What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2025-02-12 compared with 2024-02-08 · 127 added, 112 removed, 330 unchanged (42% of the section changed)

7 unchanged sentences

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.

DHI’s brands, ClearanceJobs and Dice, 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.

2 unchanged sentences

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.

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.

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.

During the third quarter of 2023, the Company sold a portion of its ownership in eFC reducing its total interest in eFC from 40% to 10%.

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.

We have been in the recruiting and career development business for almost 35 years.

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

The ClearanceJobs and Dice 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.

On January 13, 2025, we announced a strategic reorganization, restructuring our operations into two distinct divisions.

This reorganization aims to provide dedicated leadership for each brand — ClearanceJobs and Dice — to foster a unified vision and strategy tailored to their respective market dynamics.

In connection with the reorganization, we are realigning our reporting structure and will reevaluate our operating segments.

Recent Developments

Director Appointment

On July 26, 2023, Joseph Massaquoi, Jr.

was appointed as a member of the Board of Directors of the Company and a member of the Audit Committee.

Chief Financial Officer Transition

On August 7, 2023, Kevin Bostick resigned from his position as the Chief Financial Officer of the Company, effective September 1, 2023.

Bostick served the Company through December 31, 2023 in order to help support a transition.

Accordingly, on August 28, 2023 the Board of Directors of the Company appointed Art Zeile, the Company’s current President

and Chief Executive Officer, to also serve as Interim Chief Financial Officer while the Company searched for a permanent Chief Financial Officer.

On October 25, 2023, the Board of Directors of the Company appointed Raime Leeby Muhle as the Company’s Chief Financial Officer, effective December 4, 2023.

Leeby Muhle will have overall responsibility for the Company’s financial organization, including financial planning, accounting, financial reporting, investor relations, treasury, internal audit and tax matters.

Chief Financial Officer Transition and Appointment and Chief Legal Officer Appointment

Raime Leeby Muhle resigned from her position as Chief Financial Officer of the Company, effective November 14, 2024.

Leeby Muhle served the Company through December 31, 2024 in order to help support a transition.

On November 14, 2024 the Board of Directors of the Company appointed Greg Schippers, the Company’s Vice President of Finance and Controller, to also serve as Interim Chief Financial Officer.

On January 28, 2025, the Board of Directors removed the interim title and appointed Mr.

Schippers Chief Financial Officer.

Also on January 28, 2025, Mr.

Jack Connolly was appointed the Company's Chief Legal Officer.

Connolly previously served as the Company's General Counsel.

During January 2025, the Company announced an organizational restructuring intended to streamline its operations, drive business objectives, and reduce operating costs.

This includes a reduction of the Company’s current workforce by approximately 8% primarily by consolidating team structure and mid-level management within product development.

As a result of the restructuring, the positions of Chief Revenue Officer and Chief Marketing Officer were eliminated.

Stock Repurchase Plan

On January 21, 2025, the Company announced that its Board of Directors approved a new stock repurchase program that permits the purchase of up to $5.0 million of the Company's common stock through February 2026.

The number, price, structure, and timing of the repurchases, if any, will be at our sole discretion and future repurchases will be evaluated by us depending on market conditions, liquidity needs, restrictions under the agreements governing our indebtedness, and other factors.

Share repurchases may be made in the open market or in privately negotiated transactions.

The repurchase authorization does not oblige us to acquire any particular amount of our common stock.

The Board of Directors may suspend, modify, or terminate the repurchase program at any time without prior notice.

Section 382 Rights Plan

On January 28, 2025, the Company adopted a shareholder rights plan designed to protect stockholder value by preserving the availability of the Company’s net capital loss carryforwards (“Carryforwards”) and other tax attributes under the Internal Revenue Code of 1986, as amended (the “Code”) (such plan, the “Section 382 Rights Plan”).

The Section 382 Rights Plan aims to preserve the Company's Carryforwards by creating a disincentive for any stockholder to accumulate beneficial ownership of 4.99% or more of the Company’s outstanding common stock, or to further accumulate the Company’s common stock if the stockholder's beneficial ownership already exceeds 4.99%, in each case without the approval of the Company’s Board of Directors.

Any stockholder who beneficially owned 4.99% or more of the outstanding shares of the Company's common stock as of market close on January 28, 2025, when the Company first publicly announced adoption of the Section 382 Rights Plan, will not trigger the Section 382 Rights Agreement ("Rights Agreement") so long as that stockholder does not acquire beneficial ownership of any additional shares of common stock at a time when they still beneficially own 4.99% or more of such common

stock, subject to certain exceptions as set forth in the Rights Agreement.

Any such stockholder will not be permitted under the Section 382 Rights Plan to acquire any additional shares without approval of the Board of Directors.

The Board of Directors also has the authority to exempt certain stockholders and acquisitions from triggering the Section 382 Rights Plan.

In connection with its adoption of the Section 382 Rights Plan, the Board of Directors declared a dividend of one "right" under the Section 382 Rights Plan for each outstanding share of the Company’s common stock.

The dividend will be made to stockholders of record as of the close of business on February 7, 2025.

Any shares of the Company’s common stock issued after the record date will be issued together with a right.

The rights will initially trade with the Company’s common stock and will generally become exercisable only if a person (or any persons acting as a group) acquires 4.99% or more of the Company’s outstanding common stock.

If the rights become exercisable, all holders of rights (other than any triggering person) will be entitled to acquire additional shares of common stock at a 50% discount.

The rights will expire on January 28, 2028, provided that if the Company’s stockholders do not ratify the Section 382 Rights Plan at the Company's 2025 Annual Meeting of Stockholders, the rights will expire at 5:00 p.m.

eastern time on the day following the certification of the voting results of such meeting.

The rights may also expire on an earlier date upon the occurrence of certain events, including a determination by the Board of Directors that the Section 382 Rights Plan is no longer necessary or desirable for the preservation of the Company's Carryforwards or that no Carryforwards may be carried forward.

Please see Item 8 "Notes to Consolidated Financial Statements - 13.

Equity Transactions (Preferred Stock Purchase Rights)" for more information on the rights.

Our Revenues and Expenses

2 unchanged sentences

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.

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

The tables below detail this customer data.

3 unchanged sentences

December 31, 2024 December 31, 2023

Dice 5,492 6,311 (819) (13)%

ClearanceJobs 1,949 2,055 (106) (5)%

Dice 4,711 5,492 (781) (14)%

Average Annual Revenue per Recruitment Package Customer (1)

FY 2024 FY 2023 Increase (Decrease) Percent

Dice $ 15,631 $ 14,664 $ 967 7%

ClearanceJobs $ 24,308 $ 21,164 $ 3,144 15%

Dice $ 16,251 $ 15,631 $ 620 4%

(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 and then annualized to reflect 12 months.

ClearanceJobs had 1,949 recruitment package customers as of December 31, 2024 compared to 2,055 as of December 31, 2023, a 5% decrease, and average revenue per recruitment package customer increased 15%.

The decrease in recruitment package customers was due to lower renewals for ClearanceJobs' smaller customers as uncertainty continued around the timing of federal defense contracting.

The increase in average annual revenue per recruitment package customer for ClearanceJobs was due to continued high demand for professionals with government clearance and consistent product releases and enhancements driving activity on the site, along with lower renewals for its smaller customers.

Dice had 4,711 recruitment package customers as of December 31, 2024, which was a decrease of 781, or 14%, year over year while average revenue per recruitment package customer for Dice increased 4% for the year ended December 31, 2024.

The decrease in recruitment package customers was due to macroeconomic conditions causing customer counts to decline while the average annual revenue per recruitment package customer increased driven by strong retention rates as our larger recurring customers continue to renew with Dice.

ClearanceJobs had 2,055 recruitment package customers as of December 31, 2023 compared to 2,064 as of December 31, 2022, a less than 1% decrease, and average revenue per recruitment package customer increased 11%.

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.

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

7 unchanged sentences

(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, 2023 decreased $9.2 million from December 31, 2022.

The decrease is primarily due to macroeconomic conditions causing lower demand for the Company's services.

Deferred revenue at December 31, 2024 was $45.5 million, a decrease of $4.5 million, or 9%, from December 31, 2023.

The decrease in deferred revenue was due to macroeconomic conditions continuing to slow hiring of technologists.

Backlog at December 31, 2024 was $111.3 million, an increase of $3.2 million, or 3%, from December 31, 2023.

The increase is primarily due to the Company's continued 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.

5 unchanged sentences

Product Releases

Dice Premium Enhanced Company Profile, Dice Remote and Company Preferences, Dice Invite to Apply, Dice Matchscore on Jobs, Dice Connections, SMS Notifications, Company Search Dice Employer Multi-Factor Authentication, Revamped technologist onboarding, New Job Page, Dice New Job Apply Flow, Dice TalentSearch Time Zone Search, Dice TalentSearch Auto Talent Alerts, Dice iOS App Messaging

ClearanceJobs Comments, ClearanceJobs Expressed Interest, ClearanceJobs Enhanced Employer Profile, ClearanceJobs Mobile App, ClearanceJobs Live Stream ClearanceJobs Company Page, ClearanceJobs Multi-Factor Authentication, ClearanceJobs Live Video, ClearanceJobs Scheduled Broadcast Messages

ClearanceJobs Live, ClearanceJobs Pulse Newsfeed ClearanceJobs Comments, ClearanceJobs Expressed Interest, ClearanceJobs Enhanced Employer Profile, ClearanceJobs Mobile App, ClearanceJobs Live Stream

Dice Recruiter App, Easy Post Integration, Discover Companies, TopResume Integration, Dice Privacy & Trust Center Dice Premium Enhanced Company Profile, Dice Remote and Company Preferences, Dice Invite to Apply, Dice Matchscore on Jobs, Dice Connections, SMS Notifications, Company Search

Other material factors that may affect our results of operations include, but are not limited to, our ability to attract qualified professionals that become engaged with our websites and our ability to attract customers with relevant job opportunities.

4 unchanged sentences

Personnel costs consist of salaries, benefits, and incentive compensation for our employees, including commissions for salespeople.

Personnel costs are categorized in our statement of operations based on each employee’s principal function.

Personnel costs are categorized in our statements of operations based on each employee’s principal function.

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

1 unchanged sentence

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.

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.

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.

In many cases, we could reasonably have used different accounting policies and

In many cases, we could reasonably have used different accounting policies and estimates.

In some cases, changes in the accounting estimates are reasonably likely to occur from period to period.

1 unchanged sentence

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.

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

We determine whether the carrying value of recorded goodwill is impaired on an annual basis or more frequently if indicators of potential impairment exist.

21 unchanged sentences

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

Indefinite-Lived Acquired Intangible Assets

The indefinite-lived acquired intangible assets include the Dice trademarks and brand name.

Indefinite-Lived Acquired Intangible Asset

The indefinite-lived acquired intangible asset includes the Dice trademarks and brand name.

The Dice trademark, trade name and domain name is one of the most recognized names of online technology recruiting and career development.

Since Dice’s inception in 1991, the brand has been recognized as a leader in recruiting and career development services for technology and engineering professionals.

Since Dice’s inception in 1991, the brand has been recognized as a leader in recruiting and career development services for technology and

engineering professionals.

Currently, the brand is synonymous with the most specialized online marketplace for industry-specific technologists.

The brand has a significant presence in online recruiting and career development services.

Considering the recognition and the awareness of the Dice brand in the talent acquisition and staffing services market, Dice’s long operating

history and the intended use of the Dice brand, the remaining useful life of the Dice trademark, trade name and domain name was determined to be indefinite.

Considering the recognition and the awareness of the Dice brand in the talent acquisition and staffing services market, Dice’s long operating history and the intended use of the Dice brand, the remaining useful life of the Dice trademark, trade name and domain name was determined to be indefinite.

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

9 unchanged sentences

In the October 1, 2024 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%, which is based on comparable industry licensing agreements and the profitability attributable to the Dice trademarks and brand name, and a discount rate of 16.6%.

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.

The determination of whether or not indefinite-lived acquired intangible asset has 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 asset.

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, revenues, operating expense trends and capital expenditure requirements.

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

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

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

22 unchanged sentences

Total operating expenses 135,601 145,590 (9,989)

Other operating income:

Proceeds from settlement — 2,061 (2,061)

Operating income (loss) $ 6,288 $ 5,560 $ 3,145

Operating income $ 6,325 $ 6,288 $ 37

For the year ended December 31,

8 unchanged sentences

Total operating expenses 95.5 % 95.9 %

Other operating income:

Proceeds from settlement — % 1.4 %

Operating income (loss) 4.1 % 3.7 %

Operating income 4.5 % 4.1 %

Comparison of Years Ended December 31, 2024 and 2023

1 unchanged sentence

(in thousands, except percentages)

$ 102,584 $ 106,957 $ (4,373) (4.1) %

ClearanceJobs

$ 54,143 $ 50,348 $ 3,795 7.5 %

Dice 87,783 101,530 (13,747) (13.5) %

Total revenues 1

(1) Includes Dice and Career Events.

We experienced an increase in revenue of $2.2 million, or 1.5%.

Revenue at Dice decreased by $4.4 million, or 4.1%, compared to the same period of 2022 as bookings performance in 2022 delivered revenue for Dice early in 2023 but macroeconomic conditions throughout 2023 drove lower new business activity and lower activity with Dice's non-annual products.

$ 141,926 $ 151,878 $ (9,952) (6.6) %

(1) We had previously disclosed that career events were recorded within Dice.

Career events have been reclassified between ClearanceJobs and Dice based on the nature of the event for the years ended December 31, 2024 and 2023.

We experienced a decrease in revenue of $10.0 million, or 6.6%.

Revenues for ClearanceJobs increased by $3.8 million, or 7.5%, as compared to the same period of 2023, driven by continued high demand for professionals with government clearance and consistent product releases and enhancements driving activity on the site.

Revenue at Dice decreased by $13.7 million, or 13.5%, compared to the same period of 2023 due to macroeconomic conditions continuing to drive lower renewal rates, lower new business activity and lower activity with Dice's non-annual products.

Cost of Revenues

3 unchanged sentences

Percentage of revenues 14.3 % 13.0 %

Cost of revenues increased by $2.2 million, or 12.4%, driven by an increase of $1.2 million from higher compensation related costs and $1.0 million in operational costs, primarily related to the amortization of cloud computing costs.

Cost of revenues increased by $0.4 million, or 2.2%, driven by lower capitalized labor of $0.7 million, which increases operating expenses, and an increase of $0.5 million in operational costs, primarily related to professional fees and amortization of cloud computing costs.

The increases were partially offset by a $0.8 million decrease in compensation related costs due to lower headcount.

Product Development Expenses

3 unchanged sentences

Percentage of revenues 13.3 % 11.7 %

Product development expenses increased $0.1 million, or 0.6%, driven by a decrease of $1.2 million in compensation related costs, primarily related to lower headcount and bonus expense, which was offset by lower capitalized labor of $1.3 million as compared to the prior year period, which increases operating expenses.

Product development expenses increased $1.1 million, or 6.2%, driven by lower capitalized labor of $2.4 million, which increases operating expenses.

This increase was partially offset by a $1.3 million decrease in compensation related costs, primarily related to lower headcount.

Sales and Marketing Expenses

4 unchanged sentences

Sales and marketing expenses decreased $10.0 million, or 17.5%, from the same period in 2023.

The decrease was primarily driven by a $3.0 million decrease in discretionary marketing expenses, which was partially offset by an increase of $0.8 million in operational costs, primarily discretionary marketing expenses.

The decrease was driven by a $7.0 million decrease in compensation related costs, including lower commissions and headcount, $2.0 million in operational costs, including credit card fees, consulting fees, and sales performance incentives, and $1.1 million in discretionary marketing expenses.

General and Administrative Expenses

4 unchanged sentences

General and administrative costs decreased $1.3 million or 4.0%, from prior year.

The decrease was driven by a $1.9 million decrease in compensation related costs, primarily due to lower bonus expense in 2023, and a decrease of $1.0 million in other operating costs including recruiting, software, and insurance costs.

Year Ended December 31, Decrease Percent

The decrease was driven by a $1.9 million decrease in compensation related costs, primarily related to stock-based compensation and lower headcount, and $0.4 million in software subscriptions.

The decrease was partially offset by a $1.0 million increase in operational costs, primarily professional fees.

Year Ended December 31, Increase Percent

(in thousands, except percentages)

1 unchanged sentence

Percentage of revenues 12.7 % 11.1 %

Depreciation expense decreased $0.6 million or 3.3% from the same period in 2022.

The decrease was driven by the timing of assets being placed into service.

Restructuring

Year Ended December 31, Increase Percent

(in thousands, except percentages)

Depreciation expense increased $1.1 million or 6.2% from the same period in 2023.

The increase was driven by the high fixed asset purchases during 2023, which had a full year of depreciation in 2024.

Restructuring

Percentage of revenues 1.6 % — %

During 2023, the Company recorded restructuring charges of $2.4 million as part of an organizational restructuring intended to streamline its operations, drive business objectives, reduce operating expenses and improve operating margins.

The restructuring included a reduction of the Company’s then-current workforce by approximately 10%.

Proceeds from settlement

Year Ended December 31, Decrease Percent

(in thousands, except percentages)

Proceeds from settlement $ — $ 2,061 $ (2,061) (100.0) %

Restructuring $ 1,111 $ 2,417 $ (1,306) (54.0) %

Percentage of revenues 0.8 % 1.6 %

During the fourth quarter of 2022 the Company received proceeds from a legal settlement of $2.1 million.

During 2024 and 2023, the Company recorded restructuring charges of $1.1 million and $2.4 million, respectively, as part of organizational restructurings intended to streamline its operations, drive business objectives, reduce operating expenses and improve operating margins.

The restructurings included a reduction of the Company’s then-current workforce by approximately 7% and 10% for years ended December 31, 2024 and 2023, respectively.

Operating Income (Loss)

Year Ended December 31, Increase Percent

Year Ended December 31, Decrease Percent

(in thousands, except percentages)

3 unchanged sentences

Operating income for the year ended December 31, 2024 was $6.3 million, a margin of 4.5%, compared to operating income of $6.3 million, a margin of 4.1%, for the same period in 2023.

The increase in operating income and improved percentage margin was driven by higher revenues and a decrease in operational costs, as discussed above.

The increase in operating income and higher percentage margin was driven by lower operating expenses, primarily sales and marketing, partially offset by lower revenue in the current year period, as discussed above.

Income from equity method investment

3 unchanged sentences

Percentage of revenues 0.2 % 0.3 %

During the years ended December 31, 2023 and 2022, the Company recorded $0.5 million and $1.6 million, respectively, of income related to its proportionate share of eFC's net income.

During the years ended December 31, 2024 and 2023, the Company recorded $0.2 million and $0.5 million, respectively, of income related to its proportionate share of eFinancialCareers's ("eFC") net income.

The Company records its proportionate share of eFC's net income three months in arrears.

See note 7 of the notes to consolidated financial statements for additional information.

Impairment of investment

Gain on investments

Year Ended December 31, Decrease Percent

(in thousands, except percentages)

Impairment of investment $ 300 $ 2,300 $ (2,000) (87.0) %

Gain on investments $ — $ 614 $ (614) (100.0) %

Percentage of revenues — % 0.4 %

During the years ended December 31, 2023 and 2022, the Company recognized a $0.3 million and $2.3 million, respectively, loss related to the impairment of an investment.

During the year ended December 31, 2023, the Company recognized a $0.6 million gain from a partial sale of its 40% common share interest in eFC.

See note 7 of the notes to consolidated financial statements for additional information.

Gain on investments

Impairment of investment

Year Ended December 31, Increase Percent

(in thousands, except percentages)

Gain on investments $ 614 $ 320 $ 294 91.9 %

Impairment of investment $ 400 $ 300 $ 100 33.3 %

Percentage of revenues 0.3 % 0.2 %

During the year ended December 31, 2023, the Company recognized a $0.6 million gain from a partial sale of its 40% common share interest in eFC.

During the year ended December 31, 2022, the Company recognized a $0.3 million gain from the sale of its 40% common share interest in Rigzone.

During the years ended December 31, 2024 and 2023, the Company recognized losses of $0.4 million and $0.3 million, respectively, related to the impairment of an investment.

See note 7 of the notes to consolidated financial statements for additional information.

Interest Expense and Other

Year Ended December 31, Increase Percent

Year Ended December 31, Decrease Percent

(in thousands, except percentages)

1 unchanged sentence

Percentage of revenues 2.3 % 2.3 %

Interest expense and other increased by $1.9 million, or 120.4%, from the same period in 2022 due to higher debt outstanding on our revolving credit facility during 2023 and higher interest rates.

Interest expense and other decreased by $0.3 million, or 8.1%, from the same period in 2023, primarily due to lower debt outstanding on our revolving credit facility during the current period.

Year Ended December 31,

1 unchanged sentence

Income before income taxes $ 2,950 $ 3,622

Income tax expense (benefit) 131 (579)

Income tax expense 2,697 131

Effective tax rate 91.4 % 3.6 %

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

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

Year Ended December 31,

9 unchanged sentences

Change in valuation allowance (78) 18,158

Other 12 (50)

Income tax expense (benefit) $ 131 $ (579)

Income tax expense $ 2,697 $ 131

Our effective income tax rate was 91.4% and 3.6% for the years ended December 31, 2024 and 2023, respectively.

The 2023 tax rate differed from the federal statutory rate primarily because of permanent book/tax differences in basis related to the sale of investments, the expiration of a capital loss carryforward, a tax benefit related to the vesting of stock-based compensation, deduction limitations on executive compensation, tax credits for research and development, and an increase in the valuation allowance for capital loss carryforwards.

The 2022 tax rate differed from the federal statutory rate primarily because of a tax benefit related to the vesting of stock-based compensation, tax credits for research and development, and an increase in the valuation allowance associated with an investment.

The 2024 tax rate differed from the federal statutory rate primarily due to the tax impact of stock-based compensation awards, state taxes, deduction limitations on executive compensation, and tax credits for research and development.

The 2023 tax rate differed from the federal statutory rate primarily because of permanent book/tax differences in basis related to the sale of investments, the expiration of a capital loss carryforward, the tax impact of stock-based compensation awards, deduction limitations on executive compensation, tax credits for research and development, and an increase in the valuation allowance for capital loss carryforwards.

Earnings per Share

7 unchanged sentences

Diluted earnings per share was $0.01 and $0.08 for the years ended December 31, 2024 and 2023, respectively.

The lower 2023 earnings per share was driven by slightly lower net income, partially offset by lower diluted shares outstanding.

The lower 2024 earnings per share was driven by higher tax expense, primarily the tax impacts of stock-based compensation.

Non-GAAP Financial Measures

5 unchanged sentences

Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP metrics used by management to measure operating performance.

Management uses Adjusted EBITDA and Adjusted EBITDA Margin as performance measures for internal monitoring and planning, including preparation of annual budgets, analyzing investment decisions and evaluating profitability and performance comparisons between us and our competitors.

and performance comparisons between us and our competitors.

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

15 unchanged sentences

2024 2023 2022

Reconciliation of Net Income (loss) to Adjusted EBITDA:

Net income (loss) $ 3,491 $ 4,176 $ (29,742)

Reconciliation of Net Income to Adjusted EBITDA:

Net income $ 253 $ 3,491 $ 4,176

Interest expense 3,200 3,482 1,580

5 unchanged sentences

Gain on investments — (614) (320)

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

Impairment of investment 400 300 2,300

Severance and related costs 1,167 445 1,969

Loss on discontinued operations, net of tax — — 29,340

Severance, professional fees and related costs 1,842 1,167 445

Restructuring 1,111 2,417 —

Other — — (80)

Adjusted EBITDA $ 35,313 $ 36,254 $ 30,950

Reconciliation of Operating Cash Flows to Adjusted EBITDA:

Net cash provided by operating activities $ 21,345 $ 36,035 $ 28,581

Reconciliation of Cash Flows from Operating Activities to Adjusted EBITDA:

Net cash flows from operating activities $ 21,045 $ 21,345 $ 36,035

Interest expense 3,200 3,482 1,580

5 unchanged sentences

Change in deferred revenue 4,515 893 (4,718)

Discontinued operations results — — (3,593)

Severance and related costs 1,167 445 1,969

Severance, professional fees and related costs 1,842 1,167 445

Restructuring 1,111 2,417 —

5 unchanged sentences

Revenues $ 141,926 $ 151,878 $ 149,680

Net income (loss) $ 3,491 $ 4,176 $ ( 29,742 )

Net income (loss) margin (1)

2 % 3 % (25) %

Net income $ 253 $ 3,491 $ 4,176

Net income margin (1)

Adjusted EBITDA $ 35,313 $ 36,254 $ 30,950

18 unchanged sentences

Operating Activities

Cash flows from operating activities is driven by earnings and is dependent on the amount and timing of billings and cash collections from our customers.

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.

Cash flow from operating activities is driven by earnings and is dependent on the amount and timing of billings and cash collections from our customers.

Cash flow 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 $21.0 million and $21.3 million for the years ended December 31, 2024 and 2023, respectively, a decrease of $0.3 million.

Cash inflow from operations is driven by earnings and is dependent on the amount and timing of payments to vendors and employees and billings to and cash collections from our customers.

Cash provided by operating activities during the year ended December 31, 2023 decreased as compared to

the prior year due to the amount and timing of bonus payments, of payments to vendors, and of billings to and cash collections from our customers.

Cash provided by operating activities during the year ended December 31, 2024 approximated the prior year as decreases in billings and cash collections from customers were offset by reductions to wages and payments to vendors.

Investing Activities

During the year ended December 31, 2024, cash used in investing activities was $13.9 million compared to $15.3 million of cash used in investing activities during the year ended December 31, 2023.

Cash used in investing activities during the year ended December 31, 2024 is comprised of $13.9 million of purchases of fixed assets.

Cash used in investing activities during the year ended December 31, 2023 is comprised of $20.3 million of purchases of fixed assets, partially offset by $5.0 million of cash received from sale of investment.

Cash used in investing activities during the year ended December 31, 2022 is primarily comprised of $18.0 million of purchases of fixed assets, which is primarily comprised of capitalized development costs as the Company continues to invest in its products.

Included in fixed asset purchases for the years ended December 31, 2024 and 2023 was $13.9 million and $20.3 million, respectively, of capitalized development costs, which includes capitalized software costs and website development costs.

Financing Activities

Cash used in financing activities during the year ended December 31, 2023 was $4.8 million primarily due to cash uses of $12.8 million, net, related to share repurchases, partially offset by $8.0 million of net proceeds on long-term debt.

Cash used during the year ended December 31, 2022 was $16.9 million primarily due to cash uses of $23.4 million, net, related to share repurchases and $0.5 million from financing costs paid, partially offset by $7.0 million of net proceeds on long-term debt.

Cash used in financing activities during the year ended December 31, 2024 was $7.6 million primarily due to cash uses of $1.6 million, net, related to share repurchases and $6.0 million of net payments on long-term debt.

Cash used during the year ended December 31, 2023 was $4.8 million primarily due to cash uses of $12.8 million, net, related to share repurchases, partially offset by $8.0 million of net proceeds on long-term debt.

Financings and Capital Requirements

Credit Agreement

We have a $100 million revolving credit facility, which matures June 2027, with $38.0 million of outstanding borrowings on the facility at December 31, 2023, leaving $62.0 million available for future borrowings, subject to the terms of the Credit Agreement.

We have a $100 million revolving credit facility, which matures June 2027, with $32.0 million of outstanding borrowings on the facility at December 31, 2024, leaving $56.0 million available for future borrowings, 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.

Borrowings under the Credit Agreement denominated in U.S.

21 unchanged sentences

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, 2023, the Company repurchased 1.7 million shares for $6.9 million.

As of December 31, 2023, the value of shares available to be purchased under the current plan was $4.8 million.

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

During February 2024, the stock repurchase program approved in February 2023 expired with a total of 1.4 million shares purchased for $5.2 million.

On January 21, 2025 the Company announced that its Board of Directors approved a new stock repurchase program that permits the purchase of up to $5.0 million of the Company's common stock through February 2025.

We anticipate capital expenditures in 2025 to be approximately $9 million to $11 million.

5 unchanged sentences

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 technologists and financial and security cleared professionals.

3 unchanged sentences

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.

What changed 10-K

Item 7. Management’s Discussion and Analysis