MHH - Earnings call transcript Q4 2024

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Greetings, and welcome to the Mastech Digital Q4 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 for Mastech Digital. Thank you, Ms. Lacey, you may begin.

Jennifer Lacey

welcome Digital's and Conference Quarter operator, Call. you, to Fourth 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 Nirav Patel, me and it obtained of Chief our With website Jack www.mastechdigital.com. Officer; the today our can earnings our

are our not These like made statements projections us, as during and the the that information and the and Without include update are costs markets statements forward-looking in to liquidity anticipates, operate. remind are statements. currently this the which beliefs flows, forward-looking as certain that historical available growth no everyone to assume are words foregoing, as these we I change. statements forward-looking statements. would to statements based plans, intended facts and about circumstances identify similar on These concerning plans, to financial statements strategies, cash obligation limiting call well expressions we business, our intentions believes, expects and

there report -- filed the these those are on available forward-looking www.sec.gov. Securities in Exchange at including and XXXX could cause uncertainties statements XX-K actual materially events statements are There listed company's Commission and the from on that Form to annual differ risks and with its website

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

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

providing subsequent this in be calls. during As nor meetings provide we guidance one-on-one not guidance call any any will we or will a reminder,

comments. for now over to the call I Nirav turn his will

Nirav Patel

XXth Executive my and Today to good today Chief Jenna, a privilege and you everyone. day address Officer. it's Digital, with Digital's Thanks, is morning, Mastech Mastech as

prominent giving I several by joining years background start experience chain transformation organizations. executive I a for years and career. large my midsized as me over a XX scaling technology held as over with my have of a you track supply and of Prior Bristlecone, pure-play have of to bit record experience. Let and roles Mastech leadership an throughout served I President CEO of Digital, AI-powered company. X well

amount customers, serving its before days. spent Mastech XX many at I Cognizant, considerable and to for segments our industry future. And the hear spent and busy of me that, globally. in into their focusing for employees stepping It's first on roles, our plans, been a incredible XXX time an key over at the to It first and have investors. expectations partners, they listening us understand of the addition have years execution enterprise to of playing businesses multibillion-dollar about important perspectives halfway is role executive through days my I my clients across And scaling I'm since XX Digital. and

industry. landscape execution a AI-first service founder's shaping the cannot that rapidly ours require and will across brought point, in I is providers ignore What is mindset me is of our clear for and we a focus we future growth. is rooted evolving change at clear in deeply that have of foundation the world. have are customer winning by also sharper to AI this organization to technology unlocking But me the and of landscape enterprise that an strong to customers We what's changing the like believe in focus. culture in inflection terms speed that evolving our both revolution the

slower and changing and and sustainable. They a from internalized. industries, Organizations greater no are capabilities strategic AI I concepts, technology liquidity is caution in created competitive carefully both longer interest decision-making AI, that embraced data-driven and scaling are proof uncertainties beyond rapidly and concepts. market revolution integrating into no actively the That assessing the just seeing core automation said, their to being are are are are investments building conditions environment to ensure decision-making. drive cases, exploration, advantage. AI many to processes being We real. Companies macro rates, have leading and Across of moving these doubt

are AI forward remains enterprises Emerging that optimize linear, be the may like how AI-driven Lama work, for AI not strong. and reinforcing DeepSeek appetite path the is solutions fact reshaping While the Cloud, and models OpenAI, innovate.

a While a of performance I to quarter in Jack XXXX. the thoughts update, detailed our fourth wanted few share provide will on

have frontier and performance delivering acceleration. our modernization well this positioned growth seeing revenue data and strong meaningful momentum. to progress that are the next and We particularly reinforces margin with AI-driven analytics that capture made is conviction we This digital

We the X is helps and that This into beginning XXXX be transition. execution journey. begin the that themselves in words: we AI-first that one believe year just transformation, up fourth sum reimagine organizations. our quarter and I transition the enterprises will of

long-term Looking X be where driven by ahead, our and are success principles are we who we going. will we that believe define

sense is enterprises leading into a First, enterprises open reimagine forever. a AI stay must between In and not an not space, believe ourselves lagging. provider will we urgency. the we helps it establish difference technology lead advantage, this speed leading just The of as to that is transform and with window

must we of offerings. and Second, believe portfolio we Differentiation relevant key. a compelling be will build

in to how modernization that strengths must work believe staffing our solutions integrate sets apart. We participate. engagement. It's are data not not to businesses solutions, deeper together high-value We into client to us offering drive but are enough we seamless and believe just creating era. must solutions operate a that the AI We innovative our essential

to value must the clear and through organization, story our I must that market take foundation, we is right clear is a we operate and Mastech across leadership and need strategy, not shareholders. Growth efficiency execution only our and for is you believe about sustainable the where with about need the that is ensure What right and I where discipline. decisive direct Digital there. our employees customers, investment sharpen believe opportunity. right make transparency. plan the runway and when execution accountability our to lasting that own. the are, from go and talent we we We we earned how every growth scratch. simple. position intend get is creates and create to truly we commitment confidence Third, and be to We to execute we My refine have building drive be recognize meaningful about profitable. that in we with takes every time is starting we it the it

Thank time your I you and will trust. now for it Jack. hand to over

John Cronin

good Thanks, morning, everyone. Nirav, and

quarter results experienced the we momentum positive of XXXX over financial last months the Our XXXX. that reflected fourth X

Consolidated XXXX. totaled compared revenues $XX.X XX.X% quarter to increase corresponding during fourth the quarter of year-over-year the million, a of

Analytics which our in previous year-over-year Data in QX XXXX, million XX.X% and XXXX $XX Services than million, basis was higher in quarter. on $XX.X performance sequentially revenues segment of higher expectations. the Order a X.X% reported revenue bookings Our below QX and our totaled somewhat were which

of had our IT million, of X.X%. In $XX.X the of segment Staffing revenue quarter achieving Services fourth XXXX, growth revenues year-over-year

is to our During consultant previous XX consultants, base due with high line years generally assignment which declined by seasonal ends. in billable the quarter,

As impact expected, our on revenue this QX will have results. XXXX some

volumes higher dollars gross increase, revenue QX, or million million Consolidated increasing driven margin XXXX XX% by in quarter profit totaled of the corresponding $XX.X gross percent. as as a exceeded which $X.X by well

company record our year. Our of QX business margin a XXXX the expansion XX% was from as percent had gross significant segments margin both previous

margins percent XXXX and revenue XXX In compared increase basis higher points by XX.X% Data delivery. in This the quarter increased our to of as Analytics to segment, reflected and Services utilization QX in better XX.X% project XXXX. of fourth a gross

fourth In gross care Services a of loss $X.XX share for compared GAAP in income $X.XX margins XXXX medical revenues, assignments. favorable XXXX. our a were in $X.X of XXX segment, health direct or up QX claim net to in $X.X basis compared experience share negative to hire totaled due self-insured margins an a net program points on QX our and per diluted higher XXXX or million the Staffing new of increase in million to QX per IT quarter

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

year full totaled were to was with results XXXX of included in Highlights XXXX. margins largely which in Gross in full $XXX.X million, XX.X% the revenues line our our XXXX XXXX revenues. compared XX.X% year 'XX following:

a Our And basis. margin IT by margin Analytics by percent year-over-year in gross gross increased on increased points. segment, our XXX Data percent Staffing our and Services basis Services basis XXX points

earnings in totaled compared increase of diluted 'XX of GAAP $X.XX $X.XX share a XXXX, profit XXXX. loss in Non-GAAP per $X.XX XX%. share a profit -- an of diluted versus in a of XXXX improvement an of $X.XX per to in was earnings profit a

financial no At have December solid. debt liquidity XX, position XXXX, outstanding. overall remains and our we bank Today,

We balances on have hand. million cash of $XX.X

was facility and December outstanding million totaled XX, revolving sales availability cash days, credit which targeted $XX.X XXXX, at well within range. our have We XX of under our our measurement days

completes Devin, prepared that comments. questions up our now. for open like to it We'd

Operator

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

Lisa Thompson

Could AI there that a the thinking little going approach there's How trying obvious how looking XXXX. going to all exciting a forward besides increasing staffing I you're work? into We're to to going there. and offerings? what talk of changes possibilities any your Is is be know whole bit you to lot to strategy is incorporate D&A? service of of about out an your

Nirav Patel

customers priority to Lisa. immediate to assess a the my and stepped our take our chance really I'm taking I business Sure, I've structured about a defining challenges that just of to here. Thank Look, learn for my to very have very, is Lisa, I'll long-term one. sort partners, -- terms and question. and And approach, starting into strategy. role engage of our our Nirav our point you with deeply and teams, in and opportunities.

foundation. a I can Mastech very say What confidence strong with has that very,

driving strategy, growth, offerings. accelerating to Our on plans forward am more map. and and structured approach focus this our and take I specific year in defining half excellence I bit we later little of be a a enhancing to be refine But road sometime as sharing going execution will look of details our this

Lisa Thompson

one. about ever I there is in If there's Do an you see that lot curious that would be there? think Okay. government the data opportunities efficiency now. talk I'm entity also modernization, that of a needs any

Nirav Patel

-- look that something are especially in opportunities we government sure. D&A for Clearly, that at

So the to is, I question answer yes. your guess

Lisa Thompson

All do Okay. Could have employees to you year right. you happen how ended the with? many offhand

Nirav Patel

the of ended do. point year last had a employees And I -- X,XXX. XXXX year ended with as both segments just Yes, year, X,XXX. total We we we of with reference, the

Lisa Thompson

Okay.

a pretty increase. big So that's

Nirav Patel

not Yes, bad.

Lisa Thompson

do spending going any have steady? All Or thoughts there pretty right. to be And you yes. investment about much need Is to you year? it any Yes, this do? is

John Cronin

on like Spending CapEx? on spending SG&A cost or

Lisa Thompson

mostly SG&A. but either, Well,

John Cronin

Okay. had is our at in SG&A continue to percentage we XXXX in that maintain SG&A, XXXX. for SG&A the same to our yes, objective expense

are because But to of objective. XXXX, goal well increases as in I quarter-to-quarter. in half we're say maybe of So what first the to I come the probably the we to should think related a of be by in year, believe going some would the some going it's at we strategy. bit to that probably new by that's reach we be missing cost with the be hiring revenue growth that And objective. that a going not would pieces initiatives, as savings little end

of have lot don't under a -- mean we're expenditures. I $X capital from it's we standpoint, million. maybe And CapEx certainly a whole

$X So hold, that under still clearly will million.

Lisa Thompson

still you're XX% rate? tax Okay. And thinking

John Cronin

those shares. the based Well, exercising enjoy the that our XX% tax on related from expense versus XXXR employees the true-up shares company expense their like gains to rate, a it encompasses

let's and So were impacts tax negatively the And price than lower our compensation expense, higher lot the in negative, was years, was say, XX%. last -- year actually came which at our was expense. XXXR gains rate true-up the last exercises in were greater bit well, That's the why little a In of than X.X actually, XX%. rate. our the quarter, a fourth the tax we stock that

of on these have So true-ups a that unusual a tax lot make that to we depends of perspective. from some

Operator

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

Marc Riddick

picture quarter. the how of little post election? a sort maybe giving that some the was changes whether there of during bookings I as different progressed, on client maybe bit sort either spend commentary to during how you the of Was far wanted to around by bookings that in a of sort the maybe you helpful. of demand based were pre quarter? if could thoughts whether us be little really maybe it look on And as would touch the what could maybe monthly begun the on a bit fourth or did as -- verticals? to time you And -- then client seeing has as were there share activity the year any Anything

John Cronin

and a delays a a thought where some bit of in and mean looking to bookings I particular, in few would in our $XX our the little short at there's clients we they delayed pipeline, And looked they because had bit, Marc. project stab the at thought of range there of where the we D&A, us QX, bookings pipeline we little were a those. we uncertainty When in Sure, going we give I'll at we that. take marketplace. is in had saw came that. land QX a we total at and million beginning of

see before so a is political can up let And reason, we inflation? the some uncertainty? that a give cycle cycle in guess, booking immediately. sales less there transpire. it they it seem whatever concerns, in tick driver clearly They Is -- to of eager seem a on marketplace. But -- that clients mean, have I the unknowns. What's booking we deals to the is be uncertainty to our longer

Marc Riddick

more of Okay. bit And clients? sort you this now? do certain anywhere right there of is that's of is think know was whether is granular, kind across-the-board there particular, -- and I an types it's curious, sort a just in Or but I of situation of

John Cronin

clients. amount some that say bookings board. on expected care QX didn't say clients. had. that across the we the health on the just we financial the would We've have would robust bookings board. that I service I I across mean we get had we pipeline It's given

Marc Riddick

the one the -- been of has was in extended then release it program, earlier the did to initially in repurchase And share to the I of things your scheduled press highlight want of Okay. February now 'XX. which this to around end extension and was month

can I you've through can share been there. I of if share wondered XX like prioritizations. Just have thoughts get that you could just share if extension sort there. you time you understand any on thoughts there that any some for understand that, to I sort of But to repurchase days. was wondering Nirav, could some work of the

John Cronin

the shares events. and think of we that corporate-related remaining able we our X decision, to periods for the were XXX,XXX number and in have we we would I And that of that of right? those. mean like a like capitalize shares. experienced years us, some Board behind this And prior. repurchase buyback Yes. made share on transactions program X-year is period, had They weren't we we extended most during where blackout to program,

more So periods that less do in I year. compared volume you're see think blackout buyout to to going last XXXX and

Marc Riddick

on now, the of about Great. and any last And months maybe obviously, very for whether potential small sort the may as seeing you thoughts we've look seen a but in moment. maybe you're work wondering valuations pipeline the balance out or few space, if in thing as what I of deals like could maybe that have acquisitions what there. then few last far comment potential at the changed sheet with me talk strong was cash, to uses on a

Nirav Patel

first. take I'll that here. Nirav is This Marc. Sure,

my immediate bit listen Marc, certainly in terms to think, like are we So sort more just I my I in we phase right, are stepped that And like think learn. little get said think priority of sort I the starting strategy, is to clarity that. a role. are trying to we and earlier, on and look, my of And really strategy, through where said go-forward I really on of in I go-forward our

to the are structured sort and where would any I But company we But lays before in emphasis will think so organic direction I please you me, of important to getting we am which taking or in, a and our terms elements include of of share for strategy, thoughts. the we're forth. I think headed of of feel thinking execute to kind plays long-term if approach on through those free transactions. an And fairly approach want activate Jack, chime your of inorganic

John Cronin

It just our say, purchase. changing strategy want I only to Marc, sure. it's exactly always M&A decide of is growth is when leadership, It's would has that The what for to you're thing hard been. that you part

Nirav... think I So

Marc Riddick

No, that's...

John Cronin

think a I once in Marc? ahead, year...Go

Marc Riddick

forward your No, going company certainly working me that's going looking going with to I today. vision just about looking we're the and forward say you for was it to to forward forward. And for

John Cronin

Thank working you, I'm equally with you. and forward looking to Marc. excited

Operator

further There questions Mr. remarks. to floor I'd at closing be appear turn Instructions] [Operator the no this time. to over to for Patel back like

Nirav Patel

are for Thank talking additional I earnings look in you, you to there call. Devin. no with XXXX questions, for forward If I time, QX thank and our May early you your

Operator

concludes This teleconference. today's

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

Mastech Digital (MHH) 19 Feb 252024 Q4 Earnings call transcript