Mastech Digital, Inc. (AMEX:MHH) Q4 2023 Earnings Call Transcript

Lisa Thompson: Okay. So, given those signs, do you feel that Q1 will have higher revenues in Q4?

Vivek Gupta: Well, yes, I think it should be sequentially higher. I don’t want to say how much better it would be. But yes, it should be.

Lisa Thompson: All right, that’s great. Okay, I think that’s all my questions. Thank you so much.

Vivek Gupta: Thank you, Lisa.

Operator: Our next question comes from the line of Ross Davidson with [Indiscernible] Capital. Please proceed with your question.

Unidentified Analyst: Hi Jack, hi Vivek. Thanks for taking the question. Actually, both questions I want to ask or asked already. But the third one I want to ask is just around the goals of [Indiscernible], you alluded to that was sort of the cause of Michael deciding to resign. I’m curious if you could articulate, what is the Board’s and your goal for [indiscernible], the sort of that direction that led to that separation?

Vivek Gupta: I think we will start getting into the weeds a little bit over there. But I think it’s suffice to say that what we — the Board expects or wants for the organization is to take it in a direction where it can scale very quickly to a much larger size and become a bigger portion of the Mastech Digital portfolio. And when we’re looking at the goals and strategies that were being discussed, there was clearly some misalignment between the two. And we did see a clear path in being able to get to where we were hoping to. And it just led to that conclusion where Michael felt that it was best to resign.

Unidentified Analyst: Would it be fair to say that maybe the goals weren’t that far apart, Like, I mean, the idea of growing it quickly, I’m sure Michael didn’t want to shrink it maybe the growth rates are different and more about just the approach to how to accomplish that — I’m sorry, what was the approach — was the approach different?

Vivek Gupta: So, I would say, yes, it’s a mix of both. It’s the goals, the strategies, and the means to get there. And now that we have Pimenta on Board, we are actually looking forward to getting some useful strategic direction about what we could take, what the industry is doing, what our peers are doing and find the right actionable initiatives, which will take us there.

Unidentified Analyst: Okay, makes sense. Thanks for adding the color.

Operator: Our next question comes from the line of Marc Riddick with Sidoti. Please proceed with your question.

Marc Riddick: Hey, good morning everyone.

Vivek Gupta: Hey Marc.

Marc Riddick: So, I was wondering if you could give us an update on the engineering staffing services, the launch from last year and maybe what we’re seeing there thus far and maybe some early indication, early reads of what you’re getting there?

Vivek Gupta: Good question Marc. That’s one of the initiatives that we are really giving a lot of emphasis on focus and investment as well. And we’ve seen some virtually quarter-on-quarter or rather even month-on-month increase in the headcount for Engineering Staffing Services. It hasn’t quite become a very what should I — what’s the word I’m looking for? It’s not very large growth has not yet happened. But the conversations that we’ve initiated with our customers are showing good traction. So, essentially, Marc, there are three groups or buckets in which we have our opportunities. The first bucket contains customers who are already doing a bit of Engineering Staffing with us. So, the question over there is how do we wrap that up to make it much more than what we have done so far.

The second bucket is customers where we are doing IT Staffing right now, but we haven’t yet done Engineering Staffing services, getting our message across and making sure that we get invited to the party for any Engineering Staffing needs that they may have. And the third one, of course, is to go and look for new logos, new customers who have never worked with us in the past or even IT Staffing and focus on Engineering Staffing Services there. So, right now, our sales engine is focusing on all the three buckets and making sure our message is understood, heard by other customers. And we hope to see, as a result of that, the requirement volume will start picking up as the year unfolds and we should be able to get to the goals that we have set for ourselves.

Marc Riddick: Okay. Thank you for that. I was wondering in a way maybe kind of shifting to the new order wins to the $19 million. And I was wondering if you could talk a little bit about maybe — without getting too specific, because you did talk about the time frames and the multiyear and the like. I was wondering if there’s any particular catalyst or two that you would point to that led to those opportunities that could continue to have legs in the coming months?

Vivek Gupta: Marc, it’s basically the kind of relationship that we’ve been able to establish with our client accounts, customer accounts, the stellar delivery that our team has had the new offerings that under data modernization that we have come out with. And rolling all of that into seeing the customers’ needs for the next couple of years, it’s been a mix of all of that, which has led to the customers feeling comfortable enough to sign up rather than doing quarter-after-quarter individual extensions of deals or signing up for new contracts. They felt comfortable enough to commit to multiyear deals, where we know there is a steady stream of revenue, which will keep coming quarter-on-quarter. So, I can’t really put a finger on any one of them. It’s actually all of them.

Marc Riddick: That’s helpful. I’m sorry, go ahead.