TSS Inc Q3: Revenue $50 million, Systems Integration Up 75%

TSS Inc's Q3 2026 results show a company capitalizing on AI infrastructure demand, particularly through its systems integration segment. While total revenue grew 20% to $50 million, the standout was systems integration revenue climbing 75% to $16.1 million, which helped drive adjusted EBITDA up 225% to $4.7 million. This growth came even as procurement revenue grew only 4% and facilities management revenue fell 30%, highlighting the outsized contribution of integration services.

The company also invested in infrastructure readiness for next-generation AI platforms, including NVIDIA's Vera Rubin architecture. On the call, CEO Daryl Dewan noted that the current facility could double or triple integration revenue, with new warehouse space nearby and ample electrical power supporting upside. CFO Danny Chisholm echoed this, citing rack volume growth, incremental warehousing contribution, CapEx recapture from the Vera Rubin readiness investment, and pipeline volume as key drivers for the raised EBITDA target.

However, risks remain. Customer concentration is a persistent concern, as a significant portion of revenue depends on the largest customer and its order timing. Additionally, new warehousing services are expected to slightly decrease overall systems integration margin due to lower margins, and SG&A expenses increased to $6.1 million from $5.2 million on higher compensation and equity-based costs. Despite these, the raised full-year 2026 adjusted EBITDA outlook to $21 million to $23 million reflects management's confidence in continued growth.