Why Is TSS Stock Down 40% In Premarket Trade Today?

• Despite the weak quarter, the company raised its FY2025 adjusted EBITDA outlook by 50%–75%.
• TSS cited weaker procurement demand and operational challenges in the systems integration segment as the main drivers of the weak results.
• Retail sentiment on Stocktwits remains “extremely bullish” despite the selloff.

Shares of TSS Inc. (TSSI) were down 40% in premarket trading on Friday after the company reported a sharp slowdown in its third quarter, with revenue declining 40%. Despite the weak quarter, the company raised its FY2025 adjusted EBITDA outlook by 50% to 75%.

The IT services company posted consolidated revenue of $41.9 million, down from $70.1 million in the same period last year. TSS posted a net loss of $1.5 million in Q3, compared with a $2.6 million profit last year. Gross profit dropped 41% to $4.6 million due to cost pressures tied to the launch of a new factory.

TSS cited weaker procurement demand and operational challenges in the systems integration segment as the main drivers of the weak results.

Segment-wise Breakdown

Systems integration revenue came in 20% higher at $9.2 million, driven largely by the deployment of AI-enabled racks for the company’s largest customer.

Procurement revenue, however, fell 49% to $31.1 million, while facilities management revenue, which accounts for 4% of total sales, slipped 19% to $1.6 million.

Management Outlook

“We expect elevated performances from Procurement, although the government shutdown may impact pipeline orders closing in the calendar year. Systems Integration and Facilities Management should both have stronger results in the fourth quarter, resulting in a strong rebound in quarterly EBITDA. Accordingly, we are updating our full-year 2025 Adjusted EBITDA outlook to a range between 50% and 75% growth compared to 2024. This run rate should carry into 2026 and result in another year of rapid revenue and EBITDA growth,” said Darryll Dewan, CEO of TSS, Inc.

What Are Stocktwits Users Saying?

Despite the premarket slump, retail sentiment on Stocktwits turned ‘extremely bullish’ from ‘bullish’ a session earlier. It was accompanied by ‘extremely high’ message volumes. TSSI was also among the top trending tickers on the platform.

One user expects the stock to drop further.

On a year-to-date basis, the stock has gained 26%.

For updates and corrections, email newsroom[at]stocktwits[dot]com.

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