Needham lowered its price target for TSS Inc. to $13.00 from $16.00. The investment firm maintained a Buy rating following the company's second-quarter 2026 earnings report. TSS reported revenue of $35.1 million, missing analyst expectations.
A 45% decline in the lower-margin procurement segment drove the revenue miss. However, higher-margin Systems Integration revenue grew 46% year-over-year. Gross profit increased 11% as the company continues its strategic shift.
Management maintained full-year adjusted EBITDA guidance between $20 million and $22 million. The company is making significant investments to support NVIDIA’s Vera Rubin platform. Leadership expects a stronger financial performance during the second half of the year.