Good morning and welcome to the DHI Group, Inc., Second Quarter 2018 Financial Results Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note this event is being recorded. I'd now like to turn the conference over to Rachel Ceccarelli. Please go ahead, ma'am.

Thanks Keith, and good morning everyone. Welcome to our second quarter earnings call. With me today are, Art Zeile, President and Chief Executive Officer; and Luc Grégoire, Chief Financial Officer. Today's call includes certain forward-looking statements particularly statements regarding future financial and operating results of the company and its businesses. Listings are based on management's current expectations or beliefs and are subject to uncertainty and changes in circumstances. Actual results may differ possibly materially from those expressed or implied in these forward-looking statements due to changes in economics, business, competitive, technological, and/or regulatory factors. For a discussion of the principal risks and factors that could affect the company’s future results, please see the description of Risk Factors in our current annual report on Form 10-K for the year ended December 2017 and for our quarterly report on Form 10-Q in the section entitled Risk Factors, Forward-Looking Statements And Management’s Discussion and Analysis of financial conditions and results of operations. The company is under no obligation to update any forward-looking statements except what it is required by the federal securities laws. During today’s call, we will be referring to certain financial measures including adjusted EBITDA and adjusted EBITDA margin that are not prepared in accordance with the U.S. GAAP. Information and reconciliations of these non-GAAP measures to the most directly comparable GAAP measure are available in our earnings release, which is posted on our website at www.dhigroupinc.com. Now with that, let me turn the call over to Art.

Thanks, Rachel and thanks to everyone joining our call this morning. On July 19, I completed our first 100-days as CEO of DHI. During this period, I spent a significant amount of time with our current and prospective clients, tech engineers, sales teams, employees and our management team doing a deep dive on all aspects of our business in competitive positions. Let me start by saying that I am genuinely excited by the prospects for our business and thrilled to be here at such a critical juncture for this company. What I’ve learned over the last three months has confirmed for me that our strategy for growth, growth driven by execution focused on our core strengths, rather than to accumulating diverse verticals is the right one. The market for technology talent is large and expanding rapidly. Just about every employer is in some stage of this shift to digital, which creates an extraordinary demand for job candidates with technology backgrounds. In the United States alone, the market for online recruiting and job advertising is increasing at a 5% to 10% annual rate, which is impart a function of a rapid growth in overall tech employment. The market for technology jobs is expected to grow at 3.5% per year in the U.S. alone, compared to 0.9% for the overall jobs markets. Specialized, highly skilled professionals create a disproportionate share of the value. The compensation for positions in the technology sector is significantly higher than average with 70% of these having a median salary of $80,000, compared with just 23% of all jobs with that same median salary. Tech also has the highest velocity of employee turnover at approximately 13% annually, compared to a 11% for professional level positions overall. Because we operate at the intersection of the supply and demand for…

Thanks, Luc. I’d like to close by thanking all of our 500 employees worldwide for their hard work over the last quarter. Without their focus, dedication, and energy, we would not have been able to accomplish as much as we did this last quarter. With that, we are happy to take your questions.

[Operator Instructions] And this morning’s first question comes from Doug Arthur, with Huber Research.

Yes, couple questions. The – Luc, deferred revenue on the balance sheet actually declining again, that’s down year-over-year I believe. Is that a function of Hcareers? Or I guess, 64.2 at the end the of the quarter. What sort of explains that? Luc Grégoire: Yes, it’s a couple of factors, one is, it is Hcareers and the other businesses that we’ve divested this last year. That accounts for – not quite half of the variance. However, another impact is what I talked about is changes in our working capital dynamics where we are starting to open up the billing terms to our customers to be competitive and while – so basically, we are looking at some quarterly and some monthly billing situations. As opposed to where in the past, most of the billings would have pending, still our most of the billings are billed annually upfront. So it’s a combination. So the divested businesses are about $9 million worth of that change.

Okay, great. Thank you. And then, secondly, just on a housekeeping. In terms of corporate and other revenues going forward, I think you get $1.3 million in Rigzone, with the remaining of piece of Rigzone, is that sort of what we can expect going forward as a runrate to the quarters give or take? Luc Grégoire: That’s right, all that’s left in corporate and other is the Rigzone business.

Okay. Then finally, on E-Financial, I mean, I guess, with our currency is sort of not flat – or not quite flat lining, but growing very modestly. What’s it going to take to get that business growing a little faster?

So, I think that there is plenty opportunity. There is kind of geographic opportunity, as well as, product-based opportunity. What we are seeing is that there is really great growth in Asia-Pacific. So, we are actually adding sales resources there. We think that we are underpenetrated in that set of geographies. What we also believe that there is a set of managed services that are available to the entire client base there that we are able to build upon. And that’s what we are focused on for the future.

And right now, APAC represents, how much of that business? Luc Grégoire: It’s about a third of that business.

A third, currently.

About one-third, okay, great. Okay, thank you very much.

Absolutely.

Thank you. And the next question comes from Kara Anderson with B. Riley FBR.

Hi, Kara.

Hi, good morning. Luc Grégoire: Hey, Kara.

Hey. Can you expand more specifically on the competitive pressures that you are seeing, is it in price, is it in share of wallet? And then, I guess, to that last point, is there room in the direct hires wallets for Dice which might damp the other line?

So my view is that, we certainly attended two different large market segments. The staffing and recruiting and consulting agencies market as well as the direct hire market. I would say that there is probably more competitive pressure in the SRC market. They do a lot more refined return on investment diligence and analysis, whereas the direct hire market is very desperate to find technology talent and they are willing to essentially take whatever avenues are available to them to do so. I would say that, our movement towards more direct hire customers is solid and fundamental, I would say, in both of these markets. The general sense is that they need multiple tools. So, it’s a matter of share of wallet more than anything else, but there is more, I would say need and aggressive use of tools on the direct hire side, because they understand that they want to essentially effectively hire people very quickly.

Okay, great. And then, when you think about the Talent Search 4.0 rolling that out to Dice, I mean, how do you characterize that in terms of the impact on monetization?

So, I think that, as we roll that out and it’s going to be a multi-stage process as we convert customers over – 6200 customers over to that platform by the end of this year that we will see the improved usage of our platform itself, which will essentially allow for higher retention rates, as well as the ability to hopefully expand customer relationships. We are going to be putting that front and center with our new prospect activity. So, we believe that we can essentially retain more, upsell more and then, encourage new relationships by virtue of that platform change. And it’s a real huge change for us and quite frankly, years in the making.

Got it. And then, I guess, for Luc, what else comes out of 2Q operating expenses? Like, can we think of it as a reasonable runrate when you consider the investment you are making on products with the rationalization of operations? Luc Grégoire: I think it’s – yes, I think it’s going to be a reasonable runrate. There is probably a bit more room for us to expand on our technology and product. But at the same time, we are going pretty aggressively after efficiencies. So, how we are thinking about the business is constantly with that 20% margin, we think we have room. We have the wide space, I guess in our expense base to go and remove some of that. We are thinking in terms of pricing on our vendors, there is some usage management and for the business we are able to continue to invest in that in the business and like generate, we do have the operating leverage in the business that to get back to improving that as we get back on turning our growth trajectory.

We are fully focused on making sure that we maintain that margin, but also make all of these smart expense reductions, so that we could repurpose them for investment primarily in sales and product development. So, the way that I look at it is that, we can be more efficient and as Luc said, we look at efficiency as making sure that our pricing for vendor services is appropriate for market conditions and that we’ve reduced the demand associated with vendor services to the maximum degree possible. But we believe that those savings are definitely there.

Got it. Thank you.

Thank you.

Thank you. And as there are more questions at the present time, I would like to turn the call over to Rachel Ceccarelli for any closing comments.

Yes, thanks for joining us today. For further questions, please email ir@dhigroupinc.com or call 212-448-4181 to be placed in the queue. Thank you.

Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines.