Mastech Digital Reports Fourth Quarter and Full-Year 2025 Results
Continued Strong Progress Against Transformation Plan Driving Operational Improvements; Board of Directors Approves a $5,000,000 Share Repurchase Program
PITTSBURGH, Feb. 19, 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 fourth quarter and full-year ended December 31, 2025. Additionally, the Company announced that the Board of Directors authorized a share repurchase program of up to $5,000,000 of the Company's common stock, which shall remain open until the limit is reached or the Board terminates the program.
Fourth Quarter 2025 Financial Highlights:
Full-Year 2025 Financial Highlights:
Nirav Patel, Mastech Digital's President and Chief Executive Officer, stated, "We are pleased with our continued strong progress against our transformation plan to drive operational improvements across the enterprise. During the third quarter of 2025, we launched our EDGE (Efficiencies Driving Growth and Expansion) initiative, and we maintained our positive momentum during the fourth quarter of 2025 as we advanced our focus on optimizing our organization and operating model. We are also pleased to see our revenue and earnings results during the fourth quarter of 2025 coming ahead of our expectations.
2025 was a year of transition for us. We have mobilized our organization towards a new direction while delivering meaningful improvement in our operational efficiency and financial rigor, the fruits of which we believe are already reflected in our earnings. As we look ahead, we view 2026 to be a year of execution. We believe the strategic actions we took last year have established a solid foundation and have put us in a position of strength as we implement our transformation agenda. We plan to continue accelerating our investments in strategic growth priorities including Data and AI."
Share Repurchase Authorization
The share repurchase program is currently in effect and repurchases may occur from time to time through privately negotiated transactions, through block purchases, or by any combination of such methods, and may be modified, suspended or terminated at any time at the discretion of the Company's Board of Directors. The timing and actual number of shares repurchased (if any) will depend upon business, economic and market conditions, corporate and regulatory requirements, prevailing stock prices, and other considerations.
Conference Call:
Mastech Digital will host a conference call to discuss the Company's fourth quarter and full-year 2025 financial results on February 19, 2025 at 9:00 a.m. Eastern Time. To join the call telephonically, please register at https://register-conf.media-server.com/register/BId934e909986147bf883a3c784d353d76. Once registered, participants will receive the dial-in information and a unique PIN to access the call. The dial-in information and unique PIN will be sent to the email used to register for the call. The unique PIN is exclusive to the registrant and can only be used by one person at a time.
A live audio webcast of the conference call can be accessed through the Investors section of Mastech Digital's website at http://www.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 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. 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.
Severance charges: From time to time, we incur severance expenses related to the termination by the Company of leadership and other key personnel. During the third quarter of 2025, we recorded severance charges associated with strategic initiatives we undertook to better align our organizational structure with our long-term growth objectives. During the third quarter of 2025, the Company recognized $0.3 million of severance expense within cost of goods sold. As this amount was not allocated to the reportable segments, the non-allocated charge contributed to a gross margin variance between the supplemental segment presentation and the consolidated financial results. 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.
Finance and accounting transition expense: During the first quarter of 2025, the Company's Board of Directors made the decision to implement a long-term cost-cutting initiative to transition the Company's finance and accounting functions to India. During 2025, the Company expects to incur additional costs related to the duplication of resources and travel expenses during the training and knowledge transfer process. Additionally, the Company expects to pay severance expense related to this initiative. The Company estimates total transition and severance expenses to approximate $2.0 million. Post-transition cost savings are expected to approximate $1.2 million per annum. 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.
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, statements regarding the terms, timing, logistics and conditions of the Company's share repurchase program, and projections of and statements regarding the Company's operations, business, expected financial results, performance, prospects, opportunities, priorities, ongoing objectives, strategies and outlook (including the timing, effectiveness and anticipated results of the Company's EDGE initiative and other 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 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, 2024.
For more information, contact:
Liz Morgan, +1 972-896-1771
[email protected]
MASTECH DIGITAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
(Unaudited)
December 31,
December 31,
2025
2024
ASSETS
Current assets:
Cash and cash equivalents
$ 36,533
$ 27,742
Accounts receivable, net
26,396
31,443
Prepaid and other current assets
5,647
7,020
Total current assets
68,576
66,205
Equipment, enterprise software and leasehold improvements, net
1,557
1,998
Operating lease right-of-use assets, net
2,534
3,832
Deferred income taxes
2,583
1,298
Deferred financing costs, net
95
189
Deferred compensation, net
1,000
-
Non-current deposits
530
444
Goodwill, net of impairment
27,210
27,210
Intangible assets, net of amortization
7,755
10,308
Total assets
$ 111,840
$ 111,484
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable
$ 3,451
$ 4,683
Current portion of operating lease liability
1,283
1,265
Accrued payroll and related costs
15,391
13,750
Other accrued liabilities
939
879
Total current liabilities
21,064
20,577
Long-term liabilities:
Long-term operating lease liability, less current portion
1,138
2,486
Long-term severance liability
330
987
Total liabilities
22,532
24,050
Shareholders' equity:
Common stock, par value $0.01 per share
137
135
Additional paid-in capital
42,515
38,277
Retained earnings
56,427
55,817
Accumulated other comprehensive income (loss)
(2,640)
(1,910)
Treasury stock, at cost
(7,131)
(4,885)
Total shareholders' equity
89,308
87,434
Total liabilities and shareholders' equity
$ 111,840
$ 111,484
MASTECH DIGITAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share data)
(Unaudited)
Three Months ended December 31,
Year-ended December 31,
2025
2024
2025
2024
Revenues
$ 45,461
$ 50,747
$ 191,371
$ 198,943
Cost of revenues
32,578
36,032
138,315
143,346
Gross profit
12,883
14,715
53,056
55,597
Selling, general and administrative expenses
11,876
14,650
53,055
51,806
Income (loss) from operations
1,007
65
1
3,791
Other income/(expense), net
372
260
1,061
633
Income (loss) before income taxes
1,379
325
1,062
4,424
Income tax expense (benefit)
407
28
453
1,022
Net income (loss)
$ 972
$ 297
$ 609
$ 3,402
Earnings (loss) per share:
Basic
$ 0.08
$ 0.03
$ 0.05
$ 0.29
Diluted
$ 0.08
$ 0.02
$ 0.05
$ 0.28
Weighted average common shares outstanding:
Basic
11,705
11,713
11,747
11,669
Diluted
11,823
12,191
11,950
12,014
MASTECH DIGITAL, INC.
RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES
(Amounts in thousands, except per share data)
(Unaudited)
Three Months ended December 31,
Year-ended December 31,
2025
2024
2025
2024
GAAP Net Income (Loss)
$ 972
$ 297
$ 609
$ 3,402
Adjustments:
Amortization of acquired intangible assets
604
650
2,553
2,693
Stock-based compensation
780
647
3,118
2,200
Severance expense
370
2,083
3,095
2,083
Finance and accounting transition expense
299
-
1,924
-
Income tax adjustments
(526)
(875)
(2,747)
(1,795)
Non-GAAP Net Income
$ 2,499
$ 2,802
$ 8,552
$ 8,583
GAAP Diluted Earnings (Loss) Per Share
$ 0.08
$ 0.02
$ 0.05
$ 0.28
Non-GAAP Diluted Earnings Per Share
$ 0.21
$ 0.23
$ 0.72
$ 0.71
Weighted average common shares outstanding:
GAAP Diluted Shares
11,823
12,191
11,950
12,014
Non-GAAP Diluted Shares
11,823
12,191
11,950
12,014
MASTECH DIGITAL, INC.
SUPPLEMENTAL FINANCIAL INFORMATION
(Amounts in thousands)
(Unaudited)
Three Months ended December 31,
Year-ended December 31,
2025
2024
2025
2024
Revenues:
Data and analytics services
$ 7,816
$ 10,284
$ 33,275
$ 36,625
IT staffing services
37,645
40,463
158,096
162,318
Total revenues
$ 45,461
$ 50,747
$ 191,371
$ 198,943
Gross Margin %:
Data and analytics services
49.8 %
49.5 %
46.2 %
49.1 %
IT staffing services
23.9 %
23.8 %
24.0 %
23.2 %
Total gross margin % 1
28.3 %
29.0 %
27.9 %
27.9 %
Segment Operating Income (Loss):
Data and analytics services
$ (252)
$ 1,809
$ (221)
$ 3,244
IT staffing services
2,532
989
7,794
5,323
Subtotal
2,280
2,798
7,573
8,567
Amortization of acquired intangible assets
(604)
(650)
(2,553)
(2,693)
Severance expense
(370)
(2,083)
(3,095)
(2,083)
Finance and accounting transition expense
(299)
-
(1,924)
-
Interest income and other, net
372
260
1,061
633
Income (loss) before income taxes
$ 1,379
$ 325
$ 1,062
$ 4,424
(1) Gross margin differences between the supplemental segment and consolidated results primarily reflect non-allocated
severance expense of $0.3 million recorded in cost of goods sold during the third quarter of 2025.
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SOURCE Mastech Digital, Inc.