TSS Reports Third-Quarter 2026 Revenue Growth as Systems Integration Expands
TSS reported higher third-quarter revenue and profit for 2026, supported by Systems Integration growth, while first-nine-month revenue declined because of lower Procurement revenue.
TSS, Inc. (Nasdaq:TSSI) reported higher revenue and profitability for the third quarter ended September 30, 2026, as Systems Integration activity increased. The company also disclosed a seven-year lease for approximately 380,000 square feet of additional warehouse space in Georgetown, Texas.
TSS recorded revenue of $50.1 million, up 20% from the third quarter of 2025. Systems Integration revenue reached $16.1 million, an increase of 75%, and accounted for 32% of total revenue. Procurement revenue was $32.4 million, up 4%, while Facilities Management revenue fell 30% to $1.1 million. Operating lease income was $0.4 million.
Gross profit was $8.6 million, up 86%. Pre-tax income was $1.5 million, compared with a pre-tax loss of ($1.4) million in the prior-year quarter. TSS reported net income of $1.1 million and diluted EPS of $0.04, compared with a net loss of $1.5 million and diluted EPS of ($0.06) in the corresponding period.
Adjusted EBITDA was $4.7 million, up 225% from the third quarter of 2025. TSS said Adjusted EBITDA is a non-GAAP measure and should not be viewed separately from, or as a replacement for, net income or cash flows calculated under GAAP. The measure may also not be comparable with similarly named measures used by other companies.
For the first nine months of 2026, revenue was $140.5 million, down 24% from the same period of 2025. TSS attributed the decline to lower Procurement revenue, partly offset by increases in Systems Integration and Facilities Management.
Procurement revenue was $90.6 million, down 41%. Systems Integration revenue increased 68% to $44.1 million, while Facilities Management revenue rose 17% to $5.1 million.
Gross profit for the period was $25.4 million, up 21%. Pre-tax income was $6.0 million, up 91%, while net income was $4.9 million and diluted EPS was $0.16. Adjusted EBITDA was $14.5 million, up 35%, which TSS said reflected a shift in total revenue toward higher-margin Systems Integration. The company also reported that depreciation allocated to cost of goods sold was $3.0 million in the current period, compared with $1.6 million in the prior-year period.
TSS secured a seven-year lease for approximately 380,000 square feet of additional warehouse capacity in Georgetown, Texas. The company said the space is intended to provide greater supply chain flexibility, accommodate customer volumes and larger infrastructure deployments, and help address supply chain challenges.
TSS also progressed work to prepare the facility for the integration and deployment of next-generation AI technology. The build-out was completed shortly after the quarter ended.
Darryll Dewan, TSS chief executive, said the company anticipates further growth in the fourth quarter based on its current visibility into the pipeline. He said TSS raised its 2026 Adjusted EBITDA outlook to a range of $21 million to $23 million.
TSS said it cannot reconcile this forward-looking Adjusted EBITDA outlook with GAAP net income without unreasonable efforts. The company cited reconciling items that are outside its control or cannot be reasonably predicted, including stock-based compensation expense, changes in interest rates and related bank factoring fees, interest expense, interest income, income tax expense, losses on asset sales or disposals, and other adjustments. TSS said the unavailable information could have a significant impact on future GAAP net income.
The company identified risks including limited customer concentration, competition, supply chain difficulties, labour market conditions, implementation of a new enterprise resource IT system, the use of expanded warehouse and integration facilities, related lease obligations, complex project management, possible short-notice customer contract cancellations, and the availability of financial resources. TSS said these and other uncertainties could cause actual future results to differ materially from its forward-looking statements.
TSS provides integration and related services for AI and other high-performance computing infrastructure and software. Its activities include building, integrating and deploying custom, high-volume solutions, alongside Procurement and Facilities Management capabilities.
TSS, Inc. reported financial results for the third quarter ended September 30, 2026. The company reported quarterly revenue of $50.1 million, record Systems Integration revenue of $16.1 million, and a seven-year lease for approximately 380,000 square feet of additional warehouse space in Georgetown, Texas.
TSS, Inc. reported total revenue of $50.1 million for the third quarter of 2026, up 20% compared with the third quarter of 2025. Systems Integration revenue increased 75% to $16.1 million, Procurement revenue rose 4% to $32.4 million, Facilities Management revenue fell 30% to $1.1 million, and operating lease income was $0.4 million.
TSS, Inc. reported gross profit of $8.6 million, up 86%, and pre-tax income of $1.5 million, compared with a pre-tax loss of $1.4 million in the prior-year quarter. Net income was $1.1 million with diluted EPS of $0.04, compared with a net loss of $1.5 million and diluted EPS of ($0.06).
TSS, Inc. reported Adjusted EBITDA of $4.7 million for the third quarter of 2026, up 225% compared with the third quarter of 2025. The company says Adjusted EBITDA is a non-GAAP measure and should not be considered in isolation or as an alternative to net income or cash flows under GAAP.
For the first nine months of 2026, TSS, Inc. reported revenue of $140.5 million, down 24% compared with the first nine months of 2025, reflecting lower Procurement revenue partly offset by growth in higher-margin Systems Integration and Facilities Management. Gross profit was $25.4 million, pre-tax income was $6.0 million, net income was $4.9 million, diluted EPS was $0.16, and Adjusted EBITDA was $14.5 million.
TSS, Inc. said the 24% decline in first-nine-month revenue reflected lower Procurement revenue compared with the prior-year period. Procurement revenue was $90.6 million, down 41%, partly offset by Systems Integration revenue of $44.1 million, up 68%, and Facilities Management revenue of $5.1 million, up 17%.
TSS, Inc. secured a seven-year lease for approximately 380,000 square feet of additional warehouse space in Georgetown, Texas. The company said the facility expands supply chain capacity and flexibility, supports growing customer volumes and larger infrastructure deployments, and helps address supply chain challenges; its build-out for next-generation AI technology integration and deployment was completed shortly after quarter-end.
TSS, Inc. is a data centre services company that provides integration and related services for AI and other high-performance computing infrastructure and software. It builds, integrates and deploys custom, high-volume solutions and provides Procurement and Facilities Management capabilities.
Darryll Dewan, CEO of TSS, Inc., said the record Systems Integration revenue reflected investment and strategic focus on positioning the company as an integrator of AI and high-performance computing infrastructure. He also said the warehouse lease expands capacity and that investments in next-generation platform readiness and Procurement and Facilities Management capabilities position the company to pursue additional revenue opportunities and deliver profitable growth in 2027 and beyond.
TSS, Inc. raised its 2026 Adjusted EBITDA outlook to a range of $21 million to $23 million. Darryll Dewan said the company anticipates further growth in the fourth quarter, while TSS, Inc. states that it cannot reconcile this forward-looking non-GAAP measure to GAAP net income without unreasonable efforts because certain reconciling items are outside its control or cannot be reasonably predicted.
TSS, Inc. identified risks including insufficient resources to fund the business, reliance on a limited number of customers, competition, supply chain challenges, labour market conditions, implementation of a new enterprise resource IT system, expanded warehouse and integration facilities and related lease obligations, complex projects, possible customer contract cancellations, and the need for sufficient financial resources to implement its strategy. The company said these and other uncertainties could cause actual future results to differ materially from its forward-looking statements.
TSS, Inc. identifies its shares as trading on Nasdaq under the ticker symbol TSSI.
TSS, Inc. said it would conduct a conference call at 5 p.m. Eastern time on November 5, 2026. The event ID was 384673, and the company also provided a live audio webcast and a replay available for one year following the webcast.