Financial Data and Key Metrics Changes - Consolidated revenue for Q4 2025 was $45.5 million, a year-over-year decrease of 10.4% [11] - GAAP net income was $1 million or $0.08 per diluted share, compared to $0.3 million or $0.02 per diluted share in the prior year [14] - Non-GAAP net income was $2.5 million or $0.21 per diluted share, compared to $2.8 million or $0.23 per diluted share in the prior year [15] - Full year 2025 consolidated revenue was $191.4 million, a year-over-year decrease of 3.8% [16] - Gross profit for Q4 was $12.9 million, a decline of 12.5% compared to the same period last year [13] Business Line Data and Key Metrics Changes - IT Staffing Services segment revenue for Q4 2025 was $37.7 million, down 7% year-over-year, with headcount falling by 16.7% [6][11] - Data and Analytics Services segment revenue for Q4 2025 was $7.8 million, a decrease of 24% year-over-year [7][12] - Average bill rates reached an all-time high of $87.32, reflecting a focus on higher value engagements [7][11] Market Data and Key Metrics Changes - Bookings for Q4 2025 totaled $11.3 million, up nearly 37% over the same period last year [8][12] - The company is seeing strong renewals, indicating customer confidence in its ability to deliver value [8][51] Company Strategy and Development Direction - The company aims to build an AI-first services company, focusing on long-term sustainable growth and unlocking value for customers [9][32] - Strategic priorities for 2026 include delivering sustainable growth, investing in differentiated capabilities, and enhancing customer relationships [9][30] - The EDGE initiative is reshaping the company's cost structure and resource allocation to support future growth [17][18] Management's Comments on Operating Environment and Future Outlook - The market remains challenging, with clients cautious about technology budgets while pursuing modernization [5][34] - Despite macroeconomic volatility, there is reasonable confidence from clients regarding modernization efforts [36] - The company is well-positioned to help clients accelerate their AI adoption journeys [36] Other Important Information - The company maintained a solid financial position with $36.5 million in cash and no bank debt as of December 31, 2025 [18][19] - A new share repurchase program has been authorized, allowing for the repurchase of up to $5 million in common stock [20] Q&A Session Summary Question: What was the billable consultant count at the end of the quarter? - The company ended the quarter with 840 billable consultants in IT Staffing Services as of December 25 [24] Question: Are there any more one-time expenses and severance expected? - The finance and accounting transition is complete, and no significant future costs are expected [26] Question: What is the plan for cost savings in 2026? - The company plans to focus on efficiencies and investments in talent and capabilities to drive growth in 2026 [28] Question: What is the grand plan for 2026 and 2027? - The focus is on growth, targeting specific industry segments, and enhancing offerings to help clients modernize with AI [30][31] Question: Can the company grow this year given the market conditions? - The company has not seen significant pressure from clients and remains focused on modernization efforts [34][36] Question: How should SG&A levels be viewed moving forward? - Q4 SG&A levels are considered efficient, but the company plans to increase investments in talent and capabilities [42] Question: What is the outlook for cash usage and potential M&A activity? - The company aims to use cash for strategic priorities, including share repurchases and investments in capabilities [54]

Mastech Digital (NYSEAM:MHH) Q4 2025 Earnings call February 19, 2026 09:00 AM ET Company ParticipantsJennifer Lacey - Manager of Legal AffairsKannan Sugantharaman - CFO and COONirav Patel - CEOConference Call ParticipantsLisa Thompson - Senior Analyst of TechnologyMarc Riddick - Senior Equity AnalystOperatorDay, and thank you for standing by. Welcome to the Mastech Digital Fourth Quarter 2025 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation ...

Mastech Digital (NYSEAM:MHH) Q4 2025 Earnings call February 19, 2026 09:00 AM ET Speaker5Day, and thank you for standing by. Welcome to the Mastech Digital Fourth Quarter 2025 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdra ...

Exhibit 99.1 FOR IMMEDIATE RELEASE: Mastech Digital Reports Fourth Quarter and Full-Year 2025 Results Continued Strong Progress Against Transformation Plan Driving Operational Improvements; Board of Directors Approves a $5,000,000 Share Repurchase Program PITTSBURGH, PA – February 19, 2026 - Mastech Digital, Inc. (NYSE American: MHH) ("Mastech Digital"), a leading provider of Digital Transformation IT Services, announced today its financial results for the fourth quarter and full-year ended December 31, 202 ...

Revenue Performance - For the three months ended September 30, 2025, total revenues were $48.5 million, a decrease of 6.5% compared to $51.8 million for the same period in 2024[38]. - The Data and Analytics Services segment generated $7.9 million in revenue for the three months ended September 30, 2025, down 15.7% from $9.4 million in 2024[38]. - The IT Staffing Services segment reported $40.6 million in revenue for the three months ended September 30, 2025, a decrease of 4.0% from $42.4 million in 2024[38]. - For the three months ended September 30, 2025, total revenues were $48,496,000, a decrease of 6.8% from $51,839,000 in the same period of 2024[80]. - The Data and Analytics Services segment generated revenues of $7,910,000, down 15.8% from $9,398,000 year-over-year[80]. - The IT Staffing Services segment reported revenues of $40,586,000, a decline of 4.3% compared to $42,441,000 in the prior year[80]. - Total revenues for the nine months ended September 30, 2025, were $145,910,000, a decrease of 1.9% compared to $148,196,000 for the same period in 2024[82]. - The Canadian subsidiary reported revenues of $112,000 for the three months ended September 30, 2025, down 43.4% from $198,000 in 2024[82]. - The Indian and Other segment generated $306,000 in revenue for the three months ended September 30, 2025, a decline of 48.9% from $598,000 in 2024[82]. Client Concentration - The top ten clients accounted for approximately 59% of total revenues for the three months ended September 30, 2025, compared to 56% in 2024[40]. Goodwill and Impairment - Goodwill related to the IT Staffing Services segment remained unchanged at $8.4 million as of September 30, 2025[41]. - The Company recorded a goodwill impairment of $5.3 million related to the Data and Analytics Services segment in 2023[41]. Operating Expenses and Income - Total gross profit for the three months ended September 30, 2025, was $13,715,000, representing a gross margin of 28.3%, slightly down from 28.5% in the same quarter of 2024[80]. - The IT Staffing Services segment's operating income for the three months ended September 30, 2025, was $3,178,000, compared to $1,951,000 in the same period of 2024[81]. - The company’s total operating expenses for the three months ended September 30, 2025, were $1,932,000, down from $2,442,000 in the prior year[81]. Taxation - The total provision for income taxes for the three months ended September 30, 2025, was $294,000, with an effective tax rate of 23.8%[71]. - The company’s total current provision for income taxes was $84,000 for the three months ended September 30, 2025, compared to $644,000 in the same period of 2024[70]. - The company’s valuation allowance against deferred tax assets totaled $452,000 as of September 30, 2025[71]. Stock and Compensation - Stock-based compensation expense for the three months ended September 30, 2025 was $729,000, up from $542,000 in 2024; for the nine months, it increased to $2.3 million from $1.6 million[55]. - The Company granted 327,000 stock options at an average strike price of $7.45 during the nine months ended September 30, 2025, compared to 525,000 stock options at an average strike price of $8.41 in 2024[54]. - As of September 30, 2025, there were 975,000 shares of Common Stock available for grants under the Stock Incentive Plan[54]. - The Company issued 11,483 shares under the Employee Stock Purchase Plan during the nine months ended September 30, 2025, at a share price of $6.09, compared to 21,329 shares at $6.38 in 2024[60]. Lease and Rental Expenses - The Company utilized approximately 94,000 square feet of office space as of September 30, 2025, under noncancelable operating leases[45]. - The present value of operating lease liabilities as of September 30, 2025, was $2.753 million, with a weighted average discount rate of 5.7%[46]. - Rental expense for the three and nine months ended September 30, 2025 totaled $0.4 million and $1.2 million, respectively, compared to $0.4 million and $1.1 million for the same periods in 2024[47]. - Total cash paid for lease liabilities for the three and nine months ended September 30, 2025 was $0.4 million and $1.1 million, consistent with the amounts for the same periods in 2024[48]. - The Company has no new leases entered into during the three and nine months ended September 30, 2025 and 2024, indicating a stable leasing strategy[48]. Financial Position - Total assets as of September 30, 2025, amounted to $112,617,000, a slight increase from $111,484,000 on December 31, 2024[82]. - The Company had outstanding borrowings under the Revolver totaling zero dollars as of September 30, 2025, with unused borrowing capacity of approximately $20.8 million[68]. - The company had no outstanding borrowings under the Credit Agreements as of September 30, 2025[144]. Currency and Accounting Standards - The functional currency for the Canadian subsidiary is the U.S. dollar, while Indian and European subsidiaries operate in their local currencies[145]. - A hypothetical 10% increase or decrease in foreign currency rates would not have had a material impact on the consolidated financial statements[145]. - The company does not expect the recently issued ASUs to have a material impact on its financial statements[84][86]. - The company is currently evaluating the impact of ASU 2025-05 but does not expect it to have a material effect on its consolidated financial statements[86].

Financial Data and Key Metrics Changes - The company reported consolidated revenue of $48.5 million for Q3 2025, a year-over-year decrease of 6.4% [11] - Gross profit for Q3 was $13.5 million, down 8.9% compared to the prior year, with gross margins declining by 70 basis points [12] - GAAP net income was $0.9 million, or 8 cents per diluted share, compared to $1.9 million, or 16 cents per diluted share in the prior year [15] - Non-GAAP net income was $3.5 million, or 29 cents per diluted share, compared to $2.8 million, or 23 cents per diluted share in the prior year [15] - The company had cash balances of $32.7 million and no bank debt outstanding as of September 30, 2025 [16] Business Line Data and Key Metrics Changes - IT Staffing Services segment revenue was $40.6 million, a decline of 4.4% year-over-year, with record gross margins of 24.8% and average bill rates at $86.60 [8][11] - Data and Analytics Services segment revenue was $7.9 million, down 15.8% year-over-year, with new bookings of $6.1 million compared to $11.1 million in the prior year [9][11] Company Strategy and Development Direction - The company is focused on long-term sustainable growth and has initiated the EDGE program aimed at optimizing operations and driving growth [5][6] - The EDGE program includes cost diagnostics, process simplification, and disciplined spend management to unlock capacity for reinvestment [13][24] - The company aims to transition into an AI-first organization, helping enterprises modernize and adopt AI technologies [5][6] Management's Comments on Operating Environment and Future Outlook - Management noted a cautious demand environment due to macroeconomic and geopolitical uncertainties, impacting customer spending decisions [5][6] - Despite current challenges, management believes long-term demand drivers remain intact and is focused on positioning the company for future growth [9][10] Other Important Information - The company repurchased approximately 192,000 shares of common stock at an average price of $7.68, totaling about $1.5 million [16] - The company plans to continue its share repurchase program opportunistically to return capital to shareholders [17] Q&A Session Summary Question: Will the company increase its buyback program? - The company will continue its buyback efforts in Q4 and is considering entering another Rule 10b5-1 plan [19][20] Question: What is the plan regarding consultant numbers and bill rates? - The average bill rate increased to $86.60, and the focus is on higher-value accounts and complex roles, with a current count of 933 billable consultants [21][23] Question: Can you elaborate on the EDGE program and potential cost savings? - The EDGE program focuses on driving higher revenue quality and operational efficiency, with expectations for investment returns starting in Q1 2026 [24][27] Question: What are the expected expenses related to the finance and accounting transition? - The company expects costs to remain within the previously communicated range, with completion anticipated by Q4 [40] Question: What are the drivers for bill rate growth? - The average bill rate increased by 4% year-over-year, driven by a focus on high-value accounts and complex work [42] Question: What are the key areas of focus for AI-driven efforts? - The company is prioritizing data modernization, data consolidation, and AI transformation, with ongoing demand for high-value talent [44][46]

Financial Data and Key Metrics Changes - Consolidated revenue for Q3 2025 was $48.5 million, a year-over-year decrease of 6.4% [11] - GAAP net income was $0.9 million, or 8 cents per diluted share, compared to $1.9 million, or 16 cents per diluted share in the prior year [15] - Non-GAAP net income was $3.5 million, or 29 cents per diluted share, compared to $2.8 million, or 23 cents per diluted share in the prior year [15] - Gross profit for Q3 was $13.5 million, a decrease of 8.9% year-over-year [12] - SG&A as a percentage of revenue was 26.1%, a decrease of 280 basis points compared to the previous year [13] Business Line Data and Key Metrics Changes - IT Staffing Services segment revenue was $40.6 million, down 4.4% year-over-year, with record gross margins of 24.8% and average bill rates at $86.60 [8][11] - Data and Analytics Services segment revenue was $7.9 million, a decline of 15.8% year-over-year, with new bookings at $6.1 million compared to $11.1 million in the prior year [9][11] Market Data and Key Metrics Changes - Client activity continues to trend below prior year levels, consistent with broader market conditions [9] - The demand environment remains cautious due to macroeconomic and geopolitical uncertainties [5] Company Strategy and Development Direction - The company launched the EDGE program, focusing on efficiency, growth, and expansion to optimize operations and drive higher revenue quality [6][12] - The strategy aims to position the company as a trusted partner for enterprises transitioning to AI-first organizations [5][7] - The company is focused on attracting top leadership talent to support its growth agenda [7] Management's Comments on Operating Environment and Future Outlook - Management noted that while the current demand environment is measured, they are focused on long-term growth and operational efficiency [8] - The company expects to realize short-term benefits from the EDGE program while reinvesting gains to strengthen competitive positioning [14] Other Important Information - The company had $32.7 million in cash balances and no bank debt as of September 30, 2025 [16] - Approximately 192,000 shares were repurchased at an average price of $7.68, with 214,000 shares remaining available for repurchase [16] Q&A Session Summary Question: Will the buyback program increase? - The company plans to continue buyback efforts in Q4 and may consider entering another Rule 10b5-1 plan [19] Question: Will the number of consultants increase or decrease? - The number of billable consultants decreased to 933 as of October, down from 980 in June [22][23] Question: Can you explain the EDGE program further? - The EDGE program focuses on driving higher quality revenue, process simplification, and disciplined spend management [24] Question: What are the expected costs related to the finance and accounting transition? - The company expects costs to remain within the previously communicated range and to be largely completed by Q4 [40] Question: What are the drivers for bill rate growth? - The average bill rate increased to $86.60, driven by a focus on high-value accounts and complex work [42] Question: What are the key areas of focus for AI-driven efforts? - Key focus areas include data modernization, data consolidation, and AI transformation, particularly in health sciences [44][46]

Financial Performance - Total consolidated revenues for Q3 2025 were $48.5 million, a decrease of 6.4% year-over-year and 1% sequentially[2]. - Revenues for Q3 2025 were $48.496 million, a decrease of 6.5% from $51.839 million in Q3 2024[18]. - Total revenues for the nine months ended September 30, 2025, were $145.910 million, a decrease of 1.9% from $148.196 million in the same period of 2024[18]. - Data and Analytics Services segment revenues declined to $7.9 million, down 15.8% year-over-year, while IT Staffing Services segment revenues were $40.6 million, a 4.4% decrease year-over-year[2][4]. - IT staffing services revenue for Q3 2025 was $40.586 million, a decrease of 4.3% from $42.441 million in Q3 2024[22]. - Data and analytics services revenue for Q3 2025 was $7.910 million, down 15.7% from $9.398 million in Q3 2024[22]. Profitability - Gross profits were $13.5 million, compared to $14.8 million in Q3 2024, with gross margins at 27.8%, down 70 basis points year-over-year[2]. - Gross profit for Q3 2025 was $13.461 million, down from $14.771 million in Q3 2024, resulting in a gross margin of 28.3%[22]. - GAAP net income was $0.9 million, down from $1.9 million in Q3 2024, while non-GAAP net income increased to $3.5 million from $2.8 million year-over-year[2]. - Net income for Q3 2025 was $941,000, compared to $1.875 million in Q3 2024, reflecting a decline of 50.0%[20]. - Non-GAAP net income for Q3 2025 increased to $3.467 million from $2.769 million in Q3 2024, representing a growth of 25.2%[20]. - Basic earnings per share for Q3 2025 were $0.08, compared to $0.16 in Q3 2024, a decline of 50.0%[20]. - Diluted earnings per share for the nine months ended September 30, 2025, were $0.26, down from $0.27 in the same period of 2024[20]. - The company reported a severance expense of $1.084 million in Q3 2025, which impacted overall profitability[22]. Cash and Debt Management - Cash balances on September 30, 2025, were $32.7 million, with no bank debt and $20.8 million available under the revolving credit facility[4]. Operational Initiatives - The company launched the EDGE initiative to optimize operations and drive growth, focusing on revenue quality and process simplification[3]. - Days Sales Outstanding (DSO) stood at 55 days, within the targeted range[4]. - New bookings activity during the quarter was subdued at $6.1 million, reflecting ongoing market challenges[4]. - The company expects long-term demand drivers in the Data and Analytics Services segment to remain intact despite current market conditions[4].

Core Insights - Mastech Digital, Inc. reported its third quarter financial results for 2025, highlighting the impact of macroeconomic and geopolitical uncertainties on client activity and decision-making [3][4]. Financial Performance - Total consolidated revenues for the third quarter were $48.5 million, a decrease of 6.4% year-over-year and a decrease of 1% sequentially from the second quarter of 2025 [13]. - The IT Staffing Services segment generated revenues of $40.6 million, down from $42.4 million in the same quarter of 2024, while the Data and Analytics Services segment revenues fell to $7.9 million from $9.4 million year-over-year [4][13]. - Gross profits were reported at $13.5 million, compared to $14.8 million in the third quarter of 2024, with gross margins at 27.8%, a decrease of 70 basis points year-over-year [13]. - GAAP net income was $0.9 million, down from $1.9 million in the third quarter of 2024, while non-GAAP net income increased to $3.5 million from $2.8 million year-over-year [13]. Strategic Initiatives - The company launched the EDGE initiative, aimed at optimizing operations and driving growth through improved revenue quality, process simplification, and disciplined spending management [3]. - The focus on higher-value engagements led to record gross margins of 24.8% in the IT Staffing Services segment, despite a reduction in billable consultant headcount by 11.6% year-over-year [4]. Market Conditions - The Data and Analytics Services segment faced a 15.8% revenue decline year-over-year, attributed to subdued new bookings activity of $6.1 million during the quarter [5]. - The company remains optimistic about long-term demand drivers in this segment, despite current market challenges [5]. Financial Position - As of September 30, 2025, Mastech Digital had cash balances of $32.7 million, no bank debt, and $20.8 million available under its revolving credit facility [5]. - Days Sales Outstanding (DSO) stood at 55 days, within the targeted range [5].

Financial Data and Key Metrics Changes - Consolidated revenue for Q2 2025 totaled $49.1 million, reflecting a year-over-year decrease of 0.9% compared to Q2 2024 [11] - GAAP net income for Q2 2025 was $100,000 or $0.01 per diluted share, down from $1.4 million or $0.12 per diluted share in Q2 2024 [12] - Non-GAAP net income for Q2 2025 was $1.8 million or $0.15 per diluted share, compared to $2.2 million or $0.19 per diluted share in Q2 2024 [12] - Consolidated gross profit dollars decreased by 1.1% in 2025 compared to 2024, with gross margins dropping by seven basis points [12] Business Line Data and Key Metrics Changes - IT Staffing Services segment revenue for Q2 2025 was $500,000, a decrease of 0.4% from Q2 2024 [11] - Data and Analytics Services segment reported revenue of $8.6 million in Q2 2025, which was 3.2% lower than Q2 2024 [11] - Order bookings in the Data and Analytics segment totaled $5.8 million, down from $9.2 million in Q2 2024 [11] Market Data and Key Metrics Changes - The market remains cautious, but early signs of stabilization are noted, particularly in North America [5] - Clients are prioritizing investments that deliver clear business value while managing budgets prudently [5] Company Strategy and Development Direction - The company is focusing on strategic initiatives to unlock efficiency, including transitioning finance and accounting functions to India [8] - There is an emphasis on building differentiated offerings through partnerships, such as with Informatica [18] - The company aims to position itself as a trusted partner for enterprises navigating an AI-first world [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to deliver value despite a cautious market [10] - There is a focus on executing priorities and preparing for future opportunities [9] - The company is optimistic about the gradual improvement in macroeconomic conditions [6] Other Important Information - The company had a cash balance of $27.9 million as of June 30, 2025, with no bank debt outstanding [13] - Day sales outstanding (DSO) measurement was 53 days, consistent with the previous year [13] Q&A Session Summary Question: Is the finance and accounting fully moved? Are there any more one-time expenses? - The transition is on track and expected to be completed by Q4 2025, with no additional one-time expenses anticipated [15][16] Question: What is the progress on the Informatica partnership? - Initial progress has been positive, with joint solution offerings being developed [18][19] Question: Will CGI's revenue go to zero? - No drastic changes are expected; client engagement remains strong [20] Question: Can you discuss revenue mix and average bill rate? - Bill rates have increased to approximately $85-$86, reflecting improved revenue quality [25][26] Question: What are the cash usage priorities? - The company is evaluating cash usage for buybacks and targeted investments aligned with long-term growth [32] Question: What are the expectations for CapEx by the end of the year? - No significant increase in CapEx is expected; it will remain in line with past spending [34]