DHI GROUP, INC. 10-K

Item 1. Business Introduction and Summary This section provides an overview of DHI Group, Inc. (“DHI” or the "Company"). Please see our consolidated financial statements included elsewhere in this report for additional discussion regarding our results of operations for the year ended December 31, 2022. (in thousands) FY 2022 FY 2021 Change Revenues $ 149,680 $ 119,903 25 % Operating income (loss) $ 5,560 $ (1,752) n.m. Income (loss) before income taxes $ 3,597 $ (1,031) n.m. Income (loss) from continuing operations (1) $ 4,176 $ (402) n.m. Net income (loss) $ 4,176 $ (29,742) n.m. Diluted earnings (loss) per share - continuing operations (1) $ 0.09 $ (0.01) n.m. Diluted earnings (loss) per share $ 0.09 $ (0.64) n.m. Net cash flows from operating activities $ 36,035 $ 28,581 26 % Adjusted EBITDA (2) $ 30,950 $ 26,162 18 % Adjusted EBITDA Margin (2) 21 % 22 % n.m. (1) Income from continuing operations and diluted earnings per share from continuing operations for the year ended December 31, 2022 includes the net positive impact of income from investments, proceeds from settlement, impairments and severance and related costs, all net of tax, and discrete tax items of $1.9 million, or $0.04 per share. Loss from continuing operations and diluted loss per share from continuing operations for the year ended December 31, 2021 includes the net negative impact of a right-of-use asset impairment, disposition, severance and related costs, and gain on investment, all net of tax, and discrete tax items of $1.2 million, or $0.02 per share. (2) For a description of these non-GAAP measures and reasons why management believes they provide useful information to investors, please see Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations, Non-GAAP Financial Measures” located elsewhere in this report. 5 Table of Contents 2022 Highlights In 2022, DHI returned to double-digit revenue growth as employers across the United States continued to use its subscription-based offering to find, attract, engage and hire the highest quality technology and security-cleared professionals, bolstered by an increasing supply-demand gap for technologists. Dice focused its sales efforts on attracting commercial account clients, which we believe represents over a billion dollars in Target Addressable Market (TAM) and its largest opportunity for growth. As DHI further invested in sales, marketing and product, profitability remains a priority with margin expansion possible when combined with revenue growth. Dice delivered multiple product releases creating a fly-wheel effect for client/technologist engagement as ClearanceJobs further cemented itself as a product innovation leader poised to capitalize on growing defense budgets. As employer branding becomes a greater priority for clients to tell their mission, values and culture, DHI won several awards and earned the Great Place to Work® certification, demonstrating the world-class team of talent and leadership within the organization. Exceptional Financial Performance The success of new sales processes and the expansion of both New Business and Client Success teams to increase client satisfaction manifested in a growing client base. Recruitment package customer counts for Dice and ClearanceJobs grew 5% and 10% year-over-year, respectively. Average annual revenue per recruitment package customer for Dice and ClearanceJobs grew 7% and 12% year-over-year, respectively. The establishment of a New Accounts Special Handling (NASH) team to create an ideal experience for first year clients resulted in an improved first-year client experience contributing to strong overall revenue renewal rates of 99% and 100% at Dice and ClearanceJobs, respectively. Bookings strengthened in the year, growing to $160.2 million to end 2022, a 20% increase from 2021. In 2022, DHI’s overall revenue growth was 25% year-over-year, a strong growth rate. The Company maintained a solid Adjusted EBITDA margin of 21% while balancing strong financial performance with strategic investments to maximize growth opportunities. Leading Tech/Cleared Sites for Candidates Dice’s Technologist Apply Flow redesign created a new, streamlined job application process with fewer steps for technologists, resulting in higher new user registration rates and applies per job posting. Dice’s TalentSearch Time Zone launched, allowing organizations that have embraced remote work to search for technologists within a designated time zone or personalized set of parameters beyond city or radius, widening the pool of skilled talent available for our clients. ClearanceJobs’ Live Video product release enabled users to record video messages and status updates directly from the platform, again pioneering innovative solutions in the talent acquisition space. In marketing, Dice’s technologist awareness campaigns exceeded 675 million impressions delivering an average of 1.6 million monthly visits and 335k newly visible profiles. ClearanceJobs had a record number of new candidate registrations, approximately 145,000 in 2022, and total candidate resumes posted increased by 14% year-over-year. The brand also had record high visible job postings at approximately 75,000, which in tandem with an engaged candidate base, further established ClearanceJobs as an essential destination for the security cleared community. Best Place to Work Promoting DHI and its brands to attract highly skilled talent, particularly in sales and technology, leads to a more successful organization. For the first time, DHI became Great Place to Work® certified, was named a 2022 Best Midsized Place to Work by BuiltIn Colorado. Chief Technology Officer, Paul Farnsworth, earned the Top 100 most influential talent acquisition thought leaders from TATech (Association for Talent Acquisition Solutions), and Chief Executive Officer, Art Zeile, was selected as one of three finalists as CEO of the Year for Colorado Technology Association’s APEX Awards. 6 Table of Contents Company Profile DHI was incorporated in Delaware on June 28, 2005 and is a leading provider of artificial intelligence-powered software products, online tools and services to deliver career marketplaces to candidates and employers globally. DHI's brands — Dice and ClearanceJobs (the Company transferred majority ownership of the eFinancialCareers ("eFC") brand and business to eFC management on June 30, 2021) — enable recruiters and hiring managers to efficiently search, match and connect with highly skilled technologists in specialized fields, particularly technology and those with active government security clearances. Our mission is to empower technology professionals and organizations that hire them to compete and win through expert insights and relevant employment connections by delivering three key value propositions: • Providing the best search and match solution for recruiters and employers through software services; • Delivering the most relevant and personalized technology career related content; and • Aggregating and analyzing workforce intelligence data to deliver specialized insights. The majority of our revenues in 2022 were generated through the sale of recruitment packages, which allow customers to promote jobs on our websites and source candidates through our resume databases. Recruitment packages are typically provided through contractual arrangements with annual, quarterly or monthly payment terms. Our Products and Services We help organizations find the best talent, and we help technology and security cleared professionals find the best jobs to advance their careers. Through our software solutions, our vision is to create indispensable career marketplaces that match the highest quality candidates with the right career opportunities. Our solutions are available individually or bundled in packages, including: • Talent profiles. Each of our brands provides access to relevant candidate profiles, resumes, and social and web profiles creating a broader pool of talent for our clients. We help clients quickly find and connect with top talent to make their recruiting efforts more efficient. • Job postings. Our job platforms are focused on specific verticals tailored to technology and security-cleared individuals, making it easier for professionals to search for relevant jobs. In turn, the applications received by clients are more likely to be relevant and qualified compared to applications received on generalist sites. Providing professionals with the most relevant job postings benefits both the talent and the recruiting organization. • Employer Branding. Each of our brands has a suite of offerings that help clients amplify their brand to reach more professionals. Solutions include display advertising, email, enhanced job postings or company profiles, and social targeting. • Other Services. In connection with its Dice and ClearanceJobs brands, DHI offers other services such as: 1) virtual and live career events; 2) sourcing services, which is a premium service delivering sourced and screened candidates to recruiters and employers; and 3) content and data services that provides tailored content to help professionals manage their careers and provide employers insight into recruiting strategies and trends. Industry and Skill Focused Brands During 2022 we offered our talent acquisition and career development products and tools through the following brands: Service Yrs. in Operation Specialized Focus Primary Source of Revenues Dice 1 32 Technology and engineering in the U.S. Recruitment packages 2 , career fairs and open houses ClearanceJobs 20 Security-cleared professionals Recruitment packages 2 1 Includes Career Events 2 Recruitment packages are subscription based products that provide access to our candidate profiles and/or the ability to post jobs. Dice has been a go-to destination for technology and engineering talent in the United States for the past 32 years. The job postings available on Dice, from both technology and non-technology companies across many industries, include positions for software engineers, big data professionals, systems administrators, database specialists, project managers, and a variety of other technology and engineering professionals. Dice had approximately 64,000 job postings as of December 31, 2022 and during 2022, Dice had, on average, approximately 1.4 million monthly users. 7 Table of Contents Customers can purchase recruitment packages, job postings or advertisements. Recruitment packages offer our customers the ability to access candidate profiles and post up to a specified number of jobs. Candidate Match and Search on Dice is powered by IntelliSearch, a proprietary machine-learning technology that is foundational to many Dice products and services. Approximately 90% of Dice revenue was derived from recruitment packages in 2022. Professionals can post their resumes, search jobs and access our career-related content, news and tools. Skill Center, a tool implemented by Dice, uses data aggregated from across the web to show skills trends, giving professionals insights into potential skills gaps and development areas. Salary Predictor and Salary Calculator offer real-time salary tools leveraging predictive analysis to help tech professionals and employers discover tailored salary estimates based on skills, job titles, years of experience and location. Job Search and Job Alerts deliver tailored and personalized career opportunities to candidates. ClearanceJobs is a leading online career marketplace dedicated to matching security-cleared professionals with the best hiring companies searching for employees. Authorized U.S. government contractors, federal agencies, national laboratories and universities utilize The Cleared Network to quickly and easily find candidates with specific, active security clearance requirements to fill open jobs in a range of disciplines. ClearanceJobs NextGen platform provides opportunities for employers and candidates to engage in real-time through messaging and live video and employers to promote brand differentiators through BrandAmp, Pulse and employer branding pages. The majority of candidates with resumes on our site have high-level security clearance. ClearanceJobs had approximately 67,000 job postings as of December 31, 2022 and during 2022, ClearanceJobs had, on average, 630,000 monthly users. Our Industry We primarily operate in the talent discovery and acquisition segment of the broader market for human capital management services through career sites for technology professionals. There is a shortage of skilled professionals worldwide and we believe that the overall demand for talent acquisition and career development products and services has significant long-term growth potential. We also believe that certain industries that employ highly-skilled and highly-paid professionals will experience particularly strong demand for effective recruiting solutions due to the scarcity of such professionals. For example, as of December 2022, the seasonally unadjusted U.S. unemployment rate was 1.8% for computer-related occupations as compared to the overall national average of 3.5%, seasonally adjusted. We believe that there are four major trends that will continue to shape demand for talent acquisition services: • Greater competition for professional talent . The candidate-employer relationship has changed, with the balance of power shifting towards the candidates. As more companies leverage technology to advance their business, employers will increasingly need to hire tech talent to compete. According to analysis from the U.S. Bureau of Labor Statistics, many computer occupations are expected to have elevated long-term demand, due to increased business demand for telework computing infrastructure and information security arising from economic changes spurred by the COVID-19 pandemic. • Continued professional interest in career brands specific to industry and skills. Our services focus on domains or industries that require specialized skills and knowledge and, thus, customized content, profiles and search parameters. In addition, the technology professionals often share a sense of personal identity and community that goes beyond the confines of their careers. We believe that both specialized skills and the sense of personal identity and community lead professionals in our verticals to prefer specialized career brands over generalist ones. • Talent attraction and retention becoming more of a strategic priority for companies. McKinsey & Company reports a fundamental mismatch between companies' demand for talent and the number of workers willing to supply it, driven by more workers reevaluating what they want from a job and opting for nontraditional employment such as gig, temporary or part-time. Hiring skilled technologists is a key driver to moving digital innovation forward. • Increased use of data and analytics in human capital management and increased need for insights. As many companies prove the power of analytics in marketing and other business domains, organizations are seeking to gain a competitive advantage by applying data-driven insights to improve their hiring, retention and leadership capabilities. In this environment, we believe there is an opportunity for career management and talent acquisition tools that leverage the common interests, goals and skills of select professional communities. We believe that a focus on professional communities allows organizations to more efficiently identify talent, with more complete data and insights about that talent. 8 Table of Contents Our Value Proposition We are a leading provider of data, insights and employment connections through specialized online professional communities organized around common professional interests and skill sets powered by technology. This specialized approach provides technology professionals with more relevant career related information and opportunities, enhancing their ability to maximize their careers. Through engaging with professionals, we are able to build rich and unique data sets around valuable talent pools. The combination of our focused online professional websites and rich data sets allows organizations to find and hire professional talent more efficiently and effectively, and therefore incentivizes them to source talent through our online professional communities. The benefits our services provided to both professionals and recruiting customers create a robust marketplace. Benefits we provide to Professionals Relevant employment connections . When professionals post their resumes or apply for jobs on our websites, they can make valuable connections with organizations who prize their skills and expertise. Professionals can avoid having to “sort through the clutter” on generalist career sites and get the most out of their time by using our more focused services. Skills/industry-specific career management tools, information and insights . We provide professionals with targeted and relevant career development tools, content and news. For example, Dice and ClearanceJobs provide professionals with market and salary information and local market trends. In addition, the Salary Predictor allows professionals to evaluate their market value and map out which skills will increase their value. We believe our career development services and tools provide professionals with the insights they need to propel their careers forward, and thus increase the engagement of professionals with our sites. Benefits we provide to our Customers Large pools of qualified and hard-to-reach professionals . We seek to improve the efficiency of the recruiting process for our customers by providing efficient access to large pools of highly qualified and hard-to-reach professionals. Because the communities of professionals who visit our websites are highly-skilled and specialized within specific industries, we believe our customers who post jobs receive applications from candidates who are better qualified for the positions, and that they receive fewer irrelevant applications than when using generalist sites. In addition, since our resume data and resume search functions are highly tailored by specialty, we believe that our customers can more efficiently identify talent using our resume databases than by using broader services. Relevant information on prospective candidates . We believe that the specialized nature of our job posting and resume search products makes them inherently more relevant and efficient for recruiting. Using all of these products together gives our customers the most complete view of a prospective candidate, and allows them to not only identify the best talent but also tailor their recruiting approach to each individual. Hyper-targeted candidate outreach and employer branding . We offer recruiting customers the ability to target hard-to-find professionals with messages in the online forums they frequent. Our social targeting service leverages our social aggregation capabilities to assemble candidate target lists based on specific factors like skill sets, work experience, location, or interests; then executes hyper-targeted employer branding or job search campaigns in online forums where specific potential candidates spend time. Our Strategic Goals The Company continues to focus on building upon its legacy as a market leader in technology talent acquisition by delivering best-in-class candidate quality and match capabilities through its career marketplaces. As more employers use the subscription-based offerings to find, attract, engage and hire the highest quality tech professionals, the Company continues to invest in product and marketing to expand the technologist community and create an ideal onboarding experience for tech talent. The Company continues to evolve to a solution selling business, coupled with its goal of maintaining strong Adjusted EBITDA margins to maximize profitability. Delivering best-in-class candidate quality and match capabilities for technology roles. We believe candidate quality is the essential foundation of success in our industry and we intend to differentiate our business by leading in this respect. In 2022, we dramatically improved the quality of our Dice candidates to a level we believe is best-in-class and plan continued vigilance and 9 Table of Contents innovation to drive continued improvements. We are also building on our unique legacy and intellectual property in the technology jobs space to create match capabilities for both candidates and clients that are reducing the time and effort required in job searching and talent acquisition. Our proprietary and patented machine-learning technology including IntelliSearch, powers many Dice and ClearanceJobs products and is foundational to providing relevant job opportunities for candidates and efficient search and match solutions for clients. Building indispensable tech-focused career marketplaces . ClearanceJobs has established a unique franchise in the market for cleared professionals, many with tech experience. Built on a unique cohort of candidates and specialized employer and recruiter tools together, ClearanceJobs is a highly interactive two-sided marketplace environment. These attributes provide clear and measurable return on investment for clients and has contributed to ClearanceJobs more than doubling its revenue over the past five years. With nearly 20 years in the market, we believe ClearanceJobs is an indispensable and valuable business. We are in the process of transforming our Dice brand into a similar career marketplace customized for the needs of its unique candidate and client communities. We officially launched all elements of the career marketplace features for Dice in 2021 and focused 2022 on landing launches and driving adoption with customers while launching new products to create efficiency in the recruiting process. We expect these changes to transform the way our stakeholders use Dice and to drive results as adoption increases. Investing in functional excellence and product innovation. Since joining DHI in 2018, CEO Art Zeile has built a leadership team capable of driving growth and supporting a culture of high performance. The leadership team continually advances their functional areas to drive results in the business, working towards the common goal of launching and landing innovative products in the market. Specifically, in 2022 the Company released a number of products to help employers find tech candidates and technologists further their careers. These include, at Dice: a New Job Page, TalentSearch Auto Talent Alerts, and iOS Messaging; at ClearanceJobs: Company Pages, Scheduled Broadcast Messages, and Live Video. We are investing to further increase the pace of innovation by adding engineers to our technology team, centered around a development model to increase the quality and speed of product delivery. Our marketing team is focused on delivering results at lower cost in terms of driving traffic to Dice, increasing marketing qualified leads, growing visible profiles and applications with less spend and with more to come as we leverage new capabilities in customer relationship management (CRM), product marketing, and digital analytics, among others. Transforming our sales and customer success efforts to drive growth. As early leaders in online talent acquisition, DHI’s brands have a legacy of strong recurring clients and revenue and, as a result, renewals have historically provided the majority of the Company’s revenues. We believe there is significant opportunity to grow our customer base and expand to new revenue opportunities, particularly with commercial accounts, or clients who recruit for their own needs, with an expanded and better enabled sales force and at ClearanceJobs by growing relationships directly with government agencies. Our customer success team executed new strategies to drive proactive external engagement and report real-time feedback to better include the customer voice to influence our product roadmap. We plan to continue growing our sales team as opportunities arise. Marketing and Sales DHI Group’s brands are built on providing value to both sides of a thriving career marketplace. Technologists join and engage to find jobs and develop their careers, and customers (staffing firms, recruiting firms and companies hiring professionals in our areas of expertise) use our platforms and support to find the right talent for their open roles. Our consumer marketing focuses on growing the number of professionals who engage with our content, visit our websites and become members, as the more active and interested consumers we have within our platforms, the more attractive our products and services are to our customers. These efforts include digital advertising, search engine marketing, content marketing, email marketing, social media and influencer marketing. We measure success through goals related to brand awareness, consideration and product usage, traffic, new and updated consumer profiles, and applications to job postings. For customers, our marketing and sales teams work in lockstep to develop new customer relationships and maintain high customer satisfaction. Customer marketing efforts range from creating and capturing demand to retention-focused activities. Marketing supports the entire customer journey, from problem and brand/product awareness to affinity and consideration, intent and purchase, and onboarding. Marketing initiatives include advertising, thought leadership, content marketing, media relations, social media, email campaigns and participation in industry events. We measure success through lead volume and quality, lead-to-revenue metrics, brand awareness, consideration and product usage, traffic and content engagement. We sell our products and services primarily through our direct sales force and Agency Partner Channel. Our sales team is organized by brand, market segment, and geography and targets Fortune 1000 companies, large staffing and recruiting firms 10 Table of Contents and other large and mid-size commercial businesses. Our strategy in 2022 focused on executing against our solution-oriented sales approach that allows our teams to better address growing market opportunities and our existing clients' needs. In addition, we significantly increased our focus on customer engagement to drive best-in-class renewal rates and customer satisfaction scores most notably with our first year clients. As of December 31, 2022, we employed approximately 170 sales and support personnel in the United States. We also invest in fraud detection initiatives and maintain teams of account managers and customer support specialists who work to ensure customers get the most from our products and services by providing training and assistance. In addition to technologies we leverage for fraud detection, our customer support departments perform some compliance functions, such as reviewing the websites for false or inaccurate job postings. Customers We currently serve a diversified customer base consisting of approximately 10,800 customers in total. No one customer accounted for more than 10% of our revenues in 2022. Our customers include small, mid-sized and large direct employers, staffing companies, recruiting agencies, consulting firms and marketing departments of companies. As of December 31, 2022 notable customers of the Dice and ClearanceJobs businesses included AT&T, Adecco, CACI, Cisco, Disney, General Dynamics, Kforce, ManTech, Microsoft, NCI, Northrop Grumman, Samsung, Bank of America and DISH Network. Technology We use a variety of open source and proprietary technologies to support our website services. Our websites provide a multitenancy technology platform with multiple application services developed to perform at scale. We primarily utilize Amazon Web Services (AWS) as our cloud infrastructure platform, which enables us to scale our compute, network, and storage capacity on an as-needed basis. Our application services and data connections are continually monitored 24/7 for performance and stability. Our application and infrastructure architecture enable us to ensure global reach, as well as advantages in resiliency and cloud delivery. Job seekers and customers can access our websites with any standard web browser, mobile web browsers, and iOS and Android applications. Our websites also utilize AWS disaster recovery, redundancy, and resiliency services, including multi-availability zone, multi-region, redundant storage and networking solutions, and self-healing capabilities. Competition The market for talent acquisition services is highly competitive with multiple online and offline competitors. With the evolution of the online recruiting model, there has been an increasing need to provide ease-of-use and relevance to professionals, as well as an efficient and cost-effective recruitment method for direct employers, recruiters and staffing companies. Additionally, further technological advancements and evolution of social networks increasing the interaction between candidates and potential employers have made it easier for new competitors to emerge, and advertisers have many alternatives available to reach their target audiences. Our ability to maintain our existing customer base and generate new customers depends to a significant degree on the quality of our candidate databases and audiences, the quality of our services, our ability to enhance our websites and the underlying technology of our websites to meet the needs of a rapidly-evolving marketplace, our pricing strategy and ability to introduce value-added products and services, contracting alternatives such as subscription or consumption based models, and our reputation among our candidates and our customers and potential customers, who are increasingly sophisticated and demanding. Our competitors include: • social and professional networking sites, such as LinkedIn, Facebook, Twitter and Google; • niche or specialist professional networking sites such as GitHub and Stack Overflow; • generalist job boards, some of which have substantially greater resources and brand recognition than we do, such as CareerBuilder, Monster, StepStone, and Seek which, unlike specialized job boards, permit customers to enter into a single contract to find professionals across multiple occupational categories and attempt to fill all of their hiring needs through a single website; • aggregators and distributors of job postings and profiles, including Indeed (owned by Recruit), TalentBin (owned by Monster Worldwide), Entelo, ZipRecruiter, Google and Craigslist; • career-focused community sites such as Glassdoor; • newspaper and magazine publishers, national and regional advertising agencies, executive search firms and search and selection firms that carry classified advertising, many of whom have developed, begun developing or acquired new media capabilities, such as recruitment websites, or have partnered with generalist job boards; 11 Table of Contents • specialized services focused specifically on the industries we service, such as FT.com, Doximity, Upwork and JobServe; • new and emerging competitors with new business models and products; • our customers, who seek to recruit candidates directly by using their own resources, including corporate websites; and • general business sites and print publications, as well as technology news and information community sites, such as Google News, Digg.com and Reddit.com. The principal elements of competition in our markets include brand awareness and reputation, product functionality, design, price, customer service, market share and marketing. We believe that our unique product offerings position us well in the marketplace. However, a number of companies in the industry have greater financial resources, more comprehensive product lines, broader market presence, longer standing relationships with customers, longer operating histories, stronger brand recognition, and greater marketing resources than we have. Intellectual Property We seek to protect our intellectual property through a combination of service marks, trademarks, copyrights and other methods of restricting disclosure of our proprietary or confidential information. As we continue to develop and improve our technology, patents may become a more significant part of our intellectual property in the foreseeable future. We generally enter into confidentiality agreements with our employees, consultants and vendors. We also seek to control access to and distribution of our technology, documentation and other proprietary information. We generally pursue the registration of the material service marks we own in the United States and internationally, as applicable. We own a number of registered, applied for and/or unregistered trademarks and service marks that we use in connection with our businesses. Our trademarks and registered trademarks in the United States and other countries include DICE, and CLEARANCEJOBS.COM. Registrations for trademarks may be maintained indefinitely, as long as the trademark owner continues to use and police the trademarks and timely renews registrations with the applicable governmental office. Although we generally pursue the registration of our material service marks and other material intellectual property we own, where applicable, we have trademarks and/or service marks that have not been registered in the United States and/or other jurisdictions. We have not registered the copyrights in the content of our websites and do not intend to register such copyrights. The steps we have taken to protect our copyrights, trademarks, service marks and other intellectual property may not be adequate, and third parties could infringe, misappropriate or misuse our intellectual property. If this were to occur, it could harm our reputation and affect our competitive position. See Item 1A. “Risk Factors—Misappropriation or misuse of our intellectual property could harm our reputation, affect our competitive position and cost us money.” Investments DHI has made no significant investments through acquisitions during the past five years. See also Note 7 of the notes to consolidated financial statements. Regulation and Legislation User Privacy We collect, store and use a variety of information about both professionals and customers on our website properties. Within the websites, the information that is collected, stored, and used has been provided by the professionals or customers with the intent of making it publicly available. We do not ask professionals or customers to supply social security numbers. Our business data is separated from website operations by a variety of security layers including network segmentation, physical and logical access controls, firewalls, and many industry-accepted, best-practice information security controls. We post our privacy policies on our websites so that our users can access and understand the terms and conditions applicable to the collection, storage, and use of information collected from users. Our privacy policies also disclose the types of information we gather, how we use it and how a user can correct or change their information. Our privacy policies also explain the circumstances under which we share this information and with whom. Professionals who register for our websites have the option of indicating specific areas of interest in which they are willing to receive offers via email. These offers contain content created either by us or our third-party partners. To protect confidential information and to comply with our obligations to our users, we impose constraints on our customers to whom we provide user data, which are consistent with our commitments to 12 Table of Contents our users. Additionally, when we provide lists to third parties, including to our advertiser customers, it is under contractual terms that are consistent with our obligations to our users and with applicable laws and regulations. U.S. Government Regulation We are subject to a number of government regulations that regulate our products and online service offerings, including content, copyright infringement, user privacy, advertising and promotional activities, taxation, access charges, liability for third-party activities, and jurisdiction. In addition, federal, state, and local governmental organizations have enacted and also are considering, and may consider in the future, other legislative and regulatory proposals that would regulate the Internet. Areas of potential regulation include, but are not limited to, libel, electronic contracting, pricing, quality of products and services, and intellectual property ownership. There are a number of U.S. laws and regulations that affect companies conducting business online. Certain laws regulate commercial electronic messages. Such laws frequently provide a right on the part of the recipient to request the sender to stop sending messages, and establish penalties for the sending of email messages that are not compliant with such laws, including messages that are intended to deceive the recipient as to source or content or that do not provide an electronic method of informing the sender of the recipient’s decision not to receive further commercial emails. We are subject to federal, state and local laws and regulations regarding privacy and protection of data. Our privacy policies and terms of use agreements describe our practices concerning the use, storage, transmission and disclosure of user data. Any failure by us to comply with our privacy policies or terms of use agreements, or privacy-related laws and regulations, could result in proceedings against us by governmental authorities or others, which could harm our business. The interpretation of these privacy and data protection laws and various regulators’ approach to their enforcement, as well as our products and services, continue to evolve over time. We face the risk that these laws may be interpreted and applied in conflicting ways in different jurisdictions or in a manner that is not consistent with our current data protection practices, or that new and unclear laws will be enacted. There currently are a number of proposals pending before federal, state, and local legislative and regulatory bodies. There are laws as well as a number of legislative proposals in the United States, at both the federal and state level, that impose obligations in areas affecting our business, or may do so in the future. For example, California adopted the California Consumer Privacy Act of 2018, or CCPA, which became effective on January 1, 2020. The CCPA has been characterized as the first privacy statute of its kind to be enacted in the United States as it includes significant penalties for non-compliance, as well as creating the right for consumers to bring a private action in certain circumstances. More recently, on November 3, 2020, California enacted the California Privacy Rights Act ("CPRA"). The CPRA, which went into effect on January 1, 2023, expands upon the protections provided by the CCPA, including new limitations on the sale or sharing of consumers’ personal information, and the creation of a new state agency to enforce the CPRA’s protections. Complying with these varying requirements could cause us to incur additional costs and change our business practices. Further, any failure by us to adequately protect our users’ privacy and data could result in a loss of confidence in our products and services and, ultimately, in a loss of customers, which could have an adverse effect on our business, and could subject the Company to penalties or liability. Furthermore, favorable laws may change, including, for example, in the United States where the FCC voted to repeal net neutrality regulations. Given uncertainty around these rules, including changing interpretations, amendments or repeal, coupled with potentially significant political and economic power of local network operators, we could experience discriminatory or anti-competitive practices that could impede our growth, cause us to incur additional expense, or otherwise negatively affect our business. The application of laws and regulations affecting online business to our products and services is often unclear, and these laws and how various jurisdictions interpret these laws continue to evolve. Compliance with these laws may be expensive and could harm our business. Any failure by the Company to comply with these laws and regulations could result in actions against us by governmental authorities or other entities, which could harm our business, including governmental or court orders that we cease certain activities. See Item 1A. Risk Factors "Our business is subject to U.S. government regulation of the Internet and taxation, which may have a material adverse effect on our business” and “Capacity constraints, systems failures or breaches of our network security could materially and adversely affect our business. If we fail to manage our technical operations infrastructure, our existing customers may experience services outages, and our new customers may experience delays in the deployment of our solution.” 13 Table of Contents Human Capital Disclosures Employees As of December 31, 2022, we had approximately 530 employees. Our employees are not represented by any union and are not the subject of a collective bargaining agreement. We believe that we have a good relationship with our employees and experienced increased engagement among team members during the year as evidenced by results from our annual engagement survey and below average turnover rate. We offer flexible work schedules, abbreviated hours on Fridays, flexible paid time off and remote working opportunities for all team members to promote work/life balance. In 2022, we introduced free teletherapy through Talkspace and closed offices for multiple workdays to allow employees to focus on their mental health. We have made it a priority to support our employees as they work from home, including increased flexibility surrounding personal and family commitments and a quarterly work from home stipend. The Company budgets for professional development training by both functional group and at the individual level each year. Professional development could include attending an online class to learn a new skillset, attending a conference or finding opportunities within the organization to grow skillsets. Additionally the Company has a tuition reimbursement program designed to provide employees with financial assistance in continuing their education. Diversity Inclusion and diversity remain key priorities for the Company. The diverse backgrounds, skills and experiences of executive officers, board members, and employees are important to both our values and performance. We believe that a diverse board, management team and workforce that is reflective of our diverse customer base will position us to better understand customers’ wants and needs, which we believe drives our ability to deliver superior customer value and successfully innovate. Diverse perspectives amongst our management team and board allows them to evaluate issues through different experiences and perspectives and help guide the Company in a thoughtful way. The Company’s internal Diversity, Equity and Inclusion program is based on promoting a culture of inclusivity, and includes Allyship training and Unconscious Bias training, which teaches team members how to better support marginalized groups. Additionally, managers participate in Inclusive Leadership trainings. The Company has employee resource groups led by employees of underrepresented populations to share experiences and have a shared space. The internal policies of the Company encourage hiring diverse candidates and our culture is inclusive, ensuring that all team members are treated fairly and equally, amongst other things. In 2021, the Company introduced inclusive fertility benefits which support all paths to parenthood. Information Availability Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxy and information statements and other material information concerning us are available free of charge on the Investors page of our website at www.dhigroupinc.com. Our reports filed with the SEC are also available free of charge by visiting http://www.sec.gov. 14 Table of Contents