Mastech Digital, Inc. SEC 10-Q Report

Mastech Digital, Inc., a leading provider of IT staffing and digital transformation services, has released its Form 10-Q report for the third quarter of 2025. The report highlights the company's financial performance and operational activities amidst a challenging economic environment.

Financial Highlights

Total Revenues: $48.5 million, reflecting a 6% year-over-year decrease due to a 4% decline in IT Staffing Services and a 16% decline in Data and Analytics Services.

Gross Profit: $13.5 million, with a gross margin of 28.3%, slightly down from 28.5% in the prior year, impacted by lower margins in Data and Analytics Services.

Income (loss) from operations: $0.8 million, a decrease from $2.4 million in the previous year, primarily due to increased SG&A expenses.

Net Income: $0.9 million, down from $1.9 million in the prior year, influenced by lower operating income and higher tax expenses.

Diluted EPS: $0.08, compared to $0.16 in the previous year, reflecting the decrease in net income.

Business Highlights

Revenue Segments: The Data and Analytics Services segment experienced a 16% decline in revenue for the three months ended September 30, 2025, compared to the same period in 2024, primarily due to softer demand and slower client decision-making cycles. The IT Staffing Services segment saw a 4% decrease in revenue, reflecting lower demand for services.

Geographical Performance: The United States remains the primary market, contributing $48.1 million in revenue for the three months ended September 30, 2025. Canada and other regions, including India, contributed $112,000 and $306,000, respectively, indicating a decline in revenue from these regions compared to the previous year.

Sales Units: The IT Staffing Services segment reported a decrease in billable consultants, with 947 consultants at the end of September 2025 compared to 1,071 consultants a year earlier. The average bill rate increased to $86.60 per hour from $82.80 per hour in the previous year, reflecting higher quality placements.

Future Outlook: The company anticipates continued challenges due to macroeconomic uncertainties, including potential impacts from immigration, trade policies, and client spending behavior. The transition of finance and accounting functions to India is expected to yield cost savings of approximately $1.2 million per annum post-transition.

Operational Efficiency: The company undertook strategic initiatives to streamline leadership responsibilities and enhance operational efficiency, resulting in $1.1 million of severance charges in the third quarter of 2025. These efforts aim to better align the organizational structure with long-term growth objectives.

SEC Filing: Mastech Digital, Inc. [ MHH ] - 10-Q - Nov. 13, 2025