Of course, Art.
Thank you very much, Joe. Waiting for the presentation to go live. Again, I'm Art Zeile, the CEO of DHI Group, and with me today is Greg Scapas, our CFO. We'll be going through our investor presentation and then be available for Q&A afterwards. So hopefully everybody is seeing the presentation. I'm not seeing it register on my own screen.
I can see it, Art, on my end.
Fantastic! Maybe it's in some kind of a loop. Anyway, we have included our standard forward-looking statements waiver with the normal caveats. DHI Group is listed on the New York Stock Exchange under the symbol of DHX, and we are headquartered in Denver, Colorado. Our ClearanceJobs and Dice brands are the leading platforms for employers to find and engage with top tech talent in the United States. DHI is a holding company for two tech-oriented recruiting platforms. We created these platforms to allow our clients, again, recruiters and hiring managers, to connect with tech candidates. They are inherently two-sided marketplaces that serve both the clients and the candidates alike.
You might think that this sounds pretty commonplace with the likes of Indeed advertising on TV, but we have two key differentiators that make us a necessary tool for recruiters and for hiring managers looking specifically for tech professionals. First, we have built special search algorithms to find candidates based on their tech skills and not titles. And secondly, we have spent literally decades attracting the highest quality talent to our platforms.
We have, across both platforms, over 9 million tech professionals profiled, representing more than two-thirds of the total skilled technologists in the United States, and that is truly the benefit of Dice being around for 35 years and ClearanceJobs being around for 24 years. We are constantly evolving our offering to be more relevant to our community.
This past year, in 2025, we created a brand-new self-service option to buy and manage Dice online on a monthly basis. We are also testing out, for ClearanceJobs, a premium candidate experience, the first opportunity to monetize the candidates on the ClearanceJobs platform. We also bought an applicant tracking system named Agile ATS for ClearanceJobs that is optimized for government hiring, and we have integrated it into the ClearanceJobs platform.
So ultimately, we make money by charging our clients for subscription contracts that allow them to access our platforms, and in the future, also, monetizing the ClearanceJobs candidate experience. Today, over 90% of our revenue is recurring. Here is a summary overview of our 2025 annual financial performance and five-year CAGR trends. Greg will be providing quarterly performance later in the presentation.
So in the past year, DHI drove $128 million in revenue, and $126 million of bookings. The five-year CAGRs are 2% for revenue and a decline of 1% for bookings. This largely is due to the hiring recession we have seen over the past several years, but that situation is changing as we speak, particularly for the tech staffing sector, which constitutes over 80% of Dice's revenue.
Our Adjusted EBITDA was $35 million last year, delivering a 27% Adjusted EBITDA margin. We delivered $21 million in operating cash flow and $14 million in free cash flow. Almost all of our CapEx is capitalized labor used in software development across the two platforms, and Greg will brief you on how we have reduced that CapEx spend significantly this past year.
We reinstituted our share buyback program a year ago, which had been suspended since the middle of 2023, to focus on debt reduction. As a result, we repurchased $11.4 million worth of shares in 2025 and ended the year with net debt of $27 million, equating to less than 1x Leverage Ratio. And as you can see, we have had a long-term commitment to buying back our shares and recently instituted a $10 million buyback program for 2026.
We announced that on Wednesday because our board believes that our share value is under its intrinsic value. The U.S. has become, as most people are aware, a very tech-oriented economy over the course of time and has grown the tech workforce, generally speaking, over the last 30 years by approximately 3% each year.
We have a very unique pool of candidates that cannot be found on other career sites. Based on our research, roughly 20%-30% of our candidates can be found on alternative career sites like CareerBuilder plus Monster, ZipRecruiter, Indeed and LinkedIn, with actual up-to-date profiles.
When they are found on these profiles, the majority of the profiles are either out of date or they do not include resume and contact information as they do on Dice and ClearanceJobs. ClearanceJobs is the dominant leader in its market for delivering access to technology professionals with a government clearance. Think of that as secret, top secret. There are a number of different government clearances. 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's known to be a target of foreign spies. Tech professionals, in general, are well compensated. The average salary for a tech professional in the United States is roughly $111,000, whereas the average worker in the United States makes around $50,000. As a company, you basically have two choices when you're trying to hire a tech worker. You either go through a recruiter or you do it yourself. If you use a recruiter, you will generally be charged anywhere between 20%-25% of the first year's salary of that individual.
The alternative is to pay ClearanceJobs or Dice roughly $8,000 or $15,000 for our entry-level year-long subscription and find and engage that tech talent yourself. $8K is the relevant price for Dice as an entry-level subscription, and $15K is the relevant price tag for CJ, given its more dominant competitive position. Even one hire as an alternative to using a recruiter easily pays for itself.
So we target companies generally that are planning to hire at least five individual tech positions in the next year, driving an even more compelling return on investment. Our value to the tech industry was clearly validated by Forbes Magazine in 2024 when it announced that Dice was the number one career site for tech and IT jobs.
The United States and the EU are poised to record record defense spending, with the U.S. defense contractors expected to receive significant increases. The EU target spend of 5% of GDP actually equates to an incremental $500 billion in spend each year, the majority of that, which will go to U.S. contractors. So, it is roughly a 50% bump on the defense budget that was just passed in Tuesday of this week. The bottom line is that the elevated interest rate environment clearly suppressed hiring demand over the last several years, since 2022, when the Federal Reserve spiked interest rates, and that was its intended result, to reduce wage-related inflation pressure.
But as the famous quote goes, "Every company today is a software business." Our reliance as an economy has increased on technology and automation. For that reason, the Bureau of Labor Statistics and CompTIA, which is an association of the tech workforce, forecast that over the next 10 years, the tech workforce itself will grow by at least 15%, and that growth rate is roughly twice as fast as the overall employment growth rate in that same range.
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 and manage AI, and more cybersecurity engineers to protect us from ever-increasing threats. Now, many people question whether or not AI will reduce the need for coders. The independent studies actually show otherwise, and here is more evidence for that trend.
At the end of 2025, 55% of Dice jobs required at least one AI skill, which compares to 28% at the end of 2024. We expect AI to increase the demand for tech professionals long term, as tech professionals' skills evolve from basic coding to developing and managing AI models and chatbots directly. A focus on skills, as I indicated earlier, is an important reason why our two platforms are truly unique in their environments. 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 fro m the way that we've profiled and the way you can search for our candidates.
We have spent over a decade perfecting a taxonomy that categorizes over 100,000 different tech skills that candidates identify within their profile, and we received a patent for this skills taxonomy several years ago that is the heart of our value proposition. The term AI is actually a series of over 360 distinct skills in our taxonomy.
We win in the market for tech talent because we are a specialist in these technology skills and not a generalist recruiting platform. Here are two case studies of the great relationships that we've built with our clients on both platforms over the course of time. Leidos has been a client of ClearanceJobs for over 10 years and has continuously increased its spend with us, as it's been awarded new projects and initiatives by the government.
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 its spend in that time. Montefiore's case study also illustrates something that's very important about Dice. Most investors think that we focus on software and tech clients.
We do. We have a number of clients like Amazon and Microsoft and the large tech giants, but in many cases, our value proposition is actually stronger for companies in other sectors because they are less visible to the tech community. We have a large TAM, target addressable market, for each of our platforms. In the case of ClearanceJobs, we have approximately 1,800 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 in the United States. We also know that there's over 100 government agencies that we can directly contract with as well. For Dice, we have approximately 4,100 subscription clients, and we know that tens of thousands more fit our ideal customer profile.
There are also thousands of additional staffing recruiting firms that we can target. Before I transition to Greg, I will leave you with this quick summary of how we make money and have strong visibility into future revenue. First and foremost, clients pay for the opportunity to access each of these platforms. With the exception of ClearanceJobs premium candidate subscription, we don't have a charge generally for candidates to register, create a profile, and start using the platform.
As I indicated earlier, because we are a subscription-based service with a one-year minimum contract, over 90% of our revenue is recurring in nature. Over 90% of our contracts include an auto renewal clause with an automatic price escalator as well. 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.
So 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 each of these platforms, which is another key competitive differentiator. We encourage the recruiter and the candidate to engage in conversations.
That's how we know both of them will win, is if they have active dialogue on the platforms themselves, and it's a reason for them to come back time and time again to the platforms. So with that, I'd like to introduce Greg, who will take us through the rest of the presentation.
Thanks, Art. I'll share additional financial information and insights around our brands. DHI bookings, which represent the value of our contracts that will be recognized as revenue within 12 months of the contract start date, has declined at a 1% CAGR since 2021, while revenue has risen at a 2% CAGR over the same period.
With over 90% of our bookings and revenue recurring, DHI is a very predictable revenue model, with approximately 50% of each year's revenue already under contract at the start of each year. Our Adjusted EBITDA margin has expanded since 2021 to 27% in 2025. Because of the more difficult market conditions in the last few years, we reduced costs through restructurings in 2023, 2024, and again in this past year.
Together, these restructurings have reduced our operating costs by approximately $35 million. The restructure in early 2025 also separated our Dice and ClearanceJobs organizations, which is designed to better deliver results for our shareholders, maximize their profitability, and provide stronger long-term strategic options. We're targeting a 25% Adjusted EBITDA margin for 2026.
As previously mentioned, challenging market conditions in the HR tech space persisted in 2025, with bookings and revenue declining on a year-over-year basis. Also, as noted prior, we managed our cost structure to grow our Adjusted EBITDA margin to 27% in 2025. 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 the year, 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 talent sourcing products. Related to cash flow, DHI produces strong operating cash flows, with low points for cash flows over the past five years at $21 million, and the strong markets of 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 cost of our internal labor to build the products and features on the ClearanceJobs and Dice websites. With lower internal headcount resulting from the restructurings, capitalized development costs declined to $7 million in 2025, compared to $12 million in 2024.
DHI's free cash flow, which is operating cash flows less CapEx, is driven by adjusted EBITDA levels and capitalized development costs. Over time, we are targeting free cash flow at or above 10% of revenue. As Art mentioned, we suspended our share repurchase program in the middle of 2023 to focus on paying down debt. Our debt at the end of 2025 was $30 million, resulting in leverage at 0.85 times our adjusted EBITDA levels.
We generally maintain approximately $2 million of cash on hand and utilize our $100 million revolver to manage liquidity. Since 2020, DHI has repurchased over 18 million shares and has reduced shareholder dilution by approximately 4 million shares or 9%. We recently announced a new buyback program, which allows for us to repurchase up to $10 million of common stock through February of 2027, related to ClearanceJobs. ClearanceJobs operates in the gov tech space and is a dual-sided marketplace with 2025 revenue of $55 million. The logos on this slide represent a sampling of our CJ customer base.
CJ's quarterly bookings have seasonality, with the first quarter being the largest of the year, and CJ's bookings have a five-year CAGR of 9%, and most recently, Q4 bookings were up 3%, with a 90% revenue renewal rate and a 109% retention rate. With the $1 trillion defense budget approved, we expect CJ to return to double-digit bookings growth as we exit 2026. CJ revenue has a five-year CAGR of 12%, with the fourth quarter of 2025 being up 1% year-over-year.
CJ is also very profitable, with Adjusted EBITDA margin above 40% and low spend on capitalized development. Related to Dice, Dice is also a dual-sided marketplace that drove $73 million of revenue in 2025, and similarly, these are a sampling of Dice's customers and logos on the slide.
The market opportunity in commercial for Dice is comprised of companies across various industries, such as General Motors, Vitas Healthcare, the CIA, and Capital One, who aren't traditionally tech companies, but certainly hire many tech professionals every year and leverage our platform for tech hiring needs.
Dice's quarterly bookings also have seasonality, with the first quarter being the largest of the year. And Dice bookings have a five-year CAGR of -7%, with most recently, Q4 bookings decreasing 11% year-over-year as the HR tech hiring environment has remained challenged. Dice's renewal rate for the fourth quarter was 78%, while its retention rate was 94%. Dice's revenue has a five-year CAGR of -4%, with the most recent quarter being down 17% year-over-year.
Dice adjusted EBITDA margin has increased in recent quarters due to the restructurings discussed earlier, and the most recent quarter was at 30% for margin. Dice capitalized development costs have steadily decreased as well and were or totaled $1 million in Q4. Looking ahead, ClearanceJobs and Dice are positioned for growth in a normalized demand environment, supported by large total addressable markets, the trillion-dollar defense budget, our contract talent solutions offering, and Dice's new employer experience.
A recent acquisition of Agile ATS further strengthen, strengthens our portfolio and sets the stage for future tuck-in acquisition opportunities for CJ. Together, these initiatives create a clear path for sustainable growth. Related to Agile, Agile is an applicant tracking system, built specifically for recruiting and hiring clear professionals in the gov tech space, and we continue to look for additional M&A opportunities adjacent to CJ.
In summary, DHI is well prepared to capture growth in tech hiring in the coming years, and with that, we're happy to take any questions you may have.
Great insightful presentation, guys. Let's go to some of the questions. Let's start with Dice, because that seems to be one that's been, you know, facing a more challenged environment. You know, what, what trends are you seeing in tech hiring right now? You know, what, what do you think needs to happen to move that business back on to upward-sloping trends?
So that's a great question, question that we're frequently asked, and I would say that what we've seen over the past several years is a decline in all tech hiring. It's also affected the tech staffing sector very specifically, and about 80% of Dice's revenue comes from the tech staffing sector. Nevertheless, tech staffing has started to move into positive territory from a revenue growth perspective.
There is a very important industry association, it's called SIA, Staffing Industry Analysts, that charts the trends associated with tech staffing. They indicated that tech staffing revenue declined 10% in 2023, 6% in 2024, and 2% in 2025. But at the back end of last year, we saw a number of firms go revenue positive.
I think that this is because a lot of companies have the risk-off motivation to essentially hire through tech staffing to implement AI-related projects, instead of bringing those people onto their own payrolls. So we're starting to see that trend, the growth rate of tech staffing reappear. That's super important. Like I said, 80% of Dice revenue is dependent upon tech staffing.
Okay, great. Thanks for that. And what, what's been the sales uptake for the Agile, ATS product since its recent acquisition?
Great question. It's roughly doubled. The numbers are pretty small, so less than $1 million in revenue when we bought the company, the platform, in summer of last year. But in the six months since we've had it, and we've integrated it with ClearanceJobs, it has roughly doubled. We are very bullish on its prospects for this year.
We did not have a dedicated sales team, but we're in the midst of putting one together. Previously, we had just sold it through our existing ClearanceJobs sales team, which had the double responsibility of thinking about subscriptions as well as Agile ATS. Now, we're gonna bifurcate that and have its own dedicated sales team.
Okay, great. And you mentioned, you know, the growing defense budget. So are there other ways for ClearanceJobs to capitalize on the growing defense budget opportunity?
Yes. I think, you know, we're going to essentially try to find other tuck-in acquisitions so that ClearanceJobs can essentially perform more for these existing contractors that we have, the 1,800 relationships that we've built over 24 years. We think that that makes sense. In fact, the internal kind of theme is expand the mission, so we're expanding to essentially provide more services to the existing customer base and hopefully bring on board more customers over the course of time.
Okay. Maybe you could talk a little bit more about the auto renewal and price escalator clauses in your contracts, how they all work?
Sure. Greg, do you want to attend to that one?
Sure. Sure, yeah. So the standard auto renewal is. And again, these are on annual subscriptions, but the standard auto renewal is a 10% bump. And the customer, you know, it's a no-touch process if the customer wants to auto renew, and they get essentially the same product, and the same volume, over the next, you know, contract period with that 10% bump.
Okay, great. And then, you know, one more here. We're up against the time clock here. But, you know, who would you say your direct competitors are? I mean, who would you comp yourself against on a valuation type of a basis?
Valuation-wise, in the public markets? Limited set of real comps. I think the closest one would be ZipRecruiter, although ZipRecruiter attends to a completely different part of the market. ZipRecruiter really focuses on businesses that are 20 people or less, largely retail, large- and also restaurants. So those folks are not, you know, tech in orientation by any stretch of the imagination. They are a public comp.
A lot of people put, I would say, Fiverr in the category, because it's a marketplace. They'd also put SEEK, although SEEK is a platform that is run out of Australia and has different competitive dynamics. It does not have a sales team as an example. It's 100% online. So there's a few, but as a, you know, kind of pure play career marketplace, there's very few.
LinkedIn obviously is not available to us. Indeed, you can see some of their statistics through their public debt. They're a Japanese company, but they're also a conglomerate. I'd say the closest one, which isn't great, is ZipRecruiter.
Okay, great. Well, Art and Greg, we've come to the end of our allotted time. We covered a lot of ground today and got significant insight into what DHI Group does, its markets, and opportunities. We appreciate you taking the time to participate in our conference, and we wish you and the company the best in the future. Thanks again.
Thank you very much for having us.
Thank you very much.