DHI Group, Inc. (DHX) Q3 2015 Earnings Report, Transcript and Summary

Good morning and welcome to DHIs Third Quarter 2015 Earnings 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 Jennifer Milan, Director of Investor Relations. Please go ahead.

Thanks and good morning everyone. With me on the call today is Mike Durney, President and Chief Executive Officer of DHI Group, Inc.; along with John Roberts, our Chief Financial Officer. This morning we issued a press release describing the company's results for the third second quarter 2015. A copy of that release can be viewed on the company's website at dhigroupinc.com. Before I hand the call over to Mike, I'd like to note that today's call contains certain forward-looking statements, particularly statements regarding future financial and operating results of the company and its businesses. These statements are based on management's current expectations or beliefs and are subject to uncertainty and changes in circumstances. Actual results may vary materially from those expressed or implied by the statements herein due to changes in economic, business, competitive, technological and/or regulatory factors. The principal risks that could cause our results to differ materially from our current expectations are detailed in the Company's SEC filings, including our annual report on Form 10-K, in the sections entitled Risk Factors, Forward-looking Statements and Management's Discussion and Analysis of Financial Condition and Results of Operations. The company is under no obligation to update any forward-looking statements except as required by the federal securities laws. Today's call also includes certain non-GAAP financial measures, including adjusted EBITDA, adjusted EBITDA excluding Slashdot Media, adjusted revenue, adjusted revenues excluding Slashdot Media, net income excluding Slashdot Media, adjusted EBITDA margins, free cash flow and net cash to net debt. For details on these measures, including why we use them and reconciliations to the most comparable GAAP measures, please refer to our earnings release and our Form 8-K that has been furnished to the SEC, both of which are available on our website. Now I'll turn the call over to Mike.

Great, thanks Jen. Welcome to the DHI Group second quarter earnings call. This morning we will update you on our progress on improving our operations and further advancement we've made on our strategic plan and at the end of our remarks we'll be happy to take questions. Overall we're pleased with our third quarter performance which reinforces the strength of our diversified business model. We saw continued success with Open Web and a number of our new and emerging products performed well all of which are encouraging signs of the work we've been doing to improve and evolve our products is beginning to yield results. We also made some further operational and structural changes in our organization that continue to strengthen our foundation and align our resources for growth. To date we made real progress against our strategic plan and we continue to work to elevate our business across all of our brands. As we work to strengthen our vertical leadership and our sectors deepening relationships with our customers and the professionals who use our services is a top priority. In this regard we continue to improve our core products in order to deliver challenge to our customers most efficiently and make their equipment process as effective for them as possible. Today we are also providing more ways to engage with professionals in nontraditional ways which has enabled us to expand our relationship with customers and is leading to increased engagement with our services. As we described during our Investor Day and again on our second quarter call, we're focuses strategically on three primary areas where we believe we can play and win; talent acquisition, sourcing management and career management. Within the overall talent acquisition and landscape we continue to believe that sourcing will continue to play an increasingly important role and with that in mind we are working to expand our sourcing management offerings with the unique combination of sourcing tools. As in our organization, we've been energized, focused and committed to executing and the team has accomplished a great deal in the Company's repositioning. Today I'd like to highlight some of our accomplishments in Q3 which demonstrate the continued progress we're making. In the area of improving the efficiency and effectiveness of our core products and services at Dice the ongoing success Open Web is evident as we improve the customer experience, lifecycle marketing and customer on boarding and engagement and we're seeing these efforts pay off with increased usage and retention. We also launched and updated version of the Open Web Chrome Extension for Dice which drove and increase in the number of extension downloads. This puts Open Web more firmly into Dice customers' natural workflow and leads to efficiencies for them. Today they can access profiles of candidates generated from the nearly 190 sources that Open Web aggregates from without the site there on. During the quarter we reached a very exciting milestone for Open Web we had the total paying customer count for Dice in the U.S. surpassed 1000 customers, almost 900 of which are under annual contract. Those are significant numbers for a product that introduce a new method of recruiting to the marketplace and has only been a paid service for less than two years. As we continue to enhance the product and use our experience for Open Web we're focused on improving relevance and increasing the effectiveness of our customers. Also with Dice we've been working to expand the number of applicant tracking system integrations with key customers. This leads to two distinct benefits for us. One, the user experience is more seamless and has less friction which results in a better extremity for both our professionals and our customers and two, improved attribution of the performance we're driving for our customers which ultimately allows us to more clearly demonstrate ROI for them. At RIGZONE, where we continue to streamline and enhance the overall platform we launched a number of new enhancements aimed at improving the user experience and driving increased engagements. These include the launch of benchmarking analytics tools which show customers how they measure against the baseline set of users and modified resume search results with improved graft or user interface and a more comprehensive expanded view of candidates. All the enhancements we are making to the RIGZONE platform are aimed at improving search relevance and the value we provide to customers. While the market continues to be poor for recruitment in the energy industry, customers are noticing the improvements we're making and providing positive feedback regarding the commitment level during a downturn. This gives us more confidence that they'll return when the market starts to recover and then our ability to capture market share over the longer term with a much stronger offering than we had six months or a year ago. We continue to make considerable progress in healthcare during the third quarter with the launch of Spotlight and HEALTHeCAREERS. Spotlight is a new employer branding product suite that features rich content including employee sourced company reviews. Integrated with the job search experience and named it building employer branding as part of the Company's overall sourcing strategy. Not only is this enhanced the users experience with the site but it is a revenue generator as well. Although it is early, feedback has been very positive and customer demand has exceeded expectations. So we're thrilled to see how this service improves our customer's experience in the future. These are just a few examples of the enhancements we've been making that are improving the user experience of both customers and professionals. Another area of strategic focus for us is developing deeper, higher value relationships and we also made progress in this area during the third quarter. Our sourcing concierge product suite continues to perform well and posted another quarter of record sales demonstrating that customers are embracing new tools outside of traditional job postings and resume database access to help engage quality candidates and garner efficiencies. From our perspective sourcing concierge's offerings provide and effective way for us to extend our specialist expertise, provide enhanced support to our customers and deepen our client relationships. Also in the area of developing deeper, higher value relationships we launched a new Rig Data an analysis service at RIGZONE during the third quarter called Rig outlook which is targeted to industry decision-makers and other industry stakeholders and supplements are existing RigLogix service. We’re working on other projects that leverage the data we have in the energy business which will expand our offerings in this area. In terms of our continued strategic positioning we're following the rebrand of the IT Job Board to Dice at the end of June. We extended our Dice service into the UK and Continental Europe with one international tech offering the rebrand has been well received by customers. While still small we're now getting a number of customers buying Dice across our U.S. and European sites. The next phase of the integration project will entail creating a user experience for all international Dice sites that is consistent across the board with full platform integration to take place in phases over the next year or so. As we look forward to how best to capitalize on our opportunities in both our existing brands and with new initiatives we have realigned part of the company and shifted some leadership responsibilities to optimize ourselves for further growth. We've created a separate entity to focus on our new initiatives some of which you saw and heard about at Invest Day. We've put some of our best and most passionate product people on those projects under one leader who will marshal the resources of the organization to bring those products and services to market. With that change, we've also realigned the Dice management structure to build upon the product improvement we've made over the past few years. And lastly, we've combined three of our global brands, RIGZONE, eFinancialCareers and Hcareers to report to one leader through which structure we expect to get operating efficiencies and sharing of best practices that we believe will benefit all three brands. Moving on to other areas, we're happy with the continued growth delivered by our Healthcare segment with year-to-date revenue growth of 12% for HEALTHeCAREERS and 26% for BioSpace. These businesses continue to benefit from favorable market conditions, but also improvements we've made in the product, our go-to-market strategy and our sales and support organizations. HEALTHeCAREERS also continues to supplement its core product portfolio with new offerings in addition to Spotlight which I mentioned earlier, we've previously discussed SHIFT a new mobile platform for the contingent and freelance workforce in healthcare that was launched in Beta in Q2. As we expended SHIFT to more than 7000 active SHIFTs and more than 4500 registered professionals early customer feedback has been positive around the quality of applicants and apply the higher ratios and expansion of SHIFT will continue as we learn and innovate from early adopter feedback. Looking forward the environment for most of our verticals remains broadly similar to recent trends with the exception of the energy industry where job cuts continue. For most companies in the oil and gas sector all hiring continues to be frozen while they adjust their businesses to the volatility in the marketplace. While we've seen some signs of the customers we're engaged in we expect the negative impact on our business will continue in the fourth quarter and into 2016. And as I have discussed earlier the team is working diligently to continue to improve RIGZONE's position for the longer term. We've made a lot of progress on our key strategic initiatives, although we have a lot more to do. Our path of innovation, integration and evolution continues, but I believe the key elements that will enable us to grow are in place and it is encouraging to see many of our new and emerging products and services gaining traction. Across all of our businesses we made great strides in elevating our product, our people and our processes all of which are leading to increased engagement with our customers and professionals, greater affinity with our brands and deeper client relationships. While we continue to improve product performance and capabilities across our existing brands we're also pursuing new opportunities for growth including ones that will allow us to expand our addressable markets. So before I turn it over to John I'd just like to take a moment to thank all of our team members and acknowledge the tremendous amount they've accomplished. We have a much stronger foundation now in place and continue to believe that as the strategic positioning work we have accomplished begins to take hold and new and emerging product offerings being to show increasing contribution we're well positioned to drive improved financial performance beginning 2016 and deliver increased value to our shareholders over the long term. So with that, let me just turn it over to John.

Great, thanks Mike. I will review the details of our Q3 financial performance and then we will open the call up to questions. As previously mentioned, we are in the process to sell the Slashdot Media business, so where appropriate I will speak to our financials excluding that business. We believe it is important to present our financial results and expected financial performance excluding Slashdot Media operations in order to portray a more accurate picture of the ongoing operations of DHI. Overall we're pleased with the continued progress we made in our operations during the third quarter despite ongoing headwinds within the energy market and from foreign currency translation. For the third quarter I want to highlight a few areas that are important to our results. One, revenue growth in all of our core businesses on a constant currency basis with the exception of energy; two, higher year-over-year revenue per recruitment package customer at Dice reflecting the positive impact of Open Web and other new products as well as increased service levels by customers and three, solid free cash flow generation while we continue to invest in innovation for future growth. During the quarter we used free cash flow to both reduce net debt and return cash to stockholders with the repurchase of approximately 1.2 million shares of our common stock. Overall third-quarter adjusted revenues excluding Slashdot Media decreased 1% year-over-year on a constant currency basis. This reflects growth in most of our operating segments that was offset by the decline in the energy segment. Excluding energy and Slashdot Media revenues increased 6% year-over-year on a constant currency basis. As I discuss the specific segments I will compare Q3 revenues on a segment basis to adjusted revenues from last year where appropriate. As a reminder, adjusted revenue adds back the deferred revenue adjustment to Q3 2014 which effectively has the impact of lowering the year-over-year growth rates. We feel it is appropriate to give this comparison in order to provide a more fair perspective of our relative year-over-year performance. Additionally with regards to the segments we have included adjusted EBITDA and related margins in the press release and look forward to provide more insight into the various segments. For the Tech & Clearance segment revenues increased 4% year-over-year. Within that segment Dice revenues increased 1%. At September 30, Dice recruitment package customers were approximately 7,700, which is slightly lower than the count at the end of the second quarter. About 92% or nearly 7,100 of those recruitment package customers were under annual contract at quarter end. The renewal rate on annual contracts was 69% in the quarter with about 1600 customers up for renewal during the quarter. In Q3 recruitment package customer spent on average $1101 per month up 5% year-over-year as customers continue to increase their levels of service including Open Web which contributed nearly 60% of the 5% year-over-year increase. ClearanceJobs continue to do well in the quarter and achieved year-over-year revenue growth of 23%. Growth in this business was driven by improved market conditions including increased demand for security cleared professionals and a shrinking supply of candidates. ClearanceJobs was one of our first brands to use a pay for performance product which has contributed to the overall revenue growth while also increasing the average number of active posted jobs 14,000 from 12,000 a year ago. Dice Europe revenues while only about $2 million in the quarter increased 17% year-over-year due primarily to strength in the UK and Germany driven by positive market dynamics up-sells to key clients earlier in the year and new product offerings. Q3 billings for the overall Tech & Clearance segment were up 4% including an increase of 2% year-over-year at Dice and from a margin standpoint second clearance adjusted EBITDA margin has remained relatively consistent over the last year at 46% even as we have continued to invest in the product and technology organizations in that segment. Moving on to our Finance segment, revenues decreased 2% year-over-year to $9.3 million. On a constant currency basis, revenues increased by 6% year-over-year. Overall the trend is positive in the major financial centers. In the UK revenues increased 8% year-over-year in sterling and accounted for about 43% of the segment's revenues. Broadly the environment continues to be better than last year. In the Asia-Pacific region which is 26% of overall segment revenues, revenues were up 10% in Singapore dollars with stronger performance in Asia which was up 13% including Hong Kong and Singapore. And Continental Europe and the Middle East a combined 17% of the segment revenues increased 1% year-over-year in Euros. Sentiment across Continental Europe was broadly stable in the third quarter while the Middle East continues to be more mixed. And in the U.S. which is 14% of overall segment revenues, revenues were up 10% year-over-year. The increase was primarily driven by higher renewals, new business and contribution from new products including branded postings and managed services which is part of our sourcing concierge's suite of products. Overall Finance segment billings were up 4% in the third quarter compared to last year and up 12% on a constant currency basis. Adjusted EBITDA margins within the Finance segment have ticked up slightly from a year ago as we have been able to capture some of the revenue increase on the bottom line. In our Energy segment Q3 revenues were $4.7 million down 42% year-over-year. Q3 billings decreased 56% from the prior year. In the quarter we saw a continuation of the very difficult recruitment environment we have seen all year. We remain committed to our long term position in the energy market and continue to focus strategically on tightly managing overall costs. Even though this market has been very difficult for us over the last year and margins have declined we have still maintained profitability in this business as reflected in the 19% adjusted EBITDA margin in Q3, 2015. In our Healthcare segment revenues were $7.9 million up a 11% year-over-year compared to Q3 in 2014 adjusted revenues due primarily to an increase in usage by customers at healthy careers driven by increased engagement with customers. This is also reflected in the healthcare year-over-year billings increase of 23%. Overall both of the healthcare brands are executing well and HEALTHeCAREERS in particular is getting the benefit of favorable market conditions. As this segment has grown over the last year, we have also been able to expand adjusted EBITDA margins from 8% last year to nearly 15% in Q3 of this year. The Hospitality segment contributed $3.9 million in revenues in the quarter up 2% year-over-year. Results are impacted by the decline in the Canadian dollar as we use the Canadian dollars as a function of currency for that entity given its location in Vancouver which was offset by the increased usage by customers driving early renewals of service. Hospitality billings were down 3% primarily due to the early renewals in Q2 that we discussed on our Q2 call in July. As hospitality segment revenue has expanded over the last year we have also been able to capture some of the increase in adjusted EBITDA with margins up from 42% last year to 44% in Q3 of this year. Deferred revenue which totaled $81.9 million at the end of Q3, 2015 was up 2% from the end of Q3, 2014 excluding Slashdot Media. The year-over-year increase was primarily driven by our Tech & Clearance segment which grew 6%, Finance segment which grew 9% partially offset by a decrease in our Energy segment. On the expense side operating expenses were essentially flat to last year at $54.2 million. Increases in headcount and noncash stock based compensation expense were largely offset by a benefit from foreign currency translation, lower marketing expense and lower depreciation and amortization due to fewer depreciable assets and certain intangible assets becoming fully amortized. Adjusted EBITDA totaled $19.1 million or 29% of adjusted revenues during the third quarter. Adjusted EBITDA excluding Slashdot Media for the third quarter totaled $18.8 million or 30% of adjusted revenues excluding Slashdot media. Income tax expense totaled $3.6 million in Q3 compared to $3 million last year resulting in an effective tax rate of 36% in 2015 compared to 24% last year. The lower rate last year reflected a $1.7 million benefit related to tax loss carryovers obtained in the on target jobs acquisitions that did not recur in 2015. Company posted net income in Q3 of $6.5 million resulting in diluted earnings per share of $0.12. Cash flow from operations totaled $12.4 million in the third quarter compared to $14.3 last year. On a year-to-date basis cash flow from operations was up $1.7 million or 4% from last year. This year-to-date increase was largely impacted by lower tax payments in 2015 due to the timing of increased stock compensation deductions and various book tax timing differences on our 2015 estimated tax payment requirements. We anticipate tax payments of $4 million in Q4, 2015. We generated free cash flow in the quarter of $10.6 million in addition to the stock buyback during the quarter of approximately $9.3. We also reduced net debt by approximately $4 million compared to the end of the second quarter. Now I would like to turn to our outlook for the remainder of the year which will exclude Slashdot media for the reasons I outlined earlier. Please refer to the table provided in the business outlook section in our press release. For 2015 we now anticipate revenues in the range of $245 million to $246 million and adjusted EBITDA of $72.5 million to $73.5 million. In Q4 we expect revenues of $61.5 million to $62.5 million and adjusted EBITDA of $17.8 million to $18.8 million. In summary, the team continues to execute well and our performance during the third quarter demonstrates that the work we have been doing to enhance both products and our operations is working. We delivered improved constant currency results in all of our core businesses with the exception of energy and generated solid free cash flow while investing in innovation for future growth, strengthening our balance sheet and returning cash to shareholders. As we look to 2016, we have a strong foundation in place and believe we are well positioned to continue improving performance. With that, we are ready to open the call up for questions.

Thank you. We will now begin the question-and-answer session. [Operator Instructions] And our first question today comes from Doug Arthur of Huber Research.

Yes good morning. Two questions, the product development investments sort of accelerated in the quarter to an all around 22% growth. How do you see that playing out through 2016, I know you have a lot of new products in the pipeline through pretty much throughout the portfolio and then any comment on currency expectations for the fourth quarter would be helpful? Thank you.

Sure. So I’ll start Doug and Mike can enhance. So on the product development, I think what you saw on the quarter is that as we continue to build out the product development and technology teams across the organization what we’ve been talking over the course of the year that we’ve been a little bit behind in terms of hiring there. So you saw a little bit of catch up there in the quarter along with some costs related to really integrating the oil careers website into the RIGZONE as we kind of finalized the rebranding of that segment. So that’s really contributing to what you’re seeing in terms of the cost flowing through in the quarter. I think in terms of product development and investments moving forward, what we’ve been saying over the course of this year which is still a case is that we look at the investments we’ve been making certainly in Dice and Open Web, I think moving forward we expect to get some return on those investments. We are kind of guiding exactly where we’re going to be with that on 2016, I think that is generally where we’re moving towards. Second part of the question was related to FX right. So I guess in terms of expectations for Q4, I mean I think we’re still going to have impact related to FX in the quarter if you look at where the rates were in Q4 year-ago versus where they are now and what kind of most forward contracts we’re saying for FX rates moving through Q4, I think we’re still going to be impacted as we move through the fourth quarter.

Okay. Thanks a lot.

And the next question will come from Tracy Young of Evercore.

Yes hi, I was just wondering if you could talk about the market environment in Europe and what you’re seeing – you obviously had some improvement there on the tech side?

Sure. So I think – I think overall the market hasn’t changed very much. I think our performance has been enhanced as we have integrated Dice with the former IT Job Board which is now Dice Europe. So I think our own operating performance in that market – in those markets specifically in the UK and the Netherlands and Germany over the last year we’ve made a number of improvements. So I think the overall environment is probably roughly the same, but I think our operating execution has been on the continued improvement pattern. That is see where you see the growth come from.

Okay. And then looking ahead for Q4 in terms of the energy segment, when do you think are you seeing bottom – what do you see in terms of the market there?

So I would say the market continues to be really rough for us. I don’t think we see any near term improvements as I mentioned earlier. There are a handful of signs and I would say it is more handful, where customers now think that they have cut too much in terms of their recruitment activities and they’re starting to think about leveling off and coming back at a higher level, but those are few and far between. I think from our own operating experience there tends to be a lag both on the downside and the upside and we saw that in the previous downturn in 2007 and 2008 and then the comeback in 2009 through 2010 where there is probably three to six months lag. So if you go back right about a year ago from now is when the steep fall started. So somehow the customer contracts that we put in place in Q4 for calendar year 2015 reflected reduced demand. We’re anticipating that there could be some further reductions from some of those earlier contracts that didn’t fully right-size. But I think then you’ll start to see the year-over-year performance from individual customers will start to level off coming out of the fourth quarter and into 2016. So I think you’re going to see a little bit of a mix, but we don’t believe it’s going to get better in the very near term.

Okay. Thank you.

[Operator Instructions] And our next question comes from Youssef Squali of Cantor Fitzgerald.

Yes thank you. Good morning. Two questions please. Mike, in your prepared remarks you talked about the consumer experience have been improved throughout the year and particularly this quarter because of some things that you’ve done. I was wondering if you can maybe help share some key metrics around maybe usage and retention, again not on the customer side, on the paying customer side, but mostly on the user side? And then on the - you also talked about how you should – we should expect better financial performance in 2016, I was hoping you maybe provide some more clarity just around how you see 2016 meaning is the trend that you’ve seen so far this quarter effects adjusted tech and finance growing mid-single digits is something that should be sustainable into next year. I know you’re not guiding just yet, but just philosophically how you look at the growth and your budgeting for next year? Thanks.

Sure. So on the first one some of it is qualitative and some of it is quantitative and some of it is anecdotal feedback we get from users, professionals who use our services across the broad spectrum. But if you take for instance on the Dice side the number of applications and the rate of applications has been increasing during all of 2016 as we’ve made the process for engaging with job postings and for actually applying job postings easier. So the rate of applications is varied, but it’s been up year-over-year kind of at the 30%, almost 30% range. The number of first time searchable resumes or profiles has increased relatively significantly during this year to the point where at various times it’s almost over 100,000 in the 90-day bucket. So we’ve seen a level of activity and a level of engagement across the board those are specifically on Dice. On RIGZONE there is probably a mix between the overall market conditions and what happens in the downturn from engagement standpoint but we’ve made a number of changes in the service including on RIGZONE launching for the first time, detailed job alerts that users can create on their own, where in the past we did all the searching and sent job notifications from the site, now people can do it on their own. So, we’ve seen an increase in engagement in people doing search alerts, so there is a number of things, both qualitatively and quantitatively from a user experience standpoint. Having said that, there is more to do and we continue to focus on each of the brands with increasing the usability and efficiency with which people interact with our sites.

So Youssef, I will take the second part of the question in terms of looking out to 2016 we’re obviously not guiding towards 2016 as we sit on the call today, but I think as we look at the trends that we see in Q3 we’re starting to see a number of positive signs through a number of different brands and you see that reflected in some of the revenue growth rates, you see that reflected in margin expansion and some of the core segments that we have. I think as we sit here today and as we look out into Q4 and look on 2016 our expectation is that those trends would continue as we move into 2016 and I think we’ve been saying over the course of this year as we move into next year and out past next year that yes margin expansion is certainly something that we have expect based on the investments we were making. I think that certainly improvement in the energy market would help although we're not banking on that in 2016 as Mike said and I think the third broad area, looking out into 2016 is really the broad suite of new products that we have been talking about over the course of the year. So, Mike mentioned a few, today in his remarks we have talked about shift, he mentioned Spotlight. We have talked about Open Web quite a bit. We have talked about some of the other new products at the Investor Day backs a number of months ago. So I think as we start to get more traction from that suite of products, well the revenue contribution probably won’t be huge in the beginning part of 2016. Our expectation is that we will start to see some benefit from those as we move through the year.

And just one follow up if I may, can you comment just broadly speaking on the competitive landscape? There have been some newer entrants in this space that are kind of attacking this market from interesting angles like Glassdoor and a few others. I was wondering if you are seeing increase in the competition out there or do you feel that the space has not really changed all that much?

Yes, I think the competitive of landscape this year or probably the past 12 to 18 months has been really interesting for us. The core traditional competitors are still that core traditional competitors LinkedIn which we always talk about as our most important competitor, that hasn’t changed. They do a fabulous job in some respects. We think we do a fabulous job in other respects and we have a nice place in the market as it relates to them. I think the traditional generalist Monster Crew Builder, StepStone, Totaljobs, Seek all continue on this same path. I think from an aggregator standpoint the aggregators continue to be more and more important in the marketplace although our belief is that they have a more dramatic impact on generalists then they do on specialists and we continue to drive usage within our sites as a destination without the reliance on the pass-through. So I think from a competitor standpoint those are all broadly the same. I think as you pointed out and we've said this before including on Investor Day one of the things that’s happened over the last 12 to 18 months as you have a lot of new start-up competitors that given the availability of financing which has been plenty for over the last 12 to 18 months has given them life and I think given the market there is much more willingness to trial those. So we certainly see that in the tech business. Those startups continue to be relatively small and we think that our size and our historical presence of the market gives us an ongoing advantage, but they have been there and it is been helped by the fact that there is financing and the willingness to trial.

Thank you.

And next we have a follow up question from Doug Arthur of Huber research.

Yes, that was pretty much my question on the competitive landscape. I mean, I think if you look at the - I mean your comment about the traditional job boards sort of maintaining more the same I think they might take exception to that just given the big deal they made about their transformation to sort of the golden SaaS model sort to speak sometime down the road. But do you feel, by they specializing in sort of all these niches that is next word in that, that incremental approach can remain buyable and competitive over a 5-year plus period and where you got some pretty large competitors changing their stripes.

Yes, so Doug it’s a great way to phrase it and thanks for the clarification. I so let me refine a little bit what I said. I think in our core businesses is what I said I think holds, I think from a traditional provider of the services we provide and that Monster and Crew Builder and them Hot Jobs and Seek StepStone, Totaljobs and others as generalists provide, that hasn’t changed very much. I think CareerBuilder specifically has done a great job of expanding its horizons. So they now get into places in the marketplace where we don’t actually compete. So I think you, they would take exception I think would be fine because I think they may take exception because they are expanding their horizons outside of things that we focus on. I think from the core what we focus on I don’t think the competition has changed very much.

Okay.

From them, sorry just to be clear.

Right, right.

[Operator Instructions] Yes and showing no further questions, I would like to turn the conference back over to Jennifer Milan for any closing remarks.

Thank you for your time this morning and for your interest in DHI. Management will be available to answer any follow up questions you may have. Please call Investor Relations at (212) 448-4181 to be placed in the queue. Have a great day everyone.

The conference is now concluded. Thank for attending today’s presentation. You may now disconnect.