10-Q · August 13, 2026
TSS reported a mixed second quarter: revenue of $35.141 million and diluted EPS of $0.05 missed estimates and declined from $44 million and $0.06, respectively, while gross profit increased 11% to $8.009 million and…
Earnings analysis · 10-Q
TSSI earnings analysis
Filed August 14, 2026 · Our reading of the company's report
The latest report
TSS delivered a mixed second quarter: revenue of $35.141 million and diluted EPS of $0.05 declined year over year and missed consensus, but gross profit increased 11% to $8.009 million and Adjusted EBITDA rose 12% to…
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TSS delivered a mixed second quarter: revenue of $35.141 million and diluted EPS of $0.05 declined year over year and missed consensus, but gross profit increased 11% to $8.009 million and Adjusted EBITDA rose 12% to $4.487 million. The result reflects a favorable mix toward higher-margin Systems Integration and Facilities Management activity, offset by weak Procurement and overall top-line performance. Management maintained the upper end of its $20 million-$22 million 2026 Adjusted EBITDA outlook and expects a stronger second half, while the unremediated material weakness remains a significant governance risk.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $0.05
- Gross margin
- 22.8%
What stood out
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Revenue Declined and Missed Estimates
Revenue was $35.141 million, down 36% from $55 million in Q1 2026 and down 20% from $44 million in Q2 2025. Revenue also missed the $46.146 million consensus estimate by 23.8%.
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EPS Fell Below Expectations
Diluted EPS was $0.05, versus $0.08 in Q1 2026 and $0.06 in Q2 2025, missing the $0.07 estimate by 28.6%.
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Profitability Benefited From Mix
Gross profit increased 11% to $8.009 million. Based on reported revenue of $35.141 million, gross margin was approximately 22.8%, up from 15.9% in Q1 2026 and 17.8% in Q2 2025.
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Adjusted EBITDA Increased
Adjusted EBITDA rose 12% to $4.487 million despite the lower revenue base, reflecting stronger contribution from higher-margin Systems Integration and Facilities Management activity.
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Full-Year EBITDA Outlook Maintained
Management maintained its 2026 Adjusted EBITDA outlook at the upper end of the $20 million-$22 million range and expects the second half of 2026 to be stronger than the first half.
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Share Acquisitions Were Administrative
The company repurchased or acquired 71,553 shares during the quarter at an average price of $12.03 per share; all shares were acquired from associates for tax withholding or option-exercise purposes rather than through open-market trades.
What to watch
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Material Weakness Remains Unremediated
Disclosure controls remained ineffective as of June 30, 2026 because the material weakness in internal control over financial reporting continued. Management stated that remediation actions had not yet been fully evaluated or tested, and there were no changes during the quarter that materially affected internal controls.
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Top-Line and Procurement Pressure
Revenue declined to $35.141 million from $44 million in Q2 2025, while management's prior analysis identified Procurement and overall revenue weakness as continuing headwinds. Sustained top-line pressure could challenge the $20 million-$22 million 2026 Adjusted EBITDA outlook.
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Interest-Rate Exposure Continues
The company stated there were no material changes in market-risk exposure since the December 31, 2025 10-K, but remains exposed to short-term interest-rate movements through factoring fees and interest on bank debt.
Management's outlook
Management maintained its 2026 Adjusted EBITDA outlook at the upper end of the $20 million-$22 million range and expects the second half of 2026 to be stronger than the first half. No quantitative revenue or EPS guidance was provided.
Earlier filings 4
10-Q · May 7, 2026
TSS, Inc. reported Q1 2026 revenues of $55.3 million, a significant decline of 44% year-over-year, primarily due to a substantial decrease in procurement revenues. Despite this, the company achieved a diluted EPS of…
10-Q · August 11, 2025
TSS reported quarterly revenue of $43,970,000 (Q2 2025), up sharply from $12,159,000 in Q2 2024 but down vs the implied Q1 2025 run-rate. Gross profit was $7,815,000 (17.8% gross margin) and operating income was…
10-Q · May 14, 2024
TSS reported strong top-line growth for the quarter ended March 31, 2024 with revenue of $15,892,000 (up $9,318,000 or +142% year-over-year) driven by procurement/services in its Systems Integration segment. The company…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.