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TSS Inc (TSSI+6.62%) has submitted its 10-Q filing for the quarterly period ended September 30, 2024.
The filing reports a significant increase in total revenues to $70.1 million for the quarter, up from $8.9 million in the same quarter last year. This increase was driven by growth in procurement and systems integration revenues.
Procurement revenues rose to $60.5 million, a 1,016% increase from the previous year, largely due to increased purchases from the federal government and a shift to more gross deals.
Systems integration revenues, excluding procurement, increased by 361% to $7.6 million, supported by the integration of AI-enabled computer racks.
Facility management revenues increased by 8% to $1.95 million, contributing to the overall revenue growth.
Cost of revenues increased by 273% to $62.2 million, primarily due to the increase in procurement activities.
The company's gross margin decreased to 11% from 32% in the prior year quarter, reflecting the lower margins associated with procurement activities.
Selling, general, and administrative expenses increased by 90% to $3.9 million, attributed to higher headcount and compensation costs.
Operating income for the quarter was $3.8 million, up from $0.7 million in the previous year, due to the effective leveraging of the company's expense structure.
Net income for the quarter was $2.6 million, or $0.10 per diluted share, compared to $0.2 million, or $0.01 per diluted share, in the previous year.
Cash provided by operating activities was $36.9 million for the nine-month period ended September 30, 2024, a significant increase from $8.6 million in the same period last year.
The company plans to invest $25 million to $30 million in a new facility to support the integration of AI-enabled computer racks, with financing discussions currently underway.
TSS Inc has signed a multi-year agreement with its largest customer for AI-enabled rack integration services, expected to sustain the current volume levels.
The company has concluded there is no substantial doubt about its ability to continue as a going concern, based on recent financial performance and future projections.
This content was summarized by generative artificial intelligence using public filings retrieved from SEC.gov. The original data was derived from the TSS Inc quarterly 10-Q report dated November 14, 2024. To report an error, please email earnings@qz.com.