TSS ((TSSI)) has held its Q4 earnings call. Read on for the main highlights of the call.
The recent earnings call for TSS Inc. was marked by a strong positive sentiment, highlighting significant growth in revenue and profitability alongside strategic expansions. Despite some increases in costs impacting net income, the overall tone was optimistic, reflecting the company’s robust performance and future potential.
Exceptional Year for TSS
TSS Inc. reported an outstanding year with organic revenue growth of 172% for 2024. This impressive performance was complemented by an increase in diluted earnings per share, which rose from breakeven in 2023 to $0.24, showcasing the company’s ability to enhance shareholder value significantly.
Robust Growth in Procurement Services
The Procurement Services segment was a standout performer, with revenue surging by 205% to reach $117.5 million, up from $36.5 million in 2023. This substantial growth underscores the strength and demand within this segment, contributing significantly to the overall financial success of TSS.
Expansion of Facilities and Capabilities
To support growing demand, particularly in AI-driven areas, TSS signed a multiyear lease for a new 213,000 square foot facility. This expansion more than doubles the company’s operating space, positioning it to better meet future demand and continue its strategic growth trajectory.
Record Q4 Financial Performance
TSS achieved record financial results in Q4, with revenue reaching $50 million, marking a 105% increase year-over-year. Additionally, diluted earnings per share for the quarter increased by 300% to $0.08, reflecting the company’s strong operational performance.
Strong Cash Flow and Profitability
In 2024, TSS generated over $15 million in positive cash flow from operations and improved its net income to $6 million, a significant rise from $74,000 in the previous year. This financial strength underscores the company’s effective management and operational efficiency.
High SG&A Expenses
The company reported an increase in SG&A expenses to $4.2 million in Q4 2024, up from $2.5 million in the same quarter of the previous year. This rise was primarily due to investments in capacity and processes, which are expected to support future growth.
Interest Expenses Impacting Net Income
Net interest expense for Q4 2024 was $533,000, which impacted net income. This was mainly due to interest associated with factoring receivables, highlighting a cost area that the company needs to manage carefully.
Forward-Looking Guidance
Looking ahead, TSS Inc. is well-positioned for continued success in 2025. The company anticipates adjusted EBITDA growth of at least 50% over 2024, supported by improved visibility into future orders and strategic initiatives such as the expansion into a new facility. This forward-looking guidance reflects confidence in sustaining the growth momentum achieved in 2024.
In summary, TSS Inc.’s earnings call painted a picture of a company on a strong upward trajectory, with significant achievements in revenue and profitability. Despite some cost challenges, the strategic expansions and robust growth across segments position TSS well for continued success. Investors and market watchers can look forward to seeing how TSS capitalizes on its current momentum in the coming year.