DHI Group, Inc. (NYSE:DHX) Q2 2024 Earnings Call Transcript

DHI Group, Inc. (NYSE:DHX) Q2 2024 Earnings Call Transcript August 7, 2024

Operator: Good day, and welcome to the DHI Group, Inc. Second Quarter 2024 Financial Results Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Todd Kehrli, MKR Investor Relations. Please go ahead.

Todd Kehrli: Thank you, Operator. Good afternoon, and welcome to DHI Group’s 2024 second quarter earnings conference call. With me on today’s call are DHI’s CEO, Art Zeile and CFO, Raime Leeby. Before I turn the call over to Art, I’d like to cover a few quick items. This afternoon, DHI issued a press release announcing its 2024 second quarter financial results. 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 management’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, during today’s call, management will be referring to specific financial measures, including adjusted EBITDA, adjusted EBITDA margin, and non-GAAP earnings per share that are not prepared in accordance with US GAAP. Information about and reconciliation of these non-GAAP measures to the most directly comparable GAAP measures are available in our earnings release, a copy of which you can find on our website 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. Good afternoon, everyone, and welcome to our 2024 second quarter earnings conference call. We appreciate your time today as we discuss our financial performance and provide an update on our outlook. First, let’s discuss the current state of the tech labor market, which is one of the main growth drivers for our business. Although, our bookings are not where we hoped they would be throughout the quarter, we continue to see a slow rise in new tech job postings with May’s total of 209,000 reported by CompTIA, marking the highest number since June of 2023. While we haven’t yet returned to the pre-pandemic average of 300,000 new job postings per month, there are signs of improvement as more employers are coming off the sidelines.

AI initiatives are increasingly driving the demand for tech professionals, particularly with consulting firms being the initial focus for corporations. Notably, IBM recently announced that it had already booked $1 billion in AI-related business so far in 2024. And McKinsey & Company said, it anticipates at least 40% of its projects this year will involve AI. We view this as an early indication of growing AI demand as companies test initiatives with consulting firms before launching broader projects. Additionally, Lightcast reports that the percentage of all US tech job postings requiring AI skills jumped from 15% in January to 27% in June of this year. Tech is the second long — largest long-term occupational growth trend in the United States behind healthcare and is projected to grow twice as fast as the overall US workforce as the US becomes a more digital economy over time.

As businesses ramp up their investment in technology, ClearanceJobs and Dice will be essential tools for employers looking to find the ideal candidates for their open tech job postings from the 8.5 million technologist profiles we manage. Our clients continue to see increased success in attracting and hiring top tech talent using our platforms. One recent example is American National Insurance, who stated Dice has paid for itself already as we made one hire that we could not find anywhere else. Our team also has found great value in leveraging the database to source for talent and has found quality candidates. Our client Coca-Cola mentioned seeing an increase in referral traffic from Dice, which has had a positive impact on their ability to source candidates further validating the value of the platform for companies hiring for their own tech talent.

As evidenced by this feedback, our secret sauce is the ability to efficiently deliver to employers the highest quality candidates using our proprietary skills mapping technology to match the specific tech skills an employer is looking for to the exact candidates that have them. This is one of the reasons Forbes Magazine announced Dice as the number one website for tech and IT jobs just days ago. Now let me dig into the performance during the second quarter and what we see ahead for the remainder of 2024. In the second quarter, our total revenue declined 7% year-over-year. CJ revenue increased 8%, while Dice revenue decreased 14%. Excluding transactional revenue, our total recurring revenue declined 6% year-over-year. ClearanceJobs’s continued revenue growth was encouraging as government agencies and contractors are driving increased hiring of cleared tech professionals, while the decrease in Dice revenue was due to lower new business bookings and renewals over the past several quarters as well as less transactional revenue.

Looking at our bookings performance, our total bookings were down 7% year-over-year in the second quarter, a 200 basis point improvement from the 9% decline in the first quarter. ClearanceJobs’s bookings for the second quarter increased 9% year-over-year, which is still below its trend line but improving. During the second quarter, CJ secured several new customers, including Texas Research Institute, Iridium Satellite and Nighthawk flight Systems. We continue to be optimistic about the short- and long-term growth prospects for CJ, although we know that even military contractors remain cautious this year. With over 10,000 employers of clear tech professionals and over 100 government agencies that also need clear tech professionals, ClearanceJobs has a significant growth opportunity ahead of it.

Dice bookings for the second quarter declined 15% year-over-year as many employers continue to be very budget conscious in this uncertain economic environment. Despite these headwinds, Dice secured several notable customers this quarter, including Prudential Financial, Aliya Healthcare and Blue Origin as it continued to focus on those industries and companies hiring tech professionals even in this weakened economic state. The data continues to indicate that these industries include aerospace, business consulting, healthcare, financial services and education. Moving on to account management. Our CJ and Dice revenue renewal rates were 96% and 78%, respectively, in the second quarter. Retention rates for CJ and Dice were 113% and 99%, respectively.

During the second quarter, we delivered a 25% adjusted EBITDA margin, which was up from 23% a year ago. Our operating cash flow was $9.1 million for the quarter versus $8.1 million in the year ago quarter. We continue to focus on operating our business efficiently as evidenced by our 12% year-over-year reduction in total operating expenses this past quarter. Now let me quickly touch on what we are doing to drive increased adoption of our two brands. At the end of last year, we released comprehensive subscription packages that combine unlimited job postings, a company page and selected job boosts for harder-to-fill positions. During the first half of 2024, almost all of our new business bookings across both brands were sold in this format, highlighting the value of our prospects see in this combination of services.

Importantly, for the second quarter, the new subscription package pricing has improved our average contract value by approximately 4% versus last year’s average ACV, which included legacy pricing. For our existing customers, we also have started to see increased adoption with 12% of our renewals choosing the new comprehensive subscription package in the second quarter. We also continue to deliver product innovation for both ClearanceJobs and Dice. For CJ, the big development during the quarter was our selection as the official partner of the US Department of Labor’s Employment Navigator and Partnership Program. The ENPP provides one-on-one assistance connecting transitioning service members with career resources, as they explore and plan for post-military life.

After separating from the military, veterans security clearances generally stay current for three years. As an ENPP partner, ClearanceJobs will help veterans utilize their security clearance following their service with the US military. With clear jobs openings and demand for cleared talent at record highs, a security clearance can be a valuable asset for service members in their job search. Adding ClearanceJobs as a resource for transitioning service members will have a big impact on the lives of veterans and will help fill the roles vital to our nation’s, security and defense. For Dice, the Dice all jobs initiative continues to deliver an increased number of job postings, which in turn is driving increased job applications from candidates.

During the second quarter, the number of jobs posted on Dice increased 30% year-over-year, and Dice averaged 1.6 million monthly job applications, an increase of over 85% year-over-year. Increased applications can serve as a barometer for sentiment in the tech community. In a recent survey, one tech professional said, the primary reason I rated Dice, a 10 out of 10 is because of its extensive database of job listings, user-friendly interface and robust search filters that make it easy for job seekers to find relevant opportunities in their field. Additionally, Dice offers valuable resources and tools for career development, networking and skill enhancement, making it a comprehensive platform for professionals in the tech industry, providing clients with an active and engaged candidate community and candidates with the ideal jobs they’re seeking is essential to further establishing Dice as a trusted career marketplace.

Before I turn the call over to Raime, let me touch on our expectations for the rest of 2024. As I stated earlier, we believe there are emerging signs that the demand for tech professionals is improving as evidenced by the increasing number of tech job postings during the second quarter. However, as I have said before, this recovery does not appear to be V-shaped, but rather a slow and steady one. As such, while we expect our bookings performance in the second half of the year to continue to improve, we do not expect total bookings to return to growth until next year as many employers continue to be very budget conscious during this uncertain economic environment. We expect our third quarter bookings to be down between 4% to 6% year-over-year, and we expect our revenue for the third quarter to be down 4% to 6% year-over-year with total revenue for the full year declining in the mid single-digit percentage range.

We continue to focus on improving our products and our go-to-market execution so that we are ready to capitalize on the anticipated increased demand for our tools while at the same time, delivering strong profits for our shareholders. From a profitability perspective, we continue to target an adjusted EBITDA margin of 24% for the full year. In conclusion, as businesses ramp up their investment in technology, including the surge in new AI initiatives, we believe our subscription-based offerings, which include 8.5 million technologist profiles and our unique tech skills mapping and search algorithms will be essential tools for employers looking to find the ideal candidates for their open tech job postings. On that note, let me turn the call over to Raime who will take you through our financials, and then we’ll take any questions you may have.

Raime?

Raime Leeby: Thank you, Art, and good afternoon, everyone. Jumping right in, let me take you through our financial results for the quarter. We reported total revenue of $35.8 million, which was down 7% on a year-over-year basis and down 1% from the prior quarter. Total bookings for the quarter were $30 million, down 7% year-over-year. As Art mentioned, our total recurring revenue was down 6% in the second quarter. ClearanceJobs revenue was $13.3 million, up 8% year-over-year and up 3% sequentially. Bookings for CJ were $11.4 million, up 9% year-over-year. We ended the second quarter with 2009 CJ recruitment package customers, which was down 3% on a year-over-year basis and 1% sequentially. This slight reduction is attributable to churn with smaller customers.

Our average annual revenue for CJ recruitment package customer was up 16% year-over-year and up 5% sequentially to $24,275. During the quarter, over 90% of CJ revenue is recurring and comes from annual or multiyear contracts. For the quarter, CJ’s revenue renewal rate was 96%, and CJ’s retention rate was strong at 113%. The outstanding retention rate demonstrates the continued value CJ delivers and the recruitment of cleared professionals. Dice revenue was $22.6 million, which was down 14% year-over-year and 3% sequentially. Site bookings were $18.6 million, down 15% year-over-year. We ended the quarter with 5,031 Dice recruitment package customers, which is down 4% from last quarter and down 16% year-over-year. This reduction is attributable to churn with smaller customers spending less than $10,000 per year.

Our average annual revenue per Dice recruitment package customer was up 2% sequentially and up 5% year-over-year to $16,294. During the quarter, over 90% of Dice revenue was recurring and came from annual or multiyear contracts. For the quarter, our Dice revenue renewal rate was 78%, down from 82% in the first quarter and our Dice retention rate was 99%, down slightly from 100% in the first quarter. Turning to operating expenses. Second quarter operating expenses were down 12% to $33.8 million when compared to $38.6 million in the year ago quarter, reflecting cost savings associated with the restructuring initiatives in 2023. We implemented a restructuring in the third quarter of 2024, which is expected to yield $4 million to $6 million of annual savings that we expect to be partially offset by annual merit increases and investments in the business.

We continue to focus on operational excellence. For the quarter, we had income tax expense of $383,000 on income before taxes of $1.3 million. Our tax rate for the quarter approximates the statutory rate. We recorded net income of $943,000 or $0.02 per diluted share for the second quarter. For the prior year quarter, we recorded a net loss of $127,000 or $0.00 per diluted share. Our non-GAAP earnings per share was — excuse me, $0.06 per diluted share for the current and prior year quarters. Diluted shares outstanding for the quarter were $45 million compared to $43.5 million in the prior year quarter. Adjusted EBITDA for the second quarter increased 3% to $9 million, a margin of 25% compared to $8.7 million or a margin of 23%, an increase of over 200 basis points from the second quarter a year ago.

Operating cash flow for the second quarter was $9.1 million compared to $8.1 million in the prior year period. Our capitalized development costs in the second quarter were $3.2 million compared to $4.3 million second quarter of last year, a decline of $1.1 million. Capitalized development costs for the company are primarily related to costs incurred from building new products and features on our platform, which will continue to decrease in the second half of the year. We expect our CapEx for the year to be between $14 million and $16 million versus $20.3 million in the prior year. From a liquidity perspective, at the end of the quarter, we had $3 million in cash and total debt of $35 million under our $100 million revolver. Total debt decreased $6 million during the quarter and $8 million year-over-year.

I’m pleased to report that we finished the quarter under one times leverage, which resulted in a 25 basis point decrease on our revolver interest rate. Deferred revenue at the end of the quarter was $52.3 million, down 2% from the second quarter of last year. Our total committed contract backlog at the end of the quarter was $110.3 million, which was down 6% from the end of the second quarter last year. Roughly 80% of the backlog is considered short term and will be recognized as revenue in the next 12 months. During the quarter, we did not purchase shares under our share buyback program and shares purchase related to the vesting of share-based awards were minimal. Moving on to guidance, while we expect bookings performance in the second half of the year to continue to improve, many employers continue to be very budget conscious during this uncertain economic environment.

As a result, we do not expect our total bookings to return to growth until next year. We expect our third-quarter bookings to be down 4% to 6% year-over-year. And we expect our revenue for the third quarter to be down 4% to 6% year-over-year with total revenue for the full year declining in the mid-single-digit percentage range. From a profitability perspective, we continue to target an adjusted EBITDA margin of 24% for the full year. We remain focused on driving long-term sustainable revenue growth and are well positioned from a customer acquisition perspective as tech hiring returns to more normal levels. To wrap up, while the current economic environment is still impacting our growth, we expect companies across all industries will increase their investment in technology initiatives, as companies look to implement generative AI into their business models, which we believe will drive increased demand for our products and services as demand for technologists will follow.

In the meantime, we are focused on improving our industry-leading offerings and our go-to-market execution, so we are ready to capitalize on the acceleration of tech hiring. And with that, let me turn the call back to Art.

Art Zeile: Thank you, Raime. I’d like to thank all of our employees again for their hard work this past quarter. It is a pleasure to be part of such a great team. With that, we’re happy to answer your questions.

Q&A Session

Operator: We will now begin the question-and-answer session. [Operator Instructions] The first question comes from Zach Cummins with B. Riley Securities. Please go ahead.

Zach Cummins: Hi. Good afternoon, Art and Raime. Thanks for taking my questions.

Art Zeile: Of course, sir.

Zach Cummins: Thank you for taking my questions. Just curious about what you’re hearing from your customers, especially on the Dice side of the business, just given the current macro environment. It seems like job postings were making some incremental progress in recent months, but I think the latest jobs report has really almost set off the alarms that I mentioned. So just curious about the dialogue you’re hearing with your customers and kind of how that’s impacting your updated outlook in the second half of this year.

Art Zeile: Well, that’s a great question. That’s the question we ask just about every week here at DHI Group. And I would say it is still a very sluggish economy. There is still a belief that the demand for tech hiring isn’t nearly what it has been in years past or what you would consider to be a normal year. The way that we look at, the tech jobs report that comes out from CompTIA every single month is that we’re still down about 30% from what would constitute a normal environment in terms of the total number of tech job postings. In fact, we did an analysis of Q2’s tech job postings this year versus Q2 of 2019. And the exact answer was that we were down 31% from that quarter in terms of tech job postings. So again, it’s a difficult environment.

I’d say the real substantial kind of news for this quarter is that we saw not only the continuing pattern of attrition of smaller companies, which we have seen in many quarters in the past, I would say, over the last six quarters. But we did have two notable customers that were in the six-figure range for us that did not renew at all. And they were for different reasons. In one particular case, it was a large manufacturing, automobile manufacturing company that had UA or UAW strike related budget constraints. And then the second one was a staffing recruiting firm that divested their IT practice, so they no longer had IT recruiters. And that’s what really caused a dip in the Dice revenue renewal rate from what we saw in the first quarter. But that’s how I would describe the environment today.

It’s still about the same as it was in the first quarter, and that is to say that people are very budget conscious. They’re worried about the state of the economy, probably even more so since the job report that came out on Friday of last week. So that’s what we’re hearing.

Zach Cummins: Got it. And in terms of — one question for Raime, maybe nice to see you dip below one-times leverage this quarter. But how are you thinking about capital allocation just given the current backdrop? How are you going to continue to balance continuing to chip away at the debt versus maybe potentially resuming share repurchases?

Raime Leeby: Hi, Zach. Yeah, great question. We were really pleased with our leverage ratio tracking below that one-times because we do pick up the benefit of interest rate reduction of about 25 basis points. And so we’re pleased with that. I think that’s an ongoing conversation with our Board regarding what our best highest use of capital is. I envision that in this coming quarter, we will have discussions around whether we continue to pay down debt and/or we reintroduced the buyback program just given that we hit that lower than one-times leverage. So I think it remains to be seen how that conversation evolves. And as you would imagine, some of that depends on the Fed and rates as well in the broader macro environment.

Zach Cummins: Understood. Well, thanks for taking my questions, and best luck with the rest of the quarter.

Art Zeile: Thanks Zach.

Operator: The next question is from Gary Prestopino with Barrington Research. Please go ahead.

Gary Prestopino: Hey good afternoon, Art and Raime.

Art Zeile: Hey, Gary.

Gary Prestopino: Let me — well, first of all, have you gotten any data from CompTIA on what the postings were like, tech job postings were like in July? Because just according to my records, they were at 142,000 in December and March, they increased to 191 and now we’re at 209,000. So you are starting to see a pickup. But because of what’s going on in the economy, do they track down in July versus June or you don’t have that data?

Art Zeile: Yes, they did post that data just Friday of last week. And the answer is that July’s new tech job postings were 176,324. So it’s below what we saw at the peak in May. Now I have to say that because of seasonality, we always see a dip in June and July. And so when I think about that figure, I actually compare it to the last seasonal dip, which was December of last year, and that was 142,000 new tech job postings. The other kind of notable outcomes from the CompTIA report is that the unemployment rate for the tech sector did edge down, which is obviously a positive. And then the number of total tech jobs in the economy decreased by 14,000, but this is the lowest decrease we have seen in over a year, quite frankly. So it feels like there’s a little bit of stabilization.

But as we know, it’s been a difficult year or year and a half as we’ve been waiting for a recession. And so I think that more than anything else weighs on the decision-making process for a lot of CFOs out there.

Gary Prestopino: Okay. And then in terms of your target for adjusted EBITDA margin, you said is 24%, I believe…

Art Zeile: But yes, that’s correct.

Gary Prestopino: You actually came up with 25%. So is that sequential dip in the AE margin a function of that you had to lower your sales growth guidance a little bit? Or is there some kind of incremental investments that you’re making with the company over the last six months of this year?

Raime Leeby: Yes. Hi Gary, this is Raime. I think that as we look towards the second half of the year, as we noted, we did have a restructuring event at the beginning of the quarter that will yield us annualized savings, and we’re expecting that to be offset by merit increases for our employees, which actually go into fact business in the half – at the midpoint of the year. So that will impact our Q3 and Q4 on a comparable basis. And we do have investments as well baked into the second half related to several initiatives that we expect to yield longer-term growth for us.

Gary Prestopino: Okay. So your — right now, your sales force is still, especially with Dice, because CJ is growing. Dice is still a very, very challenging environment for the salespeople out there. But are they starting to pick, at least see a pickup in, I guess, lack of a better word for interest or activity listening, whatever, from the potential new account base out there?

Art Zeile: Yes. I was going to say that we have two new business teams for Dice. One is focused on commercial accounts. One is focused on staff and recruiting consulting companies, what we call SRC category. And I would say that the SRC pipeline in activity improved sequentially from Q1 to Q2, and I wouldn’t say it was significant or something that obviously drove an enormous amount of bookings, but it feels like it’s stabilizing. And there is kind of a belief that maybe that is an indicator of sorts that the market is also more stable when staffing recruiting agencies are more actively involved with staffing technology professionals. So that felt better. I’d still say, commercial accounts is a very challenged environment. We are focused on those five industries that are hiring, but I look at that and say, well, back in 2002 — I’m sorry, 2022 or maybe even a better representative year would be 2019, we had all 16 verticals that we track aggressively hiring technology talent.

Now we have a lot more difficult. There are still customers that are very interested in hiring tech professionals, but it’s an environment where the demand is a lot weaker.

Gary Prestopino: Okay. Thank you.

Operator: [Operator Instructions] The next question is from Kevin Liu with K. Liu & Company LLC. Please go ahead.

Kevin Liu: Hey good afternoon guys. Art, you mentioned that you guys have seen kind of an 85% increase in average monthly applications from candidates. I’m wondering if you could put that into context for us, do you think that’s indicative of potentially quite rates starting to rise again and maybe employers need get back to hiring the solo? Is it more a function of kind of higher unemployment amongst technology professionals? Just any help there in terms of how much of a leading indicator this could be for things improving from here on out?

Art Zeile: I think it is both. Quite frankly, I think that we’ve built a better experience for the candidates, made it easier for them to apply. We have an easy apply kind of functionality on the Dice platform. And nevertheless, I do think that the environment is such that most people are a little bit worried about their present employment situation. So, they are more interested in going to a Dice and looking at their Plan B or Plan C. I do think that there’s also kind of almost now a pent-up kind of demand to think about career steps in general. If you think about it, there were a lot of people that were eager to move to a new career position in 2021, 2022, then there was kind of last year was — and we’re still in the great stay. Well, in general, most tech professionals want to be involved with a new technology, a new skill set, a new project, I would say, once every two or three years. So, I think that there is this pent-up demand to look at alternatives.

Kevin Liu: It’s great to hear. And maybe just switching gears to CJ. It was nice to see kind of the acceleration in bookings kind of quarter-over-quarter. As you look towards the back half of the year, do you expect you can continue to build on that and accelerate that further? And perhaps you could kind of talk about how the election cycle could potentially impact that positive or negatively as we make our way through the rest of this year?

Art Zeile: So, we’re not planning on seeing anything remarkably pick up for CJ. I’d say that we are proud of the fact that we got to 9% improvement and if we could hold out for the remainder of the year, that’s a net positive in an environment where there’s still, as you mentioned, political uncertainty, there’s still a lot of economic uncertainty. Obviously, we always talk about CJ being correlated to the defense budget and that’s behind us. But quite frankly, we have to get — we’re going to probably go into a continuing resolution once again when we get to the end of this fiscal year, which, again, does provide a little bit of uncertainty going into the back half. But Raime, do you have any additional thoughts?

Raime Leeby: I don’t. Art, I think you summed it up beautifully.

Kevin Liu: All right. Great. And then just lastly for me. I know you guys have taken out some costs already through the restructuring last month. Maybe as you look at kind of more of your variable cost structure and marketing in particular, how are you thinking about the spender as we go into the back half of the year? Are you interested in continuing to kind of build the funnel and hope those better times ahead? Or would you look to pair that back and kind of match it to when you start to see more of a pickup on the bookings side?

Raime Leeby: Yes, I anticipate that our marketing spend, particularly our variable marketing spend, will be very similar in the second half to what we saw in the second quarter. We’ve made a lot of improvements and continue to make improvements on the efficiency of our marketing spend and believe that the current level of marketing spend that we’re seeing in Q2 is appropriate based on what we envision in the second half for bookings and revenue. Of course, that continues to be an area that we can flex as needed up or down, depending on how the market evolves.

Kevin Liu: All right. Thank you for taking questions.

Raime Leeby: Thanks, Kevin.

Art Zeile: Thank you, Kevin. Appreciate it.

Operator: [Operator Instructions] Next we have a follow-up question from Gary Prestopino with Barrington Research. Please go ahead.

Gary Prestopino: Yes. I just — I was trying to write down as either you were talking, Art or Raime, you mentioned something about the number of post job postings on Dice on increased applicants were up. Would — I just didn’t get it all down when you were talking about ?that. Do you have that handy?

Art Zeile: Yes. So quarter-over-quarter, if you think about Q2 of this year versus Q2 of last year, the total number of tech job postings on Dice is actually up 30% despite the weakened environment. And the total number of applications that have been generated on the platform is up 85%. And so we’re proud of the product team’s delivery of a number of different features that create more engagement on the platform. And we also related this back to what we call our all jobs initiative. We’re essentially focused on bringing all the tech jobs in the United States economy to Dice. That is the goal. It’s not something that we did achieve this year, but we think we can achieve it by the end of 2025.

Gary Prestopino: So I guess the question I would have and maybe just explain this to me, if the John postings were up 30%, right that must mean you’re obviously from your — the customer base that you’re still retaining, you’re getting more postings, but that’s not translating into a similar — some revenue growth there or similar level it wouldn’t be a similar level of revenue growth, but at least revenue growth. So could you kind of walk me through that?

Art Zeile: Yes, I can understand the logic that is inherent in that question. You’re saying if we only had jobs on our site that were associated with subscriptions, then we should have seen a lift in the dollar value of those subscriptions. Our all job initiative actually has two different additional layers of jobs that we put on to the Dice site in addition to those that are paid subscriptions. The first is what’s called programmatic. We take feeds from different job marketing agencies, and we will place them directly on the Dice platform were paid by the click-through rate associated with those jobs or by the applications that are spent to the underlying customers. There are certain customers like, for example, Capital One or Amazon that prefer to go through a marketing agency for all their jobs.

So they also include technology jobs in that. It’s a little bit of a different way of getting revenue, but it’s tuned to the way that they like to post jobs. The second lever or way of getting additional jobs on our site is that we actually scrape them off of sites that do not pay us for a subscription, and we use the benefits that we drive to those particular customers as a way of enticing them to buy a full-time subscription with us. So we are — we do have jobs now on the Dice side that are not paid for by the customer — the underlying customers themselves.

Gary Prestopino: Okay. That explains it. Thank you.

Art Zeile: Absolutely. Great question.

Operator: At this time, there are no further questions. So this concludes our question-and-answer session. I would like to turn the conference back over to Art Zeile with — for any closing remarks.

Art Zeile: Well, thank you very much, operator, and thank you to everyone for joining us today. As always, if you have any questions about our company or would like to speak with the management team, myself, Raime, please reach out to Todd, Curly and he will help to arrange a meeting. Thanks, everyone, for your interest in DHI Group, and have a great day.

Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.