Mastech Digital Reports Second Quarter 2026 Results

Mastech Digital Reports Second Quarter 2026 Results Mastech Digital Reports Sequential Revenue Growth and Sustained Bookings Momentum

PITTSBURGH, Aug. 6, 2026 /PRNewswire/ -- 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.

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

5,451

6,139

10,135

12,173

Talent

6,548

7,681

12,889

14,539

Total gross margin $

11,999

13,820

23,024

26,712

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

GAAP Net Income (Loss)

(100)

135

164

(1,304)

GAAP Diluted Earnings (Loss) Per Share

(0.01)

0.01

(0.11)

Non-GAAP Net Income

976

1,830

2,233

2,586

Non-GAAP Diluted Earnings Per Share

0.08

0.15

0.19

0.21

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:

[email protected]

MASTECH DIGITAL, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands)

(Unaudited)

June 30,

Dec 31,

2026

2025

ASSETS

Current assets:

Cash and cash equivalents

35,603

36,533

Accounts receivable, net

27,740

26,396

Prepaid and other current assets

5,930

5,647

Total current assets

69,273

68,576

Equipment, enterprise software and leasehold improvements, net

1,246

1,557

Operating lease right-of-use assets, net

2,255

2,534

Deferred income taxes

1,705

2,583

Deferred financing costs, net

Deferred compensation, net

750

1,000

Non-current deposits

518

530

Goodwill, net of impairment

27,210

Intangible assets, net of amortization

6,549

7,755

Total assets

109,553

111,840

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

Accounts payable

3,139

3,451

Current portion of operating lease liability

1,274

1,283

Accrued payroll and related costs

11,734

15,391

Other accrued liabilities

746

939

Total current liabilities

16,893

21,064

Long-term liabilities:

Long-term operating lease liability, less current portion

851

1,138

Long-term severance liability

330

Total liabilities

17,744

22,532

Shareholders' equity:

Common stock, par value $0.01 per share

140

137

Additional paid-in capital

45,490

42,515

Retained earnings

56,591

56,427

Accumulated other comprehensive income (loss)

(3,281)

(2,640)

Treasury stock, at cost

(7,131)

Total shareholders' equity

91,809

89,308

Total liabilities and shareholders' equity

109,553

111,840

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,

2026

2025

2026

2025

Revenues

41,447

49,097

82,530

97,414

Cost of revenues

29,448

35,277

59,506

70,702

Gross profit

11,999

13,820

23,024

26,712

Selling, general and administrative expenses

12,324

13,793

23,298

28,538

Income (loss) from operations

(325)

(274)

(1,826)

Other income/(expense), net

323

183

929

274

Income (loss) before income taxes

(2)

210

655

(1,552)

Income tax expense (benefit)

491

(248)

Net income (loss)

(100)

135

164

(1,304)

Earnings (loss) per share:

Basic

(0.01)

0.01

(0.11)

Diluted

(0.01)

0.01

(0.11)

Weighted average common shares outstanding:

Basic

12,011

11,767

11,919

11,760

Diluted

12,011

11,964

11,984

11,760

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,

2026

2025

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

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

(0.11)

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)

Interest income and other, net

323

183

930

274

Income (loss) before income taxes

(2)

210

655

(1,552)

Investor Relations Contact:

[email protected]

SOURCE Mastech Digital, Inc.