TSS (NASDAQ:TSSI) Issues Quarterly Earnings Results, Beats Estimates By $0.01 EPS

TSS (NASDAQ:TSSI) announced its earnings results on Thursday. The company reported $0.04 earnings per share for the quarter, beating the consensus estimate of $0.03 by $0.01, FiscalAI reports. The firm had revenue of $50.06 million during the quarter. TSS had a net margin of 7.44% and a return on equity of 19.22%.

Here are the key takeaways from TSS’s conference call:

• Third-quarter results improved sharply: Revenue rose 20% year over year to $50.1 million, while adjusted EBITDA increased 225% to $4.7 million. The company swung to net income of $1.1 million from a $1.5 million year-earlier loss, with higher-margin systems integration lifting gross margin.
• Systems integration was the main growth engine. Revenue reached a record $16.1 million, up 75% year over year, with growth in both AI and mainstream racks; TSS expects further acceleration in Q4 and into 2027. It has invested about $14 million of the $17 million–$18 million needed for next-generation platform readiness and expects the investment to begin contributing additional revenue in Q4.
• TSS raised its full-year 2026 adjusted EBITDA outlook to $21 million–$23 million and expects Q4 systems integration revenue to exceed Q3 levels, supported by rack volumes, warehousing services, and a modular data center deployment.
• TSS signed a seven-year warehousing agreement with its largest customer alongside a lease for about 380,000 square feet in Georgetown, Texas. The added capacity is intended to support customer inventory and growth, though management said warehousing margins will be lower than its other systems integration work.
• Facilities management revenue fell about 30% year over year to $1.1 million, and procurement remains subject to variable order timing. Management sees potential in modular data centers, but described current discussions as preliminary and said it is not yet prepared to deliver the proposed prefab solutions at scale.

TSS Trading Up 0.8%

Shares of TSS stock traded up $0.04 during trading hours on Friday, reaching $6.00. The stock had a trading volume of 184,431 shares, compared to its average volume of 1,248,327. The firm has a 50 day simple moving average of $8.40 and a two-hundred day simple moving average of $10.75. The firm has a market capitalization of $169.17 million, a price-to-earnings ratio of 12.73 and a beta of 2.06. The company has a current ratio of 1.66, a quick ratio of 1.38 and a debt-to-equity ratio of 0.15. TSS has a 1 year low of $5.90 and a 1 year high of $17.57.

Analyst Ratings Changes

TSSI has been the subject of a number of recent research reports. Needham & Company LLC lowered their price target on shares of TSS from $13.00 to $9.00 and set a “buy” rating for the company in a report on Friday. Weiss Ratings reissued a “hold (c)” rating on shares of TSS in a research report on Monday, September 14th. Finally, Wall Street Zen raised shares of TSS from a “sell” rating to a “hold” rating in a research note on Saturday, October 17th. One analyst has rated the stock with a Buy rating and two have given a Hold rating to the company. According to MarketBeat, the company currently has a consensus rating of “Hold” and a consensus price target of $12.00.

Institutional Inflows and Outflows

Several institutional investors and hedge funds have recently made changes to their positions in the company. Triumph Capital Management bought a new stake in TSS in the 2nd quarter valued at about $26,000. Vestor Capital LLC raised its stake in shares of TSS by 3,305.5% in the 3rd quarter. Vestor Capital LLC now owns 6,811 shares of the company’s stock worth $66,000 after buying an additional 6,611 shares in the last quarter. Cura Wealth Advisors LLC acquired a new position in shares of TSS in the 1st quarter worth approximately $130,000. Independent Financial Group LLC acquired a new stake in shares of TSS during the first quarter worth $134,000. Finally, Commonwealth Equity Services LLC increased its position in shares of TSS by 38.5% in the third quarter. Commonwealth Equity Services LLC now owns 15,249 shares of the company’s stock worth $148,000 after acquiring an additional 4,240 shares in the last quarter.

TSS Company Profile

TSS, Inc (NASDAQ:TSSI) provides data center infrastructure solutions and related services for organizations that require reliable, scalable computing environments. The company supports the planning, design, deployment, and operation of data center facilities and technology infrastructure.

Its services may include data center engineering and construction support, equipment procurement and integration, installation, infrastructure management, and ongoing maintenance. TSS serves customers with demanding information technology requirements, including enterprises, technology companies, and data center operators.

The company’s activities are centered on helping customers build and maintain physical environments for servers, networking equipment, storage systems, power systems, and cooling infrastructure.