TSS Inc (TSSI) Q1 2024 Earnings Call Transcript Highlights: A Remarkable Turnaround with Robust ...

In This Article:

  • Overall Revenue: $15.9 million in Q1 2024, up 142% from $6.6 million in Q1 2023.

  • Procurement Revenue: $11.6 million in Q1 2024, up from $1.7 million in Q1 2023.

  • Gross Profit: Increased by $1 million or 61% compared to Q1 2023.

  • Operating Income: $253,000 in Q1 2024, improved from an operating loss of $665,000 in Q1 2023.

  • Net Income: $15,000 in Q1 2024, a significant improvement from a net loss of $786,000 in Q1 2023.

  • Adjusted EBITDA: $475,000 in Q1 2024, compared to a loss of $436,000 in Q1 2023.

  • Facilities Revenue: $2.1 million in Q1 2024, slightly down by $0.1 million.

  • Systems Integration Revenue: $2.1 million in Q1 2024, down by $0.5 million from Q1 2023.

  • Gross Margin: 17% in Q1 2024, down from 26% in Q1 2023.

  • Cash from Operating Activities: Generated $2.6 million in Q1 2024.

Release Date: May 14, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • TSS Inc (TSSI) reported a significant increase in first quarter revenue to $15.9 million, up from $6.6 million in the previous year, marking a growth of 142%.

  • The company saw a substantial improvement in gross and operating profits, with gross profit increasing by $1 million or 61% compared to the first quarter of the previous year.

  • Net income improved to $15,000 in Q1 2024, a significant recovery from a net loss of $786,000 in Q1 2023.

  • Adjusted EBITDA turned positive at $475,000 in Q1 2024, compared to a loss of $436,000 in the same quarter the previous year, showing effective cost management and operational efficiency.

  • TSS Inc (TSSI) is expanding its production capacity in partnership with customers, including a major OEM partner, to meet the increasing demand for Rack integration services driven by AI computing solutions.

Negative Points

  • Despite overall revenue growth, the systems integration business saw a decline, with revenues down by $0.5 million compared to the first quarter of the previous year.

  • The gross profit margin decreased to 17% in Q1 2024 from 26% in Q1 2023, indicating a less favorable revenue mix and the impact of accounting treatments in the procurement business.

  • Selling, general and administrative expenses increased by $127,000 or 6% due to higher headcount costs, which could pressure the operating margin if not accompanied by proportional revenue increases.

  • Interest expenses increased due to higher volumes of business transacted through the procurement business, which could affect net income if not managed carefully.

  • While the company is making significant strides in its core business areas, there are still uncertainties in the IT market and the role of modular data centers, which could impact long-term strategic positioning.