MHH - Earnings call transcript Q2 2024

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Operator

Greetings, and welcome to the Mastech Digital Q2 2024 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Jenna Lacey, Manager of Legal Affairs. Thank you, Ms. Lacey, you may begin.

Jennifer Lacey

welcome Digital's and Conference Quarter operator, Call. you, to Second Mastech XXXX Thank

not copy Cronin, at received announcement, you Executive are yet If have Digital's Mastech a Financial on call be Chief Officer. from Vivek Gupta, me and it obtained of Chief our With website Jack www.mastechdigital.com. Officer; the today our can earnings our

growth statements are I markets would operate. include and historical call facts forward-looking that as our These this projections, statements our like and the we to and plans, liquidity financial cash made remind well as strategies, the are during flows, which costs everyone beliefs statements statements. that business, forward-looking about in not concerning intentions

identify differ words could annual anticipates, statements are these similar report risks foregoing, These XXXX available the that XX-K as expects to currently including uncertainties on the company's are based at the forward-looking limiting Securities There on statements, and events Form cause website Commission these Without obligation filed www.sec.gov. to circumstances assume materially believes, no listed forward-looking change. we the on and Exchange certain statements, us, information update and statements. with from those intended plans, in and to available and expressions to its actual are

provide Additionally, to supplement management on financial non-GAAP basis. to has our a elected measures certain financial GAAP results presented

earnings net comparable can used non-GAAP included the non-GAAP provide business. earnings diluted measures be website of measures and per by from financial non-GAAP Reconciliations operating which which key our www.mastechdigital.com. income with our greater transparency will these at to obtained will we respect data, management in their are provide believe Specifically, to announcement, we share the GAAP in metrics

Jack one-on-one XXXX will our not to or this providing the meetings a in As calls. subsequent any call review -- results. a call second during will over I quarter probably for turn of provide guidance now reminder, guidance we be

John Cronin

good Jen, and everyone. Thanks, morning,

client benefited from economic market around the were improvements QX. results that we XXXX in quarter second patterns seeing inflation indicators growth. favorable positive in continuation financial Our spending of and levels, job activity and data Higher

able resource During positive our delivery high in at during in to to Analytics Data add the margins a strong the we Services increased as in sequential which performance grew and quarter, reduction Namely IT mix. factors expenses utilization slight and a our by as business, gross second company-specific were X%. SG&A a quarter Staffing well revenues some operations,

the XXXX second $XX.X second quarter. revenues financial Addressing compared XXXX Consolidated our totaled million million $XX.X results. in quarter to

report percent year-over-year our that happy a revenue to we I'm consistently the basis, revenue be last over quarters. will to growth on continue growth year-over-year has several positive. the in QX and say negative been While of progressively decline reduced XXXX,

in XXXX $X.X revenue a quarterly Data million segment Analytics of compared Our XXXX Services basis, reported $X.X second grew and revenues of million XX%. to quarter. in sequential by D&A On the quarter the second

revenues Staffing Second of IT million quarter Services by million a second IT segment quarter $XX.X $XX.X our compared to X%. On sequential grew quarterly Staffing revenues in totaled XXXX. XXXX in the basis,

in performance new gross Consolidated a to higher as of quarter gross the in exceeded gross of in of margin both of $XX improved XXXX, XXXX, set Consolidated XX.X% profit of quarterly the to record Mastech for second of This overall XX.X% business which QX XX.X% compared improvement. to quarter contributed margins. XXXX our It's result being Digital. the segments totaled million gross XXXX, dollars lower. XXXX revenues the despite margins corresponding QX

Services record higher gross of XXXX segment, last margins our to employee compared on company year, IT costs, quarter. XXXX XXXX. new a and the Analytics XX.X% XX.X% project care in program. second assignments due the In segment, corresponding to This lower gross higher XX.X% our the to margins Data period XX.X% utilization quarter and In due benefit higher gross in to claims in improvement gross improved margins in health resource the self-insured second and Staffing to improved reflected to Services to of compared QX margins medical largely XXXX our related quarter favorable

quarter diluted income share, in $X.XX per diluted net QX presented $X.XX in included which net million $X.XX share XXXX million for or $X.XX non-GAAP diluted million QX measures, excuse second for was not $X.X available XXXX. second is GAAP $X.X was XXXX SG&A quarter, share net periods our XXXX of $X.X or income compared on in items or a our XXXX in financial tax net loss to a me, XXXX Non-GAAP per compared loss share of benefits website. detailed second $X.X quarter per earnings per or in expense all to the release, million quarter. diluted are

of facility. $XX.X $XX.X revolving XXXX, Addressing our and million had under bank position on we our no credit financial of June million debt outstanding on XX, cash availability hand, borrowing balances

to was is days measurement quarter Outstanding soundly end, comments. Sales turn over I'll Days favorable XX which his for the XX of target Vivek our call to Our now at days.

Vivek Gupta

X and with pent-up financial Good IT our results quarters said QX operating assignments we more coupled feeling I comfort Thank In for of Jack, morning, IT than environment, macroeconomic are you, reduced showing needs XXXX. the everyone. last that with quarter's after call, positive had starting for more review the some clients detailed addressing earnings spending. of their new about of more our

today, market only you recent to strengthened my with growth. later, even quarter speak views the X around have job jitters I As

During business increase of environment, spending. saw IT customers we QX the both to continued economic positive their XXXX, encouraging our segments in

addition, existing delivery, Services with over financial as segment result well management in I'm as all positively which Analytics signing bench QX resulting both expanded of control our project of and better organizational and In was results improved impacted growth such SG&A achieved in segments, the of tighter quarter-on-quarter client numerous utilization, quarter. the new by XXXX. growth X% revenue our accounts, our sequential spend, the a improvements Overall, The from increase also revenues as a an sequential business by resource Data for in we achieved logos. consolidated happy footprint in delivered revenue XX%

Services In from were company. our clients of financial the our pace growth, large mostly the head their the consultant needed QX, I'm in end XX% impact consultant client excited clients much existing for increase believe referred revenue count about arm segment, new potential future total that spending. XXXX. a XX consultants count by services IT Jack of billing which to increasing increase XX revenue head Services count in Staffing X% the company. of has largest billable our and The add positive billing quarter-on-quarter on sequential improved contract to, shot After head in increase of it a Staffing been account our these at expansions, for approximately should X the have in came a QX, making during a we quarters' another segment existing able acquisitions IT I from

of as Additionally, gross to XXXX. Jack mentioned, we these segments QX of XX.X% record efforts. business in our contributed margins achieved Both profit of

XX.X% XX.X%, Our highest benefit metrics one Data gross during delivery care when of Services related a Services resource segment a record and bill to claim and one, performances Analytics average reported costs margin from to higher Staffing segment XXXX; self-insured had the utilization our assignments new riding health higher margin, program. IT and gross experience of including in gross last exceptional medical delivered rate to on; due expansion our compared three, year; two, margin favorable lower and QX,

of QX continue in to we which and XXXX, XXXX, XX.X% XX.X% favorable the SG&A XXXX. as QX also our of revenue During manage compared to XX.X% to to in decreased closely QX expenses, a reported percentage were

closing, I our Mastech In models. results financial that intrinsic of in business the potential of XXXX the second believe quarter highlight value Digital's

a not a performance had trend. in I earnings Today, questions concludes quarter our prepared positive confidence consecutive start. this remarks. great can that Operator, does can we last say now. said make X positive with During X off We our are with take quarters, call, I continued to

Operator

Zacks Research. [Operator first Lisa comes Instructions] of the from Our with Investment Thompson question line

Lisa Thompson

and to great profits morning, see Nice coming quarter. back. Good

Vivek Gupta

Lisa. Thank you,

Lisa Thompson

was enough. the consultants I didn't what? number quite the scribble fast you end quarter is of with What

Vivek Gupta

in XX is at adding added And after the speak, quarter. we we that what as is consultants now, XX. So total number looking Jack

So just give us a second.

Lisa Thompson

X,XXX.

John Cronin

Yes.

X,XXX. Staffing For business, our it's

Vivek Gupta

Lisa. you're Yes, right,

Lisa Thompson

And this how going the Okay. trend Good. quarter? is

Vivek Gupta

guess, barely, the good. We've July increase week X in We only we into was had headcount. second -- month, but an I are

Lisa Thompson

was you seemed are And Okay. fluke in permanent have I it on these quarter new don't working they a really operations? the that or Or to it's something if -- your know change other consultants tighten How any up spending. much done to things? of done. you've

Vivek Gupta

just didn't part you last quite of -- on what asked, get I what that? can the Lisa, elaborate you you

Lisa Thompson

Yes.

are streamlining they if consultants your have I to business? no, other wondering do the on things? working Or So was with anything

Vivek Gupta

elements a the percentage to that G&A. related as See, we've sales, SG&A that. that. of we And expense is at of looked needed and not QX, higher SG&A really is we more percentage No. This mentioned, I to all felt our there a revenue was in marketing, as the tighten And -- consultants.

we've SG&A, ones which are of the and not all eliminated So at looked aspects needed.

grow, period We have is revenue, to the but like a the coming grow SG&A SG&A we -- over back of that which show our going like of as rather percentage will intention down time, add as revenue at to up. same a than we to as not means pace expense we'd

Lisa Thompson

they going go forward? about Do When to back historical -- good. highs? That Do they gross stay sounds Okay. feeling here? what's up margins your

Vivek Gupta

So are touched gross keep claim XX% at control the that in which in our There is margins Jack we upon, and at one is point least I can't level two -- the the elements both, medical level. the intention which experience. to a that; as

And Now quarter don't that. has that this have a couple you quarters quarter-to-quarter, quarter. been a from good over of had and varies bad control and we've

you part, that So control. can't

we leaving unturned. control no what stone we part, can But on are that --

to will be level, bit So And stay side. little at of a the level. luck our our that on hopefully, intention XX% at is also

Lisa Thompson

the D&A can get year? think gross over back this margin XX% You

Vivek Gupta

that. that the know, of predict Again, to side it's that's don't always to But hard to get XX%. intention I

now not at We away XX.X% XX%. too far is from are pretty close right

Operator

Riddick question the Our next from comes of with line Marc Sidoti.

Marc Riddick

there. muted was I Sorry,

Vivek Gupta

how Mark, are doing? you

Marc Riddick

revenue to good. wanted about mix that on the sort rate margin talk the sort of the could if bit I about maybe talk and as was utilization mentioned that you press benefit from? in gross as you improvement, piggyback curious where might be if was very a well good, release, questions. maybe I of coming the could Very little

Vivek Gupta

have in resource Data Analytics the sure right make number the people quarter. the that to is those Marc, have service the just utilization we on projects to that needed trying all that really So we resources side, billable of

to kind and when a ago change bench, that of the keep on them work preparing had I and we the down past -- resources coming having way in think processes in role In that able we sort that. -- enough and of we've or immediate having to understanding and time, we -- ago, of This a them, we X our played important in X think for better ended a this. need ready been wasn't people we what's I busy. number sharp years -- future in time resources where pipe scenario year a up the large an for then and And has training the of have there them

And are making we sure which better take out executing they are can projects high as and execution, margins talked the them. project the projects, how also making about are as of we under are delivery that the I gross

having kind from them in So and margin better of bench Analytics all resource it's of helped Data better business. outcome us management, utilization, the a delivery, gross

Marc Riddick

in encouraging. activity I client as little then if of bit talk change? you're geographic Are maybe way you could differentiation was footprint? much and as the seeing a we wondering And industry what or verticals That's seeing far very about

Vivek Gupta

Yes. they're moment. and Two economic pulled are the aspects. the losen is beginning at I One behaving clients think becoming are thing. more their is to I mean, strings, comfortable which how with they the great a environment

shall In say focused. formally definitely, differentiation, solutions terms organization, -- industry our haven't yes, are verticalized I of what we fairly, but our

If health to that we a learnings take one for care one bank, good next to we done one. are we other one. organization, we've -- able working forward the with we to the if learnings So then the are from take job the have

differentiation, which So beginning there see. to bit of that are is customers our a

by strong AI, management into like of again -- master modernization that data They company, there's broader fact that a which appreciated and management very customers. a from I have think story the And is a company. being data progressed offerings. into company And data is being solutions our coming we our MDM-only lot

embedded the like the We factoring with internally. also in is the are AI it solutions customers using those solutions. also kind in That of and

So more the have with it's our which all a bit of, of comfortable the feeling I to offerings. above, guess, customers led

Marc Riddick

a The talk the very will you your the about thoughts then And be -- the during was you cash forward? much I wondering cash little finished one activity uses nice in bit Great. a and the Q, balance Okay. obviously if this but there for repurchase quarter in way maybe a with on solid -- sheet. balance, share last are clean always, as me. was of could what of going

Vivek Gupta

this I'll to question pass to Jack answer.

Jack? So

John Cronin

on number Yes, were X are our period, actually blackout at quarter, bought we a the that We million. in $XX.X sure. in matters at Unfortunately, first corporate still an the end were we confidential. slightly Yes, of up balances of a end period cash It's second of extended the back from had quarter where quarter. shares. blackout the

no So in repurchases QX.

Marc Riddick

going just as And thoughts on as of potential Okay. uses far forward, maybe cash?

John Cronin

the very repurchase matter of and issues. when hoping get take a It's we start shares. these program. of I current confidential we're of advantage a stock just repurchase price we when on it, think period, to through we're we're out the can share of blackout once But keen some some

Operator

questions turn to time. are remarks. floor back the like There closing I'd further for over to at no this management

Vivek Gupta

Okay. and are in sharing you. to I'd we Thank no you, thank today, you further operator. XXXX you call to our November. results joining for forward quarter with If third early our look questions, Thank there like

Operator

This concludes today's teleconference.

wonderful your your Thank may for a at have You time. and disconnect day. lines this you participation,

Mastech Digital (MHH) 7 Aug 242024 Q2 Earnings call transcript