I'd now like to turn the floor over to today's host, Art Zeile, CEO of DHI. Please go ahead.
Thank you. We'll 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. In the big picture, DHI Group is listed on the New York Stock Exchange under the symbol 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. 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 the needs of both clients and candidates in order to succeed. This might sound familiar to LinkedIn or Indeed, 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 specific tech skills. Secondly, we have spent literally decades attracting the highest quality talent to our platforms. We have the profiles of over 9 million technology professionals on these two platforms, representing two-thirds of the total skilled technologists in the United States. We are constantly evolving our offering to be more relevant to our community. This year, we created a brand-new self-service option to buy Dice online, and we just released our new ClearanceJobs premium candidate experience formally last week. It's our first opportunity to monetize our candidate base. Last year, we also bought an applicant tracking system named AgileATS that is optimized for government hiring and have integrated it with the ClearanceJobs platform.
On Friday of two weeks ago, we acquired a specialized government staffing firm named Point Solutions Group that delivers top secret rated professionals for a number of prime contracts. We largely 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. 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. DHI drove $128 million in revenue and $126 million in bookings last year. The five-year CAGRs are 2% for revenue and a 1% decline for bookings.
This is due to the hiring recession that we've seen over the past years, but that is changing rapidly, particularly for the tech staffing sector, which constitutes 80% of Dice's revenue. Our adjusted EBITDA was $35 million, delivering a 27% adjusted EBITDA margin last year. We delivered $21 million in operating cash flow and $14 million of free cash flow. Almost all of our CapEx is capitalized labor used in software development. Greg will brief you on how we have reduced CapEx significantly this year. We reinstituted our share buyback program a year ago and repurchased $11.4 million of shares in 2025 and ended the year with net debt of $27 million, equating to less than 1x leverage.
As you can see, we have had a long-term commitment to buying back our shares and recently instituted a new $10 million buyback program at the beginning of 2026 because our board believes that our shares are undervalued. The U.S. has become a tech-oriented economy and has grown the tech workforce by approximately 3% each year over the past 25 years, only flattening for short periods of time in 2001, 2008, and 2020. 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 an up-to-date profile. When they are found on these other platforms, they generally do not have resume or contact information.
ClearanceJobs is the dominant leader in its market for delivering access to technology professionals with a government clearance. LinkedIn does not offer a solution to find cleared candidates. A LinkedIn profile has no field for government clearance, and government workers and military contractors in general are restricted from using this site because it is known to be a target of foreign spies. Tech professionals are well compensated. The average salary for a tech professional in the United States last year was roughly $127,000, whereas the average worker in the United States made around $50,000. As a company, you have basically two choices when hiring tech workers: use a recruiter or do it yourself. If you do use a recruiter, you will generally be charged between 20% and 25% of first-year salary.
The alternative is to pay Dice roughly $7,000 for our entry-level annual subscription or ClearanceJobs about $15,000 for the equivalent subscription, and then you find and engage the tech talent yourself. As you can tell, even one hire easily pays for itself compared to paying an external recruiting agency. We target companies that plan for at least 5 hires over the next year, driving an even more compelling return on investment. Our value to the tech industry was validated by Forbes magazine back in 2024 when it announced Dice as the No. 1 career site for tech and IT jobs. The elevated interest rate environment clearly suppressed hiring demand since the end of 2022. That, after all, was the Federal Reserve's intended result.
As the famous quote goes, every company now is a software business 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 forecast that over the next 10 years, the tech workforce will grow by at least 15%, a growth rate that is twice as fast as the overall employment growth rate for the United States. The growth is coming from the interest and 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. Many people question whether or not AI will reduce the need for coders or, software developers.
Several independent studies from McKinsey and other consultants show otherwise, and there is a lot of evidence to this trend on our own site. 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 over the long term as tech pros skills evolve from basic coding to developing and managing AI agents. As I stated earlier, our special sauce is our focus on profiling tech skills. 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 catalogs over 100,000 different tech skills that candidates identify with their profile. We received a U.S. patent for skills taxonomy several years ago, and it's the heart of our value proposition. Our customers are hyper-focused on hiring people to manage their AI projects in today's environment. Our taxonomy manages over 360 distinct AI skills rather than treating it as one umbrella term. This allows employers to find the exact right tech workers they need for their projects. We went in the market for tech talent because we're a specialist in technology skills and not a generalist recruiting platform. Over the years, we have accelerated the pace of innovation on both platforms. We generally have one or two major releases on each platform each quarter and hundreds of minor releases each year.
For ClearanceJobs, we completed 2 acquisitions in the last 9 months to extend the product set we can sell into our 1,800 client relationships. AgileATS is an applicant tracking system, a CRM for recruiters that allows them to efficiently manage their candidate pipeline. AgileATS is built specifically for recruiting and hiring cleared professionals in the GovTech space. As I indicated earlier, we just announced the acquisition of Point Solutions Group. This is a highly specialized cleared staffing firm that supports multiple prime contracts. Although there are thousands of staffing firms in the United States, there are very few that can deliver cleared personnel, making this a very unique capability. We also just released ClearanceJobs Premium Candidate Subscription, which is the first time we have charged candidates for additional special features that help them with their job search.
For Dice, we spent two and a half years rewriting the entire code base to deliver a new self-service platform last year. For the very first time in 35 years, you can now go to the site, put in your credit card information, and immediately start posting jobs and searching the candidate database. We are in the midst of rolling out the first recruiter marketplace of tools that can help recruiters improve their efficiency. We will be continuously adding partnerships in this marketplace over the course of the next year. We have a very large TAM for each one 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.
We also know that there are over 100 government agencies that we can directly contract with as well. For Dice, we have approximately 4,100 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 as well. Before I transition to Greg, I'll 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 our platform. There is no charge for a candidate to register, create a profile, and start using the platform.
As I indicated earlier, because we are largely a subscription-based service with one-year minimum contracts, over 90% of our revenue is recurring today, and a majority of our contracts include an auto-renewal clause with an automatic price escalator. Within each platform, we allow unlimited emails and texts, which is another key competitive differentiator. We encourage the recruiter and the candidate to engage in conversations. That's how they both win, and the reason for them to come back to our platforms time and time again. With that, I'd like to introduce Greg Schippers, our CFO, who will take us through the rest of the presentation. Greg?
Thank you, Art. 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, 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 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 2021 to 27% in 2025. Because of the more difficult market conditions in the last few years, we have reduced costs through restructurings over the past several years. Together, these restructurings have reduced our operating cost by approximately $35 million.
The restructure that occurred in early 2025 also separated our Dice and ClearanceJobs organizations, which was designed to better deliver results for our shareholders, maximize profitability, and provide stronger long-term strategic options. We are 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. As we also previously noted, 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. DHI produces strong operating cash flows with the low points for operating cash flows over the past five years at $21 million, and the strong markets in 2021 and 2022 driving operating cash flows to $29 million and $36 million. DHI's capitalized development costs, which are part of fixed assets 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. It's compared to $12 million in 2024. DHI's free cash flow, which is operating cash flow less capital expenditures, is driven by adjusted EBITDA levels and capitalized development costs. Over time, we target free cash flow at 10% or more of revenue. 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, which resulted 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 share buyback program, which allows us to repurchase up to $10 million of common stock through February 2027. CJ is a dual-sided marketplace that drove $55 million of revenue in 2025 and is comprised of 1,800 subscription clients in a market with roughly 10,000 client opportunities and 100 government agencies. Here you can see a number of notable customers of ClearanceJobs. CJ's quarterly bookings have seasonality, with the first quarter being the largest of the year. CJ's bookings have a five-year CAGR of 9%, and most recently, Q4 bookings were up 3% with 90% revenue renewal rate and a 109% retention rate.
With the $1 trillion defense budget approved, we expect ClearanceJobs to return to double-digit bookings growth as we exit 2026. ClearanceJobs revenue has a 5-year CAGR of 12%, with the fourth quarter of 2025 being up 1% year-over-year. As you can see, CJ is very profitable, with adjusted EBITDA margin above 40% and low spend on capitalized development. Like CJ, Dice is a dual-sided marketplace that drove $73 million of revenue in 2025 and is comprised of 4,100 subscription clients in a market with roughly 100,000 client opportunities between the commercial and staffing and recruiting accounts. These logos represent a sampling of Dice's customers.
Our market opportunity in commercial 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 their tech hiring needs. 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 negative 7%, and most recently, Q4 bookings declined 11% year-over-year as the HR tech hiring environment remained challenged. Dice's renewal rate for the fourth quarter was 78%, while its retention rate was 94%. Dice revenue has a five-year CAGR of negative 4%, with the most recent quarter being down 17%.
Dice adjusted EBITDA margin has increased in recent quarters due to the restructurings discussed earlier and with the most recent quarter being at 30%. Dice capitalized development costs have steadily decreased as well and were $1 million in Q4. Looking ahead, ClearanceJobs and Dice are positioned for growth, supported by large total addressable markets, the $1 trillion defense budget, our cleared staffing offering, and Dice's new self-service option. Our recent acquisitions of Point Solutions Group and AgileATS further strengthens our portfolio as we continue to look for additional tuck-in acquisition opportunities for ClearanceJobs. Today, these initiatives create a clear path for sustainable growth. In summary, DHI is well prepared to capture growth in the tech hiring in the coming years. With that, we're happy to take any questions.
Thank you. We do have some questions that were submitted by investors. I'll go ahead and read those now. The first question is, you've described the tech hiring market as gradually recovering after a challenging macro environment. What leading indicators are you watching most closely that signal when demand for tech talent and for platforms like Dice will return to sustained growth?
It's a great question. I'd say that there are three very important indicators. The first is associated with the tech staffing sector. It's important to understand that about 80% of the activity on Dice is associated with tech staffing companies like the tech division of Robert Half or Kforce, Kelly Services, but also the long tail of multiple tech staffing firms in the United States. There is an association called SIA, Staffing Industry Analysts, that surveys their population and determines each 60 days the level of revenue growth or decline within that tech staffing sector. The good news is that after a pretty severe recession taking place in 2023, 2024, we turned the corner the back half of 2025. That's indicator number one, the health of the tech staffing sector. Indicator number two is broader.
There's another association named CompTIA, which is an association for tech workers in the United States, and they post their review of the jobs report each month. They analyze the Bureau of Labor Statistics, JOLTS reports, and other sources, and we chart that. The bottom line is that this year it appears that the level of new tech job postings is actually increasing after, again, a number of years of decline or just bumping at the bottom. The third really important metric that we look at is the number of tech recruiter job postings, which we get from a service called Lightcast. Obviously, the reason why you're hiring tech recruiters is because you intend to hire tech workers.
That number, you know, very importantly, has grown over the last, I'd say, six months from a bottomed out number in 2024.
Okay, great. The next question is, ClearanceJobs has been growing while Dice has faced headwinds. What are the key structural differences between these two businesses, and what strategic steps are you taking to restore stronger growth at Dice?
That's a great question. I can answer that one. I would say they are in different markets. There is very low amount of competition for ClearanceJobs. As I indicated in the course of the presentation, we really don't have a meaningful competitor. LinkedIn does not have a field for clearance level, and you're not supposed to use it if you do have a clearance in the United States. It is distinctly less competition in that ClearanceJobs arena. What are we doing to essentially supercharge growth for Dice? I'd say, you know, structurally, we're making it a less friction-filled experience to get a subscription to Dice. I indicated that after 2.5 years, we've actually created a self-service option.
You can go to the site today and quite literally put in a credit card and immediately be activated for Dice so that you can start using the experience. Doesn't involve a salesperson whatsoever. We have seen since the beginning of the year the amount of activity in that self-service mode grow quite significantly. I would also say that the macro environment really affects Dice. Obviously, being a hiring platform, given that we've gone through a hiring recession these past few years, once we see the environment improving for a need for technology workers and especially the tech staffing firms hiring tech workers, I think you're gonna see the prospects of Dice improve significantly.
Okay. Thank you. Next question is AI's impact on recruiting and DHI's product strategies. The question is, DHI positions itself as an AI-powered career marketplace. How do you see AI changing the way companies source and evaluate tech talent? What differentiated capabilities is DHI building to stay ahead of that shift?
That's a great question. I can answer that as well. We've seen a lot of different capabilities come to market in the last year that assist recruiters, and they can fundamentally be built into the ATS, the applicant tracking system. They could be tools that essentially automate the interviews that take place or the screening of candidates at the very beginning of a search process. For us, we have used AI for at least 15 years now. It's the real source of strength for our search process on both platforms. When we essentially look at a job posting, we're stripping out all the skills that are being requested by that job posting and then quite literally matching it against the 9 million-plus profiles we have across both platforms on a skill basis.
Instead of looking for a Java developer in a particular location, we're looking for a Java developer that has maybe 30 distinct skills, and we're surveying our entire profile database to give the best match to our clients, the hiring managers or the recruiters. It's been involved in our platforms for quite some time, and we're constantly adding new AI-related features.
Okay. Great. Next question. You recently announced an acquisition expanding the mission of ClearanceJobs. Can you tell us more about this new opportunity and if there are other opportunities to expand the mission of CJ or Dice?
Yes. We announced the acquisition of Point Solutions Group, which is a security-cleared staffing firm. It is located in Denver, Colorado. It attends to 10 prime contracts where we essentially have roughly about 40 cleared contractors on the customer's premise. It is operating at the top secret level, so that's very unique itself. It's established about 7 years of operating history, which is important when you think about government contracts in general. They generally ask you for your requisite government history working with the government or working with contractors. It gives us the ability to essentially build off of those existing prime contracts but seek additional contract work with the government. Again, it's a very important capability that's, it's infrequent in the United States.
We like to think of it as also just an expansion of what we can deliver for our recruiters and our military contractors. You can now source the talent yourself through our ClearanceJobs platform. You could ask us to do permanent placement, and we'll essentially deliver a candidate after doing the recruitment activity ourselves, or you could ask for a contractor in a staffing assignment. We are providing the full continuum of talent resources for our clients with this acquisition.
Okay. The last question I have from the investors is if we look out 3-5 years, what does success look like for DHI Group, whether that's growth in revenue, the mix between Dice and ClearanceJobs, or the broader role you want the company to play in the tech talent ecosystem?
We have a very clear mission, as expressed by our board, which is to get ClearanceJobs back to double-digit revenue growth, Dice back to single-digit revenue growth while maintaining our profitability. That's expressed as above 40% EBITDA margins for ClearanceJobs and above 20% margins for Dice. That is the mission. That's what we're striving for every day.
Okay. Great. Well, I'll turn it back to you to give any closing remarks.
Well, thank you very much. I just wanted to say that we are happy to set up a one-on-one meeting, and please, reach out to Todd Kehrli, our IR advisor, if you'd like to do so. Thank you very much for your time today.
That concludes DHI's presentation. You may now disconnect.