QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
| ☒ | Smaller reporting company | |||||
| Emerging growth company | ||||||
MASTECH DIGITAL, INC.
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 2025
TABLE OF CONTENTS
2
ITEM 1. | FINANCIAL STATEMENTS |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2025 | 2024 | 2025 | 2024 | |||||||||||||
| Revenues | $ | $ | $ | $ | ||||||||||||
| Cost of revenues | ||||||||||||||||
| | | | | | | | | |||||||||
| Gross profit | ||||||||||||||||
| Selling, general and administrative expenses | ||||||||||||||||
| | | | | | | | | |||||||||
| Income (loss) from operations | ( | ) | ||||||||||||||
| Interest income (expense), net | ||||||||||||||||
| Other income (expense), net | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| | | | | | | | | |||||||||
| Income (loss) before income taxes | ( | ) | ||||||||||||||
| Income tax expense (benefit) | ( | ) | ||||||||||||||
| | | | | | | | | |||||||||
| Net income (loss) | $ | $ | $ | ( | ) | $ | ||||||||||
| | | | | | | | | |||||||||
| Earnings (loss) per share: | ||||||||||||||||
| Basic | $ | $ | $ | ( | ) | $ | ||||||||||
| | | | | | | | | |||||||||
| Diluted | $ | $ | $ | ( | ) | $ | ||||||||||
| | | | | | | | | |||||||||
| Weighted average common shares outstanding: | ||||||||||||||||
| Basic | ||||||||||||||||
| | | | | | | | | |||||||||
| Diluted | ||||||||||||||||
| | | | | | | | | |||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2025 | 2024 | 2025 | 2024 | |||||||||||||
| Net income (loss) | $ | $ | $ | ( | ) | $ | ||||||||||
| Other comprehensive income (loss): | ||||||||||||||||
| Foreign currency translation adjustments | ( | ) | ( | ) | ||||||||||||
| | | | | | | | | |||||||||
| Total other comprehensive income (loss), net of taxes | ( | ) | ( | ) | ||||||||||||
| | | | | | | | | |||||||||
| Total comprehensive income (loss) | $ | $ | $ | ( | ) | $ | ||||||||||
| | | | | | | | | |||||||||
June 30, 2025 | December 31, 2024 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable, net of allowance for credit losses of $ | ||||||||
| Unbilled receivables | ||||||||
| Prepaid and other current assets | ||||||||
| | | | | |||||
| Total current assets | ||||||||
| Equipment, enterprise software, and leasehold improvements, at cost: | ||||||||
| Equipment | ||||||||
| Enterprise software | ||||||||
| Leasehold improvements | ||||||||
| | | | | |||||
| Less – accumulated depreciation and amortization | ( | ) | ( | ) | ||||
| | | | | |||||
| Net equipment, enterprise software, and leasehold improvements | ||||||||
| Operating lease right-of-use | ||||||||
| Deferred income taxes | ||||||||
| Deferred financing costs, net | ||||||||
| Deferred compensation, net | ||||||||
| Non-current deposits | ||||||||
| Goodwill, net of impairment | ||||||||
| Intangible assets, net of amortization | ||||||||
| | | | | |||||
| Total assets | $ | $ | ||||||
| | | | | |||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | ||||||||
| Accrued payroll and related costs | ||||||||
| Current portion of operating lease liability | ||||||||
| Other accrued liabilities | ||||||||
| Deferred revenue | ||||||||
| | | | | |||||
| Total current liabilities | ||||||||
| | | | | |||||
| Long-term liabilities: | ||||||||
| Long-term operating lease liability, less current portion | ||||||||
| Long-term severance liability | ||||||||
| | | | | |||||
| Total liabilities | ||||||||
| | | | | |||||
| Commitments and contingent liabilities (Note 5) | ||||||||
| Shareholders’ equity: | ||||||||
| Preferred Stock, | ||||||||
| Common Stock, par value $ | ||||||||
| Additional paid-in-capital | ||||||||
| Retained earnings | ||||||||
| Accumulated other comprehensive income (loss) | ( | ) | ( | ) | ||||
| Treasury stock, at cost; | ( | ) | ( | ) | ||||
| | | | | |||||
| Total shareholders’ equity | ||||||||
| | | | | |||||
| Total liabilities and shareholders’ equity | $ | $ | ||||||
| | | | | |||||
Common Stock | Additional Paid-in Capital | Accumulated Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Total Shareholders’ Equity | |||||||||||||||||||
| Balances, December 31, 2024 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||
| Net (loss) | — | — | ( | ) | — | — | ( | ) | ||||||||||||||||
| Other comprehensive gain, net of taxes | — | — | — | — | ||||||||||||||||||||
| Stock-based compensation expense | — | — | — | — | ||||||||||||||||||||
| Stock options exercised | — | — | — | — | ||||||||||||||||||||
| | | | | | | | | | | | | |||||||||||||
| Balances, March 31, 2025 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||
| | | | | | | | | | | | | |||||||||||||
| Net income | — | — | — | — | ||||||||||||||||||||
| Employee common stock purchases | — | — | — | — | ||||||||||||||||||||
| Other comprehensive gain, net of taxes | — | — | — | — | ( | ) | ( | ) | ||||||||||||||||
| Stock-based compensation expense | — | — | — | — | ||||||||||||||||||||
| Stock options exercised | — | — | — | — | ||||||||||||||||||||
| Shares repurchased | — | — | — | ( | ) | — | ( | ) | ||||||||||||||||
| | | | | | | | | | | | | |||||||||||||
| Balances, June 30, 2025 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||
| | | | | | | | | | | | | |||||||||||||
Common Stock | Additional Paid-in Capital | Accumulated Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Total Shareholders’ Equity | |||||||||||||||||||
| Balances, December 31, 2023 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||
| Net (loss) | — | — | ( | ) | — | — | ( | ) | ||||||||||||||||
| Other comprehensive (loss), net of taxes | — | — | — | — | ( | ) | ( | ) | ||||||||||||||||
| Stock-based compensation expense | — | — | — | — | ||||||||||||||||||||
| Shares repurchased | — | — | — | ( | ) | — | ( | ) | ||||||||||||||||
| | | | | | | | | | | | | |||||||||||||
| Balances, March 31, 2024 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||
| | | | | | | | | | | | | |||||||||||||
| Net income | — | — | — | — | ||||||||||||||||||||
| Employee common stock purchases | — | — | — | — | ||||||||||||||||||||
| Other comprehensive gain, net of taxes | — | — | — | — | ||||||||||||||||||||
| Stock-based compensation expense | — | — | — | — | ||||||||||||||||||||
| Stock options exercised | — | — | — | |||||||||||||||||||||
| | | | | | | | | | | | | |||||||||||||
| Balances, June 30, 2024 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||
| | | | | | | | | | | | | |||||||||||||
Six Months Ended June 30, | ||||||||
2025 | 2024 | |||||||
| OPERATING ACTIVITIES: | ||||||||
| Net income (loss) | $ | ( | ) | $ | ||||
| Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Bad debt expense | ( | ) | ||||||
| Interest amortization of deferred financing costs | ||||||||
| Stock-based compensation expense | ||||||||
| Deferred income taxes, net | ( | ) | ||||||
| Operating lease assets and liabilities, net | ||||||||
| Amortization of deferred compensation | ||||||||
| Long-term severance liability | ||||||||
| Payment of deferred compensation | ( | ) | ||||||
| Loss on disposition of fixed assets | ||||||||
| Long term accrued income taxes | ( | ) | ||||||
| Working capital items: | ||||||||
| Accounts receivable and unbilled receivables | ( | ) | ||||||
| Prepaid and other current assets | ( | ) | ||||||
| Accounts payable | ( | ) | ||||||
| Accrued payroll and related costs | ( | ) | ( | ) | ||||
| Other accrued liabilities | ( | ) | ||||||
| Deferred revenue | ( | ) | ||||||
| | | | | |||||
| Net cash flows provided by (used in) operating activities | ( | ) | ||||||
| | | | | |||||
| INVESTING ACTIVITIES: | ||||||||
| Recovery of (payment for) non-current deposits | ( | ) | ||||||
| Capital expenditures | ( | ) | ( | ) | ||||
| | | | | |||||
| Net cash flows (used in) investing activities | ( | ) | ( | ) | ||||
| | | | | |||||
| FINANCING ACTIVITIES: | ||||||||
| Proceeds from the issuance of common shares | ||||||||
| Purchase of treasury stock | ( | ) | ( | ) | ||||
| Proceeds from the exercise of stock options | ||||||||
| | | | | |||||
| Net cash flows provided by financing activities | ||||||||
| | | | | |||||
| Effect of exchange rate changes on cash and cash equivalents | ( | ) | ||||||
| | | | | |||||
| Net change in cash and cash equivalents | ( | ) | ||||||
| Cash and cash equivalents, beginning of period | ||||||||
| | | | | |||||
| Cash and cash equivalents, end of period | $ | $ | ||||||
| | | | | |||||
1. | Description of Business and Basis of Presentation: |
2. | Revenue from Contracts with Customers |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2025 | 2024 | 2025 | 2024 | |||||||||||||
(Amounts in thousands) | ||||||||||||||||
Data and Analytics Services Segment | ||||||||||||||||
Time-and-material | $ | $ | $ | $ | ||||||||||||
Fixed-price Contracts | ||||||||||||||||
Subtotal Data and Analytics Services | $ | $ | $ | $ | ||||||||||||
IT Staffing Services Segment | ||||||||||||||||
Time-and-material | $ | $ | $ | $ | ||||||||||||
Fixed-price Contracts | ||||||||||||||||
Subtotal IT Staffing Services | $ | $ | $ | $ | ||||||||||||
Total Revenues | $ | $ | $ | $ | ||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2025 | 2024 | 2025 | 2024 | |||||||||||||
(Amounts in thousands) | ||||||||||||||||
United States | $ | $ | $ | $ | ||||||||||||
Canada | ||||||||||||||||
India and Other | ||||||||||||||||
Total revenues | $ | $ | $ | $ | ||||||||||||
3. | Goodwill and Other Intangible Assets, net |
Six Months Ended June 30, 2025 | Twelve Months Ended December 31, 2024 | |||||||
(in thousands) | ||||||||
IT Staffing Services: | ||||||||
Beginning balance | $ | $ | ||||||
Goodwill recorded | ||||||||
Impairment | ||||||||
Ending Balance | $ | $ | ||||||
Six Months Ended June 30, 2025 | Twelve Months Ended December 31, 2024 | |||||||
(in thousands) | ||||||||
Data and Analytics Services: | ||||||||
Beginning balance | $ | $ | ||||||
Goodwill recorded | ||||||||
Impairment | ||||||||
Ending Balance | $ | $ | ||||||
As of June 30, 2025 | ||||||||||||||||
(Amounts in thousands) | Amortization Period (In Years) | Gross Carrying Value | Accumulative Amortization | Net Carrying Value | ||||||||||||
IT Staffing Services: | ||||||||||||||||
Client relationships | $ | $ | $ | |||||||||||||
Covenant-not-to-compete | ||||||||||||||||
Trade name | ||||||||||||||||
Data and Analytics Services: | ||||||||||||||||
Client relationships | ||||||||||||||||
Covenant-not-to-compete | ||||||||||||||||
Trade name | ||||||||||||||||
Technology | ||||||||||||||||
Total Intangible Assets | $ | $ | $ | |||||||||||||
As of December 31, 2024 | ||||||||||||||||
(Amounts in thousands) | Amortization Period (In Years) | Gross Carrying Value | Accumulative Amortization | Net Carrying Value | ||||||||||||
IT Staffing Services: | ||||||||||||||||
Client relationships | $ | $ | $ | |||||||||||||
Covenant-not-to-compete | ||||||||||||||||
Trade name | ||||||||||||||||
Data and Analytics Services: | ||||||||||||||||
Client relationships | ||||||||||||||||
Covenant-not-to-compete | ||||||||||||||||
Trade name | ||||||||||||||||
Technology | ||||||||||||||||
Total Intangible Assets | $ | $ | $ | |||||||||||||
Years Ended December 31, | ||||||||||||||||||||
2025 | 2026 | 2027 | 2028 | 2029 | ||||||||||||||||
(Amounts in thousands) | ||||||||||||||||||||
Amortization expense | $ | $ | $ | $ | $ | |||||||||||||||
4. | Leases |
June 30, 2025 | December 31, 2024 | |||||||
(in thousands) | ||||||||
Assets: | ||||||||
Long-term operating lease right-of-use | $ | $ | ||||||
Liabilities: | ||||||||
Short-term operating lease liability | $ | $ | ||||||
Long-term operating lease liability | ||||||||
Total Liabilities | $ | $ | ||||||
Amount as of June 30, 2025 | ||||
(in thousands) | ||||
2025 (for remainder of year) | $ | |||
2026 | ||||
2027 | ||||
2028 | ||||
2029 | ||||
Thereafter | ||||
Total | $ | |||
Less: Imputed interest | ( | ) | ||
Present value of operating lease liabilities | $ | |||
5. | Commitments and Contingencies |
6. | Employee Benefit Plan |
7. | Stock-Based Compensation |
8. | Credit Facility |
9. | Income Taxes |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2025 | 2024 | 2025 | 2024 | |||||||||||||
(Amounts in thousands) | ||||||||||||||||
Income (loss) before income taxes: | ||||||||||||||||
Domestic | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||
Foreign | ||||||||||||||||
Income (loss) before income taxes | $ | $ | $ | ( | ) | $ | ||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2025 | 2024 | 2025 | 2024 | |||||||||||||
(Amounts in thousands) | ||||||||||||||||
Current provision (benefit): | ||||||||||||||||
Federal | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||
State | ( | ) | ( | ) | ||||||||||||
Foreign | ||||||||||||||||
Total current provision (benefit) | ||||||||||||||||
Deferred provision (benefit): | ||||||||||||||||
Federal | ( | ) | ( | ) | ||||||||||||
State | ( | ) | ( | ) | ||||||||||||
Foreign | ||||||||||||||||
Total deferred provision (benefit) | ( | ) | ( | ) | ||||||||||||
Change in valuation allowance | ( | ) | ( | ) | ( | ) | — | |||||||||
Total provision (benefit) for income taxes | $ | $ | $ | ( | ) | $ | ||||||||||
Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | |||||||||||||||
Income taxes computed at the federal statutory rate | $ | % | $ | % | ||||||||||||
State income taxes, net of federal tax benefit | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Excess tax expense (benefit) from stock options/restricted shares | ||||||||||||||||
Worthless stock deduction | ||||||||||||||||
Difference in income tax rate on foreign earnings/other | ||||||||||||||||
Change in valuation allowance | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| $ | % | $ | % | |||||||||||||
Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | |||||||||||||||
Income taxes computed at the federal statutory rate | $ | ( | ) | ( | )% | $ | % | |||||||||
State income taxes, net of federal tax benefit | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Excess tax expense (benefit) from stock options/restricted shares | ( | ) | ( | ) | ||||||||||||
Worthless stock deduction | ( | ) | ( | ) | ||||||||||||
Difference in income tax rate on foreign earnings/other | ||||||||||||||||
Change in valuation allowance | ( | ) | ( | ) | ||||||||||||
| $ | ( | ) | ( | )% | $ | % | ||||||||||
10. | Shareholders’ Equity |
11. | Earnings (Loss) Per Share |
12. | Business Segments and Geographic Information |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2025 | 2024 | 2025 | 2024 | |||||||||||||
(Amounts in thousands) | ||||||||||||||||
Revenues: | ||||||||||||||||
Data and Analytics Services | $ | $ | $ | $ | ||||||||||||
IT Staffing Services | ||||||||||||||||
Total revenues | $ | $ | $ | $ | ||||||||||||
Cost of Revenues: | ||||||||||||||||
Data and Analytics Services | $ | $ | $ | $ | ||||||||||||
IT Staffing Services | ||||||||||||||||
Total cost of revenues | $ | $ | $ | $ | ||||||||||||
Gross Profit: | ||||||||||||||||
Data and Analytics Services | $ | $ | $ | $ | ||||||||||||
IT Staffing Services | ||||||||||||||||
Total gross profit | $ | $ | $ | $ | ||||||||||||
Gross Margin %: | ||||||||||||||||
Data and Analytics Services | % | % | % | % | ||||||||||||
IT Staffing Services | % | % | % | % | ||||||||||||
Total gross margin % | % | % | % | % | ||||||||||||
Sales & Marketing Expenses: | ||||||||||||||||
Data and Analytics Services | $ | $ | $ | $ | ||||||||||||
IT Staffing Services | ||||||||||||||||
Total sales & marketing expenses | $ | $ | $ | $ | ||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2025 | 2024 | 2025 | 2024 | |||||||||||||
(Amounts in thousands) | ||||||||||||||||
Operations Expenses: | ||||||||||||||||
Data and Analytics Services | $ | $ | $ | $ | ||||||||||||
IT Staffing Services | ||||||||||||||||
Total operations expenses | $ | $ | $ | $ | ||||||||||||
General & Administrative Expenses: | ||||||||||||||||
Data and Analytics Services | $ | $ | $ | $ | ||||||||||||
IT Staffing Services | ||||||||||||||||
Total general & administrative expenses | $ | $ | $ | $ | ||||||||||||
Segment operating income (loss): | ||||||||||||||||
Data and Analytics Services | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||
IT Staffing Services | ||||||||||||||||
Subtotal | ||||||||||||||||
Unallocated Cost: | ||||||||||||||||
Amortization of acquired intangible assets | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
Finance and accounting transition expense | ( | ) | ( | ) | ||||||||||||
Severance expense | ( | ) | ( | ) | ||||||||||||
Interest income (expense), FX, gains (losses) and other, net | ||||||||||||||||
Income (loss) before income taxes | $ | $ | $ | ( | ) | $ | ||||||||||
June 30, 2025 | December 31, 2024 | |||||||
(Amounts in thousands) | ||||||||
Total assets: | ||||||||
Data and Analytics Services | $ | $ | ||||||
IT Staffing Services | ||||||||
Total assets | $ | $ | ||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2025 | 2024 | 2025 | 2024 | |||||||||||||
(Amounts in thousands) | ||||||||||||||||
United States | $ | $ | $ | $ | ||||||||||||
Canada | ||||||||||||||||
India and Other | ||||||||||||||||
Total revenues | $ | $ | $ | $ | ||||||||||||
13. | Recently Issued Accounting Standards |
| ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
You should read the following discussion in conjunction with our audited consolidated financial statements and accompanying notes for the year ended December 31, 2024, included in our Annual Report on Form 10-K, filed with the Securities and Exchange Commission (“SEC”) on March 14, 2025.
This quarterly report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements about future events, future performance, plans, strategies, expectations, prospects, competitive environment and regulations. Forward-looking statements include all statements that are not historical facts and can be identified by the use of forward-looking terminology such as the words, “may”, “will”, “expect”, “anticipate”, “believe”, “estimate”, “plan”, “intend” or the negative of these terms or similar expressions in this quarterly report on Form 10-Q. We have based these forward-looking statements on our current views with respect to future events and financial performance. Our actual financial performance could differ materially from those projected in the forward-looking statements due to the inherent uncertainty of estimates, forecasts and projections and our financial performance may be better or worse than anticipated. Given these uncertainties, you should not put undue reliance on any forward-looking statements. All of the forward-looking statements are qualified in their entirety by reference to the factors discussed under “Risk Factors”, “Forward-Looking Statements” and elsewhere in our Annual Report on Form 10-K for the year ended December 31, 2024. Forward-looking statements represent our estimates and assumptions only as of the date that they were made. We do not undertake any duty to update forward-looking statements and the estimates and assumptions associated with them, after the date of this quarterly report on Form 10-Q, except to the extent required by applicable securities laws.
20
Website Access to SEC Reports:
The Company’s website is www.mastechdigital.com. The Company’s Annual Report on Form 10-K for the year ended December 31, 2024, current reports on Form 8-K and all other reports filed with the SEC, are available free of charge on the Investors page. The website is updated as soon as reasonably practical after such reports are filed electronically with the SEC.
Critical Accounting Policies
Please refer to Note 1 “Summary of Significant Accounting Policies” of the Consolidated Financial Statements and “Management’s Discussion and Analysis of Financial Condition and Results of Operations–Critical Accounting Policies and Estimates” in our Annual Report on Form 10-K for the year ended December 31, 2024 for a more detailed discussion of our significant accounting policies and critical accounting estimates. There were no material changes to these critical accounting policies during the six months ended June 30, 2025.
2024 Primentor, Inc. Consulting Agreement
On January 12, 2024, we entered into a consulting services agreement with Primentor, Inc. (“Primentor”) to provide the Company with strategic advisory and management consulting services, as well as any other business and organizational strategy services as the Board of Directors of the Company may reasonably request from time to time. The initial term of the consulting services agreement is for a three-year period that commenced on January 12, 2024, and the Company may request to renew the term for additional successive one-year terms, in which case Primentor and the Company will negotiate to agree upon the scope of the additional services and the amount of additional consulting fees. During 2024, the Company incurred consulting expenses of approximately $1.1 million related to these services. In 2025 and 2026, the Company expects to pay Primentor approximately $270,000 and $120,000, respectively, plus reimbursement of any reasonable and documented out-of-pocket expenses incurred by Primentor in rendering such services.
Transition of the Company’s finance and accounting functions to India:
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. As of June 30, 2025, the Company has incurred approximately $200,000 of additional costs and estimates total expenses to range from $500,000 to $750,000 for the transition period.
Additionally, the Company expects to pay approximately $1.3 million of severance expense related to this initiative. As of June 30, 2025, the Company has incurred approximately $500,000 in severance. Post-transition cost savings are expected to approximate $1.2 million per annum.
Overview:
We are a provider of Digital Transformation IT Services to mostly large and medium-sized organizations.
Our portfolio of offerings includes data management and analytics services, other digital transformation services, such as digital learning services, and IT Staffing Services.
We operate in two reporting segments – Data and Analytics Services and IT Staffing Services. Our data and analytics services are marketed on a global basis under the brand “Mastech InfoTrellis” and are delivered largely on a project basis with on-site and off-shore resources. These data and analytics capabilities and expertise were acquired through our acquisition of InfoTrellis and enhanced and expanded subsequent to the acquisition. In October 2020, we acquired AmberLeaf Partners, Inc. (“AmberLeaf”), a Chicago-based customer experience consulting firm. This acquisition enhanced our capabilities in customer experience strategy and managed services offerings for a variety of Cloud-based enterprise applications across sales, marketing and customer services organizations. Our IT staffing business combines technical expertise with business process experience to deliver a broad range of staffing services in digital and mainstream technologies, as well as other digital transformation services.
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Both business segments provide their services across various industry verticals, including financial services, government, healthcare, manufacturing, retail, technology telecommunications and transportation. In our Data and Analytics Services segment, we evaluate our revenues and gross profits largely by service line. In our IT Staffing Services segment, we evaluate our revenues and gross profits largely by sales channel responsibility. This analysis within both our reporting segments is multi-purposed and includes technologies employed, client relationships, and geographic locations.
Data and Analytics:
We provide information regarding our new bookings in our Data and Analytics Services segment, which represents the estimated value of client engagements, including those acquired through acquisitions, as well as renewals and extensions to existing contracts, because we believe doing so provides useful trend information regarding changes in the volume of our new business over time. New bookings can vary significantly quarter to quarter, depending, in part, on the timing of the signing of a small number of large engagements. Among other factors, the types of services and solutions to be delivered, the duration of the engagement and the pace and level of client spending impact the timing of the conversion of new bookings to revenues. In addition, substantially all of our contracts are terminable by the client on short notice, with little or no termination penalties. Information regarding our new bookings is not comparable to, nor should it be substituted for, an analysis of our revenues over time. New bookings involve estimates and judgments. There are no third-party standards or requirements governing the calculation of bookings. We do not update our new bookings for material subsequent terminations or reductions related to bookings originally provided in prior periods.
Economic Trends and Outlook:
Generally, our business outlook is highly correlated to general North American economic conditions, particularly with respect to our IT Staffing Services segment. During periods of increasing employment and economic expansion, demand for our services tends to increase. Conversely, during periods of contracting employment and / or a slowing global economy, demand for our services tends to decline. With economic expansion in 2010 through 2019 activity levels improved. However, as economic conditions strengthened, we experienced increased tightness in the supply side (skilled IT professionals) of our businesses. These supply-side challenges pressured resource costs and, to some extent, gross margins. As we entered 2020, we were encouraged by continued growth in the domestic job markets and expanding U.S. and global economies. However, with the COVID-19 pandemic surfacing in the first quarter of 2020, we realized that economic growth would quickly turn into recessionary conditions, which had a material impact on activity levels in both of our business segments. In 2021, we were encouraged by the global rollout of vaccination programs and signs of economic improvement, however, the proliferation of COVID-19 variants had caused some uncertainty and disruption in the global markets. In 2022 and 2023, COVID-19-related concerns seemed to subside; however, increased inflation, challenges in the financial sector related to increasing interest rates, and concerns about a possible recession created much uncertainty and impacted demand for our services in the second half of 2022 and for the entire year of 2023. In 2024, economic conditions in North American improved over the course of the year as job growth and inflationary outlooks showed positive signs of improvement. However, as we move into the second half of 2025, uncertainty and caution continues to persist in the marketplace, driven in part by lingering questions around the direction and implementation of immigration, trade and other policies under the new administration (including the implementation of tariffs and other trade measures). These evolving dynamics have contributed to extended decision-making cycles and conservative spending behavior among clients. Given these and other factors, it remains difficult to reliably forecast how market conditions will develop for the remainder of 2025 or during 2026 and beyond.
In addition to tracking general economic conditions in the markets that we service, a large portion of our revenues is generated from a limited number of clients (see Item 1A, the Risk Factor entitled “Our revenues are highly concentrated, and the loss of a significant client would adversely affect our business and revenues” in our Annual Report on Form 10-K for the year ended December 31, 2024). Accordingly, our trends and outlook are additionally impacted by the prospects and well-being of these specific clients. This “account concentration” factor may result in our results of operations deviating from the prevailing economic trends from time to time.
Within our IT Staffing Services segment, a larger portion of our revenues has come from strategic relationships with systems integrators. Additionally, many large end users of IT staffing services are employing MSP’s to manage their contractor spending. Both of these dynamics may pressure our IT staffing gross margins in the future.
Results of Operations for the Three Months Ended June 30, 2025 as Compared to the Three Months Ended June 30, 2024:
Revenues:
Revenues for the three months ended June 30, 2025 totaled $49.1 million, compared to $49.5 million for the corresponding three-month period in 2024. This 1% year-over-year revenue decrease reflected a modest revenue decrease in our IT Staffing Services segment and a 3% decline in our Data and Analytics Services segment. For the three months ended June 30, 2025, the Company had three clients that each had revenues in excess of 10% of total revenues (Fidelity 15.0%, Populus = 12.4% and CGI = 11.0%). For the three months ended June 30, 2024, the Company had two clients that each had revenues in excess of 10% of total revenues (CGI = 14.9% and Populus = 10.7%). The Company’s top ten clients represented approximately 58% and 53% of total revenues for the three months ended June 30, 2025 and 2024, respectively.
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Below is a tabular presentation of revenues by reportable segment for the three months ended June 30, 2025 and 2024, respectively:
| Revenues (Amounts in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | ||||||
| Data and Analytics Services | $ | 8.6 | $ | 8.9 | ||||
| IT Staffing Services | 40.5 | 40.6 | ||||||
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| Total revenues | $ | 49.1 | $ | 49.5 | ||||
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Revenues from our Data and Analytics Services segment totaled $8.6 million in the second quarter ended June 30, 2025, which is slightly lower compared to $8.9 million in the corresponding period last year. While activity levels remained relatively flat to slightly down, we continue to see strong engagement from existing clients. New bookings in the second quarter of 2025 totaled approximately $5.8 million, compared to bookings of $9.2 million in the second quarter of 2024
Revenues from our IT Staffing Services segment totaled $40.5 million in the three months ended June 30, 2025, compared to $40.6 million during the corresponding 2024 period. Revenue was essentially flat year-over-year as lower demand for our services in 2025 was largely offset by higher bill rates. Billable consultants at June 30, 2025 totaled 980-consultants compared to 1,035-consultants one year earlier. During the first half of 2025, our billable consultant-base reduced by 26-consultants. Our average bill rate during the second quarter of 2025 was $85.32 per hour compared to $81.94 per hour in the corresponding 2024 quarter. The increase in average bill rate was due to higher quality of revenues in the new assignments during the first half of 2025 and was reflective of the types of skill sets that we deployed. Permanent placement / fee revenues were approximately $0.3 million during the 2025 second quarter, which were up $0.1 million from the corresponding 2024 quarter.
Gross Margins:
Gross profits in the second quarter of 2025 totaled $13.8 million, which was $0.2 million lower than the second quarter of 2024 gross profits. Gross profit as a percentage of revenue was 28.1% for the three-month period ended June 30, 2025, compared to 28.2% during the same period of 2024. This 10-basis point reduction in gross margins reflected higher margins in our IT Staffing Services business segments, offset by lower margins from our Data and Analytics Services segment during the current quarter.
Below is a tabular presentation of gross margin by reporting segment for the three months ended June 30, 2025 and 2024, respectively:
| Gross Margin | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | ||||||
| Data and Analytics Services | 45.2 | % | 49.2 | % | ||||
| IT Staffing Services | 24.5 | 23.6 | ||||||
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| Total gross margin | 28.1 | % | 28.2 | % | ||||
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Gross margins from our Data and Analytics Services segment were 45.2% of revenues during the second quarter of 2025, which represented a decrease of 400-basis points compared to 49.2% of revenues during the second quarter of 2024. The margin reduction was primarily the result of a lower utilization rate in the 2025 quarter compared to the second quarter of 2024.
Gross margins from our IT Staffing Services segment were 24.5% in the second quarter of 2025 compared to 23.6% during the corresponding quarter of 2024. This 90-basis point increase was due to higher quality placements on new assignments in 2025.
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Selling, General and Administrative (“SG&A”) Expenses:
Below is a tabular presentation of operating expenses by expense category for the three months ended June 30, 2025 and 2024, respectively:
| SG&A Expenses (Amounts in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | ||||||
| Data and Analytics Services Segment | ||||||||
| Sales and Marketing | $ | 1.8 | $ | 1.9 | ||||
| Operations | 0.2 | 0.2 | ||||||
| General & Administrative | 2.0 | 1.5 | ||||||
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| Subtotal Data and Analytics Services | $ | 4.0 | $ | 3.6 | ||||
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| IT Staffing Services Segment | ||||||||
| Sales and Marketing | $ | 2.4 | $ | 2.2 | ||||
| Operations | 1.8 | 2.1 | ||||||
| General & Administrative | 4.0 | 3.7 | ||||||
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| Subtotal IT Staffing Services | $ | 8.2 | $ | 8.0 | ||||
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| Amortization of Acquired Intangible Assets | $ | 0.7 | $ | 0.7 | ||||
| Severance Expense | 0.2 | — | ||||||
| Finance and Accounting Transition Expense | 0.7 | — | ||||||
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| Total SG&A Expenses | $ | 13.8 | $ | 12.3 | ||||
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SG&A expenses for the three months ended June 30, 2025, totaled $13.8 million or 28.1% of total revenues, compared to $12.3 million or 24.8% of total revenues for the three months ended June 30, 2024. Excluding the severance expense and finance and accounting transition expense in the 2025 period and the amortization of acquired intangible assets in both periods, SG&A expense as a percentage of total revenues would have been 24.8% and 23.4%, respectively.
Fluctuations within SG&A expense components during the second quarter of 2025, compared to the second quarter of 2024, included the following:
| • | Sales expense was $0.1 million higher in the 2025 period compared to the corresponding 2024 period. The increase was primarily related to our IT Staffing Services segment, which had higher recruiting costs for sales leadership. Sales expenses in our Data and Analytics Services segment were essentially flat. |
| • | Operations expenses decreased by $0.3 million in the 2025 period compared to the corresponding 2024 period. The entire decline occurred in our IT Staffing Services segment due to staff reductions. In our Data and Analytics Services segment, operating expenses were essentially flat. |
| • | General and administrative expenses increased by $0.8 million in the 2025 period compared to the corresponding 2024 period. General and administrative expenses in our Data and Analytics Services segment increased by $0.5 million due to bad debt expense, executive leadership hires and higher stock-based compensation expense in the 2025 period. In our IT Staffing Services segment, general and administrative expenses increased by $0.3 million largely due to executive leadership hires, and higher stock-based compensation expense. |
| • | Amortization of acquired intangible assets was $0.7 million in both the 2025 and 2024 periods. |
| • | Severance expense was $0.2 million in the 2025 period, compared to no expense in the second quarter of 2024. The expense related to the Company’s exiting IT Staffing Sales Management. |
| • | Finance and accounting transition expense was $0.7 million in the 2025 period, compared to no expense in the second quarter of 2024. The expense relates to the Company’s decision to transition the Company’s finance and accounting functions to India and includes severance and additional costs related to the duplication of resources and travel expenses during the training and knowledge transfer process. |
Other Income / (Expense) Components:
Other Income / (Expense) for the three months ended June 30, 2025, consisted of interest income of $190,000 and foreign exchange losses of ($7,000). For the three months ended June 30, 2024, Other Income / (Expense) consisted of interest income of $130,000 and foreign exchange losses of ($14,000). The higher level of interest income was reflective of higher cash balances in the 2025 period.
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Income Tax Expense (Benefit):
Income tax expense (benefit) for the three months ended June 30, 2025, totaled $75,000, representing an effective tax rate on pre-tax income of 35.7%, compared to $418,000 expense for the three months ended June 30, 2024, which represented an effective tax rate on pre-tax income of 23.1%. In the 2024 period our effective tax rate was favorably impacted by a partial reversal of our tax valuation allowance due to profit generation in two of our foreign subsidiaries during the second quarter.
Results of Operations for the Six Months Ended June 30, 2025 as Compared to the Six Months Ended June 30, 2024:
Revenues:
Revenues for the six months ended June 30, 2025, totaled $97.4 million, compared to $96.4 million for the corresponding six- month period in 2024. This 1% year-over-year revenue increase reflected a 4% increase in our Data and Analytics Services segment and a 1% increase in our IT Staffing Services segment. For the six months ended June 30, 2025, the Company had three clients that each had revenues in excess of 10% of total revenues (Fidelity = 14.0%, Populus = 12.1% and CGI = 11.5%). For the six months ended June 30, 2024, the Company had two clients that each had revenues in excess of 10% of total revenues (CGI = 16.1% and Populus = 10.1%). The Company’s top ten clients represented approximately 58% and 52% of total revenues for the six months ended June 30, 2025 and 2024, respectively.
Below is a tabular presentation of revenues by reportable segment for the six months ended June 30, 2025 and 2024, respectively:
| Revenues (Amounts in millions) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | ||||||
| Data and Analytics Services | $ | 17.5 | $ | 17.0 | ||||
| IT Staffing Services | 79.9 | 79.4 | ||||||
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| Total revenues | $ | 97.4 | $ | 96.4 | ||||
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Revenues from our Data and Analytics Services segment totaled $17.5 million during the six months ended June 30, 2025, compared to $17.0 million in the corresponding six-month period last year. The 4% year-over-year increase largely reflected strong revenues during the first quarter of 2025 compared to the corresponding quarter of 2024. Order bookings for the first six months of 2025 totaled approximately $17.4 million, compared to bookings of $19 million for the first six months of 2024.
Revenues from our IT Staffing Services segment totaled $79.9 million in the six months ended June 30, 2025, compared to $79.4 million during the corresponding 2024 period. This 1% increase largely reflected an increase in average bill rate due to higher quality of placements, offset by a lower level of billable consultants. At June 30, 2025 billable consultants totaled 980-consultants compared to 1,035-consultants at June 30, 2024.
Gross Margins:
Gross profits in the six months ended June 30, 2025 totaled $26.7 million compared to $26.1 million in the corresponding period last year. Gross profit as a percentage of revenue was 27.4% for the six-month period ended June 30, 2025, compared to 27.1% during the same period of 2024. This 30-basis point increase largely reflected improvements in our IT Staffing Services segment, offset by lower margins in our Data and Analytics Services segment.
Below is a tabular presentation of gross margin by reporting segment for the six months ended June 30, 2025 and 2024, respectively:
| Gross Margin | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | ||||||
| Data and Analytics Services | 44.6 | % | 47.9 | % | ||||
| IT Staffing Services | 23.6 | 22.7 | ||||||
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| Total gross margin | 27.4 | % | 27.1 | % | ||||
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Gross margins from our Data and Analytics Services segment were 44.6% of revenues during the six-month period ended June 30, 2025, compared to 47.9% in the corresponding period of 2024. This gross margin decrease reflected lower utilization rates during the first six months of 2025.
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Gross margins from our IT Staffing Services segment were 23.6% in the six months ended June 30, 2025, compared to 22.7% during the corresponding period of 2024. This 90-basis point increase was due to higher margins and bill rates on new assignments in 2025.
Selling, General and Administrative (“SG&A”) Expenses:
Below is a tabular presentation of operating expenses by expense category for the six months ended June 30, 2025, and 2024, respectively:
| SG&A Expenses (Amounts in millions) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | ||||||
| Data and Analytics Services Segment | ||||||||
| Sales and Marketing | $ | 3.9 | $ | 4.3 | ||||
| Operations | 0.3 | 0.3 | ||||||
| General & Administrative | 3.9 | 3.2 | ||||||
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| Subtotal Data and Analytics Services | $ | 8.1 | $ | 7.8 | ||||
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| Sales and Marketing | $ | 4.6 | $ | 4.4 | ||||
| Operations | 3.9 | 4.1 | ||||||
| General & Administrative | 8.3 | 7.1 | ||||||
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| Subtotal IT Staffing Services | $ | 16.8 | $ | 15.6 | ||||
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| Amortization of Acquired Intangible Assets | $ | 1.3 | $ | 1.4 | ||||
| Severance Expense | 1.6 | — | ||||||
| Finance and Accounting Transition Expense | 0.7 | — | ||||||
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| Total SG&A Expenses | $ | 28.5 | $ | 24.8 | ||||
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SG&A expenses for the six months ended June 30, 2025, totaled $28.5 million or 29.3% of total revenues, compared to $24.8 million or 25.8% of total revenues for the six months ended June 30, 2024. Excluding the severance expense and finance and accounting transition expense in the 2025 period and the amortization of acquired intangible assets in both periods, SG&A expense as a percentage of total revenues would have been 25.6% and 24.3%, respectively.
Fluctuations within SG&A expense components during the first six months of 2025, compared to the first six months of 2024, included the following:
| • | Sales expense decreased by $0.2 million in the 2025 period compared to the corresponding 2024 period. In our Data and Analytics Services segment sales expense decreased by $0.4 million which was due to headcount reductions. Sales expenses in our IT Staffing Services segment were up $0.2 million compared to the previous year due to higher recruiting costs for sales leadership. |
| • | Operations expense decreased by $0.2 million in the 2025 period compared to the corresponding 2024 period. The entire decline occurred in our IT Staffing Services segment due to staff reductions. |
| • | General and administrative expense increased by $1.9 million in the 2025 period compared to the corresponding 2024 period. General and administrative expense in our IT Staffing Services segment, increased by $1.2 million largely due to executive compensation, including stock-based compensation, as well as higher recruiting fees. In our Data and Analytics Services segment, general and administrative expense increased by $0.7 million primarily due to executive compensation, including stock based compensation, and bad debt expense. |
| • | Amortization of acquired intangible assets was $0.1 million lower in the 2025 period compared to the corresponding 2024 period, as a portion of our intangible assets became fully amortized in 2025. |
| • | Severance expense was $1.6 million in the 2025 period, compared to no expense in the 2024 period. The expense related to the Company’s exiting Chief Financial Officer and IT Staffing Sales Management. |
| • | Finance and accounting transition expense was $0.7 million in the 2025 period, compared to no expense in the 2024 period. The expense relates to the Company’s decision to transition the Company’s finance and accounting functions to India and includes severance and additional costs related to the duplication of resources and travel expenses during the training and knowledge transfer process. |
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Other Income / (Expense) Components:
Other Income / (Expense) for the six months ended June 30, 2025, consisted of net interest income of $305,000 and foreign exchange losses of ($31,000). For the six months ended June 30, 2024, Other Income / (Expense) consisted of interest income of $284,000 and foreign exchange losses of ($44,000). The interest income was reflective of higher cash balances on hand in the 2025 period.
Income Tax Expense:
Income tax expense (benefit) for the six months ended June 30, 2025 totaled $(248,000) representing an effective tax rate on pre-tax income of 16.0% compared to $297,000 for the six months ended June 30, 2024, which represented a 19.4% effective tax rate on pre-tax income. The 2025 period tax rate compared to the 2024 period reflected a favorable adjustment to our tax valuation allowance due to the utilization of Singapore tax benefits offset by shortfalls in the expected tax benefits of option exercised in 2024.
Liquidity and Capital Resources:
Financial Conditions and Liquidity:
As of June 30, 2025, we had no bank debt, cash balances on hand of $27.9 million and approximately $22.2 million of borrowing capacity under our existing credit facility.
Historically, we have funded our organic business needs with cash generated from operating activities. Controlling our operating working capital levels by closely managing our accounts receivable balance is an important element of cash generation. As of June 30, 2025, our accounts receivable “days sales outstanding” (“DSOs”) measurement remained steady at 53-days, which was the level reported at June 30, 2024.
We believe that cash provided by operating activities, cash balances on hand and current availability under our credit facility will be adequate to fund our business needs and support our share repurchase program that we announced in February 2023 over the next twelve months, absent any acquisition-related activities.
Cash flows provided by (used in) operating activities:
Cash provided by operating activities for the six months ended June 30, 2025, totaled $0.3 million compared to cash (used in) operating activities of ($0.1 million) during the six months ended June 30, 2024. Elements of cash flow during the 2025 period were a net (loss) of ($1.3) million, non-cash charges of $1.3 million and a decrease in operating working capital levels of $0.3 million. Elements of cash flow during the corresponding 2024 period were a net income of $1.2 million, non-cash charges of $2.9 million and an increase in operating working capital levels of ($4.2 million). Operating working capital decreased in 2025 due to lower accounts receivable and an increase in other accrued liabilities.
Cash flows (used in) investing activities:
Cash (used in) investing activities for the six months ended June 30, 2025, was ($188,000) compared to ($751,000) for the six months ended June 30, 2024. In 2025 investing activities included capital expenditures of ($169,000), and office lease deposits of ($19,000). In 2024, investing activities consisted of capital expenditures.
Cash flows provided by (used in) financing activities:
Cash provided by financing activities for the six months ended June 30, 2025, totaled $64,000 and consisted of proceeds from the exercise of stock options of $108,000, the issuance of common shares related to our Employee Stock Purchase Plan of $70,000, partially offset by the purchase of treasury shares of ($114,000). Cash provided by financing activities for the six months ended June 30, 2024, totaled $378,000 and consisted of proceeds from the exercise of stock options of $322,000, the issuance of common shares related to our Employee Stock Purchase Plan of $136,000, partially offset by the purchase of treasury shares of ($80,000).
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Off-Balance Sheet Arrangements:
Other than $324,000 in outstanding letters of credit issued under our Credit Agreement, we do not have any off-balance sheet arrangements. For further details about the outstanding letters of credit, refer to Note 8 — “Credit Facility” in the Notes to Condensed Consolidated Financial Statements included herein.
Inflation:
We do not believe that inflation had a significant impact on our results of operations for the periods presented, although economic uncertainty, including the concerns of our clients and other companies with respect to inflationary conditions in North America and elsewhere, has had and may continue to have an adverse impact on the demand for our services. On an ongoing basis, we attempt to minimize any effects of inflation on our operating results by controlling operating costs and, whenever possible, seek to ensure that billing rates reflect increases in costs due to inflation. However, high levels of inflation may result in higher interest rates which could increase our borrowing costs in the future if we elect to draw on our current or future credit facilities.
In addition, refer to “Item 1A. Risk factors” in our 2024 Annual Report on Form 10-K for a discussion about risks that inflation directly or indirectly may pose to our business.
Seasonality:
Our consultants’ billable hours are affected by national holidays and vacation policies. Accordingly, we generally have lower utilization rates and higher benefit costs during the fourth quarter. Additionally, assignment completions tend to be higher near the end of the calendar year, which largely impacts our revenue and gross profit performance during the subsequent quarter.
Recently Issued Accounting Standards:
Recent accounting pronouncements are described in Note 13 to the accompanying financial statements.
| ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
In addition to the inherent operational risks, the Company is exposed to certain market risks, primarily related to changes in interest rates and currency fluctuations.
Interest Rates
As of June 30, 2025, we had no outstanding borrowings under the Credit Agreements — Refer to Note 8 — “Credit Facility” in the Notes to Condensed Consolidated Financial Statements, included herein.
Currency Fluctuations
The reporting currency of the Company and its subsidiaries is the U.S. dollar. The functional currency of the Company’s subsidiary in Canada is the U.S. dollar because the majority of its revenue is denominated in U.S. dollars. The functional currencies of the Company’s Indian and European subsidiaries are the local currency of the location of such subsidiary. The results of operations of the Company’s Indian and European subsidiaries are translated at the monthly average exchange rates prevailing during the period. The financial position of the Company’s Indian and European subsidiaries is translated at the current exchange rates at the end of the period, and the related translation adjustments are recorded as a component of accumulated other comprehensive income (loss) within Shareholders’ Equity. Gains and losses resulting from foreign currency transactions are included as a component of other income (expense), net in the Condensed Consolidated Statements of Operations, and have not been material for all periods presented. A hypothetical 10% increase or decrease in overall foreign currency rates in the first six months of 2025 would not have had a material impact on our consolidated financial statements.
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| ITEM 4. | CONTROLS AND PROCEDURES |
Disclosure Controls and Procedures
The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports that the Company files or submits under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
As of the end of the period covered by this report, the Company carried out an evaluation, under the supervision and with the participation of Company management, including the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to Exchange Act Rules 13a-15(b). Based upon that evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective.
We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
Changes in Internal Control over Financial Reporting
There were no changes in the Company’s internal control over financial reporting during the quarter ended June 30, 2025 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II. OTHER INFORMATION
| ITEM 1. | LEGAL PROCEEDINGS |
In the ordinary course of our business, we are involved in a number of lawsuits and administrative proceedings. While uncertainties are inherent in the final outcome of these matters, management believes, after consultation with legal counsel, that the disposition of these proceedings should not have a material adverse effect on our financial position, results of operations or cash flows.
| ITEM 1A. | RISK FACTORS |
There have been no material changes from the risk factors as previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 14, 2025.
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ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
| Period | Total Number of Shares Purchased (1) | Average Price per Share (1) | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) | Maximum Number of Shares that May Yet Be Purchased Under this Plan or Programs (1) | ||||||||||||
| April 1, 2025 — April 30, 2025 | — | $ | — | — | 423,079 | |||||||||||
| May 1, 2025 — May 31, 2025 | 6,201 | $ | 7.33 | — | 416,878 | |||||||||||
| June 1, 2025 — June 30, 2025 | 10,310 | $ | 6.64 | — | 406,568 | |||||||||||
| | | | | | | | | |||||||||
| Total | 16,511 | $ | 6.90 | — | 406,568 | |||||||||||
| (1) | On February 8, 2023, the Company announced that the Board of Directors authorized a share repurchase program of up to 500,000 shares of Common Stock over a two-year period. Repurchases under the program may occur from time to time in the open market, through privately negotiated transactions, through block purchases or other purchase techniques (including a Rule 10b5-1 program), or by any combination of such methods, and the program may be modified, suspended or terminated at any time at the discretion of the Board of Directors. On February 19, 2025, the Company announced that the Board of Directors had authorized an extension of its previously announced share repurchase program for an additional year through February 8, 2026. The Company did not repurchase any shares of its Common Stock during the quarter ended June 30, 2025, other than through this publicly announced share repurchase program. |
ITEM 5. | OTHER INFORMATION |
| ITEM 6. | EXHIBITS |
(a) Exhibits
31
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on this 13th day of August, 2025.
| MASTECH DIGITAL, INC. | ||||
| August 13, 2025 | /s/ NIRAV PATEL | |||
| Nirav Patel Chief Executive Officer | ||||
| /s/ KANNAN SUGANTHARAMAN | ||||
| Kannan Sugantharaman | ||||
| Chief Financial Officer | ||||
| (Principal Financial Officer) | ||||
32
Exhibit 10.4
CONFIDENTIAL SEPARATION AGREEMENT AND GENERAL RELEASE
THIS CONFIDENTIAL SEPARATION AGREEMENT AND GENERAL RELEASE (“Release”) is made and entered into by and among Mastech Digital, Inc.,Mastech Digital Technologies, Inc., and the subsidiaries and affiliates of each (collectively, the “Company”), and John J. Cronin, Jr. (“Executive”).
WHEREAS, the Company and Executive wish to resolve any and all matters between them relating to Executive’s employment and terminationfrom employment;
NOW, THEREFORE, in consideration of the mutual undertakings set forth below, this Release will resolve, finally andcompletely, any and all possible claims and disputes between the Company and Executive arising from such employment and the termination of that employment and, accordingly, the Company and Executive, each intending to be legally bound, hereby agreeas follows:
1. Executive’s employment with the Company terminated on May 30, 2025, (the “Termination Date”) withoutCause, as defined in the Fourth Amended and Restated Employment Agreement signed on March 8, 2024, by Executive and the Company (the “Employment Agreement”).
2. (a) Except as provided in Paragraph 2(b) below, Executive shall have no further right to any salary, bonus or Executive benefits provided bythe Company or any other Executive benefit plans of the Company. Executive agrees that the provisions of this Release and the payments under this Release do not extend Executive’s service or increase any amounts due him under the benefit plansof the Company.
(b) In exchange for execution of this Release within sixty (60) days following the Termination Date, withoutrevocation and pursuant to the terms of Executive’s Employment Agreement, Executive shall be entitled to:
(i) Twenty-four(24) months of Executive’s current monthly base salary, less appropriate deductions, divided into equal installments and paid on the Company’s regular payroll dates over a period of twenty-four (24) months commencing on theSeverance Payment Commencement Date (as defined below), and any Severance Payment amounts that would otherwise have been paid prior to the Severance Payment Commencement Date shall be paid on the Severance Payment Commencement Date, and theremaining installments paid on succeeding regular payroll dates during such twenty-four (24) month period until paid in full;
1
(ii) Two times (2x) Executive’s annual performance-based cash bonus target for theyear 2024, less appropriate deductions, (A) one-half of which is payable on the later of (x) the sixtieth (60th) day following the TerminationDate and (y) the Severance Payment Commencement Date (as defined below), and (B) the second-half of which is payable on the sixtieth (60th) day following the first anniversary of theTermination Date (the payments under this paragraph (ii) and the payments under paragraph (i) above being referred to in the aggregate as the “Severance Payments”);
(iii) If Executive timely elects continued health coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985(“COBRA”), continued coverage under Company’s medical benefit plan after the Termination Date for Executive and his eligible dependents under Company’s group health plans in accordance with and for as long as required under COBRArequirements (subject to payment of the applicable cost for such coverage as may be required by Company in accordance with COBRA). For any period COBRA coverage under Company’s group health plans is in effect for Executive and/orExecutive’s qualified beneficiaries from the Termination Date until eighteen (18) months from the Termination Date, the Company shall pay, directly to the benefits provider, an amount equal to the excess of the Executive’s cost forCOBRA coverage over the cost Executive would have paid for group health plan coverage as an active Executive of the Company. For avoidance of doubt, whether or not Executive signs this Release, Executive will separately receive information aboutcontinuing health coverage under COBRA, which Executive can do at Executive’s sole expense;
(iv) For a period of twelve(12) months following the Termination Date, continued vesting of unvested stock options outstanding as of such Termination Date and granted under Company’s Stock Incentive Plan, or any successor thereto;
(v) The exercise period for a vested Option, including those which vest pursuant to subpart (iv) above, will be extended for a period ofeighteen (18) months after completion of all vesting, but not later than the earlier of (A) the original expiration date of such Option; or (B) ten (10) years from the date of grant; and
(vi) Executive’s annual target bonus for the year 2025, based on Company’s 2025 annual results through December 31, 2025,(calculated as though Executive were still an employee) will be paid in accordance with the same percentage of bonus given to the Company’s Named Executive Officers, as determined by the Board of Directors, prorated considering the days in 2025in which Executive was employed by Company divided by 365, less appropriate deductions, payable on March 15, 2026.
(c) Except as setforth in paragraph (2)(b)(iii) above, the Severance Payments will commence or be made, as applicable, on the first reasonably practicable Company payroll date after the Release becomes effective (such commencement or payment date being referred toas the “Severance Payment Commencement Date”).
(d) Included as part of Executive’s final salary payment is a lump sum payment equalto the amount of accrued and unused vacation that Executive is entitled to receive under the Company’s existing policies. Upon the termination of his employment, Executive will receive payment for accrued and unused vacation and personal daysregardless of execution of the Release.
(e) If any payment or distribution by Company to or for the benefit of Executive, whether paid orpayable or distributed or distributable pursuant to the terms of this Agreement or otherwise pursuant to or by reason of any other agreement, policy, plan, program or arrangement or the lapse or termination of any restriction on or the vesting orexercisability of any payment or benefit (each a “Payment”), would be subject to the excise tax imposed by Section 4999 of the Code (or any successor provision thereto) or to any similar tax imposed by state or local law (suchtax or taxes are hereafter collectively referred to as the “Excise Tax”), then the aggregate amount of Payments payable to Executive shall be reduced to the aggregate amount of Payments that may be made to Executive withoutincurring an excise tax (the “Safe-Harbor Amount”) in accordance with the immediately following sentence; provided that such reduction shall only be imposed if the aggregate after-tax value ofthe Payments retained by Executive (after giving effect to such reduction) is equal to or greater than the aggregate after-tax value (after giving effect to the Excise Tax) of the Payments to Executive withoutany such reduction. Any such reduction shall be made in the following order: (i) first, any future cash payments (if any) shall be reduced (if necessary, to zero); (ii) second, any current cash payments shall be reduced (if necessary, to zero);(iii) third, all non-cash payments (other than equity or equity derivative related payments) shall be reduced (if necessary, to zero); and (iv) fourth, all equity or equity derivative payments shall bereduced.
The determinations to be made with respect to this subpart (e) shall be made by Company’s independent accountants,which shall be paid by Company for the services to be provided hereunder. For purposes of making the calculations required by this Paragraph, the accountants may make reasonable, good faith interpretations concerning the application of Code Sections280G and 4999 and make reasonable assumptions regarding Executive’s marginal tax rate in effect for such parachute payments, including the effect of the deductibility of state and local taxes on such marginal tax rate. Executive and Companyshall furnish to accountants such information and documents as the accountants may reasonably request in order to make a determination under this Paragraph.
Company and Executive agree and acknowledge that the foregoing amounts and benefits exceed any payments to which Executive might otherwise beentitled under existing Company policies or practices in the absence of execution of this Release.
3. This Release shall not constitute or be construed as an admission of any liability orwrongdoing by the Company. Executive expressly understands and agrees that by entering into this Release, Company in no way is admitting to having violated any of Executive’s rights or to having violated any of the duties or obligations owedExecutive or to having engaged in any conduct in violation of the law. Company, in fact, affirmatively states that it treated Executive in full accord with the law at all times. Further, Executive understands and agrees that the Company will not beobligated in any way to provide him with future employment and Executive agrees not to seek any such employment or reemployment.
4.Executive, on behalf of himself, his heirs, representatives, estates, dependents, executors, administrators, successors and assigns, hereby voluntarily, expressly, irrevocably and unconditionally releases and forever discharges the Company, and itsand their, subsidiaries, related companies, predecessors, affiliates, successors and assigns, and its and their respective benefits plans, and their past, present and future officers, directors, trustees, administrators, agents, attorneys,employees, and representatives, as well as the heirs, successors or assigns of any of such persons or such entities (severally and collectively called “Releasees”), jointly and individually, from any and all manner of suits, actions,causes of action, demands, damages and claims, known and unknown, that Executive has or ever had or which he may have against any of the Releasees for any acts, practices or events up to and including the date he executes this Release, and thecontinuing effects thereof, it being the intention of Executive to effect a general release of all such claims. By executing this Release, Executive understands that he is releasing any and all claims under any possible legal, equitable, contract,tort or statutory theory, including but not limited to: (i) any and all claims arising from or relating to Executive’s employment with the Company and/or his termination from employment with the Company including, but not limited to, anyand all claims for breach of the Company’s policies, rules, regulations, or handbooks or for breach of express or implied contracts or express or implied covenants of good faith, and any and all claims for wrongful discharge, defamation,slander, invasion of privacy, violation of public policy, retaliation, intentional or negligent infliction of emotional distress or any other personal injury; (ii) any and all claims for back pay, front pay, or for any kind of compensatory,special or consequential damages, punitive or liquidated damages, attorneys’ fees, costs, disbursements or expenses of any kind whatsoever; (iii) any and all claims arising under federal, state, or local constitutions, laws, rules,regulations or common law prohibiting employment discrimination based upon age, race, color, sex, religion, handicap or disability, national origin or any other protected category or characteristic, including, but not limited to, any and all claimsarising under the Age Discrimination in Employment Act of 1967, as amended, the Older Workers Benefit Protection Act, Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Pennsylvania Human Rights Act, the Americans WithDisabilities Act, the Civil Rights Acts of 1866 and 1871, the Pregnancy Discrimination Act, Section 1981, the Family and Medical Leave Act, the Executive Retirement Income Security Act of 1974 and/or under any other federal, state, or localhuman rights, civil rights, or employment discrimination statutes, ordinances, rules or regulations; and (iv) any and all other claims of any kind whatsoever that Executive has or may have against Releasees up to and including the Date heexecutes this Release. Notwithstanding anything in this Release to the contrary, Executive is not waiving any rights that, under the law, cannot be waived (including any rights to challenge the validity of this Release).
5. Executive specifically releases all Releasees from any and all claims or causes of actionfor the fees, costs, expenses and interest of any and all attorneys who have at any time or are now representing Executive in connection with this Release and/or in connection with any matters released in this Release.
6. Executive acknowledges that he has been given the opportunity to consider this Release for at leasttwenty-one (21) days, which is a reasonable period of time, and that he has been advised to consult with an attorney prior to signing this Release. Executive further acknowledges that he has had a fulland fair opportunity to confer with an attorney, that he has carefully read and fully understands all of the provisions of the Release, and that he has executed it of his own free will, act and deed without coercion and with knowledge of the natureand consequences thereof. If Executive executes this Release in less than twenty-one (21) days, he acknowledges that he has thereby waived his right to the fulltwenty-one (21) day period. For a period of seven (7) calendar days following the execution of this Release, Executive may revoke this Release by delivery of a written notice revoking the same withinthat seven (7) day period to the Company at Mastech Digital, Inc., 1305 Cherrington Parkway, Bldg. 210, Suite 400, Moon Township, PA 15108, Attention: Jenna Ford Lacey. This Release shall not become effective or enforceable until said seven(7) day revocation period has expired. The date of expiration of such revocation period is referred to herein as the Effective Date. Company shall have no obligation to pay any sums under paragraph 2(b) of this Release until eight(8) days after receipt of a fully executed copy of the Release.
7. Executive acknowledges that he was provided with, received, usedand was exposed to confidential proprietary information and trade secrets relating to the Company (hereinafter referred to as “Trade Secrets and/or Confidential Information”). Executive agrees that the Company has a substantial businessinterest in the protection of its Trade Secrets and/or Confidential Information from disclosure and/or misuse and that the Company has a substantial business interest in the covenants set forth below. Executive, therefore, covenants and agrees thathe shall not, without the written consent of a duly authorized executive officer of the Company, directly or indirectly use, disclose or disseminate to any other person, organization or entity or otherwise employ any Trade Secrets and/orConfidential Information of the Company for so long as the pertinent information or documentation remain Trade Secrets and/or Confidential Information; provided, however, that for purposes of this Release, Trade Secrets and/or ConfidentialInformation shall not include any information known generally to the public (other than as a result of unauthorized disclosure by Executive) or any information of a type not otherwise considered confidential by persons engaged in the same businessor a business similar to that conducted by the Company. Executive acknowledges and agrees that the ascertainment of damages in the event of his breach or violation of the restrictions set forth in Paragraph 7 of this Release would be difficult,if not impossible, and further that the various rights and duties created hereunder are extraordinary and unique so that upon breach by Executive of the duties and obligations provided hereunder, the Company will suffer irreparable injury for whichit will have no meaningful remedy in law. Executive therefore agrees that, in addition to and without limiting any other remedy or right it may have, the Company shall be entitled to injunctive relief in order to enforce the provisions hereof.
8. Executive hereby confirms that he has returned to the Company all Company-issued creditcards and keys as well as computer software, files, manuals, letters, notes, records, drawings, notebooks, reports and any other documents and tangible items owned by the Company or which Executive obtained, prepared or acquired while he wasemployed with the Company or used or maintained in connection with conducting business for or on behalf of the Company, expressly including documents and tangible items containing confidential information about the Company, whether maintained atExecutive’s office, his home or any other location. Notwithstanding, it is agreed the Executive may retain the laptop computer issued to him by the Company but that Executive has removed or destroyed any Company information from the laptop.Such information includes information in all forms, including electronic form. Executive will not disclose or make any further use, directly or indirectly, of any such Company information.
9. Executive agrees and acknowledges that there are no outstanding expense reimbursements due to him.
10. a. Except as otherwise required by law, Executive agrees to refrain from directly or indirectly engaging in publicity or any other actionor activity which reflects adversely upon the Company, its Board of Directors, officers, agents and business, including any successor or affiliate.
b. Except as otherwise required by law, Executive agrees to keep confidential and not disclose the terms of this Release to any person, withthe exception of his spouse, attorneys or tax professionals consulted by Executive to understand he interpretation, application, or legal or financial effect of this Release or to implement any portion of it with those persons to pledge to strictlymaintain such confidentiality before Executive shares such information with them.
11. If any of the provisions of this Release aredetermined to be invalid or unenforceable for any reason, the remaining provisions and portions of this Release shall be unaffected thereby and shall remain in full force to the fullest extent permitted by law.
12. Executive and the Company agree that the language of all parts of this Release shall inall cases be construed as a whole, according to the fair meaning, and not strictly for or against any party.
13. Executive and the Companyunderstand, covenant and agree that the terms and conditions of this Release constitute the full and complete understandings, agreements and arrangements of the parties with respect to the subject matter hereto. Executive and the Company understand,covenant and agree that the post-termination obligations in the Employment Agreement shall continue post-employment and in full force and effect, and are incorporated herein by reference.
14. This Release shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania without regard to itsconflicts of law principles. This Release shall be binding upon, and inure to the benefit of, the parties hereto and their respective heirs, successors and permitted assigns. It shall not be construed against either party.
15. Executive shall make no assignment of any released claims, and he hereby warrants that no such assignment has been made.
16. Subject to such party’s legally protected rights to communicate with governmental bodies and agencies and to engage in any legallyprotected activity under any applicable law, each party hereto agrees not to make any disparaging statements concerning the other party hereto or, as applicable, such other party’s employees, officers, directors, services, products, businessrelationships, operations or reputation. This non-disparagement obligation expressly includes statements made on the internet (including, but not limited to, social networking websites such as Facebook,X, and LinkedIn) and statements made under a pseudonym.
[Signature Page Follows]
IN WITNESS WHEREOF, the undersigned parties, having read this Confidential SeparationAgreement and General Release, and intending to be legally bound thereby, have caused this Confidential Separation Agreement and General Release to be executed as of the date set forth below.
| EXECUTIVE: | ||||||||
| DATED: | 6/19/25 | By: | /s/ John J. Cronin, Jr. | |||||
| John J. Cronin, Jr. | ||||||||
| MASTECH DIGITAL, INC.: | ||||||||
| DATED: | 6/18/25 | By: | /s/ Jennifer Ford Lacey | |||||
| Name: Jennifer Ford Lacey | ||||||||
| Title: General Counsel | ||||||||
| MASTECH DIGITAL TECHNOLOGIES, INC.: | ||||||||
| DATED: | 6/18/25 | By: | /s/ Jennifer Ford Lacey | |||||
| Name: Jennifer Ford Lacey | ||||||||
| Title: General Counsel | ||||||||
Exhibit 31.1
Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by Chief Executive Officer
I, Nirav Patel, certify that:
| 1. | I have reviewed this report on Form 10-Q of Mastech Digital, Inc.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state amaterial fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report,fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintainingdisclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange ActRules 13a-15(f) and 15(d)-15(f)) for the registrant and have: |
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to bedesigned under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report isbeing prepared; |
| (b) | Designed such internal control over financial reporting, or caused such internal control over financialreporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accountingprinciples; |
| (c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in thisreport our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| (d) | Disclosed in this report any change in the registrant’s internal control over financial reporting thatoccurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in case of the annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internalcontrol over financial reporting; and |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation ofinternal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control overfinancial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role inthe registrant’s internal control over financial reporting. |
| MASTECH DIGITAL, INC. | ||||||
| Date: August 13, 2025 | /S/ NIRAV PATEL | |||||
| Nirav Patel | ||||||
| Chief Executive Officer | ||||||
Exhibit 31.2
Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by Chief Financial Officer
I, Kannan Sugantharaman, certify that:
| 1. | I have reviewed this report on Form 10-Q of Mastech Digital, Inc.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state amaterial fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report,fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintainingdisclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange ActRules 13a-15(f) and 15(d)-15(f)) for the registrant and have: |
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to bedesigned under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report isbeing prepared; |
| (b) | Designed such internal control over financial reporting, or caused such internal control over financialreporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accountingprinciples; |
| (c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in thisreport our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| (d) | Disclosed in this report any change in the registrant’s internal control over financial reporting thatoccurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in case of the annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internalcontrol over financial reporting; and |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation ofinternal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control overfinancial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role inthe registrant’s internal control over financial reporting. |
| MASTECH DIGITAL, INC. | ||||||
| Date: August 13, 2025 | /S/ KANNAN SUGANTHARAMAN | |||||
| Kannan Sugantharaman | ||||||
| Chief Financial Officer | ||||||
Exhibit 32.1
Certification Pursuant to 18 U.S.C. Section 1350,
As Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
In connection with the Quarterly Report of Mastech Digital, Inc. (the “Company”) on Form10-Q for the quarter ended June 30, 2025, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Nirav Patel, Chief Executive Officer of the Company, certify,pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:
| (1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Actof 1934, as amended; and |
| (2) | The information contained in the Report fairly presents, in all material respects, the financial condition andresults of operations of the Company. |
| /S/ NIRAV PATEL |
| Nirav Patel |
| Chief Executive Officer |
| Date: August 13, 2025 |
Exhibit 32.2
Certification Pursuant to 18 U.S.C. Section 1350,
As Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
In connection with the Quarterly Report of Mastech Digital, Inc. (the “Company”) on Form10-Q for the quarter ended June 30, 2025, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Kannan Sugantharaman, Chief Financial Officer of the Company,certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:
| (1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Actof 1934, as amended; and |
| (2) | The information contained in the Report fairly presents, in all material respects, the financial condition andresults of operations of the Company. |
| /S/ KANNAN SUGANTHARAMAN |
| Kannan Sugantharaman |
| Chief Financial Officer |
| Date: August 13, 2025 |