TSSI - Earnings call transcript Q1 2024

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Operator

Good afternoon, and welcome to the TSS First Quarter 2024 Earnings Call. Please note that this call is being recorded. [Operator Instructions]. I will now turn the call over to Mr. John Penver, Chief Financial Officer. ahead. go Please

John Penver

Officer Good and us Brianna. first and you is Chief thank XXXX today joining Thank the Executive on TSS' afternoon, Officer conference joining call Financial Penver, John on results. Dewan, our TSS. call for And financial me President you, Darryll I'm everyone, of Chief to quarter TSS. discuss for

any the of like press information the That applies may the update, review the replay This obligation or begin unless today's otherwise accurate information everyone or forward-looking conference remind or as or time-sensitive we supplement, circumstances to that that's arise law. today. XX, are which to contained we as of conference contain call, disclaims statements today, release forward-looking amend, any I'd statements, as in made language reflect issued events same cautionary the to take May otherwise statements call applicable As after regarding on comments call. statements forward-looking note made to required well will this to by language call indicated, and expressly on XXXX. date TSS

of uncertainties, affect performance, periodic which refer risks a future Commission. company's the Securities filings to may the and the For please with Exchange list and

In press in of financial addition, measures included in measures the we calculated with is financial will most reconciliation be today's comparable directly referring with differences a measures and to non-GAAP the between these release. accordance GAAP

back to overview with performance. commentary provide detail direction. I'll and and the Darryll financial the So, with to recap the about some will kick Darryll quarter's first strategy off call and our Darryll? call more an hand

Darryll Dewan

we I'm report quarter of our around John. fourth most you, business quarter 'XX. objectives that in Coming first excited history, the successful the core our Yes. momentum in off to continue Thank

Those and adjusted go-to-market prior efforts and improved increased We excellence, relationships. focus and revenue to strong growth expanding on our resulted in focus developing continue business gross our strengthened year. our improved to and attention EBITDA and operating partner and efforts improvement profits, compared built to team, operational in execution, and the

$XX EBITDA quarter and 'XX, the in $XXX,XXX an EBITDA quarter $X of loss first of of Some include first per of were overall compared or of or of $XXX,XXX first the first 'XX. in million million of XXXX in to profits Net compared compared in Procurement share first Increased the 'XX. of or XX% $X income of quarter $X.XX share of And of first loss finally, first compared to to $X.X $XX.X favorably in to an net of the 'XX. first quarter $X.X quarter $XXX,XXX $XXX,XXX first of quarter the of million revenue in the compared $XXX,XXX quarter of first negative in $XX.X million $XX,XXX operating of adjusted adjusted $XXX,XXX the highlights to a first 'XX. the quarter revenues the in the key 'XX of to for to improved quarter in million 'XX, quarter the million the by of income first XXXX. 'XX quarter by income of loss compared quarter operating gross per

are is sales that in in funnel adjusted turnaround a business. business is procurement expect by become the quite EBITDA QX to were particular, And fundamental visible driven investors business, in say profits and from very and changes but efforts integration strong benefited financial have we in pace systems changes gross at the growth in we have were ago. this rapid from of to year procurement data increased where XX demand positive. overall and we've operating in the beneath short-term, visible financial coverage Our results, in revenue and to not in the improvement dedicated this yet and extremely prior months The the compared a our materialized growing strength center we XXXX. our I'd QX our

seeing by our AI driven the OEM rack increased demand a services experienced. engagement that scale the for is with generative for be previously in not in quantities have now limitless demand in are seemingly Customer along partner hundreds in at used Rack hundreds, to integration used computing thousands. are We measured be our tens we to the and solutions. the are now quantities the that

financials of rack in volatility volumes not historical investment demand plagued This capacity spiking rack support capabilities. and has Our low cycles does historical been rapidly by temporarily.

however, planning OEM production customers, largest partner. expand and We in occurring is have begun this our partnership to including our time, completed expansion our capacity. This with

not along center familiar? have customers especially ancillary response middle these calls, of biggest and trend demands made in require integration showing us causing cooling modalities. data quick market are consistency. shift The the as with in Many power in the to as Since of greater in this current the is partner operations extreme we we area be they the all center the in such new joining integration-related such high-quality this why need has we the OEMs, invested We our is unknowns evolution.Existing our And we Again, way Does data the providers time and influence is the market have a from ideal investor demand. shift The There cheapest be NVIDIA to Our design and require in are context and the new scalability, incorporate flexibility are on flexibility sound changes best. many market of in as seem team. in services. the TSS, the This nimble echoed a we them, quality. we've introduced. in rapid response, for are I but chip IT advancements technologies of not AI today. environment. must footprint highest the bring in are partner,

a data leaning this All the towards moves offering, has touched are center more entirely brings although pipeline. that solutions could existing compute becomes occur implemented. still with are direct the center This opportunity. the its an on will footprint liquid service high-performance in technologies new in design. growing which upon center market solutions, interesting been our dense, extremely as changes data data new motivation example, an previous I infancy, cooling As behind This which call, address consideration an

over integration modular It systems solutions ongoing of from our requirements, the centers. modular or business benefiting be over demand, of for time, powering would X for questions fitted directly ease logical remains cooling packages While is the be of example, racks data there operation. with into and role and different would that deployment increased

operationally, integration our integration the process in our last both XXx and scaling up investing at least the to in be our team of during mentioned to we increase I current call, volume. to rack capacity technology are our able business, As factory

expansion are Our team we witnessing, and from scaling the guidance the spending with has meet of to is with make demand allowing our improving that in our maintaining improved that while and appropriate the growth us past operations, financial proven goals strength. along executed the data center our in infrastructure and leadership, ambitious investments

recovery We position at team and TSS, the together, of configures half solutions cyber in integration are investments cybersecurity also with cannot decades to because force offer to the against the ensuring services benefits to support critically the and including and of carry How We but of computing, to Launched matter. second provide 'XX quality understand systems a growth. Leveraging demand all less XXXX. protection services. integration another customer's are is that and customers, top-tier in important, both experience and safeguarded, that computing and integrates required the infrastructure. data speed IT is labor cybersecurity sends to delivering new breaches was into experienced high-performance solutions, deliver. our will compromised. providing qualified service improvements and how IT and a innovative delivers recovery This which comprehensive solutions it box us and make fanfare will including and robust of our security in cybersecurity of a high-performance infrastructure, solution. complexity intersection legacy These skilled our works This uniquely be the timely continue cyber offering

Our capabilities no bills pay about one the them. don't if knows

media to our new product running and go-to-market be that And next the of that These new articles several these start early continued brand announcements, will We're with opportunities. but company, the in our to efforts awareness move to delivery several the that leads in pleased about deliver working sales to weeks. so, and expand coverage results. we've services, activities team efforts, is with initial

the as improvements one continue Focused growth we busy QX on partners, deliver our and efficiently we've at effectively core improved to to and expertise, long-term business, was solutions see we beyond. the in driving investors. customers, So, intersections and and expect sector results made our of commitments the elements busiest the to of like and others. and we're on XXXX to technology in We exciting the have grow to and say the operational would it investments quarter more a experience, the in than financial

provide So, about year. with our financial the thoughts who the detail to it will closing to of more that, back before John, like with around I'd John? performance turn rest

John Penver

Thanks, Darryll.

business. to XXXX. In we million up our services, Our first million million quarter business, $X.X from quarter $XX.X of This had made the of procurement and of represents $XX.X revenue of $X.X our from XXX% this million our integration systems growth the million. revenue compared revenue in was from first was $X.X quarter, facilities

revenues procurement million business quarter by XXXX. of grew $X.X first Our the to compared

Our procurement were different integration of included of last by process facilities transactions down $X.X was million, the made quarter we'd revenue million in gross first quarter business year. In up XXXX, and the $XX million revenues the of compared The $X.X of were processed our million. transactions. in value transactions. This down by XX systems XX transactions first $X.X to

revenue, Our systems down $X.X were said, of $X.X integration million million. as by I

centers completed deployment quarter business as occurring delivered center several some on-site was first 'XX a or the in of XX% data a delivered of modular up locations. new data compared had to as were The quarter modular million project, during to and down we service, large the Now assessment fourth prior year XXXX. refresh the deployment facilities compared $X.X by we project of the an revenues

Our of of XX% in it of gross XXXX, that was down we from quarter XXXX was profit had up quarter quarter in the of margin actually but fourth first during XX% XXXX. the XX% the first from

revenue an first the XX% mix by of in XXXX. compared is the transactions $X.X or million Our the to of and significantly margin treatment the our business. $X accounting gross of of gross million profit procurement quarter Overall, influenced increase profit was

first that higher general was headcount the had the and in $X.X XXXX. costs. we million, up first or were increase million of selling, in XXXX of the primarily Our $XXX,XXX $X.X were administrative And quarter expenses quarter X% during from this

quarter of was improvement an Our which operating are business, relates $XXX,XXX for operating of of income interest all is where in large quarter first an XXXX, Nearly first short to million. transaction our period. compared procurement in the $X.X a receivables loss our $XXX,XXX of expense financed to the

of business in So, the reason transacted through higher interest business the increase volume expense. the is procurement for the

in the net $XXX,XXX $XXX,XXX XXXX After of of Our had net was $XXX,XXX improvement costs, quarter the the $XXX,XXX. per quarter net a in minus and as to interest $XX,XXX first a compared of tax $X.XX share we quarter an expense in or to XXXX, first or a income $X.XX loss of of first of share interest compared XXXX.

improvement quarter was which excludes an first interest, first of loss quarter adjusted of $XXX,XXX XXXX stock-based XXXX, EBITDA compensation $XXX,XXX and EBITDA, to in depreciation, the $XXX,XXX of compared an adjusted or XX%. the amortization, Our of in taxes,

working sheet during events material generated transactions of We the has Our XXXX. a from impact first composition. The in balance activities the cash operating capital remains of quarter million around our procurement $X.X timing on position healthy.

changes the related timing in due are procurement year-to-date payables transactions. deferred the our of cash, cash and receivable and to the so, And to revenue receipts accounts inventories, primarily payments

over hand some back will Darryll Thanks, to for I that, comments. closing with Darryll. So, the call

Darryll Dewan

Yes. at in AI Thank deliver customer to want you, a complex position I our OEM John. ecosystem. high in high ability and unique to volume solutions highlight us places

rack and growing demand IT and in computing industry capabilities more by momentum more AI, the support driven traditional and advanced our building cloud by integration for are the driven growth unprecedented systems. to We the

on We integration more the the of the for quarters 'XX. about exciting our and made become the team over in the TSS, turnaround executed very positioned are for very growth. is business impacts appreciate of the of increasingly our are exciting last last shareholders. of bearing the The is talked for fruit. at changes our prospects year systems well procurement for The an particular, in continued QX business, continued strength few rest This and support we've and The success will evident. we time

We employees, you, and are customers, to delivering focused on value to shareholders. to our our team our and

take have. we'll you questions that, any might with So,

Operator

this open over no now the for remarks. will Dewan any questions questions. time. Seeing [Operator Mr. Instructions]. closing We back at I line Darryll turn for to call the will

Darryll Dewan

of and technology appreciate long-term Thank view that. you. it's about is hear growth of I've real. talked demand we've been, you, the refreshing where we're to going, real. many comments the to perspective. on-prem AI and The where for And is we investors' The

Our built XX, result the bearing of plan XX rack ago integration capacity a now as is months fruit.

at time, we've begun. So, Thank and time. And and have our a to multiyear another know. I to can concert. plan, you our me happen with let if everybody's existing just do execute, you. got existing we Both only to continue have customer. questions I'd plan customer please support of in grow appreciate say a outside And any more

Operator

for will This disconnect. may you participation, now call. your you today's and Thank conclude conference

TSS (TSSI) 14 May 242024 Q1 Earnings call transcript