TSS swings to $1.1M profit in Q3 2026 earnings
A seven-year lease for approximately 380,000 square feet in Georgetown accompanies a raised 2026 Adjusted EBITDA outlook.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Rhea-AI Filing Summary
TSS, Inc. reported third-quarter 2026 revenue of $50.1 million, up 20% year over year, as Systems Integration revenue rose 75% to $16.1 million and Procurement revenue increased 4% to $32.4 million. Facilities Management revenue declined 30% to $1.1 million. Gross profit was $8.6 million, up 86%; net income was $1.1 million versus a $1.5 million loss a year earlier, and Adjusted EBITDA, a non-GAAP measure, was $4.7 million, up 225%.
For the first nine months of 2026, revenue fell 24% to $140.5 million, reflecting Procurement revenue down 41% to $90.6 million, partly offset by Systems Integration revenue up 68% to $44.1 million and Facilities Management revenue up 17% to $5.1 million. Gross profit rose 21% to $25.4 million, net income was $4.9 million versus $3.0 million, and Adjusted EBITDA rose 35% to $14.5 million. TSS anticipates further fourth-quarter growth and raised its 2026 Adjusted EBITDA outlook to $21 million to $23 million. It also secured a seven-year lease for approximately 380,000 square feet of additional warehouse space in Georgetown, Texas.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Hollow bars mark forward-looking points. How the balance works
Positive
- Major point. Forward-looking: it has not happened yet and may not happen.2026 Adjusted EBITDA outlook was raised to $21 million–$23 million.
- Moderate pointThird-quarter revenue rose 20% to $50.1 million year over year.
- Moderate pointThird-quarter net income reached $1.1 million, versus a $1.5 million loss.
Negative
- Moderate pointNine-month revenue fell 24% to $140.5 million.
Filing Explained
The balance sheet lists cash at
Sources and calculations
- TSS, Inc. Form 8-K and Exhibit 99.1 (2026-11-05)
- TSS, Inc. third-quarter 2026 fundamentals (2026Q3)
- Available liquidity against the last reported quarterly operating outflow, in days at that rate $53,965,000 / ($2,988,000 / 92) = 1661.6 days
Key Figures
Key Terms
Adjusted EBITDA financial
Bank factoring fees financial
Deferred tax asset financial
Valuation allowance financial
Earnings Snapshot
TSS raised its 2026 Adjusted EBITDA outlook to $21 million to $23 million and anticipates further fourth-quarter growth.
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
How much revenue did TSSI report in the third quarter of 2026?
What is TSSI's 2026 Adjusted EBITDA outlook?
What does TSSI include in Adjusted EBITDA?
AI-generated analysis. How Rhea-AI works. Not financial advice.
EXHIBIT 99.1
TSS Reports Third Quarter 2026 Financial Results
Total Revenue of $50.1 Million, Up 20% Year-Over-Year
Record Systems Integration Revenue of $16.1 Million, Up 75% Year-Over-Year on Higher Volumes, Representing 32% of Total Revenue
New Georgetown Warehouse Enhances Supply Chain Flexibility and Supports Expansion Opportunities
GEORGETOWN, TEXAS – Nov. 5, 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 third quarter ended September 30, 2026.
Recent Business Highlights
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| · | Achieved record quarterly Systems Integration revenue, reflecting continued growth in AI and high-performance computing infrastructure demand |
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| · | Progressed build-out for readiness to integrate and deploy next generation of AI technology, with the build-out completed shortly after quarter-end |
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| · | Secured a seven-year lease for approximately 380,000 square feet of additional warehouse space in Georgetown, Texas, expanding supply chain capacity and flexibility to support growing customer volumes |
“Our record Systems Integration revenue for the quarter reflects the investment and strategic focus on positioning TSS for continued growth as an integrator of AI and high-performance computing infrastructure,” said Darryll Dewan, CEO of TSS. “With revenue in this segment growing 75% year-over-year, we are experiencing the benefits of this strategic focus as we scale our integration capabilities, execute increasingly complex customer deployments and expand our role in the AI and high-performance computing infrastructure market. Our seven-year lease for approximately 380,000 square feet of additional warehouse space in Georgetown, Texas, is another important milestone, expanding our capacity to support growing customer volumes and larger infrastructure deployments while helping address supply chain challenges. We believe our investments in next-generation platform readiness for Systems Integration and continued development of our Procurement and Facilities Management capabilities position us well to pursue additional revenue opportunities and deliver profitable growth in 2027 and beyond.”
Third Quarter 2026 Financial Highlights:
(All comparisons are to Third Quarter 2025)
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| · | Revenues of $50.1 million, up 20%, with growth in higher-margin Systems Integration | |
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| o | Procurement revenues of $32.4 million, up 4% |
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| o | Systems Integration revenues of $16.1 million, up 75% |
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| o | Facilities Management revenues of $1.1 million, down 30% |
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| o | Operating lease income of $0.4 million |
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| · | Gross profit of $8.6 million, up 86% | |
| 1 |
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| · | Pre-tax income of $1.5 million, an improvement of $2.9 million compared to ($1.4) million in the prior year quarter |
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| · | Net income of $1.1 million and Diluted EPS of $0.04 after full tax provision, following the fourth quarter 2025 removal of the valuation allowance on the deferred tax asset, compared to a net loss of $1.5 million and Diluted EPS of ($0.06) |
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| · | Adjusted EBITDA of $4.7 million, up 225% |
Year-to-Date 2026 Financial Highlights:
(All comparisons are to the first nine months of 2025)
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| · | Revenues of $140.5 million, down 24%, reflecting lower Procurement revenue compared with the prior-year period, partially offset by growth in higher-margin Systems Integration and Facilities Management | |
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| o | Procurement revenues of $90.6 million, down 41% in comparison to record Procurement revenues in 2025 |
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| o | Systems Integration revenues of $44.1 million, up 68% |
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| o | Facilities Management revenues of $5.1 million, up 17% |
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| · | Gross profit of $25.4 million, up 21% | |
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| o | Reflects allocation of depreciation to COGS of $3.0 million in the current period compared to $1.6 million in the prior year period |
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| · | Pre-tax income of $6.0 million, up 91% | |
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| · | Net income of $4.9 million and Diluted EPS of $0.16 after full tax provision, compared to net income of $3.0 million and Diluted EPS of $0.11 | |
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| · | Adjusted EBITDA of $14.5 million, up 35%, reflecting a shift in total revenues to higher-margin Systems Integration | |
2026 Outlook
Dewan concluded, “Building on the growth we delivered in Systems Integration in the third quarter and current visibility into our pipeline, we anticipate further growth in the fourth quarter. We are raising our 2026 outlook for Adjusted EBITDA to a range of $21 million to $23 million.”
Adjusted EBITDA is a non-GAAP financial measure. The Company has not provided a reconciliation of its Adjusted EBITDA outlook to net income, the most directly comparable GAAP measure, for the reasons described under “About Non-GAAP Financial Measures” below.
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 1-888-506-0062 toll free from the U.S. or Canada. Other international callers may access the call at 1-973-528-0011. The event ID is 384673. 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/2294/54666.
About Non-GAAP Financial Measures
Adjusted EBITDA is a supplemental financial measure not defined under U.S. generally accepted accounting principles (“GAAP”). We define Adjusted EBITDA as net income (loss) before interest expense, net of interest income, bank factoring fees, income taxes, depreciation and amortization, impairment loss on goodwill and other intangibles, stock-based compensation, and loss on sale or disposal of assets. 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.
| 2 |
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 net income, the most directly comparable 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 without unreasonable efforts because certain reconciling items are outside the Company’s control or cannot be reasonably predicted. 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, income tax expense, losses on sale or disposal of assets, and other adjustments. The unavailable information could have a significant impact on the Company’s future GAAP net income.
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’s 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 contains “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, including our 2026 Adjusted EBITDA outlook, and often contain words such as “guidance,” “forecast,” “outlook,” “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; risks 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 related to our ability to effectively utilize our expanded warehouse and integration facilities and our related lease obligations; 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 and subsequent Quarterly Reports on Form 10-Q. These uncertainties may cause our actual future results to be materially different than those expressed in our forward-looking statements. Forward-looking statements speak only as of the date of this press release, and we do not undertake to update our forward-looking statements, except as required by law.
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 –
| 3 |
TSS, Inc.
Condensed Consolidated Balance Sheets
(In thousands)
|
|
| September 30, 2026 (Unaudited) |
|
| December 31, 2025 |
| ||
| Current Assets: |
|
|
|
|
|
| ||
| Cash and cash equivalents |
| $ | 53,965 |
|
| $ | 85,510 |
|
| Contract and other receivables, net |
|
| 13,852 |
|
|
| 12,501 |
|
| Costs and estimated earnings in excess of billings on uncompleted contracts |
|
| 254 |
|
|
| 3,011 |
|
| Inventories, net |
|
| 12,405 |
|
|
| 15,966 |
|
| Restricted cash |
|
| 1,811 |
|
|
| - |
|
| Prepaid expenses and other current assets |
|
| 1,876 |
|
|
| 1,642 |
|
| Total current assets |
|
| 84,163 |
|
|
| 118,630 |
|
| Property and equipment, net |
|
| 50,964 |
|
|
| 38,076 |
|
| Lease right-of-use asset |
|
| 14,184 |
|
|
| 15,294 |
|
| Goodwill |
|
| 780 |
|
|
| 780 |
|
| Deferred tax asset, net of valuation allowance |
|
| 6,922 |
|
|
| 7,917 |
|
| Other assets |
|
| 3,744 |
|
|
| 4,238 |
|
| Total assets |
| $ | 160,757 |
|
| $ | 184,935 |
|
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|
|
|
|
|
|
|
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| Current Liabilities: |
|
|
|
|
|
|
|
|
| Accounts payable |
| $ | 34,426 |
|
| $ | 46,362 |
|
| Accrued expenses and other current liabilities |
|
| 4,001 |
|
|
| 6,273 |
|
| Deferred revenues, current |
|
| 2,138 |
|
|
| 13,928 |
|
| Long-term debt, current |
|
| 4,239 |
|
|
| 4,010 |
|
| Lease liabilities, current |
|
| 2,184 |
|
|
| 1,994 |
|
| Total current liabilities |
|
| 46,988 |
|
|
| 72,567 |
|
| Non-current Liabilities: |
|
|
|
|
|
|
|
|
| Long-term debt, non-current |
|
| 10,859 |
|
|
| 14,004 |
|
| Lease liabilities, non-current |
|
| 19,989 |
|
|
| 21,629 |
|
| Deferred revenues, non-current |
|
| 348 |
|
|
| - |
|
| Other non-current liabilities |
|
| 97 |
|
|
| 100 |
|
| Total non-current liabilities |
|
| 31,293 |
|
|
| 35,733 |
|
| Total liabilities |
|
| 78,281 |
|
|
| 108,300 |
|
|
|
|
|
|
|
|
|
|
|
| Commitments and Contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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| Stockholders’ Equity: |
|
|
|
|
|
|
|
|
| Preferred stock |
|
| - |
|
|
| - |
|
| Common stock |
|
| 3 |
|
|
| 3 |
|
| Additional paid-in capital |
|
| 122,826 |
|
|
| 121,842 |
|
| Accumulated deficit |
|
| (40,353 | ) |
|
| (45,210 | ) |
| Total stockholders’ equity |
|
| 82,476 |
|
|
| 76,635 |
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| Total liabilities and stockholders’ equity |
| $ | 160,757 |
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| $ | 184,935 |
|
| 4 |
TSS, Inc.
Condensed Consolidated Statements of Operations
(Unaudited, In thousands except per-share values)
|
|
| Three Months Ended September 30, |
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| Nine Months Ended September 30, |
| ||||||||||
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|
| 2026 |
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| 2025 |
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| 2026 |
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| 2025 |
| ||||
| Revenues |
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| Procurement |
| $ | 32,396 |
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| $ | 31,101 |
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| $ | 90,625 |
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| $ | 154,280 |
|
| Facilities management |
|
| 1,119 |
|
|
| 1,591 |
|
|
| 5,132 |
|
|
| 4,371 |
|
| Systems integration |
|
| 16,112 |
|
|
| 9,191 |
|
|
| 44,068 |
|
|
| 26,161 |
|
| Operating lease income |
|
| 433 |
|
|
| - |
|
|
| 722 |
|
|
| - |
|
| Total revenues |
|
| 50,060 |
|
|
| 41,883 |
|
|
| 140,547 |
|
|
| 184,812 |
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| Cost of revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Cost of revenues |
|
| 39,955 |
|
|
| 36,221 |
|
|
| 111,467 |
|
|
| 162,125 |
|
| Cost of revenues - depreciation |
|
| 1,120 |
|
|
| 1,027 |
|
|
| 3,045 |
|
|
| 1,645 |
|
| Cost of lease operations |
|
| 353 |
|
|
| - |
|
|
| 588 |
|
|
| - |
|
| Total cost of revenues |
|
| 41,428 |
|
|
| 37,248 |
|
|
| 115,100 |
|
|
| 163,770 |
|
| Gross profit |
|
| 8,632 |
|
|
| 4,635 |
|
|
| 25,447 |
|
|
| 21,042 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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| Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Selling, general and administrative |
|
| 6,114 |
|
|
| 5,238 |
|
|
| 17,196 |
|
|
| 14,860 |
|
| Depreciation and amortization |
|
| 356 |
|
|
| 328 |
|
|
| 982 |
|
|
| 764 |
|
| Bank factoring fees |
|
| 718 |
|
|
| 833 |
|
|
| 1,932 |
|
|
| 3,160 |
|
| Loss on sale or disposal of assets |
|
| 285 |
|
|
| - |
|
|
| 302 |
|
|
| - |
|
| Total operating expenses |
|
| 7,473 |
|
|
| 6,399 |
|
|
| 20,412 |
|
|
| 18,784 |
|
| Income (loss) from operations |
|
| 1,159 |
|
|
| (1,764 | ) |
|
| 5,035 |
|
|
| 2,258 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Interest expense |
|
| 310 |
|
|
| 121 |
|
|
| 965 |
|
|
| 121 |
|
| Interest income |
|
| (633 | ) |
|
| (434 | ) |
|
| (1,923 | ) |
|
| (992 | ) |
| Other expense (income) |
|
| (5 | ) |
|
| (4 | ) |
|
| (6 | ) |
|
| (4 | ) |
| Pre-tax income (loss) |
|
| 1,487 |
|
|
| (1,447 | ) |
|
| 5,999 |
|
|
| 3,133 |
|
| Income tax expense |
|
| 338 |
|
|
| 50 |
|
|
| 1,142 |
|
|
| 168 |
|
| Net income (loss) |
| $ | 1,149 |
|
| $ | (1,497 | ) |
| $ | 4,857 |
|
| $ | 2,965 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Earnings (loss) per common share - basic |
| $ | 0.04 |
|
| $ | (0.06 | ) |
| $ | 0.17 |
|
| $ | 0.12 |
|
| Earnings (loss) per common share - diluted |
| $ | 0.04 |
|
| $ | (0.06 | ) |
| $ | 0.16 |
|
| $ | 0.11 |
|
| 5 |
TSS, Inc.
Adjusted EBITDA Reconciliation (GAAP to non-GAAP)
(Unaudited, In thousands)
|
|
| Three Months Ended September 30, |
|
| Nine Months Ended September 30, |
| ||||||||||
|
|
| 2026 |
|
| 2025 |
|
| 2026 |
|
| 2025 |
| ||||
| Net income (loss) |
| $ | 1,149 |
|
| $ | (1,497 | ) |
| $ | 4,857 |
|
| $ | 2,965 |
|
| Interest expense |
|
| 310 |
|
|
| 121 |
|
|
| 965 |
|
|
| 121 |
|
| Bank factoring fees |
|
| 718 |
|
|
| 833 |
|
|
| 1,932 |
|
|
| 3,160 |
|
| Interest income |
|
| (633 | ) |
|
| (434 | ) |
|
| (1,923 | ) |
|
| (992 | ) |
| Depreciation and amortization |
|
| 1,476 |
|
|
| 1,355 |
|
|
| 4,027 |
|
|
| 2,409 |
|
| Income tax expense |
|
| 338 |
|
|
| 50 |
|
|
| 1,142 |
|
|
| 168 |
|
| EBITDA |
| $ | 3,358 |
|
| $ | 428 |
|
| $ | 11,000 |
|
| $ | 7,831 |
|
| Stock-based compensation |
|
| 1,102 |
|
|
| 1,030 |
|
|
| 3,201 |
|
|
| 2,881 |
|
| Loss on sale or disposal of assets |
|
| 285 |
|
|
| - |
|
|
| 302 |
|
|
| - |
|
| Adjusted EBITDA |
| $ | 4,745 |
|
| $ | 1,458 |
|
| $ | 14,503 |
|
| $ | 10,712 |
|
| 6 |