TSS, Inc.

Welcome to the TSS, Inc. Second Quarter 2025 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. I will now turn the conference over to your host, James Carbonara. You may begin.

Thank you, Operator, and good afternoon, everyone. Thank you for joining us for TSS's conference call to discuss the company's second quarter 2025 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. This call will contain time-sensitive information as well as forward-looking statements, which are accurate only as of today, August 6, 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.S. GAAP is included in today's press release. With that, Daryl, I will turn the call over to you.

Thank you, James, and good afternoon, everyone. Thank you for joining us today for our second quarter 2025 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. It's also at 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. 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 increased ability to support larger, more complex customer deployments. The completion and activation of this facility marks the 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 second half of 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. 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 and 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 million in Q2 of 2025. 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 million in the quarter, driven by increased infrastructure investments to support AI workloads. The growth continues to underscore both our value as a strategic sourcing partner and the strong execution of our operational team. 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 rack 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. 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 and emerging AI-driven segment is well-suited to modular deployment. 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 more detailed conversation and discussion of our financial results. Danny?