I'd now like to turn the floor over to today's host, Mr. Art Zeile, Chief Executive Officer with DHI Group Incorporated. Sir, the floor is yours.
Thank you. Again, I am Art Zeile, CEO of DHI Group, and with me today is Greg Schippers, our CFO. We will be going through our investor presentation, and then we'll be available for Q&A afterwards. We have included our standard forward-looking statements waiver with the normal caveats. Just to start off, DHI Group is listed on the New York Stock Exchange under the symbol DHX. Our headquarters is located in Denver, Colorado, and our Dice brand has been active for over a third of a century right now. Here is a summary overview of our 2023 annual financial performance and five-year CAGR trends. Greg will be providing quarterly performance for 2024 later in the presentation. DHI drove $152 million in revenue and $153 million in bookings last year. The five-year CAGRs for each are 7% and 6% respectively.
Our adjusted EBITDA was $36 million, delivering a 24% adjusted EBITDA margin. We delivered $21 million in operating cash flow and spent $20 million on CapEx. Almost all of our CapEx is capitalized labor used in software development. Greg will brief you on how we have reduced that CapEx spend significantly this year. We have traditionally had a robust share buyback program in place but suspended it in the middle of 2023 to focus on debt reduction. As a result, we ended this past quarter with net debt of less than $30 million, equating to less than 1x leverage. DHI is a holding company for two tech-oriented recruiting platforms named Dice and ClearanceJobs. We create platforms that allow our clients, who are recruiters and hiring managers, to connect with tech candidates. These are two-sided marketplaces that, by definition, serve both the clients and candidates in order to succeed.
You may think that that sounds pretty commonplace with the likes of Indeed and ZipRecruiter constantly advertising on TV, but we have two key differentiators that make us a necessary tool for recruiters and hiring managers looking specifically for technology professionals. First, we have built special search algorithms to find candidates based on their tech skills, and secondly, we have spent literally decades attracting the highest quality talent to our platforms. We have 8.8 million tech professionals profiled on our two brands, representing approximately 2/3 of the total skilled technology professionals in the United States. That is the benefit of being around for 34 years. We make money by charging our clients for subscription contracts that allow them to access our platforms. Over 90% of our revenue is recurring as a result.
The United States has become a tech-oriented economy and has grown the tech workforce by approximately 3% each year over the past 25 years. We have a very unique pool of candidates that cannot be found on other career sites. Based on our research, roughly 30% of our candidates can be found on alternative career sites like CareerBuilder plus Monster, ZipRecruiter, Indeed, and LinkedIn. When they are found on LinkedIn, as an example, their profiles are out of date and do not include a resume nor contact information. ClearanceJobs is the dominant leader in its market for delivering access to technology professionals with a government clearance. LinkedIn doesn't offer a solution to find cleared candidates. A LinkedIn profile has no field for government clearance, and government workers and military contractors are restricted from using the site because it is known to be a target of foreign spies.
Tech professionals are well-compensated. The average salary for a tech worker in the United States was approximately $111,000 last year, whereas the average worker in the United States made around $50,000. At the company, you basically have two choices when hiring tech workers: use a recruiter or do it yourself. If you use a recruiter, you will generally be charged between 20%-25% of first-year's salary. The alternative is to pay Dice and/or ClearanceJobs roughly $8,000-$10,000 for our entry-level year-long subscription and find and engage the tech talent yourself. Even one hire easily pays for itself compared to paying an external recruiting agency, and we target companies that plan for at least five hires, tech hires, over the next year, driving an even more compelling return on investment.
Our value to the tech industry was validated by Forbes Magazine in July of this year when it announced Dice as the number one career site for tech and IT jobs. The elevated interest rate environment has clearly suppressed hiring demand. That was the Federal Reserve's intended result, but as the famous quote goes, "Every company is a software business now because of our reliance on technology and automation in general to drive our business models." For that reason, the Bureau of Labor Statistics and CompTIA Association forecast that over the next 10 years, the tech workforce will grow by at least 18%, a growth rate that is 2x as fast as the overall employment growth rate.
If you see all the small-point font on the right side of the slide, you will find that the growth is coming from the interest in skills that you would logically suspect: the need for ever more data scientists and engineers to implement AI, more cybersecurity engineers to protect us from an ever-increasing threat environment, and the need for armies of software developers to create more code to make our businesses more automated. A focus on skills is an important reason why our two platforms are very unique. LinkedIn and other career sites create a user profile based on titles, and their concept of skills are soft skills like public speaking. Our special sauce comes from the way that we profile and search for candidates. We have spent over a decade perfecting a taxonomy that categorizes over 100,000 different tech skills that candidates identify with their profile.
We received a U.S. patent for this skills taxonomy several years ago, and it's the heart of our value proposition. We win in this market for tech talent because we are a specialist in technology skills and not a generalist recruiting platform. Here are two case studies of great relationships we have had with our clients on both platforms. Leidos has been a client of ClearanceJobs for over 10 years and has continuously increased its spend with us. Likewise, the Montefiore Health System, operating in New York City, has also been a client of Dice for over 10 years and has more than doubled their spend with us over the course of that time. Montefiore's case study also illustrates an important point about Dice. Most investors think that we focus on software and tech clients.
We do, but in many cases, our value proposition is actually stronger for companies in other sectors because they are less visible to the technology community at large. We have a very large TAM for each of our platforms. In the case of ClearanceJobs, we have 2,000 subscription customers today. The government has publicly stated that there are over 10,000 contractors that hold a Facility Clearance, allowing them to conduct business with cleared personnel. We also know that there are over 100 government agencies that we can directly contact to sell the ClearanceJobs platform. For Dice, we have approximately 5,000 subscription clients today and know that tens of thousands more fit our Ideal Customer Profile. There are also thousands of additional staffing and recruiting firms that we can target just as well.
Before I transition to Greg, I will leave you with this quick summary of how we make money and how we have strong visibility into future revenue. First and foremost, clients pay for the opportunity to access each platform. There is no charge for a candidate to register, create a profile, and start using the platform. As indicated earlier, because we are a subscription-based service with one-year minimum contracts, over 90% of our revenue is recurring. Over 90% of our contracts include an auto-renewal clause with an automatic price escalator. We cap the number of profile views for each subscription contract based on the number of recruiters in that company that intend to use it and the number of tech professionals the company intends to hire in the next year. Robert Half, as an example, has a much larger profile view number than a 100-person tech firm.
We allow unlimited emails and texts on our platform, which is another key competitive differentiator. We encourage the recruiter and the candidate to engage in conversations. That's how they both win and a reason for them to come back to our platforms again. So with that, I would like to introduce Greg, who will take you through the rest of our presentation.
Thank you, Art, and good morning, everyone. I'll share some additional financial data and insights. DHI bookings, which represent the value of our contracts that will be recognized as revenue within 12 months of the contract start date, have risen at a 6% CAGR since 2019, and revenue has risen at a 7% CAGR over the same period. With over 90% of our bookings and revenue recurring, DHI has a very predictable revenue model with approximately 50% of each year's revenue already under contract at the start of each year. DHI's adjusted EBITDA margin has expanded since 2019 to 24% in 2023. Because of the more difficult market conditions in 2023 and thus far in 2024, we reduced costs through restructurings in the second quarter of 2023 and again in the third quarter of this year. We are targeting a 24% EBITDA margin for 2024.
As previously mentioned, challenging market conditions in the HR tech space have persisted into 2024, with bookings and revenue declining in the mid to upper single-digit range. We have, however, managed our cost structure to grow our adjusted EBITDA margin through the first three quarters of 2024. Our subscription-based business creates predictable revenue, with revenue generally being recognized ratably over the annual contract term as services are delivered to our customers. This slide depicts how our committed contracts at the start of 2023, shown as backlog, become revenue over the year, and then how our customers up for renewal during the year drive revenue as the year progresses. The remainder of our revenue comes from our new business efforts and transactional business, which primarily includes short-term job postings, career events, and our Sourcing Services product.
DHI produces strong operating cash flows, with the low points for operating cash flows over the past five years approximating $20 million, and the strong markets in 2021 and 2022 driving operating cash flows to $29 million and $36 million, respectively. DHI's capitalized development costs, which are part of fixed asset purchases in our cash flow statement, primarily represent the costs of our internal labor to build the products and features on the Dice and ClearanceJobs sites. With lower internal headcount resulting from the restructurings, capitalized development costs are expected to decline from the 2022 and 2023 amounts and approximate pre-pandemic levels. By consolidating our tech organization to a smaller number of teams that have subject matter expertise in adjacent areas, we have found that we can accelerate our release schedule.
DHI's free cash flow, which is operating cash flows less capital expenditures, is driven by adjusted EBITDA levels and capitalized development costs. Over time, we are targeting free cash flow at 10% of revenue. As Art mentioned, we suspended our share repurchase program in the middle of 2023 in a focus on paying down debt, targeting less than one-time leverage. Our debt at the end of the third quarter was $32 million, resulting in leverage at 0.88x our adjusted EBITDA levels. We maintain approximately $2 million of cash on hand and utilize our $100 million revolver to manage liquidity. Since 2019, DHI has repurchased nearly 18 million shares and has reduced shareholder dilution by approximately 7 million shares, or 13%. Our ClearanceJobs brand is a dual-sided marketplace with 2023 revenue of $49 million, comprised of approximately 2,000 clients.
The overall market has over 10,000 cleared employers and over 100 government agencies. These logos represent a sampling of our CJ customer base. CJ's quarterly bookings have seasonality, with the first quarter being the largest of the year. CJ bookings have a five-year CAGR of 18%, and most recently, Q3 bookings increased 4% year- over- year, with a renewal rate of 91% and a retention rate of 109%. CJ revenue has a five-year CAGR of 19%, with the third quarter of 2024 being up 6% year- over- year. Dice is also a dual-sided marketplace that drove $103 million of revenue in 2023 and is comprised of over 5,000 subscription clients in a market with roughly 100,000 client opportunities between the commercial and SRC accounts. The slide shows a handful of notable Dice customer logos.
Our market opportunity in commercial is based on companies across various industries, such as Coca-Cola, Disney, and Bank of America, who aren't traditionally tech companies but certainly hire many tech professionals every year and leverage our platform for their tech hiring needs. Dice bookings, excuse me, Dice's quarterly bookings also have seasonality, with the first quarter being the largest of the year. Dice bookings have a five-year CAGR of 2%, and most recently, Q3 bookings decreased 15% year-over-year as the HR tech hiring environment has remained challenged. Dice revenue has a five-year CAGR of 3%, with the most recent quarter being down 12% year-over-year. McKinsey and other economists predict tech hiring to grow in double digits over the next 10 years, and DHI is at the intersection of fueling the tech economy.
Our pool of millions of candidate profiles, coupled with our platform-enabled proprietary matching algorithms, allows for efficient and effective identification of talent and hiring. In summary, DHI is well- prepared to capture growth in tech hiring in the coming years. With that, we are happy to take any questions you may have.
Thank you, Greg. This is Todd. I handle IR for the company. I'll be reading the questions. We have, it looks like, five questions that have come in through the site. I'll start with the first one. While you remain focused on debt reduction, you have also alluded to reintroducing a potential share buyback. Do you have any color on the timeline?
So I can take that. That's a great question. We have been focused on debt reduction since the summer of 2023. The goal that was set by the Board was to get below 1x leverage. We did so in the third quarter, and the Board has wanted us to be stable and remain below 1x leverage. It's an active discussion right now, even in the month of December, as to when and whether we institute a share buyback program. Both Greg and I are very much in favor of doing so. And so, again, we don't have a specific date or timeframe, but we are very much proponents and working with the Board to see if we can deliver a new share buyback program in 2025.
Okay. Moving on to our second question. Total bookings for your third quarter were $31.2 million, down 15% year-over-year. Do you think we have seen the worst of the year-over-year declines?
I can take that as well. And Greg, if you have additional thoughts, please, by all means, add your thoughts to mine.
Please.
We have basically seen a pretty low point in our revenue renewal rate with this third quarter. So if the answer is we've been bumping along the bottom, is there an inflection point? We can't get any worse. I personally believe that that is the case. We're seeing actually some positivity in the staffing recruiting cohort or segment. In fact, that is very much consistent with the forecasts that are coming out of Staffing Industry Analysts, which is the Association for the Staffing Industry. They believe that the tech sector for staffing is going to be down 9% year-over-year in terms of revenue growth, but it's going to bounce back to 5% revenue improvement in 2025. The long-term growth rate for tech staffing has been around 3%-4%. So 5% improvement is actually a very nice forecast.
We're hopeful that that will mean that there will be more staffing opportunities for us to attend to in 2025.
Okay. Kind of following on that, the next question is, what did the CompTIA monthly report say for November?
The monthly report for November had the number come down, but actually, we would view November and December to be seasonal low points in the year. And that's the way they've historically acted for the last five to 10 years. So if you think about it, most companies aren't thinking about hiring in November or December because it's just the holiday season. And so the number came down to 184,000 new tech job postings. It is notable that that number is 18% higher than the November period of last year. So if you trended the CompTIA figures, you would see that they're going down year-over-year until we hit the month of August, and then they started inflecting, where they're now larger numbers than the back half of 2023.
Okay. Our next question is, could you give some specific examples of where AI-driven demand is impacting your growth?
So we're challenged both ways. I would say we have seen that the number of positions that we're posting that require AI skills has basically doubled from the beginning of this year to the fourth quarter. So if you looked at the number of postings on Dice in any average day, about 20% of them require AI-related skills. So we think that there is a surge of interest in AI, clearly, across the United States and the economy as a whole. You can also see that instantly in the reported earnings calls for IBM, for the statistics that are delivered by McKinsey, Accenture, other larger consulting firms, consistent with the notion that the Fortune 500 companies are spending a lot of money trying to figure out how AI is going to affect their business models.
Some people ask us, "Well, doesn't AI mean that programmers are so efficient that you don't need as many of them?" The answer to that has been that we have always had tools that allow us to be more efficient in editing code, documenting code, creating code. DHI Group itself has been using a tool for at least four or five years that is AI-driven to improve our own code. So I look at this new generative AI phenomenon as just a continuum of tool sets that allowed people to be more efficient as they code, even from the days that I started coding back in 1993, leaving the Air Force. So it's a new tool, but it's not going to eliminate the need for software developers. In fact, quite the opposite.
I believe that it's going to actually accelerate the need as people figure out the use cases and how they want to adopt them for their business models.
Okay. And our last question is relating to the CJ side of the business. How is the current political landscape impacting the CJ side of the business, and what is your outlook for bookings in 2025?
So I would say the answer is that CJ has been impacted by the debate over the budget, and the budget meaning the larger U.S. government budget, but also the Defense Authorization Act over the last year, and the constant threat of going into a government shutdown. Most people don't realize it, but we are in a 10-day period before the next potential government shutdown. This creates uncertainty for military contractors. Uncertainty creates longer sales cycles. That's the way that I would describe CJ and the performance this year. With an administration that consists of the presidency, Senate, and House in the hands of one party, I think that there will not be any issue associated with getting a budget that is going to essentially support defense.
In fact, the read that we have is that there is no appetite by the Senate nor the House to have any diminishment of a defense budget, irrespective of the efforts of DOGE. So for now, we believe that it's a net positive and a big positive that there is unity in a view of the 2025, actually, fiscal year defense budget that needs to be authorized.
Okay. Great. There are no further questions at this time. I'll turn it back to the operator to close the call.
Thank you. Ladies and gentlemen, this does conclude DHI Group Incorporated's presentation. You may now disconnect, and please consult the conference agenda for the next presenting company.