Mastech Digital Reports Fourth Quarter and Full-Year 2025 Results
Rhea-AI Summary
Mastech Digital (NYSE: MHH) reported fourth-quarter and full-year 2025 results, citing continued progress on a transformation plan and authorizing a $5.0 million share repurchase program. Q4 revenue was $45.5M (down 10.4% YoY); full-year revenue was $191.4M (down 3.8% YoY). Q4 GAAP net income was $1.0M; 2025 GAAP net income was $0.6M. Gross margin held at ~27.9% for the year. The company repurchased ~299,523 shares in 2025 (~$2.2M) and repurchased 90,900 shares (~$0.7M) in Q4.
Positive
- Board authorizes $5.0M share repurchase program
- Q4 GAAP net income of $1.0M, beating expectations
- Full-year gross margin stable at 27.9% year-over-year
Negative
- Q4 revenue down 10.4% year-over-year to $45.5M
- Data & Analytics Q4 revenue declined from $10.3M to $7.8M
- 2025 GAAP net income fell to $0.6M from $3.4M in 2024
News Market Reaction
On the day this news was published, MHH declined 0.29%, reflecting a mild negative market reaction.
Data tracked by StockTitan Argus on the day of publication.
Key Figures
Market Reality Check
Peers on Argus
MHH was up 4.55% pre-release while peers were mixed: BGSF +2.16%, TBI +3.67%, HQI -1.10%, ATLN -4.17%, HSON -0.25%. Momentum scans only flagged TBI on the downside, suggesting today’s setup was stock-specific rather than a broad staffing move.
Historical Context
| Date | Event | Sentiment | Move | Catalyst |
|---|---|---|---|---|
| Feb 11 | Earnings date notice | Neutral | +0.6% | Set expectations for timing of Q4 and full-year 2025 results. |
| Nov 12 | Earnings release | Negative | +5.4% | Reported Q3 2025 revenue and income declines with restructuring costs. |
| Nov 03 | Earnings call notice | Neutral | +3.6% | Announced timing and access details for Q3 2025 results call. |
Recent earnings-related events have often seen positive price reactions, including a strong gain on weaker Q3 results, indicating the stock has previously risen on mixed fundamentals.
Over the last few months, Mastech Digital has been in a transition period, with multiple earnings updates highlighting softer revenue and severance and finance transition costs, but stable liquidity and no bank debt. The Q3 2025 earnings on Nov 12, 2025 showed revenue down 6.4% year-over-year and non-GAAP net income of $3.5M, yet shares rose 5.42%. Scheduling releases on Nov 3, 2025 and Feb 11, 2026 also saw modest gains, suggesting investors have been receptive around news flow.
Market Pulse Summary
This announcement detailed Q4 and full-year 2025 performance, showing revenue softness but improved Q4 GAAP earnings alongside ongoing restructuring costs. Full-year non-GAAP EPS of $0.72 held slightly above 2024, while a new $5,000,000 share repurchase program and prior buybacks highlighted capital return. With shares around 6.9, well below the 14.04 52-week high and under the 7.3 200-day MA, investors may focus on how 2026 execution and Data and AI investments translate into renewed top-line growth and margin stability.
Key Terms
gross margins financial
basis points financial
non-GAAP financial
GAAP financial
AI-generated analysis. Not financial advice.
Continued Strong Progress Against Transformation Plan Driving Operational Improvements; Board of Directors Approves a
Fourth Quarter 2025 Financial Highlights:
- Total consolidated revenues of
$45.5 million 10.4% on a year-over-year basis, and a decrease of6.3% on a sequential basis from the third quarter of 2025. - Data and Analytics Services segment revenues of
$7.8 million $10.3 million - IT Staffing Services segment revenues of
$37.7 million $40.5 million - Gross profits of
$12.9 million $14.7 million $13.5 million - Gross margins of
28.3% decreased by 70-basis points on a year-on-year basis and increased by 50-basis points on a sequential basis from the third quarter of 2025. - GAAP net income of
$1.0 million $0.3 million $0.9 million $2.5 million $2.8 million $3.5 million $0.7 million $2.0 million $2.1 million - GAAP diluted earnings (loss) per share of
$0.08 $0.02 $0.08 - Non-GAAP diluted earnings per share of
$0.21 $0.23 $0.29 - During the fourth quarter, the Company repurchased 90,900 shares of Mastech Digital common stock under the previously announced share repurchase program authorized by our Board of Directors, for a total investment of approximately
$0.7 million
Full-Year 2025 Financial Highlights:
- Total consolidated revenues of
$191.4 million $198.9 million 3.8% on a year-over-year basis. - Data and Analytics Services segment revenues of
$33.3 million $36.6 million 9.1% on a year-over-year basis. - IT Staffing Services segment revenues of
$158.1 million $162.3 million 2.6% on a year-over-year basis. - Gross profits of
$53.1 million 27.9% of total revenue, compared to$55.6 million 27.9% of revenue for 2024. - GAAP net income of
$0.6 million $3.4 million $8.6 million $8.6 million - GAAP diluted earnings per share of
$0.05 $0.28 - Non-GAAP diluted earnings per share of
$0.72 $0.71 - During the full-year 2025, the Company repurchased 299,523 shares of Mastech Digital common stock under the previously announced share repurchase program authorized by our Board of Directors, for a total investment of approximately
$2.2 million
Nirav Patel, Mastech Digital's President and Chief Executive Officer, stated, "We are pleased with our continued strong progress against our transformation plan to drive operational improvements across the enterprise. During the third quarter of 2025, we launched our EDGE (Efficiencies Driving Growth and Expansion) initiative, and we maintained our positive momentum during the fourth quarter of 2025 as we advanced our focus on optimizing our organization and operating model. We are also pleased to see our revenue and earnings results during the fourth quarter of 2025 coming ahead of our expectations.
2025 was a year of transition for us. We have mobilized our organization towards a new direction while delivering meaningful improvement in our operational efficiency and financial rigor, the fruits of which we believe are already reflected in our earnings. As we look ahead, we view 2026 to be a year of execution. We believe the strategic actions we took last year have established a solid foundation and have put us in a position of strength as we implement our transformation agenda. We plan to continue accelerating our investments in strategic growth priorities including Data and AI."
Share Repurchase Authorization
The share repurchase program is currently in effect and repurchases may occur from time to time through privately negotiated transactions, through block purchases, or by any combination of such methods, and may be modified, suspended or terminated at any time at the discretion of the Company's Board of Directors. The timing and actual number of shares repurchased (if any) will depend upon business, economic and market conditions, corporate and regulatory requirements, prevailing stock prices, and other considerations.
Conference Call:
Mastech Digital will host a conference call to discuss the Company's fourth quarter and full-year 2025 financial results on February 19, 2025 at 9:00 a.m. Eastern Time. To join the call telephonically, please register at https://register-conf.media-server.com/register/BId934e909986147bf883a3c784d353d76. Once registered, participants will receive the dial-in information and a unique PIN to access the call. The dial-in information and unique PIN will be sent to the email used to register for the call. The unique PIN is exclusive to the registrant and can only be used by one person at a time.
A live audio webcast of the conference call can be accessed through the Investors section of Mastech Digital's website at http://www.mastechdigital.com, and a webcast replay will be accessible for a limited time following the scheduled call.
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
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 from 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 facilitate comparisons of our results with other periods.
Severance charges: From time to time, we incur severance expenses related to the termination by the Company of leadership and other key personnel. During the third quarter of 2025, we recorded severance charges associated with strategic initiatives we undertook to better align our organizational structure with our long-term growth objectives. During the third quarter of 2025, the Company recognized
Finance and accounting transition expense: During the first quarter of 2025, the Company's Board of Directors made the decision to implement a long-term cost-cutting initiative to transition the Company's finance and accounting functions to India. During 2025, the Company expects to incur additional costs related to the duplication of resources and travel expenses during the training and knowledge transfer process. Additionally, the Company expects to pay severance expense related to this initiative. The Company estimates total transition and severance expenses to approximate
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, statements regarding the terms, timing, logistics and conditions of the Company's share repurchase program, and projections of and statements regarding the Company's operations, business, expected financial results, performance, prospects, opportunities, priorities, ongoing objectives, strategies and outlook (including the timing, effectiveness and anticipated results of the Company's EDGE initiative and other Company initiatives, strategies, business plans and models). 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 Company's strategies, initiatives and expectations concerning its operations and operating results, the extent to which the Company's business is adversely affected by the impacts of the COVID-19 pandemic or any other health epidemics or other outbreaks that disrupt 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, 2024.
For more information, contact:
Liz Morgan, +1 972-896-1771
Investors@mastechdigital.com
MASTECH DIGITAL, INC. | |||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||
(Amounts in thousands) | |||||
(Unaudited) | |||||
December 31, | December 31, | ||||
2025 | 2024 | ||||
ASSETS | |||||
Current assets: | |||||
Cash and cash equivalents | $ 36,533 | $ 27,742 | |||
Accounts receivable, net | 26,396 | 31,443 | |||
Prepaid and other current assets | 5,647 | 7,020 | |||
Total current assets | 68,576 | 66,205 | |||
Equipment, enterprise software and leasehold improvements, net | 1,557 | 1,998 | |||
Operating lease right-of-use assets, net | 2,534 | 3,832 | |||
Deferred income taxes | 2,583 | 1,298 | |||
Deferred financing costs, net | 95 | 189 | |||
Deferred compensation, net | 1,000 | - | |||
Non-current deposits | 530 | 444 | |||
Goodwill, net of impairment | 27,210 | 27,210 | |||
Intangible assets, net of amortization | 7,755 | 10,308 | |||
Total assets | $ 111,840 | $ 111,484 | |||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||
Current liabilities: | |||||
Accounts payable | $ 3,451 | $ 4,683 | |||
Current portion of operating lease liability | 1,283 | 1,265 | |||
Accrued payroll and related costs | 15,391 | 13,750 | |||
Other accrued liabilities | 939 | 879 | |||
Total current liabilities | 21,064 | 20,577 | |||
Long-term liabilities: | |||||
Long-term operating lease liability, less current portion | 1,138 | 2,486 | |||
Long-term severance liability | 330 | 987 | |||
Total liabilities | 22,532 | 24,050 | |||
Shareholders' equity: | |||||
Common stock, par value | 137 | 135 | |||
Additional paid-in capital | 42,515 | 38,277 | |||
Retained earnings | 56,427 | 55,817 | |||
Accumulated other comprehensive income (loss) | (2,640) | (1,910) | |||
Treasury stock, at cost | (7,131) | (4,885) | |||
Total shareholders' equity | 89,308 | 87,434 | |||
Total liabilities and shareholders' equity | $ 111,840 | $ 111,484 | |||
MASTECH DIGITAL, INC. | |||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||
(Amounts in thousands, except per share data) | |||||||
(Unaudited) | |||||||
Three Months ended December 31, | Year-ended December 31, | ||||||
2025 | 2024 | 2025 | 2024 | ||||
Revenues | $ 45,461 | $ 50,747 | $ 191,371 | $ 198,943 | |||
Cost of revenues | 32,578 | 36,032 | 138,315 | 143,346 | |||
Gross profit | 12,883 | 14,715 | 53,056 | 55,597 | |||
Selling, general and administrative expenses | 11,876 | 14,650 | 53,055 | 51,806 | |||
Income (loss) from operations | 1,007 | 65 | 1 | 3,791 | |||
Other income/(expense), net | 372 | 260 | 1,061 | 633 | |||
Income (loss) before income taxes | 1,379 | 325 | 1,062 | 4,424 | |||
Income tax expense (benefit) | 407 | 28 | 453 | 1,022 | |||
Net income (loss) | $ 972 | $ 297 | $ 609 | $ 3,402 | |||
Earnings (loss) per share: | |||||||
Basic | $ 0.08 | $ 0.03 | $ 0.05 | $ 0.29 | |||
Diluted | $ 0.08 | $ 0.02 | $ 0.05 | $ 0.28 | |||
Weighted average common shares outstanding: | |||||||
Basic | 11,705 | 11,713 | 11,747 | 11,669 | |||
Diluted | 11,823 | 12,191 | 11,950 | 12,014 | |||
MASTECH DIGITAL, INC. | ||||||||||
RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES | ||||||||||
(Amounts in thousands, except per share data) | ||||||||||
(Unaudited) | ||||||||||
Three Months ended December 31, | Year-ended December 31, | |||||||||
2025 | 2024 | 2025 | 2024 | |||||||
GAAP Net Income (Loss) | $ 972 | $ 297 | $ 609 | $ 3,402 | ||||||
Adjustments: | ||||||||||
Amortization of acquired intangible assets | 604 | 650 | 2,553 | 2,693 | ||||||
Stock-based compensation | 780 | 647 | 3,118 | 2,200 | ||||||
Severance expense | 370 | 2,083 | 3,095 | 2,083 | ||||||
Finance and accounting transition expense | 299 | - | 1,924 | - | ||||||
Income tax adjustments | (526) | (875) | (2,747) | (1,795) | ||||||
Non-GAAP Net Income | $ 2,499 | $ 2,802 | $ 8,552 | $ 8,583 | ||||||
GAAP Diluted Earnings (Loss) Per Share | $ 0.08 | $ 0.02 | $ 0.05 | $ 0.28 | ||||||
Non-GAAP Diluted Earnings Per Share | $ 0.21 | $ 0.23 | $ 0.72 | $ 0.71 | ||||||
Weighted average common shares outstanding: | ||||||||||
GAAP Diluted Shares | 11,823 | 12,191 | 11,950 | 12,014 | ||||||
Non-GAAP Diluted Shares | 11,823 | 12,191 | 11,950 | 12,014 | ||||||
MASTECH DIGITAL, INC. | |||||||||
SUPPLEMENTAL FINANCIAL INFORMATION | |||||||||
(Amounts in thousands) | |||||||||
(Unaudited) | |||||||||
Three Months ended December 31, | Year-ended December 31, | ||||||||
2025 | 2024 | 2025 | 2024 | ||||||
Revenues: | |||||||||
Data and analytics services | $ 7,816 | $ 10,284 | $ 33,275 | $ 36,625 | |||||
IT staffing services | 37,645 | 40,463 | 158,096 | 162,318 | |||||
Total revenues | $ 45,461 | $ 50,747 | $ 191,371 | $ 198,943 | |||||
Gross Margin %: | |||||||||
Data and analytics services | 49.8 % | 49.5 % | 46.2 % | 49.1 % | |||||
IT staffing services | 23.9 % | 23.8 % | 24.0 % | 23.2 % | |||||
Total gross margin %1 | 28.3 % | 29.0 % | 27.9 % | 27.9 % | |||||
Segment Operating Income (Loss): | |||||||||
Data and analytics services | $ (252) | $ 1,809 | $ (221) | $ 3,244 | |||||
IT staffing services | 2,532 | 989 | 7,794 | 5,323 | |||||
Subtotal | 2,280 | 2,798 | 7,573 | 8,567 | |||||
Amortization of acquired intangible assets | (604) | (650) | (2,553) | (2,693) | |||||
Severance expense | (370) | (2,083) | (3,095) | (2,083) | |||||
Finance and accounting transition expense | (299) | - | (1,924) | - | |||||
Interest income and other, net | 372 | 260 | 1,061 | 633 | |||||
Income (loss) before income taxes | $ 1,379 | $ 325 | $ 1,062 | $ 4,424 | |||||
(1) Gross margin differences between the supplemental segment and consolidated results primarily reflect non-allocated | |||||||||
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SOURCE Mastech Digital, Inc.
FAQ
What did Mastech Digital (MHH) report for Q4 2025 revenue and net income?
What does the $5.0 million buyback authorization mean for MHH shareholders?
How did Mastech Digital's full-year 2025 results compare to 2024 for revenue and GAAP income?
What operational trends did Mastech Digital highlight for 2026 following the 2025 results?
How much stock did Mastech Digital repurchase in 2025 and during Q4 under prior programs?
