Mastech Digital, Inc

Greetings and welcome to the Mass Tech Digital first quarter 2024 earnings call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Jenna Lacey, Manager of Legal Affairs for Mass Tech Digital. Thank you, Ms. Lacey. You may begin.

Thank you, Operator, and welcome to Mass Tech Digital's first quarter 2024 conference call. If you have not yet received a copy of our earnings announcement, it can be obtained from our website at www.masstechdigital.com. With me on the call today are Vivek Gupta, Mass Tech Digital's Chief Executive Officer, and Jack Cronin, our Chief Financial Officer. I would like to remind everyone that statements made during this call that are not historical facts are forward-looking statements. These forward-looking statements include our financial growth and liquidity projections, as well as statements about our plans, strategies, intentions, and beliefs concerning the business, cash flows, costs, and the markets in which we operate. Without limiting the foregoing, the words believes, anticipates, plans, expects, and similar expressions are intended to identify certain forward-looking statements. These statements are based on information currently available to us, and we assume no obligation to update these statements as circumstances change. There are risks and uncertainties that could cause actual events to differ materially from these forward-looking statements, including those listed in the company's 2023 annual report on Form 10-K filed with the Securities and Exchange Commission and available on its website at www.sec.gov. Additionally, management has elected to provide certain non-GAAP financial measures to supplement our financial results presented on a GAAP basis. Specifically, we will provide non-GAAP net income and non-GAAP diluted earnings per share data, which we believe will provide greater transparency with respect to the key metrics used by management in operating the business. Reconciliations of these non-GAAP financial measures to their comparable GAAP measures are included in our earnings announcement which can be obtained from our website at www.masstechdigital.com. As a reminder, we will not be providing guidance during this call, nor will we provide guidance in any subsequent one-on-one meetings or calls. I will now turn the call over to Jack for a review of our first quarter 2024 results.

Thanks, Jen, and good morning, everyone. During the first quarter of 2023, activity levels, client spending patterns, and economic conditions have all shown promise for the first time since mid-2022, particularly in our IT staffing services segment. While some uncertainty still exists in the marketplace with respect to inflation and economic forecast in general, we're encouraged by our clients' more optimistic views about their prospects and opportunities in today's environment. With that backdrop, Let me address our first quarter 2024 financial results. Q1 revenues totaled $46.8 million compared to first quarter 2023 revenues of $55.1 million, representing a 15% year-over-year decline, which is a marked improvement over our Q4 2023 year-over-year revenue decline of 20%. Additionally, on a sequential basis, we achieved revenue growth over Q4 2023 of 2%. Our data and analytics services segment reported revenue of $8.1 million in Q1 2024, compared to $9.4 million in the 2023 first quarter. On a sequential basis, revenues were essentially flat in Q1 24 versus Q4 23. Coming off a record bookings performance last quarter, our Q1 2024 bookings results totaled $9.6 million, which surpassed last year's Q1 bookings by $1.2 million. While the dollar value of Q1 bookings isn't overly exciting, the fact that many of these new orders came from existing clients who have significantly reduced spending throughout 2023 is very positive. First quarter 2024 revenues in our IT staffing services segment totaled $38.8 million, compared to $45.7 million in the first quarter of 2023. On a sequential basis, revenues grew by 2%, and our billable consulting headcount increased during the quarter by 6%. Consolidated margins as a percent of revenues in Q1-24 improved to 25.9%, compared to 24.5% in the first quarter of last year, and was sequentially better than Q4 2023 gross margins of 24.6%. In our data and analytic services segment, margins improved to 46.4% compared to 38.5% in Q1 23, and were sequentially better than Q4 2023 gross margins of 44.7 percent. This improvement reflected higher project gross margins and improved utilization in the 2024 first quarter. In our IT staffing services segment, gross margins were flat compared to Q1 of last year, and 130 basis points better in the 2023 fourth quarter. Gap net income for Q1-24 was a loss of $161,000 or a one cent loss per diluted share compared to net income of $261,000 or two cents per diluted share in Q1 of last year. Non-gap net income for Q1-24 was $800,000 or six cents per diluted share compared to $1.4 million or 12 cents per diluted share in the first quarter last year. SG&A expense items not included in non-GAAP financial measures, net of tax benefits, or stock-based compensation, and the amortization of acquired intangible assets, and are detailed in our Q1 24 earnings release, which is available on our website. Lastly, addressing our financial position, On March 31, 2024, we had $19.4 million of cash balances on hand, no bank debt outstanding, and borrowing availability of $24.2 million under our revolving credit facility. Our day sales outstanding measurement was 56 days at quarter end, which soundly was favorable to our target range of 60 to 65 days. I'll now turn the call over to Vivek for his comments.