Thu, May 15, 8:06 PM (28 days ago)
**TSS, Inc. (TSSI) Q1 2025 Financial Summary** TSS, Inc. (TSSI) reported a strong Q1 2025, with significant growth in revenue and earnings. The company's financial health and performance metrics indicate robust operational efficiency and strategic investments. **Revenue and Profit Margins:** - **Total Revenue:** $98.96 million, up 523% from $15.89 million in Q1 2024. - **Procurement Revenue:** $90.18 million, a 676% increase from $11.62 million. - **Systems Integration Revenue:** $7.48 million, up 253% from $2.12 million. - **Facilities Management Revenue:** $1.298 million, down 40% from $2.146 million. - **Gross Profit Margin:** 9.3%, down from 17% in Q1 2024 due to the significant increase in lower-margin procurement activities. - **Operating Income:** $4.11 million, up from $0.253 million. - **Net Income:** $2.98 million, up from $0.015 million. - **Earnings per Share (EPS):** $0.12 (diluted), up from $0.00. **Cash Flow:** - **Operating Cash Flow:** $20.64 million, up from $2.65 million. - **Investing Cash Flow:** -$14.87 million, primarily due to capital expenditures for the new facility. - **Financing Cash Flow:** -$1.65 million, mainly for stock repurchases. **Earnings Changes:** - **Revenue Growth:** Driven by significant increases in procurement and systems integration activities. - **Profit Margins:** Decreased due to the higher volume of lower-margin procurement services. - **Operating Expenses:** Increased by 107%, but grew at a slower rate than gross profit, leading to higher operating income. **Quarterly Performance Discussion:** - **Revenue Growth:** Significant increases in procurement and systems integration revenues. - **Operational Efficiency:** Effective leverage of expense structure, leading to higher operating income. - **Capital Expenditures:** $14.87 million invested in the new facility, with additional funds drawn from the construction loan. **Trends and Uncertainties:** - **Market Demand:** Strong demand for AI-enabled rack integration services. - **Supply Chain Issues:** Potential impacts from supply chain disruptions and tariffs. - **Customer Concentration:** Heavy reliance on a single OEM customer, posing risks if the relationship changes. - **Future Operations Impact:** Strategic investments in the new facility to support growth and meet increasing power and cooling demands. **Future Outlook:** - **Revenue Projections:** Continued growth in systems integration and procurement services. - **Operational Efficiency:** Focus on leveraging expense structures and improving gross margins. - **Capital Investments:** Ongoing investments in the new facility to support future growth and operational needs. **Conclusion:** TSS, Inc. demonstrated strong financial performance in Q1 2025, driven by significant revenue growth and strategic investments. The company faces challenges related to supply chain issues and customer concentration but is well-positioned to capitalize on market demand for AI-enabled services. Continued focus on operational efficiency and strategic investments will be key to sustaining growth and profitability.