Mastech Digital (NYSE: MHH) reported Q3 EPS of $0.32, $0.06 better than the analyst estimate of $0.26. Revenue for the quarter came in at $47.2 million versus the consensus estimate of $48.52 million.

Third Quarter 2020 Highlights:

• The Company's Data and Analytics Services segment reported $7.2 million of revenues, representing a 6% sequential improvement over the second quarter of 2020 and a modest increase over the third quarter of 2019;
• The IT Staffing Services segment reported a modest gain in Consultants-on-Billing headcount reversing the downward trend of declines in the first half of 2020, achieving revenue of $40.2 million. The quarterly revenue represents a decline of approximately 5% compared to third quarter of 2019 and a 1% decrease from the previous quarter;
• Total revenues of $47.4 million, compared to revenues of $49.5 million in the third quarter of 2019, reflect the impact of COVID-19 and continued uncertain market conditions;
• Gross margins grew to a record 27.6%, which was 100 basis points higher than the previous record achieved in the second quarter of 2020;
• GAAP diluted earnings per share were $0.25 in the third quarter of 2020 versus $0.17 in the third quarter of 2019; and
• Non-GAAP diluted earnings per share were $0.32 in the third quarter of 2020 versus $0.23 in the third quarter of 2019.

"I'm pleased with the performance of both business segments in the third quarter considering the backdrop of continuing uncertain economic conditions. Our Data & Analytics business delivered significant sequential growth, which, coupled with the recent acquisition of AmberLeaf Partners, Inc., has positioned the business to scale as global markets begin to open up. Our IT Staffing segment's new remote staffing offering, MAS-REMOTE, gained traction with our customers, driving an increase in the Consultants on-Billing headcount this quarter," stated Vivek Gupta, the Company's President and Chief Executive Officer.

"The Marketing, Customer Support, and Sales Operations/Support capabilities of our acquisition AmberLeaf, broadens Mastech Digital's offerings and will help our clients learn faster from more complete insights. We are all very excited about the opportunities this will open," added Paul Burton, Chief Executive of Mastech InfoTrellis."

Expanding on the Company's financial position, Jack Cronin, Mastech Digital's Chief Financial Officer, stated, "During the third quarter, we reduced bank debt by another $6.1 million, further improving our leverage ratios and increasing our cash availability under our existing credit facility to $22.5 million from $17.3 million a quarter ago. Additionally, despite challenging economic conditions, our accounts receivable balance remains of top credit quality."

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