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Mastech Digital Reports 8% Year-over-Year Revenue Growth and 5% Sequential Revenue Growth for the Third Quarter 2024

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Mastech Digital (NYSE AMERICAN: MHH) reported strong Q3 2024 results with total revenues of $51.8 million, up 8% year-over-year and 5% sequentially. The company achieved record gross margins of 28.5%. Data and Analytics Services revenue grew 17% YoY to $9.4 million, while IT Staffing Services revenue increased 7% YoY to $42.4 million. GAAP diluted EPS improved to $0.16 from $0.01 in Q3 2023, and non-GAAP diluted EPS rose to $0.23 from $0.11. The company ended the quarter with $23.9 million in cash, no bank debt, and $25 million available credit facility.

Mastech Digital (NYSE AMERICAN: MHH) ha riportato risultati solidi per il terzo trimestre del 2024, con ricavi totali di 51,8 milioni di dollari, in aumento dell'8% rispetto all'anno precedente e del 5% rispetto al trimestre precedente. L'azienda ha raggiunto margini lordi record del 28,5%. I ricavi dei Servizi di Dati e Analitica sono cresciuti del 17% su base annua, raggiungendo 9,4 milioni di dollari, mentre i ricavi dei Servizi di Personale IT sono aumentati del 7% su base annua, toccando 42,4 milioni di dollari. L'utile per azione diluito GAAP è migliorato a 0,16 dollari rispetto a 0,01 dollari nel terzo trimestre del 2023, e l'utile per azione diluito non-GAAP è salito a 0,23 dollari rispetto a 0,11 dollari. L'azienda ha chiuso il trimestre con 23,9 milioni di dollari in contanti, senza debito bancario, e 25 milioni di dollari di linea di credito disponibile.

Mastech Digital (NYSE AMERICAN: MHH) reportó resultados sólidos para el tercer trimestre de 2024, con ingresos totales de 51.8 millones de dólares, un aumento del 8% en comparación con el año anterior y del 5% en comparación con el trimestre anterior. La empresa alcanzó márgenes brutos récord del 28.5%. Los ingresos por Servicios de Datos y Análisis crecieron un 17% interanual, alcanzando 9.4 millones de dólares, mientras que los ingresos por Servicios de Personal de TI aumentaron un 7% interanual a 42.4 millones de dólares. Las ganancias por acción diluidas GAAP mejoraron a 0.16 dólares desde 0.01 dólares en el tercer trimestre de 2023, y las ganancias por acción diluidas no GAAP subieron a 0.23 dólares desde 0.11 dólares. La empresa terminó el trimestre con 23.9 millones de dólares en efectivo, sin deuda bancaria, y 25 millones de dólares en línea de crédito disponible.

Mastech Digital (NYSE AMERICAN: MHH)는 2024년 3분기에 총 수익 5,180만 달러를 보고했으며, 이는 전년 대비 8% 증가하고 전 분기 대비 5% 증가한 수치입니다. 이 회사는 기록적인 총 매출 이익률 28.5%를 달성했습니다. 데이터 및 분석 서비스의 수익은 전년 대비 17% 증가하여 940만 달러에 달했으며, IT 인력 서비스의 수익은 전년 대비 7% 증가하여 4,240만 달러에 이르렀습니다. GAAP 기준 희석 주당 순이익은 2023년 3분기 0.01달러에서 0.16달러로 개선되었으며, 비 GAAP 기준 희석 주당 순이익은 0.11달러에서 0.23달러로 상승했습니다. 회사는 분기를 마감하며 2,390만 달러 현금, 무대출 상태, 2,500만 달러의 사용 가능한 신용 한도를 유지하고 있습니다.

Mastech Digital (NYSE AMERICAN: MHH) a annoncé des résultats solides pour le troisième trimestre 2024, avec des revenus totaux de 51,8 millions de dollars, en hausse de 8% par rapport à l'année précédente et de 5% par rapport au trimestre précédent. L'entreprise a atteint des marges brutes record de 28,5%. Les revenus des services de données et d'analyse ont augmenté de 17% d'une année sur l'autre, atteignant 9,4 millions de dollars, tandis que les revenus des services de recrutement informatique ont augmenté de 7% d'une année sur l'autre pour atteindre 42,4 millions de dollars. Le BPA dilué GAAP a été amélioré à 0,16 dollar contre 0,01 dollar au troisième trimestre 2023, et le BPA dilué non-GAAP a augmenté à 0,23 dollar contre 0,11 dollar. L'entreprise a terminé le trimestre avec 23,9 millions de dollars en liquidités, sans dettes bancaires, et 25 millions de dollars de ligne de crédit disponible.

Mastech Digital (NYSE AMERICAN: MHH) hat für das dritte Quartal 2024 starke Ergebnisse gemeldet, mit Gesamterlösen von 51,8 Millionen Dollar, was einem Anstieg von 8% im Vergleich zum Vorjahr und 5% im Vergleich zum Vorquartal entspricht. Das Unternehmen erreichte Rekord-Gewinnmargen von 28,5%. Die Erlöse aus Daten- und Analysediensten wuchsen im Jahresvergleich um 17% auf 9,4 Millionen Dollar, während die Erlöse aus IT-Personaldienstleistungen um 7% im Jahresvergleich auf 42,4 Millionen Dollar zunahmen. Der verwässerte GAAP-Gewinn pro Aktie verbesserte sich von 0,01 Dollar im dritten Quartal 2023 auf 0,16 Dollar, und der nicht-GAAP verwässerte Gewinn pro Aktie stieg von 0,11 Dollar auf 0,23 Dollar. Das Unternehmen schloss das Quartal mit 23,9 Millionen Dollar in bar, ohne Bankverbindlichkeiten und einer verfügbaren Kreditlinie von 25 Millionen Dollar.

Positive
  • Revenue growth of 8% YoY to $51.8 million
  • Record gross margins of 28.5%
  • Data and Analytics Services revenue up 17% YoY
  • GAAP EPS increased to $0.16 from $0.01 YoY
  • Strong balance sheet with $23.9 million cash and no debt
  • Order bookings increased by $6 million YoY
  • 13% growth in billable consultant base
Negative
  • $4.3 million working capital investment needed for growth

Insights

Mastech Digital delivered impressive Q3 2024 results with significant growth across key metrics. Total revenue reached $51.8 million, up 8% year-over-year, while gross margins hit a record 28.5%. The company's dual-segment strategy is paying off, with Data and Analytics growing 17% YoY to $9.4 million and IT Staffing up 7% to $42.4 million.

Most notably, GAAP EPS jumped to $0.16 from $0.01 YoY, while non-GAAP EPS rose to $0.23 from $0.11. The company's strong financial position, with $23.9 million cash on hand, zero debt and $25 million in available credit, provides significant flexibility for future growth. The healthy DSO of 55 days and $2.3 million in free cash flow demonstrate solid operational efficiency.

The strong order bookings of $11.1 million in Data and Analytics, exceeding the previous year by $6 million, signals robust market demand and client confidence. The 13% growth in billable consultants over nine months indicates a significant market recovery in IT staffing services. The company's strategic positioning in both digital transformation and staffing services provides a balanced growth approach, particularly valuable in the current tech sector environment.

The improved economic outlook driving increased client spending suggests potential for sustained growth momentum. The combination of revenue growth, margin expansion and strong bookings positions Mastech Digital favorably in the competitive IT services market.

Consolidated Gross Margins of 28.5% Set a New Mastech Digital Record for the Quarter

PITTSBURGH, Nov. 6, 2024 /PRNewswire/ -- Mastech Digital, Inc. (NYSE AMERICAN: MHH), a leading provider of Digital Transformation IT Services, announced today its financial results for the third quarter ended September 30, 2024.  

Mastech Digital Inc Logo

Third Quarter 2024 Highlights:

  • Total consolidated revenues increased by $4.1 million on a year-over-year basis and by $2.3 million on a sequential quarterly basis to $51.8 million and represented our third consecutive quarter of revenue growth;
  • The Company's Data and Analytics Services segment reported revenues of $9.4 million, which were 17% higher than revenues in the third quarter of 2023 and 6% higher on a sequential basis from the second quarter of 2024;
  • The IT Staffing Services segment delivered revenues of $42.4 million, achieving year-over-year growth of 7% and sequential quarterly growth of 4% when compared to revenues reported in the second quarter of 2024;
  • Gross margins achieved during the third quarter of 2024 were a Company performance record 28.5%, surpassing our previous gross margin record from the previous quarter;
  • GAAP diluted earnings per share was $0.16 in the third quarter of 2024, versus $0.01 in the third quarter of 2023 and $0.12 in the second quarter of 2024; and
  • Non-GAAP diluted earnings per share was $0.23 in the third quarter of 2024, versus $0.11 in the third quarter of 2023 and $0.19 in the second quarter of 2024.

Third Quarter Results: 

Revenues for the third quarter of 2024 totaled $51.8 million, compared to $47.8 million during the corresponding quarter of 2023. Gross profits in the third quarter of 2024 were $14.8 million, compared to $12.6 million in the same quarter of 2023. Gross margins improved to a Company performance record 28.5% in the 2024 third quarter, versus 26.3% in the 2023 third quarter. GAAP net income for the third quarter of 2024 totaled $1.9 million or $0.16 per diluted share, compared to $125,000 or $0.01 per diluted share, during the same period of 2023. Non-GAAP net income for the third quarter of 2024 totaled $2.8 million or $0.23 per diluted share compared to $1.3 million, or $0.11 per diluted share, in the third quarter of 2023.

Activity levels at the Company's Data and Analytics Services segment continued to be solid in the third quarter of 2024. Order bookings totaled $11.1 million during the quarter, as the Company saw numerous existing clients increase spending due to an improved economic outlook. This bookings performance exceeded our 2023 third quarter bookings by $6 million. Our IT Staffing Services clients have also shown a willingness to start new assignments during 2024 compared to the previous year, as we grew our billable consultant base by 13% over the first nine months of 2024.

Vivek Gupta, the Company's President and Chief Executive Officer, stated: "The third quarter of 2024 was a continuation of the positive momentum that we experienced during the first half of the year. A healthier macro-economic outlook and increased operational efficiencies within both of our business segments have elevated our demand trajectory in 2024. Additionally, our higher gross margin performance has highlighted several upgrades we made to the delivery-side of our organization during the year. In summary, I'm excited about our third quarter 2024 financial performance and the opportunities that we have in front of us."

Commenting on the Company's financial position, Jack Cronin, Mastech Digital's Chief Financial Officer, stated: "On September 30, 2024, we had $23.9 million of cash balances on hand, no bank debt, and borrowing availability of approximately $25 million under our revolving credit facility. Our Days Sales Outstanding (DSO) measurement was a healthy 55 days on September 30, 2024. Our free cash flow for the first nine months of 2024 totaled $2.3 million and included $4.3 million of funding investments in operating working capital levels to support revenue growth."

About Mastech Digital, Inc.:

Mastech Digital (NYSE American: MHH) is a leading provider of Digital Transformation IT Services. The Company offers Data Management and Analytics Solutions, Digital Learning, and IT Staffing Services with a Digital First approach. A minority-owned enterprise, Mastech Digital is headquartered in Pittsburgh, PA, with offices across the U.S., Canada, Europe, and India.

Use of Non-GAAP Measures:

This press release contains non-GAAP financial measures to supplement our financial results presented on a GAAP basis. The presentation of these financial measures is not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with GAAP. Investors are cautioned that there are material limitations associated with the use of non-GAAP financial measures as an analytical tool. Reconciliations of these non-GAAP measures to their comparable GAAP measures are included in the attached financial tables.

We believe that providing non-GAAP net income and non-GAAP diluted earnings per share offers investors useful supplemental information about the financial performance of our business, enables comparison of financial results between periods where certain items may vary independent of business performance, and allows for greater transparency with respect to key metrics used by management in operating our business. Additionally, management uses these non-GAAP financial measures in evaluating the Company's performance.

Specifically, the non-GAAP financial measures contained herein exclude the following expense items:

Amortization of acquired intangible assets: We amortize intangible assets acquired in connection with our June 2015 acquisition of Hudson IT, our July 2017 acquisition of the services division of InfoTrellis, Inc. and our October 2020 acquisition of AmberLeaf Partners. We exclude these amortization expenses in our non-GAAP financial measures because we believe it allows investors to make more meaningful comparisons between our operating results and those of other companies within our industry and facilitates a helpful comparison of our results with other periods.

Stock-based compensation expenses: We incur material recurring expenses related to non-cash, stock-based compensation. We exclude these expenses in our non-GAAP financial measures because we believe that it provides investors with meaningful supplemental information regarding operational performance. In particular, because of varying available valuation methodologies, subjective assumptions, and the variety of award types that companies can use under ASC 718, we believe that providing non-GAAP financial measures that exclude these expenses allows investors to make more meaningful comparisons between our operating results and those of other companies within our industry and facilitates comparison of our results with other periods.

Settlement reserve on employment-related claim, net of recoveries: In the second quarter of 2023, we recognized a pre-tax reserve of $3.1 million related to an employment claim asserted by a former employee who alleged various employment-related claims against the Company, including a claim of wrongful termination. During the third quarter of 2023, we formally settled this claim in accordance with the economic terms and conditions that were reflected in our second quarter 2023 financial statements. We have excluded this reserve in our non-GAAP financial measures because we believe it is not indicative of our ongoing operating performance and thus its exclusion allows investors to make more meaningful comparison between our operating results and those of other companies within our industry and facilitates a helpful comparison of our results with other periods.

Forward-Looking Statements:

Certain statements contained in this release are forward-looking statements based on management's expectations, estimates, projections, and assumptions.  Words such as "expects," "anticipates," "plans," "believes," "scheduled," "estimates" and variations of these words and similar expressions are intended to identify forward-looking statements, which include but are not limited to projections of and statements regarding the Company's ability to generate revenues, earnings, and cash flow.  These statements are based on information currently available to the Company and it assumes no obligation to update the forward-looking statements as circumstances change.  These statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict.  Therefore, actual future results and trends may differ materially from what is forecasted in forward-looking statements due to a variety of factors, including, without limitation, the level of market demand for the Company's services, the highly competitive market for the types of services offered by the Company, the impact of competitive factors on profit margins, market and general economic conditions that could cause the Company's customers to reduce their spending for its services, the Company's ability to create, acquire and build new lines of business, to attract and retain qualified personnel, reduce costs and conserve cash, the extent to which the Company's business is adversely affected by the impacts of the COVID-19 pandemic or any other pandemics or outbreaks disrupting day-to-day activities and other risks that are described in more detail in the Company's filings with the Securities and Exchange Commission, including its Form 10-K for the year ended December 31, 2023.

 

 

MASTECH DIGITAL, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands)

(Unaudited)







September 30,


December 31,



2024


2023






ASSETS





Current assets:





     Cash and cash equivalents 


$                    23,885


$                   21,147

     Accounts receivable, net 


34,054


29,815

     Prepaid and other current assets


7,876


5,501

           Total current assets


65,815


56,463






Equipment, enterprise software and leasehold improvements, net


2,083


1,913






Operating lease right-of-use assets, net


4,147


5,106






Deferred income taxes


607


793






Deferred financing costs, net


213


284






Non-current deposits


452


457






Goodwill, net of impairment


27,210


27,210






Intangible assets, net of amortization


10,958


13,001

           Total  assets


$                 1,11,485


$                1,05,227






LIABILITIES AND SHAREHOLDERS' EQUITY





Current liabilities:





     Accounts payable


$                      4,636


$                     4,659

     Current portion of operating lease liability


1,257


1,236

     Accrued payroll and related costs


14,717


12,354

     Other accrued liabilities


1,491


1,622

           Total current liabilities


22,101


19,871






Long-term liabilities:





    Long-term operating lease liability, less current portion


2,857


3,843

    Long-term accrued income taxes


-


69

           Total liabilities


24,958


23,783






Shareholders' equity:





     Common stock, par value $0.01 per share


134


133

     Additional paid-in capital


37,473


35,345

     Retained earnings


55,520


52,415

     Accumulated other comprehensive income (loss)


(1,715)


(1,644)

     Treasury stock, at cost


(4,885)


(4,805)

          Total shareholders' equity


86,527


81,444

           Total liabilities and shareholders' equity


$                 1,11,485


$                1,05,227

 

 

MASTECH DIGITAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in thousands, except per share data)

(Unaudited)










Three Months ended September 30,


Nine Months ended September 30,


2024


2023


2024


2023









Revenues

$                         51,839


$                        47,779


$                     1,48,196


$                    1,55,046









Cost of revenues

37,068


35,213


1,07,314


1,15,354









Gross profit

14,771


12,566


40,882


39,692









Selling, general and administrative expenses:








   Operating expenses

12,332


12,615


37,156


38,937

   Employment-related claim, net of recoveries

-


-


-


3,100

Total selling, general and administrative expenses

12,332


12,615


37,156


42,037

















Income (loss) from operations 

2,439


(49)


3,726

#

(2,345)









Other income/(expense), net

133


203


373


200









Income (loss) before income taxes

2,572


154


4,099


(2,145)









Income tax expense (benefit)

697


29


994


(358)

Net income (loss)

$                           1,875


$                             125


$                          3,105


$                       (1,787)









Earnings (loss) per share:








Basic

$                             0.16


$                            0.01


$                            0.27


$                         (0.15)

Diluted

$                             0.16


$                            0.01


$                            0.26


$                         (0.15)









Weighted average common shares outstanding:








Basic

11,695


11,597


11,654


11,618

Diluted

12,011


11,968


11,949


11,618

 

 

MASTECH DIGITAL, INC.

RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES

(Amounts in thousands, except per share data)

(Unaudited)















Three Months ended September 30,


Nine Months ended September 30,





2024


2023


2024


2023














GAAP Net Income (Loss)

$                           1,875


$                             125


$                          3,105

#

$                        (1,787)














Adjustments:











Amortization of acquired intangible assets

657


693


2,043


2,079




Stock-based compensation

542


824


1,553


2,501




Employment-related claim, net of recoveries 

-


-


-


3,100




Income tax adjustments

(305)


(385)


(920)


(1,944)



Non-GAAP Net Income

$                           2,769


$                          1,257


$                          5,781


$                          3,949

























GAAP Diluted Earnings (Loss) Per Share

$                             0.16


$                            0.01


$                            0.26


$                          (0.15)



Non-GAAP Diluted Earnings Per Share

$                             0.23


$                            0.11


$                            0.48


$                            0.33

























Weighted average common shares outstanding:










GAAP Diluted Shares

12,011


11,968


11,949


11,618



Non-GAAP Diluted Shares

12,011


11,968


11,949

#

11,998


 

 

MASTECH DIGITAL, INC.

SUPPLEMENTAL FINANCIAL INFORMATION

(Amounts in thousands)

(Unaudited)














Three Months ended September 30,


Nine Months ended September 30,




2024


2023


2024


2023











Revenues:









Data and analytics services

$                          9,398


$                     8,038


$                   26,341


$                    26,206


IT staffing services

42,441


39,741


1,21,855


1,28,840



Total revenues

$                        51,839


$                   47,779


$                1,48,196


$                 1,55,046











Gross Margin %:









Data and analytics services

50.7 %


45.8 %


48.9 %


43.1 %


IT staffing services

23.6 %


22.4 %


23.0 %


22.0 %



Total gross margin %

28.5 %


26.3 %


27.6 %


25.6 %











Segment Operating Income:









Data and analytics services

$                          1,145


$                      (832)


$                     1,435


$                    (2,393)


IT staffing services

1,951


1,476


4,334


5,227



Subtotal

3,096


644


5,769


2,834











Amortization of acquired intangible assets

(657)


(693)


(2,043)


(2,079)

Employment-related claim, net of recoveries

-


-


-


(3,100)

Interest income (expense) and other, net

133


203


373


200

Income before income taxes

$                          2,572


$                        154


$                     4,099


$                    (2,145)

 

 

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Cision View original content:https://www.prnewswire.com/news-releases/mastech-digital-reports-8-year-over-year-revenue-growth-and-5-sequential-revenue-growth-for-the-third-quarter-2024-302297473.html

SOURCE Mastech Digital, Inc.

FAQ

What was Mastech Digital's (MHH) revenue growth in Q3 2024?

Mastech Digital reported revenue growth of 8% year-over-year and 5% sequentially, reaching $51.8 million in Q3 2024.

What were Mastech Digital's (MHH) gross margins in Q3 2024?

Mastech Digital achieved record gross margins of 28.5% in Q3 2024, surpassing their previous quarter's record.

How much cash did Mastech Digital (MHH) have at the end of Q3 2024?

Mastech Digital had $23.9 million in cash balances with no bank debt as of September 30, 2024.

What was Mastech Digital's (MHH) EPS for Q3 2024?

Mastech Digital reported GAAP diluted EPS of $0.16 and non-GAAP diluted EPS of $0.23 in Q3 2024.

Mastech Digital, Inc.

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