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Computer Task Group Posts Mixed Q2 Results, Notes Strong Solutions Segment Performance

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Computer Task Group Posts Mixed Q2 Results, Notes Strong Solutions Segment Performance
  • Computer Task Group Inc (NASDAQ: CTGreported second-quarter FY21 revenue growth of 3.4% year-on-year to $92.2 million, missing the analyst consensus of $94.1 million.
  • Solutions revenue increased 10.3%Y/Y to $41.4 million, and the Solutions gross margin expanded 80 bps to 32.3%. Staffing revenue was $50.8 million.
  • Gross profit increased 8.8% to $20.4 million, and gross margin expanded by 110 bps to 22.1%.
  • The non-GAAP operating margin remained steady at 3.2%.
  • Non-GAAP EPS of $0.13 beat the analyst consensus of $0.12.
  • It held $29.2 million in cash and equivalents.
  • Computer Task Group did not provide any guidance citing the pandemic-driven uncertainties.
  • Meanwhile, it expects continued year-over-year revenue growth and operating profit improvement, driven by an increasing mix of Solutions revenue, partially offset by the ongoing strategic disengagement from lower-margin Staffing business.
  • The company's focus continues to be on driving CTG's digital transformation offerings and increasing the overall mix of higher value Solutions revenue, CEO Filip Gydé stated.
  •  Price action: CTG shares closed lower by 0.66% at $9.04 on Wednesday.
 

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