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Item 7. Management’s Discussion and Analysis

2022-02-11 compared with 2021-02-10 · 279 added, 341 removed, 344 unchanged (64% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with Item 6.

“Selected Financial Data,” and our consolidated financial statements and the related notes included elsewhere in this Annual Report.

The following discussion should be read in conjunction with our consolidated financial statements and the related notes included elsewhere in this Annual Report.

Certain statements we make under this Item 7 constitute “Forward-Looking Statements” under the Private Securities Litigation Reform Act of 1995.

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You should keep in mind that any forward-looking statement made by us herein, or elsewhere, speaks only as of the date on which it is made.

New risks and uncertainties come up from time to time, and it is impossible to predict these events or how

they may affect us.

We have no obligation to update any forward-looking statements after the date hereof, except as required by applicable law.

We are a leading provider of data, insights and employment connections through specialized services for technology professionals.

Our mission is to empower professionals and organizations to compete and win through specialized insights and relevant employment connections.

Employers and recruiters use our websites and services to source and hire the most qualified professionals in select and highly-skilled occupations, while professionals use our websites and services to find the best employment opportunities in, and the most timely news and information about, their respective areas of expertise.

In online recruitment, we target employment categories in which there has been a long-term scarcity of highly skilled, highly qualified professionals relative to market demand.

Our websites serve as online marketplaces where employers and recruiters find and recruit prospective employees, and where professionals find relevant job opportunities and information to further their careers.

New risks and uncertainties come up from time to time, and it is impossible to predict these events or how they may affect us.

We have no obligation to update any forward-looking statements after the date hereof, except as required by federal securities law.

We are a provider of software products, online tools and services that deliver career marketplaces to candidates and employers in the United States.

DHI’s brands, Dice and ClearanceJobs, enable recruiters and hiring managers to efficiently search, match and connect with highly skilled technologists in specialized fields, particularly technology and active government security clearance.

Professionals find ideal employment opportunities, relevant job advice and personalized data that help manage their technologists' lives.

In online recruitment, we specialize in employment categories in which there has been a long-term scarcity of highly skilled, highly qualified professionals relative to market demand, specifically technologists who work in a variety of industries or have active government security clearances.

Our websites serve as online two-sided marketplaces where employers and recruiters source and connect with prospective employees, and where technologists find relevant job opportunities, data and information to further their careers.

Our websites offer job postings, news and content, career development and recruiting services tailored to the specific needs of the professional community that each website serves.

The Company modified its Tech-focused reportable segment in the first quarter of 2019 to reflect the current Tech-focused operating structure.

The change comes as a result of the non-tech businesses being divested during 2018 and, as a result, corporate related costs are now reflected as part of the Tech-focused segment.

Accordingly, all prior periods have been recast to reflect the current segment presentation.

We have been in the recruiting and career development business for 30 years.

Based on our operating structure, we have identified one reportable segment as follows:

• Tech-focused — Dice, Dice Europe (ceased operations on August 31, 2018), ClearanceJobs, eFinancialCareers services, and corporate related costs (formerly in Other).

Dice, Dice Europe (ceased operations August 31, 2018), ClearanceJobs, eFinancialCareers services, and corporate-related costs (formerly in Other) are aggregated into the Tech-focused reportable segment primarily because the Company does not have discrete financial information for those brands or costs.

Prior to 2019, we had other services and activities that individually were not a significant portion of consolidated revenues, operating income or total assets.

These included Hospitality (sold May 22, 2018), Rigzone (sold the RigLogix portion of the Rigzone business on February 20, 2018 and transferred majority ownership of the remaining Rigzone business to Rigzone management on August 31, 2018), and BioSpace (transferred majority ownership to BioSpace management on January 31, 2018 and sold the remaining minority interest to BioSpace management in 2020), which are reported in the "Other" category, and are not considered a segment.

Majority ownership and control of DHI's eFinancialCareers ("eFC") business, which provides career websites to the financial services industry and has operations in the United Kingdom, Continental Europe, Asia, the Middle East and North America, was transferred to eFC management on June 30, 2021.

The Company retained a 40% common share interest.

As a result, all ongoing DHI operations, which include the Dice and ClearanceJobs brands, are in the United States subsequent to June 30, 2021.

We have been in the recruiting and career development business for over 30 years.

Based on our operating structure, we have identified one reportable segment, Tech-focused, which includes the Dice and ClearanceJobs businesses and corporate related costs.

The Dice and ClearanceJobs businesses and corporate related costs are aggregated into the Tech-focused reportable segment primarily because the Company does not have discrete financial information for those brands or costs.

As a result of the eFC separation, the eFC business was deconsolidated from the Company's consolidated financial statements as of June 30, 2021 and is reflected as a discontinued operation.

Our Revenues and Expenses

We derive the majority of our revenues from customers who pay fees, either annually, semiannually, quarterly or monthly, to post jobs on our websites and to access our searchable databases of resumes.

We derive the majority of our revenues from customers who pay fees, either annually, quarterly or monthly, to post jobs on our websites and to access our searchable databases of resumes.

Our fees vary by customer based on the number of individual users of our databases of resumes, the number and type of job postings and profile views purchased and the terms of the packages purchased.

Our Tech-focused segment sells recruitment packages that can include access to our databases of resumes and job posting capabilities.

Hcareers (sold May 22, 2018 and included in Other) sold job postings and access to our resume databases either as part of a package or individually.

We believe the key metrics that are material to an analysis of our businesses are our total number of Dice recruitment package customers and the revenue, on average, that these customers generate.

Average monthly revenue per recruitment package customer is calculated by dividing recruitment package customer revenue by the daily average count of recruitment package customers during the month, adjusted to reflect a thirty day month.

We use the simple average of each month to derive the quarterly amount.

At December 31, 2020 and 2019, Dice had approximately 5,150 and 6,000 total recruitment package customers in the U.S., respectively, and the average monthly revenue per U.S.

recruitment package customer was $1,132 and $1,135 for the years ended December 31, 2020 and 2019, respectively.

Our Company sells recruitment packages that can include access to our databases of resumes and job posting capabilities.

We believe the key metrics that are material to an analysis of our businesses are our total number of Dice and ClearanceJobs recruitment package customers and the revenue, on average, that these customers generate.

The tables below detail this customer data.

Recruitment Package Customers

Increase (Decrease) Percent

Recruitment Package Customers:

December 31, 2021 December 31, 2020

Dice 6,004 5,150 854 17%

ClearanceJobs 1,878 1,718 160 9%

Average Monthly Revenue per Recruitment Package Customer (1)

FY 2021 FY 2020 Increase (Decrease) Percent

Dice $1,137 $1,132 $5 —%

ClearanceJobs $1,419 $1,346 $73 5%

(1) Calculated by dividing recruitment package customer revenue by the daily average count of recruitment package customers during each month, adjusted to reflect a thirty day month.

The simple average of each month is used to derive the amount for each period.

Dice had 6,004 recruitment package customers as of December 31, 2021, which was an increase of 854, or 17%, year over year and average revenue per recruitment package customer for Dice increased for the year ended December 31, 2021.

The increases were driven by strong renewal rates and new business activity.

ClearanceJobs had 1,878 recruitment package customers as of December 31, 2021 compared to 1,718 as of December 31, 2020, an increase of 9%, and average revenue per recruitment package customer increased.

The increases for ClearanceJobs were due to continued high demand for professionals with government clearance and consistent product releases and enhancements driving activity on the site.

Deferred revenue, as shown on the consolidated balance sheets, reflects customer billings made in advance of services being rendered.

Backlog consists of deferred revenue plus customer contractual commitments not invoiced representing the value of future services to be rendered under committed contracts.

We believe deferred revenue and backlog to be important measures of

our business as they represent our ability to generate future revenue.

A summary of our deferred revenue and backlog as of December 31, 2020 and 2019 are presented in the table below.

We believe backlog to be an important measure of our business as it represents our ability to generate future revenue.

A summary of our deferred revenue and backlog is as follows:

Summary of Deferred Revenue and Backlog:

December 31, 2021 December 31, 2020 Decrease Percent Change

(in thousands, except percentages)

Deferred Revenue $ 46,146 $ 36,582 $ 9,564 26 %

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(1) Backlog consists of deferred revenue plus customer contractual commitments not invoiced representing the value of future services to be rendered under committed contracts.

Backlog at December 31, 2020 declined $12.4 million from December 31, 2019 due to the negative impacts of COVID-19, lower renewal rates in the Dice brand, and uncertainty around Brexit and political unrest in Hong Kong negatively impacting eFinancialCareers.

This decrease was partially offset by a backlog increase at ClearanceJobs.

Backlog at December 31, 2021 increased $28.2 million from December 31, 2020 due to the strong technology recruitment market driving bookings growth for both Dice and ClearanceJobs, investments in product, sales and marketing and a focus on signing multi-year contracts.

To a lesser extent, we also generate revenue from advertising on our various websites or from lead generation and marketing solutions provided to our customers.

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Lead generation information utilizes advertising and other methods to deliver leads to a customer.

The Company’s revenues declined $12.5 million, or 8.4%, for the year ended December 31, 2020 compared to the same period of the prior year.

This decrease was led by eFinancialCareers decline of 19.9% and an 11.2% decline at Dice and was partially offset by ClearanceJobs growth of 17.1%.

The declines at Dice and eFinancialCareers were due to the negative impacts of COVID-19, lower renewal rates in the Dice brand, and uncertainty around Brexit and political unrest in Hong Kong negatively impacting eFinancialCareers.

See further discussion in the Comparison of Years Ended December 31, 2020 and 2019.

The Company continues to evolve and develop new software products and features to attract and engage qualified professionals and match them with employers.

Our ability to grow our revenues will largely depend on our ability to grow our customer bases in the markets in which we operate by acquiring new customers while retaining a high proportion of the customers we currently serve, and to expand the breadth of services our customers purchase from us.

We continue to make investments in our business and infrastructure to help us achieve our long-term growth objectives.

For example, during the years ended December 31, 2020 and 2019, the Company released the innovative products noted in the table below.

We continue to make investments in our business and infrastructure to help us achieve our long-term growth objectives, such as the innovative products in the table below.

Product Releases

Dice IntelliSearch-Based Job Alerts, Dice Private Email, Dice Remote Jobs, Dice Recruiter Profile, Dice Instant Messaging Dice Candidate MatchTM, Dice Job Search and Job Alerts

ClearanceJobs Client Team Dashboard, ClearanceJobs Workflow, ClearanceJobs Favorites, ClearanceJobs Self-Serve BrandAmp, ClearanceJobs Candidate Search and ClearanceJobs Broadcast Message upgrades ClearanceJobs NextGen, ClearanceJobs Pulse, ClearanceJobs BrandAmp

eFinancialCareers Messaging, Video and Voice Calling, eFinancialCareers Follow and eFinancialCareers Job Alerts eFinancialCareers Recruiter Profile, and eFinancialCareers Candidate Profile

Dice Marketplace, Dice TalentSearch Social Data Refresh, Brand.io, TalentSearch Personalization, Unbiased Sourcing Mode

Dice IntelliSearch-Based Job Alerts, Dice Private Email, Dice Remote Jobs, Dice Recruiter Profile, Dice Instant Messaging

ClearanceJobs Meetings, ClearanceJobs Video, Team Recruiting, Shared Talent Pipelines, Quality of Use Improvements

ClearanceJobs Client Team Dashboard, ClearanceJobs Workflow, ClearanceJobs Favorites, ClearanceJobs Self-Serve BrandAmp, ClearanceJobs Candidate Search and ClearanceJobs Broadcast Message upgrades

Other material factors that may affect our results of operations include our ability to attract qualified professionals that become engaged with our websites and our ability to attract customers with relevant job opportunities.

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Marketing expenditures primarily consist of online advertising, brand promotion and lead generation to employers and job seekers.

Critical Accounting Policies

Critical Accounting Estimates

This discussion of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with U.S.

The preparation of these financial statements requires us to make estimates, judgments and assumptions that affect the reported amount of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities.

On an ongoing basis, we evaluate our estimates, including those related to revenue, goodwill and intangible assets, stock-based compensation and income taxes.

We evaluate our estimates, including our critical accounting estimates, on an ongoing basis.

We based our estimates of the carrying value of certain assets and liabilities on historical experience and on various other assumptions that we believe are reasonable.

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Our actual results may differ from these estimates under different assumptions or conditions.

We believe the following critical accounting policies affect our more significant judgments used in the preparation of our consolidated financial statements.

Revenue Recognition

Under Topic 606, we recognize revenue when control of the promised goods or services is transferred to our customers at an amount that reflects the consideration to which we expect to receive in exchange for those goods or services.

Revenue is recognized net of customer discounts ratably over the service period.

Customer billings delivered in advance of services being rendered are recorded as deferred revenue and recognized over the service period.

We generate revenues from the following sources:

Recruitment packages .

Recruitment package revenues are derived from the sale to recruiters and employers of a combination of job postings and/or access to a searchable database of candidates on the Dice, ClearanceJobs, and eFinancialCareers websites.

Certain of the Company’s arrangements include multiple performance obligations, which primarily consists of the ability to post jobs and access to a searchable database of candidates.

The Company determines the units of accounting for multiple performance obligations in accordance with Topic 606.

Specifically, the Company considers a performance obligation as a separate unit of accounting if it has value to the customer on a standalone basis.

The Company’s arrangements do not include a general right of return.

Services to customers buying a package of available job postings and access to the database are delivered over the same period and revenue is recognized ratably over the length of the underlying contract, typically from one to twelve months.

The separation of the package into two deliverables results in no change in revenue recognition since delivery of the two services occurs over the same time period.

Advertising revenue.

Advertising revenue is recognized over the period in which the advertisements are displayed on the websites or at the time a promotional e-mail is sent out to the audience.

Classified revenue.

Classified job posting revenues are derived from the sale of job postings to recruiters and employers.

A job posting is the ability to list a job on the website for a specified time period.

Revenue from the sale of classified job postings is recognized ratably over the length of the contract or the period of actual usage.

Career fair and recruitment event booth rentals .

Career fair and recruitment event revenues are derived from renting booth space to recruiters and employers.

Revenue from these sales are recognized when the career fair or recruitment event is held.

We believe the following critical accounting estimates affect our more significant judgments used in the preparation of our consolidated financial statements.

We record goodwill when the purchase price paid for an acquisition exceeds the estimated fair value of the net identified tangible and intangible assets acquired.

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In testing goodwill for impairment, a qualitative assessment can be performed and if it is determined that the fair value of the reporting unit is more likely than not less than the carrying amount, the impairment review process compares the fair value of the reporting unit in which the goodwill resides to the carrying value of that reporting unit.

If the fair value of the reporting unit is less than its carrying amount, an impairment charge is recorded for the amount the carrying

value exceeds the fair value.

Our annual impairment test for goodwill is performed on October 1 on the Tech-focused reporting unit.

The annual impairment test for the Tech-focused reporting unit performed as of October 1, 2019 resulted in the fair value of the reporting unit exceeding the carrying value by 37%.

During the first quarter of 2020, because of the initial impacts of the COVID-19 pandemic and its potential impact on future earnings and cash flows for the reporting unit, the Company performed an interim impairment analysis of goodwill.

The results of the analysis indicated that the fair value of the Tech-focused reporting unit was not substantially in excess of the carrying value as of March 31, 2020.

The percentage by which the estimated fair value exceeded carrying value for the Tech-focused reporting unit at March 31, 2020 was less than 1%.

If the fair value of the reporting unit is less than its carrying amount, an impairment charge is recorded for the amount the carrying value exceeds the fair value.

Our annual impairment test for goodwill is performed on October 1 of each year.

The annual impairment test for the Tech-focused reporting unit performed as of October 1, 2021 resulted in the fair value of the reporting unit being substantially in excess of the carrying value with fair value exceeding the carrying value by 100%.

During the third quarter of 2020, the impacts of the COVID-19 pandemic continued and the Company's projected earnings and cash flows for the Tech-focused reporting unit declined as compared to the projections used in the March 31, 2020 analysis.

As a result, the Company performed an interim impairment analysis as of September 30, 2020, which resulted in the Company recording an impairment charge of $23.6 million during the three month period ended September 30, 2020.

Results for the Tech-focused reporting unit for the fourth quarter of 2020 and estimated future results as of December 31, 2020 have exceeded the projections used in the September 30, 2020 analysis.

Results for the Tech-focused reporting unit for the fourth quarter of 2021 and estimated future results as of December 31, 2021 have exceeded the projections used in the October 1, 2021 analysis.

As a result, the Company believes it is not more likely than not that the fair value of the reporting unit is less than the carrying value as of December 31, 2021.

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The amount of goodwill as of December 31, 2021 allocated to the Tech-focused reporting unit was $128.1 million.

The discount rate applied for the Tech-focused reporting unit in the September 30, 2020 analysis was 14.5%, compared to 16.5% at March 31, 2020.

The decline in the discount rate is primarily due to the lower projections, as compared to the March 31, 2020 analysis.

The discount rate applied for the Tech-focused reporting unit in the October 1, 2021 analysis was 11.5%.

An increase to the discount rate applied or reductions to future projected operating results could result in future impairment of the Tech-focused reporting unit’s goodwill.

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We determine whether the carrying value of recorded indefinite-lived acquired intangible asset is impaired on an annual basis or more frequently if indicators of potential impairment exist.

The impairment review process compares the fair value of the indefinite-lived acquired intangible asset to its carrying value.

The impairment review process is performed on October 1 of each year and compares the fair value of the indefinite-lived acquired intangible asset to its carrying value.

If the carrying value exceeds the fair value, an impairment loss is recorded.

The impairment test performed as of October 1, 2019 resulted in the fair value of the Dice trademarks and brand exceeding the carrying value by 26%.

The impairment test performed as of October 1, 2021 resulted in the fair value of the Dice trademarks and brand name exceeding the carrying value by 32%.

During the first quarter of 2020, because of the initial impacts of the COVID-19 pandemic and its potential impact on future earnings and cash flows that are attributable to the Dice trademarks and brand name, the Company performed an interim impairment analysis.

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As a result, the Company performed an interim impairment analysis as of September 30, 2020, which resulted in the Company recording an additional impairment charge of $8.0 million during the three month period ended September 30, 2020.

Revenues attributable to the Dice trademarks and brand name for the fourth quarter of 2020 and estimated future results as of December 31, 2020 have exceeded the projections used in the September 30, 2020 analysis.

Revenues attributable to the Dice trademarks and brand name for the fourth quarter of 2021 and estimated future results as of December 31, 2021 have exceeded the projections used in the October 1, 2021 analysis.

As a result, the Company believes it is not more likely than not that the fair value of the Dice trademarks and brand name is less than the carrying value as of December 31, 2021.

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No impairment was recorded during the years ended December 31, 2021 and 2019.

The projections utilized in the March 31 and September 30, 2020 analyses included a decline in revenues caused by the COVID-19 pandemic that are attributable to the Dice trademarks and brand name for the year ended December 31, 2020 compared to the year ended December 31, 2019.

The September 30, 2020 analysis included a further decline in revenues caused by the COVID-19 pandemic that are attributable to the Dice trademarks and brand name for the year ending December 31, 2021 compared to the year ended December 31, 2020 and then increasing to rates approximating industry growth projections, although peaking at rates slightly lower than in the March 31, 2020 analysis.

The projections utilized in the October 1, 2021 analysis included increasing revenues at rates approximating industry growth projections.

The Company’s ability to achieve these revenue projections may be impacted by, among other things, uncertainty related to COVID-19, competition in the technology recruiting market, challenges in developing and introducing new products and product enhancements to the market and the Company’s ability to attribute value delivered to customers.

Cash flows that are attributable to the Dice trademarks and brand name were projected to decline for the year ended December 31, 2020 compared to the year ended December 31, 2019 as a result of the lower revenue, but partially offset by reductions to operating expenses.

Operating expenses, excluding impairments, utilized in the March 31 and September 30, 2020 analyses were projected to decline for the year ended December 31, 2020 as compared to the year ended December 31, 2019, including a reduction in operating margin.

The March 31, 2020 analysis included modest operating margin improvements during the year ending December 31, 2021 and beyond while the September 30, 2020 analysis included a small reduction in operating margin during the year ending December 31, 2021 and then increasing modestly.

The October 1, 2021 analysis included operating margins during the year ending December 31, 2021 that approximate operating margins for the year ended December 31, 2020 and then increasing modestly.

If future cash flows that are attributable to the Dice trademarks and brand name are not achieved, the Company could realize an impairment in a future period.

In the March 31, 2020 and September 30, 2020 analyses, the Company utilized a relief from royalty rate method to value the Dice trademarks and brand name using a royalty rate of 5.0% and 4.0%, respectively, based on comparable industry studies and a discount rate of 17.5% and 15.5%, respectively.

The decline in the royalty rate is due to revenue declines and impacts of the COVID-19 pandemic and the decline in the discount rate is primarily due to the lower projections, as compared to the March 31, 2020 analysis.

The Company's operating results attributable to the Dice trademarks and brand name through December 31, 2021 and projections of future results have met or exceeded those included in the projections utilized in the October 1, 2021 analysis.

In the October 1, 2021 analysis, the Company utilized a relief from royalty rate method to value the Dice trademarks and brand name using a royalty rate of 4.0% based on comparable industry studies and a discount rate of 12.5%.

The determination of whether or not indefinite-lived acquired intangible assets have become impaired involves a significant level of judgment in the assumptions underlying the approach used to determine the value of the indefinite-lived acquired intangible assets.

Fair values are determined using a profit allocation methodology which estimates the value of the trademark and brand name by capitalizing the profits saved because the company owns the asset.

We consider factors such as historical performance, anticipated market conditions, operating expense trends and capital expenditure requirements.

Changes in our strategy and/or market conditions could significantly impact these judgments and require adjustments to recorded amounts of intangible assets.

Changes in our strategy, uncertainty related to COVID-19, and/or changes in market conditions could significantly impact these judgments and require adjustments to recorded amounts of intangible assets.

If projections are not achieved, the Company could realize an impairment in the foreseeable future.

We utilize the asset and liability method of accounting for income taxes.

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Because of the complexity of some of these uncertainties, the ultimate resolution could result in a payment that is materially different from our current estimate of the accrual for unrecognized tax benefits.

Recent Developments

The labor market and certain of the industries that we serve have historically experienced short-term cyclicality.

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Any slowdown in recruitment activity that occurs could negatively impact our revenues and results of operations.

Alternatively, a decrease in the unemployment rate or a labor shortage, including as a result of an increase in job turnover, generally means that employers (including our customers) are seeking to hire more individuals, which would generally lead to more job postings and database licenses and have a positive impact on our revenues and results of operations.

Alternatively, a decrease in the unemployment rate or a labor shortage, including as a result of an increase in job turnover, generally means that employers (including our customers) are seeking to hire more individuals, which would generally lead to more job postings and increases in demand for access to our candidate profiles, which have a positive impact on our revenues and results of operations.

Based on historical trends, improvements in labor markets and the need for our services generally lag behind overall economic improvements.

Additionally, there has historically been a lag from the time customers begin to increase purchases of our recruitment services and the impact to our revenues due to the recognition of revenue occurring over the length of the contract, which can be several months to over a year.

From time to time, we see market slowdowns, which can lead to lower demand for recruiting technology, financial and security cleared professionals.

From time to time, we see market slowdowns, which can lead to lower demand for recruiting technology and security cleared professionals.

If recruitment activity slows in the industries in which we operate during 2022 and beyond, our revenues and results of operations could be negatively impacted.

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Our historical financial information discussed in this Annual Report has been derived from the Company’s financial statements and accounting records for the years ended December 31, 2021, 2020 and 2019.

Consolidated operating results and consolidated operating results as a percent of revenue follows:

Consolidated operating results in dollars and as a percent of revenue follows:

For the year ended December 31,

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Depreciation 16,344 10,259 8,428 6,085 1,831

Amortization of intangible assets — — 482 — (482)

Impairment of intangible assets — 15,200 — (15,200) 15,200

Impairment of goodwill — 22,607 — (22,607) 22,607

Impairment of right-of-use asset 1,919 — — 1,919 —

Disposition related and other costs — — 1,414 — (1,414)

Total operating expenses 121,655 143,557 106,607 (21,902) 36,950

Other operating income (loss):

Gain (loss) on sale of businesses — (537) 3,369 537 (3,906)

Loss on sale of business $ — $ — $ (537) — 537

Operating income (loss) $ (1,752) $ (32,390) $ 10,128 $ 30,638 $ (42,518)

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Depreciation 13.6 % 9.2 % 7.2 %

Amortization of intangible assets — % — % 0.3 %

Impairment of goodwill 17.3 % — % — %

Impairment of intangible assets — % 13.7 % — %

Impairment of goodwill — % 20.3 % — %

Impairment of right-of-use asset 1.6 % — % — %

Disposition related and other costs — % — % 1.2 %

Total operating expenses 101.5 % 129.1 % 90.9 %

Other operating income (loss):

Gain (loss) on sale of businesses — % (4.0) % 2.1 %

Loss on sale of business — % — % 0.5 %

Operating income (loss) (1.5) % (29.1) % 8.6 %

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Year Ended December 31, Increase (Decrease) Percent

Change Foreign Exchange Impact (2)

(in thousands, except percentages)

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33,646 28,977 4,669 16.1 %

eFinancialCareers

25,711 32,098 (6,387) (19.9) % (55)

Total revenues $ 119,903 $ 111,167 $ 8,736 7.9 %

(1) Includes Dice and Career Events.

(2) Foreign exchange impact is calculated by determining the increase (decrease) in current period revenues where current period revenues are translated using prior period exchange rates.

We experienced a decrease in revenue of $12.5 million, or 8.4%.

Revenue at Dice decreased by $10.3 million, or 11.2%, compared to the same period of 2019 due to the impact of the COVID-19 pandemic driving lower renewal rates year over year.

We experienced an increase in revenue of $8.7 million, or 7.9%.

Revenue at Dice increased by $4.1 million, or 4.9%, compared to the same period of 2020 due to improvements in renewal rates and new business activity along with consistently increasing customer counts during 2021, which drives additional revenue in future periods.

Revenues for ClearanceJobs increased by $4.7 million, or 16.1%, as compared to the same period of 2020, driven by continued high demand for professionals with government clearance and consistent product releases and enhancements driving activity on the site.

eFinancialCareers revenue decreased $6.4 million, or 19.9%, compared to 2019, due to the COVID-19 pandemic, uncertainty around Brexit, and political unrest in Hong Kong due to the imposition of its new security law.

Cost of Revenues

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Percentage of revenues 12.6 % 12.9 %

Cost of revenues increased by $0.8 million, or 5.0%, primarily driven by an increase in compensation related costs, partially offset by higher capitalization of internal development costs, which decrease operating expenses.

Together, this increased expense $0.8 million.

Cost of revenues increased by $0.8 million, or 5.6%, driven by an increase of $0.4 million associated with web hosting and cloud computing, consistent with the Company's investment in its products and tools to enhance sales processes.

The Company also experienced $0.4 million increase in headcount related costs.

Product Development Expenses

Year Ended December 31, Decrease Percent

Year Ended December 31, Increase Percent

(in thousands, except percentages)

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Percentage of revenues 13.4 % 13.4 %

Product development expenses decreased $0.7 million or 4.3%, driven by higher capitalization of internal development costs, which decreases operating expenses.

This was partially offset by an increase in compensation related costs due to higher headcount.

Together, this decreased expense $0.1 million.

The higher capitalization of internal development costs resulted from the Company's continued focus on the design and development of product enhancements and features for the Company's sites.

The Company also noted a decrease in travel and other costs due to COVID-19 of $0.6 million.

Product development expenses increased $1.1 million, or 7.6%, Within product development, the Company experienced a decrease in capitalized labor of $0.7 million, which increased expense, along with an increase in consulting costs of $0.3 million.

Sales and Marketing Expenses

Year Ended December 31, Decrease Percent

Year Ended December 31, Increase Percent

(in thousands, except percentages)

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Percentage of revenues 36.4 % 35.7 %

Sales and marketing expenses decreased $5.1 million, or 9.0% from the same period in 2019.

Sales and marketing had an increase in compensation related costs of $4.9 million.

This increase was offset by $6.9 million in reduced discretionary marketing expenses realized from efficiencies in vendor selection and volumes and $3.1 million reduction in other operational costs due to the COVID-19 pandemic, including consulting and travel costs.

Sales and marketing expenses increased $4.0 million, or 10.1%, from the same period in 2020.

The increase was primarily driven by $2.4 million increase in compensation related costs due to increased headcount and higher quota attainment versus sales plan, and a $1.5 million increase in discretionary marketing expenses as customer recruitment activity rebounded.

General and Administrative Expenses

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Percentage of revenues 23.8 % 24.0 %

General and administrative costs increased $0.3 million or 0.8%, primarily due to an increase in compensation costs of $0.8 million and non-cash stock based compensation costs of $0.6 million, partially offset by a decrease in other operational costs of $1.4 million, including recruiting, consulting, and travel costs.

General and administrative costs increased $2.0 million or 7.4%, primarily due to an increase in compensation related costs of $2.9 million with business performance driving achievement for the bonus and stock-based compensation plans.

This was partially offset by lower bad debt expense of $0.7 million.

Year Ended December 31, Increase Percent

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Percentage of revenues 13.6 % 9.2 %

Depreciation expense increased $2.3 million or 23.4% from the same period in 2019, in connection with higher headcount driving higher capitalization of internal development costs, which are reflected as purchases of fixed assets in the Consolidated Statements of Cash Flows.

Depreciation expense increased $6.1 million or 59.3% from the same period in 2020, in connection with increasing internal development costs during 2019 and 2020 that were then placed in service, primarily in late 2020, and depreciated.

Internal development costs are reflected as purchases of fixed assets in the consolidated statements of cash flows.

Impairment of Intangible Assets

Year Ended December 31, Increase Percent

Year Ended December 31, Decrease Percent

(in thousands, except percentages)

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The Company has an indefinite-lived acquired intangible asset related to the Dice trademarks and brand name.

During the first and third quarters of 2020, due to the impacts of the COVID-19 pandemic, the Company performed interim impairment analyses of the Dice trademarks and brand name.

As a result of the analyses, the Company recorded impairment charges totaling $15.2 million during the three month periods ended March 31, 2020 and September 30, 2020.

See also Note 9 of the Notes to the Consolidated Financial Statements.

Impairment of Goodwill

Year Ended December 31, Increase Percent

(in thousands, except percentages)

During the first and third quarters of 2020, because of the impacts of the COVID-19 pandemic, the Company performed an interim impairment analysis of the Dice trademarks and brand name.

As a result of the analysis, the Company recorded an impairment charge of $15.2 million during the nine months ended September 30, 2020.

See also Note 10 of the notes to consolidated financial statements.

Impairment of Goodwill

Percentage of revenues 17.3 % — %

During the first and third quarters of 2020, due to the impacts of the COVID-19 pandemic, the Company performed interim impairment analyses of goodwill.

As a result of the analyses, the Company recorded an impairment charge of $23.6 million during the three months ended September 30, 2020.

See also Note 10 of the Notes to the Consolidated Financial Statements.

Disposition Related and Other Costs

Year Ended December 31, Decrease Percent

(in thousands, except percentages)

Disposition related and other costs $ — $ 1,700 $ (1,700) (100.0) %

Impairment of goodwill $ — $ 22,607 $ (22,607) (100.0) %

Percentage of revenues — % 20.3 %

Disposition related and other costs of $1.7 million for the year ended December 31, 2019, as described in Note 15 to the Consolidated Financial Statements, are primarily due to severance and related costs incurred in reorganizing the Tech-focused business.

Other Operating Income (Loss)

During the third quarter of 2020, because of the impacts of COVID-19 pandemic, the Company performed an interim impairment analysis of goodwill.

As a result of the analysis, the Company recorded an impairment charge of $22.6 million in the third quarter of 2020.

See also Note 11 of the notes to consolidated financial statements.

Impairment of right-of-use asset

Year Ended December 31, Increase Percent

(in thousands, except percentages)

Other operating income (loss) $ — $ (537) $ 537 (100.0) %

Impairment of right-of-use asset $ 1,919 $ — $ 1,919 — %

Percentage of revenues 1.6 % — %

Other operating income (loss) for the year ended December 31, 2019 included a loss of $0.5 million on the 2018 sale of Hcareers due to the finalization of the working capital terms and related contingencies.

See also Note 4 to the Consolidated Financial Statements.

During the third quarter of 2021, due to the continuing impacts of COVID-19 on the real estate markets and its impact on the future cash flows attributable to its ROU assets, the Company performed an impairment analysis of a sublease within its ROU assets.

As a result, the Company recorded an impairment charge of $1.9 million during the third quarter of 2021.

Operating Income (Loss)

Year Ended December 31, Decrease Percent

Year Ended December 31, Increase Percent

(in thousands, except percentages)

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Percentages of revenues (1.5) % (29.1) %

Operating loss for the year ended December 31, 2020 was $29.6 million, a negative margin of 21.6%, compared to operating income of $17.0 million, a positive margin of 11.4%, for the same period in 2019.

The decrease in operating income and percentage margin was primarily driven by the non-cash impairments of goodwill and intangible assets of $38.8 million in the 2020 period, partially offset by the disposition and related costs of $1.7 million in the 2019 period.

Interest Expense and Other

Operating loss for the year ended December 31, 2021 was $1.8 million, a negative margin of 1.5%, compared to operating loss of $32.4 million, a negative margin of 29.1%, for the same period in 2020.

The decrease in operating loss and improved percentage margin was primarily driven by non-cash impairments of goodwill and intangible assets of $37.8 million during the 2020 period, partially offset by increased investments in sales and marketing, higher depreciation, and the ROU asset impairment of $1.9 million in the third quarter of 2021.

Income from equity method investment

Year Ended December 31, Increase Percent

(in thousands, except percentages)

Income from equity method investment $ 190 $ — $ 190 — %

Percentage of revenues 0.2 % — %

During the fourth quarter of 2021, the Company recorded $0.2 million of income related to its proportionate share of eFinancialCareer's ("eFC") net income.

Interest Expense and Other

Year Ended December 31, Decrease Percent

(in thousands, except percentages)

Interest expense and other $ 667 $ 831 $ (164) (19.7) %

Percentage of revenues 0.6 % 0.7 %

Interest expense and other increased by $0.1 million, or 18.0%, from the same period in 2019.

Interest expense increased $0.3 million, primarily due to the higher weighted-average debt outstanding during the year ended December 31, 2020 as the Company borrowed on its revolving credit facility in the first quarter of 2020 for liquidity protection during the COVID-19 pandemic.

The increase in interest expense was offset by a $0.2 million gain recognized in the second quarter of 2020 on the sale of the Company's 20% interest in BioSpace.

Impairment of Equity Investment

Interest expense and other decreased by $0.2 million, or 19.7%, from the same period in 2020.

The decrease in interest expense was primarily due to lower weighted average debt outstanding during the year.

The 2020 period included a $0.2 million gain recognized in the second quarter of 2020 on the sale of the Company's 20% interest in BioSpace.

Impairment of investment

Year Ended December 31, Decrease Percent

(in thousands, except percentages)

Impairment of equity investment $ (2,002) $ — $ (2,002) — %

Impairment of investment $ — $ 2,002 $ (2,002) (100.0) %

Percentage of revenues — % 1.8 %

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Accordingly, the Company recorded an impairment charge of $2.0 million during the first quarter of 2020.

Gain on investment

Year Ended December 31, Increase Percent

(in thousands, except percentages)

Gain on investment $ 1,198 $ — $ 1,198 — %

Percentage of revenues 1.0 % — %

The gain on investment relates to a minority interest representing less than 1% of the common stock of a technology company that became publicly traded during the first quarter of 2021 after filing an initial public offering.

The Company sold 100% of this investment during the third quarter of 2021.

See also Note 8 of the notes to consolidated financial statements.

Year Ended December 31,

(in thousands, except

Income (loss) before income taxes $ (32,434) $ 16,324

Income tax expense (benefit) (2,419) 3,773

Loss before income taxes $ (1,031) $ (35,223)

Income tax benefit (629) (2,826)

Effective tax rate 61.0 % 8.0 %

A reconciliation between tax expense at the federal statutory rate and the reported income tax expense is summarized as follows:

A reconciliation between the income tax benefit at the federal statutory rate and the reported income tax benefit is summarized as follows:

Year Ended December 31,

Federal statutory rate $ (216) $ (7,397)

Gain (loss) on sale of businesses (42) 84

Gain on sale of businesses or investments (251) (42)

Stock-based compensation (84) 432

Nondeductible impairment — 5,029

State taxes, net of federal effect (315) 467

Difference between foreign and U.S.

rates 32 (192)

State tax expense (benefit), net of federal effect 110 (514)

Change in accrual for unrecognized tax benefits (155) (216)

tax on global intangible low-taxed income, net of credits — 84

Executive compensation 541 323

Currency translation losses (278) (67)

transition tax on foreign earnings — 140

Research and development tax credits (478) (530)

Change in valuation allowances (30) 12

Other (96) 89

Income tax expense (benefit) $ (2,419) $ 3,773

Income tax benefit $ (629) $ (2,826)

Our effective income tax rate was 61.0% and 8.0% for the years ended December 31, 2021 and 2020, respectively.

The 2020 tax rate differed from the federal statutory rate primarily because of tax deficiencies in stock-based compensation;

nondeductible impairment charges;

a decreased accrual for unrecognized tax benefits;

The 2021 tax rate differed from the federal statutory rate primarily because of the utilization of a capital loss carryforward to offset a gain on an investment;

deduction limitations on executive compensation;

and tax credits for research and development.

The 2020 tax rate differed from the federal statutory rate primarily because of tax deficiencies in stock-based compensation;

state tax expense;

nondeductible impairment charges;

state tax benefits;

and tax credits for research and development.

Income (loss) from discontinued operations, net of tax

For the year ended December 31, Decrease Percent

(in thousands, except percentages)

Income (loss) from discontinued operations, net of tax $ (29,340) $ 2,382 $ (31,722) (1,332) %

Percentage of revenues (24.5) % 2.1 %

During the second quarter of 2021, the Company transferred majority ownership of its eFC business to eFC management and has recorded it as a discontinued operation.

As a result, the Company experienced a loss from discontinued operations, net of tax, of $29.3 million.

The loss was comprised of $28.1 million related to the reclassification of currency translation adjustments

and $5.2 million from the removal of eFC's net assets.

The loss was partially offset by the recording of an equity method investment of $3.6 million and eFC's earnings during the period.

Income from discontinued operations for the year ended December 31, 2020 represents eFC's earnings during the period.

Earnings per Share

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per share amounts)

Net income (loss) $ (30,015) $ 12,551

Loss from continuing operations $ (402) $ (32,397)

Income (loss) from discontinued operations, net of tax (29,340) 2,382

Net Loss $ (29,742) $ (30,015)

Weighted-average shares outstanding - diluted 46,333 48,278

Diluted earnings (loss) per share (0.62) 0.24

Diluted earnings (loss) per share was $(0.62) and $0.24 for the years ended December 31, 2020 and 2019, respectively.

The decrease in diluted earnings (loss) per share was primarily driven by the non-cash impairment charges during 2020.

Diluted loss per share - continuing operations $ (0.01) $ (0.67)

Diluted earnings (loss) per share - discontinued operations $ (0.63) $ 0.05

Diluted loss per share $ (0.64) $ (0.62)

Diluted loss per share from continuing operations was $0.01 and $0.67 for the years ended December 31, 2021 and 2020, respectively.

The decrease in diluted loss per share was primarily driven by the non-cash impairment charges during 2020 and the gain on investment in the 2021 period, partially offset by the ROU asset impairment and higher depreciation expense in the 2021 period.

Diluted loss per share was $0.64 and $0.62 for the years ended December 31, 2021 and 2020, respectively.

Current year to date loss per share is primarily driven by the loss on discontinued operations.

The prior year loss per share is primarily driven by the impairment charges.

Comparison of Years Ended December 31, 2020 and 2019

Year Ended December 31, Increase (Decrease) Percent

Change Foreign Exchange Impact (6)

(in thousands, except percentages)

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$ 82,190 $ 92,527 $ (10,337) (11.2) %

eFinancialCareers 32,098 33,758 (1,660) (4.9) % (1,002)

ClearanceJobs 28,977 24,745 4,232 17.1 %

Tech-focused, excluding Dice Europe 149,370 149,282 88 0.1 % (1,002)

Dice Europe (2)

— 2,976 (2,976) n.m.

Tech-focused 149,370 152,258 (2,888) (1.9) % (1,002)

— 5,329 (5,329) n.m.

— 3,771 (3,771) n.m.

— 212 (212) n.m.

Other — 9,312 (9,312) n.m.

Total revenues $ 111,167 $ 117,272 $ (6,105) (5.2) %

(1) Includes Dice and Career Events

(2) Dice Europe ceased operations on August 31, 2018.

(3) The Company sold Hcareers on May 22, 2018.

(4) The Company sold the RigLogix portion of the Rigzone business on February 20, 2018 and majority ownership of the remaining Rigzone business was transferred to Rigzone management on August 31, 2018.

(5) The Company transferred majority ownership of the BioSpace business to BioSpace management on January 31, 2018.

(6) Foreign exchange impact is calculated by determining the increase (decrease) in current period revenues where current period revenues are translated using prior period exchange rates.

We experienced a decrease in the Tech-focused segment revenue of $2.9 million, or 1.9%, which was driven by Dice Europe's decline of $3.0 million due to its ceasing operations on August 31, 2018.

Excluding Dice Europe and the impacts of foreign exchange, revenue for the Tech-focused segment increased 1% year over year.

Revenue at Dice U.S.

decreased by $1.9 million, or 2.0%, for the year ended December 31, 2019 compared to the same period of 2018, an improvement from the 6.9% decline experienced during the year ended December 31, 2018.

Renewal rates have improved over the prior year period while recruitment package customer count was down slightly year over year.

Revenues for ClearanceJobs increased by $3.7 million, or 17.4%, for the year ended December 31, 2019 as compared to the same period in 2018, driven by continued high demand for professionals with government clearance and consistent product releases and enhancements driving activity on the site.

eFinancialCareers revenue decreased $1.7 million, or 4.9%, compared to 2018, mainly due to the impact on U.K.

revenue from the uncertainty around Brexit and the impacts of foreign exchange.

Revenues for Other decreased $9.3 million, which was due to the non-tech businesses which were divested during 2018.

We experienced a decrease in revenue of $6.1 million, or 5.2%.

Revenue at Dice decreased by $10.3 million, or 11.2%, compared to the same period in 2019 due to the impact of the COVID-19 pandemic driving lower renewal rates year over year.

Revenues for ClearanceJobs increased by $4.2 million, or 17.1%, as compared to the same period of 2019, driven by continued high demand for professionals with government clearance and consistent product releases and enhancements driving activity on the site.

Cost of Revenues

Year Ended December 31, Decrease Percent

Year Ended December 31, Increase Percent

(in thousands, except percentages)

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Percentage of revenues 12.9 % 11.5 %

Cost of revenues decreased by $2.1 million, or 11.5%, as the Tech-focused segment decreased $0.7 million and Other decreased $1.4 million.

In the Tech-focused segment, $0.5 million reduction was due to Dice Europe ceasing operations on August 31, 2018 and $0.9 million reduction was due to a decrease in technology infrastructure costs, partially offset by an increase in compensation related costs of $0.7 million.

Other decreased $1.4 million due to the non-tech businesses being divested during 2018.

Cost of revenues increased by $0.8 million, or 5.6%, primarily driven by an increase in compensation related costs of $1.8 million, partially offset by higher capitalization of internal development costs of $1.0 million, which decreased operating expense.

Together, this increased expense $0.8 million.

Product Development Expenses

Year Ended December 31, Decrease Percent

Year Ended December 31, Increase Percent

(in thousands, except percentages)

1 unchanged sentence

Percentage of revenues 13.4 % 12.5 %

Product development expenses decreased $3.0 million or 14.8%, as the Tech-focused segment decreased $1.7 million and Other decreased $1.3 million.

The decrease in Tech-focused was mainly due to higher utilization of the Company's employees in the design and development of product enhancements and features for the Company's sites.

This resulted in a higher capitalization rate of internal development costs, which decreased operating expenses in the current period, and are reflected as purchases of fixed assets in the Consolidated Statements of Cash Flows.

Other decreased $1.3 million due to the non-tech businesses being divested during 2018.

Product development expenses increased $0.2 million or 1.3%, driven by increases in compensation related costs from higher wages.

This was partially offset by higher capitalization of internal development costs, which decrease operating expense.

Together, this increased expense $0.8 million.

The higher capitalization of internal development costs resulted from the Company's continued focus on the design and development of product enhancements and features for the Company's sites.

These increases were offset by a decrease in travel, software subscriptions, and other costs due to COVID-19 of $0.6 million.

Sales and Marketing Expenses

3 unchanged sentences

Percentage of revenues 35.7 % 36.4 %

Sales and marketing expenses decreased $3.8 million, or 6.4%, as the Tech-focused segment decreased $0.6 million and Other decreased $3.2 million.

In the Tech-focused segment, compensation related costs increased $3.9 million, of which $2.5 million related to higher sales commissions, including a transitional impact of adopting ASC Topic 606, while consulting costs, professional fees and events, together increased $1.6 million.

These increases were offset by a $4.0 million reduction in discretionary marketing expenses realized from efficiencies in vendor selection and a $2.3 million decrease due to Dice Europe ceasing operations on August 31, 2018.

Other decreased $3.2 million due to the non-tech businesses being divested during 2018.

Sales and marketing expenses decreased $3.0 million, or 7.0%, from the same period in 2019.

Sales and marketing had an increase in compensation related costs of $4.7 million.

This increase was offset by $5.6 million in reduced discretionary marketing expenses realized from efficiencies in vendor selection and volumes and $2.1 million reduction in other operational costs due to the COVID-19 pandemic, including consulting and traveling costs.

General and Administrative Expenses

Year Ended December 31, Decrease Percent

Year Ended December 31, Increase Percent

(in thousands, except percentages)

1 unchanged sentence

Percentage of revenues 24.0 % 22.0 %

General and administrative costs decreased $6.6 million or 17.5% as the Tech-focused segment decreased $5.3 million and Other decreased $1.3 million.

In the Tech-focused segment, $2.1 million was due to a decrease in consulting costs, $1.3 million due to a decrease in legal fees and contingencies, which was primarily related to the applicability of provisions of the FCRA to one of our products, as described in Note 12 to the Consolidated Financial Statements, and a $1.8 million decrease mainly due to the resolution of a sales tax contingency and a decrease from lower stock based compensation, which was primarily due to the acceleration and vesting related to the Company's former Chief Executive Officer in 2018.

Other decreased $1.3 million due to the non-tech businesses being divested during 2018.

General and administrative costs increased $0.8 million or 3.1%, primarily due to an increase in compensation costs of $1.0 million and non-cash stock based compensation costs of $0.6 million, partially offset by a decrease in other operational costs of $0.8 million, including recruiting, consulting, and travel costs.

Year Ended December 31, Increase Percent

2 unchanged sentences

Percentage of revenues 9.2 % 7.2 %

Depreciation expense increased $0.5 million or 5.0%, as the Tech-focused segment increased $0.8 million and Other decreased $0.3 million.

In the Tech-focused segment, depreciation increased primarily in connection with the higher headcount and capitalization rate of internal development costs, which are reflected as purchases of fixed assets in the Consolidated Statements of Cash Flows.

Other decreased due to the non-tech businesses being divested during 2018.

Amortization of Intangible Assets

Year Ended December 31, Decrease Percent

Depreciation expense increased $1.8 million or 21.7%, from the same period in 2019, in connection with higher headcount driving higher capitalization of internal development costs, which are reflected as purchases of fixed assets in the consolidated statements of cash flows.

Impairment of intangible assets

Year Ended December 31, Increase Percent

(in thousands, except percentages)

Amortization $ — $ 482 $ (482) (100.0) %

Impairment of intangible assets $ 15,200 $ — $ 15,200 — %

Percentage of revenues 13.7 % — %

Amortization expense decreased by $0.5 million to zero due to the removal of amortizable intangible assets related to the non-tech businesses divested during the year ended December 31, 2018.

The Company has an indefinite-lived acquired intangible asset related to the Dice trademarks and brand name.

During the first and third quarters of 2020, due to the impacts of the COVID-19 pandemic, the Company performed interim impairment analyses of the Dice trademarks and brand name.

As a result of the analyses, the Company recorded impairment charges totaling $15.2 million during the three month periods ended March 31, 2020 and September 30, 2020.

See also Note 10 of the notes to consolidated financial statements.

Impairment of goodwill

Year Ended December 31, Increase Percent

(in thousands, except percentages)

Impairment of goodwill $ 22,607 $ — $ 22,607 — %

Percentage of revenues 20.3 % — %

During the first and third quarters of 2020, due to the impacts of the COVID-19 pandemic, the Company performed interim impairment analyses of goodwill.

As a result of the analyses, the Company recorded an impairment charge of $22.6 million during the three months ended September 30, 2020.

See also Note 11 of the notes to consolidated financial statements.

Disposition Related and Other Costs

3 unchanged sentences

Percentage of revenues — % 1.2 %

The disposition related and other costs of $1.7 million for the year ended December 31, 2019, as described in Note 15 to the Consolidated Financial Statements, are primarily due to severance and related costs incurred in reorganizing the Tech-focused business.

The disposition related and other costs of $7.6 million in 2018 are primarily due to severance, lease exit, and other related costs

in connection with the non tech businesses divestiture process and the reorganization to the tech-focused strategy.

Other Operating Income (Loss)

The disposition related and other costs of $1.4 million for the year ended December 31, 2019, as described in note 16 to consolidated financial statements, are primarily due to severance and related costs incurred in reorganizing the Tech-focused business.

Loss on sale of business

Year Ended December 31, Decrease Percent

(in thousands, except percentages)

Other operating income (loss) $ (537) $ 3,369 $ (3,906) (115.9) %

Loss on sale of business $ — $ 537 $ (537) (100.0) %

Percentage of revenues — % 0.5 %

Other operating income (loss) for the year ended December 31, 2019, included a loss of $0.5 million on the 2018 sale of Hcareers, which was related to a post-closing adjustment upon the finalization of the working capital terms and related contingencies.

See also Note 4 to the Consolidated Financial Statements.

Other operating income for the year ended December 31, 2018 included a gain of $4.6 million related to the sale of the RigLogix portion of the Rigzone business on February 20, 2018 and a $0.8 million gain related to post closing price adjustment to the sale of the Health eCareers business.

These gains were partially offset by losses recognized on the sale of the Hcareers business on May 22, 2018 of $0.8 million, the transfer of majority ownership of the remaining Rigzone business to Rigzone management on August 31, 2018 of $0.7 million and the transfer of majority ownership of the BioSpace business to BioSpace management on January 31, 2018 of $0.5 million.

See also Note 4 of the Notes to Consolidated Financial Statements.

Operating Income

Loss on sale of business for the year ended December 31, 2019 included a loss of $0.5 million on the 2018 sale of Hcareers due to the finalization of the working capital terms and related contingencies.

See also note 6 to consolidated financial statements.

Operating Income (Loss)

Year Ended December 31, Increase (Decrease) Percent

1 unchanged sentence

Revenue $ 111,167 $ 117,272 $ (6,105) (5.2) %

Operating income $ 17,025 $ 11,692 $ 5,333 45.6 %

Operating income (loss) $ (32,390) $ 10,128 $ (42,518) (419.8) %

Percentage of revenues (29.1) % 8.6 %

Operating income for the year ended December 31, 2019 was $17.0 million, a margin of 11.4%, as compared to $11.7 million, a

margin of 7.2%, for the same period in 2018.

The increased operating income and percentage margin were driven by cost savings initiatives, a reduction in disposition related and other costs in 2019, higher utilization of the Company's employees in the design and development of product enhancements and features for the Company's sites, and the closure of Dice Europe in 2018, which had a lower operating margin.

Operating loss for the year ended December 31, 2020 was $32.4 million, a negative margin of 29.1%, as compared to operating income of $10.1 million, a positive margin of 8.6%, for the same period in 2019.

The decrease in operating income and percentage margin was primarily driven by the non-cash impairments of goodwill and intangible assets of $37.8 million in the 2020 period, partially offset by the decrease in disposition and related costs of $1.4 million in the 2019 period.

Interest Expense and Other

3 unchanged sentences

Percentage of revenues 0.7 % 0.6 %

Interest expense decreased by $1.4 million, or 65.9%, from the same period in 2018 due to lower weighted-average debt outstanding during the year ended December 31, 2019.

Interest expense increased by $0.1 million, or 18.2%, from the same period in 2019.

The increase in interest expense was partially offset by a $0.2 million gain recognized in the second quarter of 2020 on the sale of the Company's 20% interest in BioSpace.

Impairment of Investment

Year Ended December 31, Increase Percent

(in thousands, except percentages)

Impairment of investment $ 2,002 $ — $ 2,002 — %

Percentage of revenues 1.8 % — %

During the first quarter of 2020, due to the impacts from the COVID-19 pandemic, the Company determined the value of its 7.6% interest in a leading tech skills assessment company to be zero.

Accordingly, the Company recorded an impairment charge of $2.0 million during the first quarter of 2020.

Year Ended December 31,

(in thousands, except

Income before income taxes $ 16,324 $ 9,602

Income tax expense 3,773 2,428

Income (loss) before income taxes $ (35,223) $ 9,425

Income tax expense (benefit) (2,826) 2,794

Effective tax rate 8.0 % 29.6 %

A reconciliation between tax expense at the federal statutory rate and the reported income tax expense is summarized as follows:

A reconciliation between tax expense (benefit) at the federal statutory rate and the reported income tax expense (benefit) is summarized as follows:

Year Ended December 31,

Federal statutory rate $ (7,397) $ 1,979

Gain (loss) on sale of businesses 84 (6,111)

Loss (gain) on sale of businesses or investments (42) 84

Stock-based compensation 432 281

State taxes, net of federal effect 467 (38)

Difference between foreign and U.S.

rates (192) (102)

Nondeductible impairment 5,029 —

State tax expense (benefit), net of federal effect (514) 405

Change in accrual for unrecognized tax benefits (216) 209

tax on global intangible low-taxed income, net of credits 84 229

Executive compensation 323 147

Currency translation gains (losses) (67) 219

transition tax on foreign earnings 140 368

Research and development tax credits (530) (558)

Change in valuation allowances 12 5,117

Other (260) 152

Income tax expense $ 3,773 $ 2,428

Income tax expense (benefit) $ (2,826) $ 2,794

Our effective income tax rate was 8.0% and 29.6% for the years ended December 31, 2020 and 2019, respectively.

The 2020 tax rate differed from the federal statutory rate primarily because of tax deficiencies in stock-based compensation;

nondeductible impairment charges;

state tax benefits;

and tax credits for research and development.

The 2019 tax rate differed from the federal statutory rate primarily because of tax deficiencies in stock-based compensation;

state tax expense;

and tax credits for research and development.

The 2018 tax rate differed from the federal statutory rate primarily because of permanent book/tax differences in basis related to the gain or loss on sale of businesses;

tax deficiencies in stock-based compensation;

a decreased accrual for unrecognized tax benefits;

and an increase in the valuation allowance for capital loss carryforwards.

Earnings per Share

Earnings (Loss) per Share

Year Ended December 31,

1 unchanged sentence

per share amounts)

Net income $ 12,551 $ 7,174

Income (loss) from continuing operations $ (32,397) $ 6,631

Income from discontinued operations, net of tax 2,382 5,920

Net income (loss) (30,015) 12,551

Weighted-average shares outstanding-diluted 48,278 51,633

Diluted earnings per share 0.24 0.14

Diluted earnings per share was $0.24 and $0.14 for the years ended December 31, 2019 and 2018, respectively, an increase of $0.10.

The improvement in earnings per share was primarily driven by the improved net income year over year.

Diluted earnings (loss) per share - continuing operations (0.67) 0.13

Diluted earnings per share - discontinued operations 0.05 0.11

Diluted earnings (loss) per share (0.62) 0.24

Diluted earnings (loss) per share from continuing operations was $(0.67) and $0.13 for the years ended December 31, 2020 and 2019, respectively and diluted earnings (loss) per share was $(0.62) and $0.24 for the years ended December 31, 2020 and 2019, respectively.

The loss per share for the 2020 period was primarily driven by the non-cash impairment charges.

Liquidity and Capital Resources

3 unchanged sentences

GAAP and may be different from similarly titled non-GAAP measures reported by other companies.

We believe the presentation of non-GAAP measures, such as Adjusted Revenues, Adjusted EBITDA and Adjusted EBITDA margin, provides useful information to management and investors regarding certain financial and business trends relating to our financial condition and results of operations.

Adjusted Revenues

Adjusted Revenues is a non-GAAP metric used by management to measure operating performance.

Adjusted Revenues represents Revenues less the revenues of divested businesses.

We consider Adjusted Revenues to be an important measure to evaluate the performance of our ongoing businesses and provide comparable results excluding our divestitures.

We believe the presentation of non-GAAP measures, such as Adjusted EBITDA and Adjusted EBITDA margin, provides useful information to management and investors regarding certain financial and business trends relating to our financial condition and results of operations.

Adjusted EBITDA and Adjusted EBITDA Margin

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The Company also uses this measure to calculate amounts of performance based compensation under the senior management incentive bonus program.

Adjusted EBITDA represents net income plus (to the extent deducted in calculating such net income) interest expense, income tax expense, depreciation and amortization, non-cash stock based compensation, losses resulting from certain dispositions outside the ordinary course of business including prior negative operating results of those divested businesses, certain writeoffs in connection with indebtedness, impairment charges with respect to long-lived assets, expenses incurred in connection with an equity offering or any other offering of securities by the Company, extraordinary or non-recurring non-cash expenses or losses, transaction costs in connection with the credit agreement, deferred revenues written off in connection with acquisition purchase accounting adjustments, writeoff of non-cash stock based compensation expense, severance and retention costs related to dispositions and reorganizations of the Company, and losses related to legal claims and fees that are unusual in nature or infrequent, minus (to the extent included in calculating such net income) non-cash income or gains, interest income, business interruption insurance proceeds, and any income or gain resulting from certain dispositions outside the ordinary course of business, including prior positive operating results of those divested businesses, and gains related to legal claims that are unusual in nature or infrequent.

Adjusted EBITDA represents net income plus (to the extent deducted in calculating such net income) interest expense, income tax expense, depreciation and amortization, non-cash stock based compensation, losses resulting from certain dispositions outside the ordinary course of business, certain writeoffs in connection with indebtedness, impairment charges with respect to long-lived assets, expenses incurred in connection with an equity offering or any other offering of securities by the Company, extraordinary or non-recurring non-cash expenses or losses, losses from equity method investments, transaction costs in connection with the credit agreement, deferred revenues written off in connection with acquisition purchase accounting adjustments, severance and retention costs related to dispositions and reorganizations of the Company, and losses related to legal claims and fees that are unusual in nature or infrequent, minus (to the extent included in calculating such net income) non-cash income or gains, including income from equity method investments, interest income, business interruption insurance proceeds, and any income or gain resulting from certain dispositions outside the ordinary course of business, and gains related to legal claims that are unusual in nature or infrequent.

We also consider Adjusted EBITDA, as defined above, to be an important indicator to investors because it provides information related to our ability to provide cash flows to meet future debt service, capital expenditures and working capital requirements and to fund future growth.

We present Adjusted EBITDA as a supplemental performance measure because we believe that this measure provides our Board, management and investors with additional information to measure our performance, provide comparisons from period to period and company to company by excluding potential differences caused by variations in capital structures (affecting interest expense) and tax positions (such as the impact on periods or companies of changes in effective tax rates or net operating losses), and to estimate our value.

We present Adjusted EBITDA as a supplemental performance measure because we believe that this

measure provides our Board, management and investors with additional information to measure our performance, provide comparisons from period to period and company to company by excluding potential differences caused by variations in capital structures (affecting interest expense) and tax positions (such as the impact on periods or companies of changes in effective tax rates or net operating losses), and to estimate our value.

We understand that although Adjusted EBITDA is frequently used by securities analysts, lenders and others in their evaluation of companies, Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for analysis of our liquidity or results as reported under GAAP.

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To compensate for these limitations, management evaluates our liquidity by considering the economic effect of excluded expense items independently, as well as in connection with its analysis of cash flows from operations and through the use of other financial measures, such as capital expenditure budget variances, investment spending levels and return on capital analysis.

Adjusted EBITDA Margin is computed as Adjusted EBITDA divided by Adjusted Revenues.

Adjusted Revenues, Adjusted EBITDA and Adjusted EBITDA Margin are not measurements of our financial performance under GAAP and should not be considered as an alternative to revenue, net income, operating income, cash provided by operating activities, or any other performance measures derived in accordance with GAAP as a measure of our profitability or liquidity.

A reconciliation of Adjusted Revenues for the years ended December 31, 2020, 2019 and 2018 follows (in thousands):

Year Ended December 31,

2020 2019 2018

Revenues $ 136,878 $ 149,370 $ 161,570

Adjusted Revenues $ 136,878 $ 149,370 $ 152,258

(1) The Company sold Hcareers on May 22, 2018.

(2) The Company sold the Riglogix portion of the Rigzone business on February 20, 2018 and transferred majority ownership of remaining Rigzone business to Rigzone management on August 31, 2018.

(3) The Company transferred majority ownership of BioSpace to BioSpace management on January 31, 2018 and sold its remaining minority stake in BioSpace to BioSpace management on April 30, 2020.

Adjusted EBITDA Margin is computed as Adjusted EBITDA divided by Revenues.

Prior to 2019, Adjusted EBITDA was divided by Adjusted Revenues, which represented Revenues less revenues of divested businesses.

For the years ended December 31, 2021, 2020, and 2019, revenues of divested businesses was zero.

Accordingly, Adjusted Revenues is no longer used in the computation.

Adjusted EBITDA and Adjusted EBITDA Margin are not measurements of our financial performance under GAAP and should not be considered as an alternative to revenue, net income, operating income, cash provided by operating activities, or any other performance measures derived in accordance with GAAP as a measure of our profitability or liquidity.

A reconciliation of Adjusted EBITDA for the years ended December 31, 2021, 2020 and 2019 follows (in thousands):

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Depreciation 16,344 10,259 8,428

Amortization of intangible assets — — 482

Non-cash stock based compensation 7,681 5,764 5,145

(Gain) loss on sale of businesses, net — 537 (3,369)

Loss on sale of business — — 537

Income from equity method investment (190) — —

Disposition related and other costs — — 1,414

Legal contingencies and related fees — 149 1,965

Impairment of intangible assets — 15,200 —

Impairment of goodwill — 22,607 —

Impairment of equity investment 2,002 — —

Gain on sale of equity investment (200) — —

Divested businesses — — (2,243)

Impairment of investment — 2,002 —

Impairment of right-of-use asset 1,919 — —

Gain on investments (1,198) (200) —

Legal contingencies and related fees — — 123

Severance and related costs 1,969 1,194 —

Loss (income) on discontinued operations, net of tax 29,340 (2,382) (5,920)

Other (80) — 1

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Legal contingencies and related fees — — 123

Divested businesses — — (2,243)

Discontinued operations results (3,593) (7,290) (9,083)

Severance and related costs 1,969 1,194 —

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Adjusted EBITDA $ 26,162 $ 22,634 $ 25,776

A reconciliation of Adjusted EBITDA Margin for the years ended December 31, 2020, 2019 and 2018 follows (in thousands):

A reconciliation of Adjusted EBITDA Margin for the years ended December 31, 2021, 2020 and 2019 follows (in thousands, except percentages):

Year Ended December 31,

2021 2020 2019

Adjusted Revenues $ 136,878 $ 149,370 $ 152,258

Revenues $ 119,903 $ 111,167 $ 117,272

Adjusted EBITDA $ 26,162 $ 22,634 $ 25,776

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Cash from operating activities $ 28,581 $ 18,683 $ 22,923

Cash from (used in) investing activities (15,904) (11,505) 7,489

Cash used in investing activities (19,304) (15,904) (11,505)

Cash used in financing activities (15,387) (542) (12,423)

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At December 31, 2021, we had cash of $1.5 million compared to $4.5 million at December 31, 2020.

Cash held by foreign subsidiaries totaled approximately $3.1 million and $1.9 million at December 31, 2020 and 2019, respectively.

Cash and cash equivalent balances and cash generation in the United States, along with the unused portion of our revolving credit facility, are sufficient to maintain liquidity and meet our obligations without being dependent on cash and earnings from our foreign subsidiaries.

Our principal internal sources of liquidity are cash on hand, as well as the cash flow that we generate from our operations.

In addition, we had $67.0 million in borrowing capacity under our $90.0 million Credit Agreement at December 31, 2021, subject to certain availability limits including our consolidated leverage ratio, which generally limits borrowings to 2.5 times annual adjusted EBITDA levels, as defined in the Credit Agreement.

We believe that our existing U.S.

cash and cash equivalents, cash generated from operations and available borrowings under our Credit Agreement will be sufficient to satisfy our currently anticipated cash requirements through at least the next 12 months and the foreseeable future thereafter.

We believe that our existing cash and cash equivalents, cash generated from operations and available borrowings under our Credit Agreement will be sufficient to satisfy our currently anticipated cash requirements through at least the next 12 months and the foreseeable future thereafter.

However, it is possible that one or more lenders under the revolving credit facility may refuse or be unable to satisfy their commitment to lend to us or we may need to refinance our debt and be unable to do so.

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Operating Activities

Net cash flows from operating activities primarily consist of net income adjusted for certain non-cash items, including depreciation, amortization, changes in deferred tax assets and liabilities, stock based compensation and the effect of changes in working capital.

Net cash flows from operating activities were $18.7 million and $22.9 million for the years ended December 31, 2020 and 2019, respectively, a decrease of $4.2 million.

Net cash flows from operating activities primarily consists of net income adjusted for certain non-cash items, including depreciation, changes in deferred tax assets and liabilities, stock based compensation, impairments, and the effect of changes in working capital.

Net cash flows from operating activities were $28.6 million and $18.7 million for the years ended December 31, 2021 and 2020, respectively, an increase of $9.9 million.

Cash inflow from operations is driven by earnings and is dependent on the amount and timing of billings and cash collection from our customers.

Cash provided by operating activities during the year ended December 31, 2020 decreased primarily due to lower billings to customers resulting from the COVID-19 pandemic, partially offset by cost savings implemented by the Company in response to the COVID-19 pandemic.

Cash provided by operating activities during the year ended December 31, 2021 increased primarily due to strong billings to and collections from customers.

Investing Activities

During the year ended December 31, 2021, cash used in investing activities was $19.3 million compared to $15.9 million of cash used in investing activities during the year ended December 31, 2020.

Cash used by investing activities during the year ended December 31, 2020 increased from the comparable 2019 period due to higher capitalization of internally developed software of $1.9 million and $2.5 million lower receipts from the sale of businesses and equity investments.

Cash used in investing activities during the year ended December 31, 2021 increased from the comparable 2020 period due to cash transferred to the eFC business and cash paid for investment, partially offset by lower internal development costs, primarily driven by lower headcount and development activities dedicated to the transfer of the eFC business, partially offset by higher proceeds from sale of investments.

Financing Activities

Cash used in financing activities during the year ended December 31, 2021 was $15.4 million primarily due to $3.0 million of net borrowings on long-term debt and $18.4 million of repurchases of common stock.

Cash used during the year ended December 31, 2019 was $12.4 million primarily due to $8.0 million of net repayments on long-term debt and $4.4 million of repurchases of common stock.

Cash used during the year ended December 31, 2020 was $0.5 million primarily due to $10.0 million of net borrowings on long-term debt and $10.5 million of repurchases of common stock.

Comparison of Years Ended December 31, 2020 and 2019

Operating Activities

Net cash flows from operating activities were $22.9 million and $14.9 million for the years ended December 31, 2019 and 2018, respectively, an increase of $8.0 million.

Net cash flows from operating activities primarily consist of net income adjusted for certain non-cash items, including depreciation, changes in deferred tax assets and liabilities, stock based compensation, impairments, and the effect of changes in

working capital.

Net cash flows from operating activities were $18.7 million and $22.9 million for the years ended December 31, 2020 and 2019, respectively, a decrease of $4.2 million.

Cash inflow from operations is driven by earnings and is dependent on the amount and timing of billings and cash collection from our customers.

Cash provided by operating activities during the year ended December 31, 2019 increased due to increased income before changes in working capital and a change in billing terms implemented in the first half of 2018 to bring them in line with market standards, which reduced operating cash flows during the 2018 period.

The impact of this change was most significant in the first half of 2018 and then diminished throughout the remainder of the year and has substantially stabilized in 2019.

Investing Activities

During the year ended December 31, 2019, cash used in investing activities was $11.5 million compared to $7.5 million of cash

provided by investing activities during the year ended December 31, 2018.

Cash used by investing activities during the year ended December 31, 2019 was attributable to the acquisition of fixed assets, including costs of internally developed software, of $14.2 million, partially offset by escrow cash received from the sale of the non-tech businesses of $2.7 million.

Cash provided by investing activities during the year ended December 31, 2018 was attributable to net cash received from the sale of businesses of $17.5 million, partially offset by the acquisition of fixed assets, including costs of internally developed software, of $10.1 million.

During the year ended December 31, 2020, cash used in investing activities was $15.9 million compared to $11.5 million of cash used in investing activities during the year ended December 31, 2019.

Financing Activities

Cash used in financing activities during the year ended December 31, 2019 was $12.4 million primarily due to $8.0 million of net repayments on long-term debt and $2.5 million of repurchases of common stock.

Cash used during the year ended December 31, 2018 was $27.2 million primarily due to $24.0 million of net repayments on long-term debt and $2.0 million of repurchase of common stock.

Cash used in financing activities during the year ended December 31, 2020 was $0.5 million primarily due to $10.0 million of net borrowings on long-term debt and $10.5 million of repurchases of common stock.

Cash used during the year ended December 31, 2019 was $12.4 million primarily due to $8.0 million of net repayments on long-term debt and $4.4 million of repurchases of common stock.

Financings and Capital Requirements

Credit Agreement

In November 2018, the Company, together with Dice Inc.

(a wholly-owned subsidiary of the Company) and its wholly-owned subsidiary, Dice Career Solutions, Inc.

(collectively, the “Borrowers”) entered into a Second Amended and Restated Credit Agreement (the “Credit Agreement”), which matures in November 2023, and replaced the previously existing credit agreement dated November 2015.

The Credit Agreement provides for a revolving loan facility of $90 million, with an Expansion Option up to $140 million, as permitted under the terms of the Credit Agreement.

The Company borrowed $18 million to repay, in full, all outstanding indebtedness, including accrued interest, under the previous credit agreement and to pay certain costs associated with the Credit Agreement.

Unamortized debt issuance costs of $0.2 million were recorded to interest expense at the time of reduction.

Borrowings under the Credit Agreement bear interest, at the Company’s option, at a London Interbank Offered Rate ("LIBOR") rate or a base rate plus a margin.

The margin ranges from 1.75% to 2.50% on LIBOR loans and 0.75% to 1.50% on base rate loans, determined by the Company’s most recent consolidated leverage ratio.

The facility may be prepaid at any time without penalty.

We have a $90 million revolving credit facility, which matures November 2023, with $23 million of borrowings on the facility at December 31, 2021, leaving $67 million available for future borrowings.

Borrowings under the Credit Agreement bear interest, payable at least quarterly, at the Company’s option, at a London Interbank Offered Rate ("LIBOR") rate or a base rate, plus a margin.

Assuming an int eres t rate of 1.88% (the rate in effect on December 31, 2021) on our current borrowings, interest payments are expected to be $0.4 million per year in 2022-2023.

The Credit Agreement contains various customary affirmative and negative covenants and also contains certain financial covenants, including a consolidated leverage ratio and a consolidated interest coverage ratio.

Borrowings are allowed under the Credit Agreement to the extent the consolidated leverage ratio, calculated on a pro forma basis, is equal to or less than 2.50 to 1.00.

Negative covenants include restrictions on incurring certain liens;

making certain payments, such as stock repurchases and dividend payments;

making certain investments;

making certain acquisitions;

making certain dispositions;

and incurring additional indebtedness.

Restricted payments are allowed under the Credit Agreement to the extent the consolidated leverage ratio, calculated on a pro forma basis, is equal to or less than 2.00 to 1.00, plus an additional $5.0 million of restricted payments.

The Credit Agreement also provides that the payment of obligations may be accelerated upon the occurrence of customary events of default, including, but not limited to, non-payment, change of control, or insolvency.

As of December 31, 2021, the Company was in compliance with all of the financial covenants under the Credit Agreement.

Refer to Note 11 in the Notes to the Condensed Consolidated Financial Statements.

The obligations under the Credit Agreement are guaranteed by two of the Company's U.S.

based wholly-owned subsidiaries and secured by substantially all of the assets of the Borrowers and the guarantors and stock pledges from certain of the Company's foreign subsidiaries.

Other Capital Requirements

We anticipate capital expenditures in 2021 to be approximately $16 million to $18 million.

The increase over prior periods is due to the additional investments in the development of new products and features.

We intend to use operating cash flows to fund capital expenditures.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Commitments and Contingencies

The following table presents certain minimum payments due and the estimated timing under contractual obligations with minimum firm commitments as of December 31, 2020:

Payments due by period

Total Less Than 1 Year 1-3 Years 3-5 Years More Than 5 Years

(in thousands)

Credit Agreement $ 20,000 $ — $ 20,000 $ — $ —

Operating lease obligations 18,984 4,040 7,334 6,089 1,521

Total contractual obligations $ 38,984 $ 4,040 $ 27,334 $ 6,089 $ 1,521

Refer to Note 12 in the notes to consolidated financial statements and Item 7A.

"Quantitative and Qualitative Disclosures about Market Risk - Interest Rate Risk."

Contractual Obligations

The Company has operating leases for corporate office space and certain equipment.

The leases have terms from one year to eight years, some of which include options to renew the lease, and are included in the lease term when it is reasonably certain that the Company will exercise the option.

No leases include options to purchase the leased property.

As of December 31, the value of our obligations under operating leases was $6.9 million.

See note 7 to consolidated financial statements for further information.

We make commitments to purchase advertising from online vendors, which we pay for on a monthly basis.

We have no significant long-term obligations to purchase a fixed or minimum amount with these vendors.

Our principal commitments consist of obligations under operating leases for office space and equipment and long-term debt.

As of December 31, 2020, we had $20.0 million outstanding under our Credit Agreement.

Interest payments are due quarterly or at varying, specified periods (to a maximum of three months) based on the type of loan (LIBOR or base rate loan) we choose.

See Note 11 “Indebtedness” in our consolidated financial statements for additional information related to our Credit Agreement.

Future interest payments on our Credit Agreement are variable due to our interest rate being based on a LIBOR rate or a base rate.

Assuming an int eres t rate of 2.19% (the rate in effect on December 31, 2020) on our current borrowings, interest payments are expected to be $0.4 million per year in 2020-2023.

Other Capital Requirements

As of December 31, 2021, we recorded approximately $0.8 million of unrecognized tax benefits as liabilities, and we are uncertain if or when such amounts may be settled.

Related to the unrecognized tax benefits considered permanent differences, we have also recorded a liability for potential penalties and interest.

Included in the balance of unrecognized tax benefits at December 31, 2020 are $1.3 million of tax benefits that if recognized, would affect the effective tax rate.

The Company believes it is reasonably possible that as much as $0.4 million of its unrecognized tax benefits may be recognized in the next twelve months.

Included in the balance of unrecognized tax benefits at December 31, 2021 are $0.8 million of tax benefits that would affect the effective tax rate if recognized.

The Company believes

it is reasonably possible that as much as $0.2 million of its unrecognized tax benefits may be recognized in the next twelve months.

The Company's Board of Directors approved a stock repurchase program that permits the Company to repurchase its common stock.

During the year ended December 31, 2021, the Company repurchased 3.9 million shares for $15.3 million.

As of December 31, 2021, the value of shares available to be purchased under the current plan was $5.8 million.

Management has discretion in determining the conditions under which shares may be purchased from time to time.

See note 14 of notes to consolidated financial statements for further information.

We anticipate capital expenditures in 2022 to be approximately $16 million to $19 million.

The increase over prior periods is due to the additional investments in the development of new products and features.

We intend to use operating cash flows to fund capital expenditures.

Recent Accounting Pronouncements

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

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Item 7. Management’s Discussion and Analysis