Item 7. Management’s Discussion and Analysis
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
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, the Securities Act and the Exchange Act. See also “Note Concerning Forward-Looking Statements.”
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 federal securities law.
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Overview
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, 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.
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.
We have been in the recruiting and career development business for 35 years. In connection with the organizational restructuring in the first quarter of 2025, as described in Note 5 to the accompanying consolidated financial statements, the Company changed its reportable segments to reflect the current operating structure. Accordingly, prior periods have been recast to reflect the current segment presentation. Management has organized its reportable segments based upon our internal management reporting and information provided to the chief operating decision maker "CODM" after the restructuring was completed.
The Company previously reported one segment, Tech-focused. Information previously reported in the Tech-focused segment has been separated into ClearanceJobs ("CJ") and Dice, and the Company has two reportable segments: ClearanceJobs and Dice. See Note 19 of the notes to the consolidated financial statements for additional disclosures.
Recent Developments
None.
Our Revenues and Expenses
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 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 ClearanceJobs and Dice 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
Change
Recruitment Package Customers: December 31, 2025 December 31, 2024
ClearanceJobs 1,775 1,949 (174) (9)%
Dice 4,132 4,711 (579) (12)%
Average Annual Revenue per Recruitment Package Customer (1)
FY 2025 FY 2024 Increase (Decrease) Percent
Change
ClearanceJobs $ 26,420 $ 24,308 $ 2,112 9%
Dice $ 15,795 $ 16,251 $ (456) (3)%
(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.
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ClearanceJobs had 1,775 recruitment package customers as of December 31, 2025 compared to 1,949 as of December 31, 2024, a 9% decrease, and average revenue per recruitment package customer increased 9%. 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 4,132 recruitment package customers as of December 31, 2025, which was a decrease of 579 , or 12%, and average annual revenue per recruitment package customer for Dice decreased 3% for the year ended December 31, 2025. The decrease in recruitment package customers and the average annual revenue per recruitment package customer was due to macroeconomic conditions causing customer counts and retention rates to decline.
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 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, 2025 December 31, 2024 Increase Percent Change
(in thousands, except percentages)
Deferred Revenue $ 39,939 $ 45,456 $ (5,517) (12) %
Contractual commitments not invoiced 59,632 59,294 338 1 %
Backlog 1
$ 99,571 $ 104,750 $ (5,179) (5) %
(1) Backlog consists of deferred revenue plus customer contractual commitments not invoiced representing the value of future services to be rendered under committed contracts.
Deferred revenue at December 31, 2025 was $39.9 million, a decrease of $5.5 million, or 12%, from December 31, 2024 and backlog at December 31, 2025 was $99.6 million, a decrease of $5.2 million, or 5%, from December 31, 2024. The decreases in deferred revenue and backlog are primarily due to macroeconomic conditions continuing to slow the hiring of technologists, causing lower demand for the Company's services.
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. Advertisements include various forms of rich media and banner advertising, text links, sponsorships, and custom content marketing solutions. Lead generation information utilizes advertising and other methods to deliver leads to a customer.
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, such as the innovative products in the table below.
Product Releases
2025 2024
ClearanceJobs Expanded Multi-Factor Authentication, ClearanceJobs Live Enhancements, Candidate Experience Personalization, AgileATS, Premium Candidate Experience ClearanceJobs Live, ClearanceJobs Pulse Newsfeed
Dice Technologist Dashboard, Easy Post for SmartRecruiters ATS, Candidate Home Feed Redesign, Dice Employer Experience Platform, Enhanced My Jobs, Detail Job View Dice Recruiter App, Easy Post Integration, Discover Companies, TopResume Integration, Dice Privacy & Trust Center
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. The more qualified professionals that use our websites, the more attractive our websites become to employers and advertisers, which in turn makes them more likely to become our customers, positively impacting our results of operations. If we are unable to continue to attract qualified professionals to engage with our websites, our customers may no longer find our services attractive,
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which could have a negative impact on our results of operations. Additionally, we need to ensure that our websites remain relevant in order to attract qualified professionals to our websites and to engage them in high-value tasks, such as posting resumes and applying to jobs.
The largest components of our expenses are personnel costs and marketing and sales expenditures. Personnel costs consist of salaries, benefits, and incentive compensation for our employees, including commissions for salespeople. 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.
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 GAAP. 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 estimates. In some cases, changes in the accounting estimates are reasonably likely to occur from period to period. Our actual results may differ from these estimates under different assumptions or conditions. We believe the following critical accounting estimates affect our more significant judgments used in the preparation of our consolidated financial statements.
Goodwill
The amount of goodwill as of December 31, 2025 allocated to the ClearanceJobs and Dice reporting units was $97.7 million and $22.9 million, respectively. 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. 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.
During the first quarter of 2025, in connection with the organizational restructuring, which is further described in Note 5 to the accompanying consolidated financial statements, the Company performed an interim impairment test of the Tech-focused reporting unit immediately prior to the restructuring, then allocated its goodwill into the two new reporting units, ClearanceJobs and Dice, based on the relative fair value of each reporting unit, and finally tested each reporting unit's goodwill for impairment. The interim impairment test performed immediately prior to the organizational restructuring indicated that the fair value of the Tech-focused reporting unit was substantially in excess of the carrying value as of the date of the organizational restructuring.
The prior Tech-focused reporting unit's goodwill of $128.1 million was allocated to ClearanceJobs and Dice based on their relative fair values, which resulted in goodwill for ClearanceJobs and Dice of $97.4 million and $30.7 million, respectively.
The impairment test performed immediately after the allocation for the ClearanceJobs reporting unit indicated that the fair value was substantially in excess of the carrying value as of the date of the organizational restructuring. The impairment test performed immediately after the allocation for the Dice reporting unit resulted in the Company recording an impairment charge of $7.8 million during the first quarter of 2025. The Dice projections utilized in the organizational restructuring impairment test included increasing revenues at rates approximating industry growth projections.
The annual impairment test for the ClearanceJobs and Dice reporting units are performed on October 1 of each year. The Company’s ability to achieve the projections used in the annual impairment tests may be impacted by, among other things, general market conditions, 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. If future cash flows that are attributable to the ClearanceJobs and Dice reporting units are not achieved, the Company could realize an impairment in a future period.
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The annual impairment test for the ClearanceJobs and Dice reporting units performed as of October 1, 2025 resulted in the fair value of the reporting units being in excess of each respective carrying value. Results for the ClearanceJobs and Dice reporting units for the fourth quarter of 2025 and estimated future results as of December 31, 2025 approximate the projections used in the October 1, 2025 analysis. As a result, the Company believes it is not more likely than not that the fair value of each reporting unit is less than each respective carrying value as of December 31, 2025. No impairment was recorded during the three month period ended December 31, and the years ended December 31, 2024 and 2023.
It is reasonably possible that changes in judgments, assumptions and estimates the Company made in assessing the fair value of goodwill could cause the Company to consider some portion or all of the goodwill of the reporting units to become impaired. In addition, a future decline in the overall market conditions, political instability, and/or changes in the Company’s market share could negatively impact the estimated future cash flows and discount rates used to determine the fair value of the reporting units and could result in an impairment charge in the foreseeable future.
The determination of whether or not goodwill has become impaired is judgmental in nature and requires the use of estimates and key assumptions, particularly assumed discount rates and projections of future operating results, such as forecasted revenues and earnings before interest, taxes, depreciation and amortization margins and capital expenditure requirements. Fair values are determined by using a combination of a discounted cash flow methodology and a market comparable method. The discounted cash flow methodology is based on projections of the amounts and timing of future revenues and cash flows, assumed discount rates and other assumptions as deemed appropriate. We consider factors such as historical performance, anticipated market conditions, operating expense trends and capital expenditure requirements. Additionally, the discounted cash flows analysis takes into consideration cash expenditures for product development, other technological updates and advancements to our websites and investments to improve our candidate databases. The market comparable method indicates the fair value of a business by comparing it to publicly traded companies in similar lines of business or to comparable transactions or assets. Considerations for factors such as size, growth, profitability, risk and return on investment are analyzed and compared to the comparable businesses and adjustments are made. A market value of invested capital of the publicly traded companies is calculated and then applied to the entity’s operating results to arrive at an estimate of value. 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
Dice Trademarks and Brand Name
As of December 31, 2025, the Company had an indefinite-lived acquired intangible asset of $14.2 million related to the Dice trademarks and brand name. The Dice trademarks and trade 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. 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.
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. 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.
During the third quarter of 2025, because of the continuing impacts of tariffs, DOGE, and artificial intelligence (AI) models lowering the demand for technology professionals, when combined with the demand impacts of uncertainty surrounding the U.S. federal budget during the quarter, and the subsequent shut-down of the U.S. government, the Company recorded an impairment charge of $9.6 million, reducing the carrying value of the Dice trademarks and brand name to $14.2 million.
The projections utilized in the October 1, 2025 analysis included lower revenues in the near term due to tariffs, DOGE initiatives, AI, and uncertainty surrounding the U.S. government budget and then increasing revenues at rates approximating industry growth projections. The Company’s ability to achieve the projections used in the October 1, 2025 analysis may be impacted by, among other things, 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. If
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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.
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 the intangible asset. If projections are not achieved, the Company could realize an impairment in the foreseeable future.
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Results of Operations
A discussion of our comparison between 2025 and 2024 is presented below. Management’s Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 11, 2025, which is available free of charge on the SEC’s website at www.sec.gov and our corporate website (www.dhigroupinc.com).
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, 2025 and 2024. Consolidated operating results in dollars and as a percent of revenue follows:
For the year ended December 31,
(in thousands) 2025 2024 2025 vs 2024
Revenues $ 127,826 $ 141,926 $ (14,100)
Operating expenses:
Cost of revenues 19,612 20,232 (620)
Product development 12,842 18,883 (6,041)
Sales and marketing 39,820 47,382 (7,562)
General and administrative 27,083 30,021 (2,938)
Depreciation 14,244 17,972 (3,728)
Amortization 333 — 333
Restructuring 6,486 1,111 5,375
Impairment of intangible assets 9,600 — 9,600
Impairment of goodwill 7,800 — 7,800
Impairment of right-of-use asset 1,379 — 1,379
Total operating expenses 139,199 135,601 3,598
Operating income (loss) $ (11,373) $ 6,325 $ (17,698)
For the year ended December 31,
2025 2024
Revenues 100.0% 100.0%
Operating expenses:
Cost of revenues 15.3 % 14.3 %
Product development 10.0 % 13.3 %
Sales and marketing 31.2 % 33.4 %
General and administrative 21.2 % 21.2 %
Depreciation 11.1 % 12.7 %
Amortization 0.3 % — %
Restructuring 5.1 % 0.8 %
Impairment of intangible assets 7.5 % — %
Impairment of goodwill 6.1 % — %
Impairment of right-of-use asset 1.1 % — %
Total operating expenses 108.9 % 95.5 %
Operating income (loss) (8.9) % 4.5 %
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Comparison of Years Ended December 31, 2025 and 2024
Revenues
Year Ended December 31, Increase (Decrease) Percent
Change
2025 2024
(in thousands, except percentages)
ClearanceJobs
$ 54,889 $ 54,143 $ 746 1 %
Dice 72,937 87,783 (14,846) (17) %
Total revenues $ 127,826 $ 141,926 $ (14,100) (10) %
We experienced a decrease in revenue of $14.1 million, or 10%. Revenues for ClearanceJobs increased by $0.7 million, or 1%, as compared to the same period of 2024, driven by continued demand for professionals with government clearance and consistent product releases and enhancements driving activity on the site. Revenue at Dice decreased by $14.8 million, or 17%, compared to the same period of 2024 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
Year Ended December 31, Increase (Decrease) Percent
Change
2025 2024
(in thousands, except percentages)
Cost of revenues
ClearanceJobs $ 6,889 $ 6,225 $ 664 11 %
Dice 12,656 13,938 (1,282) (9) %
Other corporate expenses 67 69 (2) (3) %
Total cost of revenue $ 19,612 $ 20,232 $ (620) (3) %
Percentage of revenues 15.3 % 14.3 %
Cost of revenue decreased by $0.6 million, or 3%, from the prior period. The ClearanceJobs segment increased $0.7 million due to a $0.6 million increase in compensation related costs, primarily due to headcount, and an increase of $0.5 million in contract staffing costs, partially offset by a $0.4 million decrease in operational costs, primarily web hosting. The Dice segment decreased $1.3 million compared to the prior year period due to a $2.1 million decrease in compensation related costs, primarily headcount and commissions, partially offset by lower capitalized labor of $0.6 million, which increases expense, and a $0.3 million increase in operational costs, primarily contract staffing, professional fees, consulting, and contractor costs.
Product Development Expenses
Year Ended December 31, Increase (Decrease) Percent
Change
2025 2024
(in thousands, except percentages)
Product development
ClearanceJobs $ 5,223 $ 4,467 $ 756 17 %
Dice 7,403 14,370 (6,967) (48) %
Other corporate expenses 216 46 170 370 %
Total product development $ 12,842 $ 18,883 $ (6,041) (32) %
Percentage of revenues 10.0 % 13.3 %
Product development expenses decreased $6.0 million, or 32%, from the prior year period. The ClearanceJobs segment increased $0.8 million driven by an increase of $0.4 million in compensation related costs, primarily due to headcount and $0.2 million increase in operational costs, primarily from consulting and travel. The Dice segment decreased $7.0 million primarily due to lower compensation related costs of $11.0 million due to lower headcount from the June 2025 restructure, a decrease of $0.4 million in operational costs, primarily consulting and software subscriptions, partially offset by lower capitalized labor of $4.5 million, which increases expense. Other corporate expenses increased $0.2 million due to compensation related costs that did not occur in the prior year period.
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Sales and Marketing Expenses
Year Ended December 31, Increase (Decrease) Percent
Change
2025 2024
(in thousands, except percentages)
Sales and marketing
ClearanceJobs $ 14,614 $ 14,925 $ (311) (2) %
Dice 25,124 32,271 (7,147) (22) %
Other corporate expenses 82 186 (104) (56) %
Total sales and marketing $ 39,820 $ 47,382 $ (7,562) (16) %
Percentage of revenues 31.2 % 33.4 %
Sales and marketing expenses decreased $7.6 million, or 16%, from the same period in 2024. The ClearanceJobs segment decreased $0.3 million driven by lower compensation related costs of $0.4 million due to lower headcount, partially offset by higher commissions. The Dice segment decreased $7.1 million driven by lower compensation related costs of $5.7 million due to lower headcount, a $1.1 million decrease in discretionary marketing expenses, and a $0.3 million decrease in operational costs, including consulting, travel and credit card fees. Other corporate expenses decreased 0.1 million due to compensation related costs that did not occur in the prior year period.
General and Administrative Expenses
Year Ended December 31, Increase (Decrease) Percent
Change
2025 2024
(in thousands, except percentages)
General and administrative
ClearanceJobs $ 5,418 $ 5,841 $ (423) (7) %
Dice 10,352 11,842 (1,490) (13) %
Other corporate expenses 11,313 12,338 (1,025) (8) %
Total general and administrative $ 27,083 $ 30,021 $ (2,938) (10) %
Percentage of revenues 21.2 % 21.2 %
General and administrative costs decreased $2.9 million or 10%, from prior year. The ClearanceJobs segment decreased $0.4 million driven by $0.6 million of lower compensation related costs, primarily stock-based compensation, partially offset by an increase of $0.2 million in operational costs, primarily professional fees. The Dice segment decreased $1.5 million due to a $1.1 million decrease in compensation related costs, primarily stock-based compensation, and a $0.5 million decrease in operational costs, primarily software subscriptions and consulting. Other corporate expenses decreased $1.0 million driven by $1.6 million of lower compensation related costs, primarily stock-based compensation, partially offset by a $0.5 million increase in operational costs including professional fees, education and training, and company events.
Depreciation
Year Ended December 31, Increase (Decrease) Percent
Change
2025 2024
(in thousands, except percentages)
Depreciation
ClearanceJobs $ 2,946 $ 2,631 $ 315 12 %
Dice 11,298 15,341 (4,043) (26) %
Other corporate expenses — — — n.m.
Total depreciation $ 14,244 $ 17,972 $ (3,728) (21) %
Percentage of revenues 11.1 % 12.7 %
Depreciation expense decreased $3.7 million or 21% from the same period in 2024. The ClearanceJobs segment increased $0.3 million driven by depreciation related to capitalized development costs, which are recorded as fixed assets. The Dice segment decreased by $4.0 million as fixed asset purchases, which are primarily comprised of capitalized development costs, have declined.
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Amortization
Year Ended December 31, Increase (Decrease) Percent
Change
2025 2024
(in thousands, except percentages)
Amortization
ClearanceJobs $ 333 $ — $ 333 — %
Dice — — — n.m.
Other corporate expenses — — — n.m.
Total amortization $ 333 $ — $ 333 — %
Percentage of revenues 0.3 % — %
Amortization expense increased $0.3 million compared to the same period in 2024 as $1.6 million of definite lived intangible assets were acquired by ClearanceJobs in the third quarter of 2025. See Note 9 to the consolidated financial statements included elsewhere in this report for additional information.
Restructuring
Year Ended December 31, Increase (Decrease) Percent
Change
2025 2024
(in thousands, except percentages)
Restructuring
ClearanceJobs $ 372 $ 284 $ 88 31 %
Dice 3,844 827 3,017 365 %
Other corporate expenses 2,270 — 2,270 — %
Total restructuring $ 6,486 $ 1,111 $ 5,375 484 %
Percentage of revenues 5.1 % 0.8 %
During the years ended December 31, 2025 and 2024, the Company recorded restructuring charges of $6.5 million and $1.1 million, respectively, as part of organizational restructurings intended to streamline its operations, drive business objectives, reduce operating expenses and improve operating margins.
Impairment of Intangible Assets
Year Ended December 31, Increase (Decrease) Percent
Change
2025 2024
(in thousands, except percentages)
Impairment of intangible assets
ClearanceJobs $ — $ — $ — n.m.
Dice 9,600 — 9,600 — %
Other corporate expenses — — — n.m.
Total impairment of intangible assets $ 9,600 $ — $ 9,600 — %
Percentage of revenues 7.5 % — %
During the third quarter of 2025, the Company recorded a $9.6 million loss related to the impairment of intangible assets in the Dice segment. See Note 10 to the consolidated financial statements included elsewhere in this report for additional information.
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Impairment of Goodwill
Year Ended December 31, Increase (Decrease) Percent
Change
2025 2024
(in thousands, except percentages)
Impairment of goodwill
ClearanceJobs $ — $ — $ — n.m.
Dice 7,800 — 7,800 — %
Other corporate expenses — — — n.m.
Total impairment of goodwill $ 7,800 $ — $ 7,800 — %
Percentage of revenues 6.1 % — %
During the first quarter of 2025, the Company recorded a $7.8 million loss related to the impairment of goodwill in the Dice segment. See Note 11 to the consolidated financial statements included elsewhere in this report for additional information.
Impairment of right-of-use asset
Year Ended December 31, Increase (Decrease) Percent
Change
2025 2024
(in thousands, except percentages)
Impairment of right-of-use asset
ClearanceJobs $ 552 $ — $ 552 — %
Dice 827 — 827 — %
Other corporate expenses — — — n.m.
Total impairment of right-of-use asset $ 1,379 $ — $ 1,379 — %
Percentage of revenues 1.1 % — %
During the fourth quarter of 2025, due to headcount reductions, the Company began a search to sublease certain office space. As a result, the Company has performed an impairment analysis of the respective lease agreement. The fair value was determined using the present value of the expected sublease rentals that the Company expects could be generated over the remaining lease term. As a result, the Company recorded an impairment charge of $1.4 million in the fourth quarter of 2025, of which the ClearanceJobs segment was allocated $0.6 million and the Dice segment was allocated $0.8 million.
Operating Income (Loss)
Year Ended December 31, Increase (Decrease) Percent
Change
2025 2024
(in thousands, except percentages)
Revenue $ 127,826 $ 141,926 $ (14,100) (9.9) %
Operating income (loss) (11,373) 6,325 $ (17,698) (279.8) %
Percentages of revenues (8.9) % 4.5 %
Operating loss for the year ended December 31, 2025 was $11.4 million, a negative margin of 8.9%, compared to operating income of $6.3 million, a margin of 4.5%, for the same period in 2024. The decrease in operating income and lower percentage margin was primarily driven by lower revenues and the restructuring and impairment charges, partially offset by lower product development, and sales and marketing, general and administrative, and depreciation expenses.
Income from equity method investment
Year Ended December 31, Increase (Decrease) Percent
Change
2025 2024
(in thousands, except percentages)
Income from equity method investment $ 92 $ 225 $ (133) (59.1) %
Percentage of revenues 0.1 % 0.2 %
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During the years ended December 31, 2025 and 2024, the Company recorded $0.1 million and $0.2 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 8 of the notes to consolidated financial statements for additional information.
Impairment of investments
Year Ended December 31, Increase (Decrease) Percent
Change
2025 2024
(in thousands, except percentages)
Impairment of investments $ 948 $ 400 $ 548 137.0 %
Percentage of revenues 0.7 % 0.3 %
During the years ended December 31, 2025 and 2024, the Company recognized losses of $0.9 million and $0.4 million, respectively, related to the impairment of investments. See Note 8 of the notes to consolidated financial statements for additional information.
Interest Expense and Other
Year Ended December 31, Increase (Decrease) Percent
Change
2025 2024
(in thousands, except percentages)
Interest expense and other $ 2,459 $ 3,200 $ (741) (23.2) %
Percentage of revenues 1.9 % 2.3 %
Interest expense and other decreased by $0.7 million, or 23.2%, from the same period in 2024, primarily due to lower debt outstanding and lower interest rates on our revolving credit facility during the current period.
Income Taxes
Year Ended December 31,
2025 2024
(in thousands, except
percentages)
Income (loss) before income taxes $ (14,688) $ 2,950
Income tax expense (benefit) (1,178) 2,697
Effective tax rate 8.0 % 91.4 %
Our effective income tax rate was 8.0% and 91.4% for the years ended December 31, 2025 and 2024, respectively. The 2025 effective rate differed from the federal statutory rate primarily due to nondeductible impairments, the tax impact of stock-based compensation awards, deduction limits on executive compensation, and the completion of a federal tax examination related to research credits. The 2024 effective 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.
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Earnings per Share
Year Ended December 31,
2025 2024
(in thousands, except
per share amounts)
Net income (loss) $ (13,510) $ 253
Weighted-average shares outstanding - basic 44,775 44,648
Weighted-average shares outstanding - diluted 44,775 45,090
Diluted earnings (loss) per share $ (0.30) $ 0.01
Diluted earnings (loss) per share was $(0.30) and $0.01 for the years ended December 31, 2025 and 2024, respectively. The decrease was driven by lower operating income and impairment of investments, partially offset by an income tax benefit, as described above.
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Comparison of Years Ended December 31, 2024 and 2023
Revenues
Year Ended December 31, Increase (Decrease) Percent
Change
2024 2023
(in thousands, except percentages)
ClearanceJobs
$ 54,143 $ 50,348 $ 3,795 8 %
Dice 87,783 101,530 (13,747) (14) %
Total revenues $ 141,926 $ 151,878 $ (9,952) (7) %
We experienced a decrease in revenue of $10.0 million, or 7%. Revenues for ClearanceJobs increased by $3.8 million, or 8%, 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 14%, 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
Year Ended December 31, Increase (Decrease) Percent
Change
2024 2023
(in thousands, except percentages)
Cost of revenues
ClearanceJobs $ 6,225 $ 5,170 $ 1,055 20 %
Dice 13,938 14,617 (679) (5) %
Other corporate expenses 69 — 69 — %
Total cost of revenue $ 20,232 $ 19,787 $ 445 2 %
Percentage of revenues 14.3 % 13.0 %
Cost of revenue increased by $0.4 million, or 2%, from the prior period. The ClearanceJobs segment increased $1.1 million due to a $0.4 million increase in compensation related costs, primarily due to headcount, an increase of $0.5 million operational costs including software subscriptions, web hosting, and professional fees. The Dice segment decreased $0.7 million compared to the prior year period due to a $1.5 million decrease in compensation related costs, primarily headcount and commissions. The Dice decrease was partially offset by lower capitalized labor of $0.6 million, which increases expense, and a $0.3 million increase in operational costs, primarily professional fees and contractor costs.
Product Development Expenses
Year Ended December 31, Increase (Decrease) Percent
Change
2024 2023
(in thousands, except percentages)
Product development
ClearanceJobs $ 4,467 $ 4,217 $ 250 6 %
Dice 14,370 13,539 831 6 %
Other corporate expenses 46 21 25 119 %
Total product development $ 18,883 $ 17,777 $ 1,106 6 %
Percentage of revenues 13.3 % 11.7 %
Product development expenses increased $1.1 million, or 6%, from the prior year period. The ClearanceJobs segment increased $0.3 million driven by an increase of $0.2 million in compensation related costs, primarily due to headcount. The Dice segment increased $0.8 million primarily due to lower capitalized labor of $2.5 million, which increases expense, partially offset by lower compensation related costs of $1.5 million due to lower headcount and a decrease of $0.3 million in operational costs, primarily consulting.
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Sales and Marketing Expenses
Year Ended December 31, Increase (Decrease) Percent
Change
2024 2023
(in thousands, except percentages)
Sales and marketing
ClearanceJobs $ 14,925 $ 15,850 $ (925) (6) %
Dice 32,271 41,296 (9,025) (22) %
Other corporate expenses 186 275 (89) (32) %
Total sales and marketing $ 47,382 $ 57,421 $ (10,039) (17) %
Percentage of revenues 33.4 % 37.8 %
Sales and marketing expenses decreased $10.0 million, or 17%, from the same period in 2023. The ClearanceJobs segment decreased $0.9 million driven by lower compensation related costs primarily due to lower commissions. The Dice segment decreased $9.0 million driven by lower compensation related costs of $6.1 million due to lower headcount and commissions, a $1.5 million decrease in discretionary marketing expenses, and a $1.4 million decrease in operational costs, including consulting, travel and credit card fees.
General and Administrative Expenses
Year Ended December 31, Increase (Decrease) Percent
Change
2024 2023
(in thousands, except percentages)
General and administrative
ClearanceJobs $ 5,841 $ 5,462 $ 379 7 %
Dice 11,842 12,270 (428) (3) %
Other corporate expenses 12,338 13,541 (1,203) (9) %
Total general and administrative $ 30,021 $ 31,273 $ (1,252) (4) %
Percentage of revenues 21.2 % 20.6 %
General and administrative costs decreased $1.3 million or 4%, from prior year. The ClearanceJobs segment increased $0.4 million driven by $0.3 million of higher compensation related costs, primarily stock-based compensation and higher headcount. The Dice segment decreased $0.4 million primarily due to a decrease in compensation related costs, primarily stock-based compensation. Other corporate expenses decreased $1.2 million driven by lower compensation related costs, primarily stock-based compensation and lower headcount.
Depreciation
Year Ended December 31, Increase (Decrease) Percent
Change
2024 2023
(in thousands, except percentages)
Depreciation
ClearanceJobs $ 2,631 $ 1,996 $ 635 32 %
Dice 15,341 14,919 422 3 %
Other corporate expenses — — — n.m.
Total depreciation $ 17,972 $ 16,915 $ 1,057 6 %
Percentage of revenues 12.7 % 11.1 %
Depreciation increased $1.1 million or 6% from the same period in 2023. The ClearanceJobs segment increased $0.6 million and the Dice segment increased by $0.4 million, both driven by the high fixed asset purchases during 2023, which had a full year of depreciation in 2024.
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Restructuring
Year Ended December 31, Increase (Decrease) Percent
Change
2024 2023
(in thousands, except percentages)
Restructuring
ClearanceJobs $ 284 $ 152 $ 132 87 %
Dice 827 1,473 (646) (44) %
Other corporate expenses — 792 (792) (100) %
Total restructuring $ 1,111 $ 2,417 $ (1,306) (54) %
Percentage of revenues 0.8 % 1.6 %
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
Year Ended December 31, Increase (Decrease) Percent
Change
2024 2023
(in thousands, except percentages)
Revenue $ 141,926 $ 151,878 $ (9,952) (7) %
Operating income 6,325 6,288 $ 37 1 %
Percentages of revenues 4.5 % 4.1 %
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 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
Year Ended December 31, Increase (Decrease) Percent
Change
2024 2023
(in thousands, except percentages)
Income from equity method investment $ 225 $ 502 $ (277) (55) %
Percentage of revenues 0.2 % 0.3 %
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 8 of the notes to consolidated financial statements for additional information.
Gain on investments
Year Ended December 31, Increase (Decrease) Percent
Change
2024 2023
(in thousands, except percentages)
Gain on investments $ — $ 614 $ (614) (100) %
Percentage of revenues — % 0.4 %
During the year ended December 31, 2023, the Company recorded $0.6 million gain from a partial sale of its 40% common share interest in eFC. See Note 8 of the notes to consolidated financial statements for additional information.
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Impairment of investments
Year Ended December 31, Increase (Decrease) Percent
Change
2024 2023
(in thousands, except percentages)
Impairment of investments $ 400 $ 300 $ 100 33 %
Percentage of revenues 0.3 % 0.2 %
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 investments. See Note 8 of the notes to consolidated financial statements for additional information.
Interest Expense and Other
Year Ended December 31, Increase (Decrease) Percent
Change
2024 2023
(in thousands, except percentages)
Interest expense and other $ 3,200 $ 3,482 $ (282) (8) %
Percentage of revenues 2.3 % 2.3 %
Interest expense and other decreased by $0.3 million, or 8%, from the same period in 2023, primarily due to lower debt outstanding on our revolving credit facility during the current period.
Income Taxes
Year Ended December 31,
2024 2023
(in thousands, except
percentages)
Income before income taxes $ 2,950 $ 3,622
Income tax expense 2,697 131
Effective tax rate 91.4 % 3.6 %
Our effective income tax rate was 91.4% and 3.6% for the years ended December 31, 2024 and 2023, respectively. The 2024 effective 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 effective 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
Year Ended December 31,
2024 2023
(in thousands, except
per share amounts)
Net income $ 253 $ 3,491
Weighted-average shares outstanding - basic 44,648 43,571
Weighted-average shares outstanding - diluted 45,090 44,496
Diluted earnings per share $ 0.01 $ 0.08
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Diluted earnings per share was $0.01 and $0.08 for the years ended December 31, 2024 and 2023, respectively. The lower 2024 earnings per share was driven by higher tax expense, primarily the tax impacts of stock-based compensation.
Non-GAAP Financial Measures
We have provided certain non-GAAP financial information as additional measures for our operating results. These measures are not in accordance with, or an alternative for, measures in accordance with U.S. 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 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
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. 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, and items such as 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 write-offs 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, write-off of non-cash stock-based compensation expense, impairment of investment, severance and retention costs related to dispositions and reorganizations of the Company, restructuring charges 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, including prior operating results of those divested businesses, and gains related to legal claims that are unusual in nature or infrequent.
Adjusted EBITDA Margin is computed as Adjusted EBITDA divided by Revenues.
We also consider Adjusted EBITDA and Adjusted EBITDA Margin, as defined above, to be important indicators to investors because they provide 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 and Adjusted EBITDA Margin as supplemental performance measures because we believe that these measures provide our Board, management and investors with additional information to measure our performance, provide comparisons from period to period 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 and Adjusted EBITDA Margin is frequently used by securities analysts, lenders and others in their evaluation of companies, Adjusted EBITDA and Adjusted EBITDA Margin have limitations as analytical tools, and you should not consider them in isolation, or as a substitute for analysis of our liquidity or results as reported under GAAP. Some limitations are:
• Adjusted EBITDA and Adjusted EBITDA Margin do not reflect our cash expenditures, or future requirements for capital expenditures or contractual commitments;
• Adjusted EBITDA and Adjusted EBITDA Margin do not reflect changes in, or cash requirements for, our working capital needs;
• Adjusted EBITDA and Adjusted EBITDA Margin do not reflect interest expense, or the cash requirements necessary to service interest or principal payments on our debt;
• Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized often will have to be replaced in the future, and Adjusted EBITDA and Adjusted EBITDA Margin do not reflect any cash requirements for such replacements; and
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• Other companies in our industry may calculate Adjusted EBITDA and Adjusted EBITDA Margin differently than we do, limiting their usefulness as a comparative measure.
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 and Adjusted EBITDA Margin are not measurements of our financial performance under GAAP and should not be considered as an alternative to revenue, operating income, net income, net income margin, 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, 2025, 2024 and 2023 follows (in thousands):
Year Ended December 31,
2025 2024 2023
Reconciliation of Net Income (loss) to Adjusted EBITDA:
Net income (loss) $ (13,510) $ 253 $ 3,491
Interest expense 2,459 3,200 3,482
Income tax expense (benefit) (1,178) 2,697 131
Depreciation 14,244 17,972 16,915
Amortization 333 — —
Non-cash stock based compensation 4,857 8,063 9,467
Income from equity method investment (92) (225) (502)
Impairment of intangible assets 9,600 — —
Impairment of goodwill 7,800 — —
Impairment of right-of-use asset 1,379 — —
Gain on investments — — (614)
Impairment of investments 948 400 300
Severance, professional fees and related costs 1,777 1,842 1,167
Restructuring 6,486 1,111 2,417
Adjusted EBITDA $ 35,103 $ 35,313 $ 36,254
Reconciliation of Cash Flows from Operating Activities to Adjusted EBITDA:
Net cash flows from operating activities $ 21,102 $ 21,045 $ 21,345
Interest expense 2,459 3,200 3,482
Amortization of deferred financing costs (145) (145) (145)
Income tax expense (benefit) (1,178) 2,697 131
Deferred income taxes 1,253 845 3,301
Change in accrual for unrecognized tax benefits 491 (28) (263)
Change in accounts receivable (4,157) (105) 1,398
Change in deferred revenue 5,516 4,515 893
Severance, professional fees and related costs 1,777 1,842 1,167
Restructuring 6,486 1,111 2,417
Changes in working capital and other 1,499 336 2,528
Adjusted EBITDA $ 35,103 $ 35,313 $ 36,254
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A reconciliation of Adjusted EBITDA Margin for the years ended December 31, 2025, 2024 and 2023 follows (in thousands, except percentages):
Year Ended December 31,
2025 2024 2023
Revenues $ 127,826 $ 141,926 $ 151,878
Net income (loss) $ (13,510) $ 253 $ 3,491
Net income (loss) margin (1)
(11) % — % 2 %
Adjusted EBITDA $ 35,103 $ 35,313 $ 36,254
Adjusted EBITDA Margin (1)
27 % 25 % 24 %
(1) Net income (loss) margin and Adjusted EBITDA Margin are calculated by dividing the respective measure by that period's revenues.
Liquidity and Capital Resources
Cash Flows
We have summarized our cash flows for the years ended December 31, 2025 and 2024 as follows (in thousands):
Year Ended December 31,
2025 2024
Cash from operating activities $ 21,102 $ 21,045
Cash used in investing activities (8,709) (13,932)
Cash used in financing activities (13,187) (7,617)
We have financed our operations primarily through cash provided by operating activities and borrowings under our revolving credit facility. At December 31, 2025, we had cash and borrowings of $2.9 million and $30.0 million, respectively, compared to $3.7 million and $32.0 million, respectively, at December 31, 2024.
Liquidity
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 $51.0 million in borrowing capacity under our $100.0 million Credit Agreement at December 31, 2025, 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 cash and cash equivalents, cash generated from our continuing 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 Credit Agreement may refuse or be unable to satisfy their commitment to lend to us, we may violate one or more of our covenants or financial ratios contained in our Credit Agreement or we may need to refinance our debt and be unable to do so. In addition, our liquidity could be negatively affected by a decrease in demand for our products and services and the ability of our customers to pay for current or future services. We may also make acquisitions and may need to raise additional capital through future debt financings or equity offerings to the extent necessary to fund such acquisitions, which we may not be able to do on a timely basis or on terms satisfactory to us or at all.
Comparison of Years Ended December 31, 2025 and 2024
Operating Activities
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 $21.1 million and $21.0 million for the
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years ended December 31, 2025 and 2024, respectively, an increase of $0.1 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, 2025 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, 2025, cash used in investing activities was $8.7 million compared to $13.9 million of cash used in investing activities during the year ended December 31, 2024. Cash used in investing activities during the year ended December 31, 2025 is comprised of $7.3 million of purchases of fixed assets and $1.4 million of payments for acquisition. Cash used in investing activities during the year ended December 31, 2024 is comprised of $13.9 million of purchases of fixed assets. Included in fixed asset purchases for the years ended December 31, 2025 and 2024 was $6.8 million and $12.5 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, 2025 was $13.2 million primarily due to cash uses of $11.2 million, net, related to share repurchases and $2.0 million of net payments on long-term debt. Cash used 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.
Financings and Capital Requirements
Credit Agreement
We have a $100 million revolving credit facility, which matures June 2027, with $30.0 million of outstanding borrowings on the facility at December 31, 2025, leaving $51.0 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. dollars bear interest, payable at least quarterly, at the Company’s option, at the Secured Overnight Financing Rate ("SOFR") or a base rate, plus a margin. Borrowings under the credit agreement denominated in pounds sterling, if any, bear interest at the Sterling Overnight Index Average ("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, determined by the Company’s most recent consolidated leverage ratio, plus an additional spread of 0.10%. The Company incurs a commitment fee ranging from 0.35% to 0.50% on any unused capacity under the revolving loan facility, determined by the Company’s most recent consolidated leverage ratio. Assuming an interest rate of 5.83% (the rate in effect on December 31, 2025) on our current borrowings, interest payments are expected to be $1.7 million in 2026 and $0.9 million in 2027. The Credit Agreement contains various affirmative and negative covenants and also contains certain financial covenants, including a consolidated leverage ratio and a consolidated interest coverage ratio. As of December 31, 2025, the Company was in compliance with all of the financial covenants under the Credit Agreement. Refer to Note 11 of 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 generally have initial terms from five years to ten 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, 2025 the value of our lease right-of-use asset was $4.4 million and the value of our lease liability was $9.2 million. See also Note 6 of the notes 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.
Other Capital Requirements
As of December 31, 2025, we recorded approximately $0.6 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,
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we have also recorded a liability for potential penalties and interest. Included in the balance of unrecognized tax benefits at December 31, 2025 are $0.6 million of tax benefits that would affect the effective tax rate if recognized.
During October 2025, the stock repurchase program approved in February 2025 expired with a total of 2.1 million shares purchased for $5.0 million.
During November 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 November 2026. In January 2026, the stock repurchase program approved in November 2025 expired with a total of 2.9 million shares purchased for $5.0 million.
During February 2026, the Company announced that its Board of Directors approved a new stock repurchase program that permits the purchase of up to $10.0 million of the Company's common stock through February 2027.
We anticipate capital expenditures in 2026 to be approximately $6 million to $7 million. We intend to use operating cash flows to fund capital expenditures.
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Cyclicality
The labor market and certain of the industries that we serve have historically experienced short-term cyclicality. However, we believe that online career websites and marketplaces continue to provide economic and strategic value to the labor market and industries that we serve.
Any slowdown in recruitment activity that occurs could negatively impact our revenues and results of operations. 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. 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, typically from one to twelve months.
From time to time, we see market slowdowns, which can lead to lower demand for recruiting technologists and financial and security cleared professionals. If recruitment activity slows in the industries in which we operate, our revenues and results of operations could be negatively impacted.
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Recent Accounting Pronouncements
For a discussion of new accounting pronouncements affecting the Company, refer to Note 2 of the notes to consolidated financial statements included in Item 8 of this Annual Report.
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