Mastech Digital(MHH) - 2025 Q3 - Quarterly Results

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].