May 4, 2019
Operator
Ladies and gentlemen, greetings and welcome to the Mastech Digital, Inc. First Quarter Earnings Call.
At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation.
[Operator Instructions] As a reminder, this program is being recorded. It is now my pleasure to introduce your host Jennifer Ford-Lacey, Manager of Legal Affairs for Mastech Digital, Inc.
Thank you. You may begin.
Jennifer Ford-Lacey
Thank you, operator, and welcome to Mastech Digital's first quarter 2019 conference call. If you have not yet received a copy of our earnings announcement, it can be obtained from our website at www.mastechdigital.com.
With me on the call today are Vivek Gupta, Mastech Digital's Chief Executive Officer; and Jack Cronin, our Chief Financial Officer. I would like to remind everyone that statements made during this call that are not historical facts are forward-looking statements.
These forward-looking statements include our financial growth and liquidity projections as well as statements about our plans, strategies, intentions and beliefs concerning our business, cash flows, costs and the markets in which we operate. Without limiting the foregoing, the words believes, anticipates, plans, expects and similar expressions are intended to identify certain forward-looking statements.
These statements are based on information currently available to us and we assume no obligation to update these statements as circumstances change. There are risks and uncertainties that could cause actual events to differ materially from these forward-looking statements, including those listed in the Company's 2018 annual report on Form 10-K filed with the Securities and Exchange Commission and available on its website at www.sec.gov.
Additionally, management has elected to provide certain non-GAAP financial measures to supplement our financial results presented on a GAAP basis. Specifically, we will provide non-GAAP net income and non-GAAP diluted earnings per share data, which we believe will provide greater transparency with respect to the key metrics used by management in operating our business.
Reconciliations of these non-GAAP financial measures to their comparable GAAP measures are included in our earnings announcement, which can be obtained from our website at www.mastechdigital.com. As a reminder, we will not be providing guidance during this call nor will we provide guidance in any subsequent one-on-one meetings or calls.
I will now turn the call over to Jack for a review of our first quarter 2019 results.
Jack Cronin
Thanks, Jen, and good morning, everyone. Revenues for the first quarter of 2019 totaled $45.2 million and represented a 4% increase compared to $43.3 million in the first quarter of 2018.
Our data and analytics services segment contributed $5.8 million of revenue during Q1 of 2019, which is an increase from last quarter's performance of $5.4 million, but below revenues of $6.6 million achieved in the first quarter of 2018. I’m also happy to add that activity levels were robust in Q1 of 2019 when compared to the previous quarter in terms of both pipeline opportunities and project wins.
Organic year-over-year revenue growth from our IT staffing services segment was 7% in Q1 2019, as our global consultant base increased for the fifth consecutive quarter. Demand for our IT staffing services remained strong during Q1 of 2019, and we ended the quarter with over 1,100 IT consultants on billing.
Gross profit for Q1 of 2019 totaled $10.8 million compared to $10.2 million in the same period last year. Our gross margins for Q1 2019 were 24% of revenues compared to 23.7% in Q1 of 2018.
Our data and analytics services segment had gross margins of 45.5% in Q1 2019, which was 120 basis points higher when compared to Q1 of 2018. Better utilization of our technical resources, our higher-valued services contributed to this improvement in gross margins.
Our IT staffing services segment had Q1 2019 gross margins of 20.8% compared to 20.0% in the same period last year. Strong direct hire revenues and higher margins on new assignments favorably impacted this segment's margin performance.
SG&A expenses were $9 million in the first quarter of 2019 and represented 19.8% of revenues compared to $7.8 million or 8.1% of revenues in the first quarter of 2018. This $1.2 million increase in SG&A expenses represented investments of $500,000 in our data and analytics services segment, principally in the area of sales and offshore delivery and $700,000 in our IT staffing services segment due to higher expenses related to systems upgrades, facility expansion and higher volume driven variable expenses.
GAAP net income for Q1 2019 was $1 million or $0.09 per diluted share compared to $1.4 million or $0.12 per diluted share in the first quarter of 2018. Non-GAAP net income for Q1 2019 was $1.6 million or $0.15 per diluted share compared to $2 million or $0.18 per diluted share in the corresponding quarter of 2018.
Q1 SG&A expense items not included in non-GAAP financial measures net of tax benefits were the amortization of acquired intangible assets and stock-based compensation. These items are detailed in our first quarter earnings release, which is available on our website.
Addressing our financial position at March 31, 2019, we had $37 million of outstanding bank debt net of cash balances on hand, and our borrowing availability approximated $8 million under our existing revolving credit line. During the quarter, debt levels declined by $800,000, as we made progress on cash conversion matters related to the implementation of our new cloud-based ERP platform.
I will now turn the call over to Vivek for his comments.
Vivek Gupta
Good morning, everyone. Thank you, Jack, for the detailed financial review of our operating results for Q1 2019.
Let me start by saying, I'm excited by the first quarter performance of our data and analytics services segment in terms of pipeline growth, project wins, improved utilization and the resultant sequential quarterly revenue growth. We continued forward with the momentum that we saw in the latter half of 2018, which I see as a very positive sign for this segment's future.
Additionally, we recently appointed industry veteran, Paul Burton as the Chief Executive of our data and analytics business. With Paul's stellar background and international experience, we are well positioned to return to a growth trajectory in 2019.
Our IT staffing services segment continued to perform at a very high level in Q1 2019. Organic revenue growth approximated 7% on a year-over-year basis, well above the industry average growth rate of 4%.
Additionally, we expanded gross margins by 80 basis points and segment operating profits by 11% over Q1 2018 levels, as our focus on digital technologies continues. While we invested in both of our business segments during the first quarter of 2019, the lion share of investment going forward will be on the data and analytics segment, which underscores our confidence in the future of this business segment.
I will now open the session for your questions.
Operator
Q - A -
Vivek Gupta
Thank you, operator. If there are no questions, I would like to thank you for joining our call today, and we look forward to sharing our second quarter 2019 results with you in late July.
Thank you.
Operator
Thank you ladies and gentlemen, this does conclude our teleconference for today. You may now disconnect your line at this time.
Thank you for your participation and have a wonderful day.