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DHI Group (DHX) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Industrials· Aug 5, 2026

Source: earnings call transcript

Executive summary

DHI Group Q2 FY26 — ClearanceJobs Drives Growth, Dice Shows Recovery Signs

DHI Group delivered a mixed quarter, with ClearanceJobs serving as the primary growth engine, driven by increased defense spending and expanding market opportunities. Dice showed encouraging signs of recovery in the tech hiring market, supported by product innovation and a skills-based approach. The company continues to focus on operational efficiency and capital allocation, generating healthy free cash flow while investing in growth and returning capital to shareholders.

Highlights

5

  • ClearanceJobs bookings increased by 24% year-over-year.

  • ClearanceJobs new business sales grew approximately 75% compared with the prior year quarter.

  • ClearanceJobs revenue retention rate was 110%, demonstrating strong customer value.

  • Dice's adjusted EBITDA margin improved to 26% from 23% in the prior year quarter.

  • Non-GAAP earnings per share increased to $0.09 from $0.07 year-over-year.

Concerns

5

  • Dice revenue declined 14% year-over-year to $15.8 million.

  • Dice bookings were down 14% year-over-year to $13.4 million.

  • Dice recruitment package customers decreased by 15% year-over-year to 3,702.

  • Deferred revenue was $41.5 million, down 12% from the second quarter of last year.

  • Total committed contract backlog was $92.3 million, down 9% from the prior year.

Guidance & targets

CategoryTargetConfidence
ClearanceJobs bookings growth
accelerate
high materiality
High
Dice bookings growth
decline rate to improve, no growth
high materiality
High
DHI total revenue
$124 million to $128 million
high materiality
High
DHI total revenue
$30 million to $32 million
medium materiality
High
ClearanceJobs revenue
$62 million to $64 million
medium materiality
High
ClearanceJobs revenue
$15 million to $16 million
medium materiality
High
Dice revenue
$62 million to $64 million
medium materiality
High
Dice revenue
$15 million to $16 million
medium materiality
High
DHI adjusted EBITDA margin
25%
high materiality
High
ClearanceJobs adjusted EBITDA margin
40%
medium materiality
High
Dice adjusted EBITDA margin
24%
medium materiality
High
Total capital expenditures
$6 million and $7 million
medium materiality
High
Free cash flow generation
at or above 10% of revenues
high materiality
High
Leverage ratio
1x adjusted EBITDA
medium materiality
High
Dice bookings growth
flat to marginal growth
high materiality
Medium

Segment performance

SegmentRevenueYoYQoQMargin
ClearanceJobs
Strong performance driven by new business sales and expanding market opportunity. PSG contributed $2M to revenue and bookings. Adjusted EBITDA margin declined YoY due to PSG acquisition.
Bookings: $14.3MBookings growth YoY: 24%Organic bookings growth YoY: 7%Recruitment package customers: 1,735Recruitment package customers YoY change: -7%Recruitment package customers QoQ change: flatAverage annual revenue per customer: $28,255Average annual revenue per customer YoY change: 9%Average annual revenue per customer QoQ change: 4%Revenue renewal rate: 87%Retention rate: 110%
$15.6M14%11%$6M adjusted EBITDA (39% margin)
Dice
Revenue and bookings declined year-over-year, but bookings decline improved sequentially. Customer count reduction primarily due to churn with smaller customers. Adjusted EBITDA margin improved YoY.
Bookings: $13.4MBookings growth YoY: -14%Recruitment package customers: 3,702Recruitment package customers YoY change: -15%Recruitment package customers QoQ change: -3%Average annual revenue per customer: $15,899Average annual revenue per customer YoY change: 3%Average annual revenue per customer QoQ change: 3%Revenue renewal rate: 66%Retention rate: 98%
$15.8M-14%1%$4.2M adjusted EBITDA (26% margin)

Product announcements

ProductTypeDetails
Dice Model Context Protocol (MCP) serverlaunch
AgileATSupdate
Premium candidate subscription for CJ mobile experiencelaunch

Deals & partnerships

Point Solutions Group (PSG) Acquisition to extend 'Expand the Mission' strategy, deepening customer relationships beyond recruiting into adjacent defense workforce solutions.

Acquired earlier this year, PSG exceeded expectations and is expanding relationships with major government contractors.

Shield AI New business customer for ClearanceJobs. almost $100,000 in ACV

Shield AI is a significant defense tech company, representing a new cohort of clients for ClearanceJobs.

York Space Systems New client onboarded for ClearanceJobs.

Onboarded as a notable client in Q2.

Texas Instruments New client onboarded for ClearanceJobs.

Onboarded as a notable client in Q2.

Tech Labs New client onboarded for Dice.

Onboarded as a notable client in Q2.

Yada Systems New client onboarded for Dice.

Onboarded as a notable client in Q2.

Kforcetech Solutions New client onboarded for Dice.

Onboarded as a notable client in Q2.

Risks & headwinds

Slower tech hiring environment Past year, ongoing into 2026

Dice revenue down 14% YoY; Dice bookings down 14% YoY; Dice customer count down 15% YoY.

Mitigation:Introduction of new Dice platform with monthly subscriptions to offset churn among smaller accounts; focus on AI-related job demand; improving leading indicators in the market.

Churn with smaller Dice customers Q2 FY26

Smaller customers spending less than $15,000 per year represented 80% of total Dice customer churn.

Mitigation:Introduction of new Dice platform with flexible monthly subscriptions to lower upfront commitment and improve affordability.

Gross margin compression Q2 FY26

DHI gross margin down YoY and QoQ; CJ adjusted EBITDA margin 39% vs. 45% YoY.

Mitigation:Attributable to the Point Solutions Group acquisition, with Q2 reflecting a full quarter of associated labor costs. Management indicated Q2 run rate is a decent expectation.

What to watch in Q3 FY26

ClearanceJobs organic bookings growth

H2 FY26
Current 7% YoY
Target Double-digit growth

Why it matters

ClearanceJobs is the primary growth engine for DHI, and accelerating organic bookings growth is key to overall company performance and thesis validation.

As we've been saying, we are targeting double-digit revenue growth for ClearanceJobs, and we feel like there's definitely a path towards getting there on an organic basis.

Find out whether DHX delivers this. Inve re-checks your case every morning.

Q&A highlights

What are the primary drivers behind the strong 110% revenue retention rate for ClearanceJobs, specifically regarding seats, upsells, or pricing?

The strong retention is a combination of both seats and profile views, with a greater weighting towards profile views. Recruiters use profile views to search, interact with candidates, and create shortlists, making them critical to the search process.

“I'd say it's a combination of both. I would say more weighted towards profile views. So with any subscription, whether it's Dice or ClearanceJobs, you get a number of seats and then you get a number of profile views.”

asked by Josh Nichols · answered by Art Zeile

2 min read 5 chapters

Detailed narrative

ClearanceJobs Performance and Market Expansion

ClearanceJobs delivered strong Q2 performance with bookings up 24% year-over-year, including a 7% organic growth rate excluding the PSG acquisition. New business sales surged by 75% year-over-year, reaching a 5-year high in pipeline. This growth is fueled by traditional defense contractors and an expanding base of commercial companies entering the government sector, with approximately 10,000 new defense firms emerging in the last two years. Revenue retention rates remain strong, and the platform surpassed 2 million cleared candidate profiles.

Dice Recovery and AI Impact

Dice is progressing along its anticipated recovery path, with bookings decline improving sequentially. Technology job postings increased by 30% year-over-year in Q2, with 75% now requiring at least one AI-related skill, up from 38% a year ago. This indicates AI is increasing demand for skilled tech professionals rather than displacing them. Dice's skills-based platform, organizing talent around 360+ AI-related skills, is well-positioned to capitalize on this trend.

Product Innovation and Self-Service Initiatives

DHI continues to invest in product innovation across both platforms. ClearanceJobs saw improvements in AgileATS and the premium candidate experience, with subscriber growth accelerating after a mobile launch. Dice launched the Model Context Protocol (MCP) server, enabling AI assistants like ChatGPT and Gemini to interact directly with its job database, enhancing the candidate search experience. Progress is also being made with the Dice self-service digital experience, with increased marketing spend recently initiated.

Financial Strength and Capital Allocation

DHI generated healthy free cash flow of $4.5 million in Q2, providing flexibility for capital allocation. The company reduced debt by $1 million and repurchased approximately 700,000 shares under its $10 million authorization, with $4.5 million remaining. Operating expenses decreased by 17% year-over-year, highlighting improved operating efficiency. The company targets a 1x leverage ratio and free cash flow generation averaging at or above 10% of revenues.

Strategic Outlook and Growth Drivers

DHI Group is strategically positioned at the intersection of rising global defense spending and growing demand for specialized technology talent, particularly in AI. ClearanceJobs is expected to see accelerating bookings growth in the second half of the year, while Dice's year-over-year bookings decline rate is projected to improve. The company remains focused on strengthening its solutions, optimizing go-to-market strategies, and executing efficiently to capitalize on future opportunities.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.