0001193125-22-283634 | 10-Q | XBRL Viewer

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Cover Page - shares	9 Months Ended
Cover Page - shares	Sep. 30, 2022	Oct. 31, 2022
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Entity Interactive Data Current	Yes
Amendment Flag	false
Document Period End Date	Sep. 30, 2022
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q3
Entity Registrant Name	MASTECH DIGITAL, INC.
Entity Central Index Key	0001437226
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity File Number	001-34099
Entity Incorporation, State or Country Code	PA
Entity Tax Identification Number	26-2753540
Entity Address, Address Line One	1305 Cherrington Parkway
Entity Address, Address Line Two	Building 210
Entity Address, Address Line Three	Suite 400
Entity Address, City or Town	Moon Township
Entity Address, Postal Zip Code	15108
Entity Address, State or Province	PA
City Area Code	412
Local Phone Number	787-2100
Title of 12(b) Security	Common Stock
Trading Symbol	MHH
Security Exchange Name	NYSEAMER
Entity Common Stock, Shares Outstanding		11,617,709

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Income Statement [Abstract]
Revenues	$ 63,150	$ 59,531	$ 185,022	$ 162,964
Cost of revenues	46,863	42,911	136,057	119,225
Gross profit	16,287	16,620	48,965	43,739
Selling, general and administrative expenses:
Operating expenses	12,930	11,645	38,753	33,566
Revaluation of contingent consideration liability	0	0	0	(1,982)
Total selling, general and administrative expenses	12,930	11,645	38,753	31,584
Income from operations	3,357	4,975	10,212	12,155
Interest income (expense), net	(85)	(169)	(326)	(523)
Other income (expense), net	85	(66)	334	(88)
Income before income taxes	3,357	4,740	10,220	11,544
Income tax expense	951	1,334	3,046	3,206
Net income	$ 2,406	$ 3,406	$ 7,174	$ 8,338
Earnings per share:
Basic	$ 0.21	$ 0.30	$ 0.62	$ 0.73
Diluted	$ 0.20	$ 0.28	$ 0.59	$ 0.69
Weighted average common shares outstanding:
Basic	11,616	11,441	11,578	11,430
Diluted	12,084	12,025	12,082	12,007

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Net income	$ 2,406	$ 3,406	$ 7,174	$ 8,338
Other comprehensive income (loss):
Net unrealized gain on interest-rate swap contracts	0	0	0	35
Foreign currency translation adjustments	(235)	31	(701)	(83)
Total pretax net unrealized gain (loss)	(235)	31	(701)	(48)
Income tax expense	0	0	0	9
Total other comprehensive gain (loss), net of taxes	(235)	31	(701)	(57)
Total comprehensive income	$ 2,171	$ 3,437	$ 6,473	$ 8,281

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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+ Details

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Current assets:
Cash and cash equivalents	$ 3,482	$ 6,622
Accounts receivable, net of allowance for uncollectible accounts of $444 in 2022 and $375 in 2021	37,257	34,153
Unbilled receivables	13,183	9,240
Prepaid and other current assets	3,833	3,890
Total current assets	57,755	53,905
Equipment, enterprise software, and leasehold improvements, at cost:
Equipment	2,821	2,356
Enterprise software	4,146	3,753
Leasehold improvements	737	842
Total equipment, enterprise software, and leasehold improvements	7,704	6,951
Less – accumulated depreciation and amortization	(4,723)	(3,913)
Net equipment, enterprise software, and leasehold improvements	2,981	3,038
Operating lease right-of-use assets	4,263	4,894
Deferred financing costs, net	311	366
Non-current deposits	571	595
Goodwill, net of impairment	32,510	32,510
Intangible assets, net of amortization	16,385	18,760
Total assets	114,776	113,702
Current liabilities:
Current portion of long-term debt	2,200	4,400
Accounts payable	5,831	4,954
Accrued payroll and related costs	15,628	14,240
Current portion of operating lease liability	1,500	1,479
Other accrued liabilities	1,035	1,227
Deferred revenue	550	544
Total current liabilities	26,744	26,844
Long-term liabilities:
Long-term debt, less current portion, net	0	8,334
Long-term operating lease liability, less current portion	2,699	3,706
Long-term accrued income taxes	105	125
Deferred income taxes	761	265
Total liabilities	30,309	39,274
Commitments and contingent liabilities (Note 6)
Shareholders' equity:
Preferred Stock, no par value; 20,000,000 shares authorized; none outstanding
Common Stock, par value $.01; 250,000,000 shares authorized and 13,264,129 shares issued as of September 30, 2022 and 13,112,202 shares issued as of December 31, 2021	133	131
Additional paid-in-capital	31,814	28,250
Retained earnings	58,015	50,841
Accumulated other comprehensive (loss)	(1,308)	(607)
Treasury stock, at cost; 1,646,420 shares as of September 30, 2022 and as of December 31, 2021	(4,187)	(4,187)
Total shareholders' equity	84,467	74,428
Total liabilities and shareholders' equity	$ 114,776	$ 113,702

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Statement of Financial Position [Abstract]
Accounts receivable, allowance for uncollectible accounts	$ 444	$ 375
Preferred Stock, par value	$ 0	$ 0
Preferred Stock, shares authorized	20,000,000	20,000,000
Preferred Stock, shares outstanding	0	0
Common stock, par value	$ 1	$ 1
Common stock, shares authorized	250,000,000	250,000,000
Common stock, shares issued	13,264,129	13,112,202
Treasury stock, shares	1,646,420	1,646,420

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands	Total	Common Stock [Member]	Additional Paid-in Capital [Member]	Accumulated Retained Earnings [Member]	Treasury Stock [Member]	Accumulated Other Comprehensive Income (loss) [Member]
Beginning Balances at Dec. 31, 2020	$ 59,533	$ 130	$ 25,509	$ 38,620	$ (4,187)	$ (539)
Net income	1,194			1,194
Other comprehensive gain (loss), net of taxes	7					7
Stock-based compensation expense	621		621
Stock options exercised	101		101
Ending Balances at Mar. 31, 2021	61,456	130	26,231	39,814	(4,187)	(532)
Beginning Balances at Dec. 31, 2020	59,533	130	25,509	38,620	(4,187)	(539)
Net income	8,338
Other comprehensive gain (loss), net of taxes	(57)
Ending Balances at Sep. 30, 2021	70,171	131	27,865	46,958	(4,187)	(596)
Beginning Balances at Mar. 31, 2021	61,456	130	26,231	39,814	(4,187)	(532)
Net income	3,738			3,738
Employee common stock purchases	181		181
Other comprehensive gain (loss), net of taxes	(95)					(95)
Stock-based compensation expense	757		757
Stock options exercised	4	1	3
Ending Balances at Jun. 30, 2021	66,041	131	27,172	43,552	(4,187)	(627)
Net income	3,406			3,406
Other comprehensive gain (loss), net of taxes	31					31
Stock-based compensation expense	693		693
Ending Balances at Sep. 30, 2021	70,171	131	27,865	46,958	(4,187)	(596)
Beginning Balances at Dec. 31, 2021	74,428	131	28,250	50,841	(4,187)	(607)
Net income	2,332			2,332
Other comprehensive gain (loss), net of taxes	(147)					(147)
Stock-based compensation expense	526		526
Stock options exercised	893	2	891
Ending Balances at Mar. 31, 2022	78,032	133	29,667	53,173	(4,187)	(754)
Beginning Balances at Dec. 31, 2021	74,428	131	28,250	50,841	(4,187)	(607)
Net income	7,174
Other comprehensive gain (loss), net of taxes	(701)
Ending Balances at Sep. 30, 2022	84,467	133	31,814	58,015	(4,187)	(1,308)
Beginning Balances at Mar. 31, 2022	78,032	133	29,667	53,173	(4,187)	(754)
Net income	2,436			2,436
Employee common stock purchases	199		199
Other comprehensive gain (loss), net of taxes	(319)					(319)
Stock-based compensation expense	752		752
Stock options exercised	430		430
Ending Balances at Jun. 30, 2022	81,530	133	31,048	55,609	(4,187)	(1,073)
Net income	2,406			2,406
Employee common stock purchases	(10)		(10)
Other comprehensive gain (loss), net of taxes	(235)					(235)
Stock-based compensation expense	776		776
Ending Balances at Sep. 30, 2022	$ 84,467	$ 133	$ 31,814	$ 58,015	$ (4,187)	$ (1,308)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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+ Details

- Definition

Total of all stockholders' equity (deficit) items, net of receivables from officers, directors, owners, and affiliates of the entity which are attributable to the parent. The amount of the economic entity's stockholders' equity attributable to the parent excludes the amount of stockholders' equity which is allocable to that ownership interest in subsidiary equity which is not attributable to the parent (noncontrolling interest, minority interest). This excludes temporary equity and is sometimes called permanent equity.

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+ Details

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
OPERATING ACTIVITIES:
Net income	$ 7,174	$ 8,338
Adjustments to reconcile net income to cash provided by (used in) operating activities:
Depreciation and amortization	3,251	2,984
Bad debt expense	50	150
Interest amortization of deferred financing costs	55	61
Stock-based compensation expense	2,054	2,071
Deferred income taxes, net	496	813
Revaluation of contingent consideration liability	0	(1,982)
Operating lease assets and liabilities, net	(355)	199
Loss on disposition of fixed assets	0	5
Long-term accrued income taxes	(20)	0
Working capital items:
Accounts receivable and unbilled receivables	(7,097)	(13,391)
Prepaid and other current assets	57	(2,825)
Accounts payable	877	2,353
Accrued payroll and related costs	1,388	3,178
Other accrued liabilities	(192)	(13)
Deferred revenue	6	(32)
Net cash flows provided by (used in) operating activities	7,744	1,909
INVESTING ACTIVITIES:
Recovery of (payment for) non-current deposits	24	(201)
Capital expenditures	(819)	(851)
Proceeds from the sale of fixed assets	0	10
Net cash flows provided by (used in) investing activities	(795)	(1,042)
FINANCING ACTIVITIES:
(Repayments) on term loan facility	(10,900)	(3,300)
Proceeds from the issuance of common shares	189	181
Proceeds from the exercise of stock options	1,323	105
Net cash flows provided by (used in) financing activities	(9,388)	(3,014)
Effect of exchange rate changes on cash and cash equivalents	(701)	(83)
Net change in cash and cash equivalents	(3,140)	(2,230)
Cash and cash equivalents, beginning of period	6,622	7,677
Cash and cash equivalents, end of period	$ 3,482	$ 5,447

Description of Business and Basis of Presentation

9 Months Ended

Sep. 30, 2022

Accounting Policies [Abstract]

Description of Business and Basis of Presentation

1.	Description of Business and Basis of Presentation:

Basis of Presentation

References in this Quarterly Report on Form

10-Q

to “we”, “our”, “Mastech Digital”, “Mastech” or “the Company” refer collectively to Mastech Digital, Inc. and its wholly-owned operating subsidiaries, which are included in these Condensed Consolidated Financial Statements (the “Financial Statements”).

Description of Business

We are a provider of Digital Transformation IT Services to mostly large and

medium-sized

organizations.

Our portfolio of offerings includes data management and analytics services; digital learning services; and IT staffing services.

In our 2017 acquisition of the services division of Canada-based InfoTrellis, Inc., we added specialized capabilities in delivering data and analytics services to our customers, which became our Data and Analytics Services segment. This segment offers project-based consulting services in the areas of data management, data engineering and data science, with such services delivered using

on-site

and offshore resources. In October 2020, we acquired AmberLeaf Partners, Inc. (“AmberLeaf”), a Chicago-based customer experience consulting firm. This acquisition expanded our Data and Analytics Services segment’s capabilities in customer experience strategy and managed services offering for a variety of Cloud-based enterprise applications across sales, marketing and customer services organizations.

Our IT Staffing Services segment combines technical expertise with business process experience to deliver a broad range of staffing services in digital and mainstream technologies. Our digital technologies include data management, analytics, cloud, mobility, social and artificial intelligence. We work with businesses and institutions with significant IT spending and recurring staffing service needs. We also support smaller organizations with their “project focused” temporary IT staffing requirements.

The

COVID-19

pandemic had a material impact on activity levels in both of our business segments in 2020. This impact was reduced in 2021 as a result of the global

roll-out

of vaccination programs and signs of improving economic conditions.

COVID-19

related concerns have been less impactful on our business in 2022. Still the proliferation of

COVID-19

variants have caused some uncertainty and could continue to disrupt global markets during the fourth quarter of 2022 and into 2023.

Accounting Principles

The accompanying Financial Statements have been prepared by management in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and applicable rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all of the information and disclosures required by U.S. GAAP for complete consolidated financial statements. In the opinion of management, all adjustments, consisting principally of normal recurring adjustments, considered necessary for a fair presentation have been included. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the Financial Statements and the accompanying notes. Actual results could differ from these estimates. These Financial Statements should be read in conjunction with the Company’s audited consolidated financial statements and accompanying notes for the year ended December 31, 2021, included in our Annual Report on Form

10-K

filed with the SEC on March 14, 2022. Additionally, our operating results for the three and nine months ended September 30, 2022 are not necessarily indicative of the results that can be expected for the year ending December 31, 2022 or for any other period.

Principles of Consolidation

The Financial Statements include the accounts of the Company and its wholly-owned subsidiaries. All material intercompany transactions and balances have been eliminated in consolidation.

Critical Accounting Policies

Please refer to Note 1 “Summary of Significant Accounting Policies” of the Consolidated Financial Statements and “Management’s Discussion and Analysis of Financial Condition and Results of Operations–Critical Accounting Policies and Estimates” in our Annual Report on Form

10-K

for the year ended December 31, 2021 for a more detailed discussion of our significant accounting policies and critical accounting estimates. There were no material changes to these critical accounting policies during the nine months ended September 30, 2022.

Segment Reporting

The Company has two reportable segments, in accordance with Accounting Standards Committee (“ASC”) Topic 280 “Disclosures About Segments of an Enterprise and Related Information”: Data and Analytics Services and IT Staffing Services.

Revenue from Contracts with Customers

9 Months Ended

Sep. 30, 2022

Revenue from Contract with Customer [Abstract]

Revenue from Contracts with Customers

2.	Revenue from Contracts with Customers

The Company recognizes revenue on

time-and-material

contracts over time as services are performed and expenses are incurred.

Time-and-material

contracts typically bill at an agreed-upon hourly rate, plus

out-of-pocket

expense reimbursement.

Out-of-pocket

expense reimbursement amounts vary by assignment, but on average represent less than 2% of the total contract revenues. Revenue is earned on a per transaction or labor hour basis, as that amount directly corresponds to the value of the Company’s performance. Revenue recognition is negatively impacted by holidays and consultant vacation and sick days.

The Company recognizes revenue on fixed price contracts over time as services are rendered and uses a cost-based input method to measure progress. Determining a measure of progress requires management to make judgments that affect the timing of revenue recognized. Under the cost-based input method, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation. Revenues, including estimated fees or profits, are recorded proportionally as costs are incurred. The Company has determined that the cost-based input method provides a faithful depiction of the transfer of goods or services to the customer. Estimated losses are recognized immediately in the period in which current estimates indicate a loss. We record deferred revenues when cash payments are received or due in advance of our performance, including amounts which may be refundable.

The Company’s

time-and-material

and fixed price revenue streams are recognized over time as the customer receives and consumes the benefits of the Company’s performance as the work is performed.

In certain situations related to client direct hire assignments, where the Company’s fee is contingent upon the hired resources continued employment with the client, revenue is not fully recognized until such employment conditions are satisfied.

We do not sell, lease or otherwise market computer software or hardware, and essentially 100% of our revenue is derived from the sale of data and analytics, IT staffing and digital transformation services. We expense sales commissions in the same period in which revenues are realized. These costs are recorded within sales and marketing expenses.

Each contract the Company enters into is assessed to determine the promised services to be performed and includes identification of the performance obligations required by the contract. In substantially all of our contracts, we have identified a single performance obligation for each contract either because the promised services are distinct or the promised services are highly interrelated and interdependent and therefore represent a combined single performance obligation.

Our Data and Analytics Services segment provides specialized capabilities in delivering data management and analytics services to its customers. This business offers project-based consulting services in the areas of Master Data Management, Enterprise Data Integration, Data Engineering and Analytics, which can be delivered using onsite and offshore resources.

Our IT Staffing Services segment combines technical expertise with business process experience to deliver a broad range of services in digital and mainstream technologies. Our digital technology stack includes data management and analytics, cloud, mobility, social and automation. Our mainstream technologies include business intelligence / data warehousing; web services; enterprise resource planning & customer resource management; and

e-Business

solutions. We work with businesses and institutions with significant IT spend and recurring staffing needs. We also support smaller organizations with their “project focused” temporary IT staffing requirements.

The following table depicts the disaggregation of our revenues by contract type and operating segment:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021

	(Amounts in thousands)				(Amounts in thousands)
Data and Analytics Services Segment
Time-and-material Contracts	$	6,524	$	6,021	$	19,568	$	17,792
Fixed-price Contracts		3,552		4,502		11,910		10,475

Subtotal Data and Analytics Services	$	10,076	$	10,523	$	31,478	$	28,267

IT Staffing Services Segment
Time-and-material Contracts	$	53,074	$	49,008	$	153,544	$	134,697
Fixed-price Contracts		—		—		—		—

Subtotal IT Staffing Services	$	53,074	$	49,008	$	153,544	$	134,697

Total Revenues	$	63,150	$	59,531	$	185,022	$	162,964

For the three months ended September 30, 2022, the Company had one client that exceeded 10% of total revenue (CGI = 23.7%). For the nine months ended September 30, 2022, the Company had one client that exceeded 10% of total revenue (CGI = 21.3%). For the three months ended September 30, 2021, the Company had two clients that exceeded 10% of total revenue (CGI = 14.6% and Accenture =10.4%). For the nine months ended September 30, 2021, the Company had one client that exceeded 10% of total revenue (CGI = 14.8%).

The Company’s top ten clients represented approximately 54% and 49% of total revenues for the three months ended September 30, 2022 and 2021, respectively. For the nine months ended September 30, 2022 and 2021, the Company’s top ten clients represented approximately 53% and 48%, respectively. The following table presents our revenue from external customers disaggregated by geography, based on the work location of our customers:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021

	(Amounts in thousands)				(Amounts in thousands)
United States	$	61,704	$	57,682	$	180,519	$	157,156
Canada		1,038		988		3,187		3,270
India and Other		408		861		1,316		2,538

Total revenues	$	63,150	$	59,531	$	185,022	$	162,964

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

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+ Details

Goodwill and Other Intangible Assets, net

9 Months Ended

Sep. 30, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets, net

3.	Goodwill and Other Intangible Assets, net

Goodwill related to our June 15, 2015 acquisition of Hudson Global Resources Management’s U.S. IT staffing business (“Hudson IT”) totaled $8.4 million. Goodwill related to our July 13, 2017 acquisition of the services division of InfoTrellis totaled $27.4 million. During 2018, the Company recorded a goodwill impairment related to the InfoTrellis acquisition of $9.7 million. Goodwill related to our October 1, 2020 acquisition of AmberLeaf totaled $6.4 million.

The Company is amortizing the identifiable intangible assets on a straight-line basis over estimated average lives ranging from 3 to 12 years. Identifiable intangible assets were comprised of the following as of September 30, 2022 and December 31, 2021:


	As of September 30, 2022
(Amounts in thousands)	Amortization Period (In Years)		Gross Carrying Value		Accumulative Amortization		Net Carrying Value
IT Staffing Services:
Client relationships		12	$	7,999	$	4,861	$	3,138
Covenant-not-to-compete		5		319		319		—
Trade name		3		249		249		—
Data and Analytics Services:
Client relationships		12		19,641		7,731		11,910
Covenant-not-to-compete		5		1,201		967		234
Trade name		5		1,711		1,467		244
Technology		7		1,979		1,120		859

Total Intangible Assets			$	33,099	$	16,714	$	16,385


	As of December 31, 2021
(Amounts in thousands)	Amortization Period (In Years)		Gross Carrying Value		Accumulative Amortization		Net Carrying Value
IT Staffing Services:
Client relationships		12	$	7,999	$	4,361	$	3,638
Covenant-not-to-compete		5		319		319		—
Trade name		3		249		249		—
Data and Analytics Services:
Client relationships		12		19,641		6,503		13,138
Covenant-not-to-compete		5		1,201		788		413
Trade name		5		1,711		1,211		500
Technology		7		1,979		908		1,071

Total Intangible Assets			$	33,099	$	14,339	$	18,760

Amortization expense for the three and nine month periods ended September 30, 2022 totaled $791,000 and $2.4 million, respectively and is included in selling, general and administrative expenses in the Consolidated Statement of Operations. For the three and nine month periods ended September 30, 2021, amortization expense was $792,000 and $2.4 million, respectively.

The estimated aggregate amortization expense for intangible assets for the years ending December 31, 2022 through 2026 is as follows:


	Years Ended December 31,
	2022		2023		2024		2025		2026

	(Amounts in thousands)
Amortization expense	$	2,987	$	2,772	$	2,693	$	2,553	$	2,413

Leases

9 Months Ended

Sep. 30, 2022

Leases [Abstract]

Leases

The Company rents certain office facilities and equipment under noncancelable operating leases. As of September 30, 2022, approximately 96,000 square feet of office space is utilized for our sales and recruiting offices, delivery centers, and corporate headquarters. All of our leases are classified as operating leases. The average initial lease term is five years. Several leases have an option to renew, at our sole discretion, for an additional term. Our present lease terms range from 1.3 years to 4.5 years with a weighted average of 3.5 years. Leases with an initial term of twelve months or less are not recorded on the balance sheet.

The following table summarizes the balance sheet classification of the lease assets and related lease liabilities:


	September 30, 2022		December 31, 2021

	(in thousands)
Assets:
Long-term operating lease right-of-use assets	$	4,263	$	4,894

Liabilities:
Short-term operating lease liability	$	1,500	$	1,479
Long-term operating lease liability		2,699		3,706

Total liabilities	$	4,199	$	5,185

Future minimum rental payments for office facilities and equipment under the Company’s noncancelable operating leases are as follows:


	Amount as of September 30, 2022
	(in thousands)
2022 (For remainder of year)	$	408
2023		1,633
2024		949
2025		682
2026		665
Thereafter		158

Total		4,495
Less: Imputed interest		(296	)

Present value of operating lease liabilities	$	4,199

The weighted average discount rate used to calculate the present value of future lease payments was 4.0%.

We recognize rent expense for these leases on a straight-line basis over the lease term. Rental expense for the three and nine months ended September 30, 2022 totaled $0.4 million and $1.3 million, respectively. Rental expense for the three and nine months ended September 30, 2021 totaled $0.4 million and $1.3 million, respectively.

Total cash paid for lease liabilities for the three and nine months ended September 30, 2022 totaled $0.4 million and $1.3 million, respectively. Total cash paid for lease liabilities for the three and nine months ended September 30, 2021 totaled $0.4 million and $1.1 million, respectively.

New leases entered into during the three and nine months ended September 30, 2022 totaled $0 million and $0.5 million, respectively. New leases entered into during the three and nine months ended September 30, 2021 totaled $0 million and $3.1 million, respectively. New leases are considered non cash transactions.

Payroll Tax Liability

9 Months Ended

Sep. 30, 2022

Payroll Tax Liability [Abstract]

Payroll Tax Liability

5.	Payroll Tax Liability

As allowed under the Coronavirus Aid, Relief and Economic Security (CARES) Act, the Company elected to defer payment of the employer’s share of social security tax. As of September 30, 2022, and December 31, 2021, the balance of this liability is $2.3 million and $2.3 million, respectively. The Company is required to repay the $2.3 million by December 31, 2022, which is reflected as part of current liabilities under the caption accrued payroll and related costs.

Commitments and Contingencies

9 Months Ended

Sep. 30, 2022

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

6.	Commitments and Contingencies

In the ordinary course of our business, the Company is involved in several lawsuits. While uncertainties are inherent in the final outcome of these matters, the Company’s management believes, after consultation with legal counsel, that the disposition of these proceedings should not have a material adverse effect on our financial position, results of operations or cash flows.

Employee Benefit Plan

9 Months Ended

Sep. 30, 2022

Retirement Benefits [Abstract]

Employee Benefit Plan

7.	Employee Benefit Plan

The Company provides an Employee Retirement Savings Plan (the “Retirement Plan”) under Section 401(k) of the Internal Revenue Code of 1986, as amended (the “Code”), that covers substantially all U.S. based salaried and

W-2

hourly employees. Employees may contribute a percentage of eligible compensation to the Retirement Plan, subject to certain limits under the Code. The Company did

not

provide for any matching contributions for the three and nine month periods ended September 30, 2022 and 2021.

- Definition

The entire disclosure for retirement benefits.

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+ Details

Stock-Based Compensation

9 Months Ended

Sep. 30, 2022

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation

8.	Stock-Based Compensation

In 2008, the Company adopted a Stock Incentive Plan (the “Plan”) which, as amended, provides that up to 4,900,000 shares of the Company’s Common Stock shall be allocated for issuance to directors, officers and key personnel. Grants under the Plan can be made in the form of stock options, stock appreciation rights, performance shares or stock awards. During the three months ended September 30, 2022, the Company granted no restricted share units and 250,000 stock options under the Plan. During the three months ended September 30, 2021, the Company granted no shares under the Plan.

During the nine months ended September 30, 2022, the Company granted restricted share units of 13,979 and 650,000

stock options at a weighted average strike price of

$17.00. During the nine months ended September 30, 2021, the Company granted restricted share units of 11,955 and 270,000
stock option grants at

a weighted

average strike price of $17.65. As of September 30, 2022 and December 31, 2021, there were 159,842 shares and 538,000 shares, respectively, available for grants under the Plan.

Stock-based compensation expense for the three months ended September 30, 2022 and 2021 was $776,000 and $693,000, respectively, and for the nine months ended September 30, 2022 and 2021 was $2.1 million and $2.1 million. Stock-based compensation expense is included in selling, general and administrative expenses in the Condensed Consolidated Statements of Operations.

During the three and nine months ended September 30, 2022, the Company issued 0 and 133,932 shares, respectively, related to the grant of restricted share units and the exercise of stock options. During the three and nine months ended September 30, 2021, the Company issued 0 and 30,239 shares, respectively, related to the vesting of restricted shares and the exercising of stock options.

In October 2018, the Board of Directors of the Company approved the Mastech Digital, Inc. 2019 Employee Stock Purchase Plan (the “Employee Stock Purchase Plan”). The Employee Stock Purchase Plan is intended to meet the requirements of Section 423 of the Code and was approved by the Company’s shareholders to be qualified. On May 15, 2019, the Company’s shareholders approved the Employee Stock Purchase Plan. Under the Employee Stock Purchase Plan, 600,000 shares of Common Stock (subject to adjustment upon certain changes in the Company’s capitalization) are available for purchase by eligible employees who become participants in the Employee Stock Purchase Plan. The purchase price per share is 85% of the lesser of (i) the fair market value per share of Common Stock on the first day of the offering period, or (ii) the fair market value per share of Common Stock on the last day of the offering period.

The Company’s eligible full-time employees are able to contribute up to 15% of their base compensation into the Employee Stock Purchase Plan, subject to an annual limit of $25,000 per person. Employees are able to purchase Company Common Stock at a 15% discount to the lower of the fair market value of the Company’s Common Stock on the initial or final trading dates of each

six-month

offering period. Offering periods begin on January 1 and July 1 of each year. The Company uses the Black-Scholes option pricing model to determine the fair value of Employee Stock Purchase Plan share-based payments. The fair value of the

six-month

“look-back” option in the Company’s Employee Stock Purchase Plan is estimated by adding the fair value of 15% of one share of stock to 85% of the fair value of an option on one share of stock. The Company utilized U.S. Treasury yields as of the grant date for its risk-free interest rate assumption, matching the Treasury yield terms to the

six-month

offering period. The Company utilized historical company data to develop its dividend yield and expected volatility assumptions.

During the three months ended September 30, 2022 and 2021, there were no shares issued under the Stock Purchase Plan. During the nine months ended September 30, 2022 and 2021, there were 15,765 shares and 14,301 shares issued under the Stock Purchase Plan at a share price of $12.63 and $12.71, respectively. Stock-based compensation expense related to the Stock Purchase Plan for the three months ended September 30, 2022 and 2021 totaled $11,000 and $25,000, respectively. Stock-based compensation expense related to the Stock Purchase Plan for the nine months ended September 30, 2022 and 2021 totaled $81,000 and $106,000, respectively and is included in selling, general and administrative expenses in the Condensed Consolidated Statements of Operations for the nine months ended September 30, 2022 and 2021. At September 30, 2022, there were 500,589 shares available for purchases under the Employee Stock Purchase Plan.

Credit Facility

9 Months Ended

Sep. 30, 2022

Text Block [Abstract]

Credit Facility

9.	Credit Facility

On July 13, 2017, the Company entered into a Credit Agreement (the “Credit Agreement”) with PNC Bank, as administrative agent, swing loan lender and issuing lender, PNC Capital Markets LLC, as sole lead arranger and sole book-runner, and certain financial institution parties thereto as lenders (the “Lenders”). The Credit Agreement, as amended, provides for a total aggregate commitment of $53.1 million, consisting of (i) a revolving credit facility (the “Revolver”) in an aggregate principal amount not to exceed $40 million and; (ii) a $13.1 million term loan facility (the “Term Loan), as more fully described in Exhibit 10.1 to the Company’s Form

8-Ks

filed with the SEC on July 19, 2017, April 25, 2018 and October 7, 2020, and Exhibit 10.2 to the Form

8-K/A

filed with the SEC on January 4, 2022. Additionally, the facility includes an accordion feature for additional borrowing of up to $20 million upon satisfaction of certain conditions.

The Revolver expires in December 2026 and includes swing loan and letter of credit

sub-limits

in the aggregate amount not to exceed $6.0 million for swing loans and $5.0 million for letters of credit. Borrowings under the Revolver may be denominated in U.S. dollars or Canadian dollars. The maximum borrowings in U.S. dollars may not exceed the sum of 85% of eligible U.S. accounts receivable and 60% of eligible U.S. unbilled receivables, less a reserve amount established by the administrative agent. The maximum borrowings in Canadian dollars may not exceed the lesser of (i) $10.0 million; and (ii) the sum of 85% of eligible Canadian receivables, plus 60% of eligible Canadian unbilled receivables, less a reserve amount established by the administrative agent.

Amounts borrowed under the Term Loan are required to be repaid in consecutive quarterly installments through and including the maturity date of October 1, 2024. The principal amount of each quarterly installment payable on the Term Loan equals $1.1 million through and including the maturity date, with the maturity date payment equal to the outstanding amount of the loan on that date.

Borrowings under the revolver and the term loan, at the Company’s election, bear interest at either (a) the higher of PNC’s prime rate or the federal funds rate plus 0.50%, plus an applicable margin determined based upon the Company’s senior leverage ratio or (b) the Bloomberg Short-Term Bank Yield Index (“BSBY”), plus an applicable margin determined based upon the Company’s senior leverage ratio. The applicable margin on the base rate is between 0.50% and 1.25% on revolver borrowings and between 1.75% and 2.50% on term loans. The applicable margin on the BSBY is between 1.50% and 2.25% on revolver borrowings and between 2.75% and 3.50% on term loans. A 20 to

30-basis

point per annum commitment fee on the unused portion of the revolver facility is charged and due monthly in arrears. The applicable commitment fee is determined based upon the Company’s senior leverage ratio.

The Company pledged substantially all of its assets in support of the Credit Agreement. The Credit Agreement contains standard financial covenants, including, but not limited to, covenants related to the Company’s senior leverage ratio and fixed charge ratio (as defined under the Credit Agreement) and limitations on liens, indebtedness, guarantees, contingent liabilities, loans and investments, distributions, leases, asset sales, stock repurchases and mergers and acquisitions. As of September 30, 2022, the Company was in compliance with all provisions under the facility.

In connection with securing the commitments under the Credit Agreement and the April 20, 2018, October 1, 2020, and December 29, 2021 amendments to the Credit Agreement, the Company paid a commitment fee and incurred deferred financing costs totaling $975,000, which were capitalized and are being amortized as interest expense over the life of the facility. Deferred financing costs of $311,000 (net of amortization) as of September 30, 2022 are presented as a long-term asset in the Company’s Consolidated Balance Sheet. Deferred financing costs of $366,000 (net of amortization) as of December 31, 202

are presented as reductions in long-term debt in the Company’s Consolidated Balance Sheet.

The Company had no outstanding borrowings under the Revolver at September 30, 2022 and December 31, 2021; and unused borrowing capacity available was approximately $36.4 million and $32.4 million, respectively. The Company’s outstanding borrowings under the term loan were $2.2 million and $13.1 million as of September 30, 2022 and December 31, 2021, respectively. Additionally, under the Term Loan agreement there is a mandatory repayment requirement related to excess cash flows (as defined in the Credit Agreement) generated in a given fiscal year. This provision takes effect in first quarter of 2023 should the Company senior leverage ratio exceeds 1.50x. In August 2022, the Company

prepaid

$7.6 million of the outstanding term loan with excess cash balances.

Income Taxes

9 Months Ended

Sep. 30, 2022

Income Tax Disclosure [Abstract]

Income Taxes

10.	Income Taxes

The components of income before income taxes, as shown in the accompanying Financial Statements, consisted of the following for the three and nine months ended September 30, 2022 and 2021:


	Three Months Ended September 30,					Nine Months Ended September 30,
	2022			2021		2022			2021

	(Amounts in thousands)					(Amounts in thousands)
Income before income taxes:
Domestic	$	3,950		$	4,644	$	11,123		$	12,091
Foreign		(593	)		96		(903	)		(547	)

Income before income taxes	$	3,357		$	4,740	$	10,220		$	11,544

The Company has subsidiaries organized in jurisdictions outside the United States, which generate revenues from

non-U.S.-based

clients. Additionally, these subsidiaries provide services to the Company’s U.S. parents. Accordingly, the Company allocates a portion of its income to these subsidiaries based on a “transfer pricing” model and reports such income as foreign in the above table.

The provision for income taxes, as shown in the accompanying Financial Statements, consisted of the following for the three and nine months ended September 30, 2022 and 2021:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021

	(Amounts in thousands)						(Amounts in thousands)


Current provision:
Federal	$	806		$	550		$	1,836		$	1,809
State		187			133			446			437
Foreign		(55	)		195			(4	)		179

Total current provision	$	938		$	878		$	2,278		$	2,425

Deferred provision (benefit):
Federal		12			372			496			659
State		(7	)		105			118			173
Foreign		(60	)		(41	)		(118	)		(140	)

Total deferred provision (benefit)		(55	)		436			496			692

Change in valuation allowance		68			20			272			89

Total provision for income taxes	$	951		$	1,334		$	3,046		$	3,206

The reconciliation of income taxes computed using the statutory U.S. income tax rate and the provision for income taxes for the three and nine months ended September 30, 2022 and 2021 were as follows (amounts in thousands):


	Three Months Ended September 30, 2022					Three Months Ended September 30, 2021


Income taxes computed at the federal statutory rate	$	705		21.0	%	$	995	21.0	%
State income taxes, net of federal tax benefit		168		5.0			238	5.0
Excess tax benefit from stock options/restricted shares		19		0.6			—	—
Difference in income tax rate on foreign earnings		(9	)	(0.3	)		81	1.7
Change in valuation allowance		68		2.0			20	0.4

	$	951		28.3	%	$	1,334	28.1	%


	Nine Months Ended September 30, 2022				Nine Months Ended September 30, 2021
Income taxes computed at the federal statutory rate	$	2,146	21.0	%	$	2,424		21.0	%
State income taxes, net of federal tax benefit		554	5.4			619		5.4
Excess tax benefit from stock options/restricted shares		10	0.1			(48	)	(0.4	)
Difference in income tax rate on foreign earnings		64	0.6			122		1.1
Change in valuation allowance		272	2.7			89		0.7

	$	3,046	29.8	%	$	3,206		27.8	%

We evaluate deferred income taxes quarterly to determine if valuation allowances are required or should be adjusted. GAAP accounting guidance requires us to assess whether valuation allowances should be established against deferred tax assets based on all available evidence, both positive and negative using a “more likely than not” standard. Our assessment considers, among other things, the nature of cumulative losses; forecast of future profitability; the duration of statutory carry-forward periods and tax planning alternatives. At September 30, 2022, our valuation allowance was comprised of balances within locations of Singapore, the United Kingdom and Ireland. The valuation allowance balances at these locations totaled $583,000 and $311,000 as of September 30, 2022 and December 31, 2021, respectively, and reflect net operating losses which may not be realizable in the future. In the third quarter of 2022, the Company decided to close the Singapore and Ireland operations.

The Company’s Canadian subsidiary is currently under audit by Revenue Canada for the years 2018 and 2019.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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+ Details

Derivative Instruments and Hedging Activities

9 Months Ended

Sep. 30, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments and Hedging Activities

11.	Derivative Instruments and Hedging Activities

Interest Rate Risk Management

Concurrent with the Company’s July 13, 2017 borrowings under its credit facility, the Company entered into a 44–month interest-rate

swap

to convert the debt’s variable interest rate to a fixed rate of interest. The swap contracts, which matured on April 1, 2021, were designated as cash flow hedging instruments and qualified as effective hedges at inception under ASC Topic 815, “Derivatives and Hedging”. These contracts were recognized on the balance sheet at fair value. The effective portion of the changes in fair value on these instruments was recorded in other comprehensive income (loss) and was reclassified into the Consolidated Statements of Operations as interest expense in the same period in which the underlying hedge transaction affected earnings. Because the interest-rate swap contracts matured, they had no value as of September 30, 2022, and December 31, 2021, therefore there is no balance reflected in the Consolidated Balance Sheets for these periods.

There was no impact on the Consolidated Statements of Operations and Comprehensive Income (“OCI”) for the three and nine months ended September 30, 2022. The effect of derivative instruments on the Consolidated Statements of Operations and OCI for the three and nine months ended September 30, 2021 are as follows (in thousands):


Derivatives in ASC Topic 815 Cash Flow Hedging Relationships	Amount of Gain recognized in OCI on Derivatives	Location of Gain reclassified from Accumulated OCI to Income	Amount of Gain reclassified from Accumulated OCI to Income	Location of Gain reclassified in Income on Derivatives	Amount of Gain recognized in Income on Derivatives

	(Effective Portion)	(Effective Portion)	(Effective Portion)	(Ineffective Portion/Amounts excluded from effectiveness testing)
For the Three Months Ended September 30, 2021:
Interest-Rate Swap Contract	$ —	Interest Expense	$ —	Interest Expense	$ —
For the Nine Months Ended September 30, 2021:
Interest-Rate Swap Contract	$ 35	Interest Expense	$ 34	Interest Expense	$ —

Fair Value Measurements

9 Months Ended

Sep. 30, 2022

Fair Value Disclosures [Abstract]

Fair Value Measurements

12.	Fair Value Measurements

The Company has adopted the provisions of ASC 820, “Fair Value Measurements and Disclosures” (“ASC 820”), related to certain financial and nonfinancial assets and liabilities. ASC 820 establishes the authoritative definition of fair value; sets out a framework for measuring fair value; and expands the required disclosures about fair value measurements. The valuation techniques required by ASC 820 are based on observable and unobservable inputs using the following three-tier hierarchy:

•

Level 1—Inputs are observable quoted prices (unadjusted) in active markets for identical assets and liabilities.

•

Level 2—Inputs are observable, other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are directly or indirectly observable in the marketplace.

•

Level 3—Inputs are unobservable that are supported by little or no market activity.

In prior periods, the company carried interest-rate swap contracts and contingent consideration liabilities at fair value measured on a recurring basis. At September 30, 2022 and December 31, 2021, the Company did not have any balances in the financial statements related to these items as the swap matured on April 1, 2021 and the contingent consideration was revalued to zero as of

December 31, 2021.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Shareholders' Equity

9 Months Ended

Sep. 30, 2022

Equity [Abstract]

Shareholders' Equity

13.	Shareholders’ Equity

The Company

purchases shares to satisfy employee tax obligations related to its Stock Incentive Plan. The Company did

t purchase any shares during the nine months ended September

2022

and

2021

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-URI https://asc.fasb.org/topic&trid=2208762

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+ Details

Earnings Per Share

9 Months Ended

Sep. 30, 2022

Earnings Per Share [Abstract]

Earnings Per Share

14.	Earnings Per Share

The computation of basic earnings per share is based on the Company’s net income divided by the weighted average number of common shares outstanding. Diluted earnings per share reflect the potential dilution that could occur if outstanding stock options were exercised. The dilutive effect of stock options was calculated using the treasury stock

method.

For the three and nine months ended September 30, 2022, there were

644,000

and

549,000

anti-dilutive stock options excluded from the computation of diluted earnings per share. For the three months and nine months ended September 30, 2021, there were

270,000

anti-dilutive stock options excluded from the computation of diluted earnings

per share.

Business Segments and Geographic Information

9 Months Ended

Sep. 30, 2022

Segment Reporting [Abstract]

Business Segments and Geographic Information

15.	Business Segments and Geographic Information

Our reporting

segments are:

Data and Analytics Services; and

IT Staffing Services.

The Data and Analytics Services segment was acquired through the July 13, 2017 acquisition of the services division of Canada-based InfoTrellis, Inc. This segment is a project-based consulting services business with specialized capabilities in data management and analytics. The business is marketed as Mastech InfoTrellis and utilizes a dedicated sales team with deep subject matter expertise. Mastech InfoTrellis has offices in Atlanta, Toronto and London, and a global delivery center in Chennai, India. Project-based delivery reflects a combination of

on-site

resources and offshore resources. Assignments are secured on both a time and material and fixed price basis. In October 2020, we acquired AmberLeaf, a Chicago-based customer experience consulting firm. This acquisition expanded our capabilities in customer experience strategy and managed services offering for a variety of Cloud-based enterprise application across sales, marketing and customer service organizations.

The IT Staffing Services segment offers staffing services in digital and mainstream technologies and uses digital methods to enhance organizational learning. These services are marketed using a common sales force and delivered via our domestic and global recruitment centers. While the vast majority of our assignments are based on time and materials, we do have the capabilities to deliver our digital transformation services on a fixed price basis.


	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021

	(Amounts in thousands)						(Amounts in thousands)
Revenues:
Data and analytics services	$	10,076		$	10,523		$	31,478		$	28,267
IT staffing services		53,074			49,008			153,544			134,697

Total revenues	$	63,150		$	59,531		$	185,022		$	162,964

Gross Margin %:
Data and analytics services		39.6	%		51.6	%		42.8	%		48.2	%
IT staffing services		23.2	%		22.8	%		23.1	%		22.4	%

Total gross margin %		25.8	%		27.9	%		26.5	%		26.8	%

Segment operating income:
Data and analytics services	$	826		$	1,851		$	2,615		$	3,014
IT staffing services		3,892			3,916			10,542			9,537

Subtotal		4,718			5,767			13,157			12,551
Amortization of acquired intangible assets		(791	)		(792	)		(2,375	)		(2,378	)
Revaluation of contingent consideration liability		—			—			—			1,982
Reserve for cyber-security bre a ch		(450	)		—			(450	)		—
Severance expense		(120	)		—			(120	)		—
Interest expenses and other, net		—			(235	)		8			(611	)

Income before income taxes	$	3,357		$	4,740		$	10,220		$	11,544

Below is a reconciliation of segment total assets to consolidated total assets:


	September 30, 2022		December 31, 2021

	(Amounts in thousands)
Total assets:
Data and Analytics Services	$	56,644	$	56,634
IT Staffing Services		58,132		57,068

Total assets	$	114,776	$	113,702

Below is geographic information related to our revenues from external customers:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021

	(Amounts in thousands)				(Amounts in thousands)
United States	$	61,704	$	57,682	$	180,519	$	157,156
Canada		1,038		988		3,187		3,270
India and Other		408		861		1,316		2,538

Total revenues	$	63,150	$	59,531	$	185,022	$	162,964

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

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+ Details

Recently Issued Accounting Standards

9 Months Ended

Sep. 30, 2022

Accounting Changes and Error Corrections [Abstract]

Recently Issued Accounting Standards

16.	Recently Issued Accounting Standards

Recently Adopted Accounting Pronouncements

In November 2021, the FASB issued ASU

2021-10,

“Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance”. The amendments in this ASU require annual disclosures to increase the transparency of government assistance received by a business entity including information about the nature of the government transactions, related accounting policy, the line items on the balance sheet and income statement that are affected, amounts applicable to each financial statement line item, and significant terms and conditions of the transactions, including commitments and contingencies. The amendments in this ASU are effective for annual periods beginning after December 15, 2021. We adopted this ASU on January 1, 2022, with no material impact on our financial statements.

Recent Accounting Pronouncements not yet adopted

In October 2021, the FASB issued ASU

2021-08,

“Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers”. The amendments in this ASU require that an entity (acquirer) recognize, and measure contract assets and contract liabilities acquired in a business combination, including contract assets and contract liabilities arising from revenue contracts with customers, as if it had originated the contracts as of the acquisition date. The amendments in this ASU are effective for annual and interim periods beginning after December 15, 2022. Early adoption is permitted. The Company does not expect this ASU to have a material impact on its financial statements.

A variety of proposed or otherwise potential accounting standards are currently under consideration by standard-setting organizations and certain regulatory agencies. Because of the tentative and preliminary nature of such proposed standards, management has not yet determined the effect, if any that the implementation of such proposed standards would have on the Company’s consolidated financial statements.

- Definition

The entire disclosure for change in accounting principle. Includes, but is not limited to, nature, reason, and method of adopting amendment to accounting standards or other change in accounting principle.

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+ Details

Subsequent Event

9 Months Ended

Sep. 30, 2022

Subsequent Events [Abstract]

Subsequent Event

17.	Subsequent Event

On and effective November 1, 2022, Ganeshan Venkateshwaran resigned as the Chief Executive Officer of the Data and Analytics Services segment. Concurrent with this resignation, Mr. Venkateshwaran and the Company entered into an Amendment, (the “Amendment”), to Mr. Venkateshwaran’s Executive Employment Agreement dated as of March 28, 2022 (the “Employment Agreement”). Under the terms of the Amendment, Mr. Venkateshwaran will be entitled to receive a severance payment equal to $700,000, with $550,000 paid out over a twelve (12) month period and the remaining $150,000 paid out in a lump sum, in each case in accordance with the Company’s normal payroll practices. Additionally, under the terms of the Amendment, Mr. Venkateshwaran’s unvested stock options ceased vesting on November 1, 2022.

Description of Business and Basis of Presentation (Policies)	9 Months Ended
	Sep. 30, 2022
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation References in this Quarterly Report on Form 10-Q to “we”, “our”, “Mastech Digital”, “Mastech” or “the Company” refer collectively to Mastech Digital, Inc. and its wholly-owned operating subsidiaries, which are included in these Condensed Consolidated Financial Statements (the “Financial Statements”).
Description of Business	Description of Business We are a provider of Digital Transformation IT Services to mostly large and medium-sized organizations. Our portfolio of offerings includes data management and analytics services; digital learning services; and IT staffing services. In our 2017 acquisition of the services division of Canada-based InfoTrellis, Inc., we added specialized capabilities in delivering data and analytics services to our customers, which became our Data and Analytics Services segment. This segment offers project-based consulting services in the areas of data management, data engineering and data science, with such services delivered using on-site and offshore resources. In October 2020, we acquired AmberLeaf Partners, Inc. (“AmberLeaf”), a Chicago-based customer experience consulting firm. This acquisition expanded our Data and Analytics Services segment’s capabilities in customer experience strategy and managed services offering for a variety of Cloud-based enterprise applications across sales, marketing and customer services organizations. Our IT Staffing Services segment combines technical expertise with business process experience to deliver a broad range of staffing services in digital and mainstream technologies. Our digital technologies include data management, analytics, cloud, mobility, social and artificial intelligence. We work with businesses and institutions with significant IT spending and recurring staffing service needs. We also support smaller organizations with their “project focused” temporary IT staffing requirements. The COVID-19 pandemic had a material impact on activity levels in both of our business segments in 2020. This impact was reduced in 2021 as a result of the global roll-out of vaccination programs and signs of improving economic conditions. COVID-19 related concerns have been less impactful on our business in 2022. Still the proliferation of COVID-19 variants have caused some uncertainty and could continue to disrupt global markets during the fourth quarter of 2022 and into 2023.
Accounting Principles	Accounting Principles The accompanying Financial Statements have been prepared by management in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and applicable rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all of the information and disclosures required by U.S. GAAP for complete consolidated financial statements. In the opinion of management, all adjustments, consisting principally of normal recurring adjustments, considered necessary for a fair presentation have been included. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the Financial Statements and the accompanying notes. Actual results could differ from these estimates. These Financial Statements should be read in conjunction with the Company’s audited consolidated financial statements and accompanying notes for the year ended December 31, 2021, included in our Annual Report on Form 10-K filed with the SEC on March 14, 2022. Additionally, our operating results for the three and nine months ended September 30, 2022 are not necessarily indicative of the results that can be expected for the year ending December 31, 2022 or for any other period.
Principles of Consolidation	Principles of Consolidation The Financial Statements include the accounts of the Company and its wholly-owned subsidiaries. All material intercompany transactions and balances have been eliminated in consolidation.
Critical Accounting Policies	Critical Accounting Policies Please refer to Note 1 “Summary of Significant Accounting Policies” of the Consolidated Financial Statements and “Management’s Discussion and Analysis of Financial Condition and Results of Operations–Critical Accounting Policies and Estimates” in our Annual Report on Form 10-K for the year ended December 31, 2021 for a more detailed discussion of our significant accounting policies and critical accounting estimates. There were no material changes to these critical accounting policies during the nine months ended September 30, 2022.
Segment Reporting	Segment Reporting The Company has two reportable segments, in accordance with Accounting Standards Committee (“ASC”) Topic 280 “Disclosures About Segments of an Enterprise and Related Information”: Data and Analytics Services and IT Staffing Services.

Revenue from Contracts with Customers (Tables)

9 Months Ended

Sep. 30, 2022

Summary of Disaggregation of Our Revenues by Contract Type and Operating Segment

The following table depicts the disaggregation of our revenues by contract type and operating segment:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021

	(Amounts in thousands)				(Amounts in thousands)
Data and Analytics Services Segment
Time-and-material Contracts	$	6,524	$	6,021	$	19,568	$	17,792
Fixed-price Contracts		3,552		4,502		11,910		10,475

Subtotal Data and Analytics Services	$	10,076	$	10,523	$	31,478	$	28,267

IT Staffing Services Segment
Time-and-material Contracts	$	53,074	$	49,008	$	153,544	$	134,697
Fixed-price Contracts		—		—		—		—

Subtotal IT Staffing Services	$	53,074	$	49,008	$	153,544	$	134,697

Total Revenues	$	63,150	$	59,531	$	185,022	$	162,964

Summary of Revenue from External Customers

he following table presents our revenue from external customers disaggregated by geography, based on the work location of our customers:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021

	(Amounts in thousands)				(Amounts in thousands)
United States	$	61,704	$	57,682	$	180,519	$	157,156
Canada		1,038		988		3,187		3,270
India and Other		408		861		1,316		2,538

Total revenues	$	63,150	$	59,531	$	185,022	$	162,964

Goodwill and Other Intangible Assets, net (Tables)

9 Months Ended

Sep. 30, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Components of Identifiable Intangible assets


	As of September 30, 2022
(Amounts in thousands)	Amortization Period (In Years)		Gross Carrying Value		Accumulative Amortization		Net Carrying Value
IT Staffing Services:
Client relationships		12	$	7,999	$	4,861	$	3,138
Covenant-not-to-compete		5		319		319		—
Trade name		3		249		249		—
Data and Analytics Services:
Client relationships		12		19,641		7,731		11,910
Covenant-not-to-compete		5		1,201		967		234
Trade name		5		1,711		1,467		244
Technology		7		1,979		1,120		859

Total Intangible Assets			$	33,099	$	16,714	$	16,385


	As of December 31, 2021
(Amounts in thousands)	Amortization Period (In Years)		Gross Carrying Value		Accumulative Amortization		Net Carrying Value
IT Staffing Services:
Client relationships		12	$	7,999	$	4,361	$	3,638
Covenant-not-to-compete		5		319		319		—
Trade name		3		249		249		—
Data and Analytics Services:
Client relationships		12		19,641		6,503		13,138
Covenant-not-to-compete		5		1,201		788		413
Trade name		5		1,711		1,211		500
Technology		7		1,979		908		1,071

Total Intangible Assets			$	33,099	$	14,339	$	18,760

Schedule of Estimated Amortization Expense

The estimated aggregate amortization expense for intangible assets for the years ending December 31, 2022 through 2026 is as follows:


	Years Ended December 31,
	2022		2023		2024		2025		2026

	(Amounts in thousands)
Amortization expense	$	2,987	$	2,772	$	2,693	$	2,553	$	2,413

Leases (Tables)

9 Months Ended

Sep. 30, 2022

Leases [Abstract]

Summary of Balance Sheet classification of lease assets and related lease liabilities

The following table summarizes the balance sheet classification of the lease assets and related lease liabilities:


	September 30, 2022		December 31, 2021

	(in thousands)
Assets:
Long-term operating lease right-of-use assets	$	4,263	$	4,894

Liabilities:
Short-term operating lease liability	$	1,500	$	1,479
Long-term operating lease liability		2,699		3,706

Total liabilities	$	4,199	$	5,185

Schedule of Minimum Future Rental Payments

Future minimum rental payments for office facilities and equipment under the Company’s noncancelable operating leases are as follows:


	Amount as of September 30, 2022
	(in thousands)
2022 (For remainder of year)	$	408
2023		1,633
2024		949
2025		682
2026		665
Thereafter		158

Total		4,495
Less: Imputed interest		(296	)

Present value of operating lease liabilities	$	4,199

Income Taxes (Tables)

9 Months Ended

Sep. 30, 2022

Income Tax Disclosure [Abstract]

Components of Income Before Income Taxes

The components of income before income taxes, as shown in the accompanying Financial Statements, consisted of the following for the three and nine months ended September 30, 2022 and 2021:


	Three Months Ended September 30,					Nine Months Ended September 30,
	2022			2021		2022			2021

	(Amounts in thousands)					(Amounts in thousands)
Income before income taxes:
Domestic	$	3,950		$	4,644	$	11,123		$	12,091
Foreign		(593	)		96		(903	)		(547	)

Income before income taxes	$	3,357		$	4,740	$	10,220		$	11,544

Provision for Income Taxes

The provision for income taxes, as shown in the accompanying Financial Statements, consisted of the following for the three and nine months ended September 30, 2022 and 2021:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021

	(Amounts in thousands)						(Amounts in thousands)


Current provision:
Federal	$	806		$	550		$	1,836		$	1,809
State		187			133			446			437
Foreign		(55	)		195			(4	)		179

Total current provision	$	938		$	878		$	2,278		$	2,425

Deferred provision (benefit):
Federal		12			372			496			659
State		(7	)		105			118			173
Foreign		(60	)		(41	)		(118	)		(140	)

Total deferred provision (benefit)		(55	)		436			496			692

Change in valuation allowance		68			20			272			89

Total provision for income taxes	$	951		$	1,334		$	3,046		$	3,206

Reconciliation of Income Taxes


	Three Months Ended September 30, 2022					Three Months Ended September 30, 2021


Income taxes computed at the federal statutory rate	$	705		21.0	%	$	995	21.0	%
State income taxes, net of federal tax benefit		168		5.0			238	5.0
Excess tax benefit from stock options/restricted shares		19		0.6			—	—
Difference in income tax rate on foreign earnings		(9	)	(0.3	)		81	1.7
Change in valuation allowance		68		2.0			20	0.4

	$	951		28.3	%	$	1,334	28.1	%


	Nine Months Ended September 30, 2022				Nine Months Ended September 30, 2021
Income taxes computed at the federal statutory rate	$	2,146	21.0	%	$	2,424		21.0	%
State income taxes, net of federal tax benefit		554	5.4			619		5.4
Excess tax benefit from stock options/restricted shares		10	0.1			(48	)	(0.4	)
Difference in income tax rate on foreign earnings		64	0.6			122		1.1
Change in valuation allowance		272	2.7			89		0.7

	$	3,046	29.8	%	$	3,206		27.8	%

Derivative Instruments and Hedging Activities (Tables)

9 Months Ended

Sep. 30, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Effect of Derivative Instruments on Consolidated Statements of Operations and Comprehensive Income


Derivatives in ASC Topic 815 Cash Flow Hedging Relationships	Amount of Gain recognized in OCI on Derivatives	Location of Gain reclassified from Accumulated OCI to Income	Amount of Gain reclassified from Accumulated OCI to Income	Location of Gain reclassified in Income on Derivatives	Amount of Gain recognized in Income on Derivatives

	(Effective Portion)	(Effective Portion)	(Effective Portion)	(Ineffective Portion/Amounts excluded from effectiveness testing)
For the Three Months Ended September 30, 2021:
Interest-Rate Swap Contract	$ —	Interest Expense	$ —	Interest Expense	$ —
For the Nine Months Ended September 30, 2021:
Interest-Rate Swap Contract	$ 35	Interest Expense	$ 34	Interest Expense	$ —

Business Segments and Geographic Information (Tables)

9 Months Ended

Sep. 30, 2022

Segment Reporting [Abstract]

Summary of Operating Segments


	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021

	(Amounts in thousands)						(Amounts in thousands)
Revenues:
Data and analytics services	$	10,076		$	10,523		$	31,478		$	28,267
IT staffing services		53,074			49,008			153,544			134,697

Total revenues	$	63,150		$	59,531		$	185,022		$	162,964

Gross Margin %:
Data and analytics services		39.6	%		51.6	%		42.8	%		48.2	%
IT staffing services		23.2	%		22.8	%		23.1	%		22.4	%

Total gross margin %		25.8	%		27.9	%		26.5	%		26.8	%

Segment operating income:
Data and analytics services	$	826		$	1,851		$	2,615		$	3,014
IT staffing services		3,892			3,916			10,542			9,537

Subtotal		4,718			5,767			13,157			12,551
Amortization of acquired intangible assets		(791	)		(792	)		(2,375	)		(2,378	)
Revaluation of contingent consideration liability		—			—			—			1,982
Reserve for cyber-security bre a ch		(450	)		—			(450	)		—
Severance expense		(120	)		—			(120	)		—
Interest expenses and other, net		—			(235	)		8			(611	)

Income before income taxes	$	3,357		$	4,740		$	10,220		$	11,544

Summary of Assets, Depreciation and Amortization and Capital Expenditures by Segment

Below is a reconciliation of segment total assets to consolidated total assets:


	September 30, 2022		December 31, 2021

	(Amounts in thousands)
Total assets:
Data and Analytics Services	$	56,644	$	56,634
IT Staffing Services		58,132		57,068

Total assets	$	114,776	$	113,702

Summary of Revenue from External Customers and Long-lived Assets

Below is geographic information related to our revenues from external customers:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021

	(Amounts in thousands)				(Amounts in thousands)
United States	$	61,704	$	57,682	$	180,519	$	157,156
Canada		1,038		988		3,187		3,270
India and Other		408		861		1,316		2,538

Total revenues	$	63,150	$	59,531	$	185,022	$	162,964

Revenue from Contracts with Customers - Additional Information (Detail) - Agreement	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Disaggregation of Revenue [Line Items]
Percentage of billing expense revenues			2.00%
Sales Revenue Net [Member] \| Revenue from Rights Concentration Risk [Member] \| CGI [Member]
Disaggregation of Revenue [Line Items]
Percentage of total revenues	23.70%	14.60%	21.30%	14.80%
Number of customers	1	2	1	1
Top Ten Customers [Member]
Disaggregation of Revenue [Line Items]
Revenue percentage of total revenue	54.00%	49.00%	53.00%	48.00%
Data and Analytics Services [Member]
Disaggregation of Revenue [Line Items]
Percent of revenue from services			100.00%

Revenue from Contracts with Customers - Summary of Disaggregation of Our Revenues by Contract Type and Operating Segment (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Disaggregation of Revenue [Line Items]
Revenues by contract type and operating segment	$ 63,150	$ 59,531	$ 185,022	$ 162,964
Data and Analytics Services [Member]
Disaggregation of Revenue [Line Items]
Revenues by contract type and operating segment	10,076	10,523	31,478	28,267
Data and Analytics Services [Member] \| Time-and-Material Contract [Member]
Disaggregation of Revenue [Line Items]
Revenues by contract type and operating segment	6,524	6,021	19,568	17,792
Data and Analytics Services [Member] \| Fixed-Price Contract [Member]
Disaggregation of Revenue [Line Items]
Revenues by contract type and operating segment	3,552	4,502	11,910	10,475
IT Staffing Services [Member]
Disaggregation of Revenue [Line Items]
Revenues by contract type and operating segment	53,074	49,008	153,544	134,697
IT Staffing Services [Member] \| Time-and-Material Contract [Member]
Disaggregation of Revenue [Line Items]
Revenues by contract type and operating segment	53,074	49,008	153,544	134,697
IT Staffing Services [Member] \| Fixed-Price Contract [Member]
Disaggregation of Revenue [Line Items]
Revenues by contract type and operating segment	$ 0	$ 0	$ 0	$ 0

- Definition

Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 30
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8906-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 40
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9031-108599

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 41
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9038-108599

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 4
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130543-203045

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
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-Paragraph 22
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8736-108599

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
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-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8736-108599

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 42
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9054-108599

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 5
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130545-203045

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 924
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB Topic 11.L)
-URI https://asc.fasb.org/extlink&oid=6472922&loc=d3e499488-122856

+ Details

Revenue from Contracts with Customers - Summary of Revenue from External Customers (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Revenue from External Customer [Line Items]
Total revenues	$ 63,150	$ 59,531	$ 185,022	$ 162,964
United States [Member]
Revenue from External Customer [Line Items]
Total revenues	61,704	57,682	180,519	157,156
Canada [Member]
Revenue from External Customer [Line Items]
Total revenues	1,038	988	3,187	3,270
India and Other [Member]
Revenue from External Customer [Line Items]
Total revenues	$ 408	$ 861	$ 1,316	$ 2,538

- Definition

+ References

+ Details

Goodwill and Other Intangible Assets, net - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2018	Dec. 31, 2021	Oct. 01, 2020	Jul. 13, 2017	Jun. 15, 2015
Goodwill and Intangible Assets [Line Items]
Goodwill	$ 32,510		$ 32,510			$ 32,510
Amortization expense	$ 791	$ 792	$ 2,375	$ 2,378
Hudson IT [Member]
Goodwill and Intangible Assets [Line Items]
Goodwill									$ 8,400
Info Trellis Inc [Member]
Goodwill and Intangible Assets [Line Items]
Goodwill								$ 27,400
Goodwill impairment					$ 9,700
Amber Leaf Partners Inc [Member]
Goodwill and Intangible Assets [Line Items]
Goodwill							$ 6,400

- Definition

Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.

+ References + Details

Goodwill and Other Intangible Assets, net - Components of Identifiable Intangible assets (Detail) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
Intangible Assets, Accumulated Amortization	$ 16,714	$ 14,339
Total Intangible Assets, Gross Carrying Value	33,099	33,099
Total Intangible Assets, Net Carrying Value	$ 16,385	$ 18,760
Client Relationships [Member] \| IT Staffing Services [Member]
Amortization Period (In Years)	12 years	12 years
Intangible Assets, Gross Carrying Value	$ 7,999	$ 7,999
Intangible Assets, Accumulated Amortization	4,861	4,361
Intangible Assets, Net Carrying Value	$ 3,138	$ 3,638
Client Relationships [Member] \| Data and Analytics Services [Member]
Amortization Period (In Years)	12 years	12 years
Intangible Assets, Gross Carrying Value	$ 19,641	$ 19,641
Intangible Assets, Accumulated Amortization	7,731	6,503
Intangible Assets, Net Carrying Value	$ 11,910	$ 13,138
Covenant Not-to-Compete [Member] \| IT Staffing Services [Member]
Amortization Period (In Years)	5 years	5 years
Intangible Assets, Gross Carrying Value	$ 319	$ 319
Intangible Assets, Accumulated Amortization	319	319
Intangible Assets, Net Carrying Value	$ 0	$ 0
Covenant Not-to-Compete [Member] \| Data and Analytics Services [Member]
Amortization Period (In Years)	5 years	5 years
Intangible Assets, Gross Carrying Value	$ 1,201	$ 1,201
Intangible Assets, Accumulated Amortization	967	788
Intangible Assets, Net Carrying Value	$ 234	$ 413
Trade Name [Member] \| IT Staffing Services [Member]
Amortization Period (In Years)	3 years	3 years
Intangible Assets, Gross Carrying Value	$ 249	$ 249
Intangible Assets, Accumulated Amortization	249	249
Intangible Assets, Net Carrying Value	$ 0	$ 0
Trade Name [Member] \| Data and Analytics Services [Member]
Amortization Period (In Years)	5 years	5 years
Intangible Assets, Gross Carrying Value	$ 1,711	$ 1,711
Intangible Assets, Accumulated Amortization	1,467	1,211
Intangible Assets, Net Carrying Value	$ 244	$ 500
Technology [Member] \| Data and Analytics Services [Member]
Amortization Period (In Years)	7 years	7 years
Intangible Assets, Gross Carrying Value	$ 1,979	$ 1,979
Intangible Assets, Accumulated Amortization	1,120	908
Intangible Assets, Net Carrying Value	$ 859	$ 1,071

Goodwill and Other Intangible Assets, net - Schedule of Estimated Amortization Expense (Detail) $ in Thousands	Sep. 30, 2022 USD ($)
Intangible Liability Disclosure [Abstract]
Estimated aggregate amortization expense for year ending 2022	$ 2,987
Estimated aggregate amortization expense for year ending 2023	2,772
Estimated aggregate amortization expense for year ending 2024	2,693
Estimated aggregate amortization expense for year ending 2025	2,553
Estimated aggregate amortization expense for year ending 2026	$ 2,413

Leases - Additional Information (Detail) $ in Millions	3 Months Ended		9 Months Ended
Leases - Additional Information (Detail) $ in Millions	Sep. 30, 2022 USD ($) ft²	Sep. 30, 2021 USD ($)	Sep. 30, 2022 USD ($) ft²	Sep. 30, 2021 USD ($)
Square feet of office space \| ft²	96,000		96,000
Average initial lease term	5 years		5 years
Discount rate	4.00%		4.00%
Operating leases, rent expense, net	$ 0.4	$ 0.4	$ 1.3	$ 1.3
Total lease payments	0.4	0.4	1.3	1.1
Lease obligation incurred	$ 0.0	$ 0.0	$ 0.5	$ 3.1
Minimum [Member]
Lease term range			1 year 3 months 18 days
Maximum [Member]
Lease term range			4 years 6 months
Weighted Average [Member]
Lease term range			3 years 6 months

Leases - Summary of Balance Sheet classification of lease asset and related lease liability (Detail) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Assets:
Long-term operating lease right-of-use assets	$ 4,263	$ 4,894
Liabilities:
Short-term operating lease liability	1,500	1,479
Long-term operating lease liability	2,699	3,706
Total liabilities	$ 4,199	$ 5,185

Leases - Schedule of Future Minimum Rental Payments for Operating Leases (Detail) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
2022 (For remainder of year)	$ 408
2023	1,633
2024	949
2025	682
2026	665
Thereafter	158
Total	4,495
Less: Imputed interest	(296)
Present value of operating lease liabilities	$ 4,199	$ 5,185

Payroll Tax Liability - Additional Information (Detail) - Coronavirus Aid, Relief and Economic Security Act [Member] - Social Security Tax [Member] - USD ($) $ in Millions	Sep. 30, 2022	Dec. 31, 2021
Deferred tax Payment	$ 2.3	$ 2.3
Short-term Payroll Tax Liabilities [Member]
Deferred Current Liability		$ 2.3

Employee Benefit Plan - Additional Information (Detail) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Defined Benefit Plan Disclosure [Line Items]
Matching contributions	$ 0	$ 0	$ 0	$ 0

Stock-Based Compensation - Additional Information (Detail) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021	May 15, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares allocated for issuance to directors, officers and key personnel	4,900,000		4,900,000
Number of Options, Granted	250,000		650,000	270,000
Stock-based compensation expense	$ 776,000	$ 693,000	$ 2,054,000	$ 2,071,000
Weighted average strike price \| $ / shares			$ 17	$ 17.65
Restricted shares granted	0		13,979	11,955
Fair value estimation			The fair value of the six-month “look-back” option in the Company’s Employee Stock Purchase Plan is estimated by adding the fair value of 15% of one share of stock to 85% of the fair value of an option on one share of stock
Stock Options And Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock issued during period share-based compensation	0	0	133,932	30,239
Employee Stock Purchase Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares available for future grants	500,589		500,589			600,000
Stock-based compensation expense	$ 11,000	$ 25,000	$ 81,000	$ 106,000
Price per share	$ 12.63	$ 12.71	$ 12.63	$ 12.71
Percentage of maximum contribution of salary towards plan	15.00%		15.00%
Maximum contribution towards plan	$ 25,000		$ 25,000
Discount on purchase of common stock			15.00%
Stock issued during period share-based compensation	0	0	15,765	14,301
Stock Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares available for future grants	159,842	0	159,842	0	538,000

Credit Facility - Additional information (Detail) - USD ($)			1 Months Ended	3 Months Ended	9 Months Ended		12 Months Ended
	Jan. 04, 2022	Oct. 01, 2020	Aug. 31, 2022	Mar. 31, 2023	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2020	Dec. 31, 2021
Line of Credit Facility [Line Items]
Current borrowing capacity under line of credit facility					$ 36,400,000			$ 32,400,000
Deferred financing costs					311,000			366,000
Senior leverage ratio				1.50%
Repayments of Debt					10,900,000	$ 3,300,000
Term Loan Facility [Member]
Line of Credit Facility [Line Items]
Outstanding borrowings amount					$ 2,200,000			13,100,000
Repayments of Debt			$ 7,600,000
Revolving Line of Credit [Member]
Line of Credit Facility [Line Items]
Percentage of eligible accounts receivable							85.00%
Revolving Line of Credit [Member] \| United States [Member]
Line of Credit Facility [Line Items]
Percentage of eligible unbilled accounts							60.00%
Revolving Line of Credit [Member] \| Canada [Member]
Line of Credit Facility [Line Items]
Credit facility maximum borrowing capacity							$ 10,000,000
Percentage of eligible accounts receivable							85.00%
Percentage of eligible unbilled accounts							60.00%
Revolving Line of Credit [Member] \| Line of Credit [Member]
Line of Credit Facility [Line Items]
Credit facility maximum borrowing capacity							$ 5,000,000
Revolving Line of Credit [Member] \| Swing Loans [Member]
Line of Credit Facility [Line Items]
Credit facility maximum borrowing capacity							$ 6,000,000
Federal Funds Rate [Member]
Line of Credit Facility [Line Items]
Basis spread on variable rate					0.50%
PNC Bank, N.A. [Member]
Line of Credit Facility [Line Items]
Credit facility maximum borrowing capacity					$ 53,100,000
Payment of deferred financing costs		$ 975,000
PNC Bank, N.A. [Member] \| Term Loan Facility [Member]
Line of Credit Facility [Line Items]
Credit facility maximum borrowing capacity								$ 13,100,000
Credit facility, periodic payment		1,100,000
PNC Bank, N.A. [Member] \| Revolving Line of Credit [Member]
Line of Credit Facility [Line Items]
Credit facility maximum borrowing capacity		$ 40,000,000
Maximum [Member]
Line of Credit Facility [Line Items]
Revolving credit facility percentage margin over base rate							1.25%
Term loan percentage margin over base rate							2.50%
Revolving credit facility percentage margin adjusted LIBOR rate							2.25%
Term loan percentage margin adjusted LIBOR rate							3.50%
Maximum [Member] \| PNC Bank, N.A. [Member] \| Revolving Line of Credit [Member]
Line of Credit Facility [Line Items]
Credit facility additional borrowing capacity upon certain conditions	$ 20,000,000
Minimum [Member]
Line of Credit Facility [Line Items]
Revolving credit facility percentage margin over base rate							0.50%
Term loan percentage margin over base rate							1.75%
Revolving credit facility percentage margin adjusted LIBOR rate							1.50%
Term loan percentage margin adjusted LIBOR rate							2.75%

Income Taxes - Components of Income Before Income Taxes (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Income before income taxes:
Domestic	$ 3,950	$ 4,644	$ 11,123	$ 12,091
Foreign	(593)	96	(903)	(547)
Income before income taxes	$ 3,357	$ 4,740	$ 10,220	$ 11,544

- Definition

Amount of income (loss) from continuing operations, including income (loss) from equity method investments, before deduction of income tax expense (benefit), and income (loss) attributable to noncontrolling interest.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (c)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 30
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8906-108599

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (f)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599

Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 940
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+ Details

Income Taxes - Provision for Income Taxes (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Current provision
Federal	$ 806	$ 550	$ 1,836	$ 1,809
State	187	133	446	437
Foreign	(55)	195	(4)	179
Total current provision	938	878	2,278	2,425
Deferred provision (benefit):
Federal	12	372	496	659
State	(7)	105	118	173
Foreign	(60)	(41)	(118)	(140)
Total deferred provision (benefit)	(55)	436	496	692
Change in valuation allowance	68	20	272	89
Total provision for income taxes	$ 951	$ 1,334	$ 3,046	$ 3,206

Income Taxes - Reconciliation of Income Taxes (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Income Tax Disclosure [Abstract]
Income taxes computed at the federal statutory rate, Value	$ 705	$ 995	$ 2,146	$ 2,424
State income taxes, net of federal tax benefit, Value	168	238	554	619
Excess tax benefit from stock options/restricted shares	19	0	10	(48)
Difference in income tax rate on foreign earnings	(9)	81	64	122
Change in valuation allowance	68	20	272	89
Total provision for income taxes	$ 951	$ 1,334	$ 3,046	$ 3,206
Income taxes computed at the federal statutory rate	21.00%	21.00%	21.00%	21.00%
State income taxes, net of federal tax benefit	5.00%	5.00%	5.40%	5.40%
Excess tax benefit from stock options/restricted shares	0.60%	0.00%	0.10%	(0.40%)
Difference in income tax rate on foreign earnings	(0.30%)	1.70%	0.60%	1.10%
Change in valuation allowance[Percent]	2.00%	0.40%	2.70%	0.70%
Effective for income tax rate, Total	28.30%	28.10%	29.80%	27.80%

Income Taxes - Additional Information (Detail) - USD ($)	Sep. 30, 2022	Dec. 31, 2021
Deferred Tax Liabilities Valuation Allowance	$ 583,000	$ 311,000

Derivative Instruments and Hedging Activities - Effect of Derivative Instruments on Consolidated Statements of Operations and Comprehensive Income (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain recognized in OCI on Derivatives	$ 0	$ 0	$ 0	$ 35
Interest rate swap contract [Member] \| Cash Flow Hedging Relationships [Member] \| Interest Expense [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain recognized in OCI on Derivatives		0		35
Amount of Gain reclassified from Accumulated OCI to Income		0		34
Amount of Gain recognized in Income on Derivatives		$ 0		$ 0

Fair Value Measurements - Additional Information (Detail) - Interest Rate Swap [Member] - USD ($)	Sep. 30, 2022	Dec. 31, 2021
Fair Value Disclosures [Line Items]
Fair value of contingent consideration		$ 0
Foreign Currency Contracts, Liability, Fair Value Disclosure	$ 0	$ 0

Shareholders' Equity - Additional Information (Detail) - shares	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Equity, Class of Treasury Stock [Line Items]
Shares purchased to satisfy employee tax obligation	0	0

Earnings per Share - Additional Information (Detail) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Earnings Per Share [Abstract]
Anti-dilutive securities not included in computation of earnings per share	644,000	270,000	549,000	270,000

Business Segments and Geographic Information - Summary of Operating Segments (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Segment Reporting Information [Line Items]
Revenues	$ 63,150	$ 59,531	$ 185,022	$ 162,964
Total gross margin %	25.80%	27.90%	26.50%	26.80%
Segment operating income	$ 3,357	$ 4,975	$ 10,212	$ 12,155
Amortization of acquired intangible assets	(791)	(792)	(2,375)	(2,378)
Revaluation of contingent consideration liability	0	0	0	1,982
Reserve for cyber-security breach	(450)		(450)
Severance cost	(120)		(120)
Interest expenses and other, net	0	(235)	8	(611)
Income before income taxes	3,357	4,740	10,220	11,544
Data and analytics services [Member]
Segment Reporting Information [Line Items]
Revenues	$ 10,076	$ 10,523	$ 31,478	$ 28,267
Total gross margin %	39.60%	51.60%	42.80%	48.20%
IT staffing services [Member]
Segment Reporting Information [Line Items]
Revenues	$ 53,074	$ 49,008	$ 153,544	$ 134,697
Total gross margin %	23.20%	22.80%	23.10%	22.40%
Operating Segments [Member]
Segment Reporting Information [Line Items]
Segment operating income	$ 4,718	$ 5,767	$ 13,157	$ 12,551
Operating Segments [Member] \| Data and analytics services [Member]
Segment Reporting Information [Line Items]
Segment operating income	826	1,851	2,615	3,014
Operating Segments [Member] \| IT staffing services [Member]
Segment Reporting Information [Line Items]
Segment operating income	$ 3,892	$ 3,916	$ 10,542	$ 9,537

Business Segments and Geographic Information - Summary of Assets by Segment (Detail) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Segment Reporting, Asset Reconciling Item [Line Items]
Total assets	$ 114,776	$ 113,702
Data and analytics services [Member]
Segment Reporting, Asset Reconciling Item [Line Items]
Total assets	56,644	56,634
IT Staffing Services [Member]
Segment Reporting, Asset Reconciling Item [Line Items]
Total assets	$ 58,132	$ 57,068

- Definition

Sum of the carrying amounts as of the balance sheet date of all assets that are recognized. Assets are probable future economic benefits obtained or controlled by an entity as a result of past transactions or events.

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Business Segments and Geographic Information - Summary of Revenue from External Customers (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Segment Reporting Information [Line Items]
Revenues	$ 63,150	$ 59,531	$ 185,022	$ 162,964
United States [Member]
Segment Reporting Information [Line Items]
Revenues	61,704	57,682	180,519	157,156
Canada [Member]
Segment Reporting Information [Line Items]
Revenues	1,038	988	3,187	3,270
India and Other [Member]
Segment Reporting Information [Line Items]
Revenues	$ 408	$ 861	$ 1,316	$ 2,538

- Definition

Amount of revenue recognized from goods sold, services rendered, insurance premiums, or other activities that constitute an earning process. Includes, but is not limited to, investment and interest income before deduction of interest expense when recognized as a component of revenue, and sales and trading gain (loss).

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Subsequent Event - Additional Information (Detail) - USD ($)		3 Months Ended	9 Months Ended
	Nov. 01, 2022	Sep. 30, 2022	Sep. 30, 2022
Subsequent Event [Line Items]
Severance cost		$ (120,000)	$ (120,000)
Subsequent Event [Member] \| Ganeshan Venkateshwaran [Member]
Subsequent Event [Line Items]
Severance cost	$ 700,000
Supplemental unemployment benefits, severance benefits	550,000
Payments for postemployment benefits	$ 150,000