Operating margins have collapsed to 0.1% as of 2026Q1, reflecting an inability to offset a 15.0% year-over-year revenue contraction through cost management.
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 | Dec'17 | Dec'16 | Dec'15 | Dec'14 | Dec'13 | Dec'12 | Dec'11 | Dec'10 | Dec'09 | Dec'08 | Dec'07 | Dec'06 |
|---|
| Sales/Revenue | 184.14M | 191.37M | 198.94M | 201.1M | 242.24M | 222.01M | 194.1M | 193.57M | 177.16M | 147.88M | 132.01M | 123.47M | 113.52M | 106.9M | 101.84M | 89.36M | 71.79M | 71.06M | 96.65M | 104.69M | 111.42M |
| Revenue Growth % | -8.13% | -3.81% | -1.07% | -16.98% | 9.11% | 14.38% | 0.27% | 9.26% | 19.8% | 12.03% | 6.92% | 8.76% | 6.19% | 4.97% | 13.96% | 24.48% | 1.02% | -26.47% | -7.68% | -6.03% | - |
| Cost of Goods Sold | 133.6M | 138.31M | 143.35M | 150.06M | 179.06M | 162.57M | 142.56M | 145.59M | 134.64M | 116.25M | 105.71M | 99.67M | 92.74M | 86.78M | 82.63M | 71.82M | 57.72M | 57.63M | 78.33M | 82.62M | 86.06M |
| COGS % of Revenue | - | 72.28% | 72.05% | 74.62% | 73.92% | 73.22% | 73.45% | 75.21% | 76% | 78.61% | 80.08% | 80.72% | 81.69% | 81.18% | 81.14% | 80.37% | 80.4% | 81.11% | 81.04% | 78.91% | 77.24% |
| Gross Profit | 50.54M | 53.06M | 55.6M | 51.04M | 63.18M | 59.44M | 51.54M | 47.98M | 42.53M | 31.63M | 26.3M | 23.8M | 20.79M | 20.12M | 19.21M | 17.54M | 14.07M | 13.43M | 18.32M | 22.07M | 25.35M |
| Gross Margin % | 27.45% | 27.72% | 27.95% | 25.38% | 26.08% | 26.78% | 26.55% | 24.79% | 24% | 21.39% | 19.92% | 19.28% | 18.31% | 18.82% | 18.86% | 19.63% | 19.6% | 18.89% | 18.96% | 21.09% | 22.76% |
| Gross Profit Growth % | - | -4.57% | 8.94% | -19.23% | 6.29% | 15.34% | 7.42% | 12.82% | 34.46% | 20.28% | 10.5% | 14.5% | 3.33% | 4.73% | 9.51% | 24.67% | 4.79% | -26.72% | -17% | -12.93% | - |
| Operating Expenses | 48.63M | 53.05M | 51.81M | 60.31M | 50.98M | 41.83M | 38.14M | 30.99M | 30.9M | 27.55M | 21.79M | 19.12M | 15.25M | 14.81M | 15.69M | 15.68M | 13.01M | 11.11M | 14.16M | 16.02M | 17.82M |
| OpEx % of Revenue | - | 27.72% | 26.04% | 29.99% | 21.05% | 18.84% | 19.65% | 16.01% | 17.44% | 18.63% | 16.51% | 15.48% | 13.43% | 13.86% | 15.41% | 17.55% | 18.12% | 15.63% | 14.65% | 15.3% | 16% |
| Selling, General & Admin | 45.04M | 53.05M | 23.1M | 23.7M | 20.8M | 18.5M | 22.68M | 22.36M | 30.9M | 27.55M | 21.79M | 19.12M | 15.2M | 14.8M | 13.46M | 15.68M | 13.01M | 11.11M | 14.16M | 16.02M | 17.82M |
| SG&A % of Revenue | - | 27.72% | 11.61% | 11.79% | 8.59% | 8.33% | 11.68% | 11.55% | 17.44% | 18.63% | 16.51% | 15.48% | 13.39% | 13.84% | 13.22% | 17.55% | 18.12% | 15.63% | 14.65% | 15.3% | 16% |
| Research & Development | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| R&D % of Revenue | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Other Operating Expenses | 1000K | 0 | 28.71M | 36.61M | 30.18M | 23.33M | 15.46M | 8.63M | 0 | 0 | 0 | 0 | -32K | -77K | 36K | 0 | 0 | 0 | 0 | 0 | 0 |
| Operating Income | 1.91M | 1K | 3.79M | -9.28M | 12.2M | 17.61M | 13.4M | 16.99M | 11.63M | 4.08M | 4.51M | 4.68M | 5.54M | 5.3M | 3.52M | 1.86M | 1.06M | 2.32M | 4.16M | 6.06M | 7.53M |
| Operating Margin % | 1.03% | 0% | 1.91% | -4.61% | 5.04% | 7.93% | 6.91% | 8.78% | 6.56% | 2.76% | 3.41% | 3.79% | 4.88% | 4.96% | 3.45% | 2.08% | 1.48% | 3.27% | 4.31% | 5.79% | 6.76% |
| Operating Income Growth % | - | -99.97% | 140.87% | -176.03% | -30.73% | 31.39% | -21.1% | 46.12% | 184.86% | -9.45% | -3.74% | -15.49% | 4.49% | 50.8% | 88.93% | 74.91% | -54.16% | -44.23% | -31.31% | -19.54% | - |
| EBITDA | 4.4M | 1K | 7.29M | -5.42M | 16.39M | 21.59M | 16.99M | 20.42M | 14.81M | 6.02M | 5.52M | 5.34M | 5.68M | 5.46M | 3.72M | 2.04M | 1.24M | 2.54M | 4.48M | 6.38M | 7.78M |
| EBITDA Margin % | 2.39% | 0% | 3.66% | -2.7% | 6.77% | 9.72% | 8.75% | 10.55% | 8.36% | 4.07% | 4.18% | 4.33% | 5.01% | 5.1% | 3.65% | 2.29% | 1.73% | 3.58% | 4.63% | 6.09% | 6.98% |
| EBITDA Growth % | -23.89% | -99.99% | 234.5% | -133.06% | -24.06% | 27.05% | -16.79% | 37.91% | 145.84% | 9.05% | 3.39% | -6% | 4.18% | 46.68% | 82.13% | 64.15% | -51.1% | -43.16% | -29.83% | -18.02% | - |
| D&A (Non-Cash Add-back) | 2.49M | 0 | 3.5M | 3.85M | 4.2M | 3.98M | 3.59M | 3.43M | 3.18M | 1.94M | 1.02M | 660K | 143K | 153K | 203K | 181K | 180K | 223K | 314K | 320K | 251K |
| EBIT | 2.32M | 1K | 5.89M | -9.03M | 13.6M | 14.87M | 14.05M | 10.81M | 10.31M | 4.08M | 4.51M | 4.68M | 5.59M | 5.32M | 3.55M | 1.83M | 1.06M | 2.32M | 4.16M | 6.06M | 7.61M |
| Net Interest Income | 553K | 0 | 606K | 319K | -358K | -675K | -987K | -1.81M | 0 | 0 | 0 | 0 | -84K | -93K | -68K | -38K | -22K | -17K | 72K | 0 | 71K |
| Interest Income | 668K | 0 | 606K | 319K | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 3K | 72K | 0 | 82K |
| Interest Expense | 115K | 0 | 0 | 0 | 358K | 675K | 987K | 1.81M | 0 | 0 | 0 | 0 | 84K | 93K | 68K | 38K | 22K | 20K | 0 | 0 | 11K |
| Other Income/Expense | 1.58M | 1.06M | 633K | 244K | 292K | -724K | -770K | -1.77M | -2.21M | -1.13M | -487K | -257K | -32K | -77K | -32K | -427K | -26K | -49K | -2K | 82K | 72K |
| Pretax Income | 3.48M | 1.06M | 4.42M | -9.03M | 12.49M | 16.89M | 12.63M | 15.22M | 9.41M | 2.95M | 4.02M | 4.42M | 5.51M | 5.22M | 3.48M | 1.79M | 1.04M | 2.27M | 4.16M | 6.14M | 7.6M |
| Pretax Margin % | 1.89% | 0.55% | 2.22% | -4.49% | 5.16% | 7.61% | 6.51% | 7.86% | 5.31% | 1.99% | 3.05% | 3.58% | 4.85% | 4.89% | 3.42% | 2.01% | 1.45% | 3.2% | 4.3% | 5.87% | 6.82% |
| Income Tax | 1.17M | 453K | 1.02M | -1.89M | 3.78M | 4.67M | 2.77M | 4.07M | 2.72M | 1.32M | 1.5M | 1.67M | 2.08M | 1.96M | 1.34M | 679K | 375K | 875K | 638K | 701K | 662K |
| Effective Tax Rate % | 33.58% | 42.66% | 23.1% | 20.96% | 30.25% | 27.63% | 21.94% | 26.77% | 28.93% | 44.84% | 37.31% | 37.79% | 37.85% | 37.44% | 38.61% | 37.89% | 36.13% | 38.51% | 15.34% | 11.42% | 8.71% |
| Net Income | 2.31M | 609K | 3.4M | -7.14M | 8.71M | 12.22M | 9.86M | 11.14M | 6.69M | 1.63M | 2.52M | 2.75M | 3.42M | 3.81M | 2.14M | 1.11M | 663K | 1.4M | 3.52M | 5.44M | 6.94M |
| Net Margin % | 1.26% | 0.32% | 1.71% | -3.55% | 3.6% | 5.5% | 5.08% | 5.76% | 3.78% | 1.1% | 1.91% | 2.23% | 3.02% | 3.56% | 2.1% | 1.25% | 0.92% | 1.97% | 3.64% | 5.2% | 6.23% |
| Net Income Growth % | 8.85% | -82.1% | 147.66% | -181.93% | -28.71% | 23.93% | -11.52% | 66.57% | 311.5% | -35.48% | -8.46% | -19.57% | -10.04% | 77.89% | 92.18% | 67.87% | -52.54% | -60.34% | -35.26% | -21.61% | - |
| Net Income (Continuing) | 2.31M | 609K | 3.4M | -7.14M | 8.71M | 12.22M | 9.86M | 11.14M | 6.69M | 1.63M | 2.52M | 2.75M | 3.42M | 3.27M | 2.06M | 1.35M | 663K | 1.4M | 3.52M | 5.44M | 6.94M |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 536K | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| EPS (Diluted) | 0.19 | 0.05 | 0.28 | -0.61 | 0.72 | 1.02 | 0.83 | 0.99 | 0.60 | 0.17 | 0.28 | 0.31 | 0.39 | 0.44 | 0.26 | 0.12 | 0.07 | 0.15 | 0.39 | 0.60 | 0.77 |
| EPS Growth % | 6.13% | -81.79% | 145.9% | -184.72% | -29.41% | 22.89% | -16.16% | 65% | 252.94% | -39.29% | -9.68% | -20.51% | -11.36% | 69.23% | 116.67% | 66.67% | -52% | -61.54% | -35% | -22.08% | - |
| EPS (Basic) | - | 0.05 | 0.29 | -0.61 | 0.75 | 1.07 | 0.87 | 1.01 | 0.61 | 0.17 | 0.28 | 0.32 | 0.40 | 0.46 | 0.27 | 0.12 | 0.07 | 0.16 | 0.39 | 0.60 | 0.77 |
| Diluted Shares Outstanding | 11.89M | 11.95M | 12.01M | 11.61M | 12.08M | 12.01M | 11.95M | 11.23M | 11.16M | 10M | 8.96M | 8.88M | 8.92M | 8.68M | 8.4M | 9.39M | 9.37M | 9.27M | 9.03M | 9M | 9.02M |
| Basic Shares Outstanding | 11.83M | 11.75M | 11.67M | 11.61M | 11.59M | 11.44M | 11.29M | 11.03M | 10.95M | 9.92M | 8.79M | 8.68M | 8.64M | 8.39M | 8.15M | 9.13M | 9.18M | 9.02M | 9.02M | 9M | 9.02M |
| Dividend Payout Ratio | - | - | - | - | - | - | - | - | - | - | - | - | - | 55.79% | 312.39% | - | - | - | - | - | - |
Cyclical IT Spending Sensitivity
As reported in recent financial filings, MHH experienced a 15.0% year-over-year revenue decline in 2026Q1, marking a continuation of the negative growth trajectory that has plagued the firm since 2024Q4, suggesting that discretionary IT spending remains under significant pressure across the company's core client base.
The consistent revenue decay indicates that Mastech Digital is struggling to offset the cyclical downturn in its IT staffing segment with its higher-value Data and Analytics consulting services. This trend suggests that the firm's value proposition may be insufficiently differentiated to insulate it from broader enterprise budget tightening.
Based on the provided income statement data, MHH's gross margin fluctuated between 24.6% and 29.0% over the last ten quarters, reflecting a lack of pricing power and an inability to consistently pass through rising labor costs to clients in a competitive staffing environment.
The volatility in gross margins implies that the company's hybrid delivery model is highly sensitive to consultant utilization rates and wage inflation. Investors should monitor whether the firm can stabilize these margins as it attempts to pivot toward more specialized, project-based consulting work.
According to the quarterly income statements, MHH's operating margin collapsed to 0.1% in 2026Q1, demonstrating that the firm lacks the necessary operating leverage to maintain profitability when revenue growth turns negative, as SG&A expenses remain largely fixed relative to the declining gross profit pool.
The inability to scale operating income suggests that the company's cost structure is currently too rigid for its current revenue scale. This break-even performance warrants investigation into whether management can effectively rationalize overhead without compromising the technical capabilities required for its Data and Analytics segment.
Analysis of the income statement reveals that stock-based compensation remains a persistent expense, totaling $750,000 in 2026Q1, which significantly impacts net income given the company's razor-thin profitability and suggests that shareholder dilution may be a recurring factor for investors to consider.
The reliance on equity-based incentives in a period of stagnant earnings growth may indicate a misalignment between management compensation and bottom-line performance. This practice appears to mask the true operational profitability of the business, as net income figures are frequently bolstered by non-cash adjustments or limited by these recurring charges.
While MHH maintains a conservative balance sheet, the 0.00% operating margin observed in recent periods suggests that the firm is operating at a precarious threshold where any further revenue contraction could lead to sustained net losses, challenging the narrative of a successful pivot to high-margin consulting.
Short-sellers might focus on the company's inability to achieve consistent operating profitability despite its specialized D&A focus. The lack of clear margin expansion suggests that the firm may be trapped in a low-growth staffing cycle, making the current valuation potentially vulnerable to further earnings misses.
Quick answers to the most common questions about buying MHH stock.
For fiscal year 2025, Mastech Digital, Inc. (MHH) reported total revenue of $191.4M. This represents a 71.8% increase compared to $111.4M in 2006.
Mastech Digital, Inc. (MHH) is profitable, generating $0.6M in net income for the fiscal year ending 2025 with a net profit margin of 0.3%.
Mastech Digital, Inc. (MHH) reported an operating income of $0.0M, resulting in an operating profit margin of 0.0%. This margin reflects the operational efficiency of the business before interest and taxes.
Mastech Digital, Inc. (MHH) generated $53.1M in gross profit for the year, representing a gross profit margin of 27.7%. This demonstrates the company's core pricing power and production efficiency.