Mastech Digital, Inc. 2026 Q2 Earnings Call

Please go ahead. Thank you, operator.

Welcome to Mastech Digital's second quarter 2026 conference call. If you have not yet received a copy of our earnings announcement, it can be obtained from our investor section on our website at www.mastechdigital.com. With me on the call today are Nirav Patel, Mastech Digital's Chief Executive Officer, and Kannan Sugantharaman, our Chief Financial and Operations 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. 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 2025 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.

As a reminder, we will not be providing guidance during this call. We will not provide guidance in any subsequent one-on-one meetings or calls. I will now turn the call over to Nirav for his comments.

Thanks, Jenna. Good morning, everyone. We appreciate you joining us as we review our second quarter 2026 results. I'm pleased to share the progress we made during the second quarter. On a consolidated basis, Mastech Digital delivered sequential revenue growth of 0.9%. Within that figure, our talent segment saw a modest sequential decline of 1.9%, while our data and AI segment grew 7.2% sequentially, its first quarter of sequential growth since 2024. We believe this growth is a direct reflection of the progress we are making as an AI-first company. During the second quarter, we entered into a strategic engagement with the leading American convenience store chain and e-commerce retailer that operates more than 10,000 stores globally to build the agentic foundation that will power its e-commerce apps and store operations.

We have been entrusted to architect, build, and deploy semantic search for their consumer experiences, a retail knowledge fabric as an ontology layer beneath it, and an agentic foundation for building, orchestrating, and monitoring agents at scale. We view this engagement as an early indicator of the new capabilities we are building, specifically to help accelerate AI adoption and grow customer revenues. Deal wins like this engagement have contributed to a positive year-over-year quarter in bookings, which is building further on a strong first quarter. We are encouraged by our trajectory. As part of our initiatives under the growth office, which I will talk about in a moment, we are pleased to have launched our partner program during the second quarter. We participated in four major industry events, Google Cloud Next, Informatica World, the Snowflake Summit, and the Databricks Data + AI Summit.

We value the connections and relationships that have come out of our participation in these events. This partner program reflects a serious commitment to our partners and a willingness to go deep in the capabilities we build around them. It is about how we more meaningfully serve our customers by building trust through the value we demonstrate alongside our partners. We look forward to building on this program in the coming quarters. Kannan will provide more color on the segment performances in his remarks. I want to spend a moment on the market environment because it continues to shape how enterprises are approaching their roadmaps and their investment decisions. We are seeing frontier labs, companies like Anthropic and OpenAI, continue to push the pace of innovation in AI. That pace continues to accelerate.

Enterprises, especially the Global 2,000 customers we work with, are beginning to shift their spending away from what has traditionally been considered standard expected technology investments and towards innovation and AI. A recent analysis from Zinnov suggests that as much as 30% of traditional IT spending could rotate into new AI-oriented investments. We believe there are two areas where enterprises acceleration has been most consistent: AI foundation and business transformation. AI foundation is an important layer where enterprises are doing the groundwork, getting their underlying data clean, structured, and governed enough to actually support AI at scale. This is where we continue to see significant dollars being spent, because without the foundation in place, nothing built on top of it holds up. It is also the layer where questions of trust, safety, and governance ultimately live. Business transformation is the other area of acceleration.

Here, enterprises are developing use cases they can tie directly to top-line or bottom-line results. We are seeing enterprises narrow in on the specific domains and use cases that help them differentiate from their competitors and become a true AI-first enterprise. We believe this area has the most potential to drive business impact and sets the groundwork for us to deliver outcome-based engagements that position us as a trusted partner in their AI journey. We are beginning to see progress in both of these areas. Let me also highlight some of the progress we have made on our strategic initiatives. To meet the acceleration we described earlier in AI foundation and business transformation, we made a deliberate effort during the second quarter to build out our modern data and AI readiness offerings, hiring strong local and international talent to meet the market where the demand is.

We are also investing in becoming an autonomous enterprise ourselves, acting as customer zero for our own AI and transformation initiatives. During the second quarter, we assessed all of our enabling functions and their maturity levels with the intention of becoming a fully autonomous AI-led company. This is also the quarter where we launched our Growth Office function, investing across four areas that we believe will compound over time. New Logo Sales is focused on opening and developing new client relationships, giving us a dedicated motion for winning first-time business. Performance and Revenue Marketing covers our events, demand generation, campaigns, inbound leads, and broader engagement efforts, feeding a stronger pipeline into that motion. Partnership Ecosystem Build is focused on partner source deals and ecosystem development, an area that ties directly into the partner program momentum I mentioned earlier.

Finally, Large Deal Enablement brings cross-functional teams together to synergize best practices in pursuing and winning our largest, most strategic deals. Together, these four investments within the Growth Office are designed to build a more complete commercial engine, one that wins new business, deepens through partners, and competes for the deals that matter most. As I described earlier, we are seeing two forces continue to move together in the market. The pace of AI innovation coming out of the frontier labs and the pace of AI adoption inside enterprises as they rotate their own spending towards AI foundation and business transformation to keep up. We believe that is exactly where our opportunity lies. In our view, there is a clear place for partners like us who understand both the depth of enterprise systems and the pace of AI innovation.

We view this position as an important place for us to be as we support enterprises in increasing their AI adoption. We are focused on meeting this moment and driving value for our shareholders. We believe we are entering the second half of the year in a position of strength. The redeployment of EDGE savings into our strategic initiatives, the investments we have made in our capabilities and our Growth Office, the early wins we are seeing in data and AI all give us confidence that our plan is working. Our balance sheet strength, our leadership team, and the alignment across our organization position us well to compete for the opportunities ahead. We are grateful for the trust our clients, our employees, and our shareholders continue to place in us. We intend to continue earning it going forward.

With that, I will hand it over to Kannan, who will walk you through the financials in more detail.