Kannan Sugantharaman to Join as Chief Financial and Operations Officer on April 14, 2025; Jack Cronin to Step Down After 27 Years of Service. PITTSBURGH, April 7, 2025 /PRNewswire/ -- Mastech Digital, Inc. (NYSE American: MHH), a leading provider of Digital Transformation Services, today announced the appointment of Kannan Sugantharaman as Chief Financial and Operations Officer, effective April 14, 2025. Sugantharaman succeeds Jack Cronin, who will step down after more than two decades of distinguished serv ...

Company Overview - Mastech Digital, Inc. operates in the IT staffing and digital transformation services sector, bridging older workforce solutions with newer technology consulting [1] Investment Focus - Grassroots Trading emphasizes objective and unbiased research, focusing on small- to mid-cap companies while also identifying opportunities in larger companies [1]

Revenue Performance - Total revenues for 2024 were $198.9 million, a 1.1% decline from $201.1 million in 2023, with Data and Analytics Services segment revenues increasing by 6.6% and IT Staffing Services segment revenues decreasing by 2.6%[209] - Mastech Digital, Inc. reported revenues of $198.943 million for the year ended December 31, 2024, a decrease of 1% from $201.098 million in 2023[308] - The Data and Analytics Services segment generated $36,625,000 in 2024, up 6.6% from $34,358,000 in 2023, but down 9.8% from $40,594,000 in 2022[389] - The IT Staffing Services segment reported revenues of $162,318,000 in 2024, a decrease of 2.5% from $166,740,000 in 2023 and a decrease of 19.5% from $201,644,000 in 2022[389] - Revenue from the United States was $195,455,000 in 2024, a slight decrease from $197,246,000 in 2023 and a significant decrease from $236,187,000 in 2022[391] Profitability and Margins - Gross profit for 2024 increased to $55.6 million, an 8.9% increase year-over-year, with total gross margin percentage rising to 27.9% from 25.4% in 2023[214] - Gross margins for Data and Analytics Services segment improved to 49.1% in 2024, up 560 basis points from 43.5% in 2023, reflecting higher utilization and improved efficiencies[215] - The company's gross profit increased to $55.597 million in 2024, up 9% from $51.036 million in 2023[308] - In 2023, the company's gross profit decreased to $51.0 million, a 19% decline from $63.2 million in 2022, with gross profit as a percentage of revenue at 25.4% compared to 26.1% in 2022[224] Expenses and Cost Management - SG&A expenses decreased to $51.8 million in 2024, representing 26.0% of total revenues, down from $60.3 million or 30.0% in 2023[216] - The company's SG&A expenses in 2023 totaled $60.3 million, representing 30.0% of total revenues, up from $51.0 million or 21.1% in 2022, with adjusted SG&A expenses at 23.2% in 2023 versus 19.2% in 2022[228] - Selling, general and administrative expenses decreased to $51.806 million in 2024, down from $60.311 million in 2023, reflecting improved cost management[308] Client Concentration - The top ten clients accounted for 54% of total revenues in 2024, with financial services representing approximately 49% of total revenues[213] - The Company's top ten clients accounted for approximately 54% of total revenues in 2024, compared to 53% in both 2023 and 2022[391] - The Company had two clients, CGI and Allegis, that exceeded 10% of total revenues in 2024, with CGI accounting for 14.5% and Allegis for 10.7%[389] Cash Flow and Financial Position - Cash provided by operating activities was $7.2 million in 2024, down from $16.0 million in 2023, with a net loss of $7.1 million in 2023[236] - The company had cash balances of $27.7 million as of December 31, 2024, with no bank debt outstanding and approximately $22.6 million of borrowing capacity[232] - The company’s cash and cash equivalents rose to $27.742 million in 2024, an increase of 31% from $21.147 million in 2023[306] - The company’s total equity as of December 31, 2024, was $87,434,000, an increase from $81,444,000 in 2023[315] Tax and Valuation - The effective tax rate for 2024 was 23.1%, compared to a negative rate of (21.0%) in 2023, influenced by a worthless stock deduction from the dissolution of a Singapore entity[219] - The effective tax rate for 2023 was (21.0%), compared to 30.3% in 2022, largely due to shortfalls in expected tax benefits on stock options[231] - As of December 31, 2024, the Company provided a valuation allowance of $452,000 related to the uncertainty of the realization of foreign net operating losses[275] - The company evaluates its deferred tax assets and records a valuation allowance when it is more likely than not that some portion will not be realized[275] Goodwill and Impairment - The company reported a goodwill impairment charge of $5.3 million in 2023, related to the Data and Analytics Services segment, compared to no impairment in 2022[225] - Goodwill remained unchanged at $27.210 million, with no impairment recorded in 2024, compared to an impairment of $5.300 million in 2023[301][308] - The Company performed quantitative impairment tests related to its IT Staffing Services segment and found no impairment associated with the carrying amount of goodwill for 2024, 2023, and 2022[264] Operational Highlights - Bookings for 2024 totaled $41 million, consistent with the full year 2023's performance, indicating stable demand[210] - The Company recognizes revenue on fixed price contracts over time as services are rendered, using a cost-based input method to measure progress[254] - Unbilled receivables represent amounts recognized as revenues based on services performed, which will be invoiced in a subsequent period[257] - The Company expanded its service offerings to include engineering staffing services in late 2023[388] Stock and Shareholder Information - The weighted average diluted shares outstanding increased to 12.014 million in 2024 from 11.613 million in 2023[308] - The company repurchased 9,222 shares of common stock at an average price of $8.70 per share in 2024, and 67,699 shares at an average price of $9.10 per share in 2023[371] - The company held 1.7 million shares in its treasury at a cost of approximately $4.9 million as of December 31, 2024[372]

Financial Data and Key Metrics Changes - Consolidated revenues for Q4 2024 totaled $50.7 million, a year-over-year increase of 10.2% compared to Q4 2023 [22] - GAAP net income for Q4 2024 was $0.3 million or $0.02 per diluted share, compared to a net loss of $5.4 million or a negative $0.46 per share in Q4 2023 [25] - Non-GAAP net income for Q4 2024 was $2.8 million or $0.23 per diluted share, compared to $1.3 million or $0.11 per diluted share in Q4 2023 [25] - Full year 2024 revenues were $198.9 million, largely in line with full year 2023 revenues [26] - Gross margins in 2024 totaled 27.9%, compared to 25.4% in 2023 [26] Business Line Data and Key Metrics Changes - Data and Analytics Services segment reported revenues of $10.3 million in Q4 2024, a 26.2% increase year-over-year and 9.4% sequentially [22] - IT Staffing Services segment had revenues of $40.5 million in Q4 2024, achieving year-over-year revenue growth of 6.8% [23] - Billable consultant base declined by 63 consultants during the quarter, consistent with previous years due to seasonal assignment ends [23] - Q4 2024 gross margin percent was a company record 29%, with significant margin expansion in both business segments [24] Market Data and Key Metrics Changes - Order bookings in Q4 2024 totaled $11 million, somewhat below expectations, with project delays noted in the Data and Analytics segment [22][54] - Clients exhibited greater caution in decision-making, leading to longer sales cycles and delayed bookings [54][55] Company Strategy and Development Direction - The company is at an inflection point due to the AI revolution, requiring sharper execution focus and a founder's mindset for growth [11] - The strategy for 2025 includes leading with urgency, building a compelling portfolio of offerings, and executing with discipline [16][18][19] - The company aims to refine its strategy and create a growth story that is uniquely its own [21] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the uncertainties in the macro environment affecting technology investments, but remains confident in the strong appetite for AI-driven solutions [12][14] - The company plans to accelerate growth and enhance offerings while taking a structured approach to defining its long-term strategy [33] Other Important Information - The liquidity position remains solid with no bank debt outstanding and $27.7 million in cash balances [28] - The share repurchase program has been extended to February 2026, with 423,000 shares remaining [61] Q&A Session Summary Question: Approach to increasing staffing and D&A - Management is taking a structured approach to defining long-term strategy, focusing on growth and enhancing offerings [32][33] Question: Opportunities in government efficiency - Management sees government opportunities, especially in Data and Analytics [35] Question: Employee count at year-end - The company ended the year with 1,816 employees, up from 1,648 in 2023 [37] Question: Spending plans for the year - SG&A expenses are expected to maintain the same percentage as in 2024, with some increases in the first half due to hiring [44][45] Question: Tax rate expectations - The tax rate is influenced by stock compensation true-ups, with a recent rate lower than 25% [49] Question: Commentary on bookings during the quarter - Bookings were affected by project delays and uncertainty in the marketplace, leading to a longer sales cycle [54][55] Question: Thoughts on share repurchase program extension - The Board decided to extend the share repurchase program due to fewer blackout periods expected in 2025 [61] Question: Potential acquisitions and cash uses - M&A remains part of the growth strategy, but clarity on the direction is needed before executing transactions [66]

Financial Performance - Consolidated revenues for Q4 2024 increased by 10.2% to $50.7 million, compared to $46.1 million in Q4 2023[3] - Gross profits for Q4 2024 were $14.7 million, up from $11.3 million in Q4 2023, with gross margins reaching a record 29.0%[5] - Revenues for Q4 2024 reached $50,747 thousand, a 10.8% increase from $46,052 thousand in Q4 2023[23] - Gross profit for Q4 2024 was $14,715 thousand, up 29.5% from $11,344 thousand in Q4 2023[23] - Total revenues for the year ended December 31, 2024 were $198,943 thousand, a slight decrease from $201,098 thousand in 2023[23] Segment Performance - The Data and Analytics Services segment reported revenues of $10.3 million, a 26.2% increase year-over-year[5] - Data and analytics services revenue for Q4 2024 was $10,284 thousand, a 26.1% increase from $8,152 thousand in Q4 2023[27] - IT Staffing Services segment revenues rose by 6.8% to $40.5 million compared to $37.9 million in Q4 2023[5] - IT staffing services revenue for Q4 2024 was $40,463 thousand, up from $37,900 thousand in Q4 2023, representing a 6.8% increase[27] Profitability - GAAP net income for 2024 was $3.4 million, or $0.28 per diluted share, compared to a loss of $7.1 million, or ($0.61) per diluted share in 2023[6] - Non-GAAP net income for 2024 totaled $8.6 million, or $0.71 per diluted share, compared to $5.3 million, or $0.44 per diluted share in 2023[6] - Net income for Q4 2024 was $297 thousand, compared to a net loss of $5,351 thousand in Q4 2023[25] - Non-GAAP net income for Q4 2024 increased to $2,802 thousand from $1,326 thousand in Q4 2023[25] - Basic earnings per share for Q4 2024 was $0.03, compared to a loss of $0.46 per share in Q4 2023[25] Cash and Debt Management - Cash balances increased by $6.6 million during 2024, reaching $27.7 million as of December 31, 2024, with no bank debt[7] - The Board of Directors extended the share repurchase program for an additional year through February 8, 2026, with 423,000 shares available for repurchase[8] Operational Metrics - The company experienced a decline of 63 billable consultants in the IT Staffing Services segment during Q4 2024, consistent with seasonal trends[4] - Days Sales Outstanding (DSO) stood at 52 days as of December 31, 2024, within the targeted range[7] - The company reported a total operating income of $65 thousand in Q4 2024, a significant recovery from an operating loss of $6,930 thousand in Q4 2023[23] - Total gross margin percentage improved to 29.0% in Q4 2024 from 24.6% in Q4 2023[27]

The Company's Data and Analytics Services Segment achieved 26.2% Revenue Growth during QuarterPITTSBURGH, Feb. 19, 2025 /PRNewswire/ -- Mastech Digital, Inc. (NYSE American: MHH), a leading provider of Digital Transformation IT Services, announced today its financial results for the fourth quarter and full year ended December 31, 2024. Additionally, Mastech Digital announced that its Board of Directors authorized an extension of the previously announced share repurchase program for an additional year throug ...

Core Viewpoint - Mastech Digital, Inc. is set to discuss its fourth quarter and full year results for 2024 in a conference call scheduled for February 19, 2025 [1] Group 1: Conference Call Details - The conference call will be hosted by CEO Nirav Patel and CFO Jack Cronin [1] - Access to the call will be available via a listen-only dial-in number (877-407-3980) or through a live webcast on the company's website [2] - A replay of the call will be available for 7 days, with specific access numbers provided for domestic and international callers [3] Group 2: Company Overview - Mastech Digital is a leading provider of Digital Transformation IT Services, focusing on Data Management and Analytics Solutions, Digital Learning, and IT Staffing Services [4] - The company operates with a Digital First approach and is a minority-owned enterprise [4] - Mastech Digital is headquartered in Pittsburgh, PA, with offices in the U.S., Canada, Europe, and India [4]

Core Points - Mastech Digital, Inc. has awarded non-qualified stock options to its new President and CEO, Nirav Patel, for up to 702,358 shares of common stock, effective January 6, 2025 [1] - The stock options will vest based on the Company's Quarterly Average Market Capitalization, with specific milestones set at $300 million, $450 million, and $600 million [2] - The options are subject to acceleration and forfeiture based on the termination of Mr. Patel's employment or a 'Change of Control' of the Company [3] Company Overview - Mastech Digital, Inc. is a leading provider of Digital Transformation Services, focusing on delivering technology talent and innovative solutions to drive digital transformation [4] - The company operates globally, with headquarters in Pittsburgh, PA, and delivery centers in North America and India [4]

Core Points - Nirav Patel has been appointed as President and CEO of Mastech Digital, effective January 6, 2025, succeeding Vivek Gupta who has led the company for nine years [2][6] - Patel has over 20 years of experience in technology, previously serving as President and CEO of Bristlecone, where he significantly scaled the business and expanded its workforce [3][4] - The Board of Directors expressed strong support for Patel's appointment, highlighting his expertise in data and AI-driven transformation as aligned with the company's strategic priorities [5][6] Company Transition - Vivek Gupta is stepping down after nine years, during which he transformed Mastech Digital from an IT staffing company to a technology-focused solutions organization [7][8] - Under Gupta's leadership, the company expanded into digital transformation services and improved its revenue quality and gross margin profile [7] - Gupta's last day will be February 28, 2025, marking his nine-year anniversary with the company [9] Company Overview - Mastech Digital, Inc. is a leading provider of Digital Transformation Services, specializing in technology talent and innovative solutions to drive digital transformation [10]

Financial Performance - Revenues for Q3 2024 reached $51,839,000, a 8.6% increase from $47,779,000 in Q3 2023[5] - Gross profit for Q3 2024 was $14,771,000, up 17.6% from $12,566,000 in Q3 2023[5] - Net income for Q3 2024 was $1,875,000, compared to a net income of $125,000 in Q3 2023, representing a significant increase[6] - Basic earnings per share for Q3 2024 was $0.16, compared to $0.01 in Q3 2023[5] - The company reported a total comprehensive income of $1,831,000 for Q3 2024, compared to $37,000 in Q3 2023[6] - Net income for the nine months ended September 30, 2024, was $3,105,000, compared to a net loss of $(1,787,000) for the same period in 2023, indicating a significant turnaround in profitability[11] - For the nine months ended September 30, 2024, net income was $3.1 million, compared to a net loss of $1.8 million for the same period in 2023[5] Revenue Breakdown - Total revenues for the three months ended September 30, 2024, were $51.839 million, an increase from $47.779 million in the same period of 2023, representing a growth of approximately 4.4%[27] - The Data and Analytics Services segment generated $9.398 million in revenue for the three months ended September 30, 2024, compared to $8.038 million in 2023, reflecting a year-over-year increase of 16.9%[27] - The IT Staffing Services segment reported revenues of $42.441 million for the three months ended September 30, 2024, up from $39.741 million in 2023, indicating a growth of 6.8%[27] - Revenues for Q3 2024 totaled $51.8 million, an 8% increase from $47.8 million in Q3 2023, driven by 17% growth in Data and Analytics Services and 7% growth in IT Staffing Services[98] - Data and Analytics Services segment revenues reached $9.4 million in Q3 2024, up 17% from $8.0 million in Q3 2023, attributed to higher activity levels and new assignments[99] - IT Staffing Services segment revenues totaled $42.4 million in Q3 2024, a 7% increase from $39.8 million in Q3 2023, reflecting higher demand for services[100] Assets and Liabilities - Total assets as of September 30, 2024, were $111,485,000, an increase from $105,227,000 as of December 31, 2023[8] - Total current assets increased to $65,815,000 as of September 30, 2024, compared to $56,463,000 at the end of 2023[8] - Total liabilities as of September 30, 2024, were $24,958,000, up from $23,783,000 at the end of 2023[8] - Shareholders' equity increased to $86,527,000 as of September 30, 2024, compared to $81,444,000 at the end of 2023[8] - Cash and cash equivalents increased to $23,885,000 from $21,147,000, reflecting a growth of 12.9%[8] - The total current liabilities increased to $22,101,000 from $19,871,000, representing a rise of 11.6%[8] Operating Expenses - Operating expenses for Q3 2024 were $12,332,000, slightly down from $12,615,000 in Q3 2023[5] - SG&A expenses for the three months ended September 30, 2024 totaled $12.3 million, representing 23.8% of total revenues, a decrease from $12.6 million or 26.4% in the same period of 2023[105] - Total SG&A expenses for the nine months ended September 30, 2024 were $37.2 million, or 25.1% of total revenues, down from $42.0 million or 27.1% in the same period of 2023[117] - General and administrative expenses decreased by $1.8 million in the first nine months of 2024 compared to the same period in 2023, primarily due to staff reductions and lower stock-based compensation[118] Stock and Compensation - Stock-based compensation expense for the nine months ended September 30, 2024, was $1,553 thousand, down from $2,501 thousand in the same period of 2023[11] - Stock-based compensation expense for the three months ended September 30, 2024 was $542,000, down from $824,000 in the same period of 2023, while for the nine months it was $1.6 million compared to $2.5 million in 2023[46] - The Company granted 40,130 restricted share units and 525,000 stock options at an average strike price of $8.41 during the nine months ended September 30, 2024, compared to 19,924 restricted share units and 125,000 stock options at an average strike price of $11.24 in 2023[45] Taxation - Total provision for income taxes for the three months ended September 30, 2024, was $697,000, compared to a benefit of $29,000 in the same period of 2023, reflecting a significant increase[61] - The effective tax rate for the three months ended September 30, 2024 was 27.1%, compared to 18.8% in the same period of 2023, due to higher state income tax rates[108] - The total provision for income taxes for the nine months ended September 30, 2024, was $994,000, while it was $(358,000) for the same period in 2023[63] Market and Strategic Focus - The company continues to focus on digital transformation IT services, targeting large and medium-sized organizations[13] - Mastech Digital's acquisition strategy has enhanced its capabilities in data management and analytics services, particularly through the acquisition of InfoTrellis and AmberLeaf[14] - The company anticipates potential disruptions in global markets due to the ongoing impact of COVID-19 variants[16] - The company anticipates continued economic uncertainty impacting demand for services in 2024, influenced by inflation and geopolitical factors[94] Client Concentration - The Company's top ten clients accounted for approximately 56% of total revenues for the three months ended September 30, 2024, compared to 52% in the same period of 2023[28] - The company had two clients contributing over 10% of total revenues in Q3 2024, with CGI at 14.0% and Allegis at 11.7%[98]