Mastech Digital reported third‑quarter 2025 results, with revenue of $48.5 million, a 6.4% year‑over‑year decline, GAAP net income of $0.9 million, and a GAAP diluted earnings per share of $0.08. Non‑GAAP net income rose to $3.5 million, translating to a diluted EPS of $0.29, a $0.12 beat over the consensus estimate of $0.17.
Revenue fell 6.4% YoY, driven by a 4.4% drop in the IT staffing segment to $40.6 million and a 15.8% decline in the data and analytics segment to $7.9 million. In Q3 2024, IT staffing generated $42.4 million and data & analytics $9.4 million, underscoring the sharper contraction in the latter.
Consolidated gross margin contracted to 27.8% from 28.5% in Q3 2024, largely because the data and analytics business, which had a higher cost base, shrank. The IT staffing segment, however, posted a record 24.8% margin and an all‑time high average bill rate of $86.60, reflecting pricing power and a higher mix of high‑margin engagements.
Cash and liquidity remain robust, with $32.7 million in cash, no debt, and a $20.8 million borrowing capacity under the revolving credit facility. The company incurred $2 million in severance and transition costs during the quarter, a one‑time charge that reduced GAAP net income but did not affect the non‑GAAP figure. The EDGE initiative continues to drive cost discipline and operational efficiency.
The non‑GAAP EPS beat analysts by $0.12, driven by disciplined cost management, the successful implementation of the EDGE program, and the higher bill rates in IT staffing. CEO Nirav Patel noted that macroeconomic and geopolitical uncertainties weighed on revenue, but the company remains confident in long‑term demand drivers and is focused on capturing growth opportunities as client spending normalizes.
Investors responded positively to the earnings, with the market reflecting confidence in Mastech Digital’s operational improvements and its ability to generate strong non‑GAAP profitability despite revenue headwinds.
The content on BeyondSPX is for informational purposes only and should not be construed as financial or investment advice. We are not financial advisors. Consult with a qualified professional before making any investment decisions. Any actions you take based on information from this site are solely at your own risk.