Mastech Digital Reports 20% Increase in Revenues in the First Quarter 2022

Both the Data & Analytics and IT Staffing Segments Achieved Double-Digit YOY Revenue Growth

PITTSBURGH, April 27, 2022 /PRNewswire/ -- Mastech Digital, Inc. (NYSE American: MHH), a leading provider of Digital Transformation IT Services, announced today its financial results for the first quarter ending March 31, 2022.

First Quarter 2022 Highlights:

• The Company delivered record consolidated revenues in the first quarter of 2022. Total revenues grew organically by 20% to $59.8 million, compared to revenues of $49.8 million in the 2021 first quarter;
• The Company's Data and Analytics Services segment reported revenues of $10.2 million, an organic increase of 15% over last year's $8.8 million;
• The IT Staffing segment achieved record revenues of $49.6 million and record gross margins of 22.9% during the first quarter 2022. Top-line organic growth totaled 21% compared to the first quarter of 2021;
• GAAP diluted earnings per share was $0.19 in the first quarter of 2022 compared to $0.10 in the first quarter of 2021; and
• Non-GAAP diluted earnings per share was $0.28 in the first quarter of 2022 compared to $0.19 in the 2021 first quarter.

First Quarter 2022 Results:

Revenues for the first quarter of 2022 totaled $59.8 million compared to $49.8 million during the corresponding quarter of 2021.  Gross profits in the first quarter of 2022 increased by 24% to $15.9 million from $12.8 million in the same quarter of 2021. GAAP net income for the first quarter of 2022 totaled $2.3 million or $0.19 per diluted share, compared to $1.2 million or $0.10 per diluted share during the same period of 2021.  Non-GAAP net income for the first quarter of 2022 was $3.3 million or $0.28 per diluted share, compared to $2.2 million or $0.19 per diluted share in the first quarter of 2021.

Activity levels at the Company's Data and Analytics Services segment were solid, with order bookings of $11.8 million. Additionally, backlog increased during the quarter.  Demand for the Company's IT Staffing Services segment remained elevated during the first quarter, as the segment achieved record revenues and gross margins.  

"2022 is off to a strong start with solid financial results in a quarter that has historically been weak", said Vivek Gupta, the Company's President and Chief Executive Officer.  "Both of our business segments had sequential revenue growth, strong year-over-year top-line growth and solid operating profits.  Additionally, we brought onboard Ganeshan Venkateshwaran, a seasoned leader with an impressive track record of successes in the digital transformation services space, as the Chief Executive Officer of our Data and Analytics Services segment.  Ganeshan joins us with a wealth of knowledge around advanced technologies and digital transformation services to lead the next phase of growth for Mastech InfoTellis."

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, EMEA, India and ASEAN.

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 expense related to non-cash, stock-based compensation. We exclude these expenses in 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 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.  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 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 extent to which the Company's business is adversely affected by the impacts of the COVID-19 pandemic and governmental responses to limit the further spread of COVID-19 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, 2021.

For more information, contact:
Donna Kijowski 
Manager, Investor Relations 
Mastech Digital, Inc. 
888.330.5497

SOURCE Mastech Digital, Inc.