Connect with us

Technology

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

Published

4 hours ago

on

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.  

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; andNon-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)

 

 

Logo: https://mma.prnewswire.com/media/1039524/2514173/Mastech_Digital_Logo.jpg

 

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.

Related Topics:
Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Technology

October LightBox CRE Activity Index Retracts Slightly After Strong September

Published

18 seconds ago

on

November 6, 2024

By

IRVINE, Calif., Nov. 6, 2024 /PRNewswire/ — LightBox, a leading provider of commercial real estate (CRE) information and technology, released its Monthly CRE Activity Index for October, revealing a slight decrease in market activity after a strong September.

This aggregate measure of activity in commercial property listings, environmental due diligence, and appraisals collectively tracks shifts in the velocity of key functions that support CRE transactions, and therefore provides a useful leading indicator of deal activity. After a bullish 8.3-point rise in September, the Index ticked down 2.3 points in October to 95.9 but landed well above 79.7 one year ago.

The average daily volume of environmental due diligence activity behind the Index rose by 5% in what could signal the first round of underwriting on deals expected to close by the end of the year. Lenders’ appraisal activity month over month was stable, and property listings declined 5% after the strong 18% uptick over August, a sign of an expanding universe of available properties.

October’s slight dip aligns with historical trends, where the Index often softens after a strong August-to-September rebound. The uncertainty leading up to the November election and the higher 10-year Treasury rate both contributed to a cautious, “wait-and-see” sentiment on the part of investors.

“Our Index performance this month reflects both typical seasonal adjustments and broader market dynamics as stakeholders balance opportunities with election-related uncertainties,” said Manus Clancy, LightBox head of Data Strategy. “Investor confidence remains strong, but caution is prevailing as they anticipate both economic and political shifts in Q4.”

Despite the slight October dip, the CRE Activity Index heads into the final months of the year at a still-high 95.9 reading. Last year, November and December activity was lackluster as the market remained frozen at elevated interest rates with little relief in sight, ending 2023 at the Index’s four-year low of 48.2. With the November election in the rearview mirror, there can now be clarity emerging on several policy issues affecting CRE finance, including taxes, housing, climate change, and bank regulations, at a critical point in the market’s recovery.

After a slow start to 2024, some investors are actively shopping for opportunities while others are waiting until later in the rate cutting cycle. September laid the foundation for October’s strong deal volume, which will contribute to a continued stabilization in property pricing that will add momentum to Q4 activity.

“These signs of traction starting to build could contribute to a strong finish to 2024 as the market establishes a new normal that will eventually stabilize at levels closer to 2019 levels. Overall, the market is showing a growing intention to transact, and CRE professionals, are exhibiting more optimism than they’ve shown in several years, ” Clancy said.

Read the full report

About LightBox

At LightBox, we are at the forefront of delivering advanced and precise solutions for commercial real estate intelligence. Our dedication to innovation propels real estate professionals forward by providing them with the essential tools required to navigate complex decisions, minimize risk, and boost productivity across the spectrum of real estate operations. LightBox is renowned for its commitment to promoting excellence and fostering connections in the industry, serving an extensive clientele of over 30,000 customers. Our diverse client base spans commercial and government sectors, including but not limited to brokers, developers, investors, lenders, insurers, technologists, environmental advisors, appraisers, and other businesses that depend on geospatial information. To discover more about how LightBox can illuminate the path to informed real estate solutions, visit us at: www.LightBoxRE.com

Media inquiries: media@lightboxRE.com

View original content to download multimedia:https://www.prnewswire.com/news-releases/october-lightbox-cre-activity-index-retracts-slightly-after-strong-september-302297650.html

SOURCE LightBoxRE

Continue Reading

Technology

TSA announces proposed rule that would require the establishment of pipeline and railroad cyber risk management programs

Published

19 seconds ago

on

November 6, 2024

By

WASHINGTON, Nov. 6, 2024 /PRNewswire/ — The Transportation Security Administration (TSA) published a Notice of Proposed Rulemaking that proposes to mandate cyber risk management and reporting requirements for certain surface transportation owners and operators.

“TSA has collaborated closely with its industry partners to increase the cybersecurity resilience of the nation’s critical transportation infrastructure,” said TSA Administrator David Pekoske. “The requirements in the proposed rule seek to build on this collaborative effort and further strengthen the cybersecurity posture of surface transportation stakeholders. We look forward to industry and public input on this proposed regulation.”

This rule proposes to continue TSA’s commitment to performance-based requirements. Building on the performance-based cybersecurity requirements TSA previously issued via annual Security Directives since 2021, the proposed rule leverages the cybersecurity framework developed by the National Institute of Standards and Technology and the cross-sector cybersecurity performance goals developed by the Cybersecurity and Infrastructure Security Agency (CISA).

Consistent with these requirements and standards, this rule proposes:

To require that certain pipeline, freight railroad, passenger railroad and rail transit owner/operators with higher cybersecurity risk profiles establish and maintain a comprehensive cyber risk management program;To require these owner/operators, and higher-risk bus-only public transportation and over-the-road bus owner/operators, currently required to report significant physical security concerns to TSA to report cybersecurity incidents to CISA; andTo extend to higher-risk pipeline owner/operators TSA’s current requirements for rail and higher-risk bus operations to designate a physical security coordinator and report significant physical security concerns to TSA.

TSA asserts that maintaining an effective cybersecurity posture is critically important to ensuring that the surface transportation sector is prepared for, and able to manage, cyber risks. The requirements contained in this proposed rule would strengthen cybersecurity resilience across the surface transportation systems sector.

View original content to download multimedia:https://www.prnewswire.com/news-releases/tsa-announces-proposed-rule-that-would-require-the-establishment-of-pipeline-and-railroad-cyber-risk-management-programs-302297619.html

SOURCE Transportation Security Administration

Continue Reading

Technology

Molecular Instruments and Visiopharm Announce Strategic Partnership to Combine AI-Driven Precision Pathology with HCR™ Pro Assays to Advance Clinical-Grade RNA-ISH

Published

20 seconds ago

on

November 6, 2024

By

LOS ANGELES, Nov. 6, 2024 /PRNewswire/ — Molecular Instruments® (MI), the inventor of the HCR™ Imaging technology, is pleased to announce a strategic partnership with Visiopharm, a global leader in AI-driven precision pathology software. This collaboration brings together MI’s clinical-grade HCR™ platform with Visiopharm’s Oncotopix® Discovery software, empowering users with a highly flexible, deep learning approach to precise and efficient image analysis for RNA-ISH assays.

MI’s class-leading HCR™ Pro RNA-ISH assay, lauded for making protease-free sample preparation the standard for RNA-ISH, provides unparalleled specificity and sensitivity in RNA detection and enables seamless integration with existing IHC/IF workflows. When combined with Oncotopix® Discovery, researchers can analyze chromogenic and fluorescent HCR™ Pro RNA-ISH and HCR™ Pro RNA-ISH + IHC/IF co-detection images with more precise segmentation and spot counting, ensuring accurate gene expression profiling in even the most challenging samples.

“Our North Star at MI is to set bioimaging assays to a true ‘clinical-grade’ standard, focusing on performance, robustness, and accessibility,” said Dr. Aneesh Acharya, Chief Commercial Officer at Molecular Instruments. “Partnering with Visiopharm reflects our shared drive to delivering clinical-grade assays, paired with world-class analysis tools that empower pathologists and support downstream decision-making. We’re thrilled to kickstart this journey with the team at Visiopharm to bring new possibilities to RNA-ISH.”

Visiopharm’s Oncotopix® Discovery software enables users to explore complex tissue data intuitively and customize analyses to fit their specific experimental needs. Its advanced exploratory capabilities enhance analysis accuracy in complex tissue samples. The ability to develop custom deep-learning-based segmentation algorithms, which can account for both cellular and nuclear morphology, enables more precise quantification of RNA. This marks a significant improvement over traditional methods, which often struggle with complex or irregular structures, such as a nuclear or multinucleate cells, leading to missed or inaccurate counts.

“At Visiopharm, our mission is to empower researchers with advanced tools that deliver unmatched precision in image analysis,” said Regan Baird, Senior Vice President, Commercial Strategy Deployment of Visiopharm. “Partnering with Molecular Instruments allows us to elevate the standard of RNA-ISH analysis, integrating our Oncotopix® Discovery software with MI’s HCR™ technology to provide researchers with an unprecedented level of accuracy and efficiency. We are excited to collaborate and advance the field of precision pathology, accelerating breakthroughs in disease research and diagnostics.”

This partnership marks a pivotal advancement in research, combining high-performance, clinical-grade RNA-ISH with sophisticated image analysis. Together, we are equipping scientists to drive breakthroughs in disease studies, offering deeper insights into gene expression and protein interactions. By integrating our innovative technologies, we aim to accelerate discoveries across translational medicine, where accurately and precisely understanding gene and protein expression are essential.

About Molecular Instruments: 
Molecular Instruments® (www.hcrimaging.com) develops and synthesizes molecular kits powered by the breakthrough HCR™ imaging platform for applications in academic research, drug development, synthetic biology, and clinical pathology and diagnostics.

About Visiopharm: 
Visiopharm is a leading provider of AI-driven precision pathology software for research and diagnostics. In research, it is a technology leader providing tools that help scientists, pathologists, and image analysis experts produce accurate data for all types of tissue-based research. In diagnostics, it is a leader within clinical applications, with no fewer than nine diagnostic algorithms cleared under IVDR for EU and UK customers. These applications provide diagnostic decision support and can be easily activated and integrated into existing lab workflows. Founded in 2002, Visiopharm is privately owned and operates internationally with over 750 customer accounts in more than 40 countries. The company’s headquarters are located in Denmark’s Medicon Valley, with legal entities in Sweden, the UK, Germany, the Netherlands, and the United States, and local representation in France and China.
For more information visit visiopharm.com.

Media Contact: Joyce Yoo, Associate Director of Marketing, joyce@molecularinstruments.com

View original content to download multimedia:https://www.prnewswire.com/news-releases/molecular-instruments-and-visiopharm-announce-strategic-partnership-to-combine-ai-driven-precision-pathology-with-hcr-pro-assays-to-advance-clinical-grade-rna-ish-302297058.html

SOURCE Molecular Instruments

Continue Reading

Trending