Key Highlights

  • Consolidated Revenue was USD 42.0 million, down 13.4%, as the Talent segment fell 16.4% to USD 27.9 million.
  • The average bill rate reached a record USD 92.37, up from USD 89.65 a year earlier.
  • Gross Margin improved 50 basis points to 40.5%, although Gross Profit declined 10.5% to USD 12.2 million.
  • Non-GAAP Net Income was USD 1.2 million, or USD 0.10 per diluted share, against USD 0.29 a year earlier.

Revenue Declines, Margin Improves

Mastech Digital, Inc. (NYSE American:MHH) reported third-quarter 2026 consolidated revenue of USD 42.0 million, a decrease of 13.4% from the prior-year period. Gross profit was USD 12.2 million, down 10.5%, while gross margin rose to 40.5% from 40.0%.

GAAP net income was USD 0.00 per diluted share compared with USD 0.9 million, or USD 0.08, a year earlier. Non-GAAP net income was USD 1.2 million, or USD 0.10 per diluted share, compared with USD 3.5 million, or USD 0.29.

Talent and Data and AI Segments

Talent segment revenue was USD 27.9 million, down 16.4%, as the company maintains its focus on revenue quality. The billable consultant base fell by 154, or 21%, since the third quarter of 2025, reflecting insourcing at one of its top 10 clients and a deliberate exit from certain low-margin staffing positions. Management said the impact of those factors is now largely behind it, though they lower the baseline going into future quarters, and noted seasonal holiday slowdowns and year-end contract completions in the fourth quarter.

Data and AI segment revenue was USD 14.1 million, down 6.8% from a year earlier but up 4.7% sequentially. Bookings totaled USD 10.8 million on a total contract value basis versus USD 8.4 million a year ago, which management called an encouraging sign in a seasonally slower period.

Nine-Month Results and Liquidity

For nine months, GAAP net income was USD 0.2 million, or USD 0.01 per diluted share, against a GAAP net loss of USD 0.4 million, or USD 0.03 per share. Non-GAAP net income was USD 3.4 million, or USD 0.29 per share, versus USD 6.1 million, or USD 0.50.

At September 30, 2026, the company held USD 37.9 million of cash, no bank Debt outstanding and USD 18.3 million of availability under its revolving Credit facility. Days Sales Outstanding were 56, in line with a year earlier and improved over recent quarters. No shares were repurchased in the quarter, leaving the full USD 5 million repurchase authorization available.

Chief executive Nirav Patel described Investment in a vision to build an indispensable partner for customers, including a Knowledge-first Enterprise positioning, and said the company continues to invest in talent, skills and capabilities, including data foundation work with platforms such as Databricks. The company does not provide guidance on its calls. Management said it continues to invest in the talent, skills and capabilities needed to turn competencies into solutions customers can adopt at scale, and that the Talent focus remains revenue quality over volume, with the average bill rate up about 3.0% year over year.

Consultant Base and Bookings Indicators

Items to follow include the consultant base after the client insourcing impact, the Data and AI bookings trend, bill rates and the use of the repurchase authorization.