TSS Q2 2025 Earnings Call Transcript

Quartr
Provided by Quartr
August 6, 2025

Key Takeaways

  • Positive Sentiment: Company’s new 213,000 sq ft Georgetown facility is now fully operational, delivering faster delivery cycles, higher efficiency, and support for larger, more complex AI deployments.
  • Positive Sentiment: Second quarter revenue rose 262% YoY to $44 million, adjusted EBITDA more than doubled to $4 million, and the first six months generated positive operating cash flow.
  • Positive Sentiment: Procurement services revenue climbed 572% YoY to $33 million, with the gross value of transactions up 213%, driven by increased federal AI infrastructure spending.
  • Positive Sentiment: Systems integration revenue increased 91% to $9.5 million, underpinned by multiyear AI rack integration contracts and robust demand from enterprises and hyperscalers.
  • Negative Sentiment: Facilities management revenue fell 35% to $1.5 million due to evolving modular data center usage, though the segment remains strategically important for edge computing solutions.
AI Generated. May Contain Errors.
Earnings Conference Call
TSS Q2 2025
00:00 / 00:00

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Operator

Greetings. Welcome to the TSS Inc. Second Quarter twenty twenty five Financial Results Conference Call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation.

Operator

I will now turn the conference over to your host, James Carbonara. You may begin.

James Carbonara
Partner at Hayden IR

Thank you, operator, and good afternoon, everyone. Thank you for joining us for TSS's conference call to discuss the company's second quarter twenty twenty five results. Joining me today on this call are Daryl Duan, President and CEO of TSS and Danny Chisholm, the company's CFO. As we begin the call, I would like to remind everyone to take note of the cautionary language regarding forward looking statements contained in the press release we issued today. That same language applies to comments and statements made on today's conference call.

James Carbonara
Partner at Hayden IR

This call will contain time sensitive information as well as forward looking statements, are accurate only as of today, 08/06/2025. TSS expressly disclaims any obligation to update, amend, supplement or otherwise review any information or forward looking statements made on this conference call or the replay to reflect events or circumstances that may change or arise after the date indicated, except as otherwise required by applicable law. For a list of the risks and uncertainties that may affect the company's future performance, please refer to the company's periodic filings with the SEC. In addition, we will be referring to non GAAP financial measures. A reconciliation of the differences between these measures and the most directly comparable financial measures calculated in accordance with The U.

James Carbonara
Partner at Hayden IR

S. GAAP is included in today's press release. With that, Daryl, I will turn the call over to you.

Darryll Dewan
President, CEO & Director at TSS

Thank you, James, and good afternoon, everyone. Thank you for joining us today for our second quarter twenty twenty five earnings conference call. The demand for complex high performance computing systems, particularly those enabling AI applications, continues to accelerate at a remarkable pace, and we are squarely positioned to address that demand. This past quarter marked a major transformative milestone in our company's journey and positions us for what we expect will be a record year. I'm pleased to report that we are successfully operating in our new facility, state of the art 213,000 square foot facility in Georgetown, Texas, and is now fully operational.

Darryll Dewan
President, CEO & Director at TSS

It's also less than 100 degrees today. The build out is testament to detailed planning, teamwork, and the team's ability to execute. It is more than just additional square footage. This facility is a strategic asset purpose built to support rapid scaling of integration services of the most advanced and complicated computing solutions. The facility became operational across all capabilities late in the second quarter.

Darryll Dewan
President, CEO & Director at TSS

With systems now validated and capable of running at full capacity, we're beginning to capture tangible benefits. We continue to produce faster delivery cycles, generate greater operational efficiency, and increase the ability to support larger, more complex customer deployments. The completion and activation of this facility marks a turning point, and we are incredibly bullish about what lies ahead. In terms of our financial results, we delivered on our commitment of revenues in the first half of this year exceeding the revenues in the 2024. And comparing the first half of this year to the first half of last year, we tripled our diluted earnings per share and more than tripled our adjusted EBITDA.

Darryll Dewan
President, CEO & Director at TSS

We are on track for what we believe will be a record year for our company. Our momentum is accelerating, the market is thriving and rich with opportunities, and we're excited about the execution and our focus on precision. So let me walk through a few of the highlights for the second quarter. We achieved record year over year revenue growth of 262%, highlighting the accelerating demand for our solutions, the depth of our customer relationships and the strengths of the market environment we are operating in. Adjusted EBITDA increased more than 100% to $4,000,000 in 2025.

Darryll Dewan
President, CEO & Director at TSS

We also generated positive cash flow from operations for the first six months of the year, further strengthening our financial foundation, reinforcing durability of our business model. The exceptional performance was driven by growth in our two largest service offerings, procurement and systems integration. So let me break this down by segment. Starting with procurement services where we source and resell third party hardware, software and services, revenue grew more than 572% year over year to $33,000,000 in the quarter, driven by increased infrastructure investments to support AI workloads. The growth continues to underscore both our value as strategic sourcing partner and the strong execution of our operational team.

Darryll Dewan
President, CEO & Director at TSS

While the business may experience quarter variability, the overall trajectory remains positive and we remain very optimistic about the contribution from this segment. Systems Integration, which includes AI RAC integration, delivered another strong quarter with revenue growth increasing 91%, fueled by growing demand for AI enabled infrastructure. This growth reflects the accelerating momentum behind AI deployments as enterprises begin to modernize and expand their compute environments, while hyperscalers remain in rapid expansion investment mode. We believe we are still in the early stages of the AI infrastructure build out cycle, and we expect continued robust growth as customers scale investments to meet evolving compute requirements in the quarters and years ahead. I'll speak more to this in a minute.

Darryll Dewan
President, CEO & Director at TSS

In our facilities management business, which primarily includes our modular data center business, revenues declined 35%. While this segment represents a smaller portion of our overall business, approximately 3% of the total revenue in the quarter, it has historically delivered stable high margin contributions. The modular market is evolving. Modular data centers are no longer used solely to augment traditional data centers, but are increasingly viewed as prefabricated solutions for delivering dense computing capacity more efficiently. Additionally, edge computing, an emerging AI driven segment, is well suited to modular deployment.

Darryll Dewan
President, CEO & Director at TSS

As adoption of AI technologies accelerates, we expect modular data centers to play a growing role in our strategy through 2025 and beyond. So it's clear to me that we're still in the early days of AI and demand for high performance computing. That demand is growing, our capabilities and partnerships are expanding, and our pipeline continues to strengthen. Importantly, we're successfully executing our business strategy and delivering substantial growth while scaling our operations and positioning the company to capture a meaningful share of the rapidly growing and complex AI infrastructure market. So let me turn the call over to Danny for a more detailed conversation and discussion of our financial results. Danny?

Danny Chism
Danny Chism
CFO at TSS

Thanks Darryl. Consolidated total revenue increased by 262% in the 2025 to $44,000,000 up from $12,200,000 in the 2024. As Darryl mentioned, the increase was driven by significant year over year growth in our two largest service lines, procurement and systems integration. Revenue from procurement services totaled $33,000,000 up 572% compared to $4,900,000 in the year ago quarter, driven primarily by purchases from the federal government combined with a mix shift with a greater proportion of revenues coming from gross deals as opposed to net deals. As a reminder, revenue in this segment represents a mix of gross and net deals whose revenue recognition method varies based on the contractual terms of whether we modify the product in some way or just act as an agent in the transaction.

Danny Chism
Danny Chism
CFO at TSS

The gross value of all procurement transactions, regardless of how accounted for, increased 213% from the prior year quarter to $65,700,000 this quarter. Based on recorded GAAP values, procurement gross margins were 7.7% in the current quarter compared to 14.7% in the prior year quarter. When viewed using the non GAAP gross value of all transactions, which we see more as apples to apples comparison because it ignores the gross versus net difference, gross margins improved from 3.4% in the prior year quarter to 3.9% in the current quarter. The margin expansion worked in concert with the 213% increase in the gross value of procurement transactions, driving 251% growth in procurement services gross profit to $2,500,000 up from $700,000 this quarter last year. Revenue from the Facilities Management totaled $1,500,000 down 35% from $2,300,000 in the same quarter last year.

Danny Chism
Danny Chism
CFO at TSS

Although currently the smallest segment of all our businesses, facilities management holds significant strategic potential. We're actively pursuing new opportunities while maintaining readiness to address customers' needs for modular data centers, or MDCs, when that demand picks back up. We're also seeing some discrete projects planned for the second half of the this fiscal year on MDCs that were deployed in past years. In addition to year one revenues, new deployments typically generate multi year maintenance contracts, further enhancing our earnings profile. Revenue from the systems integration segment increased to $9,500,000 up 91% compared to $5,000,000 in the 2024, driven primarily by the continued growth in the integration of AI enabled racks, which began with significant volume in June 2024.

Danny Chism
Danny Chism
CFO at TSS

Our work here is pursuant to the multiyear agreement signed in October 2024 to integrate AI enabled racks for our largest customer. We expect systems integration revenue in the next several quarters and next several years to grow substantially from current levels. Consolidated gross margin was 17.8% this quarter, down compared to 37.3% in the 2024 and up compared to 9.3% in the first quarter of this year. The year over year decrease is primarily due to the mix of revenues with lower margin procurement services representing a much larger portion of the total revenue compared to the prior year quarter. Breaking down the components of the consolidated margins, Systems Integration gross margins improved from 43% to 44%.

Danny Chism
Danny Chism
CFO at TSS

Facilities management gross margins remained robust at 74% in each period. And as mentioned earlier, the gross margins on procurement activities improved from 3.4% to 3.9% in the current quarter when viewed on the basis of the gross value of transactions. So the downward movement in blended consolidated margins is driven by the outsized growth in the larger I'm sorry, in the lower margin procurement business, combined with a greater portion of the procurement deals being recorded as gross deals compared to the prior year where more were net deals. SG and A expenses were 61% of gross profit in the second quarter, on par with 60% in the year ago quarter. On a dollar basis, SG and A expenses increased to $4,700,000 in the 2025 from $2,700,000 this quarter last year and decreased sequentially from $4,900,000 in the first quarter of this year.

Danny Chism
Danny Chism
CFO at TSS

The year over year increase was primarily due to the higher headcount and related compensation costs. The current quarter's SG and A expenses include $930,000 of non cash equity based compensation compared to $155,000 in this period last year. It's worth noting that as a result of the growth of our market capitalization and revenues, we'll no longer be considered a smaller reporting company at the 2025. Will instead be an accelerated filer. As a direct direct result to that, our external auditor must, for the first time, perform an integrated audit, including testing and opining on our internal controls over financial reporting.

Danny Chism
Danny Chism
CFO at TSS

We're starting to incur new higher audit and accounting costs as we prepare for both a more robust internal audit of these costs of these controls, as well as a first time external audit of these controls pursuant to the Sarbanes Oxley Act Section four zero four. And amortization expenses increased year over year to $844,000 compared to $117,000 in the year ago quarter. The increase is due to two full months of depreciation recognized on our new facility, which we put into service in May 2025. I expect the quarterly run rate of depreciation to increase ratably in the third quarter as we see a full quarter's depreciation related to the new facility versus only two months' worth of depreciation on that facility in the current quarter. Consolidated operating income in the 2025 was $2,200,000 up 32% compared to $1,700,000 this quarter last year.

Danny Chism
Danny Chism
CFO at TSS

While higher in dollar terms, this represents a lower operating margin from 37.5% this quarter last year to 28.6% this quarter. As the growth in depreciation outgrew the pace of growth in gross profit. As revenues continue to ramp at the new factory, we anticipate operating income in the final six months of 2025 will exceed the comparable period of 2024 as well as the first half of this year. If we're successful in subleasing our Round Rock, Texas facility, our operating income will be further enhanced in future periods. We've seen some interest in the facility, but we wouldn't expect to see any sublease consummated this fiscal year.

Danny Chism
Danny Chism
CFO at TSS

Interest expense increased to $859,000 in the 2025, compared to $378,000 in the year ago quarter. The increase was due to an increase in the gross value procurement transactions and other revenues from our primary customer compared to the prior year quarter, as well as interest on the $20,000,000 construction loan related to our new Georgetown facility where we had no outstanding debt in the prior year quarter. Partially offsetting that interest expense was $175,000 of interest income earned from cash on hand compared to $106,000 of interest income this quarter last year. As a net result of all the factors mentioned, net income for the 2025 was $1,500,000 up 6% from $1,400,000 this quarter last year. Diluted earnings per share was $06 in each period.

Danny Chism
Danny Chism
CFO at TSS

Adjusted EBITDA, which excludes interest, taxes, depreciation, amortization, and stock based compensation, was $4,000,000 up 103% from just under $2,000,000 this quarter last year. Now let's take a look at the year to date results. For the six months ended 06/30/2025, total revenues were up 410% to $142,900,000 compared to $28,100,000 in the year ago period. As Darryl mentioned, the first half twenty twenty five revenues exceeded second half twenty twenty four revenues of 120,100,000.0 a sequential increase of 19%. By segment, procurement revenues increased by 645% and systems integration revenues increased by 140%.

Danny Chism
Danny Chism
CFO at TSS

The increases were somewhat offset by a 37 year to date decrease in revenues from facilities management. This decrease is primarily due to the timing of discrete projects in this segment and a smaller decrease in ongoing maintenance revenues. Based on our current pipeline, I expect a bit of an increase in discrete projects in the back half of the year compared to what we saw in the first six months. Gross profit for the first six months of twenty twenty five increased 135% to $17,000,000 and our SG and A costs improved to 57% of gross profit, down from 70% in the year ago period. Year to date, our net income was $4,600,000 compared to $1,500,000 in the first half of last year, an increase of 215%, and diluted EPS nearly tripled to zero one seven dollars in the current period, up from $06 in the prior year period.

Danny Chism
Danny Chism
CFO at TSS

Turning to the balance sheet. As of 06/30/2025, we had $36,800,000 of unrestricted cash and cash equivalents, plus another $5,000,000 of restricted cash securing our bank loan, up from $23,200,000 at year end 2024. The increase was driven primarily by cash generated from operations and $11,300,000 of current quarter proceeds from bank financing used to support the construction at our new Georgetown facility. These inflows were partially offset by the capital expenditures tied to the facility's build out. To support anticipated increases in production, as well as to support more and more powerful racks, as Daryl discussed, we completed the move of our new headquarters and production facility to a new location during the 2025.

Danny Chism
Danny Chism
CFO at TSS

Through the end of the second quarter, we invested approximately $31,600,000 in improvements to that leased facility, primarily to significantly increase the available electrical power and related cooling capabilities for both air cooled and direct liquid cooled That amount is the amount invested both last year and this year to date. This is a bit higher than the 20,000,000 to $25,000,000 we previously indicated that we plan to invest. The increased investment was primarily in response to changes in anticipated technology roadmap from our OEM customers, which require even more power and cooling capacity than what was initially planned. We expect these incremental investments in capex will lead to incremental future revenues. To date, funding for the investments has consisted of $20,000,000 of bank debt, with the remainder coming from our cash on hand.

Danny Chism
Danny Chism
CFO at TSS

The loan converted to a fully amortizing loan on July with monthly principal and interest payments through January 2030. Net working capital decreased from $1,300,000 at the 2024 to a negative $16,300,000 at the end of second quarter twenty twenty five, primarily reflecting the investment in those capital expenditures. The use of the working capital, including the growth in accounts payable at the end of the period, is primarily related to procurement transactions and the funding of those construction costs. Due to the conversion of our debt to a term loan about a month ago, dollars 5,000,000 of cash that is a deposit securing our loan was reclassified from a current asset, cash, to a non current asset, restricted cash. In Q3, we anticipate receiving $6,800,000 of tenant improvement funds from our landlord, reimbursing us for CapEx we've invested to date.

Danny Chism
Danny Chism
CFO at TSS

We've also requested to exercise the accordion feature on our bank loan, allowing us to borrow an additional $5,000,000 on that loan in recognition of the additional capex that we have to date funded with cash on hand. These sources of funds will further improve the strong cash position showing on our balance sheet. For the first six months of twenty twenty five, we generated cash flow from operations of $37,000,000 which compares favorably to $1,700,000 of cash used in our operations in the first six months of last year. The improvement was driven by much stronger earnings combined with the timing of cash flows in our procurement activities discussed above. Overall, it was another great quarter, and we look forward to a strong back half of the year. With that, I'll turn the call back over to Daryl for some closing comments.

Darryll Dewan
President, CEO & Director at TSS

Thanks, Danny. I appreciate it. I commented earlier that our Georgetown facility is a strategic asset, and I'd like to expand on that before turning the call over to questions. I've described in previous calls how the amount of compute power in each rack is growing as a result of advancements in chip technologies such as GPUs from leading providers.

Darryll Dewan
President, CEO & Director at TSS

Our close relationship with a leading IT OEM provides us an operational view of the roadmap ahead for chips and resulting rack densities. As a couple of years ago, a rack might have required 30 kilowatts of power. We're now preparing to integrate racks with 300 kilowatts of power, on our way to a megawatt of power possibly within the next year. The layout and capabilities of a facility that integrates 300 kilowatt racks is very different to a facility that integrates 30 kilowatt. We have invested in a new facility beyond our initial expectation because racks of greater density are approaching faster than we expected.

Darryll Dewan
President, CEO & Director at TSS

More availability of electrical power is certainly the case, and we're targeting in a year more than double the current availability of electricity. We have also invested in cooling infrastructure, including direct liquid processing required to address racks of dramatically higher power. The point to all of this is we are seeing great growth opportunity as the new facility comes online. Looking out over the next twelve to twenty four months, our facility will become more and more critical for IT OEMs to deliver the product roadmap. Interestingly, we also expect to see more investment in the enterprise marketplace as the AI rollout continues and small, very dense compute resources are located closer to the end user.

Darryll Dewan
President, CEO & Director at TSS

In summary, we expect continued strong performance for the remainder of this year. Given the strength of our first half and our increasingly visibility into the second half of the year, we are raising our full year 2025 adjusted EBITDA outlook, as we've said previously, from at least 50% growth to at least 75% growth compared to 2024. We remain focused on driving long term profitable growth and delivering lasting shareholder value. So with that, let's open up the line for Q and A.

Operator

Thank you. At this time, we will be conducting a question and answer You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we poll for questions. First question comes from Bradley Stevenson with Breakout Investors. Please proceed.

Analyst

Hi guys, how are you doing?

Darryll Dewan
President, CEO & Director at TSS

Pretty good. How are you, Bradley?

Analyst

Good. Good. So it's good to talk to you again. I've got a few questions, and, we'll see see how you feel about answering those. One of one of the things that I we've never talked about or at least I've never heard you talk about it, is how, where does TSSI stand in the priority order for Dell for rack integration projects?

Analyst

We know they have in house RAC integration sites as well and then we also know they use you and believe maybe another vendor or two as well possibly. Can you comment on that at all?

Darryll Dewan
President, CEO & Director at TSS

Bradley, I think the way I would answer that is our desire is to make it really easy to pick TSS to do the total solution. We've positioned ourselves for the more complex future and to be the cheaper, better, faster alternative than anything else in the marketplace. So in terms of priority, in our world we are never satisfied. We want to be the top priority. We're working hard to be the top priority.

Darryll Dewan
President, CEO & Director at TSS

And in the scheme of things, probably can't go into any more detail on that, the top percentages or whatever, but rest assured we want our unfair share of the business and we're making it as easy to do that as possible.

Operator

Okay,

Analyst

thanks. You talked a little bit about growing organically in your press release and also exploring strategic alternatives. I think that comment was about expanding beyond Dell. Am I reading that correctly? And if so, can you talk a little more about that or provide any more detail on that thought?

Darryll Dewan
President, CEO & Director at TSS

Yes. So organic growth is doing more with what we've got with our existing relationship. I think that's pretty obvious. We're doing everything we can to grow organically and we so far so good. Every day is a new day and we strive to be better every day.

Darryll Dewan
President, CEO & Director at TSS

So we want to continue to grow organically. Outside of that, there's a number of different ways that we can expand. We talked about some of that in the past by doing some on-site rack integration, for example, in a customer facility. But there's a, if you will, a respect involved where people that we have working with our existing customer are not gonna put somewhere else. I mean, we're just on a competitive environment.

Darryll Dewan
President, CEO & Director at TSS

We're just not gonna do But that doesn't mean we can't have other teams dedicated to other technologies, and we're exploring doing that. So that's one way to grow in a customer facility. Another way is to grow through providing our kind of solution to the channel, The channel market out there that actually resells current customer technology and other technology wants someone or a firm to do the integration work that we have invested a lot of money in, dollars 25,000,000, 35,000,000 as we talked, in our world is a lot of money. So we wanna make sure that we invest and use that. Why would a channel partner be faced to have to make that kind of investment to satisfy their customer?

Darryll Dewan
President, CEO & Director at TSS

They can route the technology through us. We'll do the integration. We have the facility in Round Rock, which we could use for that if that ever comes up. So that's an opportunity. And then third, there's a whole another level of technology that's out in the marketplace that I think our existing relationship would be okay with if we were to partner in and with.

Darryll Dewan
President, CEO & Director at TSS

And I can't go into a whole lot more detail here, but let's put it this way. Think we're interested in anything that works that helps us grow, that doesn't damage our existing relationship, and that is done fairly and profitably.

Analyst

Okay. Thank you. Procurement, it's a big number. It's a lot smaller than last quarter, a whole lot bigger than the year ago quarter. Is there any is there any way to to correlate that with anything else in your operation?

Analyst

I I guess I what I'm trying to say, I find myself like, I was surprised with the 90,000,000 last quarter. I didn't expect to see a number that big. This quarter, 33,000,000. I won't say I was a surprise. I just didn't really know.

Analyst

I find myself not having really any idea of knowing what to expect. Is there any guidance you can give on that?

Darryll Dewan
President, CEO & Director at TSS

Well, if you yes, there is. We inspect our pipeline frequently. And if you were surprised by the $90,000,000 so were we in the respect that it was such a big number and a big quarter for us. If you recall, we did 60,000,000 in Q3 last year, and that was an eye opener. And we traditionally haven't had that kind of a large procurement quarter in the beginning of a year.

Darryll Dewan
President, CEO & Director at TSS

And we've felt and we still feel there's a little bit of a propensity to dial closer to the federal buying cycle, which usually is the third quarter of the calendar year. I can tell you that we're optimistic about the full year. I think you'll hopefully be pleasantly surprised again someday. And we're working hard to make that happen. So the corollary to anything other than the federal buying cycle and the fact that we put more muscle behind working transactions than we ever did before, I think it's paying off.

Darryll Dewan
President, CEO & Director at TSS

So in other words, internal resource allocated to go after opportunities that drive revenue for procurement. That also leads into business that we're driving in our configuration services business. And we've realigned our team internally to place, if you will, more attention and talent into the config services business, which really is connected to the procurement business. Eventually and hopefully very soon we'll see the benefits of that.

Danny Chism
Danny Chism
CFO at TSS

Yeah, to be clear on that, Bradley, while the configuration services is gets a lot of that volume fed from the procurement activity, those numbers for configuration services are classified in the systems integration segment.

Analyst

Okay.

Darryll Dewan
President, CEO & Director at TSS

It's confusing. Bradley, I mean, can tell you that I've been here almost now three years and what Danny just said is something we always kind of go, now how does that work? It is what it is, but at the same time, Danny's completely right. They feed each other and they work closely together. And we can also grow config services without procurement, which is what we're trying to do.

Darryll Dewan
President, CEO & Director at TSS

And in order for that to happen, we had to change some people and we're continuing to invest in a software platform and technology to automate the process that makes it a lot easier to deliver the end result. And we're doing that from operational money. It's not a lot of money, but it just takes time.

Analyst

Gotcha. And I wasn't trying to say I was disappointed in 33,000,000. Just didn't know what to expect. That's all I was really saying.

Darryll Dewan
President, CEO & Director at TSS

I was just trying to figure out where you're coming from because next time you ask a question, I might not take the answer question.

Analyst

I'm giving you all the time.

Analyst

I have I'm gonna call what you said about EBITDA guidance. You can correct me if you don't want it referred to as guidance. But if I if I've done my math right, if to do 75% more than last year, that would basic that would mean breaking even with the quarter we just finished over the next two quarters on average. Do you while that's a good number, do you see upside potential beyond that scenario?

Danny Chism
Danny Chism
CFO at TSS

Yeah. We we absolutely view that as the floor. Right? If you think about you may not have picked up on the exact words Darryl's used in communicating that, but it was we see at least 75% uptick. So last year, we did 10,000,000.

Analyst

K. So so if you do four and I guess what I'm trying to say, maybe I misunderstood what you meant, but if you hit if you hit 4,000,000 in the third quarter, 4,000,000 in fourth quarter, that gets you about a 75% uptick, I think.

Darryll Dewan
President, CEO & Director at TSS

Think your math is somewhat close. The first half of this year, Danny, correct me if I'm wrong, I think first half we did about $8,200,000 EBITDA. Last year we did 10,000,000 We're saying at least 75%.

Danny Chism
Danny Chism
CFO at TSS

First half of this year was 9.2. 9.2? Yep.

Darryll Dewan
President, CEO & Director at TSS

What's a million dollars amongst friends? 9.2, 8.2, 9.2. There's your hopefully that answers your question. If we're looking at the full year, we're increasing the guidance to at least 75%.

Analyst

Okay, got it. Alright. Well, I appreciate it, guys, and good quarter, and thank you for answering my questions.

Darryll Dewan
President, CEO & Director at TSS

Thank you, Bradley. Alright. Bye.

Operator

Please indicate so by pressing star one on your touch tone phone. Once again, that's star one if you have a question or a comment. Please continue to hold while we poll for questions. The next question comes from Chris Tuttle with Blue Caterpillar. Please proceed.

Kris Tuttle
Head - Research & Chief Investment Officer at Blue Caterpillar LLC

Hey, fellows. Thanks for taking my questions. I was hoping there'd be more coverage on this call. In the old days, analysts would introduce companies with this kind of growth and fundamentals. But anyway, couple of quick ones just for me.

Kris Tuttle
Head - Research & Chief Investment Officer at Blue Caterpillar LLC

In terms of Georgetown, where are what did you say you weren't completely 100% operational there or at capacity? What I just wanna clarify what you said about that and if it's not 100%, sort of what's your timeframe on getting there?

Darryll Dewan
President, CEO & Director at TSS

Are now 100%, Chris, good to talk to you by the way. We're now at 100%. We started the transition around the May and we segued into 100%. So we're full capacity, full production capability right now. Capability. Chris, I'm sorry.

Danny Chism
Danny Chism
CFO at TSS

Sorry, Chris. You're pixelating a little bit.

Kris Tuttle
Head - Research & Chief Investment Officer at Blue Caterpillar LLC

Sorry.

Darryll Dewan
President, CEO & Director at TSS

Operator, we can't pick him up.

Kris Tuttle
Head - Research & Chief Investment Officer at Blue Caterpillar LLC

I'll have to call you back.

Operator

Okay, Chris. We'll take your question once you come back into queue. The next question comes from Maj Fowden with GeoInvesting. Please proceed.

Maj Soueidan
Co-Founder at GeoInvesting, LLC

Hey, guys. Hi. Thanks for taking the call. One quick question, and I might have missed it because I I missed the prepared remarks. So if I did, just use me for asking again.

Maj Soueidan
Co-Founder at GeoInvesting, LLC

It's been already answered. But did you address it? The you know, anything going on the round the Round Rock facility, like, any any kind of movement there in terms of opportunities, or you're just 100% concentrated in the Georgetown facility now? Just wanted to know if you addressed that at all.

Danny Chism
Danny Chism
CFO at TSS

Yeah. Opportunity as in sublease or as in doing additional business there.

Maj Soueidan
Co-Founder at GeoInvesting, LLC

Yeah. I I guess both. I mean, you mean I'm I'm in I've been I'm assuming too that that's kind of that facility allows you to maybe do stuff that's nonbelt related also potentially, was an assumption also.

Darryll Dewan
President, CEO & Director at TSS

You're right, hey Maj. It is available. We've had some interested parties to sublease too. It's also something on our list to go expand our configuration services business. It's got adequate power for that and some DLC capability, direct liquid cooling, which is obviously what we used to do there.

Darryll Dewan
President, CEO & Director at TSS

But it's 110,000 square feet, and we're working angles to try and figure out how to best use it. It does open up opportunity for us to grow beyond our existing relationship in a way that doesn't upset our existing relationship. But nothing yet that we can talk about here, but we're working it.

Maj Soueidan
Co-Founder at GeoInvesting, LLC

All right, great. Thanks, That's the only question I really had. Thanks.

Danny Chism
Danny Chism
CFO at TSS

Okay, great. Thanks, Bash.

Operator

This concludes the Q and A portion of our call. And I'd like to turn the floor back over to Darryl Dewan for closing remarks.

Darryll Dewan
President, CEO & Director at TSS

Thank you, sir. Folks on the call, we're really grateful and glad to be in our new facility. It's been an effort and an extreme amount of work by a great team to get here. So the execution to get here is quite amazing. We're doing everything we can to position a company to scale and be ready to address these advanced technologies by the investments we're making and by the people that we've got here.

Darryll Dewan
President, CEO & Director at TSS

I can tell you that we're focused daily and quarterly and on an annual basis to continue to execute and to produce shareholder value. In a big picture, this is exciting space. The AI world just amazing. We appreciate you, our investors, for your commitment and your support. We're doing everything we can to give you a good return on your investment.

Darryll Dewan
President, CEO & Director at TSS

And my phone and my door is always open as the management team here. So appreciate any of your feedback or questions. As we've said before and I've said before in the previous call, wish us luck. So thank you. Have a good day.

Operator

Thank you. This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.

Executives
    • Danny Chism
      Danny Chism
      CFO
Analysts
    • James Carbonara
      Partner at Hayden IR
    • Darryll Dewan
      President, CEO & Director at TSS
    • Analyst
    • Kris Tuttle
      Head - Research & Chief Investment Officer at Blue Caterpillar LLC
    • Maj Soueidan
      Co-Founder at GeoInvesting, LLC
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