Dice Holdings, Inc (DHX)
Q1 2008 Earnings Call
April 29, 2008, 8:30 am ET
Jennifer Bewley - Director of Investor Relations
Scot Melland - Chairman, President and Chief Executive Officer
Michael Durney - Senior Vice President of Finance and Chief Financial Officer
Heath Terry - Credit Suisse
Youseff Squali - Jefferies & Company
John Janedis - Wachovia
[Carlos Boyce] - Morgan Stanley
Imran Khan - JP Morgan
Doug Anmuth - Lehman Brothers
Previous Statements by DHX
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I will now turn the call over to Jennifer Bewley, Director of Investor Relations. Please proceed.
Jennifer Bewley - Director of Investor Relations
Thanks and good morning, everyone. With me on the call today is Scot Melland, Chairman, President, and Chief Executive Officer of Dice Holdings along with Mike Durney, SVP of Finance and Chief Financial Officer.
Please note this morning, we issued a press release describing the company's results for the first quarter of 2008. A copy of that release can be viewed on the Company's website at diceholdingsinc.com. Before we begin, I'd like to note that today's call includes certain forward-looking statements particularly statements regarding future financial and operating results of the Company and its businesses.
These statements are based on management's current expectations or beliefs and are subject to uncertainty and changes in circumstances. Actual results may vary materially from those expressed or implied by the statements herein due to changes in economic business, competitive technological and/or regulatory factors.
The principal risks that could cause our results to differ materially from our current expectations are detailed in the Company's SEC filings including our annual report on Form 10-K in the sections entitled "Risk Factors", forward-looking statements and management's discussion and analysis of financial conditions and results of operations. The company is under no obligation to update any forward-looking statements except as required by the Federal Securities Laws.
Today's call also includes certain non-GAAP financial measures including adjusted EBITDA, adjusted EBITDA margin and free cash flow. For details on these measures including why we use them and reconciliations to the most comparable GAAP measures, please refer to our earnings release and our Form 8-K that has been furnished to the SEC both of which are available on our website.
With that out of the way, I'll turn the call over to Scot.
Scot Melland - Chairman, President, and Chief Executive Officer
Thank you, Jennifer. First, let me welcome all of you to the Dice Holdings first quarter 2008 conference call. I'll start today by discussing our first quarter performance including our perspective on the current economic conditions here in the US and elsewhere and how they are impacting our business. Then I'll hand it over to Mike Durney, our CFO, to take you through our financial performance in greater detail and our guidance. After Mike, I'll make a few closing remarks and we'll open up the call for questions.
Now let me say a few words about the first quarter. Overall, we turned in very solid performance despite tougher market conditions. Revenue across the company totaled 39.6 million, up 30% year-over-year, or 27% on an organic basis. Adjusted EBITDA grew 43% to just under $17 million and we generated over $22 million in free cash flow.
Domestically, DCS Online, our largest business segment, grew 16% year-over-year, driven by growth in both the number of recruitment package customers and revenue per customer. We achieved this growth despite a US market that continued to soften as the quarter progressed. During the quarter, an increasing number of our customers and prospects delayed their purchase decisions and renewals as they became more cautious in managing their own businesses. Many of these customers have open positions and budget money for recruiting but lack the urgency to fill the positions.
Broadly defined, there are two categories of customers we serve with Dice.com today. The first category are clients who are in the tech sector directly or act as technology specialists, usually consulting and staffing firms. Typically, these customers have a regular need for our service and today are recruiting in a relatively tight technology labor market. Many actively use our service. However, upgrading these customers to larger packages has become more difficult as their clients' long-term needs have become more uncertain.
The other category of customers we serve with Dice.com are direct hiring companies. These customers have businesses in a variety of industries and may have only intermittent need for recruiting technology professionals. As we have mentioned before, it is this customer segment that presents a significant growth opportunity for Dice. However, in this current environment, expanding direct hiring company usage has been difficult as their businesses have been, generally speaking, more directly impacted by the slowing economy. Putting it all together, it's a more difficult environment for growth in the US and our forward guidance reflects that environment.
Moving overseas, eFinancialCareers had an exceptional first quarter. Revenues grew 75% year-over-year on a comparable basis with strong performance across all regions. Growth was driven by an increase in the number of clients we serve around the world and increase in yield per client with very strong growth from our newer markets, especially the Middle East and Asia. Even with this stellar performance, however, the continuing turmoil in the financial services industry is beginning to impact customer sentiment.