Dhi Group, Inc. · NYSE:DHX
Dhi — Investor Day (September 2022)
85 slides from Dhi's investor day presentation, Sep 8, 2022
Slide 1: DHI Investor Day
NYSE: DHX DHI Investor Day Where Tech Connects September 8, 2022
Slide 2: Welcome
NYSE: DHX Welcome Art Zeile Chief Executive Officer
Slide 3: Forward-looking statements
3 Forward-looking statements This presentation and oral statements made from time to time by our recruitment packages, cyclicality or downturns in the economy or industries we representatives contain forward-looking statements. You should not place undue serve, the impact of the coronavirus COVID-19
Slide 4: Today's Presenters
4 Today’s Presenters Art Zeile Paul Farnsworth Michelle Marian Evan Lesser Arie Kanofsky Kevin Bostick Chief Chief Chief Founder + Chief Chief Executive Technology Marketing President Revenue Financial Officer Officer Officer ClearanceJobs Officer Officer
Slide 5: Overview and Growth Strategy
Overview and Growth Strategy Art Zeile Dice: The Essential Solution for Tech Paul Farnsworth Career Connections Driving Brand Awareness Michelle Marian and Qualified Leads ClearanceJobs: The Security-Cleared Evan Lesser and Marketplace North Star Winning Sales Strategy: Arie Kanofsky Then, Now + Bey
Slide 6: Who We Are
6 NYSE: DHX Who We Are
Slide 7: Who We Are
7 Who We Are DHI Group is a subscription software company delivering 20%+ revenue growth and 20% Adjusted EBITDA margins.
Slide 8: What We Do
8 What We Do Our subscription-based software gives recruiters and employers access to over 6 million technologists and the ability to our find, attract, engage and hire the best Lorem Ipsum Lorem Ipsum tech candidates through our Data Data two Career Marketplaces. Lorem Ipsum Lorem Ipsum Notes
Slide 9: Our Marketplaces Connect Clients and Candidates
9 Our Marketplaces Connect Clients and Candidates 8K+ 6M+ Clients Candidates Pitch Opportunities Seek Opportunities Other Buyer-Seller Marketplace Models
Slide 10: How We Generate Revenue
10 How We Generate Revenue We are a Software Subscription business model, charging annual subscription contracts with an autorenewal clause and price escalators
Slide 11: The Problem We Solve
11 NYSE: DHX The Problem We Solve
Slide 12: The Insatiable Demand for Tech Talent
12 The Insatiable Demand for Tech Talent Source: https://www.comptia.org/content/tech-jobs-report
Slide 13: Increase in Year-To-Date Dice Job Postings
13 Increase in Year-To-Date Dice Job Postings 74% Source: Dice Actual Tech Job Postings Through July 2022
Slide 14: This Is a Long-Term Trend
14 This Is a Long-Term Trend 2x Projected growth rate for tech jobs over the next decade is nearly twice the national jobs rate. Source: https://www.cyberstates.org/
Slide 15: The Pandemic Has Accelerated Digitization
15 The Pandemic Has Accelerated Digitization Source: The Wall Street Journal, August 5, 2022
Slide 16: New York City Is an Example
16 New York City Is an Example NYC Cross-Sector Employment Feb 2020–Dec 2021 10% 8% From February 2020 to 6% December 2021, private 4% 2% sector employment in 0% the city declined 5.3%, -2% while tech saw an -4% -6% 8.7% increase in jobs. -8% -10% All private Health Finance Retail Tech sector Since
Slide 17: The Supply Demand Gap
17 The Supply Demand Gap “Through the first seven months of 2022 U.S. companies listed approximately 3.1 million jobs postings for tech positions, an increase of 49% for the same period last year.” --CompTIA “So far this year, tech companies worldwide have laid off a total of 35,000 workers, CBS New
Slide 18: We Are Slowly Adding Supply
18 We Are Slowly Adding Supply Source: https://www.ciodive.com/news/tech-talent-salary-spike-hiring/626901/
Slide 19: The Supply Demand Gap
19 The Supply Demand Gap 600,000 500,000 500,000 400,000 300,000 200,000 136,000 100,000 100,000 85,000 0 Tech Talent Demand Tech Professional New Computer Science All Potential H1B Visas July 2022 Unemployed Including Graduates Layoffs Demand is 2x+ Supply
Slide 20: Recruiters Need More Tools
20 Recruiters Need More Tools “Organizations’ [HR] tech spending is up by 57 percent in 2021 compared with last year and is above the totals from recent pre-pandemic years as well.” Source: https://www.shrm.org/resourcesandtools/hr-topics/technology/pages/hr- technology-spending-rebounds-2021-vendor
Slide 21: Our Growth Strategy
21 NYSE: DHX Our Growth Strategy
Slide 22: Dice Key Growth Drivers
22 Dice Key Growth Drivers Better Product Patterned Identified Large Dice Better Go-To-Market after ClearanceJobs Total Addressable Execution Success Market
Slide 23: Dice Ideal Customer Profile
23 Dice Ideal Customer Profile Mid-Size Tech Firm Large Size Non-Tech Firm Lorem Ipsum Lorem Ipsum Data Data Lorem Ipsum Lorem Ipsum 10 or more open tech positions on career site
Slide 24: TAM $1.24B
24 Total Addressable Market Number of Prospects Average Average AnnualDice Dice Contract TAM Meeting Criteria Contract Value 86,803 $14,304 $1.24B Value
Slide 25: We Don't Just Sell to Software (Tech) Companies
25 We Don’t Just Sell to Software (Tech) Companies TAM Energy, Utilities $1.24B Other, 19% Real Estate, & Waste, 1% 1% Average Dice Contract Value Government, 2% Business Services, 34% Media & Internet, 2% Insurance, 2% Retail, 3% Number of Telecommunications, 3% Prospects Manufacturing, 9% meeting
Slide 26: Revenue Growth Results
26 Revenue Growth Results +29% 1Q18 2Q22 -18%
Slide 27: Key Takeaways
27 NYSE: DHX Key Takeaways
Slide 28: We solely focus on tech.
We solely focus on tech. DHi
Slide 29: Tech is ~10% of the U.S. economy
29 Tech is ~10% of the U.S. economy, but one of the fastest growing sectors.
Slide 30: Tech workers are compensated well
30 Tech workers are compensated well with an average salary of $105k.
Slide 31: We sell annual subscription licenses
31 We sell annual subscription licenses (Software Business Model)
Slide 32: Giving recruiters access to 6.4M tech candidates
32 Giving recruiters access to 6.4M tech candidates
Slide 33: The world needs more technologists
33 The world needs more technologists. And we are delivering them.
Slide 34: Dice: The Essential Solution for Tech Career Connections
NYSE: DHX Dice: The Essential Solution for Tech Career Connections Paul Farnsworth Chief Technology Officer
Slide 35: The Essential Solution for Tech Career Connections
35 The Essential Solution for Tech Career Connections To be the trusted partner for every technologist throughout their career, and for the organizations who rely on them, by providing unparalleled access to meaningful opportunities, connections, and information. Jobs Technologists Clients Talent Di
Slide 36: Technologists (Job Candidates)
Technologists (Job Candidates) 36 Companies Job Searches Recruiters Job Alerts ~300K Monthly Jobs Staffing, Recruiting and Location Job Applies Consulting Culture 1.6M Monthly Visits 30K+ Recruiters Private Email Connections Messages Commercial Accounts Messages Job Market Insights Job Skills
Slide 37: Technologists (Job Candidates)
Technologists (Job Candidates) 37 What Technologists Care About – Finding Opportunities and Advancing their Career • Easy – User Interface, Automated Job Alerts and Easy Apply Flow • Jobs – Accurate Matches for Location / Skills / Culture • Help – Insights about Job Search / Resumes and Interviews S
Slide 38: Clients (Recruiters)
Clients (Recruiters) 38 Dice.com Skills TalentSearch Job History Technologists Location Dice.com 5M Profile Views Applicant Tracking Systems Culture 5.1M Profiles Private Email Connections Messages 3M Profile Views Social Dice.com - API Job Market 43M Profiles Insights Recruiting
Slide 39: Clients (Recruiters)
Clients (Recruiters) 39 What Employers Care About – Finding Tech Talent to Help Advance Their Mission • Finding Great Technologists – Accurate Matches for Location / Skills / Culture / PAGES for Passive • Easy – Applicant Tracking System (ATS) integration / Quick alerts for new technologists / Job P
Slide 40: Feature Highlight - IntelliSearch
Feature Highlight - IntelliSearch 40 Tech recruiting is all about the unique skills required by a position and the candidate profile Data wrangling Data analysis Statistical DHX has spent 9+ years creating a data model that Computer vision models captures the relationship between 100,000+ tech skill
Slide 41: The Dice Difference: We Know Tech
The Dice Difference: We Know Tech 41 Dice makes candidate quality a top priority to Key examples Candidate ensure that employers can connect with an Data quality for inclusion, uniqueness in Quality expansive community of engaged technologists. depth, breadth and quality, automated processes to ensu
Slide 42: Driving Brand Awareness and Qualified Leads
NYSE: DHX Driving Brand Awareness and Qualified Leads Michelle Marian Chief Marketing Officer
Slide 43: Dice Tech Audiences
Dice Tech Audiences 43 Technologists Clients Impact Skillful Staffing & Commercial Go Getters Seekers Balancers 0–3 YOE Recruiting Accounts 4–10 YOE 11–20 YOE Mid-Market Large Enterprise Enterprise (Tech) (Non-Tech)
Slide 44: Marketing Drives Leads to Support Sales
Marketing Drives Leads to Support Sales 44 Targeting mid-market tech and large non-tech companies Awareness Consideration Intent Conversion Loyalty 40% new business bookings driven by marketing
Slide 45: Marketplace Ecosystem
Marketplace Ecosystem 45 Technologist Growth Technologists drive client growth; jobs and Increased Engaged Tech Jobs Connections Technologists marketplace features drive technologist engagement Client Growth
Slide 46: Driving Technologist Reach and Growth
Driving Technologist Reach and Growth 46
Slide 47: Driving Technologist Reach and Growth
Driving Technologist Reach and Growth 47
Slide 48: Driving Technologist Reach and Growth
Driving Technologist Reach and Growth 48
Slide 49: Technologist Targeting
49 Technologist Targeting Target early/mid-career-stage technologists; maintain dominance within established technologist segments. Tech sites, social media, digital/video ads, and influencer partnerships enable reach while driving strong awareness and engagement. 5.1M Dice technologists 1.6M Monthl
Slide 50: Content as a Competitive Differentiator
50 Content as a Competitive Differentiator • Content supports brand awareness, company positioning and renewals • Marketing investments drive client growth and increased platform usage
Slide 51: ClearanceJobs: The Security-Cleared and Marketplace North Star
NYSE: DHX ClearanceJobs: The Security- Cleared and Marketplace North Star Evan Lesser Founder & President, ClearanceJobs
Slide 52: Security Clearances 101
52 Security Clearances 101 A Determination, Not an ID Card Three Basic Levels Having a clearance means you’ve been deemed Collateral clearances include Confidential, Secret, suitable to access classified info related to national and Top Secret; levels determined by national security security consequ
Slide 53: Fast Facts
53 Fast Facts Candidate Count Customer Count Launched online in 2002, the 1.4 Million 2,000 ClearanceJobs marketplace serves Registered Subscription three main U.S. industries: Defense Intelligence Annual Contract Value Jobs Visible $18,708 74,000 Homeland Security Recruitment Packages Monthly
Slide 54: ClearanceJobs Market Resiliency
54 ClearanceJobs Market Resiliency Defense Intelligence Homeland ü DOD is the country’s ü Arguably the most high- Security largest employer tech employer on the ü 250,000 employees all planet ü Wide job range: tech, requiring clearance engineering, logistics, ü $67 billion budget ü Agencies include
Slide 55: DHI Career Site Software Stages
55 DHI Career Site Software Stages Job Board Marketplace Community PAST PRESENT FUTURE Primary Audience Primary Audience Primary Audience Active Job Seekers Passive Candidates Active and Passive Focus Focus Focus Transactions Lead Gen Engagement Communication Communication Communication One-Way Two-
Slide 56: ClearanceJobs: Our North Star
56 ClearanceJobs: Our North Star Key ClearanceJobs Employer Product Features Drive ROI Live Text Chat Live Voice Chat Marketplace Maturity 12 years old with Candidates with Candidates Career Site Stage Early Community Community Features Some Workflow Full Talent Automation Pipelining Messaging Capab
Slide 57: Candidate Relationship Management
57 Candidate Relationship Management LEADS Aggregate and Organize Like Salesforce does for sales, the ClearanceJobs marketplace software helps employers find, PROSPECTS Nurture and Brand organize, engage, and hire cleared talent by moving them down stages in a funnel. WINS Engage and Hire
Slide 58: New Employer Profile
58 KEY PRODUCT RELEASE New Employer Profile Rich employer branding to convert passive candidates to active job applicants. Old Profile New Profile Limited content Unlimited content Fixed layout Flexible layout No customization Full customization Data entry forms Drag-and-drop, mouse Basic branding D
Slide 59: New Candidate Mobile App
59 KEY PRODUCT RELEASE New Candidate Mobile App Our first-ever mobile app for candidates launches Q4 of this year. We expect already high user engagement to increase and drive KPIs. Key Features Candidate profile creation and updates Direct connections with employers Rich messaging platform with liv
Slide 60: ClearanceJobs Growth Opportunities
60 ClearanceJobs Growth Opportunities Pricing & Packaging Total Market Share Government Sales ü New Business Average ü Approximately 10,000 cleared ü Clients include DHS, DOD, Contract Value up 241% employers (direct hire) NSA, FBI, and multiple since Q2’20 national laboratories ü We presently serve
Slide 61: Winning Sales Strategy: Then, Now + Beyond
NYSE: DHX Winning Sales Strategy: Then, Now + Beyond Arie Kanofsky Chief Revenue Officer
Slide 62: What's happened since last we spoke..?
62 What’s happened since last we spoke..?
Slide 63: Transformation Accomplished!
Transformation Accomplished! 63 Account Billing / ChurnZero Segmentation Payment Term SF Proposal Approvals Sandler Sales Generation QBR Training Process Marketplace Daily Stack Product Ranking Releases Daily Flash Ambition Report Coaching Dynamic Multi-Year New Sales AMF and St SalesLoft Process De
Slide 64: Dice June 2021
64 Dice June 2021 KPIs Jun ‘21 Vs Jan ‘20 $1.24B Annual Contract Value $5,614 19% Renewal Rate Count 84% 22% Renewal Rate $ 94%of Number 12% Prospects meeting criteria Retention Rate 86,803 105% 4%
Slide 65: 2022 Sales Strategy Update
65 2022 Sales Strategy Update 5 Key Levers To Continue Operational Efficiency & Customer Acquisition Lever #1 Lever #2 Lever #3 Lever #4 Lever #5 Baseline 1st Year Solution Expansion Learning & Strategy Client Selling of Teams Development Renewals
Slide 66: Continuing to Solidify Our Baseline Strategy
66 Continuing to Solidify Our Baseline Strategy LEVER #1 Baseline Strategy Excepteur • Closed 1447 multi-year contracts locking up $35M in Excepteur Annual Contract Value (17% of customers) for 2 or Renewal Rate $ 24% pts higher more years. • 95% of MYC’s now include an average of 5% price Excepteur
Slide 67: Year 1 Dice Client Renewal Strategy Exceeding Expectations
67 Year 1 Dice Client Renewal Strategy LEVER #2 Exceeding Expectations 1st Year Client Renewals Q2’22 continued to outperform targets achieving historic levels Renewal Rate # 25% pts higher Renewal Rate $ 24% pts higher Retention Rate 4% pts higher
Slide 68: Evolution Towards Solution Selling
68 Evolution Towards Solution Selling LEVER #3 Targeted focus on expanding deal size continues momentum in Q2 Solution Selling Non-Core Product Bookings ($M) 1.8 1.6 0.2 0.1 1.4 1.2 0.6 0.7 1.0 0.8 0.1 0.6 0.4 0.4 0.8 0.7 0.2 0.3 0.0 Q2'21-A Q1'22-A Q2'22-A Advertising Sourcing Services Career Event
Slide 69: Continued Expansion of Sales Team Fuels Growth
69 Continued Expansion of Sales Team LEVER #4 Fuels Growth Expansion of Teams Commercial NBS Sales Client Engagement Capture additional market share Proper Account Capacity Coverage
Slide 70: Continue to Strengthen Our Foundation
70 Continue to Strengthen Our Foundation LEVER #5 Investing in our People – Our #1 Asset Learning and Development Sales Fellow Emerging Sales Effective Inclusive Program Leader Program Enablement Coaching Hiring/Inclusive Leadership Hitting targets Shared interest in Onboarding Conversations which O
Slide 71: Dice June 2022
71 Dice June 2022 KPIs Jun ‘22 Vs Jun ‘21 Vs Jan ‘20 Annual Contract Value $9,512 69% 101% Renewal Rate Count 85% 1% 23% Renewal Rate $ 101% 7% 20% Retention Rate 111% 6% 10%
Slide 72: 2023 and Beyond…
72 2023 and Beyond… • Increase Focus on Customer Engagement & Increased Wallet Share • Expansion of New Business Teams to Capitalize on TAM • Create Digital “Low Touch” Customer Engagement Strategy • Improve Sales KPI Results
Slide 73: A SaaS Business Model
NYSE: DHX A SaaS Business Model Driving Growth Kevin Bostick Chief Financial Officer
Slide 74: DHI Core Products
74 DHI Core Products • Commercial Account customers and staffing/recruiting agencies purchase annual licenses to gain access to DHI’s recruiting platform and solutions. These Annual Recruitment Packages represent ~90% of total bookings. • Contract Value is a function of product, quantity and duratio
Slide 75: DHI Reporting Metrics for Bookings and Revenue
75 DHI Reporting Metrics for Bookings and Revenue DHI reports several bookings and revenue metrics in addition to GAAP financial statement categories to better understand the business • Bookings - the subsequent 12 months of revenue that will be recognized on a contract started during that period or
Slide 76: Bookings to Revenue
76 Bookings to Revenue $100k subscription bookings Q1 revenue Q2 revenue Q3 revenue Q4 revenue $25k $25k $25k $25k (annual term) $20k Sourcing Services bookings Jan revenue Feb revenue $10k $10k (2 mo term) $75k Career Events Event 1 Date, Event 2 Date, Event 3 Date, Revenue Revenue Revenue ($25k pe
Slide 77: Bookings Changes Implications to Revenue
77 Bookings Changes Implications to Revenue • Bookings growth often takes 2-3 quarters to be fully recognized in Revenue growth. • A 10% growth in bookings in Q1 (assuming an Annual Recruitment Package) would lead to 2.5% revenue growth in each subsequent quarter for 4 quarters. • Consistent 10% boo
Slide 78: Trading off Revenue Growth for EBITDA
78 Trading off Revenue Growth for EBITDA DHI intends to maintain its “Rule of 40” standing, with a bias to driving bookings and revenue growth through continued investment in sales and marketing • Rule of 40 = the summation of Revenue Growth % and EBITDA Margin % should exceed 40% • To drive revenue
Slide 79: Driving Revenue Growth
79 Driving Revenue Growth Focusing on Bookings and Revenue growth will drive greater long term value creation Rule of 40 Year 1 Year 2 Year 3 Year 4 Year 5 Rule of 40 Year 1 Year 2 Year 3 Year 4 Year 5 Revenue Growth 18.0% 16.0% 14.0% 12.0% 10.0% Revenue Growth 20.0% 20.0% 20.0% 17.5% 15.0% EBITDA M
Slide 80: Comparable Analysis
80 Comparable Analysis In conjunction with its investment bankers, DHI created a peer group for valuation benchmarks in the Talent Acquisition and Application Software industries. Talent Acquisition Application Software Grupa Pracuj A10 Fiverr Agilysys New Work American Software Recruit Clearwater A
Slide 81: Benchmarking – Revenue Valuations
81 Benchmarking – Revenue Valuations Talent Acquisition Application Software CY22E REVENUE GROWTH Median = 13.2% Median = 14.8% 28.2% 22.1% 22.4% 23.0% 22.9% 19.8% 18.5% 14.6% 13.2% 12.1% 11.0% 10.2% 9.4% 8.8% (2.1%) (12.1%) CY22E EV / REVENUE Median = 3.4x 9.2x Median = 3.8x 7.3x 6.0x 5.5x 4.7x 4.4
Slide 82: Benchmarking – EBITDA Valuations
82 Benchmarking – EBITDA Valuations Talent Acquisition Application Software CY22E EBITDA MARGIN Median = 19.1% Median = 15.3% 50.0% 45.4% 33.1% 26.5% 25.6% 20.5% 19.1% 19.7% 16.2% 15.3% 15.2% 15.2% 15.0% 10.6% 6.1% (1.9%) CY22E EV / EBITDA Median = 11.0x Median = 21.9x 39.6x 34.8x 31.1x 22.1x 21.7x
Slide 83: Business Outlook
83 Business Outlook Strong bookings performance across Dice and CJ is driving continued revenue growth • For Q3 2022, revenue will be in the range of $37-38 million, while maintaining ~20% Adjusted EBITDA Margins • For FY2022, DHI is increasing its guidance to $148-149 million based on strong bookin
Slide 84: Q&A
NYSE: DHX Q&A Where Tech Connects September 8, 2022
Slide 85: Thank you
Thank you Get in touch with us at ir@dhigroupinc.com