TSS Revenue Grows 172% to a Record $148.1 Million in FY 2024; Increases EPS to $0.24, Up from $0.00 in 2023

Rhea-AI Summary

TSS Inc (NASDAQ:TSSI) reported exceptional financial results for FY 2024, with revenue surging 172% to $148.1 million. The company's growth was primarily driven by strong demand for AI rack integration services.

Key financial highlights include:

• Net income increased to $6.0 million from $74,000 in 2023
• Diluted EPS rose to $0.24 from breakeven
• Adjusted EBITDA grew 283% to $10.2 million

Revenue breakdown shows Procurement Services at $117.5 million (+205%), Systems Integration at $22.6 million (+157%), and Facilities Management at $8.0 million (+13%). The fourth quarter demonstrated strong momentum with revenue up 105% to $50.0 million and EPS reaching $0.08. The company secured a multi-year agreement with its largest customer and is expanding capacity with a new state-of-the-art facility expected to be operational by June 2025.

Positive

• Revenue grew 172% to $148.1 million in FY 2024
• Net income increased significantly from $74,000 to $6.0 million
• Adjusted EBITDA up 283% to $10.2 million
• Secured multi-year agreement with largest customer
• All business segments showed growth, with Procurement up 205%
• Q4 showed strong momentum with 105% revenue growth

Negative

• Procurement Services (80% of revenue) has lower margins than corporate average
• Procurement revenue shows wider quarter-to-quarter variability

Insights

Financial Analyst

TSS's 172% revenue growth to $148.1 million represents exceptional execution in capturing AI infrastructure demand. The transformation from breakeven to $0.24 EPS showcases impressive bottom-line conversion, with net income reaching $6 million compared to just $74,000 last year.

The revenue mix reveals important dynamics: Procurement services ($117.5 million, up 205%) dominate revenue at 80% but carry lower margins than Systems Integration ($22.6 million, up 157%) and Facilities Management ($8 million, up 13%). Despite this mix, gross profit doubled to $22.4 million while Adjusted EBITDA surged 283% to $10.2 million.

Q4 results accelerated beyond already strong annual figures with revenue up 105% and EPS quadrupling to $0.08. This momentum indicates the growth trajectory isn't slowing, particularly in high-value Systems Integration (up 264% in Q4).

The secured multi-year agreement with their largest customer provides revenue stability while the new facility (operational by June) addresses capacity constraints that might otherwise limit 2025 growth. Management's projected "high level of EBITDA growth" for 2025 suggests continued margin expansion as higher-margin service segments outpace overall growth rates.

Technology Industry Expert

TSS has positioned itself perfectly at the intersection of two crucial technology trends: the explosive growth in AI infrastructure and the acute shortage of specialized rack integration capability. Their 157% Systems Integration growth indicates they've become an essential intermediary for hyperscalers and enterprises racing to deploy complex AI infrastructure.

The multi-year agreement with their largest customer (likely a major cloud provider or AI infrastructure company) represents a significant competitive moat. Such agreements are only established when a service provider demonstrates unique capabilities and reliability in mission-critical environments. Customers typically avoid changing integration partners once workflows and quality standards are established.

The procurement revenue surge (205%) reveals TSS has also gained trusted advisor status, handling component sourcing amid ongoing supply constraints for specialized AI hardware. While procurement services generate lower margins, they strengthen customer relationships and provide insights into future deployment trends.

Their new facility represents not just capacity expansion but likely includes specialized testing capabilities for AI-optimized infrastructure. The June operational target aligns with expected deployment cycles for next-generation AI accelerators and systems in mid-2025, positioning TSS to capture the next wave of infrastructure spending.

Most importantly, this performance demonstrates TSS has successfully transformed from a traditional data center services company to a specialized AI infrastructure enabler - a much higher-value market position with sustainable growth potential.

Fueled by Continuous Rise in Demand for AI Rack Integration

ROUND ROCK, TEXAS / ACCESS Newswire / March 27, 2025 / TSS, Inc. (Nasdaq:TSSI), a data center services company that integrates AI and other high-performance computing infrastructure and software and provides related data center services, today reported results for its fourth quarter and year ended December 31, 2024.

"2024 was a transformative year by all accounts, driven by strong operational execution and our commitment to customer service as we capture the soaring demand for AI rack integration and capitalize on opportunistic procurement services," commented Darryll Dewan, CEO of TSS. "For the full year, we delivered organic revenue growth of 172%, earnings per share of $0.24 compared to just over breakeven last year and Adjusted EBITDA of $10.2 million, up 283% from 2023. We signed a multi-year agreement with our largest customer, solidifying our position as a key partner for executing its technology roadmap, particularly AI rack integration. We exited the year with strong momentum, securing debt financing for the buildout of our new state-of-the-art facility, which is progressing according to plan, and achieving impressive fourth quarter revenue and diluted EPS growth of 105% and 300%, respectively."

Dewan continued, "The outlook for our industry is robust with significant capital investment flowing into AI-enabling technologies. With a strong operational foundation established and capacity expansion underway, we are confident in our ability to capitalize on these trends and deliver profitable growth, generate positive cash from operations and further enhance value for our shareholders."

Full-Year 2024 Financial Highlights:
(All comparisons are to Full-Year 2023)

• Revenues of $148.1 million, up 172%

  • Systems Integration revenues of $22.6 million, up 157%

  • Facilities Management revenues of $8.0 million, up 13%

  • Procurement revenues of $117.5 million, up 205%

• Gross profit of $22.4 million, up 103% on growth in all service lines

• Net income of $6.0 million compared to $74,000

• Diluted EPS of $0.24, up from $0.00

• Adjusted EBITDA of $10.2 million, up 283%

Fourth Quarter 2024 Financial Highlights:
(All comparisons are to Fourth Quarter 2023)

• Revenues of $50.0 million, up 105%

  • Systems Integration revenues of $7.9 million, up 264%

  • Facilities Management revenues of $1.6 million, up 11%

  • Procurement revenues of $40.5 million, up 95%

• Gross profit of $7.2 million, up 121%, driven by growth and greater contribution from higher margin revenues

• Net income of $1.9 million, up 471%

• Diluted EPS of $0.08, up from $0.02

• Adjusted EBITDA of $3.4 million, up 267%

2025 Outlook
Dewan concluded, "We are highly optimistic about our growth prospects in 2025 and beyond given the outsized opportunities in our sector, our strong customer relationships and expanded capacity. Our profitability will continue to be influenced by our revenue mix. Procurement Services represents nearly 80% of revenues in 2024 and is characterized by wider quarter-to-quarter revenue variability and margins that are typically below our corporate average. In our higher-margin Systems Integration and Facilities Management businesses, we expect growth at a significantly higher rate than our overall business."

"We have made significant progress in the readiness of our new facility and expect to be fully operational by June. Looking ahead to 2025, we expect an overall high level of EBITDA growth for the year compared to 2024. The second quarter will mark initial contributions from our new facility, with that segment ramping as rack volumes grow through the year and in 2026."

Quarterly Conference Call Details
The Company will conduct a conference call at 5:00 p.m. Eastern time today. To participate on the conference call, please dial 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 number is 410860.

A replay will be available until June 27, 2025. To access the replay, dial 1-877-481-4010 or 1-919-882-2331. When prompted, enter Conference Passcode 52156. 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.webcaster4.com/Webcast/Page/2294/52156

About Non-GAAP Financial Measures
Adjusted EBITDA is a supplemental financial measure not defined under Generally Accepted Accounting Principles (GAAP). We define Adjusted EBITDA as net income (loss) before net interest expense, income taxes, depreciation and amortization, impairment loss on goodwill and other intangibles, stock-based compensation, provision for bad debts and certain extraordinary items. 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.

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 the nearest GAAP measure, and this reconciliation is located under the heading "Adjusted EBITDA Reconciliation" following the Consolidated Statements of Operations included in this press release.

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 may contain "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, and often contain words such as "guidance," "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; risk 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 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, 2023. These uncertainties may cause our actual future results to be materially different than those expressed in our forward-looking statements. We do not undertake to update our forward-looking statements.

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

TSS, Inc.
Consolidated Balance Sheets
(In thousands except par values)

		December 31,				December 31,
		2024				2023
Assets
Current Assets
Cash and cash equivalents		$	23,222			$	11,831
Contract and other receivables, net			16,203				3,527
Costs and estimated earnings in excess of billings on uncompleted contracts			851				1,310
Inventories, net			15,394				2,343
Prepaid expenses and other current assets			248				302
Total current assets			55,918				19,313
Property and equipment, net			8,591				628
Lease right-of-use assets			24,213				4,062
Goodwill			780				780
Other assets			4,787				817
Total assets		$	94,289			$	25,600
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable and accrued expenses		$	51,061			$	14,362
Deferred revenues, current			2,613				3,370
Lease liabilities, current			966				688
Total current liabilities			54,640				18,420
Non-current liabilities:
Long-term debt, non-current			8,200				-
Lease liabilities, non-current			23,540				3,631
Deferred revenues, non-current			771				-
Total non-current liabilities			32,511				3,631
Total liabilities			87,151				22,051
Stockholders' Equity
Preferred stock		-				-
Common stock			3				2
Additional paid-in capital			74,200				72,103
Treasury stock			(6,730	)			(2,245	)
Accumulated deficit			(60,335	)			(66,311	)
Total stockholders' equity			7,138				3,549
Total liabilities and stockholders' equity		$	94,289			$	25,600

TSS, Inc.
Condensed Consolidated Statements of Operations
(In thousands except per-share values)

		Three Months Ended December 31,								Year Ended December 31,
		2024				2023				2024				2023
		(unaudited)				(unaudited)
Results of Operations:
Revenues:
Procurement		$	40,497			$	20,774			$	117,519			$	38,515
Facilities management			1,620				1,463				8,005				7,067
Systems integration			7,908				2,171				22,620				8,817
Total revenues			50,025				24,408				148,144				54,399
Cost of revenues			42,812				21,145				125,793				43,398
Gross profit			7,213				3,263				22,351				11,001
Operating expenses:
Selling, general and administrative			4,246				2,468				13,240				8,931
Depreciation and amortization			211				71				608				320
Total operating costs			4,457				2,539				13,848				9,251
Income from operations			2,756				724				8,503				1,750
Interest expense			721				498				2,737				1,971
Interest income			(188	)			(124	)			(562	)			(355	)
Other expense			207				-				194				-
Income before income taxes			2,016				350				6,134				134
Income tax provision			103				15				158				60
Net income		$	1,913			$	335			$	5,976			$	74
Earnings per common share - Basic		$	0.09			$	0.02			$	0.27			$	0.00
Earnings per common share - Diluted		$	0.08			$	0.02			$	0.24			$	0.00

TSS, Inc.
Adjusted EBITDA Reconciliation (GAAP to non-GAAP)
(In thousands, unaudited)

		Three Months Ended December 31,								Year Ended December 31,
		2024				2023				2024				2023
Net income		$	1,913			$	335			$	5,976			$	74
Interest expense, net			533				374				2,175				1,616
Depreciation and amortization			211				71				608				320
Income tax provision			103				15				158				60
EBITDA		$	2,760			$	795			$	8,917			$	2,070
Stock based compensation			630				128				1,235				581
Adjusted EBITDA		$	3,390			$	923			$	10,152			$	2,651

SOURCE: TSS, Inc.

View the original press release on ACCESS Newswire

FAQ

What was TSS Inc's (TSSI) revenue growth in fiscal year 2024?

TSS Inc achieved 172% revenue growth in FY 2024, reaching $148.1 million compared to the previous year.

How much did TSSI's earnings per share (EPS) improve in 2024?

TSSI's diluted EPS improved from $0.00 in 2023 to $0.24 in 2024.

When will TSSI's new facility become operational?

TSSI's new state-of-the-art facility is expected to be fully operational by June 2025.

What was TSSI's Adjusted EBITDA performance in 2024?

TSSI's Adjusted EBITDA grew 283% to $10.2 million in 2024 compared to 2023.

How did TSSI's different business segments perform in 2024?

Procurement revenues grew 205% to $117.5M, Systems Integration increased 157% to $22.6M, and Facilities Management rose 13% to $8.0M.