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

Computer Task Group Inc CTG reported 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.