DHI GROUP, INC. 10-Q

Item 3. Quantitative and Qualitative Disclosures about Market Risk We have exposure to financial market risks, including changes in foreign currency exchange rates, interest rates, and other relevant market prices. Foreign Exchange Risk Our operations are conducted within the United States. As a result, our current operations are not subject to foreign exchange risk The Company's investment in eFC, as described in note 7 to the condensed consolidated financial statements, which is recorded under the equity method of accounting, subjects the Company to foreign exchange risk because the functional currency of eFC is the British Pound Sterling. Accordingly, the Company must translate its share of eFC's net income into United States dollars. The foreign currency translation related to the Company's share of eFC's net income is not expected to be significant. Interest Rate Risk We have interest rate risk primarily related to borrowings under our Credit Agreement. Borrowings under the Credit Agreement denominated in U.S. dollars bear interest, payable at least quarterly, at the Company’s option, at the SOFR or a base rate, plus a margin. Borrowings under the Credit Agreement denominated in pounds sterling, if any, bear interest at the SONIA rate plus a margin. The margin ranges from 2.00% to 2.75% on SOFR and SONIA loans and 1.00% to 1.75% on base rate loans, as determined by our most recent consolidated leverage ratio. As of March 31, 2024, we had outstanding borrowings of $41.0 million under our Credit Agreement. A hypothetical increase of 1.0% on these variable rate borrowings would increase our annual interest expense over the next 12 months by approximately $0.4 million, based on the balances outstanding for these borrowings as of March 31, 2024.