Q1 2025 Mastech Digital Inc Earnings Call
Operator: Greetings, and welcome to Mastech Digital Incorporation first quarter 2025 earnings call. At this time, all participants are in a listen only mode.
Greetings and welcome to Mastech Digital Corporation first quarter 2025 earnings call. At this time all participants are in a listen only mode. A question and answer session will follow the flow of our pension teach and if anyone should require operator assistance. Please press star zero on your telephone keypad.
Operator: A question and answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded.
Jenna Lacey: It is now my pleasure to introduce your host, Jenna Lacey, Manager of Legal Affairs for Mastech Digital. Thank you, Ms. Lacey, you may begin.
As a reminder, this conference is being recorded it is now my pleasure to introduce your host Jennifer Lacey manager of legal affairs for Mastech digital. Thank you Ms. Lacey you may begin.
Jenna Lacey: Jenna Lacey, Manager of Legal Affairs for Mastech Digital Thank you, Operator, and welcome to Mastech Digital's first quarter 2025 conference call. If you have not yet received a copy of our earnings announcement, it can be obtained from our website at www.mastechdigital.com.
Speaker Change: Thank you operator, and welcome to Mastech Digital's first quarter 2025 conference call. If you would.
Speaker Change: Have not yet received a copy of our earnings announcement. It can be obtained from our website at www Dot Master Satcom.
Jenna Lacey: With me on the call today are Nirav Patel, Mastech Digital's Chief Executive Officer, and Kanan Sugandharaman, our Chief Financial and Operations Officer. I would like to remind everyone The 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 believe, anticipate, plan, expect, 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.
Amit: With me on the call today on your South Magic Digital Chief Executive Officer, and kind of took its Amit <unk>, our chief financial and operations Officer.
Speaker Change: I would like to remind everyone.
Speaker Change: The 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 them.
Speaker Change: Before selling 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.
Jenna Lacey: There are risks and uncertainties that could cause actual events to differ materially from those forward-looking statements, including those listed in the company's 2024 Annual Report of Form 10-K, filed with the Securities and Exchange Commission and available on its website at www.sec.gov.
Speaker Change: Could cause actual events.
Speaker Change: She will differ materially from those forward looking statements, including those listed in the company's 2024 annual report on Form 10-K filed with the Securities and Exchange Commission and available on its website at Www SEC Gov.
Jenna Lacey: 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 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.mastechdigital.com.
Speaker Change: <unk> management has elected to provide certain non-GAAP financial measures to supplement our financial results are presented on a GAAP basis.
Speaker Change: Specifically, we will provide non-GAAP net income and non-GAAP diluted earnings per share per share data, which we believe will provide greater transparency with respect to key metrics used by management in operating the business reconciliations of these non-GAAP financial measures to their careful GAAP measures are included in our earnings announcement.
Speaker Change: Which can be obtained from our website at www Dot Mastech Digital's dotcom.
Jenna Lacey: 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.
Speaker Change: As a reminder, we will not be providing guidance. During this call horrible we provide guidance in any subsequent one on one meetings or calls I will now turn the call over to <unk> for his comments.
Nirav Patel: I will now turn the call over to Nirav for his comments. Thanks, Jenna. And good morning, everyone. I'm very pleased with the progress made over my first 100 days, and I'm energized by the meaningful conversations I continue to have throughout the business with our customers, employees, and stakeholders. The insights I've gathered have only reinforced what I've said last quarter. I believe we are standing at an inflection point, and how we choose to act in the near term will shape our trajectory for years to come.
Speaker Change: Thanks, Jennifer and good morning, everyone.
Speaker Change: I'm very pleased with the progress made over my first hundred days and I'm energized by the meaningful conversations I continue to have throughout the business with our customers employees and stakeholders.
Speaker Change: The insights I've gathered have only reinforce what I've said last quarter.
Speaker Change: I believe you are standing at an inflection point and.
Speaker Change: And how we choose to act in the near term, we would shape up tragically for years to come.
Nirav Patel: Let me start with a summary of our Q1 performance before handing it over to Canon to share more details. We've ticked off 2025 on a strong note, delivering solid results in the first quarter. I'm pleased to report that we achieved year-over-year revenue growth across both of our key operating segments. Notably, our data and analytics segment delivered double-digit growth compared to the same period last year. I believe this performance underscores the growth demand for AI-driven digital modernizations and highlights our continued relevance to enterprise customers, validating our strategic focus on data-driven solutions. A key example of this focus is the recent announcement of our expanded partnership with Informatica, a leader in enterprise data management services, which we believe will enable us to accelerate AI-led transformation initiatives for clients globally.
Speaker Change: Let me start with if somebody off our Q1 performance before handing it over to Kevin to share more detail.
Speaker Change: We have kicked off any 25 on a strong north delivering solid results in the first quarter.
Speaker Change: I'm pleased to report that we achieved year over year revenue growth across both of our key operating segments.
Speaker Change: Notably our data and analytics segment delivered double digit growth compared to the same period last year.
Speaker Change: I believe this performance underscores the growing demand for AI, driven digital modernization and highlights our continued relevance to enterprise customers validating our strategic focus on data driven solutions.
Speaker Change: A key example of this focus is the recent announcement of an expanded partnership with Informatica a leader in enterprise data management services, which we believe will enable us to accelerate AI led transformation initiatives for clients globally.
Nirav Patel: This collaboration not only enhances our data modernization capability, but also reinforces our commitment to delivering differentiated high impact solutions in an AI first world. It deepens our industry focus and establishes a joint AI and data innovation platform that we expect will accelerate outcomes for our clients. Our IT staffing segment has also delivered resilience and growth supported by strategic client engagements and disciplined execution, despite a decline in overall business activity levels. These results reflect our continued commitment to our themes of leading with a sense of urgency to meet client needs, building a truly differentiated portfolio, and executing with financial discipline while laying a strong foundation for our ongoing transformation journey.
Speaker Change: This collaboration not only enhances our data modernization capability, but also reinforces our commitment to delivering differentiated high impact solutions in an AI first world.
Speaker Change: It deepens, our industry focus and establishes a joint AI and data innovation platform that we expect will accelerate outcomes for our clients.
Speaker Change: Our it staffing segment has also delivered resilience and growth supported by strategic cloud engagements and disciplined execution.
Speaker Change: The decline in overall business activity levels.
Speaker Change: These results reflect our continued commitment to our teams are leading with a sense of urgency to meet client needs building, a truly differentiated portfolio and executing with financial discipline, while laying a strong foundation for our ongoing transformation journey.
Nirav Patel: Central to this journey are the transformation initiatives we have set in motion. I am pleased to share that these efforts are beginning to show early signs of progress in our quarterly performance. We remain on track with our commitment of unveiling a go-forward strategy later this year, one that we believe will position Mastech Digital as a leading partner to some of the largest Global 2000 enterprise customers that are transitioning into AI-first organizations. Our focus remains on synergizing our data modernization and IT staffing solutions to offer cohesive, high-value services that meet the evolving needs of our clients.
Speaker Change: Central to this journey the transformation initiatives, we have set in motion.
Speaker Change: I'm pleased to share that these efforts are beginning to show early signs of progress in our quarterly performance.
Speaker Change: We remain on track with our commitment of unveiling a go forward strategy. Later this year, one that we believe will position mastech digital as a leading partner to some of the largest global 2000 enterprise customers that are transitioning into AI influenced organization.
Speaker Change: Our focus remains on synergize in our data modernization and <unk> staffing solutions to all sorts of what has to high value services that meet the evolving needs of a glide.
Nirav Patel: We are investing in talent, technology, and processes to enhance our capabilities and drive sustainable growth. While transformation is a complex endeavour, we believe our disciplined approach and clear vision will continue moving us in the right direction, and build on our strong foundation to unlock new opportunities.
Speaker Change: We are investing in talent technology and processes to enhance our capabilities and drive sustainable growth.
Speaker Change: <unk> transformation is a complex endeavor, we believe our disciplined approach and clear vision, we continue moving in the right direction.
Speaker Change: And build on our strong foundation to unlock new opportunities at the same time, we are mindful of the prevailing macroeconomic market conditions, which continues to shape, how and when our clients choose to accelerate our technology spending.
Nirav Patel: At the same time, we are mindful of the prevailing macroeconomic market conditions, which continues to shape how and when our clients choose to accelerate their technology spending. We have observed a cautious approach across the board, with decision-making becoming more deliberate. As noted by my industry peers, this period is characterized by considerable turbulence. Companies are reassessing strategies, and in some cases, pausing major decisions in light of ongoing volatility, a trend we are seeing reflected in our customer conversations as well. Despite these headwinds, we believe the long-term outlook for AI-driven solutions remains promising. Organizations continue to recognize the transformative potential of AI, and are investing in technologies that drive efficiency and innovation at scale.
Speaker Change: Observe their cautious approach across the board with decision, making becoming more deliberate as.
Speaker Change: As noted by my industry peers. This video just characterized by considerable turbulence companies are reassessing strategies and in some cases faulting major decisions in light of ongoing volatility a trend we are seeing reflected in our customers' organizations as well.
Speaker Change: These headwinds we believe the long term outlook for AI driven solutions remain promising organizations continue to recognize the transformation potential of AI and.
Speaker Change: Investing in technologies that drive efficiency and innovation at scale.
Nirav Patel: At Mastech Digital, we remain committed to supporting our clients through this shift to an AI-first world. That said, we recognize that the near-term volatility may continue to bring uncertainty. While we are optimistic about the future, we are approaching the months ahead with measured caution. We plan to stay focused on delivering for our clients and executing steadily against our plan.
Speaker Change: At Mastech digital we remain committed to supporting our clients through this shift to any excellence award that said, we recognize that the near term volatility may continue to bring uncertainty. While we are optimistic about the future. We are approaching the months ahead with a measure of caution we plan to stay focused on delivering for our clients and executing step.
Speaker Change: Daily against up lots.
Kanan Sugandharaman: I will now hand it over to our Chief Financial and Operations Officer, Kanan Sugandham. Thanks, Neerav. And good morning, everyone.
Speaker Change: I will now hand, it over to our chief financial and operations officer guidance have been felt.
Speaker Change: Thanks, Neal and.
Speaker Change: Good morning, everyone.
Kanan Sugandharaman: Today marks a little over a month since I joined Mastech Digital and it's a privilege to introduce myself as the company's Chief Financial and Operations Officer. Let me start with my background. I bring in over 25 years of experience in finance and operations across global technology and services organizations. Prior to joining Mastech Digital, I served as the Chief Financial Officer of Omega Healthcare, where I helped drive enterprise-wide transformation, strengthened execution discipline, and delivered strong financial outcomes. Earlier in my career, I held senior leadership roles in finance, operations, and transformation at Cognizant and Sutherland. It has been a fast-paced and energizing few first weeks since I joined Mastech Digital.
Speaker Change: Today marks a little over a month since I joined Mastech digital and it's a privilege to introduce myself as the company's chief financial and operations Officer.
Speaker Change: Let me start with my background.
Speaker Change: I bring them over 25 years of experience in finance and operations across global technology and services as automakers.
Speaker Change: Prior to joining Mastech Digital Inc.
Speaker Change: <unk> is the chief financial officer of <unk>.
Speaker Change: Okay.
Speaker Change: I hope drive enterprise wide transformation strengthening execution discipline.
Speaker Change: And delivered strong financial outcomes.
Speaker Change: Earlier in my Cardio I held senior leadership roles in finance operations and transformation are cognizant.
Speaker Change: And suddenly.
Speaker Change: It doesn't mean, our phosphates and energizing to first weeks since I joined Mastech digital.
Kanan Sugandharaman: A key part of my initial focus has been to ensure a smooth transition from my predecessor, Jack Cronin. I am thankful to Jack for the solid foundation he has helped build, one that we can now leverage as we gear up for the next phase of growth. Partnering closely with Nirav, I am committed to driving agility, discipline, and scale across our financial and operations functions, ensuring we execute with precision today while laying the groundwork for long-term value creation. We are aligning our teams, our systems, our processes, to not only keep pace with change, but to position ourselves as a more responsive and resilient organization in an AI-first world.
Speaker Change: Part of my initial focus has been to ensure a smooth transition from my predecessor.
Speaker Change: Jack Cronin I'm thankful for the solid foundation he has held.
Speaker Change: One that we can now leverage as we geared up for the next phase of growth.
Speaker Change: Partnering closely with Mito, I'm committed to driving agility discipline and scale across our financial and operation functions and ensuring we execute with precision.
Speaker Change: While laying the groundwork for long term value creation.
Speaker Change: We are aligning our teams our systems, our processes not only keep pace with change but to position ourselves as a more responsive and resilient organization and an AI first world.
Kanan Sugandharaman: I firmly believe that operational excellence, financial discipline, and cross-functional collaboration will be the key enablers in unlocking our future.
Speaker Change: I firmly believe that operational excellence financial discipline and cross functional collaboration will be the key enablers in unlocking our future.
Kanan Sugandharaman: It's a privilege to share the journey alongside a deeply committed leadership team with a shared ambition to scale and create impact.
Speaker Change: Privilege to shop, the journey alongside a deeply committed leadership team with a short ambition to scale and create impact.
Kanan Sugandharaman: Now, on to the first part of financial Our first quarter 2025 financial results reflected a cautionary macroeconomic environment. We saw client spending patterns impacted by the level of economic uncertainty that we are seeing today. Despite these headwinds, our sharp focus on key client relationships resulted in an year-on-year revenue growth in both our business segments and an order booking performance in our data and analytics segment, which was in line with our expectations during the first quarter of 2025. Consolidated revenues during the first quarter of 2025 total to $48.3 million, a year-over-year increase of 3.2% compared to the corresponding quarter of 2024.
Speaker Change: Now onto the first quarter financial results.
Speaker Change: Our first quarter.
Speaker Change: 2025 financial results reflected a cautionary macroeconomic environment we.
Speaker Change: We saw client spending patterns impacted by the level of economic uncertainty that we're seeing today.
Speaker Change: Despite these headwinds our sharp focus on key client relationships resulted in year on year revenue growth in both our business segments and an order bookings performance in our data and analytics segment, which was in line with our expectations during the first quarter of 2025.
Speaker Change: Consolidated revenues during the first quarter of 2025 total to 48 3 billion a year.
Speaker Change: <unk> got three 2% compared to the corresponding quarter of 2024.
Kanan Sugandharaman: A data analytics services segment reported revenues of 9 million in Q1 of 2025, which were 11.1% higher than Q1 2024 revenues. Additionally, first quarter 2025 order bookings totaled 11.7 million, which exceeded last year's Q1 performance of 9.6 million. First quarter 2025 revenues in our IT staffing services segment totaled 39.4 million, 1.6% higher revenues than what was achieved during the first quarter of 2024. Despite some growth in Q1 2025, demand in our IT staffing segment was somewhat muted during the quarter as our billable consultant base declined by 15 consultants. Consolidated Gross Profits dollars increased by 6.3 percent in Q1 2025 compared to the corresponding quarter of 2024.
Speaker Change: Our data and analytics services segment reported revenues of $9 million in Q1 of 2025, which was <unk>, 1% page higher than Q1 2020 for revenues.
Speaker Change: Additionally, first quarter 2025 order bookings totaled 11.7 million, which exceeded last year's Q1 performance of $9 6 million.
Speaker Change: First quarter 2020 revenues are not IV stopping services segment totaled 39.4 million, one 6% higher revenues than what was achieved during the first quarter of 2024.
Speaker Change: Despite some growth in Q1 2025, B mind in our it staffing segment was somewhat muted during the quarter as our billable consultant base declined by 15 consultants.
Speaker Change: Consolidated gross profit.
Speaker Change: Dollars increased by six 3% in Q1 2020, if I come back to the corresponding quarter of 'twenty 'twenty four consolidated gross margins improved 80 basis points over the first quarter of 2020 full largely driven by increases in our staffing business <unk>.
Kanan Sugandharaman: Consolidated gross margins improved 80 basis points over the first quarter of 2024, largely driven by increases in our IT staffing bill. gap net income for the first quarter of 2025 totaled a net loss of 1.4 million 12 cents per diluted share compared to a net loss of 0.2 million or 1 cent per diluted share in the first quarter of 2024. non-gap net income for Q1 2025 was 0.8 million or 6 cents per diluted share compared to 0.8 million or 6 cents diluted share in the 2024 first quarter as well. SG&A expends items not included in non-GAAP financial measures.
GAAP net income for the first quarter of 2025 totaled a net loss of $1 4 million do other things, but diluted share compared to a net loss of <unk> 2 million or one cent per diluted tried in the first quarter of 2024.
Speaker Change: non-GAAP net income for Q1 blended rent if I was <unk> 8 million or <unk> <unk> per diluted share compared to <unk> 8 million or six cents diluted in the 'twenty 'twenty four first quarter as well.
SG&A expense items not included in non-GAAP financial measures may drop back benefits are detailed in our first quarter 2025 earnings release for all periods presented which are available you know a better site.
Kanan Sugandharaman: Net of tax benefits are detailed in our first quarter 2025 earnings release for all periods presented which are available in our website. During the first quarter of 2025, our liquidity and overall financial position remained solid. On March 31, 2025, we had 24.7 million cash balance on hand, no bank debt outstanding, and cash availability of 23.7 million under our revolving credit facility. Our day sales outstanding DSO measurement on March 31, 2025 totals 56 days, which is well within our targeted range and is in line with our DSO measurement a year ago.
During the first quarter of 2025, our liquidity and overall financial position remains solid.
Speaker Change: On March 31, 2025, we had 24.7 million cash balance on hand, no bank debt outstanding.
Speaker Change: And cash availability of $23 7 million I'm better off evolving credit facility.
Speaker Change: Our day sales outstanding DSO Michele on March 31, 2025 totaled 56 days, which is well within our targeted range I didn't line without VSO measurement of yoga.
Operator: Operator, we will now open the call for questions. Thank you. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. And for participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key.
Speaker Change: Operator, we will now open the call for questions.
Speaker Change: Thanks, Yeah, if he would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question kill you.
Speaker Change: You May press Star Kim if he would like to remove your question finally kill.
Speaker Change: And for participants using speaker equipment, it may be necessary to pick up your handset before pressing the star he is.
Operator: One moment while we pull for questions.
Speaker Change: One moment, while we poll for questions.
Lisa Thompson: Our first question is from Lisa Thompson with Zacks Investment Research, please proceed. Good morning. It's great talking to you two.
Speaker Change: Our first question is from Lisa Thompson with Zacks investment Research. Please proceed.
Speaker Change: Good morning, it's great talking to you too.
Kanan Sugandharaman: First I have a few questions about first data and analytics. It looks like it dropped off sequentially quite a bit and the margin was quite a bit lower compared to last year throughout the quarters. Can you tell us a little bit about what's going on there? Sure. In terms of gross margins in the DNA, it has been impacted by lower utilization and a one time reserve adjustment on a fixed bid project during Q1 2025. That is a one timer and the reduction has been roughly about two percentage points and we do see it as a one time.
Speaker Change: First I have a few questions about first our data and analytics it looks like it dropped off sequentially quite a bit in the margin.
Speaker Change: It was quite a bit lower compared to last years throughout the quarters can you tell us a little bit about what's going on there.
Speaker Change: Sure.
Speaker Change: <unk> gross margins in the DNA it has been impacted by lower utilization.
Speaker Change: And a one time reserve, we're just spend on a fixed bid project during Q1 'twenty 'twenty five that it is a one timer and the reduction has been roughly about two percentage points and we do see it as a one time.
Lisa Thompson: Okay, that's good to hear.
Speaker Change: Okay, that's good to hear.
Nirav Patel: And could you go a little bit into your relationship with Informatica? You said that you had one before. What was it before compared to what it is now? And in practice, how does this work? Do you just have salesmen that are working together now?
Speaker Change: And can you go a little bit into your relationship with Informatica, who said that you had won before what was it before compared to what it is now and in practice.
Speaker Change: Does this work you just have salesmen that are working together now.
Nirav Patel: Yeah, hi, Lisa, Nirav here, I'll take that question. So, you know, we've always had a long standing relationship with Informatica, where we have continued to work with them as a strategic partner for us, as we talked about it in the past. I think what the expanded partnership with Informatica now really takes our relationship at an even more strategic level for both in terms of growth, and I think what we can do jointly together with our customers. We are not just embedding the tools going forward, I think what we are going to think about it is co-developed industry-specific accelerators and possibly also launch an outcomes lab where many of our clients could actually come together with us in building up a joint solution as they think about modernizing their estates to an AI-first world.
Speaker Change: Yeah, Hi, Lisa need up here I'll take that question so.
Speaker Change: So we've always had a long standing relationship with Informatica, all that and we have continued to work with them as a strategic partner for us as we've talked about it in the past I think what the <unk>.
Speaker Change: <unk> partnership with Informatica now really takes a relationship at the even more strategic level.
Speaker Change: But both in terms of growth and I think what we can do jointly together with our customers.
Speaker Change: We are not just embedding their tools are going forward I think what we are going to think about it is affordable or industry specific accelerators.
Speaker Change: And Boll CB also launch and outcomes lab Oh go ahead, many of our clients, who would actually come together with us.
Speaker Change: You know building up a joint solutions as they think about you know modernizing that our states to an AI first world. So I think we see this really translating into both the high quality deal flows and a stronger differentiation.
Nirav Patel: So I think we see this really translating into both higher quality deal flows and stronger differentiation in our competitive pursuits going forward. So I think we feel very, very great about the fact that we were able to further strengthen our partnership that we already had prior to this announcement.
Speaker Change: In a competitive pursuits going forward. So I think we feel really great.
Speaker Change: Great about the fact that we were able to.
Speaker Change: Further step down on our partnership that we already had the prior to this announcement.
Nirav Patel: So are you, are the projects going to have people from each company? Yeah, the way I think, Lisa, just to comment on it, I think we are still working through the details of the specifics of the partnerships. But the way we have visualized this whole partnership is the fact that we will commit, you know, resources from both sides. But more importantly, we will actually jointly pursue the solution building with our clients. So think about that as we are going forward in the market and expanding and making and realizing their whole AI-first dreams come real. We now have, together with us, Informatica, as a partnership that we think we can build jointly solutions and go forward.
Speaker Change: So are you of the project's gonna have people from each company.
Speaker Change: Yes, the way I think Lisa just to comment on it I think we are still working through the details of the specifics of the partnerships, but the way we visualize this whole partnership is the fact that we will comet.
Speaker Change: You know of resources from both sides, but more importantly, we will actually jointly pursue the solution building our retail clients. So so think about that as well.
As veeva going forward in the market and expanding and making.
Speaker Change: And realizing that hole.
Speaker Change: AIE fluids dreams come real we now have together with us informatica as a partnership that we think we can build jointly solutions on go forward.
Nirav Patel: Both our organizations already have a tremendous amount of differentiation and depth in the market for what we do for our clients. I think bringing us together just makes it even more stronger as we approach the clients for more and integrated, unified solutions that they look forward for in the market.
Speaker Change: Both our organizations already have a tremendous amount of differentiation and depth.
Speaker Change: In the market for what we do for our clients I think bringing US together Jackson just makes it even more stronger as we approach the clients for more of an integrated unified solutions that they look forward, Florida.
Speaker Change: Future.
Speaker Change: Yeah.
Lisa Thompson: Great. Thank you for that.
Speaker Change: Great. Thank you for that so my last question is did you get a chance to do any stock buybacks this quarter.
Nirav Patel: So my last question is, did you get a chance to do any stock buybacks this quarter? Yeah. So, as you know, in February 19, 2025, the board did authorize an extension of the Shire Repurchase Program by an additional year to February 8, 2026. We still have 423,000 shares that are available for repurchase. Nothing had been done in the last quarter. But you would notice that in the initial period when it was launched, we experienced a number of extended blackout periods, which we weren't able to repurchase our shares. And these were mostly corporate related transactions and events.
Speaker Change: Yeah. So as you know in February 9th 19 to anybody if I. The board did authorize an extension of the share repurchase program by an additional year to February eight 2026, you still have 123000 shares that are available for repurchase nothing had been done in the.
Speaker Change: Last quarter.
Speaker Change: You would notice that in the initial period when it was launched we experienced a number of extended blackout periods, which better be ready and able to repurchase our shares and these are mostly corporate related transactions and events and now that should be behind us. So I don't think that youre going to see such a blackout periods.
Nirav Patel: And now that should be behind us. So I don't think that you're going to see such blackout periods in the future. And so we will get active on the buyback.
Speaker Change: In the future and so we will get active on the buyback.
Lisa Thompson: Okay, great. Thank you for clarifying that.
Speaker Change: Okay, great. Thank you for clarifying that that's all my questions. Thank you.
Lisa Thompson: That's all my questions. Thank you.
Operator: As a reminder, it is star one on your telephone keypad if you would like to ask a question.
Speaker Change: As a reminder to Starwood and your telephone keypad, if he would like to ask a question. Our next question is from Marc Riddick with Sidoti and company. Please proceed.
Marc Riddick: Our next question is from Marc Riddick with Sidoti and Company. Please proceed. Hey, good morning. Good morning. Hey, Marc.
Marc Riddick: Hey, good morning.
Marc Riddick: Good morning, Hey, Marc.
Kanan Sugandharaman: So I was wondering, actually, first, can we start with where do we finish on consultant count for the quarter? Yeah, so our billable headcount and staffing landed up at 991. Okay, great.
Marc Riddick: So I was wondering actually first can we start with where do we finish on consultant count for the quarter.
Marc Riddick: Yeah, so our billable headcount and staffing.
Marc Riddick: <unk> landed up at 991.
Marc Riddick: Okay.
Nirav Patel: And then I was wondering if you could talk a little bit about as far as maybe what you saw through the quarter with client demand and feedback trends, and maybe could talk a little bit about the pacing through the quarter by month. Maybe we can sort of get a sense of what impact headlines had on client demand throughout the quarter. We do not see lumpiness in that sense between the months, Marc, but the kind of projects we are winning, we continue to remain very active in engaging with our clients and we are seeing a growth in demand in the AI-driven digital modernization, which kind of highlights our continued relevance for the enterprise customers.
Marc Riddick: Okay, Great and then I was wonder if you could talk a little bit about as far as maybe what you saw through the quarter was what's client demand and feedback trends and maybe you could talk a little bit about.
Marc Riddick: The pacing through the through the quarter by months, maybe you can sort of get a sense of.
Marc Riddick: What impact are headlines had.
Marc Riddick: On client demand throughout the quarter.
Marc Riddick:
Marc Riddick: I do not see lumpiness in that sense between the months March but the kind of projects. We are winning we continue to remain very active in engaging with our clients and we are seeing a growth in demand in the AI driven digital modernization.
Marc Riddick: Our highlights our continued relevance for the enterprise customers.
Nirav Patel: And with the informatic conversation that we have been having, we only believe that it could be a catalyst and enable us to accelerate our AI-led IT transformation in that sense. But in terms of just the month-on-month, we haven't seen any lumpiness. Okay, great. And can you can you speak to whether or not you've seen much in the way of any particular customer industry verticals that have been more active than others in any particular standouts that we should be aware It's been broad-based, Marc, but we do see a fair traction in our healthcare licenses practice. But other than that, it has been largely broad-based.
Marc Riddick: And midday Informatica, it's monetization that we have been having we only believe that it could be a catalyst and enabled us to accelerate our.
Marc Riddick: And then I do transformation in that sense, but in terms of just the month on month or we haven't seen any lumpiness.
Speaker Change: Okay, Great and can you can you speak to whether or not you've seen much in the way of any particular customer industry verticals that have been more active than others. Any particular standouts there that we should be aware of.
Marc Riddick: It's been broad based mark, but we don't see a traction in healthcare life Sciences practice.
Marc Riddick: But other than that it has been largely broad based.
Marc Riddick: Okay. And then, so I think it's been a few months now and turbulent months as far as the macro, I suppose.
Marc Riddick: Okay, and then so I think so it was a it's been a few months now.
Marc Riddick: Turbulent most as far as the macro I suppose, but maybe you could talk a little bit about maybe show you your initial thoughts.
Nirav Patel: But maybe you could talk a little bit about maybe show your initial thoughts in leading the company and if there are any areas that either have been surprising on a positive or or maybe just initial views that would provide insights as to sort of your views as to the company and where it can go. Most definitely, Marc. This is Nirav here. So look, we, we remain, I would say, from a market condition standpoint, we remain very cautiously optimistic, right? We think, I mean, there are no questions that the macro environment continues to present uncertainties, right?
Marc Riddick: And leading the company at.
Marc Riddick: If there are any areas that either were a bit surprising in a positive or negative later or maybe just initial views that would provide.
Marc Riddick: Provide insights as to sort of your your your views as to the company and in a word.
Marc Riddick: Most definitely Mark this is neither here. So look we are we remain I would say from a market condition standpoint, we remain very cautiously optimistic right. We think I mean, there are no questions that are of the macro environment continues to present uncertainties site, but that said you know the the law.
Nirav Patel: But that said, you know, the the long term demand drivers for AI driven transformations and data modernization remain very strong. which usually tends to pick up pretty well, as soon as the spends open up. And equally important on what I call long term transformation initiatives are our AI data and analytics capabilities really fit beautifully well as well.
Marc Riddick: Long term demand drivers for.
Marc Riddick: Sure, Yeah, I, driven transformations and data modernization remains very strong.
Marc Riddick: Clients might be I would call re prioritizing spend.
Marc Riddick: But they're not necessarily pausing their transformation agenda is altogether.
Marc Riddick: So we are continuing to stay very very close to their evolving needs.
Marc Riddick: And are focusing on sort of what I call delivering high impact Ottawa aligned solutions and increasingly so as we as we look in the near term I think you know each of these initiatives really will need to be back with a very strong set of Ottawa.
Marc Riddick: Is that the Cfos of these festivals organizations are very carefully assessing and accruing. So we think we are we are in a great place in terms of their our offerings have that relevancy to really be first in line to drive both sets of offerings. If you think about it you know the operator.
Marc Riddick: Talent business, which usually tends to pick up pretty well as soon as the spend is open up and equally important on what I call long term transformation initiatives, our Rd, I data and analytics capabilities really fit beautifully well as well. So we think we are we are going with what I.
Nirav Patel: So we think we are we are going with what I call cautious optimism as we approach the next phase.
Marc Riddick: Paul.
Marc Riddick: Our cautious optimism.
Marc Riddick: We approach the next few months.
Marc Riddick: Great.
Kanan Sugandharaman: And then last one for me, it seems as though that we've had a pickup in bill rate. I think both, it seems as though it would be both sequentially and year over year, but maybe you could talk a little bit about that and what you're seeing there. Sure, yes. Our average bill rate is right now trending between $84.5 and $85.5, which is up from $83 to $83.5 last quarter, and up actually from $79 last year at the same time. The increase in bill rate has primarily been on account of the higher rates on new assignments and pretty much reflective of the type of skills that we have employed in the recent past.
Marc Riddick: Great and then last one from me it seems as though that we've had a pick up in and bill rate I think both.
Marc Riddick: It seems as though it would be both.
Marc Riddick: Sequentially and year over year, but maybe you could talk a little bit about that and what you're seeing there.
Marc Riddick: Sure. He is our average bill rate.
Marc Riddick: Is that I know training between 84, and a half an 80 fan which is up from 80.
Marc Riddick: <unk> reiterated today.
Marc Riddick: Three and a half last quarter and up actually from 79.
Marc Riddick: Last year, the same time increase in bill rate has primarily been on the phone drove the higher rates on new assignments and pretty much reflective of the type of Skus that we have employed in the recent past mark, but that's uptick that'd be a thing.
Kanan Sugandharaman: Marc, that's the uptick that we are seeing.
Marc Riddick: Excellent.
Marc Riddick: Thank you very much.
Marc Riddick: Excellent. Thank you very much.
Kanan Sugandharaman: With no further questions in the queue, I would like to hand the conference back over to management for closing remarks. It is for us, this has been an exciting time with me coming in about 30 days back and Nirav pitching in for the, you know, I would say, I think it's 100 days. It's been an exciting journey and we are so looking forward to making an impression when it comes to the markets and looking at our strategies going forward. So, thanks, thanks for that.
Speaker Change: With no further questions in the queue I would like to hand, the conference back over to management for closing remarks.
Marc Riddick: Yeah.
Marc Riddick: Got it.
Marc Riddick: It is for us.
Marc Riddick: This has been an exciting time with me coming in about 30 days back in and getting game for.
Marc Riddick: And I would say if you use 100 days its been an exciting journey and we are also looking forward to making a nutrition when it comes to the market and looking at our strategies going forward. So.
Nirav Patel: And Nirav, over to you. Yeah, thank you. Thank you, guys. I appreciate your support through the process and we look forward to seeing you all in the next quarter. Thank you.
Marc Riddick: Thanks, Thanks for that and you know what do you think you think you guys said I appreciate the your your your support through the process and we look forward to seeing you out in the next quarter.
Marc Riddick: Thank you. This does conclude today's conference you may disconnect. Your lines at this time and thank you for your participation.
Operator: This will conclude today's conference. You may disconnect your lines at this time and thank you for your participation.
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