Good day, and welcome to the DHI Group Inc. Fourth Quarter and Year-End 2020 Financial Results. All participants will be in a listen-only mode. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Todd Kehrli, MKR Investor Relations. Please go ahead.

Thank you, operator, good afternoon and welcome to DHI Group's fiscal 2020 fourth quarter and year-end financial results conference call. With me on today's call are DHI's CEO, Art Zeile, and Chief Financial Officer, Kevin Bostick. Before I turn the call over to Art, I would like to cover a few quick items. This afternoon DHI issued a press release announcing its Fiscal 2020 Fourth Quarter and Full-Year Financial Results. This 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 Section 21E of the Securities Exchange Act of 1934. When used the words anticipate, believe, expect, intend, future and other similar expressions identify forward-looking statements. 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 outcomes contained in any forward-looking statements. Factors that could cause these forward-looking statements to differ from actual results include delays in development, marketing, or sales, the adverse impact of uncertainty surrounding the COVID-19 pandemic, and other risks and uncertainties discussed in the Company's periodic reports on Form 10-K and 10-Q and other filings with the Securities 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 and, net debt that are not prepared in accordance with US GAAP. Information about and reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are available in our earnings release and on our website at dhigroupinc.com in the Investor Relations section. With that, I'll now turn the conference over to Art Zeile, CEO of DHI Group.

Thank you, Todd. Good afternoon everyone and welcome to our Fiscal 2020 Fourth Quarter and Year-End Earnings Conference Call. Thank you for joining us today. I hope that everyone is staying safe and healthy. I'd like to start my comments by providing some detail around how we finished the year and some of the accomplishments we achieved during 2020. After that, I'll provide an update on what we're seeing now and how our efforts this past fiscal year have more effectively positioned us to grow our business going forward. Starting with the fourth quarter, I'm pleased to report that we finished the year with strong bookings for Dice in December and solid performance with continued momentum in January. December and January are our two largest renewal months for Dice and combined they represent almost 30% of our total bookings for Dice in any given year. We also saw our Dice revenue renewal rate increased significantly from 66% last quarter to 75% this quarter with that rate increasing further still towards the end of the quarter. This gives us increased confidence in the rebound for our business as we enter the New Year. Surveys during the fourth quarter from two independent industry research firms, the Staffing Industry Analysts, SIA, and the TechServe Alliance reflect the continuing recovery trend throughout the staffing sector and confidence that tech hiring will continue to rebound in 2021. Also, comp tier using Bureau of Labor Statistics data reported that the tech industry showed job growth of 391,000 positions in December even as the U.S. as a whole lost 140,000 jobs. Several commentators are calling 2021, the year of the great re-hiring. It's clear that the worldwide effort to digitize the new businesses online will require technologists and there is no doubt these efforts will result in a worldwide surge in digital jobs over the next several years. According to a Microsoft survey released last summer, worldwide digital jobs are expected to grow from $41 million in 2020 to $190 million in 2025. Companies in the staffing and recruiting firms that service these companies will need tools such as ours to find qualified candidates to fill these new tech jobs. As we continue to execute on our plan to create the best tech-focused career marketplaces using our technology skills data model, we stand well-positioned to capitalize on this explosion in the hiring of technologists over the next several years. Now, let me quickly recap some of our accomplishments this past fiscal year. During 2020, we continued our fast pace of innovation. We launched several marquee product releases across Dice, ClearanceJobs, and eFC bringing best-in-class marketplace features to all three brands. Our continued innovation is driving our product leadership in the space and has resulted in solid increases in technologist engagement, including 11% growth year-over-year in visible candidate profiles and 47% growth year-over-year in candidate applications on the Dice platform. We also implemented new sales processes, methodologies, and forecasting driving improvements to better address market opportunities in our clients' needs. We increased our focus on client success through new leadership and technology in the second and third quarters, which has resulted in higher renewal rates with our existing customers in the fourth quarter. Last but not least, we were able to reset our entire financial budget within weeks of the start of the pandemic, so we could maintain our EBITDA goals throughout 2020. Team members globally united to implement expense management policies to ensure achievement of our cost savings goals while at the same time not losing sight of executing on our long-term growth plan. As we enter the New Year, we believe we have emerged from 2020 a better company. We have invested smartly in our products in sales resources to allow us to capitalize on the multiple growth opportunities in front of us. And as I will discuss later, we are planning to accelerate our investment in sales and marketing in 2021 to drive long-term revenue growth. Now, let me touch briefly on our sales performance during the fourth quarter. Bookings were slow at the beginning of the fourth quarter but as I mentioned earlier, they improved dramatically at the end and this strong performance was followed by continued positive momentum in January. We saw a significant rebound in our renewal rates in 2 of our 3 new business teams reached or exceeded the pre-pandemic level of bookings production for the quarter. One of those teams was our Dice, SRC are staffing, recruiting, and consulting new business team. As I mentioned before, the need for technologists is expected to grow significantly in the new post-pandemic economy and the rebound of Dice's SRC business in the fourth quarter is a positive indicator of that trend. We believe Dice is a necessity for staffing and recruiting firms focused on serving the tech industry. SRC market opportunity for Dice remained significant. While Dice has over 4,000 SRC customers today, there are over 18,000 staffing and recruiting firms in the U.S. alone leaving us significant room for growth. As such, we shifted sales reps to Dice's SRC new business team in the fourth quarter to capitalize on this opportunity, and while these new reps are still ramping up, we are excited about their contribution in the quarters to come as we look to further penetrate the large SRC market. On the Dice commercial accounts front, our team continues to experience longer sales cycles as many large enterprises went into a cost-cutting mode during the last three quarters of 2020 and are still solidifying their hiring plans for 2021. With that said, the Dice commercial team's pipeline of deal activity has continued to grow in both the fourth quarter of 2019, in the first 10 weeks of the first quarter of 2020. The commercial accounts new business team exceeded their bookings plan and we believe they will once again be a growth driver as the economy further. Commercial accounts still represent our largest opportunity for growth as there are tens of thousands of companies in the United States that fit our ideal prospect profile. Based on our Burning Glass feed, there are about 2000 companies that have more than 20 open tech job postings right now. Companies like Amazon, Anthem Blue Cross, Ernst & Young, Pfizer, and General Dynamics all have over a thousand active tech jobs posted today. We are focusing our commercial accounts team on these companies that are growing in the current economy. The first job is the other to outperform their bookings quoted during the quarter and we also added sales resources to this team during the fourth quarter. ClearanceJobs has been relatively unaffected by the pandemic, as evidenced by its full-year revenue growth of 17% year-over-year. We continue to work hard on expanding CJ's addressable market by moving beyond our government contract customers and making direct sales to U.S. government agencies. CJ signed several initial deals with government customers in 2020 and we expect them to add more in 2021. The market opportunity for CJ with government agencies is largely untapped and we see it as a significant growth opportunity as we move forward. Lastly, our eFinancialCareers brand continues to be challenged. It is still being affected by the protests and security laws imposed by China in Hong Kong, which had been its fastest-growing market. Also, there is continued uncertainty in the UK, eFC is the largest market because the Brexit agreement that was recently signed did not address the future of the financial services industry. There is no question that this uncertainty has weighed down eFC's performance to date and will continue to do so for the foreseeable future. As such, during the quarter, we took action to reduce the size of our eFC organization and start the process of spinning out this business to the eFC management team, which is expected to officially take place around mid-year. We believe this strategy will allow us to show positive revenue growth we expect to see with our remaining Dice and CJ brands, as well as allow eFC to be a nimbler, more entrepreneurial competitor in its markets. Looking forward, due to the success we are seeing in both Dice and CJ staffing and recruiting new business teams, we are planning to begin hiring even more new sales reps for these two teams this quarter. With our industry leading product offerings, we believe the time is right to add more sales resources to these teams as we look to capitalize on the expected growth in technology jobs over the next several years. We are also planning to focus more of our marketing spend in 2021 on generating more marketing qualified leads to fuel our new business team's growth. During the fourth quarter, we started by shifting the mix of our marketing spend from candidate generation to focus more on creating marketing qualified leads and we were able to successfully scale our MQL production across all of our new business teams during the quarter. Now that we have built industry-leading marketplaces for tech professionals, we also plan on launching targeted brand awareness campaigns in 2021. In 2019 and in 2020, we built a better product. 2021 will be the year we capitalize on our product innovation through increased sales and marketing efforts. Before I turn the call over to Kevin, I would like to highlight the continued high pace of product innovation from our product development teams during the fourth quarter. Significantly, only four months after the release of Dice [indiscernible], approximately half of our 30,000 active recruiters on the platform have created their own profile. This is a great validation of the value of our marketplace concept. Additionally, during the fourth quarter, we took another major step in the evolution of the Dice Marketplace introducing Dice Instant Messaging, a comprehensive and flexible platform through which recruiters and candidates can rapidly and confidently communicate in real-time. Instant messaging plays for connection tools to help recruiters drive continual engagement with candidates for current and future roles and for candidates to have direct and private conversations with recruiters. Launched in late November 2020, over 30,000 messages have already been sent through the Dice Instant Messaging platform and this number continues to grow exponentially. As always, ClearanceJobs also had important new releases in the quarter with the launch of self-serve BrandAmp which allows employers to customize the branding of their jobs in real-time. CJ also released candidate search, cast messages upgrades where employers can search and find prospects for broadcast messages by adding tags. Tags are critically important to recruiter workflows and are the brains behind CJ's suite of talent pipelining and messaging tools. ClearanceJobs continues to be our tested for innovation. As I conclude my remarks, I want to reiterate that we have created industry leading online marketplaces for matching companies with the highest quality tech professionals and with these marketplaces, we believe we can capitalize on the millions of new technologist jobs expected over the next 5 years. We are confident in our business plan and the continued progress we are making towards achieving our goal of driving revenue growth and we look forward to sharing our progress throughout the rest of 2021. With that, let me turn the call over to Kevin, who will take you through our financials, and then we'll take any questions you may have. Kevin?

Thank you, Art, and good afternoon, everyone. I'll start by going through the financial results then add a few comments about the business. For the fourth quarter, we reported total revenues of $33.2 million, which was flat with the third quarter and down 12% year-over-year. Dice revenue was $19.4 million in the fourth quarter, down 2% sequentially and 17% year-over-year. We ended the fourth quarter with 5,150 Dice recruitment package customers, which is down 3% sequentially and 14% year-over-year. Our average monthly revenue produced per Dice recruitment package customer was down 2% versus the year-ago quarter to $1,120 or $13,440 on an annual basis. Over 90% of Dice revenue is recurring and comes from recruitment package customers. Our Dice revenue renewal rate was 75% for the fourth quarter, up 9 percentage points from 66% last quarter, but down 6 percentage points year-over-year. Our Dice customer count renewal rate was 68%, up 5 percentage points from last quarter, but down 2 percentage points when compared to the same period last year. As Art mentioned, the tech jobs market continues to show signs of a rebound, especially as it relates to our staffing and recruiting business, which is driving the improvement in our Dice renewal rates. Our client success organization continues to focus on improving its processes around onboarding and ongoing touchpoints that we believe have positively impacted both our customer and revenue renewal rates. ClearanceJobs' fourth quarter revenue was $7.6 million, an increase of 4% sequentially and 15% year-over-year. This continued solid double-digit revenue growth year-over-year is reflective of ClearanceJobs' strong innovative product and competitive differentiation as well as the somewhat insulated market it serves. Fourth quarter revenue for eFinancialCareers was $6.2 million, which was up 1% sequentially but down 23% year-over-year when excluding the impact of foreign exchange rates. In the UK, which is our largest geography by revenue for eFC, we continue to be impacted by Brexit and its recent agreement, which did not address the future of the financial services industry in the UK. In the APAC region, eFC's second-largest geography, we continue to be affected by protests and the security laws imposed by China on Hong Kong. Turning to operating expenses; fourth quarter operating expenses were $31.4 million, representing a decrease of $1.9 million or 6% year-over-year. The decrease in operating expenses is the result of continued discipline around our cost structure as well as being more efficient with our third-party marketing spend. The company realized an income tax benefit for the quarter of $400,000 on income before taxes of $1.6 million. The income tax benefit was driven by discrete tax items including the reversal of liabilities for uncertain tax positions as federal and state statutes expired. Our effective tax rate for the year of 7% was different than our expected statutory rate of 25% primarily due to non-deductible impairment charges and the allocation of loss between jurisdictions. We recorded net income for the fourth quarter of $2 million or $0.04 per diluted share compared to net income of $3.5 million or $0.07 per diluted share a year ago. This quarter's net income was positively impacted by $400,000 related to the discrete tax items, partially offset by severance and related costs. Last year's net income was positively impacted by $400,000 from discrete tax items. Adjusted diluted earnings per share for the quarter was $0.03 versus $0.06 last year. Adjusted EBITDA for the fourth quarter was $7 million, a margin of 21% compared to a margin of 23% in both the third quarter of this year and the fourth quarter of last year. As we've stated before, our goal is to manage the business to approximately 20% Adjusted EBITDA margins. We continued to focus on supporting our customers as well as investing in sales, marketing, and product, while also being equally mindful of the overall cost structure of the business notably around headcount, marketing, and other third-party spend. We generated 4.2 million of operating cash flow in the fourth quarter compared to $3.9 million in the prior year quarter. From a liquidity perspective, at the end of the quarter, our total debt was $20 million. We had 7.6 million of cash resulting in a net debt of $12.4 million. As we mentioned before during the first quarter of 2020, we borrowed $25 million from our credit facility to ensure we had sufficient liquidity to manage through the pandemic. We now have better visibility into cash flow and as a result, we paid down $17 million of debt under our credit facility during the fourth quarter. Deferred revenue at the end of the quarter was $43.5 million compared to $51.6 million in the year ago quarter. This decrease year-over-year is due to lower bookings and more contracts having monthly or quarterly payment terms. When we add the unbilled portion of our contracts to deferred revenue, our committed contract backlog at the end of the quarter was $76.3 million, which was down 14% from the end of the fourth quarter last year. During the quarter, we repurchased approximately 1.2 million shares for $2.5 million or an average price of $2.9 per share. In total, we have used approximately $3.9 million of the current $5 million buyback program. We continue to believe that buyback is a recognition of the long-term prospects of our business and the undervalued price of our stock. Consistent with our previous programs, we will continue to evaluate investment opportunities in the business against buying back shares, while also using the buyback program as an opportunity to offset the impacts of our employee equity incentive program. As we look ahead, bookings are improving for the company as a whole. As Art mentioned for Dice, we saw a significant increase in bookings in December and January as companies continued to increase their use of technologists. We are seeing strength in our staffing and recruiting business as these firms realize they need our technology to do their job effectively. With regards to ClearanceJobs, we expect them to continue to grow because their success is correlated to the U.S. Department of Defense budget which relatively speaking has been immune to the environment, we find ourselves in. For eFinancialCareers, we continue to expect significant headwinds as our two largest regions, the UK and APAC continue to be impacted by COVID, the ongoing geopolitical issues in Hong Kong, as well as a potential impact to hiring in the banking sector due to Brexit. Looking forward, we believe we have the right ongoing cost structure in place to operate the business and to support our customers, while at the same time continuing to invest in areas that drive long-term revenue growth. While not providing specific guidance, we continue to manage the business to Adjusted EBITDA margins in the 20% range and believe we will see year-over-year revenue growth in the second half of this year. Let me sum up by saying that we are excited by the progress we made in 2020 and believe the investments we have made in product innovation and sales will drive long-term revenue growth. We remain focused on the continued execution of our business plan and look forward to reporting on our progress throughout 2021. And with that, let me turn the call back to Art.

Thanks, Kevin. I'd like to close by once again thanking all of our employees around the globe for their hard work this last quarter and throughout this past challenging year. It is a pleasure to be part of such a great team. With that, we're happy to take your questions.

[Operator Instructions] and our first question today will come from Aman Gulani with B. Riley. Please go ahead.

Hey guys, thanks for taking my question. It's nice to see the improvement in renewals. So I wanted to ask about that. Given the trajectory and your pickup in hiring in the tech sector, do you see that momentum continuing into February and March. I mean I know Jan and December are your strongest renewal month, but I figured you've given the pickup in hiring, you think that momentum will continue, and where do you see like the renewal rate being towards the end of the first quarter?

So I can give you my perspective here, Aman and it's great to hear your voice. I just wanted to say that in my opinion, we don't have enough data to really call February obviously just being at the very beginning of February, but it felt like we had a shift at the end of November due to the confidence around the vaccines and so if I look at the entirety of the pandemic period last year, we saw a high correlation between bookings and people's overall confidence, and their confidence I would say markedly increased as a result of the delivery of the vaccines, the approval of the vaccines, the initiation of the distribution of the vaccines. Where I think we should be on a healthy basis over the long term and hopefully Q1 is above 80% revenue renewal rate but Kevin, do you want to add anything, any more context to that.

No, I think you covered it, Art.

Great, thank you. That's helpful. And then this is regarding the potential spin-off of eFinancialCareers, you know you mentioned that you expect that to happen maybe in the second half, but how should we think about the overall margins of the business once that happens?

Yes, Aman. I would say the margins will likely be similar to what we see today, we are actually going through that process right now. Right now, as you would expect eFC does benefit from the infrastructure within the broader Dice DHI organization. So I would not expect a material change in margins for that reason, but it's actually something that we're spending time going through as I mentioned.

Got it, thanks. And then last question for me. Can you talk about how the new administration might impact as there's a job market for individuals who have security clearance? Do you see the new Biden administration as an overall positive for ClearanceJobs?

I personally think that it's neutral. I think that Biden is strong on security and is in favor of a strong and healthy military budget. There is a view that he might have to look for places to cut budget because of his additional visionary plans for what he wants to do with the climate and other things, but I can't personally see that coming from the military budget. I do think, just his years of service inside of the Senate in various committees' kind of has put them in a position where he is strong on the military for the United States.

Okay, thank you. I'll pass it on.

Thanks, Aman. Appreciate the time today.

[Operator Instructions] Our next question will come from Josh Vogel with Sidoti. Please go ahead.

Hey Josh. Good afternoon, Art and Kevin. How are you guys?

Great, thanks.

I'm good. Thank you. Understanding that you continued to operate into an Adjusted EBITDA margin around 20% and you don't expect any material changes to margins once eFC is spun-off, so is it fair to assume given the expected step-up in revenue in the second half of the year at Dice and CJ and the operating leverage that's built into your model that we can see a step-up in the Adjusted EBITDA margin as well, perhaps like to those mid 20% levels that we saw in parts of 2018.

Yes, Josh. I would say, partly true; however, our goal, as we get more momentum on the booking side and we have KPI's supporting an increase in spend for sales and marketing that we will continue to invest in that part of our business that is a direct expense and a hit to margin. So as we continue to see the bookings grow and the benefits to revenue, we do anticipate that we will continue to invest in the business at least in the near term.

Okay and that kind of leads into my next question thinking about budgeting '21 and when you think about investments in product development as well as internal engineers in headcount. How should we think about that relative to prior years?

Yes, I would say that would generally I would expect that to be flat with prior years as Art mentioned 2019-2020 was really the year of product, product improvement, and product innovation across the brands. This year is really around the investment in sales and marketing.

I think we've also critical mass with our engineering team to so we feel like we're in a good shape for the size of that team.

Great and kind of a random question. Thinking about CJ and in nature of a contract that is signed directly with the government agency any different when you're using a third party, is the margin profile different at all. What about to end the renewal process, is it different for direct government work versus when you're working with a third party. I know it's a huge whitespace opportunity that you're tapping into so I'm just curious about the general dynamics there.

So I would say we aren't seeing any difference in margins and that's because ultimately, we are selling to the government write-off of rate card and so there is the opportunity to discount from rate card, but it's kind of a thin band and so we're not seeing anything substantial between pricing for the government and pricing for military contractors.

Okay. And this one just kind of out there, you do quarterly surveys, you have all this information at your fingertips with regard to who needs what type technologists and where and when, the salaries and I was just wondering, is there you're an opportunity here for you to monetize this data and if so, how would you do that?

We can talk to that, but not enough. I would say that is kind of a future state for us being able to really say that, just because we've been operating for 30 years, we've been watching people, the full candidate base of 9 million inside of our database evolve and see how they actually interact with jobs, there might be something in that data that allows us to essentially better inform clients as how to represent themselves with job postings, but we haven't really cracked the code on that yet. That's something in the future I'd say.

Okay, great and just last one. Is there a notable seasonality around renewal rates for CJ and eFC, I know with Dice what it is, so I'm just curious with the others?

Yes, they're similar I would say in that neighborhood of high 20s, 30% so pretty much the same cycle as what we see at Dice.

Okay, great but it's nice to see the improvements in the business especially as Q4 progressed and I thank you guys for taking my questions.

Thank you very much, Josh. Really appreciate it.

And our next question will come from Bill Dezellem with Tieton Capital. Please go ahead.

Thank you. Your cost of revenues was up in the fourth quarter versus last year and yet revenues were down, down slightly. What, what led to that disconnect?

Yes, so there what we did within our cost of revenue is what we call our client success organization, which is the people who have ongoing conversations with all of our accounts, they have quarterly business meetings with them, they're checking in, they're looking at their statistics, et cetera., and so as we made that comment that that client success organization, we brought in new leadership and there is a lot more touchpoints with our customers and so that is, that is expensed and so that comes on to our revenue on to our income statement sorry in advance of actually seeing the benefit of that bill. As we talked about, we actually did see improvements in our customer and revenue renewal rates in the fourth quarter and we think some of that, a lot of that is driven by that improved client success organization, but you're seeing that expense prior to seeing the benefits of the revenue.

Great, thank you and then secondarily, a remedial question what leads to the change in Dice average monthly revenue per customer. Is that simply a function of the size of the customer and the number of seats that they're buying and discounts and therefore it's a mix issue or is there some other factor?

Now, it is really a mix issue. It basically comes down to the 5100 customers, we have 5200 customers we have and their size, what they're buying and just, it's an average across all of them and so coming down 2 percentage points is simply we may just have had a couple of additional smaller customers sign up this particular period or the bigger customers then increase, but it is, it's just broadly across our entire portfolio and I would say, with a 2% swing I think from our perspective, that is, I don't want to say immaterial, but it's not something right now that we are worried about I mean clearly we do want to grow the size of our average contract with our customers and we think we're in a position to do that.

Great, thank you, Kevin.

Absolutely.

[Operator Instructions] This will conclude the question-and-answer session. I'd like to turn the conference back over to management for any closing remarks.

So we greatly appreciate everybody's attention to our performance results for not only the fourth quarter but also 2020 as a whole. We're very excited about the future for DHI Group, and look forward to keeping you informed of our progress each quarter this year. So, thank you all.

Thank you.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect your lines at this time.