0001193125-23-275231 | 10-Q | XBRL Viewer

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Revenue from Contracts with Customers - Summary of Revenue from External Customers (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Revenue from External Customer [Line Items]
Total	$ 47,779	$ 63,150	$ 155,046	$ 185,022
United States [Member]
Revenue from External Customer [Line Items]
Total	46,778	61,704	151,798	180,519
Canada [Member]
Revenue from External Customer [Line Items]
Total	627	1,038	2,159	3,187
India and other [Member]
Revenue from External Customer [Line Items]
Total	$ 374	$ 408	$ 1,089	$ 1,316

- 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

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+ Details

Leases

9 Months Ended

Sep. 30, 2023

Leases [Abstract]

Leases

The Company rents certain office facilities and equipment under noncancelable operating leases. As of September 30, 2023, 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 4.8 years. Several leases have an option to renew, at our sole discretion, for an additional term. Our present lease terms range from less than one year to 3.9 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, 2023		December 31, 2022

	(in thousands)
Assets:
Long-term operating lease right-of-use assets	$	4,418	$	3,886

Liabilities:
Short-term operating lease liability	$	1,318	$	1,504
Long-term operating lease liability		3,054		2,294

Total Liabilities	$	4,372	$	3,798

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


	Amount as of September 30, 2023
	(in thousands)
2023 (for remainder of year)	$	380
2024		1,408
2025		1,225
2026		1,220
2027		535
Thereafter		—

Total	$	4,768
Less: Imputed interest		(396	)

Present value of operating lease liabilities	$	4,372

The weighted average discount rate used to calculate the present value of future lease payments was 4.9%.

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, 2023 totaled $0.4 million and $1.2 million, respectively. Rental expense 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, 2023 totaled $0.4 million and $1.2 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.

New leases entered into during the three and nine months ended September 30, 2023 totaled $1.7 million and $1.7 million, respectively. New leases entered into during the three and nine months ended September 30, 2022 totaled $0 and $0.5 million, respectively. New leases are considered non cash transactions.

In August 2023, the Company renegotiated and extended an operating lease for 39,875 square feet of office space in Noida, India. Lease payments will approximate $1.9 million through the extension period which ends August 30, 2027.

In October 2023, the Company renegotiated and extended an operating lease for 11,495 square feet of office space in Moon Township, Pennsylvania. Lease payments will approximate $1.3 million through the extension period which ends September 29, 2029.

Cover Page - shares	9 Months Ended
Cover Page - shares	Sep. 30, 2023	Oct. 31, 2023
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, 2023
Document Fiscal Year Focus	2023
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
Title of 12(b) Security	Common Stock
Trading Symbol	MHH
Security Exchange Name	NYSEAMER
Entity Address, State or Province	PA
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		11,599,138
Entity File Number	001-34099
Entity Incorporation, State or Country Code	PA
Entity Address, Address Line One	1305 Cherrington Parkway
Entity Address, City or Town	Moon Township
Entity Address, Postal Zip Code	15108
Entity Tax Identification Number	26-2753540
City Area Code	412
Local Phone Number	787-2100
Entity Address, Address Line Two	Building 210
Entity Address, Address Line Three	Suite 400

Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Deferred Tax Liabilities Valuation Allowance	$ 613	$ 559

Income Taxes - Reconciliation of Income Taxes (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Income Tax Disclosure [Abstract]
Income taxes computed at the federal statutory rate	$ 33	$ 705	$ (450)	$ 2,146
State income taxes, net of federal tax benefit	(2)	168	(74)	554
Excess tax expense (benefit) from stock options/restricted shares	0	19	40	10
Difference in income tax rate on foreign earnings/other	1	(9)	72	64
Change in valuation allowance	(3)	68	54	272
Total provision (benefit) for income taxes	$ 29	$ 951	$ (358)	$ 3,046
Income taxes computed at the federal statutory rate	21.00%	21.00%	(21.00%)	21.00%
State income taxes, net of federal tax benefit	(1.20%)	5.00%	(3.50%)	5.40%
Excess tax expense (benefit) from stock options/restricted shares	0.00%	0.60%	1.90%	0.10%
Difference in income tax rate on foreign earnings/other	0.90%	(0.30%)	3.40%	0.60%
Change in valuation allowance	(1.90%)	2.00%	2.50%	2.70%
Effective for income tax rate, Total	18.80%	28.30%	(16.70%)	29.80%

Employee Benefit Plan

9 Months Ended

Sep. 30, 2023

Retirement Benefits [Abstract]

Employee Benefit Plan

6.	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 months ended September 30, 2023, and 2022.

- Definition

The entire disclosure for retirement benefits.

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+ Details

Income Taxes

9 Months Ended

Sep. 30, 2023

Income Tax Disclosure [Abstract]

Income Taxes

9.	Income Taxes

The components of income (loss) before income taxes, as shown in the accompanying Financial Statements, consisted of the following for the three and nine months ended September 30, 2023 and 2022:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022

	(Amounts in thousands)						(Amounts in thousands)
Income (loss) before income taxes:
Domestic	$	(211	)	$	3,950		$	(3,205	)	$	11,123
Foreign		365			(593	)		1,060			(903	)

Income (loss) before income taxes	$	154		$	3,357		$	(2,145	)	$	10,220

The Company has foreign subsidiaries which generate revenues from

non-U.S.-based

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

The provision (benefit) for income taxes, as shown in the accompanying Financial Statements, consisted of the following for the three and nine months ended September 30, 2023 and 2022:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022

	(Amounts in thousands)						(Amounts in thousands)
Current provision (benefit):
Federal	$	(88	)	$	806		$	(271	)	$	1,836
State		(9	)		187			25			446
Foreign		93			(55	)		238			(4	)

Total current provision (benefit)	$	(4	)	$	938		$	(8	)	$	2,278

Deferred provision (benefit):
Federal		25			12			(377	)		496
State		7			(7	)		(91	)		118
Foreign		4			(60	)		64			(118	)

Total deferred provision (benefit)		36			(55	)		(404	)		496

Change in valuation allowance		(3	)		68			54			272

Total provision (benefit) for income taxes	$	29		$	951		$	(358	)	$	3,046

The reconciliation of income taxes computed using the statutory U.S. income tax rate and the provision (benefit) for income taxes for the three and nine months ended September 30, 2023 and 2022 were as follows (amounts in thousands):


	Three Months Ended September 30, 2023					Three Months Ended September 30, 2022
Income taxes computed at the federal statutory rate	$	33		21.0	%	$	705		21.0	%
State income taxes, net of federal tax benefit		(2	)	(1.2	)		168		5.0
Excess tax expense (benefit) from stock options/restricted shares		—		—			19		0.6
Difference in income tax rate on foreign earnings/other		1		0.9			(9	)	(0.3	)
Change in valuation allowance		(3	)	(1.9	)		68		2.0

	$	29		18.8	%	$	951		28.3	%


	Nine Months Ended September 30, 2023					Nine Months Ended September 30, 2022
Income taxes computed at the federal statutory rate	$	(450	)	(21.0	)%	$	2,146	21.0	%
State income taxes, net of federal tax benefit		(74	)	(3.5	)		554	5.4
Excess tax expense (benefit) from stock options/restricted shares		40		1.9			10	0.1
Difference in income tax rate on foreign earnings/other		72		3.4			64	0.6
Change in valuation allowance		54		2.5			272	2.7

	$	(358	)	(16.7	)%	$	3,046	29.8	%

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, 2023, our valuation allowance was comprised of balances within locations of Singapore, Ireland and the United Kingdom. The valuation allowance balances at these locations totaled $613,000 and $559,000 as of September 30, 2023, and December 31, 2022, 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

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+ Details

Goodwill and Other Intangible Assets, net

9 Months Ended

Sep. 30, 2023

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 of $9.7 million related to the InfoTrellis acquisition. Goodwill related to our October 1, 2020, acquisition of AmberLeaf totaled $6.4 million.

Declines in 2023 revenues in our Data and Analytics Services segment, compared to expectations, was viewed as a triggering event for impairment testing in the third quarter of 2023. Accordingly, we performed an interim quantitative impairment test for our Data and Analytics Services segment. The interim impairment test did not result in an impairment during the third quarter, however, further declines in revenue could have a negative impact on the implied fair value of goodwill and may result in a goodwill impairment charge in a subsequent period.

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, 2023, and December 31, 2022:


	As of September 30, 2023
(Amounts in thousands)	Amortization Period (In Years)		Gross Carrying Value		Accumulative Amortization		Net Carrying Value
IT Staffing Services:
Client relationships		12	$	7,999	$	5,527	$	2,472
Covenant-not-to-compete		5		319		319		—
Trade name		3		249		249		—
Data and Analytics Services:
Client relationships		12		19,641		9,367		10,274
Covenant-not-to-compete		5		1,201		1,025		176
Trade name		5		1,711		1,515		196
Technology		7		1,979		1,403		576

Total Intangible Assets			$	33,099	$	19,405	$	13,694


	As of December 31, 2022
(Amounts in thousands)	Amortization Period (In Years)		Gross Carrying Value		Accumulative Amortization		Net Carrying Value
IT Staffing Services:
Client relationships		12	$	7,999	$	5,027	$	2,972
Covenant-not-to-compete		5		319		319		—
Trade name		3		249		249		—
Data and Analytics Services:
Client relationships		12		19,641		8,140		11,501
Covenant-not-to-compete		5		1,201		959		242
Trade name		5		1,711		1,441		270
Technology		7		1,979		1,191		788

Total Intangible Assets			$	33,099	$	17,326	$	15,773

Amortization expense for the three and nine-month periods ended September 30, 2023 totaled $693,000 and $2.1 million, respectively and is included in selling, general and administrative expenses in the Condensed Consolidated Statement of Operations. For the three and nine-month periods ended September 30, 2022, amortization expense was $791,000 and $2.4 million, respectively.

The estimated aggregate amortization expense for intangible assets for the years ending December 31, 2023, through December 31, 2027, is as follows:


	Years Ended December 31,
	2023		2024		2025		2026		2027

	(Amounts in thousands)
Amortization expense	$	2,772	$	2,693	$	2,553	$	2,413	$	2,025

Leases (Tables)

9 Months Ended

Sep. 30, 2023

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, 2023		December 31, 2022

	(in thousands)
Assets:
Long-term operating lease right-of-use assets	$	4,418	$	3,886

Liabilities:
Short-term operating lease liability	$	1,318	$	1,504
Long-term operating lease liability		3,054		2,294

Total Liabilities	$	4,372	$	3,798

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, 2023
	(in thousands)
2023 (for remainder of year)	$	380
2024		1,408
2025		1,225
2026		1,220
2027		535
Thereafter		—

Total	$	4,768
Less: Imputed interest		(396	)

Present value of operating lease liabilities	$	4,372

Income Taxes - Components of Income (Loss) Before Income Taxes (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Income (loss) before income taxes:
Domestic	$ (211)	$ 3,950	$ (3,205)	$ 11,123
Foreign	365	(593)	1,060	(903)
Income (loss) before income taxes	$ 154	$ 3,357	$ (2,145)	$ 10,220

- 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
-Topic 944
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.7-04(11))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483586/944-220-S99-1

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 22
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-22

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 30
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-30

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (f)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

Reference 5: http://www.xbrl.org/2003/role/exampleRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 31
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-31

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (c)
-Publisher FASB
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 942
-SubTopic 235
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.9-05(b)(2))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479557/942-235-S99-1

Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef
-Name Accounting Standards Codification
-Section 25
-Paragraph 1
-SubTopic 20
-Topic 940
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481913/940-20-25-1

Reference 9: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 220
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 2
-Subparagraph (SX 210.5-03(10))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483621/220-10-S99-2

Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 942
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.9-04(15))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483589/942-220-S99-1

+ Details

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Accounts receivable, allowance for uncollectible accounts	$ 515	$ 444
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	$ 0.01	$ 0.01
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	13,307,919	13,269,118
Treasury stock, shares	1,708,781	1,646,420

Leases - Additional Information (Detail) $ in Millions	1 Months Ended		3 Months Ended		9 Months Ended
Leases - Additional Information (Detail) $ in Millions	Oct. 31, 2023 USD ($) ft²	Aug. 31, 2023 USD ($) ft²	Sep. 30, 2023 USD ($) ft²	Sep. 30, 2022 USD ($)	Sep. 30, 2023 USD ($) ft²	Sep. 30, 2022 USD ($)
Square feet of office space \| ft²	11,495	39,875	96,000		96,000
Average initial lease term			4 years 9 months 18 days		4 years 9 months 18 days
Discount rate			4.90%		4.90%
Operating leases, rent expense, net			$ 0.4	$ 0.4	$ 1.2	$ 1.3
Total lease payments			0.4	0.4	1.2	1.3
Lease obligation incurred			$ 1.7	$ 0.0	$ 1.7	$ 0.5
Operating lease payment to be made	$ 1.3	$ 1.9
Lessee, operating lease, option to extend	September 29, 2029	August 30, 2027
Minimum [Member]
Lease term range					1 year
Maximum [Member]
Lease term range					3 years 10 months 24 days
Weighted Average [Member]
Lease term range					3 years 6 months

Income Taxes - Provision (Benefit) for Income Taxes (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Current provision (benefit):
Federal	$ (88)	$ 806	$ (271)	$ 1,836
State	(9)	187	25	446
Foreign	93	(55)	238	(4)
Total current provision (benefit)	(4)	938	(8)	2,278
Deferred provision (benefit):
Federal	25	12	(377)	496
State	7	(7)	(91)	118
Foreign	4	(60)	64	(118)
Total deferred provision (benefit)	36	(55)	(404)	496
Change in valuation allowance	(3)	68	54	272
Total provision (benefit) for income taxes	$ 29	$ 951	$ (358)	$ 3,046

Business Segments and Geographic Information - Summary of Revenue from External Customers (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Segment Reporting Information [Line Items]
Revenues	$ 47,779	$ 63,150	$ 155,046	$ 185,022
United States [Member]
Segment Reporting Information [Line Items]
Revenues	46,778	61,704	151,798	180,519
Canada [Member]
Segment Reporting Information [Line Items]
Revenues	627	1,038	2,159	3,187
India and Other [Member]
Segment Reporting Information [Line Items]
Revenues	$ 374	$ 408	$ 1,089	$ 1,316

- 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).

+ References

+ Details

Description of Business and Basis of Presentation

9 Months Ended

Sep. 30, 2023

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.

With 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 because of the global

roll-out

of vaccination programs and signs of improving economic conditions.

COVID-19-

related concerns were less impactful on our business in 2022. Still, the proliferation of

COVID-19

variants has caused some uncertainty and could continue to disrupt global markets in 2023 and beyond.

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, 2022, included in our Annual Report on Form

10-K

filed with the SEC on March 27, 2023. Additionally, our operating results for the three and nine months ended September 30, 2023, are not necessarily indicative of the results that can be expected for the year ending December 31, 2023, 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, 2022, 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, 2023.

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.

Earnings (Loss) Per Share

9 Months Ended

Sep. 30, 2023

Earnings Per Share [Abstract]

Earnings (Loss) Per Share

11.	Earnings (Loss) Per Share

The computation of basic earnings (loss) per share is based on the Company’s net income (loss) divided by the weighted average number of shares of Common Stock outstanding. Diluted earnings (loss) 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 months ended September 30, 2023, there were 1,473,000 anti-dilutive stock options excluded from the computation of diluted earnings per share. For the nine months ended September 30, 2023, all stock options and restricted shares were anti-dilutive and excluded from the computation of diluted (loss) per share. 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.

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Current assets:
Cash and cash equivalents	$ 15,881	$ 7,057
Accounts receivable, net of allowance for uncollectible accounts of $515 in 2023 and $444 in 2022	24,841	33,603
Unbilled receivables	7,437	8,719
Insurance recovery	2,200	0
Prepaid and other current assets	5,859	3,795
Total current assets	56,218	53,174
Equipment, enterprise software, and leasehold improvements, at cost:
Equipment	2,896	2,790
Enterprise software	4,185	4,185
Leasehold improvements	752	732
Total equipment, enterprise software, and leasehold improvements	7,833	7,707
Less – accumulated depreciation and amortization	(5,824)	(5,042)
Net equipment, enterprise software, and leasehold improvements	2,009	2,665
Operating lease right-of-use assets, net	4,418	3,886
Deferred financing costs, net	238	293
Non-current deposits	456	578
Goodwill, net of impairment	32,510	32,510
Intangible assets, net of amortization	13,694	15,773
Total assets	109,543	108,879
Current liabilities:
Current portion of long-term debt	0	1,100
Accounts payable	4,842	4,475
Accrued payroll and related costs	12,270	11,085
Current portion of operating lease liability	1,318	1,504
Other accrued liabilities	864	1,186
Deferred revenue	410	207
Total current liabilities	19,704	19,557
Long-term liabilities:
Long-term operating lease liability, less current portion	3,054	2,294
Long-term accrued income taxes	69	105
Deferred income taxes	516	920
Total liabilities	23,343	22,876
Commitments and contingent liabilities (Note 5)
Shareholders' equity:
Preferred Stock, no par value; 20,000,000 shares authorized; none outstanding
Common Stock, par value $.01; 100,000,000 shares authorized and 13,307,919 shares issued as of September 30, 2023 and 13,269,118 shares issued as of December 31, 2022	133	133
Additional paid-in-capital	34,710	32,059
Retained earnings	57,766	59,553
Accumulated other comprehensive income (loss)	(1,650)	(1,555)
Treasury stock, at cost; 1,708,781 shares as of September 30, 2023 and 1,646,420 shares as of December 31, 2022	(4,759)	(4,187)
Total shareholders' equity	86,200	86,003
Total liabilities and shareholders' equity	$ 109,543	$ 108,879

Commitments and Contingencies - Additional Information (Detail) - Former Employee Unasserted Claim [Member] - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Jun. 30, 2023	Sep. 30, 2023
Loss Contingencies [Line Items]
Professional fees	$ 225,000		$ 1,200,000
Loss contingency accrual, provision		$ 3,100,000

Stock-Based Compensation

9 Months Ended

Sep. 30, 2023

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

Stock-Based Compensation

7.	Stock-Based Compensation

In 2008, the Company adopted a Stock Incentive Plan (as amended from time to time, the “Plan”) which provided that up to 5,400,000 shares of the Company’s common stock, par value $0.01 per share (“Common Stock”) should be allocated for issuance to directors, officers and key personnel. Grants under the Plan may be made in the form of stock options, stock appreciation rights, performance shares or stock awards.

During the three months ended September 30, 2023, the Company granted no shares under the Plan. During the three months ended September 30, 2022, the Company granted zero restricted share units and 250,000 stock options under the Plan.

During the nine months ended September 30, 2023, the Company granted 19,924 restricted share units and 125,000 stock options, with an average strike price of $11.24, under the Plan. During the nine months ended September 30, 2022, the Company granted 13,979 restricted share units and 650,000 stock options, at a weighted average strike price of $17.00, under the Plan. As of September 30, 2023, there were 505,000 shares of Common Stock available for grants under the Plan.

Stock-based compensation expense for the three months ended September 30, 2023 and 2022 was $824,000 and $776,000, respectively, and for the nine months ended September 30, 2023, and 2022 was $2.5 million and $2.1 million, respectively. 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, 2023, the Company issued zero and 17,804 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, 2022, the Company issued zero and 133,932 shares, respectively, related to the grant of restricted share units and the exercise 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 on May 15, 2019, to be so qualified. 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. Employees are able to purchase shares of Common Stock at a 15% discount to the lower of the fair market value of 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, 2023 and 2022, there were no shares issued under the Stock Purchase Plan. During the nine months ended September 30, 2023, and 2022, there were 17,890 shares and 15,765 shares issued under the Employee Stock Purchase Plan, at a share price of $8.40 and $12.63, respectively. Stock-based compensation expense related to the Stock Purchase Plan for the three months ended September 30, 2023, and 2022 totaled $10,000 and $11,000, respectively. Stock-based compensation expense related to the Stock Purchase Plan for the nine months ended September 30, 2023, and 2022 totaled $78,000 and $81,000, respectively, and is included in selling, general and administrative expenses in the Condensed Consolidated Statements of Operations for the nine months ended September 30, 2023, and 2022. As of September 30, 2023, there were 474,675 shares of Common Stock available for purchases under the Employee Stock Purchase Plan.

Shareholders' Equity

9 Months Ended

Sep. 30, 2023

Equity [Abstract]

Shareholders' Equity

10.	Shareholders’ Equity

On February 8, 2023, the Company announced that the Board of Directors authorized a share repurchase program of up to 500,000 shares of the Company’s common stock over a

two-year

period. Repurchases under the program may occur from time to time in the open market, through privately negotiated transactions, through block purchases or other purchase techniques, or by any combination of such methods, and the program may be modified, suspended, or terminated at any time at the discretion of the Board of Directors. During the three months ended September 30, 2023, the Company did not repurchase any shares of common stock. During the nine months ended September 30, 2023, the Company repurchased 62,361 shares of common stock at an average price of $9.15 per share under this program.

Additionally, the Company makes stock purchases from time to time to satisfy employee tax obligations related to its Stock Incentive Plan. The Company did not purchase any shares to satisfy employee tax obligations during the nine months ended September 30, 2023 and 2022.

- Definition

The entire disclosure for equity.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-13

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-13

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
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-Section 50
-Paragraph 14
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-14

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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-URI https://asc.fasb.org//505/tableOfContent

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-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-18

+ Details

Goodwill and Other Intangible Assets, net - Components of Identifiable Intangible assets (Detail) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Intangible Assets, Accumulated Amortization	$ 19,405	$ 17,326
Total Intangible Assets, Gross Carrying Value	33,099	33,099
Total Intangible Assets, Net Carrying Value	$ 13,694	$ 15,773
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	5,527	5,027
Intangible Assets, Net Carrying Value	$ 2,472	$ 2,972
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	9,367	8,140
Intangible Assets, Net Carrying Value	$ 10,274	$ 11,501
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	1,025	959
Intangible Assets, Net Carrying Value	$ 176	$ 242
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	1,515	1,441
Intangible Assets, Net Carrying Value	$ 196	$ 270
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	1,403	1,191
Intangible Assets, Net Carrying Value	$ 576	$ 788

Business Segments and Geographic Information (Tables)

9 Months Ended

Sep. 30, 2023

Segment Reporting [Abstract]

Summary of Operating Segments


	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022

	(Amounts in thousands)						(Amounts in thousands)
Revenues:
Data and Analytics Services	$	8,038		$	10,076		$	26,206		$	31,478
IT Staffing Services		39,741			53,074			128,840			153,544

Total revenues	$	47,779		$	63,150		$	155,046		$	185,022

Gross Margin %:
Data and Analytics Services		45.8	%		39.6	%		43.1	%		42.8	%
IT Staffing Services		22.4	%		23.2	%		22.0	%		23.1	%

Total gross margin %		26.3	%		25.8	%		25.6	%		26.5	%

Segment operating income (loss):
Data and Analytics Services	$	(832	)	$	826		$	(2,393	)	$	2,615
IT Staffing Services		1,476			3,892			5,227			10,542

Subtotal		644			4,718			2,834			13,157
Amortization of acquired intangible assets		(693	)		(791	)		(2,079	)		(2,375	)
Employment-related claim, net of recoveries		—			—			(3,100	)		—
Reserve for cyber-security breach		—			(450	)		—			(450	)
Severance expense		—			(120	)		—			(120	)
Interest expenses, FX gains/losses and other, net		203			—			200			8

Income (loss) before income taxes	$	154		$	3,357		$	(2,145	)	$	10,220

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, 2023		December 31, 2022

	(Amounts in thousands)
Total assets:
Data and Analytics Services	$	51,845	$	54,544
IT Staffing Services		57,698		54,335

Total assets	$	109,543	$	108,879

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,
	2023		2022		2023		2022

	(Amounts in thousands)				(Amounts in thousands)
United States	$	46,778	$	61,704	$	151,798	$	180,519
Canada		627		1,038		2,159		3,187
India and Other		374		408		1,089		1,316

Total revenues	$	47,779	$	63,150	$	155,046	$	185,022

Shareholders' Equity - Additional Information (Detail) - $ / shares		3 Months Ended	9 Months Ended
	Feb. 08, 2023	Sep. 30, 2023	Sep. 30, 2023	Sep. 30, 2022
Equity, Class of Treasury Stock [Line Items]
Shares purchased to satisfy employee tax obligation			0	0
Number of shares repurchased during the period		0	62,361
Stock repurchase program average purchase price per share			$ 9.15
Common Stock [Member]
Equity, Class of Treasury Stock [Line Items]
Stock repurchase program, number of shares authorized to be repurchased	500,000
Stock repurchase program, period in force	2 years

- Definition

Number of shares that have been repurchased during the period and have not been retired and are not held in treasury. Some state laws may govern the circumstances under which an entity may acquire its own stock and prescribe the accounting treatment therefore. This element is used when state law does not recognize treasury stock.

+ References + Details

Stock-Based Compensation - Additional Information (Detail) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022	May 15, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares allocated for issuance to directors, officers and key personnel	5,400,000		5,400,000
Number of Options, Granted		250,000	125,000	650,000
Stock-based compensation expense			$ 2,501,000	$ 2,054,000
Strike price \| $ / shares			$ 11.24	$ 17
Restricted shares granted	0	0	19,924	13,979
Employee stock purchase 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.
Common stock, par value	$ 0.01		$ 0.01		$ 0.01
Stock Options And Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares issued related to employee stock purchases	0	0	17,804	133,932
Employee Stock Purchase Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares available for future grants	474,675		474,675			600,000
Stock-based compensation expense	$ 824,000	$ 776,000	$ 2,500,000	$ 2,100,000
Number of shares issued related to employee stock purchases	0	0	17,890	15,765
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%
Share issued price per share	$ 8.4	$ 12.63	$ 8.4	$ 12.63
Share-based payment arrangement, expense	$ 10,000	$ 11,000	$ 78,000	$ 81,000
Stock Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares available for future grants	505,000		505,000

Revenue from Contracts with Customers - Additional Information (Detail) - Agreement	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
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 accounts receivable	21.10%	23.70%	23.70%	21.30%
Number of customers	1	1	1	1
Top Ten Customers [Member]
Disaggregation of Revenue [Line Items]
Revenue percentage of total revenue	52.00%	54.00%	54.00%	53.00%
Data and Analytics Services [Member]
Disaggregation of Revenue [Line Items]
Percent of revenue from services			100.00%

Goodwill and Other Intangible Assets, net - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2018	Dec. 31, 2022	Oct. 01, 2020	Jul. 13, 2017	Jun. 15, 2015
Goodwill and Intangible Assets [Line Items]
Goodwill	$ 32,510		$ 32,510			$ 32,510
Amortization expense	$ 693	$ 791	$ 2,079	$ 2,375
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

Leases - Summary of Balance Sheet classification of lease asset and related lease liability (Detail) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Assets:
Long-term operating lease right-of-use assets	$ 4,418	$ 3,886
Liabilities:
Short-term operating lease liability	1,318	1,504
Long-term operating lease liability	3,054	2,294
Total Liabilities	$ 4,372	$ 3,798

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, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Disaggregation of Revenue [Line Items]
Revenues by contract type and operating segment	$ 47,779	$ 63,150	$ 155,046	$ 185,022
Data and Analytics Services [Member]
Disaggregation of Revenue [Line Items]
Revenues by contract type and operating segment	8,038	10,076	26,206	31,478
Data and Analytics Services [Member] \| Time-and-Material Contract [Member]
Disaggregation of Revenue [Line Items]
Revenues by contract type and operating segment	5,888	6,524	19,027	19,568
Data and Analytics Services [Member] \| Fixed-Price Contract [Member]
Disaggregation of Revenue [Line Items]
Revenues by contract type and operating segment	2,150	3,552	7,179	11,910
IT Staffing Services [Member]
Disaggregation of Revenue [Line Items]
Revenues by contract type and operating segment	39,741	53,074	128,840	153,544
IT Staffing Services [Member] \| Time-and-Material Contract [Member]
Disaggregation of Revenue [Line Items]
Revenues by contract type and operating segment	39,741	53,074	128,840	153,544
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

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References + Details

- Definition

+ References

+ Details

Goodwill and Other Intangible Assets, net (Tables)

9 Months Ended

Sep. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Components of Identifiable Intangible assets


	As of September 30, 2023
(Amounts in thousands)	Amortization Period (In Years)		Gross Carrying Value		Accumulative Amortization		Net Carrying Value
IT Staffing Services:
Client relationships		12	$	7,999	$	5,527	$	2,472
Covenant-not-to-compete		5		319		319		—
Trade name		3		249		249		—
Data and Analytics Services:
Client relationships		12		19,641		9,367		10,274
Covenant-not-to-compete		5		1,201		1,025		176
Trade name		5		1,711		1,515		196
Technology		7		1,979		1,403		576

Total Intangible Assets			$	33,099	$	19,405	$	13,694


	As of December 31, 2022
(Amounts in thousands)	Amortization Period (In Years)		Gross Carrying Value		Accumulative Amortization		Net Carrying Value
IT Staffing Services:
Client relationships		12	$	7,999	$	5,027	$	2,972
Covenant-not-to-compete		5		319		319		—
Trade name		3		249		249		—
Data and Analytics Services:
Client relationships		12		19,641		8,140		11,501
Covenant-not-to-compete		5		1,201		959		242
Trade name		5		1,711		1,441		270
Technology		7		1,979		1,191		788

Total Intangible Assets			$	33,099	$	17,326	$	15,773

Schedule of Estimated Amortization Expense

The estimated aggregate amortization expense for intangible assets for the years ending December 31, 2023, through December 31, 2027, is as follows:


	Years Ended December 31,
	2023		2024		2025		2026		2027

	(Amounts in thousands)
Amortization expense	$	2,772	$	2,693	$	2,553	$	2,413	$	2,025

Income Taxes (Tables)

9 Months Ended

Sep. 30, 2023

Income Tax Disclosure [Abstract]

Components of Income (Loss) Before Income Taxes

The components of income (loss) before income taxes, as shown in the accompanying Financial Statements, consisted of the following for the three and nine months ended September 30, 2023 and 2022:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022

	(Amounts in thousands)						(Amounts in thousands)
Income (loss) before income taxes:
Domestic	$	(211	)	$	3,950		$	(3,205	)	$	11,123
Foreign		365			(593	)		1,060			(903	)

Income (loss) before income taxes	$	154		$	3,357		$	(2,145	)	$	10,220

Provision (Benefit) for Income Taxes

The provision (benefit) for income taxes, as shown in the accompanying Financial Statements, consisted of the following for the three and nine months ended September 30, 2023 and 2022:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022

	(Amounts in thousands)						(Amounts in thousands)
Current provision (benefit):
Federal	$	(88	)	$	806		$	(271	)	$	1,836
State		(9	)		187			25			446
Foreign		93			(55	)		238			(4	)

Total current provision (benefit)	$	(4	)	$	938		$	(8	)	$	2,278

Deferred provision (benefit):
Federal		25			12			(377	)		496
State		7			(7	)		(91	)		118
Foreign		4			(60	)		64			(118	)

Total deferred provision (benefit)		36			(55	)		(404	)		496

Change in valuation allowance		(3	)		68			54			272

Total provision (benefit) for income taxes	$	29		$	951		$	(358	)	$	3,046

Reconciliation of Income Taxes


	Three Months Ended September 30, 2023					Three Months Ended September 30, 2022
Income taxes computed at the federal statutory rate	$	33		21.0	%	$	705		21.0	%
State income taxes, net of federal tax benefit		(2	)	(1.2	)		168		5.0
Excess tax expense (benefit) from stock options/restricted shares		—		—			19		0.6
Difference in income tax rate on foreign earnings/other		1		0.9			(9	)	(0.3	)
Change in valuation allowance		(3	)	(1.9	)		68		2.0

	$	29		18.8	%	$	951		28.3	%


	Nine Months Ended September 30, 2023					Nine Months Ended September 30, 2022
Income taxes computed at the federal statutory rate	$	(450	)	(21.0	)%	$	2,146	21.0	%
State income taxes, net of federal tax benefit		(74	)	(3.5	)		554	5.4
Excess tax expense (benefit) from stock options/restricted shares		40		1.9			10	0.1
Difference in income tax rate on foreign earnings/other		72		3.4			64	0.6
Change in valuation allowance		54		2.5			272	2.7

	$	(358	)	(16.7	)%	$	3,046	29.8	%

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, 2021	$ 74,428	$ 131	$ 28,250	$ 50,841	$ (4,187)	$ (607)
Net income (loss)	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 (loss)	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 (loss)	2,436			2,436
Adjustment Employee Stock Purchase Plan	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 (loss)	2,406			2,406
Adjustment Employee Stock Purchase Plan	(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)
Beginning Balances at Dec. 31, 2022	86,003	133	32,059	59,553	(4,187)	(1,555)
Net income (loss)	261			261
Other comprehensive gain (loss), net of taxes	5					5
Stock-based compensation expense	835		835
Ending Balances at Mar. 31, 2023	87,104	133	32,894	59,814	(4,187)	(1,550)
Beginning Balances at Dec. 31, 2022	86,003	133	32,059	59,553	(4,187)	(1,555)
Net income (loss)	(1,787)
Other comprehensive gain (loss), net of taxes	(95)
Ending Balances at Sep. 30, 2023	86,200	133	34,710	57,766	(4,759)	(1,650)
Beginning Balances at Mar. 31, 2023	87,104	133	32,894	59,814	(4,187)	(1,550)
Net income (loss)	(2,173)			(2,173)
Adjustment Employee Stock Purchase Plan	150		150
Other comprehensive gain (loss), net of taxes	(12)					(12)
Stock-based compensation expense	842		842
Shares repurchased	(572)				(572)
Ending Balances at Jun. 30, 2023	85,339	133	33,886	57,641	(4,759)	(1,562)
Net income (loss)	125			125
Other comprehensive gain (loss), net of taxes	(88)					(88)
Stock-based compensation expense	824		824
Ending Balances at Sep. 30, 2023	$ 86,200	$ 133	$ 34,710	$ 57,766	$ (4,759)	$ (1,650)

- Definition

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

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(g)(1)(ii))
-Publisher FASB
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 323
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-Section 50
-Paragraph 3
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481687/323-10-50-3

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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-Section 50
-Paragraph 28
-Subparagraph (f)
-Publisher FASB
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
-Section 50
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-Publisher FASB
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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Reference 11: http://www.xbrl.org/2003/role/disclosureRef
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Reference 12: http://www.xbrl.org/2003/role/disclosureRef
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Reference 13: http://www.xbrl.org/2003/role/exampleRef
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-Name Accounting Standards Codification
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Reference 14: http://www.xbrl.org/2003/role/disclosureRef
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Reference 15: http://www.xbrl.org/2003/role/disclosureRef
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Equity impact of the value of stock that has been repurchased during the period and has not been retired and is not held in treasury. Some state laws may mandate the circumstances under which an entity may acquire its own stock and prescribe the accounting treatment therefore. This element is used when state law does not recognize treasury stock.

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+ Details

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Statement of Comprehensive Income [Abstract]
Net income (loss)	$ 125	$ 2,406	$ (1,787)	$ 7,174
Other comprehensive income (loss):
Foreign currency translation adjustments	(88)	(235)	(95)	(701)
Total other comprehensive gain (loss), net of taxes	(88)	(235)	(95)	(701)
Total comprehensive income (loss)	$ 37	$ 2,171	$ (1,882)	$ 6,473

- Definition

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

+ References

+ Details

Business Segments and Geographic Information

9 Months Ended

Sep. 30, 2023

Segment Reporting [Abstract]

Business Segments and Geographic Information

12.	Business Segments and Geographic Information

Our reporting segments are: 1) Data and Analytics Services; and 2) 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, engineering services 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,
	2023			2022			2023			2022

	(Amounts in thousands)						(Amounts in thousands)
Revenues:
Data and Analytics Services	$	8,038		$	10,076		$	26,206		$	31,478
IT Staffing Services		39,741			53,074			128,840			153,544

Total revenues	$	47,779		$	63,150		$	155,046		$	185,022

Gross Margin %:
Data and Analytics Services		45.8	%		39.6	%		43.1	%		42.8	%
IT Staffing Services		22.4	%		23.2	%		22.0	%		23.1	%

Total gross margin %		26.3	%		25.8	%		25.6	%		26.5	%

Segment operating income (loss):
Data and Analytics Services	$	(832	)	$	826		$	(2,393	)	$	2,615
IT Staffing Services		1,476			3,892			5,227			10,542

Subtotal		644			4,718			2,834			13,157
Amortization of acquired intangible assets		(693	)		(791	)		(2,079	)		(2,375	)
Employment-related claim, net of recoveries		—			—			(3,100	)		—
Reserve for cyber-security breach		—			(450	)		—			(450	)
Severance expense		—			(120	)		—			(120	)
Interest expenses, FX gains/losses and other, net		203			—			200			8

Income (loss) before income taxes	$	154		$	3,357		$	(2,145	)	$	10,220

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


	September 30, 2023		December 31, 2022

	(Amounts in thousands)
Total assets:
Data and Analytics Services	$	51,845	$	54,544
IT Staffing Services		57,698		54,335

Total assets	$	109,543	$	108,879

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


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022

	(Amounts in thousands)				(Amounts in thousands)
United States	$	46,778	$	61,704	$	151,798	$	180,519
Canada		627		1,038		2,159		3,187
India and Other		374		408		1,089		1,316

Total revenues	$	47,779	$	63,150	$	155,046	$	185,022

- 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

Credit Facility

9 Months Ended

Sep. 30, 2023

Text Block [Abstract]

Credit Facility

8.	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 were required to be repaid in consecutive quarterly installments of $1.1 million through and including the maturity date of October 1, 2024. In August 2022, the Company prepaid $7.6 million of the outstanding term loan with excess cash balances. The final term loan payment was made on January 3, 2023, taking the outstanding balance to zero.

Borrowings under the Revolver and the Term Loan, which may be made 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 Loan borrowings. 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 Loan borrowings. A 20 to

30-basis

point per annum commitment fee on the unused portion of the Revolver 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, 2023, the Company was in compliance with all applicable provisions of the Credit Agreement.

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 Credit Agreement. Deferred financing costs of $238,000 and $293,000 (net of amortization) as of September 30, 2023, and December 31, 2022, respectively, are presented as long-term assets in the Company’s Consolidated Balance Sheets.

As of September 30, 2023, and December 31, 2022, the Company’s outstanding borrowings under the Revolver totaled zero dollars; and unused borrowing capacity available was approximately $24.8 million and $31.8 million, respectively. The Company’s outstanding borrowings under the Term Loan were zero dollars and $1.1 million at September 30, 2023, and December 31, 2022, respectively.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Income Statement [Abstract]
Revenues	$ 47,779	$ 63,150	$ 155,046	$ 185,022
Cost of revenues	35,213	46,863	115,354	136,057
Gross profit	12,566	16,287	39,692	48,965
Selling, general and administrative expenses:
Operating expenses	12,615	12,930	38,937	38,753
Employment-related claim, net of recoveries	0	0	3,100	0
Total selling, general and administrative expenses	12,615	12,930	42,037	38,753
Income (loss) from operations	(49)	3,357	(2,345)	10,212
Interest income (expense), net	148	(85)	232	(326)
Other income (expense), net	55	85	(32)	334
Income (loss) before income taxes	154	3,357	(2,145)	10,220
Income tax expense (benefit)	29	951	(358)	3,046
Net income (loss)	$ 125	$ 2,406	$ (1,787)	$ 7,174
Earnings (loss) per share:
Basic	$ 0.01	$ 0.21	$ (0.15)	$ 0.62
Diluted	$ 0.01	$ 0.20	$ (0.15)	$ 0.59
Weighted average common shares outstanding:
Basic	11,597	11,616	11,618	11,578
Diluted	11,968	12,084	11,618	12,082

Business Segments and Geographic Information - Summary of Operating Segments (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Segment Reporting Information [Line Items]
Revenues:	$ 47,779	$ 63,150	$ 155,046	$ 185,022
Gross Margin %:	26.30%	25.80%	25.60%	26.50%
Income (loss) from operations	$ (49)	$ 3,357	$ (2,345)	$ 10,212
Amortization of acquired intangible assets	(693)	(791)	(2,079)	(2,375)
Employment-related claim, net of recoveries	0	0	(3,100)	0
Reserve for cyber-security breach	0	(450)	0	(450)
Severance expense	0	(120)	0	(120)
Interest expenses, FX gains/losses and other, net	203	0	200	8
Income (loss) before income taxes	154	3,357	(2,145)	10,220
Data and Analytics Services [Member]
Segment Reporting Information [Line Items]
Revenues:	$ 8,038	$ 10,076	$ 26,206	$ 31,478
Gross Margin %:	45.80%	39.60%	43.10%	42.80%
IT Staffing Services [Member]
Segment Reporting Information [Line Items]
Revenues:	$ 39,741	$ 53,074	$ 128,840	$ 153,544
Gross Margin %:	22.40%	23.20%	22.00%	23.10%
Operating Segments [Member]
Segment Reporting Information [Line Items]
Income (loss) from operations	$ 644	$ 4,718	$ 2,834	$ 13,157
Operating Segments [Member] \| Data and Analytics Services [Member]
Segment Reporting Information [Line Items]
Income (loss) from operations	(832)	826	(2,393)	2,615
Operating Segments [Member] \| IT Staffing Services [Member]
Segment Reporting Information [Line Items]
Income (loss) from operations	$ 1,476	$ 3,892	$ 5,227	$ 10,542

Commitments and Contingencies

9 Months Ended

Sep. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

5.	Commitments and Contingencies

In December 2022, the Company received a demand letter from the attorney of a former employee who resigned from his employment with the Company in November 2022. Among other allegations in the letter, this former employee has asserted various employment-related claims against the Company, including a claim of wrongful termination. For the three and nine months ended September 30, 2023, the Company incurred $225,000 and $1.2 million, respectively, of professional service fees related to this matter. Additionally, the Company recorded a $3.1 million loss reserve, net of recoveries in the second quarter of 2023, with respect to an estimated settlement. During the third quarter, we settled this claim and, under the terms of the settlement agreement with this former employee, we paid the settlement amount. The exact terms of the settlement agreement are to remain confidential; however, the settlement amount, net of expected recoveries, was fully reserved in the second quarter of 2023 and is included in Selling, General and Administrative expenses in the Condensed Consolidated Statement of Operations included in this quarterly report on Form

10-Q.

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.

Revenue from Contracts with Customers

9 Months Ended

Sep. 30, 2023

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 and also require

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 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, all of 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,
	2023		2022		2023		2022

	(Amounts in thousands)				(Amounts in thousands)
Data and Analytics Services Segment
Time-and-material Contracts	$	5,888	$	6,524	$	19,027	$	19,568
Fixed-price Contracts		2,150		3,552		7,179		11,910

Subtotal Data and Analytics Services	$	8,038	$	10,076	$	26,206	$	31,478

IT Staffing Services Segment
Time-and-material Contracts	$	39,741	$	53,074	$	128,840	$	153,544
Fixed-price Contracts		—		—		—		—

Subtotal IT Staffing Services	$	39,741	$	53,074	$	128,840	$	153,544

Total Revenues	$	47,779	$	63,150	$	155,046	$	185,022

For the three months ended September 30, 2023, the Company had one client (CGI =21.1%) that exceeded 10% of total revenues. For the nine months ended September 30, 2023, the Company had the same one client (CGI = 23.7%) that exceeded 10% of total revenues. For the three months ended September 30, 2022, the Company had one client (CGI =23.7%) that exceeded 10% of total revenues. For the nine months ended September 30, 2022, the Company had the same one client (CGI = 21.3%) that exceeded 10% of total revenues.

The Company’s top ten clients represented approximately 52% and 54% of total revenues for the three months ended September 30, 2023 and 2022, respectively. For the nine months ended September 30, 2023 and 2022, the Company’s top ten clients represented approximately 54% and 53% of total revenues, 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,
	2023		2022		2023		2022

	(Amounts in thousands)				(Amounts in thousands)
United States	$	46,778	$	61,704	$	151,798	$	180,519
Canada		627		1,038		2,159		3,187
India and Other		374		408		1,089		1,316

Total revenues	$	47,779	$	63,150	$	155,046	$	185,022

- 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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-Topic 606
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+ Details

Revenue from Contracts with Customers (Tables)

9 Months Ended

Sep. 30, 2023

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,
	2023		2022		2023		2022

	(Amounts in thousands)				(Amounts in thousands)
Data and Analytics Services Segment
Time-and-material Contracts	$	5,888	$	6,524	$	19,027	$	19,568
Fixed-price Contracts		2,150		3,552		7,179		11,910

Subtotal Data and Analytics Services	$	8,038	$	10,076	$	26,206	$	31,478

IT Staffing Services Segment
Time-and-material Contracts	$	39,741	$	53,074	$	128,840	$	153,544
Fixed-price Contracts		—		—		—		—

Subtotal IT Staffing Services	$	39,741	$	53,074	$	128,840	$	153,544

Total Revenues	$	47,779	$	63,150	$	155,046	$	185,022

Summary of Revenue from External Customers

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,
	2023		2022		2023		2022

	(Amounts in thousands)				(Amounts in thousands)
United States	$	46,778	$	61,704	$	151,798	$	180,519
Canada		627		1,038		2,159		3,187
India and Other		374		408		1,089		1,316

Total revenues	$	47,779	$	63,150	$	155,046	$	185,022

Earnings (Loss) per Share - Additional Information (Detail) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2022
Earnings Per Share [Abstract]
Anti-dilutive securities not included in computation of earnings per share	1,473,000	644,000	549,000

Business Segments and Geographic Information - Summary of Assets by Segment (Detail) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Segment Reporting, Asset Reconciling Item [Line Items]
Total assets	$ 109,543	$ 108,879
Data and Analytics Services [Member]
Segment Reporting, Asset Reconciling Item [Line Items]
Total assets	51,845	54,544
IT Staffing Services [Member]
Segment Reporting, Asset Reconciling Item [Line Items]
Total assets	$ 57,698	$ 54,335

- 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.

+ References

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+ Details

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
OPERATING ACTIVITIES:
Net income (loss)	$ (1,787)	$ 7,174
Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities:
Depreciation and amortization	2,943	3,251
Bad debt expense	0	50
Interest amortization of deferred financing costs	55	55
Stock-based compensation expense	2,501	2,054
Deferred income taxes, net	(405)	496
Operating lease assets and liabilities, net	68	(355)
Loss on disposition of fixed assets	1	0
Long term accrued income taxes	(36)	(20)
Working capital items:
Accounts receivable and unbilled receivables	10,044	(7,097)
Insurance recovery	(2,200)	0
Prepaid and other current assets	(2,081)	57
Accounts payable	370	877
Accrued payroll and related costs	1,192	1,388
Other accrued liabilities	(323)	(192)
Deferred revenue	203	6
Net cash flows provided by (used in) operating activities	10,545	7,744
INVESTING ACTIVITIES:
Recovery of (payment for) non-current deposits	119	24
Capital expenditures	(213)	(819)
Net cash flows provided by (used in) investing activities	(94)	(795)
FINANCING ACTIVITIES:
(Repayments) on term loan facility	(1,100)	(10,900)
Proceeds from the issuance of common shares	150	189
Purchase of treasury stock	(572)	0
Proceeds from the exercise of stock options	0	1,323
Net cash flows provided by (used in) financing activities	(1,522)	(9,388)
Effect of exchange rate changes on cash and cash equivalents	(105)	(701)
Net change in cash and cash equivalents	8,824	(3,140)
Cash and cash equivalents, beginning of period	7,057	6,622
Cash and cash equivalents, end of period	$ 15,881	$ 3,482

Goodwill and Other Intangible Assets, net - Schedule of Estimated Amortization Expense (Detail) $ in Thousands	Sep. 30, 2023 USD ($)
Intangible Liability Disclosure [Abstract]
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
Estimated aggregate amortization expense for year ending 2027	$ 2,025

Recently Issued Accounting Standards

9 Months Ended

Sep. 30, 2023

Recently Issued Accounting Standards [Abstract]

Recently Issued Accounting Standards

13.	Recently Issued Accounting Standards

Recently Adopted Accounting Pronouncements

In October 2021, the Financial Accounting Standards Board 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. We adopted this ASU on January 1, 2023 with no material impact on our 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.

+ References

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+ Details

Credit Facility - Additional information (Detail) - USD ($)			1 Months Ended	9 Months Ended		12 Months Ended
	Jan. 04, 2022	Oct. 01, 2020	Aug. 31, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2020	Dec. 31, 2022	Dec. 31, 2021
Line of Credit Facility [Line Items]
Current borrowing capacity under line of credit facility				$ 24,800,000			$ 31,800,000
Deferred financing costs				238,000			293,000
Repayments of debt				1,100,000	$ 10,900,000
Term Loan Facility [Member]
Line of Credit Facility [Line Items]
Outstanding borrowings amount				0			1,100,000
Revolving Line of Credit [Member]
Line of Credit Facility [Line Items]
Percentage of eligible accounts receivable						85.00%
Outstanding borrowings amount				$ 0			0
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
Repayments of debt			$ 7,600,000
Line of credit facility outstanding amount				$ 0
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%

Employee Benefit Plan - Additional Information (Detail) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Defined Benefit Plan Disclosure [Line Items]
Matching contributions	$ 0	$ 0	$ 0	$ 0

Leases - Schedule of Future Minimum Rental Payments for Operating Leases (Detail) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
2023 (for remainder of year)	$ 380
2024	1,408
2025	1,225
2026	1,220
2027	535
Thereafter	0
Total	4,768
Less: Imputed interest	(396)
Present value of operating lease liabilities	$ 4,372	$ 3,798

Business Segments and Geographic Information - Additional Information (Detail)	9 Months Ended
	Sep. 30, 2023
Data and Analytics Services [Member] \| Business Combination Credit Agreement [Member]
Segment Reporting Information [Line Items]
Business acquisition date	Jul. 13, 2017