Mastech Digital Reports 6% Sequential Revenue Growth for the Second Quarter of 2024
Mastech Digital (NYSE American: MHH) reported strong financial results for Q2 2024, with total consolidated revenues increasing by $2.7 million to $49.5 million. The company achieved a record-breaking gross profit margin of 28.2%. Key highlights include:
- Data and Analytics Services segment revenues grew 10% sequentially to $8.9 million
- IT Staffing Services segment revenues increased 5% sequentially to $40.7 million
- GAAP diluted EPS improved to $0.12 profit from ($0.19) loss in Q2 2023
- Non-GAAP diluted EPS rose to $0.19 from $0.11 in Q2 2023
The company reported solid activity levels and increased client spending, with order bookings of $9.2 million in the Data and Analytics segment and a 10% growth in billable consultants over the first half of 2024.
Mastech Digital (NYSE American: MHH) ha riportato risultati finanziari solidi per il secondo trimestre del 2024, con entrate consolidate totali in aumento di 2,7 milioni di dollari a 49,5 milioni di dollari. L'azienda ha raggiunto un margine di profitto lordo record del 28,2%. I principali punti salienti includono:
- Le entrate del segmento Servizi di Dati e Analisi sono cresciute del 10% rispetto al trimestre precedente, arrivando a 8,9 milioni di dollari
- Le entrate del segmento Servizi di Staffing IT sono aumentate del 5% rispetto al trimestre precedente, toccando i 40,7 milioni di dollari
- L'EPS diluito GAAP è migliorato a un profitto di 0,12 dollari rispetto a una perdita di 0,19 dollari nel Q2 2023
- L'EPS diluito Non-GAAP è salito a 0,19 dollari da 0,11 dollari nel Q2 2023
L'azienda ha riportato solidi livelli di attività e un aumento della spesa dei clienti, con ordini di 9,2 milioni di dollari nel segmento Dati e Analisi e una crescita del 10% nei consulenti fatturabili nella prima metà del 2024.
Mastech Digital (NYSE American: MHH) reportó resultados financieros sólidos para el segundo trimestre de 2024, con ingresos consolidados totales en aumento de 2,7 millones de dólares a 49,5 millones de dólares. La compañía logró un margen de beneficio bruto récord del 28,2%. Los aspectos destacados incluyen:
- Los ingresos del segmento de Servicios de Datos y Análisis crecieron un 10% secuencialmente a 8,9 millones de dólares
- Los ingresos del segmento de Servicios de Contratación de TI aumentaron un 5% secuencialmente a 40,7 millones de dólares
- El EPS diluido GAAP mejoró a una ganancia de 0,12 dólares desde una pérdida de 0,19 dólares en el Q2 2023
- El EPS diluido No-GAAP subió a 0,19 dólares desde 0,11 dólares en el Q2 2023
La compañía reportó niveles de actividad sólidos y un aumento en el gasto de los clientes, con pedidos de 9,2 millones de dólares en el segmento de Datos y Análisis y un crecimiento del 10% en consultores facturables en la primera mitad de 2024.
Mastech Digital (NYSE American: MHH)는 2024년 2분기 강력한 재무 성과를 보고했으며, 총 연결 수익이 270만 달러 증가하여 4,950만 달러에 달했습니다. 이 회사는 28.2%의 기록적인 총 이익률을 달성했습니다. 핵심 하이라이트는 다음과 같습니다:
- 데이터 및 분석 서비스 부문 수익이 전분기 대비 10% 증가하여 890만 달러에 도달했습니다.
- IT 인력 서비스 부문 수익이 전분기 대비 5% 증가하여 4,070만 달러에 도달했습니다.
- GAAP 희석 주당 순이익(EPS)은 Q2 2023에 비해 0.19달러의 손실에서 0.12달러의 이익으로 개선되었습니다.
- 비GAAP 희석 주당 순이익은 Q2 2023의 0.11달러에서 0.19달러로 상승했습니다.
회사는 강력한 활동 수준과 증가된 고객 지출을 보고했으며, 데이터 및 분석 부문에서 920만 달러의 주문이 있었고 2024년 상반기 동안 청구 가능한 컨설턴트가 10% 성장했습니다.
Mastech Digital (NYSE American: MHH) a annoncé des résultats financiers solides pour le deuxième trimestre 2024, avec une augmentation des revenus consolidés totaux de 2,7 millions de dollars pour atteindre 49,5 millions de dollars. L'entreprise a atteint une marge brute record de 28,2%. Les principaux points forts incluent :
- Les revenus du segment Services de Données et d’Analyse ont augmenté de 10 % par rapport au trimestre précédent, atteignant 8,9 millions de dollars
- Les revenus du segment Services de Recrutement IT ont augmenté de 5 % par rapport au trimestre précédent, atteignant 40,7 millions de dollars
- Le BPA dilué GAAP a amélioré à un bénéfice de 0,12 $ par rapport à une perte de 0,19 $ au Q2 2023
- Le BPA dilué Non-GAAP a augmenté à 0,19 $ contre 0,11 $ au Q2 2023
L'entreprise a fait état de niveaux d'activité solides et d'une augmentation des dépenses des clients, avec des réservations de commandes de 9,2 millions de dollars dans le segment Données et Analyse et une croissance de 10 % dans le nombre de consultants facturables au cours de la première moitié de 2024.
Mastech Digital (NYSE American: MHH) hat starke finanzielle Ergebnisse für das 2. Quartal 2024 gemeldet, mit einem Anstieg der konsolidierten Gesamterlöse um 2,7 Millionen US-Dollar auf 49,5 Millionen US-Dollar. Das Unternehmen erzielte eine rekordverdächtige Bruttogewinnmarge von 28,2%. Zu den wichtigsten Highlights gehören:
- Die Erlöse im Segment Daten- und Analyse-Dienstleistungen wuchsen im Vergleich zum Vorquartal um 10% auf 8,9 Millionen US-Dollar
- Die Erlöse im Segment IT-Personalvermittlung stiegen im Vergleich zum Vorquartal um 5% auf 40,7 Millionen US-Dollar
- Der verwässerte GAAP EPS verbesserte sich von einem Verlust von 0,19 US-Dollar im Q2 2023 auf einen Gewinn von 0,12 US-Dollar
- Der verwässerte Non-GAAP EPS stieg von 0,11 US-Dollar im Q2 2023 auf 0,19 US-Dollar
Das Unternehmen berichtete von soliden Aktivitätsniveaus und einem Anstieg der Kundenausgaben, mit Auftragseingängen von 9,2 Millionen US-Dollar im Daten- und Analyse-Segment und einem Wachstum von 10% bei abrechnungsfähigen Beratern in der ersten Hälfte von 2024.
- Total consolidated revenues increased by $2.7 million sequentially to $49.5 million
- Record-breaking gross profit margin of 28.2% achieved
- Data and Analytics Services segment revenues grew 10% sequentially to $8.9 million
- IT Staffing Services segment revenues increased 5% sequentially to $40.7 million
- GAAP diluted EPS improved to $0.12 profit from ($0.19) loss in Q2 2023
- Non-GAAP diluted EPS rose to $0.19 from $0.11 in Q2 2023
- Order bookings in Data and Analytics segment totaled $9.2 million
- Billable consultant base grew by nearly 10% over the first six months of 2024
- Strong cash position with $20.6 million in cash balances and no bank debt
- Year-over-year revenue decline from $52.2 million in Q2 2023 to $49.5 million in Q2 2024
Insights
Mastech Digital's Q2 2024 results show promising signs of recovery and growth. Revenue increased by
The company's segments performed well, with Data and Analytics Services growing
Mastech Digital's Q2 results reflect a broader trend in the IT services sector. The sequential revenue growth and record gross margins suggest a rebound in client spending and demand for digital transformation services. The
The company's ability to improve margins while growing revenue is particularly noteworthy in a competitive landscape. The positive shift in client spending patterns, especially among legacy clients, could signal a broader industry trend towards increased investment in digital initiatives. This positions Mastech Digital favorably for potential market share gains in the coming quarters.
Mastech Digital's Q2 performance underscores the resilience of the digital transformation market. The company's dual-segment approach, combining Data and Analytics with IT Staffing, appears to be paying off. The strong order bookings of
The improved DSO of 53 days suggests better cash flow management, important for service-based tech companies. As businesses continue to prioritize digital initiatives, Mastech's positioning in both staffing and specialized services could provide a competitive edge. However, the company should remain vigilant about potential market volatility and continue to focus on high-margin services to maintain its growth trajectory.
Consolidated Gross Profit Margins of
Second Quarter 2024 Highlights:
- Total consolidated revenues increased by
on a sequential quarterly basis to$2.7 million and represented our second consecutive quarter of revenue growth;$49.5 million - The Company's Data and Analytics Services segment reported revenues of
, which were approximately$8.9 million 10% higher sequentially than revenues of reported in the first quarter of 2024;$8.1 million - The IT Staffing Services segment reported revenues of
, achieving sequential quarterly revenue growth of$40.7 million 5% when compared to revenues reported in the first quarter of 2024; - Gross profit margins during the second quarter of 2024 achieved a Company quarterly performance record of
28.2% , as the Company's two business segments reported margin improvements on both a year-over-year and a sequential quarterly basis; - GAAP diluted earnings (loss) per share was
profit in the second quarter of 2024, versus a ($0.12 ) loss in the second quarter of 2023 and a ($0.19 ) loss in the first quarter of 2024; and$0.01 - Non-GAAP diluted earnings per share was
in the second quarter of 2024, versus$0.19 in the second quarter of 2023 and$0.11 in the first quarter of 2024.$0.06
Second Quarter Results:
Revenues for the second quarter of 2024 totaled
Activity levels at the Company's Data and Analytics Services segment continued to be solid in the second quarter of 2024, with order bookings totaling
Vivek Gupta, the Company's President and Chief Executive Officer stated, "The second quarter of 2024 was a continuation of market improvements experienced during the first quarter of 2024, as many of our clients appear to have shifted their spending patterns in a positive direction. Additionally, our gross profit margins improved to a Company quarterly performance record
Commenting on the Company's financial position, Jack Cronin, Mastech Digital's Chief Financial Officer, stated, "On June 30, 2024, we had
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 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
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 clients 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) | ||||
June 30, | December 31, | |||
2024 | 2023 | |||
ASSETS | ||||
Current assets: | ||||
Cash and cash equivalents | $ 20,587 | $ 21,147 | ||
Accounts receivable, net | 32,643 | 29,815 | ||
Prepaid and other current assets | 7,385 | 5,501 | ||
Total current assets | 60,615 | 56,463 | ||
Equipment, enterprise software and leasehold improvements, net | 2,242 | 1,913 | ||
Operating lease right-of-use assets, net | 4,471 | 5,106 | ||
Deferred income taxes | 660 | 793 | ||
Deferred financing costs, net | 236 | 284 | ||
Non-current deposits | 454 | 457 | ||
Goodwill, net of impairment | 27,210 | 27,210 | ||
Intangible assets, net of amortization | 11,615 | 13,001 | ||
Total assets | $ 107,503 | $ 105,227 | ||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||
Current liabilities: | ||||
Accounts payable | $ 5,790 | $ 4,659 | ||
Current portion of operating lease liability | 1,250 | 1,236 | ||
Accrued payroll and related costs | 11,347 | 12,354 | ||
Other accrued liabilities | 1,889 | 1,622 | ||
Total current liabilities | 20,276 | 19,871 | ||
Long-term liabilities: | ||||
Long-term operating lease liability, less current portion | 3,191 | 3,843 | ||
Long-term accrued income taxes | - | 69 | ||
Total liabilities | 23,467 | 23,783 | ||
Shareholders' equity: | ||||
Common stock, par value | 134 | 133 | ||
Additional paid-in capital | 36,813 | 35,345 | ||
Retained earnings | 53,645 | 52,415 | ||
Accumulated other comprehensive income (loss) | (1,671) | (1,644) | ||
Treasury stock, at cost | (4,885) | (4,805) | ||
Total shareholders' equity | 84,036 | 81,444 | ||
Total liabilities and shareholders' equity | $ 107,503 | $ 105,227 | ||
MASTECH DIGITAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Amounts in thousands, except per share data) | |||||||
(Unaudited) | |||||||
Three Months ended June 30, | Six Months ended June 30, | ||||||
2024 | 2023 | 2024 | 2023 | ||||
Revenues | $ 49,534 | $ 52,204 | $ 96,357 | $ 107,267 | |||
Cost of revenues | 35,554 | 38,560 | 70,246 | 80,141 | |||
Gross profit | 13,980 | 13,644 | 26,111 | 27,126 | |||
Selling, general and administrative expenses: | |||||||
Operating expenses | 12,287 | 13,372 | 24,824 | 26,322 | |||
Employment-related claim, net of recoveries | - | 3,100 | - | 3,100 | |||
Total selling, general and administrative expenses | 12,287 | 16,472 | 24,824 | 29,422 | |||
Income (loss) from operations | 1,693 | (2,828) | 1,287 | (2,296) | |||
Other income/(expense), net | 116 | 50 | 240 | (3) | |||
Income (loss) before income taxes | 1,809 | (2,778) | 1,527 | (2,299) | |||
Income tax expense (benefit) | 418 | (605) | 297 | (387) | |||
Net income (loss) | $ 1,391 | $ (2,173) | $ 1,230 | $ (1,912) | |||
Earnings (loss) per share: | |||||||
Basic | $ 0.12 | $ (0.19) | $ 0.11 | $ (0.16) | |||
Diluted | $ 0.12 | $ (0.19) | $ 0.10 | $ (0.16) | |||
Weighted average common shares outstanding: | |||||||
Basic | 11,652 | 11,620 | 11,633 | 11,629 | |||
Diluted | 11,922 | 11,620 | 11,915 | 11,629 | |||
MASTECH DIGITAL, INC. | ||||||||||
RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES | ||||||||||
(Amounts in thousands, except per share data) | ||||||||||
(Unaudited) | ||||||||||
Three Months ended June 30, | Six Months ended June 30, | |||||||||
2024 | 2023 | 2024 | 2023 | |||||||
GAAP Net Income | $ 1,391 | $ (2,173) | $ 1,230 | $ (1,912) | ||||||
Adjustments: | ||||||||||
Amortization of acquired intangible assets | 693 | 693 | 1,386 | 1,386 | ||||||
Stock-based compensation | 461 | 842 | 1,011 | 1,677 | ||||||
Employment-related claim, net of recoveries | - | 3,100 | - | 3,100 | ||||||
Income tax adjustments | (296) | (1,171) | (615) | (1,559) | ||||||
Non-GAAP Net Income | $ 2,249 | $ 1,291 | $ 3,012 | $ 2,692 | ||||||
GAAP Diluted Earnings Per Share | $ 0.12 | $ (0.19) | $ 0.10 | $ (0.16) | ||||||
Non-GAAP Diluted Earnings Per Share | $ 0.19 | $ 0.11 | $ 0.25 | $ 0.22 | ||||||
Weighted average common shares outstanding: | ||||||||||
GAAP Diluted Shares | 11,922 | 11,620 | 11,915 | 11,629 | ||||||
Non-GAAP Diluted Shares | 11,922 | 11,961 | 11,915 | 12,014 | ||||||
MASTECH DIGITAL, INC. | |||||||||
SUPPLEMENTAL FINANCIAL INFORMATION | |||||||||
(Amounts in thousands) | |||||||||
(Unaudited) | |||||||||
Three Months ended June 30, | Six Months ended June 30, | ||||||||
2024 | 2023 | 2024 | 2023 | ||||||
Revenues: | |||||||||
Data and analytics services | $ 8,876 | $ 8,773 | $ 16,943 | $ 18,168 | |||||
IT staffing services | 40,658 | 43,431 | 79,414 | 89,099 | |||||
Total revenues | $ 49,534 | $ 52,204 | $ 96,357 | $ 107,267 | |||||
Gross Margin %: | |||||||||
Data and analytics services | 49.2 % | 45.6 % | 47.9 % | 41.9 % | |||||
IT staffing services | 23.6 % | 22.2 % | 22.7 % | 21.9 % | |||||
Total gross margin % | 28.2 % | 26.1 % | 27.1 % | 25.3 % | |||||
Segment Operating Income: | |||||||||
Data and analytics services | $ 744 | $ (881) | $ 290 | $ (1,561) | |||||
IT staffing services | 1,642 | 1,846 | 2,383 | 3,751 | |||||
Subtotal | 2,386 | 965 | 2,673 | 2,190 | |||||
Amortization of acquired intangible assets | (693) | (693) | (1,386) | (1,386) | |||||
Employment-related claim, net of recoveries | - | (3,100) | - | (3,100) | |||||
Interest income (expense) and other, net | 116 | 50 | 240 | (3) | |||||
Income before income taxes | $ 1,809 | $ (2,778) | $ 1,527 | $ (2,299) | |||||
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SOURCE Mastech Digital, Inc.
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