TSS Q1 revenue falls 44% on lower sales in procurement business

TSS

07/05/2026 21:49

Overview

US data center services firm's Q1 revenue fell 44% yr/yr but beat analyst expectations

Systems Integration revenue rose 88% yr/yr, offset by lower Procurement segment revenue

Company sees 2026 adjusted EBITDA outlook at high end of $20-22 mln range

Outlook

TSS expects 2026 adjusted EBITDA toward high end of $20 mln to $22 mln range

Company says total integration demand continues to exceed volume incorporated into outlook

TSS expects quarterly EBITDA levels to grow as AI rack volumes increase

Result Drivers

SYSTEMS INTEGRATION GROWTH - 88% yr/yr increase in Systems Integration revenue driven by strong customer demand and operational execution, with growth particularly high in AI activities, per CEO Dewan

PROCUREMENT DECLINE - Lower Procurement revenue due to record high volumes in the prior-year quarter, which can vary significantly between periods

AI RACK INTEGRATION - Scaling of Georgetown, Texas AI rack integration facility contributed to higher-margin revenue and supported adjusted EBITDA growth

Company press release: ID:nACS9qjLsa

Key Details

Metric
Beat/Miss
Actual
Consensus Estimate
Q1 Revenue
Beat
$55.35 mln
$43.19 mln (3 Analysts)
Q1 EPS
$0.08
Q1 Net Income
$2.28 mln
Q1 Basic EPS
$0.08
Q1 Gross Profit
$8.81 mln
Q1 Operating Income
$2.27 mln
Q1 Pretax Profit
$2.67 mln


Analyst Coverage

The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 3 "strong buy" or "buy", no "hold" and no "sell" or "strong sell"

Wall Street's median 12-month price target for TSS Inc is $16.00, about 6.4% below its May 6 closing price of $17.09

The stock recently traded at 66 times the next 12-month earnings vs. a P/E of 51 three months ago

For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.

(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)