TSS, Inc. Q2 2026: Persistent Material Weakness Overshadows Results
TSSI sits 32% above its 52-week low of $6.87 on elevated volume (2.3× avg).
Summary
TSS, Inc. reported Q2 2026 net income of $1.4 million on revenue of $34.9 million, down 21% year-over-year. The company disclosed a continuing material weakness in internal controls and a new warehousing agreement with its largest customer.
Key Events · Earnings and Guidance · TSSI
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Material Weakness Persists
Disclosure controls and procedures remain ineffective as of June 30, 2026, due to a material weakness in internal control over financial reporting first identified in the 2024 audit. Management has not yet completed remediation.
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Q2 Revenue Declines 21%
Total revenues fell to $34.9 million from $43.9 million a year ago, driven by a 45% drop in procurement revenues to $18.2 million. Systems integration revenue grew 46% to $13.9 million.
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Net Income Slightly Lower
Net income was $1.4 million, or $0.05 per diluted share, compared to $1.5 million, or $0.06 per share, in Q2 2025. Higher interest expense and income taxes offset improved gross margins.
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New Warehousing Agreement
Effective May 1, 2026, the company began a multi-year warehousing and logistics arrangement with its largest customer at its Round Rock, Texas facility, expected to provide recurring revenue through March 31, 2029.
Analysis · TSSI · Trade & Services
TSS, Inc. reported Q2 2026 net income of $1.4 million, down slightly from $1.5 million a year ago, while revenue fell 21% to $34.9 million. The company continues to operate with a material weakness in internal control over financial reporting, which management has not yet remediated. A new warehousing and logistics agreement with its largest customer, effective May 1, 2026, adds a recurring revenue stream through March 2029. The company holds $69.5 million in cash and remains in compliance with debt covenants.
At the time of this filing, TSSI was trading at $9.05 on NASDAQ in the Trade & Services sector, with a market capitalization of approximately $335.8M. The 52-week trading range was $6.87 to $21.77. This filing was assessed with negative market sentiment and an importance score of 8 out of 10.