-William’s Win Over PPG Stock in The Construction Boom DHI Group (NYSE:DHX) reported second-quarter 2026 results that reflected continued growth at its ClearanceJobs business and a slower, though improving, technology hiring environment for Dice. Total revenue declined year over year, but the company returned to profitability, maintained a 27% adjusted EBITDA margin and generated $4.5 million in free cash flow. Chief Executive Officer Art Zeile said ClearanceJobs remained the company’s primary growth engine, while Dice was progressing in line with the recovery path management had anticipated at the beginning of the year. DHI operates the ClearanceJobs marketplace for professionals holding active U.S. security clearances and the Dice technology-talent marketplace. → 3 Drone Stocks That Should Soar After the Summer Slump DHI recorded net income of $2.6 million, or $0.06 per diluted share, compared with a net loss of $800,000, or $0.02 per share, in the prior-year quarter. The year-ago loss included a $4.2 million restructuring charge. Non-GAAP earnings were $0.09 per share, compared with $0.07 per share a year earlier. Adjusted EBITDA was $8.3 million, equal to a 27% margin, versus $8.5 million and a 27% margin in the second quarter of 2025. Operating expenses declined 17% year over year to $27.5 million, which Chief Financial Officer Greg Schippers said reflected the company’s operating-efficiency efforts. → Meta’s Earnings Drop Shows Wall Street Wants More Than Ad Growth Operating cash flow was $6.1 million, down from $6.9 million a year earlier, while free cash flow was $4.5 million, compared with $4.8 million in the prior-year period. Capital expenditures declined 20% to $1.6 million. At quarter-end, DHI had $3.8 million in cash and $32 million in total debt, down $1 million from the prior quarter. The company spent $2 million on share repurchases during the quarter, buying approximately 700,000 shares. It had $4.5 million remaining under its $10 million repurchase authorization. → Jersey Mike's Serves Fresh Gains After IPO Stumble ClearanceJobs revenue rose 14% year over year and 11% sequentially to $15.6 million. Bookings increased 24% from a year earlier to $14.3 million. The Point Solutions Group acquisition, completed at the end of February, contributed $2 million of revenue and bookings during the quarter. Zeile said that even excluding the acquisition, ClearanceJobs produced 7% organic bookings growth. New business sales increased approximately 75% year over year, and the pipeline reached its highest level in more than five years, according to management. ClearanceJobs ended the quarter with 1,735 Recruitment Package customers, down 7% from a year earlier and flat sequentially. However, average annual revenue per customer rose 9% year over year and 4% sequentially to $28,255. Its revenue renewal rate was 87%, while retention was 110%. During the call, Zeile said retention was supported by both subscriptions and usage of candidate profile views, which recruiters use to identify and contact prospective candidates. ClearanceJobs surpassed 2 million cleared candidate profiles during the quarter. The platform added customers including Shield AI, York Space Systems and Texas Instruments. Zeile said Shield AI represented ClearanceJobs’ largest new-business customer in company history, with nearly $100,000 in annual contract value. Management said its opportunity is expanding beyond traditional defense contractors as more commercial and venture-backed companies pursue government and Department of Defense work. ClearanceJobs generated adjusted EBITDA of $6 million, representing a 39% margin, compared with $6.1 million and a 45% margin a year earlier. Schippers said the lower gross-margin run rate reflected the Point Solutions Group acquisition and the labor costs associated with that business. Dice revenue was $15.8 million, down 14% year over year but up 1% from the first quarter. Bookings declined 14% to $13.4 million. The business ended the quarter with 3,702 Recruitment Package customers, down 15% year over year and 3% sequentially. Dice’s revenue renewal rate was 66%, while retention was 98%. Schippers attributed most customer-count churn to smaller accounts spending less than $15,000 annually, which he said had been more exposed to the soft technology hiring market. Average annual revenue per Dice Recruitment Package customer increased 3% from both the prior-year and prior-quarter periods to $15,899. Dice adjusted EBITDA was unchanged at $4.2 million, while its adjusted EBITDA margin improved to 26% from 23% a year earlier. Zeile pointed to improving hiring-market indicators, including a roughly 30% year-over-year increase in new technology job postings during the second quarter. He said June postings approached 300,000, a level management associates with improving hiring conditions. About 75% of new technology postings required at least one AI-related skill, compared with approximately 38% a year ago, according to the company. Dice launched a Model Context Protocol server during the quarter, allowing AI assistants including ChatGPT, Claude and Gemini to interact with Dice’s job database for candidate job searches. Zeile said the capability is not currently monetized, though DHI sees a future opportunity to offer a recruiter-focused capability behind its paywall. The company also continued rolling out its self-service digital experience, including monthly subscription options intended to reduce upfront commitments for smaller customers. Zeile said the initiative did not have a meaningful effect on second-quarter financial results because marketing spending increased only in the final weeks of the quarter. DHI expects full-year revenue of $124 million to $128 million, with third-quarter revenue of $30 million to $32 million. Management expects both ClearanceJobs and Dice to generate $62 million to $64 million of revenue for the full year, and $15 million to $16 million each in the third quarter. The company expects ClearanceJobs bookings growth to accelerate in the second half and said it sees a path toward double-digit organic revenue growth for the business. For Dice, management expects year-over-year declines to continue improving but does not expect bookings growth to resume during 2026. DHI maintained its target for a 25% full-year adjusted EBITDA margin and a 40% margin for ClearanceJobs, while raising its Dice margin target to 24%. Management also continues to target free cash flow of at least 10% of revenue. 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. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "DHI Group Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

This article first appeared on GuruFocus. Release Date: August 05, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. ClearanceJobs delivered strong performance with bookings up 24% year-over-year, including 7% organic growth, and new business sales increased approximately 75%. ClearanceJobs surpassed 2 million cleared candidate profiles and achieved a record retention rate of 110%, demonstrating strong customer value and platform stickiness. The company is benefiting from secular tailwinds, including increased defense spending and a growing number of new defense tech companies (e.g., Shield AI), expanding its addressable market. DICE is showing encouraging signs of recovery, with technology job postings up 30% year-over-year and approximately 75% of new postings requiring AI-related skills, positioning the platform for future growth. The company maintains a strong financial position with healthy free cash flow, reduced debt, and an active share repurchase program, returning capital to shareholders. The Point Solutions Group (PSG) acquisition exceeded expectations, contributing $2 million in revenue and expanding customer relationships into adjacent defense workforce solutions. Total company revenue declined year-over-year, primarily due to a 14% decrease in DICE revenue and bookings, reflecting the continued soft tech hiring environment. DICE's customer count fell 15% year-over-year, with significant churn among smaller customers spending less than $15,000 annually, and its revenue renewal rate dropped to 66%. The company does not anticipate DICE bookings growth resuming in 2026, with expectations only for the rate of decline to improve. ClearanceJobs' customer count decreased 7% year-over-year, and its adjusted EBITDA margin declined to 39% from 45% in the prior year period. Total committed contract backlog decreased 9% year-over-year, and deferred revenue was down 12%, indicating potential headwinds for future revenue recognition. Gross margin was negatively impacted by the PSG acquisition, which includes higher labor costs, and the company expects this to be a run rate for the second half of the year. Warning! GuruFocus has detected 7 Warning Signs with DHX. Is DHX fairly valued? Test your thesis with our free DCF calculator. Q: ClearanceJobs retention hit 110%, the highest level yet. Is that driven more by seat upsells or pricing? A: CEO Art Zailey explained it's a combination of both, but weighted more toward profile views. In the subscription model, customers get seats and profile views, and the search process of pulling profiles and interacting with candidates is critical. The strong retention reflects the value customers place on this core functionality. Q: ClearanceJobs bookings were up 24% year-over-year, including the PSG acquisition. On an organic basis, it was up 7%. Do you expect organic growth to accelerate in the second half? A: CFO Greg Skippers confirmed this is fair. The company is targeting double-digit revenue growth for ClearanceJobs and sees a clear path to achieving that on an organic basis. Q: DICE is still down year-over-year, but the rate of decline is improving. Given the demand for AI tech jobs, could the business return to growth next year? A: CEO Art Zailey stated that for now, they are thinking flat to marginal growth for next year. The business has a large dependency on the staffing sector, with many renewals occurring in December and January. However, he noted the environment has become much healthier, citing the Bullhorn Staffing Indicator from Staffing Industry Analysts, which shows the tech staffing market is already in year-over-year growth mode. Q: Gross margin was down year-over-year and quarter-over-quarter. Is that mostly attributable to the PSG acquisition? A: CFO Greg Skippers confirmed that Q2 is a good run rate for gross margin on ClearanceJobs, and the decline is related to the PSG acquisition, as the company absorbed a full quarter of labor costs associated with that revenue. Q: You reduced the engineering team by 50% last year. How are you continuing to support product innovation? A: CEO Art Zailey explained that the restructuring was timed well, as 80% to 90% of the self-service platform (digital experience) was already completed. The company believed it could make the cuts and still move forward with important innovation, which has been validated by the recent product releases. Q: How are you looking to grow your cleared contractor footprint in ClearanceJobs? A: CEO Art Zailey highlighted a shift in strategy, focusing on new geographic areas like California due to the concentration of space-based firms. He also noted a new cohort of over 10,000 new defense tech firms launched in the last two years, largely by private investors. Companies like Shield AI, Anduril, and Palantir represent a significant greenfield opportunity that didn't exist in the past. Q: What early indicators are you tracking in the commercial and staffing sectors to achieve roughly flat to slightly down bookings by year-end? A: CEO Art Zailey cited two main indicators: the Bullhorn Staffing Indicator from Staffing Industry Analysts, which shows the company turned the corner at the end of last year and is now in growth territory for tech staffing, and reports from Lightcast, which scrapes job postings from tens of thousands of career sites nightly. The rise in tech and staffing job postings month-over-month gives them confidence. Q: With the new Model Context Protocol (MCP) server, is that monetizable, and how do AI interfaces change your go-to-market strategy? A: CEO Art Zailey explained the MCP server is currently available to candidates using top LLMs like ChatGPT, Claude, and Gemini, allowing them to search jobs naturally. It's not monetizable yet, but they are thinking about an MCP capability for recruiters to review profiles using agents, which would be behind the paywall and monetizable. More profile views and searches consumed would be positive for revenue. Q: Has the introduction of the DICE self-serve marketplace had a meaningful impact on metrics, especially with monthly customers? A: CEO Art Zailey stated it hasn't had a meaningful impact on Q2 financial performance yet, as most of the quarter was spent training Google on their ideal candidate profile. The company only recently increased digital marketing spend, so it's too early to discuss statistics. Q: Shield AI was the largest new business customer in ClearanceJobs history. Is that indicative of what you're seeing in the pipeline, and what's driving these larger initial lands? A: CEO Art Zailey noted that contract sizes are correlated to the size of the companies themselves. While Shield AI is a massive defense tech company with a large engineering staff, they are still seeing a large number of smaller deals for two to three recruiter subscriptions. The pipeline includes a mix of both large and small new customers. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

DHI Group (DHX) came out with quarterly earnings of $0.09 per share, beating the Zacks Consensus Estimate of $0.07 per share. This compares to earnings of $0.07 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +28.57%. A quarter ago, it was expected that this provider of websites and career fairs for professionals would post earnings of $0.04 per share when it actually produced earnings of $0.08, delivering a surprise of +100%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. DHI Group, which belongs to the Zacks Internet - Content industry, posted revenues of $31.34 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 1.55%. This compares to year-ago revenues of $32.03 million. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. DHI Group shares have added about 167.1% since the beginning of the year versus the S&P 500's gain of 13%. While DHI Group has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for DHI Group was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.08 on $31.92 million in revenues for the coming quarter and $0.32 on $124.92 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Internet - Content is currently in the bottom 37% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Another stock from the same industry, Perion Network (PERI), has yet to report results for the quarter ended June 2026. The results are expected to be released on August 10. This digital media company is expected to post quarterly earnings of $0.02 per share in its upcoming report, which represents a year-over-year change of -92.3%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Perion Network's revenues are expected to be $97.5 million, down 5.3% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report DHI Group, Inc. (DHX) : Free Stock Analysis Report Perion Network Ltd (PERI) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

CENTENNIAL, Colo., August 05, 2026--(BUSINESS WIRE)--Today, DHI Group, Inc. (NYSE: DHX) ("DHI" or the "Company") announced its financial results for the second quarter ended June 30, 2026. Second Quarter 2026 Financial Highlights Compared to the Second Quarter 2025(1) Total revenue was $31.3 million, down 2%. Total bookings were $27.7 million, up 2%. Net income was $2.6 million, or $0.06 per diluted share, a net income margin of 8%, compared to net loss of $0.8 million, or $0.02 per diluted share, a net income margin of negative 3%. Non-GAAP earnings per share was $0.09 per diluted share, compared to $0.07 per diluted share. Adjusted EBITDA decreased 2% to $8.3 million, an Adjusted EBITDA Margin of 27% compared to Adjusted EBITDA of $8.5 million, and a margin of 27%. Cash flow from operations was $6.1 million, compared to $6.9 million while fixed asset purchases declined $0.4 million, or 20%, to generate free cash flow of $4.5 million, compared to $4.8 million. Cash was $3.8 million at quarter end compared to $2.9 million at the end of last year. Total debt at the end of the quarter was $32.0 million compared to $30.0 million at the end of last year. The Company repurchased 0.7 million shares for $2.0 million in the second quarter under its stock repurchase program and from the vesting of share-based awards. Commenting on the results, Art Zeile, President and CEO of DHI Group, said: "Our second quarter results demonstrate that we are executing against the strategy we outlined at the beginning of the year. ClearanceJobs is performing exceptionally well, with bookings increasing 24% year over year, supported by improving demand from both traditional defense contractors and a growing number of commercial companies pursuing government work for the first time. At the same time, Point Solutions Group also exceeded our expectations, further expanding the strategic value of the ClearanceJobs platform. "While the broader technology hiring market remains in the early stages of recovery, we see encouraging signs of improvement. Demand for AI talent is accelerating, and today approximately three-quarters of new technology job postings require AI-related skills. This reinforces our belief that AI is increasing demand for highly skilled technology professionals rather than replacing them, positioning Dice well as hiring activity begins to recover. Together with our recurring revenue model, product innovation and disciplined execution, we believe DHI is well positioned to create long-term shareholder value." Greg Schippers, CFO of DHI Group, commented: "Our second quarter financial results reflect the resilience of our business model. Despite headwinds in Dice revenue, we generated Adjusted EBITDA of $8.3 million with a 27% margin while delivering nearly $4.5 million of free cash flow during the quarter. ClearanceJobs again produced exceptional profitability, while Dice maintained strong margins as we balance investments with disciplined expense management. "Our strong cash generation continues to provide meaningful financial flexibility. During the quarter, we repurchased approximately 650,000 shares under our share repurchase program while at the same time investing in strategic growth initiatives and maintaining a healthy balance sheet. We remain committed to disciplined capital allocation and are reaffirming our revenue and consolidated Adjusted EBITDA margin guidance for the full year, while increasing our full-year Adjusted EBITDA margin outlook for Dice to 24%, as we continue executing our long-term strategy." Fiscal 2026 Financial Guidance DHI is reaffirming its previously issued revenue guidance for the full year 2026 and providing third quarter guidance. The Company is also maintaining its full year Adjusted EBITDA margin guidance of 25% for DHI and 40% for ClearanceJobs, while increasing its full-year Adjusted EBITDA margin guidance for Dice to 24% from 22%. Conference Call Information Art Zeile, President and Chief Executive Officer, and Greg Schippers, Chief Financial Officer, will host a conference call today, August 5, 2026, 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 will be 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, ClearanceJobs and Dice, 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, and intentions, growth potential, and statements regarding our financial outlook. These statements often include words such as "may," "will," "should," "believe," "expect," "anticipate," "intend," "plan," "estimate," "target" 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 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, a write-off of all or a part of our goodwill and intangible assets, backlog not accurately representing future revenue, 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 and the development of new products and services, macroeconomic conditions, including government shutdowns, the impact of initiatives to restructure or streamline government agencies, such as DOGE, the risk that AI models will reduce demand for technology professionals in the workforce, failure to maintain and develop our reputation and brand recognition, failure to increase or maintain the number of customers who purchase recruitment packages, failure to attract qualified professionals to our websites or grow the number of qualified professionals who use our websites, a review of strategic alternatives may occur from time to time and the possibility that such review will not result in a transaction, inability to successfully integrate future acquisitions or identify and consummate future acquisitions, misappropriation or misuse of our intellectual property, claims against us for intellectual property infringement or failure to enforce our ownership of intellectual property, failure to attract and retain users who create and post original content on our web properties, taxation risks in various jurisdictions and the potential for unfavorable decisions related to tax assessments, taxation risks impacting our liability or past sales, and ability to make future sales, downturns in our customers' businesses, our indebtedness and our ability to borrow funds under our revolving credit facility or refinance our indebtedness, restrictions on our current and future operations under such indebtedness, development and use of artificial intelligence, failure to timely and efficiently scale, adapt and maintain our technology and infrastructure, capacity constraints, system failures or breaches of network security, usefulness of our candidate profiles to our customers, decreases in our user engagement, changes in search engines' methodologies, failure to halt operations of third-party websites aggregating our data, our reliance on third-party hosting facilities, our compliance with laws and regulations, U.S. and foreign government regulation of the Internet and taxation, failure to attract or retain key executives and personnel, our ability to navigate the cyclicality or downturns of the U.S. and worldwide economies, litigation related to infringement or other claims regarding our services or content, our ability to defend ownership of our intellectual property, global climate change, compliance with the continued listing standards of the New York Stock Exchange, volatility in our stock price, differences between estimates of financial projections and future results, failure to maintain controls over financial reporting, results of operations fluctuating on a quarterly and annual basis, our Section 382 Rights Plan may have an anti-takeover effect, anti-takeover provisions in our governing documents may make changes to management difficult, and disruption resulting from unsolicited offers to purchase the company. 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 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. 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, Free Cash Flow, and non-GAAP Earnings Per Share provides useful information to management and investors regarding certain financial and business trends relating to the Company's 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. Non-GAAP Earnings Per Share Non-GAAP 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. Non-GAAP Earnings Per Share is computed as diluted earnings per share plus or minus the impacts of certain non-cash and other items, including non-cash stock-based compensation, impairments, costs related to reorganizing the Company, including severance and related costs, gains or losses on investments, restructuring charges, and discrete tax items. Non-GAAP 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. Free Cash Flow We define free cash flow as net cash provided by operating activities minus fixed asset purchases. We believe free cash flow is an important non-GAAP measure for investors as it provides useful cash flow information regarding our ability to service, incur or pay down indebtedness or repurchase our common stock. Management uses free cash flow as a measure to reflect cash available to service our debt as well as to fund our expenditures. A limitation of using free cash flow versus the GAAP measure of net cash provided by operating activities is that free cash flow does not represent the total increase or decrease in the cash balance from operations for the period since it includes cash used for fixed asset purchases during the period. 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, 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 revenue 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, impairment of investment and goodwill, restructuring charges 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 gains related to legal claims that are unusual in nature or infrequent. Adjusted EBITDA Margin is computed as Adjusted EBITDA divided by revenue. 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. ) (1,495)Proceeds from issuance of common stock through ESPP 60 81 60 81 Net cash flows used in financing activities (3,529) (4,714) (5,202) (5,849)Net change in cash for the period 757 127 861 (920)Cash, beginning of period 3,012 2,655 2,908 3,702 Cash, end of period$3,769 $2,782 $3,769 $2,782 Supplemental Information and Non-GAAP Reconciliations On the pages that follow, we have 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 directly comparable GAAP measure. A statement of operations and statement of cash flows for the three and six month periods ended June 30, 2026 and 2025 and balance sheets as of June 30, 2026 and December 31, 2025 are provided elsewhere in this press release. 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, professional fees and related costs, and restructuring charges. 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 without unreasonable efforts. View source version on businesswire.com: https://www.businesswire.com/news/home/20260805903680/en/ Contacts Investor Contact Todd Kehrli or Jim ByersPondelWilkinson, [email protected]

DHI Group, Inc. DHX delivered first-quarter 2026 earnings of 6 cents per share, beating the Zacks Consensus Estimate of 2 cents by 200%. The company’s results reflected continued momentum at ClearanceJobs and tighter cost execution. Revenues came in at $30 million, topping the consensus mark by 2.16%. On a year-over-year basis, revenues declined 7.1%. DHX’s subscription-heavy model continues to support a high level of recurring revenues. ClearanceJobs revenues were $14 million, up 5% year over year. Management cited improving demand trends tied to a more favorable government spending environment, with early benefits from recent strategic initiatives. Dice revenues totaled $15.7 million, down 17% from the year-ago quarter. The segment continued to face a softer tech hiring backdrop, even as management pointed to improving leading indicators and engagement trends. DHI Group, Inc. price-consensus-eps-surprise-chart | DHI Group, Inc. Quote DHX ended the quarter with 1,741 ClearanceJobs recruitment package customers, down 8% year over year. Despite the lower count, average annual revenue per ClearanceJobs recruitment package customer increased 6% to $27,286, pointing to better monetization within the base. Dice recruitment package customers were 3,832 at quarter end, reflecting a 15% year-over-year decline. Average annual revenue per Dice recruitment package customer was $15,466, down 6%, as smaller customers remained more sensitive to macro uncertainty. ClearanceJobs posted a revenue renewal rate of 88% in the quarter, while Dice recorded 71%. DHX also reported retention rates of 105% for ClearanceJobs and 100% for Dice, reflecting solid contract value preservation among renewing customers. Deferred revenues ended the quarter at $44.5 million, down 12% from the first quarter of 2025. Total committed contract backlog was $99.0 million, down 8% year over year, giving investors a snapshot of contracted revenue visibility across the business. Operating expenses fell 36% year over year to $26.6 million, due to efficiency actions and the ongoing shift in Dice toward a modern recruiting platform and a leaner operating model. The improved cost structure helped DHX generate operating income of $3.1 million versus an operating loss a year earlier. Adjusted EBITDA increased 17% to $8.1 million, translating into a 27% margin compared with 22% in the year-ago quarter. Net income was $1.5 million, a sharp turnaround from the prior-year loss that included a goodwill impairment charge and restructuring expense. Operating cash flow was $8.4 million, up from $2.2 million in the year-ago period. Free cash flow improved to $6.8 million, supported by lower fixed asset purchases and continued discipline around capitalized development spending. DHX ended the quarter with $3 million in cash and $33.0 million of total debt. The company repurchased 2 million shares for $4.7 million during the quarter and had $6.4 million remaining under its $10 million authorization. For outlook, DHX expects second-quarter revenues of $30 to $32 million and full-year revenues of $124 million to $128 million, while maintaining its full-year adjusted EBITDA margin target of 25%. For fiscal 2026, DHI Group’s revenues are expected to be between $126 million and $128 million. The Zacks Consensus Estimate for fiscal 2026 revenues is pegged at $119 million, indicating a year-over-year decline of 6.7%. DHX’s second-quarter 2026 revenues are expected to be in the range of $30-$32 million. The Zacks Consensus Estimate for the second quarter of fiscal 2026 revenues is pegged at 27 cents, indicating a year-over-year decline of 6.9%. ClearanceJobs and Dice are each expected to generate quarterly revenues between $15 million and $16 million in the second quarter of 2026. DHX reaffirmed its adjusted EBITDA margin to be 25% for 2026, with ClearanceJobs expected to deliver margins of 40% and Dice 22%. Currently, DHX carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader Zacks Computer and Technology sector are Broadcom AVGO, Celestica CLS and Samsara IOT, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here. Shares of Broadcom have gained 21.7% year to date. The Zacks Consensus Estimate for Broadcom’s 2026 earnings is pegged at $11.45 per share, up by a penny over the past 30 days, indicating an increase of 68% year over year. Shares of Celestica have rallied 41.7% year to date. The Zacks Consensus Estimate for Celestica’s 2026 earnings is pegged at $9.85 per share, up $1.01 over the past seven days, indicating an increase of 62.8% year over year. Samsara shares have lost 14% year to date. The Zacks Consensus Estimate for IOT’s fiscal 2027 earnings is pegged at 68 cents per share, up 11 cents over the past 60 days, indicating an increase of 21.4% year over year. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Celestica, Inc. (CLS) : Free Stock Analysis Report Broadcom Inc. (AVGO) : Free Stock Analysis Report DHI Group, Inc. (DHX) : Free Stock Analysis Report Samsara Inc. (IOT) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

CENTENNIAL, Colo., May 05, 2026--(BUSINESS WIRE)--Today, DHI Group, Inc. (NYSE: DHX) ("DHI" or the "Company") announced its financial results for the first quarter ended March 31, 2026. First Quarter 2026 Financial Highlights Compared to the First Quarter 2025(1) Total revenue was $29.7 million, down 8%. ClearanceJobs revenue was $14.0 million, up 5%. Dice revenue was $15.7 million, down 17%. Total bookings were $38.3 million, down 9%. ClearanceJobs bookings were $18.0 million, up 7%. Dice bookings were $20.2 million, down 20%. Net income was $1.5 million, or $0.04 per diluted share, a net income margin of 5%, compared to net loss of $9.8 million, or $0.21 per diluted share, a net loss margin of negative 30%. Non-GAAP earnings per share was $0.08 per diluted share, compared to $0.04 per diluted share. Adjusted EBITDA increased 17% to $8.1 million, an Adjusted EBITDA Margin of 27% compared to Adjusted EBITDA of $7.0 million, and a margin of 22%. ClearanceJobs Adjusted EBITDA was $5.7 million with a 40% Adjusted EBITDA Margin, compared to Adjusted EBITDA of $5.7 million, and a margin of 43% Adjusted EBITDA Margin. Dice Adjusted EBITDA was $4.3 million with a 28% Adjusted EBITDA Margin, compared to Adjusted EBITDA of $3.4 million, and an 18% Adjusted EBITDA Margin. Cash flow from operations was $8.4 million, compared to $2.2 million while fixed asset purchases declined $0.5 million, or 24%, to generate free cash flow of $6.8 million, compared to $0.1 million. Cash was $3.0 million at quarter end compared to $2.9 million at the end of last year. Total debt at the end of the quarter was $33.0 million compared to $30.0 million at the end of last year. The Company repurchased 2.0 million shares for $4.7 million in the first quarter under its stock repurchase program and from the vesting of share-based awards. Commenting on the results, Art Zeile, President and CEO of DHI Group, said: "We are executing well against our strategy, with strong momentum in ClearanceJobs and encouraging progress across our strategic initiatives. ClearanceJobs continues to benefit from improving demand trends and a more favorable government spending environment, positioning us for the next phase of growth. Our recent acquisitions, Point Solutions Group and AgileATS, are performing ahead of expectations and expanding the scope of the ClearanceJobs platform as our primary growth engine. "At the same time, we are seeing signs of stabilization in the broader tech hiring market, along with increasing demand for AI-related skills, which plays directly to Dice’s strengths. Across both platforms, our focus on highly skilled technology professionals, combined with ongoing product innovation and a highly recurring revenue model, positions us to drive sustainable, profitable growth and generate meaningful shareholder value through strong free cash flow." Greg Schippers, CFO of DHI Group, commented: "We delivered strong profitability and cash flow performance in the quarter, expanding Adjusted EBITDA margin by 500 basis points to 27% and generating $6.8 million of free cash flow, a significant increase from the prior year. This reflects disciplined cost management, improved operating leverage, and the strength of our highly recurring revenue model. "While top-line performance was impacted by continued softness in Dice, the business drove meaningful margin expansion, and ClearanceJobs continues to deliver durable growth and industry-leading profitability. Importantly, we are converting earnings into cash at a higher rate, strengthening our financial flexibility. "Given our confidence in the business and cash flow outlook, we implemented a $10 million share repurchase plan during the quarter and returned $3.8 million to shareholders through the plan, while maintaining a consistent leverage position. We remain focused on driving further margin expansion, cash generation, and disciplined capital allocation." Fiscal 2026 Financial Guidance We are reaffirming our 2026 fiscal year Adjusted EBITDA margin guidance for DHI of 25% with ClearanceJobs at 40% and Dice at 22%. Conference Call Information Art Zeile, President and Chief Executive Officer, and Greg Schippers, Chief Financial Officer, will host a conference call today, May 5, 2026, 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 will be 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, ClearanceJobs and Dice, 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, and intentions, growth potential, and statements regarding our financial outlook. These statements often include words such as "may," "will," "should," "believe," "expect," "anticipate," "intend," "plan," "estimate," "target" 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 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, a write-off of all or a part of our goodwill and intangible assets, backlog not accurately representing future revenue, 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 and the development of new products and services, macroeconomic conditions, including government shutdowns, the impact of initiatives to restructure or streamline government agencies, such as DOGE, the risk that AI models will reduce demand for technology professionals in the workforce, failure to maintain and develop our reputation and brand recognition, failure to increase or maintain the number of customers who purchase recruitment packages, failure to attract qualified professionals to our websites or grow the number of qualified professionals who use our websites, inability to successfully integrate future acquisitions or identify and consummate future acquisitions, misappropriation or misuse of our intellectual property, claims against us for intellectual property infringement or failure to enforce our ownership of intellectual property, failure to attract and retain users who create and post original content on our web properties, taxation risks in various jurisdictions and the potential for unfavorable decisions related to tax assessments, taxation risks impacting our liability or past sales, and ability to make future sales, downturns in our customers' businesses, our indebtedness and our ability to borrow funds under our revolving credit facility or refinance our indebtedness, restrictions on our current and future operations under such indebtedness, development and use of artificial intelligence, failure to timely and efficiently scale, adapt and maintain our technology and infrastructure, capacity constraints, system failures or breaches of network security, usefulness of our candidate profiles to our customers, decreases in our user engagement, changes in search engines’ methodologies, failure to halt operations of third-party websites aggregating our data, reliance on third-party hosting facilities, our compliance with laws and regulations, U.S. and foreign government regulation of the Internet and taxation, failure to attract or retain key executives and personnel, our ability to navigate the cyclicality or downturns of the U.S. and worldwide economies, litigation related to infringement or other claims regarding our services or content, our ability to defend ownership of our intellectual property, global climate change, compliance with the continued listing standards of the New York Stock Exchange, volatility in our stock price, differences between estimates of financial projections and future results, failure to maintain controls over financial reporting, results of operations fluctuating on a quarterly and annual basis, our Section 382 Rights Plan may have an anti-takeover effect, anti-takeover provisions in our governing documents may make changes to management difficult, disruption resulting from unsolicited offers to purchase the company. 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 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. 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, Free Cash Flow, and non-GAAP Earnings Per Share provides useful information to management and investors regarding certain financial and business trends relating to the Company's 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. Non-GAAP Earnings Per Share Non-GAAP 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. Non-GAAP Earnings Per Share is computed as diluted earnings per share plus or minus the impacts of certain non-cash and other items, including non-cash stock-based compensation, impairments, costs related to reorganizing the Company, including severance and related costs, gains or losses on investments, restructuring charges, and discrete tax items. Non-GAAP 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. Free Cash Flow We define free cash flow as net cash provided by operating activities minus fixed asset purchases. We believe free cash flow is an important non-GAAP measure for investors as it provides useful cash flow information regarding our ability to service, incur or pay down indebtedness or repurchase our common stock. Management uses free cash flow as a measure to reflect cash available to service our debt as well as to fund our expenditures. A limitation of using free cash flow versus the GAAP measure of net cash provided by operating activities is that free cash flow does not represent the total increase or decrease in the cash balance from operations for the period since it includes cash used for fixed asset purchases during the period. 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, 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 revenue 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, impairment of investment and goodwill, restructuring charges 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 gains related to legal claims that are unusual in nature or infrequent. Adjusted EBITDA Margin is computed as Adjusted EBITDA divided by revenue. 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. Supplemental Information and Non-GAAP Reconciliations On the pages that follow, we have 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 directly comparable GAAP measure. A statement of operations and statement of cash flows for the three month periods ended March 31, 2026 and 2025 and balance sheets as of March 31, 2026 and December 31, 2025 are provided elsewhere in this press release. 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, professional fees and related costs, and restructuring charges. 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 without unreasonable efforts. View source version on businesswire.com: https://www.businesswire.com/news/home/20260505372476/en/ Contacts Investor Contact Todd Kehrli or Jim Byers PondelWilkinson, Inc. 212-448-4181 [email protected] Media Contact Rachel Ceccarelli VP of Engagement 212-448-8288 [email protected]