TSS (NASDAQ:TSSI – Get Free Report) released its earnings results on Thursday. The company reported $0.04 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.03 by $0.01, FiscalAI reports. TSS had a return on equity of 19.22% and a net margin of 7.44%. The company had revenue of $50.06 million for the quarter.
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 Price Performance
Shares of TSSI stock traded up $0.75 during trading hours on Friday, reaching $6.70. The company’s stock had a trading volume of 1,200,914 shares, compared to its average volume of 828,931. The firm’s 50 day simple moving average is $8.37 and its 200-day simple moving average is $10.72. The company has a market capitalization of $189.07 million, a price-to-earnings ratio of 11.55 and a beta of 2.06. TSS has a fifty-two week low of $5.90 and a fifty-two week high of $17.57. The company has a quick ratio of 1.38, a current ratio of 1.66 and a debt-to-equity ratio of 0.15.
Analysts Set New Price Targets
Several equities research analysts recently weighed in on TSSI shares. Needham & Company LLC cut their price objective on shares of TSS from $13.00 to $9.00 and set a “buy” rating for the company in a research report on Friday. Wall Street Zen downgraded shares of TSS from a “hold” rating to a “sell” rating in a research note on Saturday. Finally, Weiss Ratings reissued a “hold (c)” rating on shares of TSS in a report on Monday, September 14th. One equities research analyst has rated the stock with a Buy rating and two have given a Hold rating to the company’s stock. According to data from MarketBeat.com, the stock presently has a consensus rating of “Hold” and an average target price of $12.00.
Institutional Trading of TSS
Several institutional investors and hedge funds have recently modified their holdings of the business. Alyeska Investment Group L.P. acquired a new stake in TSS in the second quarter valued at about $1,914,000. Bank of New York Mellon Corp bought a new position in shares of TSS in the second quarter worth about $917,000. Russell Investments Group Ltd. boosted its stake in shares of TSS by 53.9% in the 3rd quarter. Russell Investments Group Ltd. now owns 51,564 shares of the company’s stock valued at $502,000 after purchasing an additional 18,050 shares in the last quarter. Royal Bank of Canada boosted its stake in shares of TSS by 78.5% in the 1st quarter. Royal Bank of Canada now owns 25,849 shares of the company’s stock valued at $336,000 after purchasing an additional 11,365 shares in the last quarter. Finally, Hsbc Holdings PLC acquired a new stake in shares of TSS in the 2nd quarter valued at approximately $324,000.
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.
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