DHI Group, Inc. (DHX) Q4 2024 Earnings Report, Transcript and Summary

Good afternoon and welcome to the DHI Group Fourth Quarter and Full Year 2024 Financial Results Conference Call. All participants’ will be in listen-only mode. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Todd Kehrli of PondelWilkinson Investor Relations. Please go ahead.

Thank you, operator. Good afternoon and welcome to DHI Group's 2024 fourth quarter and full year earnings conference call. With me on today's call are DHI's CEO, Art Zeile; and CFO, Greg Schippers. 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 fourth quarter and full year 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, free cash flow, and non-GAAP earnings per share, that are not prepared in accordance with U.S. 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 conference call over to Art Zeile, CEO of DHI Group.

Thank you, Todd. Good afternoon everyone and welcome to our 2024 fourth quarter earnings conference call. We appreciate your time today as we review our financial performance for the fourth quarter and the full year and provide our outlook for 2025. Let's begin with an overview of our performance and the actions we've taken to strengthen our position moving forward. Despite a 7% revenue decline in 2024, we delivered full year adjusted EBITDA of $35.3 million, a margin of 25%, up from a margin of 24% a year ago. During the year and including our recently announced restructuring, we have reduced our total operating costs by over $10 million, while enhancing our product offerings and strengthening our sales and marketing organization. The savings are approximately evenly split between operating expenses and capitalized development costs. These actions position us well for return to a normal tech hiring environment and increased demand for our solutions. As part of our restructuring conducted three weeks ago, we split our operations into two distinct brands of Dice and ClearanceJobs. This reorganization provides dedicated leadership for each brand, enabling tailored strategies that enable and align with their unique market dynamics and different customer bases. It also establishes a line of business structure that aligns sales, marketing, product, and development functions under a brand leader, while maintaining centralized support for human resources, finance, and technology operations to efficiently manage employees, business systems, and public company obligations. Ultimately, the restructure enhances profitability, while at the same time unlocking greater long-term strategic opportunities for each brand. It also sets us up to provide more specific brand financial reporting this year. Now, let's dig into the current state of the tech labor market, which is a key growth indicator for our business. Encouragingly, we are starting to see green shoots of increased demand. Revenue renewal rates for both brands improved at the end of the quarter and we've seen solid new business bookings in our staffing and recruiting business. While the number of new tech job postings is approximately 70% of normal, we believe we are starting the new year off with a positive trajectory. A promising sign of recovery, albeit slowly, is the steady rise in new tech job postings. According to CompTIA, these postings experienced a notable rebound in the second half of 2024 compared to the first half. During the first half of the year, new tech job postings fell 28% year-over-year, but momentum shifted in the latter half showing a 12% increase. In December alone, which is traditionally a slow month, more than 165,000 new tech job postings were created, representing a 16% year-over-year increase. We believe this trend signals a steady, albeit gradual recovery is taking shape for the tech hiring demand. Additionally, the tech unemployment rate remained low at approximately 2% in December, highlighting a tight labor market for tech talent. These positive trends align with projections from staffing industry analysts, which forecasts a 5% growth in tech staffing hiring or revenue, I should say, in 2025. This follows a 7% decline in 2024 and a 10% drop in 2023, suggesting a shift towards recovery in the tech staffing market. This optimistic outlook was developed through extensive interviews with staffing recruiting firms reflecting a shared confidence in the industry's improved performance in the year ahead. Another encouraging demand signal comes from LightCast, which tracks new tech recruiter job postings. In the second half of 2024, tech recruiter job postings increased 22% year-over-year. An increase in hiring of tech recruiters often precedes a broader rise in demand for tech professionals. As businesses ramp up their investment in technology initiatives such as AI, platforms like ClearanceJobs and Dice will be essential tools for employers seeking top tech talent from our database of 9 million tech professionals. We continue to hear success stories from our clients like Zions Bank Corporation's corporate recruiter who said, "Being able to search for active and engaged IT candidates is a huge asset. Dice is a must have tool in your tool belt if you are a technology recruiter." Now, let me dig into our performance during the fourth quarter and what we see ahead for 2025. In the fourth quarter, total revenue declined 7% year-over-year. ClearanceJobs saw an increase of 7%, while Dice saw a decrease of 14%. Excluding transactional revenue, our total recurring revenue declined 5% year-over-year. Looking at our bookings performance, our total bookings were down 9% year-over-year in the fourth quarter. ClearanceJobs bookings for the fourth quarter was flat year-over-year. The defense budget continuing resolution and uncertainty due to a possible government shutdown as well as the change of administration impeded our CJ bookings, but we believe that a one party government now favors a more consistent defense contracting environment. Defense spending remains a high priority for Congress and we believe that CJ will benefit as a result. During the quarter, CJ secured several new customers including Hughes Network Solutions, Trillion Technology Solutions, and Innovion Solutions. With CJ serving approximately 2,000 of the more than 10,000 employers hiring cleared tech professionals and over 100 government agencies also in need, there is a significant growth opportunity ahead for CJ. Looking at Dice's business performance, its bookings for the fourth quarter declined 14% year-over-year due to the budget constraints imposed by employers and staffing firms in 2024. Nevertheless, Dice secured several notable customers this quarter, including D.R. Horton, the U.S. Bureau of Diplomatic Technology, and General Motors. On the new business front, we continue to focus on recession-resistant sectors like consulting, aerospace/defense, healthcare, financial services, and education. In terms of renewals, CJ and Dice revenue renewal rates were 93% and 77% respectively, and our retention rates for CJ and Dice were 11% and 97% respectively. On the bottom-line during the fourth quarter, we delivered a 26% adjusted EBITDA margin, slightly down from 27% a year ago. However, as mentioned earlier, our capitalized development expenses declined by 23% year-over-year contributing to free cash flow conversion. Now, let me quickly touch on what we're doing to drive increased adoption of our two brands. For ClearanceJobs, we are preparing to launch CJ Verify by the end of the first quarter. As discussed on our last conference call, this product enables individual members to ascertain their government security status for a fee. CJ is also developing a paid candidate subscription service similar to LinkedIn Premium that will offer enhanced functionality beyond the standard candidate experience. We plan to launch this offering by midyear and if successful we'll explore introducing a similar subscription model for Dice. For Dice, our all jobs initiative continues to fuel job posting growth, driving higher candidate engagement and application activity. In 2024, Dice averaged 1.6 million monthly job applications, marking a 30% year-over-year increase and further reinforcing its position as the leading tech career marketplace. We believe in the virtuous cycle where increased candidate activity attracts more recruiters, strengthening our subscriber base. Candidate success on Dice is integral to maintaining a balanced two-sided marketplace and advancing our mission of connecting tech professionals with meaningful careers. A recent candidate testimonial underscores this impact commenting, I have found all my jobs on Dice. I'd also like to highlight the success of our comprehensive subscription packages, which include unlimited job postings, company pages and job boosts, not to mention a higher average selling price. Since its launch in November of 2023, 98% of all new business deals were signed in these packages and 10% of our renewed customer accounts converted to this comprehensive subscription package with an average retention rate of 106%. In 2025, our key project product initiative for Dice is a total reimagination of the Dice Web Store, aimed at boosting customer adoption among individual recruiters and small and medium-sized businesses in a self-serve manner. Recruiters will be able to purchase individual Dice services directly through our site using a credit card, paving the way for broader market engagement. With over 30 beta customers currently testing the early functionality of the platform today, we are on track to be fully launched by the end of the year. Moving on to guidance. While tech job postings are showing signs of improvement, we anticipate a slow and steady recovery. For the full year 2025, we expect CJ bookings to grow. However, we do not expect total bookings growth to resume until tech hiring normalizes. As a result, we anticipate revenue of $131 million to $135 million for the full year. In the first quarter, we expect revenue of $32 million to $33 million. As tech hiring gradually improves throughout the year, we anticipate growing demand for our tech hiring solutions driving increased momentum. In the meantime, we are focused on delivering strong profits for our shareholders and are targeting a 24% adjusted EBITDA margin for the full year 2025. As a result, our Board approved a new $5 million stock buyback program a couple of weeks ago as it believes as we do that our shares are trading below their intrinsic value due to the soft tech hiring environment. Before I wrap-up, I'm pleased to announce that Greg Schippers is no longer serving as our Interim CFO, but has officially been appointed our Chief Financial Officer. As noted during our last earnings call, Greg brings over a decade of experience with DHI Group and has consistently demonstrated exceptional financial expertise in key areas vital to this role, including strategic financial planning, rigorous fiscal oversight, and sound decision making. He has shown outstanding leadership in budget management, operational efficiency optimization, and maintaining the highest standards of financial integrity. Greg's sharp analytical skills, attention to detail, and commitment to transparency make him an excellent choice for this position. I am confident in his abilities and look forward to his continued success in this role. In closing, we have strengthened our business over the past year and are well-positioned to capitalize on a steadily improving tech hiring environment. We remain committed to delivering greater value for our shareholders and look forward to sharing updates on our progress in the months ahead. With that, I'll hand the call over to Greg to walk you through our financials and then we'll open up the floor for questions. Greg?

Thank you, Art and good afternoon everyone. Before I begin, I want to express how excited I am to take on the role of CFO and how energized I feel about contributing to the growth of this business. I also look forward to building relationships with our shareholders and the analysts who cover DHI. Now, let me take you through our financial results for the quarter. Please note that in the fourth quarter, we reclassified our career events bookings and revenue, which had previously been included in Dice, to allocate them between ClearanceJobs and Dice based on the nature of the event. Bookings and revenue were recast by quarter beginning with the first quarter of 2022 and can be found in our investor presentation, which will be posted to the Investor Relations' tab on the DHI Group website shortly after this call. We reported total revenue of $34.8 million, which was down 7% on a year-over-year basis and down 1% versus the third quarter. Total bookings for the quarter were $32.9 million, down 9% year-over-year. Our total recurring revenue was down 5% for both the fourth quarter and for the full year, and the bookings that drive our recurring revenue were down 11% for the fourth quarter and 6% for the full year. ClearanceJobs revenue was $13.8 million, up 7% year-over-year but down 1% sequentially. Bookings for CJ were $14.2 million, flat year-over-year. We ended the fourth quarter with 1,949 CJ recruitment package customers, which was down 5% on a year-over-year basis and down 2% on a sequential basis. This reduction is attributable to churn with smaller customers, whereas the number of CJ accounts spending greater than $15,000 in annual recurring revenue has increased and is up approximately 15% versus prior year. Our average annual revenue per CJ recruitment package customer was up 15 year-over-year and up 2% sequentially to $25,148. Approximately 90% of CJ revenue is recurring and comes from annual or multi-year contracts. For the quarter, CJ's revenue renewal rate was up sequentially to 93% and CJ's retention rate was strong at 111%. The outstanding retention rate demonstrates the continued value CJ delivers in the recruitment of cleared professionals. Dice revenue was $21.0 million which was down 14% year-over-year and down 2% sequentially. Dice bookings were $18.7 million, down 14% year-over-year. We ended the quarter with 4,711 Dice recruitment package customers, which is down 3% from last quarter and down 14% year-over-year. This reduction is attributable to churn with smaller customers spending less than $15,000 per year. Our average annual revenue per Dice recruitment package customer was up slightly compared to the third quarter and up 4% year-over-year to $16,380. As with CJ, 90% -- approximately 90% of Dice revenue is recurring and comes from annual or multi-year contracts. For the quarter, our Dice revenue renewal rate was 77% and its retention rate was 97%. Turning to operating expenses. Fourth quarter operating expenses were down 2% to 33.1 million when compared to $33.8 million in the year ago quarter. Our fourth quarter operating expenses reflect the cost savings associated with our restructuring in the third quarter of 2024. Because of the more difficult market conditions in 2023 and 2024, we reduced costs through restructurings in the second quarter of 2023, in the third quarter of 2024, and again in January of this year. Together, these restructurings have reduced our annual operating expenses and capitalized development costs by approximately $20 million We continue to focus on our operational efficiency. For the quarter, we had an income tax benefit of $50,000 on income before taxes of $972,000. Our tax rate for the quarter differed from our approximate statutory rate of 25%, due primarily to the reversal of liabilities for uncertain tax positions as federal and state statutes expired. We also remain committed to preserving our capital loss carry forward, which exceeds $100 million and is an important asset for maximizing shareholder value. To safeguard this asset, we implemented a Section 382 rights plan last week. This plan is designed to protect our capital loss carryforward, ensuring we can offset any potential future capital gains tax. Moving on to the bottom-line, we recorded net income of $1.0 million or $0.02 per diluted share in the fourth quarter. For the prior year quarter, we reported a net income of $2.1 million or $0.05 per diluted share. Non-GAAP earnings per share for the quarter was $0.07 compared to $0.08 for the prior year quarter. Diluted shares outstanding for the quarter were 45.9 million compared to 44.6 million shares in the prior year quarter. Adjusted EBITDA for the fourth quarter decreased 9% to $9.2 million, a margin of 26% compared to $10.1 million, or a margin of 27% in the fourth quarter a year ago. Operating cash flow for the fourth quarter was $4.4 million compared to $7.6 million in the prior year period. Free cash flow, which is operating cash flows less capital expenditures, was $1.6 million for the fourth quarter compared to $2.4 million in the fourth quarter of last year. Our capital expenditures primarily consist of capitalized development costs, which were $2.7 million in the fourth quarter compared to $3.6 million in the fourth quarter last year, a savings of $0.8 million or 23%. For the full year, operating cash flows were $21.0 million, which approximated the 2023 level. Free cash flow for the current year was $7.1 million a $6.0 million increase over the prior year, which included a $3.9 million decrease in capitalized development costs year-over-year. Over time, we are targeting free cash flow at 10% of annual revenue. Following the restructurings, we expect further reductions to our capitalized development costs in 2025. We are targeting total capital expenditures in 2025 to range between $10 million and $11 million as compared to $13.9 million last year. By consolidating our tech organization to a smaller number of teams with subject matter expertise in adjacent areas, we are expecting to accelerate our product release schedule and enhance our overall efficiency. From a liquidity perspective, at the end of the quarter, we had $3.7 million in cash and our total debt was $32.0 million under our $100 million revolver, resulting in leverage at 0.9 times our adjusted EBITDA. Total debt outstanding decreased $6 million from $38 million at the end of last year. We continue to target one-times leverage for the business. Deferred revenue at the end of the quarter was $45.5 million, down 9% from the fourth quarter of last year. Our total committed contract backlog at the end of the quarter was $111.3 million, which was up 3% from the end of the fourth quarter last year. Short-term backlog was $85.2 million at the end of the fourth quarter, a decrease of $4.6 million or 5% year-over-year. Long-term backlog, that is revenue to be recognized in 13 or more months, was $26.0 million at the end of the quarter, an increase of $7.7 million or 42% from the prior year quarter. During the quarter, we did not purchase shares under our share buyback program. For the year, we repurchased 0.8 million shares for $1.9 million to cover income tax withholdings associated with the vesting of employee shares. As Art mentioned, our Board recently approved a new $5 million stock repurchase program, which will begin this month and will run through February 2026. Adding to the guidance that Art provided, we are targeting an adjusted EBITDA margin of 24% for the full year as lower capitalized development costs contribute to free cash flow. Our focus remains on achieving long-term sustainable revenue growth and we are well-positioned to drive customer acquisition and capitalize on opportunities when tech hiring returns to normal levels. To wrap-up, while the hiring environment over the past two years has impacted our growth, we anticipate that companies across all industries will steadily increase their investment in technology initiatives in 2025 and beyond. We believe this will drive greater demand for our products and services. In the meantime, we remain focused on enhancing our industry-leading offerings, optimizing our go-to-market execution and doing so efficiently, ensuring we are well-positioned to capitalize on this opportunity. And with that, let me turn the call back to Art.

Thank you, Greg. I want to thank all of our employees again for their hard work and one team effort this past year. It is a pleasure to be part of such a great team. With that, we're happy to answer your questions.

We will now begin the question-and-answer session. [Operator Instructions] Our first question today is from Zack Cummins with B. Riley FBR. Please go ahead.

Hi, good afternoon, Art and congrats Greg on appointment to the permanent CFO position. Art, I just wanted to ask you about Dice and the business prospects as you're thinking about 2025. It seems like you're assuming a slow and steady recovery as we move throughout the year. I'm just curious what you're hearing from your staffing side of the business versus maybe what you're hearing from the commercial accounts?

We've -- that's a great question, Zack. And we've always had this thesis that staffing would have a return to kind of normalcy before our commercial accounts and it seems like that's happening right now. In fact, it seemed like the turning point was really the end of last year when a lot of people were deciding their budgets and it feels a lot more bullish, a lot more positive. I'd say that the one area that feels like it's firming up and stabilizing is both the renewal activity associated with our staffing accounts as well as new business activity. And that is consistent with that SIA report that indicates that we're going to see -- or its forecasting that we're going to see 5% revenue growth for 2025.

Understood. And my one follow-up question is more towards CJ. Just given all the efficiency initiatives within the current administration, any concerns for CJ's prospects as we move throughout the year amidst these different organizations?

That's another great question. A number of our investors have asked us that same question as to what we're hearing about whether or not contract activity will be cut or that there will be a view to reduce the defense budget. Right now, we are not seeing that in terms of the activity levels for CJ new business as well as account renewals. And we do believe that Congress is firmly committed to the existing and enhanced defense budget. So, we haven't seen any direct impact to activities like Dodge, but it remains to be seen, obviously, in the weeks and months to come.

Understood. Well, thanks for taking my questions and congrats on the stabilizing results in Q4.

Really appreciate that, Zack. Thank you.

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

Hi, good afternoon, Art and Greg. A couple of questions here. First of all, in terms of the cash, I'm just looking at it and if you hadn't paid down debt, you used cash throughout the year to pay down debt, I guess, is what I'm getting. And if you hadn't paid down debt, the cash on hand would have been much higher in Q4. Is that kind of a correct assumption?

Yes, we used approximately $6 million of cash to pay down debt and then almost $2 million to repurchase shares under share vestings from our share programs with employees.

All right. And then I guess I'm just having just a little bit of problem reconciling some of this here. You said you've cut your expenses by about $20 million or your expenses including $10 million of OpEx and $10 million of capitalized expenses. I realize in the capitalized expenses, they get amortized over a year or two, right, or two years. But is your P&L not going to feel the full effect of that $10 million decline in operating expenses? Because of why wouldn't it, I guess, is what I'm getting at, that would cause your EBITDA margin to not be a little bit higher?

Yes. No, that makes complete sense, Gary. So, you're correct, it's roughly a 50/50 split between capitalized development costs and OpEx. So, you can think about $20 million of cash savings, but the timing of that flowing through, those savings started with the bigger chunk of it being in 2023 in that restructuring, which was $8 million to $10 million the last two that we did in the middle of last year and then just now we're each call it approximately $5 million in the $4 million to $6 million range for each one. So, you'll see more of those savings coming through in 2025 if you get the full year impact of the cash savings. Otherwise, it was kind of amortized in, if you will, over time because they were staggered over six to eight months in between.

And then, Art, when -- or will you be doing more in-depth segment reporting in terms of either operating income or adjusted EBITDA by brand this year?

Yes, Gary, I'll take one as well. Good question and we do get that a lot since we announced the restructuring. And our intention is to dive into that immediately following actually, our intention is to dive into that immediately following actually our earnings process here. And our finance team will have the goal of getting there in the first half of this year and we'll have more to come on that here in the next couple of months.

Okay, that's great. That's all I need to know. Thank you.

You're welcome.

Thanks, Gary.

The next question is from Max Michaelis with Lake Street Capital Markets. Please go ahead.

Hey, guys. Just a couple from me. Thanks for taking my questions. And Greg, congrats on the promotion.

Thank you.

When we look at bookings in 2025, I know you guys don't expect bookings growth, you do expect clearance jobs growth. But I guess, just wondering if you could help me out a little bit just with Dice contracting 15% in the year. I mean, from current internal, when you guys look out to 2025 and internally when you guys look at bookings growth or decline, whatever you want to call it, I mean, are you expecting an improvement in 2025 from 2024, I guess, on both segments, maybe Dice from the decline of 15% and ClearanceJobs from 4% growth in 2024 or are you kind of just holding back?

Yes. So, we are expecting, as we mentioned kind of on the call here that we do expect some growth at CJ and continues to have strong demand and with the government having one political party kind of in charge will help with the Defense budget, getting that certainty in place. But Dice -- yes, Dice continues, we're not expecting anything and we're not budgeting for anything to improve in the market at this point. We're staying on the conservative side of that. That said, from a year-over-year basis as you go through the year, we do expect some improvement throughout the four quarters of 2025 on a year-over-year basis in bookings.

Okay. That's it for me guys. Thanks.

Thanks Max.

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

Hey, good afternoon guys. Maybe just to revisit the CJ part of the business. Wanted to clarify whether you guys feel you have any exposure today to either the Department of Education or other agencies that may potentially be on the chopping block here or if all of your exposure there is primarily tied to Defense budget activity?

That's a great question, Kevin. And I would say that we really don't have any exposure from the kind of non-cleared agencies that are operating. I would say it's always the intelligence community and those that are associated with Defense that are interested and have the wherewithal and the ability to directly license with ClearanceJobs. So, if you think of it this way that if there are major changes with that with the intelligence community agencies like CIA, FBI, DIA, NSA that could affect us. But otherwise, we're not necessarily exposed to the broader number of agencies that operate under the government. And that's not to say that we're out of the woods or that they won't be targeting those agencies, but it seems less likely, though not impossible.

Got it. No, I appreciate that. And just as it relates to Dice, I'm wondering as we look at your forecast for revenue for the year, what are the expectations around kind of the non-recurring portion of the business versus the recurring? And then just related to that with kind of the new Dice story coming out, what exactly is kind of different about what you guys are introducing there versus what you've done historically?

I'll take the first part of that, Kevin. So, from a recurring and non-recurring business, so that's basically our annual packages on the recurring side. We don't -- we're not anticipating improvement in that transactional or non-recurring business in 2025. If the tech recruiting market really picks up, as we mentioned, then do we have the opportunity for some upside there, but it's -- at this point, we're not seeing it. And so we're going to project out that we're similar to how we were in 2024. And just for purposes of kind of what that relates, it's about 90% recurring and less than 10% non-recurring and we project that into 2025 as well.

Yes. And Kevin, I'll follow-up by saying that we believe that those transactional products are generally associated with hiring urgency. So, if we do see those transactional products become more needed by our customer base, that would be a very good thing because it would say that the market is tightening significantly and people are having a harder time finding tech talent. The second part of your question is a good one. What are we envisioning for Dice's -- its future and how we want to reestablish its brand? We are embracing this idea of a new Dice web store. It's been a development that's been underway for at least a year, probably more like a year and a half when you think about the planning period. And it will embrace what's called product-led growth. It will allow individual recruiters to, for example, buy a subscription package on their own using a credit card. They'll be able to, in the future, buy a number of profile views if they have a real problematic position and they're trying to find more résumés to fulfill that position. And the hope is that by getting a taste of Dice, they'll convince their HR leader that they need a larger subscription for the whole team. So, it's kind of a way of getting a foot in the door for new organizations that we can't necessarily talk to every day just because we have limited sales capacity.

Yes, makes sense. And then just lastly for me, as we think about kind of the marketing spend for this year, is it expected to be pretty steady throughout the year or are there certain periods where you expect it to be more pronounced than others?

Yes. So, I could tell you that marketing spend is seasonal in a sense. We know that recruiters and candidates are taking vacations in the summertime. They're also enjoying the holidays in November and December. And we tailor the spend in those two periods downward as a result because we're just not going to see the eyeballs that we expected through our regular digital marketing campaign effort.

Got it. That's all for me. Good luck as you guys make your way through this year.

Well, I really appreciate it, Kevin. Thank you.

This concludes our question and answer session. I would like to turn the conference back over to Art Zeile for any closing remarks.

Thank you, Gary and thank you for all of you joining us today. As always, if you have any questions about our company or would like to speak with management, please reach out to Todd and he will help arrange a meeting. Thank you for your interest in DHI Group and have a wonderful day and week.

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