TSS Reports Second Quarter 2026 Financial Results
Rhea-AI Summary
TSS (Nasdaq:TSSI) reported second quarter 2026 revenue of $35.1 million, down 20% year-over-year, reflecting an intentional shift away from lower-margin procurement toward higher-margin services. Procurement revenue fell 45% to $18.2 million, while systems integration revenue rose 46% to $13.9 million and facilities management revenue increased 84% to $2.7 million. Systems integration represented 39% of total revenue versus 22% a year ago.
Gross profit grew 11% to $8.0 million, and adjusted EBITDA increased 12% to $4.5 million. Net income was $1.4 million, or $0.05 diluted EPS, compared with $1.5 million and $0.06. Year-to-date, revenue was $90.5 million (down 37%), but systems integration rose 65% to $28.0 million and adjusted EBITDA reached $9.8 million, up 5%. TSS also began deploying capital toward a planned $17 million investment to support next-generation AI data center technology and reaffirmed its 2026 adjusted EBITDA outlook at the upper end of $20–$22 million.
Positive
- Systems integration revenue up 46% YoY to $13.9M in Q2 2026
- Facilities management revenue up 84% YoY to $2.7M in Q2 2026
- Gross profit up 11% YoY to $8.0M in Q2 2026
- Adjusted EBITDA up 12% YoY to $4.5M in Q2 2026
- YTD systems integration revenue up 65% YoY to $28.0M
- Maintained 2026 adjusted EBITDA outlook at upper end of $20M–$22M range
Negative
- Total Q2 2026 revenue down 20% YoY to $35.1M
- Q2 2026 procurement revenue down 45% YoY to $18.2M
- YTD 2026 procurement revenue down 53% YoY to $58.2M
- Q2 2026 net income slightly down to $1.4M vs. $1.5M
- YTD 2026 net income down to $3.7M vs. $4.5M in 2025
- Cash and cash equivalents declined to $67.7M from $85.5M at 12/31/2025
News Explained
As a backward-looking liquidity reference, the first-quarter cash balance of
Sources and calculations
- TSS second-quarter 2026 financial results (2026-08-13)
- TSS first-quarter 2026 fundamentals (2026Q1)
- Cash and equivalents vs quarterly operating cash outflow, in days of cash use $65,973,000 / ($14,928,000 / 90) = [object Object]
Market reaction after 2Q26 earnings report: TSSI -24.58%
Following this news, TSSI has declined 24.58%, reflecting a significant negative market reaction. Our momentum scanner has triggered 31 alerts so far, indicating elevated trading interest and price volatility. The stock is currently trading at $9.02. Trading volume is very high at 4.3x the average, suggesting heavy selling pressure.
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Key Figures
Previous Earnings Reports
| Date | Event | Sentiment | 24h Move | Catalyst |
|---|---|---|---|---|
| May 07 | Q1 2026 earnings | Negative | -24.1% | Revenue and diluted EPS declined despite higher-margin systems integration growth. |
| Mar 11 | Q4 2025 earnings | Positive | +8.1% | Full-year revenue and diluted EPS increased, with systems integration revenue rising. |
| Nov 13 | Q3 2025 earnings | Negative | -43.3% | Quarterly revenue, adjusted EBITDA, and net income declined year over year. |
| Aug 06 | Q2 2025 earnings | Positive | -23.1% | Revenue and adjusted EBITDA increased, while full-year EBITDA growth outlook was raised. |
| May 15 | Q1 2025 earnings | Positive | +74.1% | Revenue, net income, and diluted EPS increased substantially year over year. |
24h Move is the share-price change in the day after each event; other market factors may also have contributed.
Earnings-tagged events showed four aligned reactions and one divergence, with an average move of -1.69%.
Key Terms
gaap financial
diluted eps financial
deferred tax asset financial
regulation g regulatory
AI-generated analysis. How Rhea-AI works. Not financial advice.
Systems Integration Revenue Increased
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GEORGETOWN, TX / ACCESS Newswire / August 13, 2026 / TSS, Inc. (Nasdaq:TSSI), a data center services company that provides integration and related services for AI and other high-performance computing infrastructure and software, today reported results for its second quarter ended June 30, 2026, showing a continued strategic shift of its revenue base toward higher margin AI and infrastructure services.
Systems integration revenue grew
46% year-over-yearFacilities management revenue grew
84% Reduction in total revenues reflects shift from lower margin procurement business to higher margin systems integration and facilities management business lines
The company began deploying capital for its planned
$17 million investment in readiness for the next generation of AI data center technology, which is expected to convert into higher systems integration revenues beginning in the third quarter of 2026
"Systems integration revenue represented
Second Quarter 2026 Financial Highlights:
(All comparisons are to Second Quarter 2025)
Revenues of
$35.1 million , down20% , with growth in higher margin business linesProcurement revenues of
$18.2 million , down45% Systems Integration revenues of
$13.9 million , up46% Facilities Management revenues of
$2.7 million , up84% Operating lease income of
$0.3 million as we began warehouse operations May 1, 2026 using our previously idle former Round Rock integration facility
Gross profit of
$8.0 million , up11% Pre-tax income up
19% on favorable leveraging of expense structureNet income of
$1.4 million and Diluted EPS of$0.05 , compared to net income of$1.5 million and Diluted EPS of$0.06 after full tax provision, following Q4 2025 removal of valuation allowance on deferred tax assetAdjusted EBITDA of
$4.5 million , up12% , reflecting a shift in total revenues to higher margin systems integration
Year-to-Date 2026 Financial Highlights:
(All comparisons are to the First Six Months of 2025)
Revenues of
$90.5 million , down37% , with growth skewed towards higher margin business linesProcurement revenues of
$58.2 million , down53% Systems Integration revenues of
$28.0 million , up65% Facilities Management revenues of
$4.0 million , up44%
Gross profit of
$16.8 million , up2% Reflects current period
$1.9 million allocation of depreciation to COGS vs$0.6 million in the prior year period
Pre-tax income of
$4.5 million , down only1% despite comparison to record procurement revenues in the prior year periodNet income of
$3.7 million and Diluted EPS of$0.13 compared to net income of$4.5 million and Diluted EPS of$0.17 after full tax provision, following Q4 2025 removal of valuation allowance on deferred tax assetAdjusted EBITDA of
$9.8 million , up5% , reflecting a shift in total revenues to higher margin systems integration
2026 Outlook
Dewan concluded, "Looking ahead, we expect the second half of this year to be stronger than the first half with accelerated growth in Systems Integration as we continue to see strong demand across our business. We maintain our 2026 outlook for Adjusted EBITDA to be at the upper end of our
Conference Call Details
The Company will conduct a conference call at 5 p.m. Eastern time today. To participate on the conference call, please dial 888-506-0062 toll free from the U.S. or Canada. Other international callers may access the call at 1-973-528-0011. The event ID is 473873. Investors may also access a live audio webcast of this conference call and replay the call for one year following the webcast at https://www.webcaster5.com/Webcast/Page/2294/54255.
About Non-GAAP Financial Measures
Adjusted EBITDA is a supplemental financial measure not defined under Generally Accepted Accounting Principles (GAAP). We define Adjusted EBITDA as net income (loss) before net interest expense and bank factoring costs, income taxes, depreciation and amortization, impairment loss on goodwill and other intangibles, stock-based compensation, and certain extraordinary items. We present Adjusted EBITDA because we believe this supplemental measure of operating performance is helpful in comparing our operating results across reporting periods on a consistent basis by excluding items that may or could have a disproportionately positive or negative impact on our results of operations in any particular period. We also use Adjusted EBITDA as a factor in evaluating the performance of certain management personnel when determining incentive compensation.
Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies. Adjusted EBITDA, while providing useful information, should not be considered in isolation or as an alternative to net income or cash flows as determined under GAAP. Consistent with Regulation G under the U.S. federal securities laws, Adjusted EBITDA has been reconciled to the nearest GAAP measure; this reconciliation is located under the heading "Adjusted EBITDA Reconciliation" following the Consolidated Statements of Operations included in this press release. The Company is unable to provide a reconciliation of forward-looking Adjusted EBITDA to GAAP net income because certain reconciling items are outside the Company's control or cannot be reasonably predicted without unreasonable efforts. These items may include stock-based compensation expense, fluctuations in prevailing interest rates and the resulting impacts on bank factoring fees, interest expense and interest income, and other adjustments that may be material.
About TSS, Inc.
TSS specializes in simplifying the complex. The TSS mission is to streamline the integration and deployment of high-performance computing infrastructure and software, ensuring that end users quickly receive and efficiently utilize the necessary technology. Known for flexibility, the company builds, integrates, and deploys custom, high-volume solutions that empower data centers and catalyze the digital transformation of generative AI and other leading-edge technologies essential for modern computing, data, and business needs. TSS' reputation is built on passion and experience, quality, and fast time to value. As trusted partners of the world's leading data center technology providers, the company manages and deploys billions of dollars in technology each year. For more information, visit www.tssiusa.com.
Forward Looking Statements
This press release may contain "forward-looking statements" -- that is, statements related to future -- not past -- events, plans, and prospects. In this context, forward-looking statements may address matters such as our expected future business and financial performance, and often contain words such as "guidance," "forecast," "prospects," "expects," "anticipates," "intends," "plans," "believes," "seeks," "should," or "will." Forward-looking statements by their nature address matters that are, to different degrees, uncertain. Particular uncertainties that could adversely or positively affect our future results include: we may not have sufficient resources to fund our business and may need to issue debt or equity to obtain additional funding; our reliance on a significant portion of our revenues from a limited number of customers and our ability to diversify our customer base; risks relating to operating in a highly competitive industry; risks relating to supply chain challenges; risk related to changes in labor market conditions; risks related to the implementation of a new enterprise resource IT system; risks related to the development of our procurement services business; risks relating to rapid technological, structural, and competitive changes affecting the industries we serve; risks involved in properly managing complex projects; risks relating to the possible cancellation of customer contracts on short notice; risks relating to our ability to continue to implement our strategy, including having sufficient financial resources to carry out that strategy; and other risks and uncertainties disclosed in our filings with the Securities and Exchange Commission, including the Annual Report on Form 10-K for the fiscal year ended December 31, 2025. These uncertainties may cause our actual future results to be materially different than those expressed in our forward-looking statements. We do not undertake to update our forward-looking statements.
Contacts:
Hayden IR TSS, Inc.
James Carbonara (646) 755-7412 Danny Chism, CFO
Brett Maas (646) 536-7331 (512) 310-4908
tssi@haydenir.com dchism@tssiusa.com
-- Tables Follow -
TSS, Inc.
Condensed Consolidated Balance Sheets
(In thousands)
June 30, 2026 (Unaudited) | December 31, 2025 | |||||||
Current Assets: | ||||||||
Cash and cash equivalents | $ | 67,679 | $ | 85,510 | ||||
Contract and other receivables, net | 14,320 | 12,501 | ||||||
Costs and estimated earnings in excess of billings on uncompleted contracts | 205 | 3,011 | ||||||
Inventories, net | 16,962 | 15,966 | ||||||
Restricted cash | 1,811 | - | ||||||
Prepaid expenses and other current assets | 1,944 | 1,642 | ||||||
Total current assets | 102,921 | 118,630 | ||||||
Property and equipment, net | 45,901 | 38,076 | ||||||
Lease right-of-use asset | 14,569 | 15,294 | ||||||
Goodwill | 780 | 780 | ||||||
Deferred tax asset, net of valuation allowance | 7,242 | 7,917 | ||||||
Other assets | 3,908 | 4,238 | ||||||
Total assets | $ | 175,321 | $ | 184,935 | ||||
Current Liabilities: | ||||||||
Accounts payable | $ | 38,295 | $ | 46,362 | ||||
Accrued expenses and other current liabilities | 14,814 | 6,273 | ||||||
Deferred revenues, current | 2,793 | 13,928 | ||||||
Long-term debt, current | 4,161 | 4,010 | ||||||
Lease liabilities, current | 2,117 | 1,994 | ||||||
Total current liabilities | 62,180 | 72,567 | ||||||
Non-current Liabilities: | ||||||||
Long-term debt, non-current | 11,919 | 14,004 | ||||||
Lease liabilities, non-current | 20,568 | 21,629 | ||||||
Deferred revenues, non-current | 255 | - | ||||||
Other non-current liabilities | 103 | 100 | ||||||
Total non-current liabilities | 32,845 | 35,733 | ||||||
Total liabilities | 95,025 | 108,300 | ||||||
Commitments and Contingencies | ||||||||
Stockholders' Equity: | ||||||||
Preferred stock | - | - | ||||||
Common stock | 3 | 3 | ||||||
Additional paid-in capital | 121,795 | 121,842 | ||||||
Accumulated deficit | (41,502 | ) | (45,210 | ) | ||||
Total stockholders' equity | 80,296 | 76,635 | ||||||
Total liabilities and stockholders' equity | $ | 175,321 | $ | 184,935 | ||||
TSS, Inc.
Consolidated Statements of Operations
(Unaudited, In thousands except per-share values)
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2026 | 2025 | 2026 | 2025 | |||||||||||||
Revenues | ||||||||||||||||
Procurement | $ | 18,249 | $ | 33,002 | $ | 58,229 | $ | 123,179 | ||||||||
Facilities management | 2,723 | 1,482 | 4,013 | 2,780 | ||||||||||||
System integration | 13,880 | 9,486 | 27,956 | 16,970 | ||||||||||||
Operating lease income | 289 | - | 289 | - | ||||||||||||
Total revenues | 35,141 | 43,970 | 90,487 | 142,929 | ||||||||||||
Cost of revenues | ||||||||||||||||
Cost of revenues | 25,908 | 36,155 | 71,512 | 125,904 | ||||||||||||
Cost of revenues - depreciation | 989 | 618 | 1,925 | 618 | ||||||||||||
Cost of lease operations | 235 | - | 235 | - | ||||||||||||
Total cost of revenues | 27,132 | 36,773 | 73,672 | 126,522 | ||||||||||||
Gross Profit | 8,009 | 7,197 | 16,815 | 16,407 | ||||||||||||
Operating Expenses: | ||||||||||||||||
Selling, general and administrative | 5,560 | 4,735 | 11,082 | 9,622 | ||||||||||||
Depreciation and amortization | 320 | 226 | 626 | 436 | ||||||||||||
Bank factoring fees | 510 | 859 | 1,214 | 2,327 | ||||||||||||
Loss on sale or disposal of assets | 17 | - | 17 | - | ||||||||||||
Total operating expenses | 6,407 | 5,820 | 12,939 | 12,385 | ||||||||||||
Income from operations | 1,602 | 1,377 | 3,876 | 4,022 | ||||||||||||
Interest expense | 322 | - | 655 | - | ||||||||||||
Interest income | (565 | ) | (175 | ) | (1,290 | ) | (558 | ) | ||||||||
Other expense (income) | - | - | (1 | ) | - | |||||||||||
Pre-tax income | 1,845 | 1,552 | 4,512 | 4,580 | ||||||||||||
Income tax expense | 413 | 69 | 804 | 118 | ||||||||||||
Net income | $ | 1,432 | $ | 1,483 | $ | 3,708 | $ | 4,462 | ||||||||
Earnings per common share - Basic | $ | 0.05 | $ | 0.06 | $ | 0.13 | $ | 0.19 | ||||||||
Earnings per common share - Diluted | $ | 0.05 | $ | 0.06 | $ | 0.13 | $ | 0.17 | ||||||||
TSS, Inc.
Adjusted EBITDA Reconciliation (GAAP to non-GAAP)
(Unaudited, In thousands)
Three Months Ended June 30, | Six Month Ended June 30, | |||||||||||||||
2026 | 2025 | 2026 | 2025 | |||||||||||||
Net income | $ | 1,432 | $ | 1,483 | $ | 3,708 | $ | 4,462 | ||||||||
Interest expense | 322 | - | 655 | - | ||||||||||||
Bank factoring fees | 510 | 859 | 1,214 | 2,327 | ||||||||||||
Interest income | (565 | ) | (175 | ) | (1,290 | ) | (558 | ) | ||||||||
Depreciation and amortization | 1,309 | 844 | 2,551 | 1,054 | ||||||||||||
Income tax expense | 413 | 69 | 804 | 118 | ||||||||||||
EBITDA | $ | 3,421 | $ | 3,080 | $ | 7,642 | $ | 7,403 | ||||||||
Stock based compensation | 1,049 | 930 | 2,099 | 1,851 | ||||||||||||
Loss on sale or disposal of assets | 17 | -- | 17 | - | ||||||||||||
Adjusted EBITDA | $ | 4,487 | $ | 4,010 | $ | 9,758 | $ | 9,254 | ||||||||
SOURCE: TSS, Inc.
View the original press release on ACCESS Newswire