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Mastech Digital Q3 revenue falls 13% on Talent segment weakness

By Reuters News


Overview

  • Digital transformation IT services firm's Q3 revenue fell 13% yr/yr but rose sequentially

  • Non-GAAP diluted EPS dropped to $0.10 from $0.29 a year earlier

  • Talent segment revenue declined 16% yr/yr as a top client insourced services


Outlook

  • Mastech expects to continue investing in Data & AI capabilities into 2027

  • Company sees enterprises moving past AI experimentation toward production deployments


Result Drivers

  • DATA & AI MOMENTUM - Data & AI segment revenue grew 4.7% sequentially, marking a second consecutive quarter of growth, and bookings rose 29% yr/yr, per company

  • TALENT SEGMENT WEAKNESS - Talent segment revenue fell 16.4% yr/yr, driven by a 21% drop in billable consultants as a top client continued insourcing and the company exited lower-margin positions

  • FOCUS ON HIGH-VALUE WORK - Company said emphasis on high-value Data & AI work lifted segment gross margin by 50 basis points yr/yr to 40.5%


Company press release:


Key Details

Metric

Beat/Miss

Actual

Consensus Estimate

Q3 Revenue

Beat

$41.99 mln

$41.39 mln (2 Analysts)

Q3 Net Income

$7,000

Q3 Gross Profit

$12.05 mln

Q3 Income from Operations

$13,000

Q3 Pretax Profit

$250,000


Analyst Coverage

  • Wall Street's median 12-month price target for Mastech Digital Inc is $12.75, about 101.4% above its October 29 closing price of $6.33

  • The stock recently traded at 8 times the next 12-month earnings vs. a P/E of 11 three months ago


Reuters Recommended Reads

  • Oct 28 - Microsoft Q1 results beats estimates driven by Azure growth

  • Oct 27 - BigBear.ai Q3 gross margin rises on Generative AI platform, lifts 2026 revenue outlook

  • Oct 27 - Exlservice Q3 revenue rises 20%, raises FY revenue and adjusted EPS outlook


For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.


(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)

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