TSS Lifts 2026 Adjusted EBITDA Outlook After Record Integration

The Tip Desk · November 5, 2026 · 3 min read

Third-quarter revenue reached $50.1 million as Systems Integration hit a record $16.1 million, and the company raised its 2026 Adjusted EBITDA outlook to $21 million to $23 million.

TSS, Inc. (TSSI), a data center services company that integrates AI and other high-performance computing infrastructure, reported third-quarter revenue of $50.1 million, up 20% from a year earlier, reversing the sequential decline from $35.1 million in the second quarter.

The company said Systems Integration produced a record $16.1 million, up 75% year-over-year on higher volumes, and accounted for 32% of total revenue. That segment had been $13.9 million in the second quarter. Procurement revenue was $32.4 million, up 4% from a year earlier after falling to $18.2 million in the prior quarter. Facilities Management revenue was $1.1 million, down 30% from a year earlier. Operating lease income was $0.4 million.

Gross profit was $8.6 million, up 86% from a year earlier. Pre-tax income was $1.5 million, an improvement of $2.9 million from a $1.4 million loss in the year-ago quarter. Net income was $1.1 million, or $0.04 a share, after a full tax provision following the fourth-quarter 2025 removal of a valuation allowance on the deferred tax asset, compared with a $1.5 million net loss, or ($0.06) a share, a year earlier. Adjusted EBITDA was $4.7 million, up 225% from a year earlier.

Chief Executive Officer Darryll Dewan said the record Systems Integration revenue reflected investment and strategic focus on positioning TSS as an integrator of AI and high-performance computing infrastructure. He said the company was scaling integration capabilities, executing increasingly complex customer deployments and expanding its role in that market.

TSS said it progressed a build-out for readiness to integrate and deploy the next generation of AI technology, with the build-out completed shortly after quarter-end. In the second quarter the company had said it began deploying capital for a planned $17 million investment expected to convert into higher Systems Integration revenue beginning in the third quarter.

The company also secured a seven-year lease for approximately 380,000 square feet of additional warehouse space in Georgetown, Texas, which it said expands supply chain capacity and flexibility to support growing customer volumes. Warehouse operations had begun May 1, 2026, using a previously idle former Round Rock integration facility.

Dewan said investments in next-generation platform readiness for Systems Integration and continued development of Procurement and Facilities Management capabilities position the company to pursue additional revenue opportunities and deliver profitable growth in 2027 and beyond.

For the nine months ended September 30, 2026, revenue was $140.5 million, down 24% from the first nine months of 2025, reflecting lower Procurement revenue compared with the prior-year period, partially offset by growth in higher-margin Systems Integration and Facilities Management. Procurement was $90.6 million, down 41% from record Procurement revenues in 2025. Systems Integration was $44.1 million, up 68%. Facilities Management was $5.1 million, up 17%. Gross profit was $25.4 million, up 21%. Pre-tax income was $6.0 million, up 91%. Net income was $4.9 million, or $0.16 a share. Adjusted EBITDA was $14.5 million, up 35%.

Building on third-quarter Systems Integration growth and current visibility into the pipeline, Dewan said the company anticipates further growth in the fourth quarter. TSS is raising its 2026 outlook for Adjusted EBITDA to a range of $21 million to $23 million, from the prior $20 million to $22 million range that had been expected toward the high end.

Cash and cash equivalents were $54.0 million at September 30, 2026, down from $85.5 million at December 31, 2025. Property and equipment, net, was $51.0 million versus $38.1 million at year-end 2025.