Mastech Digital (NYSE: MHH) Q2 2026 revenue drops 15.6% year over year
Rhea-AI Filing Summary
Mastech Digital, Inc. reported second‑quarter 2026 revenues of $41.4 million, down 15.6% from the prior year but up 0.9% sequentially. Gross margin was 29.0%, compared with 28.1% a year earlier. GAAP results were a small net loss of $0.1 million, or $(0.01) per diluted share, while non‑GAAP net income was $0.976 million, or $0.08 per diluted share.
Data & AI revenues were $13,484 thousand, down 14.4% year over year but up 7.2% sequential, with bookings higher than in 2025. Talent revenues were $27,963 thousand, down 16.2% year over year and 1.9% sequential, reflecting client insourcing and exits from lower‑margin roles. Liquidity totaled $56.0 million, including $35.6 million in cash and $20.4 million of credit facility capacity, with no bank debt.
On August 1, 2026, CEO Nirav Patel received 50,000 restricted stock units, vesting in three annual installments beginning one year after grant. The board also adopted Second Amended and Restated Bylaws aligning with Pennsylvania corporate law, adding exclusive forum provisions and confirming board authority to amend the bylaws.
Positive
- None.
Negative
- Total revenues fell 15.6% year over year to $41.4 million in Q2 2026, with both Data & AI and Talent segments showing double‑digit revenue declines versus the prior‑year quarter.
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liquidity financial
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FAQ
How did Mastech Digital (MHH) perform financially in Q2 2026?
What were Mastech Digital (MHH) segment results for Data & AI and Talent in Q2 2026?
What was Mastech Digital’s (MHH) liquidity position as of June 30, 2026?
What stock-based compensation did Mastech Digital (MHH) grant to its CEO in August 2026?
What bylaw changes did Mastech Digital (MHH) adopt in August 2026?
How did Mastech Digital’s (MHH) non-GAAP results compare to GAAP in Q2 2026?
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): |
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Registrant’s Telephone Number, Including Area Code: |
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
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Trading |
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition. |
On August 6, 2026, Mastech Digital, Inc. (the “Company”) issued a press release (the “Press Release”) announcing its financial results for the second quarter ended June 30, 2026. A copy of the Press Release is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.
The information contained in this Item 2.02 and in Exhibit 99.1 shall not be deemed filed for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On August 1, 2026, Mastech Digital, Inc. (the "Company") awarded Nirav Patel, the Company's Chief Executive Officer and President, 50,000 restricted stock units (“RSUs”). The terms regarding the issuance of these restricted stock units are set forth in a Restricted Stock Unit Agreement between the Company and Mr. Patel dated August 1, 2026 (the “Restricted Stock Agreement”).
Under the terms of the Restricted Stock Agreement, the RSUs shall become vested and exercisable in accordance with the following schedule:
The foregoing description of the Restricted Stock Agreement does not purport to be complete and is qualified in its entirety by the full text of the Restricted Stock Agreement, a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
On August 5, 2026, the Board of Directors of the Company adopted the Second Amended and Restated Bylaws of the Company (the "Amended and Restated Bylaws"), effective as of that date. The Amended and Restated Bylaws replaced the Company's prior Amended and Restated Bylaws in their entirety.
The Amended and Restated Bylaws contain amendments that were adopted primarily to conform the Bylaws to the 2022 amendments to the Pennsylvania Business Corporation Law of 1988, as amended (the "BCL"), including amendments relating to shareholder meetings by electronic means, notice provisions, officer liability limitations and other conforming changes, as well as an exclusive forum selection provision designating the state courts of the Commonwealth of Pennsylvania in and for Allegheny County as the exclusive forum for certain actions relating to the Company's internal affairs, and designating the federal district courts of the United States as the exclusive forum for claims arising under the Securities Act of 1933, as amended. In addition, a new Article 10 was added, which expressly provides that the Bylaws may be altered, amended or repealed by the Board, as set forth in the Company’s Amended and Restated Articles of Incorporation.
The foregoing description of the Amended and Restated Bylaws does not purport to be complete and is qualified in its entirety by reference to the full text of the Second Amended and Restated Bylaws, a copy of which is filed as Exhibit 3.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
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Exhibit |
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Description |
3.1 |
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Mastech Digital Second Amended and Restated Bylaws effective August 5, 2026 |
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10.1 |
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Restricted Stock Unit Agreement dated August 5, 2026, between Mastech Digital, Inc and Nirav Patel |
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99.1 |
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Press Release |
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104 |
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Cover Page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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MASTECH DIGITAL, INC. |
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Date: |
August 6, 2026 |
By: |
/s/ Kannan Sugantharaman |
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Kannan Sugantharaman |
Exhibit 99.1
FOR IMMEDIATE RELEASE:
Mastech Digital Reports Second Quarter 2026 Results
Mastech Digital Reports Sequential Revenue Growth and Sustained Bookings Momentum
PITTSBURGH, PA – August 6, 2026 - Mastech Digital, Inc. (NYSE American: MHH) (“Mastech Digital”), a leading provider of Digital Transformation IT Services, announced today its financial results for the second quarter ended June 30, 2026.
Second Quarter 2026 Highlights:
MASTECH DIGITAL, INC. |
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SUPPLEMENTAL FINANCIAL INFORMATION |
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(Amounts in thousands) |
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(Unaudited) |
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Three Months ended June 30, |
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Six Months ended June 30, |
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2026 |
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2025 |
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2026 |
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2025 |
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Revenues: |
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Data & AI |
$ |
13,484 |
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$ |
15,737 |
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$ |
26,068 |
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$ |
31,734 |
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Talent |
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27,963 |
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33,360 |
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56,462 |
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65,680 |
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Total revenues |
$ |
41,447 |
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$ |
49,097 |
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$ |
82,530 |
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$ |
97,414 |
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Gross Margin $: |
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Data & AI |
$ |
5,451 |
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$ |
6,139 |
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$ |
10,135 |
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$ |
12,173 |
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Talent |
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6,548 |
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7,681 |
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12,889 |
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14,539 |
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Total gross margin $ |
$ |
11,999 |
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$ |
13,820 |
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$ |
23,024 |
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$ |
26,712 |
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Gross Margin %: |
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Data & AI |
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40.4 |
% |
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39.0 |
% |
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38.9 |
% |
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38.4 |
% |
Talent |
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23.4 |
% |
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23.0 |
% |
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22.8 |
% |
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22.1 |
% |
Total gross margin % |
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29.0 |
% |
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28.1 |
% |
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27.9 |
% |
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27.4 |
% |
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GAAP Net Income (Loss) |
$ |
(100 |
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$ |
135 |
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$ |
164 |
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$ |
(1,304 |
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GAAP Diluted Earnings (Loss) Per Share |
$ |
(0.01 |
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$ |
0.01 |
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$ |
0.01 |
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$ |
(0.11 |
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Non-GAAP Net Income |
$ |
976 |
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$ |
1,830 |
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$ |
2,233 |
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$ |
2,586 |
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Non-GAAP Diluted Earnings Per Share |
$ |
0.08 |
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$ |
0.15 |
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$ |
0.19 |
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$ |
0.21 |
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See “Use of Non-GAAP Financial Measures” and “Reconciliation of GAAP Measures to Non-GAAP Measures” below.
Total consolidated revenues of $41.4 million during the quarter represented a decrease of 15.6% on a year-over-year basis, but an increase of 0.9% on a sequential basis from the first quarter of 2026. Data and AI segment revenues declined 14.4% during the quarter when compared to the second quarter of 2025 but increased 7.2% on a sequential basis from the first quarter of 2026, the first quarter of sequential growth since 2024. Data & AI segment reported bookings of $13.5 million during the quarter when compared to $9.0 million in the second quarter of 2025. Talent segment revenues declined 16.2% when compared to the second quarter of 2025, and a decrease of 1.9% on a sequential basis from the first quarter of 2026, driven by a 22.3% decrease in billable consultants since the second quarter of 2025, as a top ten client continued insourcing services we provide in this segment and we continued to exit lower-margin and non-strategic positions. Strong average bill rate of $92.17, as compared to $88.36 during the second quarter of 2025 reflected a continued focus on revenue quality.
Management Commentary:
Nirav Patel, Mastech Digital's President and Chief Executive Officer, stated, “Last quarter, we realigned our business into two segments, Talent and Data & AI, positioning us as a full-service, AI-first provider for enterprise customers. We believe that decision is beginning to show results. During the second quarter, we entered into a strategic AI deployment engagement with a leading US convenience store retailer to deploy a production-grade agentic AI foundation to power its consumer applications and store
operations. We believe this engagement reflects continued enterprise demand for partners like Mastech Digital that can support AI-first initiatives.
Within our Data & AI segment, deliberate investments in our go-to-market acceleration, AI ready talent, and Data platform partnership scale-ups are now beginning to increase as reflected in our financials for the second quarter of 2026. Bookings for the quarter totaled $13.6 million, compared to $9.0 million in the second quarter of 2025.Revenue grew 7.2% sequentially, marking the segment's first sequential quarter of growth since 2024.
As anticipated, insourcing by one of our top ten clients continued to weigh on Talent segment performance, consistent with prior quarters. We continue to monitor the situation closely.
As we move into the second half of the year, our team remains focused and disciplined in executing our transformation plan”
Balance Sheet & Liquidity Update:
As of June 30, 2026, Mastech Digital had liquidity of $56.0 million, including cash and cash equivalents of $35.6 million and approximately $20.4 million of borrowing capacity available under its credit facility, with no bank debt.
Conference Call:
Mastech Digital will host a conference call to discuss the Company’s second quarter 2026 financial results on August 6, 2026 at 9:00 a.m. Eastern Time. Those wishing to participate via telephone may dial in at 1-800-715-9871 (USA) or 1-646-307-1963 (International) with the passcode 7506988. A live audio webcast of the conference call can be accessed through the Mastech Digital investor relations website at https://investors.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, Analytics & AI Solutions, 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. Visit us at www.mastechdigital.com.
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.
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, and projections of and statements regarding the Company’s operations, business, segments, expected financial results, performance, prospects, opportunities, priorities, ongoing objectives, strategies and outlook (including the timing, effectiveness and anticipated results of 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, segments 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, 2025.
Investor Relations Contact:
Investors@mastechdigital.com
MASTECH DIGITAL, INC. |
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CONDENSED CONSOLIDATED BALANCE SHEETS |
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(Amounts in thousands) |
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(Unaudited) |
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June 30, |
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Dec 31, |
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2026 |
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2025 |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
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$ |
35,603 |
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$ |
36,533 |
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Accounts receivable, net |
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27,740 |
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26,396 |
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Prepaid and other current assets |
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5,930 |
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5,647 |
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Total current assets |
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69,273 |
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68,576 |
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Equipment, enterprise software and leasehold improvements, net |
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1,246 |
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1,557 |
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Operating lease right-of-use assets, net |
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2,255 |
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2,534 |
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Deferred income taxes |
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1,705 |
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2,583 |
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Deferred financing costs, net |
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47 |
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95 |
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Deferred compensation, net |
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750 |
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1,000 |
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Non-current deposits |
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518 |
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530 |
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Goodwill, net of impairment |
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27,210 |
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27,210 |
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Intangible assets, net of amortization |
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6,549 |
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7,755 |
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Total assets |
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$ |
109,553 |
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$ |
111,840 |
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LIABILITIES AND SHAREHOLDERS' EQUITY |
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Current liabilities: |
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Accounts payable |
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$ |
3,139 |
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$ |
3,451 |
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Current portion of operating lease liability |
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1,274 |
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1,283 |
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Accrued payroll and related costs |
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11,734 |
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15,391 |
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Other accrued liabilities |
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746 |
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939 |
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Total current liabilities |
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16,893 |
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21,064 |
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Long-term liabilities: |
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Long-term operating lease liability, less current portion |
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851 |
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1,138 |
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Long-term severance liability |
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- |
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330 |
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Total liabilities |
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17,744 |
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22,532 |
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Shareholders' equity: |
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Common stock, par value $0.01 per share |
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140 |
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137 |
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Additional paid-in capital |
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45,490 |
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42,515 |
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Retained earnings |
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56,591 |
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56,427 |
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Accumulated other comprehensive income (loss) |
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(3,281 |
) |
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(2,640 |
) |
Treasury stock, at cost |
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(7,131 |
) |
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(7,131 |
) |
Total shareholders' equity |
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91,809 |
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89,308 |
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Total liabilities and shareholders' equity |
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$ |
109,553 |
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$ |
111,840 |
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MASTECH DIGITAL, INC. |
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
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(Amounts in thousands, except per share data) |
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(Unaudited) |
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Three Months ended June 30, |
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Six Months ended June 30, |
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2026 |
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2025 |
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2026 |
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2025 |
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Revenues |
$ |
41,447 |
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$ |
49,097 |
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$ |
82,530 |
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$ |
97,414 |
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Cost of revenues |
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29,448 |
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|
35,277 |
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59,506 |
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70,702 |
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Gross profit |
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11,999 |
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13,820 |
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23,024 |
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26,712 |
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Selling, general and administrative expenses |
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12,324 |
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13,793 |
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23,298 |
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28,538 |
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Income (loss) from operations |
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(325 |
) |
|
27 |
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|
(274 |
) |
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(1,826 |
) |
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Other income/(expense), net |
|
323 |
|
|
183 |
|
|
|
929 |
|
|
274 |
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Income (loss) before income taxes |
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(2 |
) |
|
210 |
|
|
|
655 |
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(1,552 |
) |
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Income tax expense (benefit) |
|
98 |
|
|
75 |
|
|
|
491 |
|
|
(248 |
) |
|
Net income (loss) |
$ |
(100 |
) |
$ |
135 |
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|
$ |
164 |
|
$ |
(1,304 |
) |
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Earnings (loss) per share: |
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Basic |
$ |
(0.01 |
) |
$ |
0.01 |
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$ |
0.01 |
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$ |
(0.11 |
) |
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Diluted |
$ |
(0.01 |
) |
$ |
0.01 |
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$ |
0.01 |
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$ |
(0.11 |
) |
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Weighted average common shares outstanding: |
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Basic |
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12,011 |
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11,767 |
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11,919 |
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11,760 |
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Diluted |
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12,011 |
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11,964 |
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11,984 |
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11,760 |
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MASTECH DIGITAL, INC. |
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RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES |
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(Amounts in thousands, except per share data) |
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(Unaudited) |
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Three Months ended June 30, |
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Six Months ended June 30, |
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2026 |
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2025 |
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2026 |
|
|
2025 |
|
||||
|
|
GAAP Net Income (Loss) |
$ |
(100 |
) |
|
$ |
135 |
|
|
$ |
164 |
|
|
$ |
(1,304 |
) |
|
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Amortization of acquired intangible assets |
|
604 |
|
|
|
649 |
|
|
|
1,207 |
|
|
|
1,299 |
|
|
|
Stock-based compensation |
|
818 |
|
|
|
714 |
|
|
|
1,568 |
|
|
|
1,609 |
|
|
|
Severance expense |
|
- |
|
|
|
232 |
|
|
|
- |
|
|
|
1,641 |
|
|
|
Finance and accounting transition expense |
|
- |
|
|
|
688 |
|
|
|
- |
|
|
|
688 |
|
|
|
Income tax adjustments |
|
(346 |
) |
|
|
(588 |
) |
|
|
(706 |
) |
|
|
(1,347 |
) |
|
|
Non-GAAP Net Income |
$ |
976 |
|
|
$ |
1,830 |
|
|
$ |
2,233 |
|
|
$ |
2,586 |
|
|
|
GAAP Diluted Earnings (Loss) Per Share |
$ |
(0.01 |
) |
|
$ |
0.01 |
|
|
$ |
0.01 |
|
|
$ |
(0.11 |
) |
|
|
Non-GAAP Diluted Earnings Per Share |
$ |
0.08 |
|
|
$ |
0.15 |
|
|
$ |
0.19 |
|
|
$ |
0.21 |
|
|
|
Weighted average common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
GAAP Diluted Shares |
|
12,011 |
|
|
|
11,964 |
|
|
|
11,984 |
|
|
|
11,760 |
|
|
|
Non-GAAP Diluted Shares |
|
12,086 |
|
|
|
11,964 |
|
|
|
11,984 |
|
|
|
12,084 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
MASTECH DIGITAL, INC. |
|
|
|
||||||||||||||
|
|
SUPPLEMENTAL FINANCIAL INFORMATION |
|
|
|
||||||||||||||
|
|
(Amounts in thousands) |
|
|
|
||||||||||||||
|
|
(Unaudited) |
|
|
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
Three Months ended June 30, |
|
|
Six Months ended June 30, |
|
|
|
||||||||||
|
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
|
|
||||
|
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Data & AI |
$ |
13,484 |
|
|
$ |
15,737 |
|
|
$ |
26,068 |
|
|
$ |
31,734 |
|
|
|
|
|
Talent |
|
27,963 |
|
|
|
33,360 |
|
|
|
56,462 |
|
|
|
65,680 |
|
|
|
|
|
Total revenues |
$ |
41,447 |
|
|
$ |
49,097 |
|
|
$ |
82,530 |
|
|
$ |
97,414 |
|
|
|
|
|
Gross Margin %: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Data & AI |
|
40.4 |
% |
|
|
39.0 |
% |
|
|
38.9 |
% |
|
|
38.4 |
% |
|
|
|
|
Talent |
|
23.4 |
% |
|
|
23.0 |
% |
|
|
22.8 |
% |
|
|
22.1 |
% |
|
|
|
|
Total gross margin % |
|
29.0 |
% |
|
|
28.1 |
% |
|
|
27.9 |
% |
|
|
27.4 |
% |
|
|
|
|
Segment Operating Income (Loss): |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Data & AI |
$ |
(481 |
) |
|
$ |
957 |
|
|
$ |
(929 |
) |
|
$ |
1,229 |
|
|
|
|
|
Talent |
|
760 |
|
|
|
639 |
|
|
|
1,861 |
|
|
|
573 |
|
|
|
|
|
Subtotal |
|
279 |
|
|
|
1,596 |
|
|
|
932 |
|
|
|
1,802 |
|
|
|
|
|
Amortization of acquired intangible assets |
|
(604 |
) |
|
|
(649 |
) |
|
|
(1,207 |
) |
|
|
(1,299 |
) |
|
|
|
|
Severance expense |
|
- |
|
|
|
(232 |
) |
|
|
- |
|
|
|
(1,641 |
) |
|
|
|
|
Finance and accounting transition expense |
|
- |
|
|
|
(688 |
) |
|
|
- |
|
|
|
(688 |
) |
|
|
|
|
Interest income and other, net |
|
323 |
|
|
|
183 |
|
|
|
930 |
|
|
|
274 |
|
|
|
|
|
Income (loss) before income taxes |
$ |
(2 |
) |
|
$ |
210 |
|
|
$ |
655 |
|
|
$ |
(1,552 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Investor Relations Contact:
Investors@mastechdigital.com