olivLaw · US equity research
TSS, Inc. TSSI
Services-Management Consulting Services · SIC 8742 · Vertical: Services-Management Consulting Services (SIC 8742)
TSS, Inc. provides integration, design, deployment and maintenance services for data center infrastructure, including AI racks, plus IT procurement services. The company grew quickly in 2025 on its contract with a major OEM, but revenue fell in the first half of 2026 as the mix shifted toward higher-margin segments, which makes the balance between these lines worth watching. Total revenues rose 66% in fiscal 2025 to 245.7 million USD.
The AI analysis may be outdated: new filings came after its sources (see the «AI analysis» section).
At the close of 05 Nov 2026, TSS, Inc. (TSSI) stock was 5.95 USD (−13.14% on the day), with market capitalisation 167.9 m USD, P/E 10.2 on diluted EPS of 0.58 USD over the last 12 months, beta 2.80, 52-week range 5.95–17.09 USD. Latest reported quarter (Q3 2026): revenue of 50.1 m USD (+19.5% YoY), net income of 1.1 m USD, diluted EPS 0.04 USD.
Data as of · AI analysis dated · Source: SEC filings and closing prices, computed by olivLaw.
Price history
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Technical reading
- RSI (14)
- 29.7
- oversold (≤ 30)
- Bollinger (20, 2)
- 5.73 – 9.18
- in the lower half of the band · %B 0.06 · band width 46.3%
- SMA 50 / 200
- 8.40 / 10.79
- downtrend (price < SMA50 < SMA200)
- MACD (12, 26, 9)
- -0.63 / -0.55
- MACD below signal
Indicators describe past prices; on their own they do not predict direction. On our history the RSI ≤ 40 filter added no return (see the signals methodology).
Performance
| Company | S&P 500 | vs S&P 500 | Vertical median | |
|---|---|---|---|---|
| 1 month | −42.7% | −5.9% | −36.8 pp | — |
| 3 months | −44.7% | −4.6% | −40.0 pp | — |
| 6 months | −62.4% | +0.2% | −62.7 pp | — |
| Year to date | −15.8% | +7.4% | −23.3 pp | — |
| 1 year | −66.2% | +8.2% | −74.4 pp | −19.2% |
| 3 years | +1,465.8% | +68.4% | +1,397.4 pp | −28.6% |
| 5 years | +762.3% | +56.5% | +705.8 pp | — |
Price returns, dividends excluded.
Quarterly results
Latest quarter: Q3 2026 · 30 Sept 2026
Quarterly margins
Quarterly statements · USD
| Fiscal year | Q4 '24 | Q1 '25 | Q2 '25 | Q3 '25 | Q4 '25 | Q1 '26 | Q2 '26 | Q3 '26 |
|---|---|---|---|---|---|---|---|---|
| Revenue | 50.0 m | 99.0 m | 44.0 m | 41.9 m | 60.9 m | 55.3 m | 35.1 m | 50.1 m |
| Cost of revenue | 42.8 m | 89.7 m | 36.8 m | 37.2 m | 49.6 m | 46.5 m | 27.1 m | 41.4 m |
| Gross profit | 7.2 m | 9.2 m | 7.2 m | 4.6 m | 11.3 m | 8.8 m | 8.0 m | 8.6 m |
| SG&A | 4.2 m | 4.9 m | 4.7 m | 5.2 m | 5.8 m | 5.5 m | 5.6 m | 6.1 m |
| Operating income | 19.0 k | 2.6 m | 1.4 m | -1.8 m | 4.1 m | 2.3 m | 1.6 m | 1.2 m |
| Depreciation & amortisation | 211.0 k | 210.0 k | 226.0 k | 328.0 k | 329.0 k | 306.0 k | 320.0 k | 356.0 k |
| Interest expense | 722.0 k | 1.5 m | 859.0 k | 121.0 k | — | — | — | 310.0 k |
| Pre-tax income | 2.0 m | 3.0 m | 1.6 m | -1.4 m | 4.4 m | 2.7 m | 1.8 m | 1.5 m |
| Income tax | 102.0 k | 49.0 k | 69.0 k | 50.0 k | -7.8 m | 391.0 k | 413.0 k | 338.0 k |
| Net income | 1.9 m | 3.0 m | 1.5 m | -1.5 m | 12.2 m | 2.3 m | 1.4 m | 1.1 m |
| Diluted EPS | 0.07 ≈ | 0.12 | 0.06 | -0.06 | 0.41 ≈ | 0.08 | 0.05 | 0.04 |
| Operating cash flow | -21.6 m | 20.6 m | 16.3 m ≈ | -18.4 m ≈ | 16.3 m | -14.9 m | 7.6 m ≈ | -3.0 m ≈ |
| Capex | 6.7 m | 14.9 m | 10.9 m ≈ | 6.4 m ≈ | 537.0 k | 534.0 k | 4.1 m ≈ | 9.6 m ≈ |
| Share repurchases | 3.7 m | 1.7 m | 2.3 m ≈ | 974.0 k ≈ | 10.0 k | 1.4 m | 861.0 k ≈ | 71.0 k ≈ |
≈ derived quarter (cumulative difference / share-days average)
E/P over time
E/P = trailing-12-month diluted EPS / price at quarter end. E/P is the inverse of P/E and stays defined when earnings are negative.
Today's P/E sits at the 36 percentile of its own 22-quarter history (min 3.7, median 15.4, max 93.9; quarters with earnings only).
Fiscal years
| Fiscal year | 2018 | 2019 | 2020 | 2021 | 2022 | ⚠ 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|
| Revenue | 22.3 m | 32.8 m | 45.1 m | 27.4 m | 30.6 m | 54.4 m | 148.1 m | 245.7 m |
| Revenue YoY | +21.9% | +46.8% | +37.5% | −39.2% | +11.8% | — | +172.3% | +65.9% |
| Net income | 2.4 m | 126.0 k | 79.0 k | -1.3 m | -73.0 k | 74.0 k | 6.0 m | 15.1 m |
| Net income YoY | +218.1% | −94.8% | −37.3% | −1,741.8% | unavailable | — | +7,975.7% | +153.1% |
| Diluted EPS | 0.13 | 0.01 | 0.00 | -0.07 | 0.00 | 0.00 | 0.24 | 0.56 |
| Diluted EPS YoY | +160.0% | −92.3% | −100.0% | unavailable | unavailable | — | unavailable | +133.3% |
| net % | 10.9% | 0.4% | 0.2% | -4.7% | -0.2% | 0.1% | 4.0% | 6.2% |
| Free cash flow | 1.7 m | 2.4 m | 9.6 m | -10.5 m | 14.2 m | -8.5 m | 6.8 m | 2.1 m |
The series breaks before 2023: earlier years come from the original reports of the issuer of that time, later years from a subsequent filing that restated the perimeter (a separation, discontinued operations). The year-on-year change across the break is not shown.
Reported results vs expectations
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Balance sheet & financial health
Fiscal year 2025 · 31 Dec 2025
- Cash
- 85.5 m USD
- Financial debt
- 18.0 m USD
- Net debt
- -67.5 m USD
- Equity
- 76.6 m USD
- Total assets
- 184.9 m USD
- Debt / equity
- 0.24x
- Current ratio
- 1.63x
- ROE
- 36.1%
- ROA
- 10.7%
- FCF margin
- 0.9%
Financial statements (source on every figure)
Revenue and net income (USD)
Margins
Income statement · USD
| Line | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | Source (latest year) |
|---|---|---|---|---|---|---|---|
| Revenue | 45.1 m | 27.4 m | 30.6 m | 54.4 m | 148.1 m | 245.7 m | SEC (XBRL)· 18 Mar 2026verified |
| Cost of revenue | 38.3 m | 21.0 m | 21.7 m | 43.4 m | 125.8 m | 213.3 m | SEC (XBRL)· 18 Mar 2026verified |
| Gross profit | 6.8 m | 6.4 m | 9.0 m | 11.0 m | 22.4 m | 32.4 m | SEC (XBRL)· 18 Mar 2026verified |
| SG&A | 6.7 m | 6.7 m | 7.7 m | 8.9 m | 13.2 m | 20.7 m | SEC (XBRL)· 18 Mar 2026verified |
| Operating income | -400.0 k | -831.0 k | 914.0 k | -221.0 k | 5.8 m | 6.3 m | SEC (XBRL)· 18 Mar 2026verified |
| Depreciation & amortisation | 529.0 k | 536.0 k | 383.0 k | 320.0 k | 608.0 k | 1.1 m | SEC (XBRL)· 18 Mar 2026verified |
| EBITDA | 129.0 k ≈ | -295.0 k ≈ | 1.3 m ≈ | 99.0 k ≈ | 6.4 m ≈ | 7.4 m ≈ | SEC (XBRL)· 18 Mar 2026derived |
| Interest expense | 367.0 k | 430.0 k | 931.0 k | 2.0 m | 2.7 m | — | SEC (XBRL)· 15 Apr 2025verified |
| Pre-tax income | 129.0 k | -1.2 m | -17.0 k | 134.0 k | 6.1 m | 7.5 m | SEC (XBRL)· 18 Mar 2026verified |
| Income tax | 50.0 k | 65.0 k | 56.0 k | 60.0 k | 158.0 k | -7.6 m | SEC (XBRL)· 18 Mar 2026verified |
| Net income | 79.0 k | -1.3 m | -73.0 k | 74.0 k | 6.0 m | 15.1 m | SEC (XBRL)· 18 Mar 2026verified |
| Diluted EPS | 0.00 | -0.07 | 0.00 | 0.00 | 0.24 | 0.56 | SEC (XBRL)· 18 Mar 2026verified |
| Weighted average diluted shares | 21.0 m | 18.4 m | 20.1 m | 22.0 m | 25.1 m | 27.2 m | SEC (XBRL)· 18 Mar 2026verified |
≈ computed by olivLaw from the reported lines of the same year: Operating income + Depreciation & amortisation.
Balance sheet · USD
| Line | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | Source (latest year) |
|---|---|---|---|---|---|---|---|
| Cash | 19.0 m | 8.0 m | 20.4 m | 11.8 m | 23.2 m | 85.5 m | SEC (XBRL)· 18 Mar 2026verified |
| Inventories | 197.0 k | 847.0 k | 862.0 k | 2.3 m | 17.7 m | 16.0 m | SEC (XBRL)· 18 Mar 2026verified |
| Current assets | 21.0 m | 11.8 m | 24.4 m | 19.3 m | 58.2 m | 118.6 m | SEC (XBRL)· 18 Mar 2026verified |
| Property, plant & equipment, net | 662.0 k | 281.0 k | 587.0 k | 628.0 k | 8.6 m | 38.1 m | SEC (XBRL)· 18 Mar 2026verified |
| Goodwill | 780.0 k | 780.0 k | 780.0 k | 780.0 k | 780.0 k | 780.0 k | SEC (XBRL)· 18 Mar 2026verified |
| Intangibles (excl. goodwill) | 217.0 k | 126.0 k | 35.0 k | 0 | — | — | SEC (XBRL)· 29 Mar 2024verified |
| Total assets | 23.8 m | 19.3 m | 31.4 m | 25.6 m | 96.6 m | 184.9 m | SEC (XBRL)· 18 Mar 2026verified |
| Accounts payable | 12.6 m | 5.5 m | 20.0 m | 12.4 m | 33.5 m | 46.4 m | SEC (XBRL)· 18 Mar 2026verified |
| Short-term debt | 0 | 2.0 m | 0 | — | 0 | 4.0 m | SEC (XBRL)· 18 Mar 2026verified |
| Long-term debt | 2.2 m | 0 | 0 | 0 | 8.2 m | 14.0 m | SEC (XBRL)· 18 Mar 2026verified |
| Current liabilities | 18.1 m | 12.1 m | 24.2 m | 18.4 m | 56.9 m | 72.6 m | SEC (XBRL)· 18 Mar 2026verified |
| Total liabilities | 20.6 m | 17.1 m | 28.5 m | 22.1 m | 89.4 m | 108.3 m | SEC (XBRL)· 18 Mar 2026verified |
| Equity | 3.2 m † | 2.2 m † | 2.9 m † | 3.5 m † | 7.1 m † | 76.6 m † | SEC (XBRL)· 18 Mar 2026verified |
† equity attributable to the parent's shareholders: in these years the issuer no longer reports the total including non-controlling interests.
Cash flow · USD
| Line | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | Source (latest year) |
|---|---|---|---|---|---|---|---|
| Operating cash flow | 10.0 m | -10.5 m | 14.7 m | -8.3 m | 15.3 m | 34.9 m | SEC (XBRL)· 18 Mar 2026verified |
| Capex | 396.0 k | 64.0 k | 536.0 k | 257.0 k | 8.5 m | 32.7 m | SEC (XBRL)· 18 Mar 2026verified |
| Free cash flow | 9.6 m ≈ | -10.5 m ≈ | 14.2 m ≈ | -8.5 m ≈ | 6.8 m ≈ | 2.1 m ≈ | SEC (XBRL)· 18 Mar 2026derived |
| Investing cash flow | -396.0 k | -64.0 k | -536.0 k | -257.0 k | -8.5 m | -32.7 m | SEC (XBRL)· 18 Mar 2026verified |
| Financing cash flow | 733.0 k | -504.0 k | -1.8 m | -40.0 k | 4.6 m | 60.2 m | SEC (XBRL)· 18 Mar 2026verified |
| Share repurchases | 174.0 k | 197.0 k | 134.0 k | 40.0 k | 4.5 m | 4.9 m | SEC (XBRL)· 18 Mar 2026verified |
≈ computed by olivLaw from the reported lines of the same year: Operating cash flow − Capex.
Computed indicators
Growth
Profitability
Returns
Balance sheet
Liquidity
Cash
Efficiency
Market and valuation
Risk
Valuation
olivLaw classification
Score: 71 / 100
A scoring methodology on indicators and valuation, not investment advice.
Closing price
05 Nov 2026Source: olivLaw, closing series
Market cap: 167.9 m USD
Key indicators
Coverage and freshness
Score by group
- Growth100
- Returns20
- Balance sheet97
- Valuation56
- Quality69
Estimated value range
The combined range = the median of the valid methods' low, central and high values; it is not a probability interval and does not cover every result. Envelope of all methods: 5.76 – 14.35 USD.
Valuation assumptions are editorial choices, not measured; beta is not measured.
Method ranges (USD per share)
— — Mid · ▏ Price
Valuation methods
- DCF (discounted cash flow)unavailable · the base of the ratio is not positive
- Peers: EV/EBITDA5.76 – 7.34 (Mid 6.97)10 companies used · median multiple 15.2x · quartiles 11.9x – 16.2xACCS, ASTH, BAH, BWMN, FCN, HCKT, HURN, ICFI, III, ONT
- Peers: P/E7.61 – 14.35 (Mid 11.09)11 companies used · median multiple 19.0x · quartiles 13.0x – 24.5xAERT, BAH, EXPO, FCN, G, HCKT, HURN, ICFI, III, RMR, ZTG
- Dividend discount (DDM)unavailable · the company pays no dividend: a dividend model needs an explicit initiation assumption
Classification (SIC) comparables group by industry code, not by economic activity; the direct group is an editorial selection by activity. Members' multiples are on their own trailing twelve months, at their own latest close.
Assumptions (illustrative, editorial)
- Risk-free rate
- 4.3%
- Equity risk premium
- 5.0%
- Beta (default)
- 1.00
- Cost of equity
- 9.3%
- Terminal growth
- 2.5%
Factor scorecard
Neutral profile · Score 71/100
| Factor | Value | Score | Weight used |
|---|---|---|---|
| ROIC · Quality | 25.4% | 100 (vs peers) | 12% |
| Net margin · Quality | 8.4% | 85 (vs peers) | 7% |
| FCF conversion · Quality | -51.4% | 0 (on a fixed band) | 7% |
| Revenue CAGR 3Y · Growth | 100.2% | 100 (on a fixed band) | 10% |
| EPS CAGR 3Y · Growth | unavailable | unavailable | — |
| Net debt / EBITDA · Balance sheet | -3.7x | 100 (vs peers) | 12% |
| Interest coverage · Balance sheet | 10.8x | 100 (on a fixed band) | 7% |
| Current ratio · Balance sheet | 1.8x | 83 (on a fixed band) | 5% |
| P/E (TTM) · Valuation | 10.2x | 94 (vs peers) | 12% |
| EV/EBITDA · Valuation | 12.4x | 64 (vs peers) | 12% |
| FCF yield · Valuation | -5.2% | 0 (on a fixed band) | 10% |
| Shareholder yield (distributions) · Returns | 1.4% | 20 (on a fixed band) | 7% |
| Payout ratio (FCF) · Returns | unavailable | unavailable | — |
Factors without a value were dropped; the remaining weights were renormalised.
Score groups
- Balance sheet97/100 · 3/3 factors with a value
- Growth· partial100/100 · 1/2 factors with a value
- Quality69/100 · 3/3 factors with a value
- Returns· partial20/100 · 1/2 factors with a value
- Valuation56/100 · 3/3 factors with a value
A «partial» group is computed from under half of its weight or from one factor: it is not a full assessment of the group.
Memo
TSS, INC. (TSSI). Latest full fiscal year: 2025; data up to 2026-09-30.
Figures computed from the financial statements: revenue 245.7 m USD in 2025; YoY growth 65.9%; net margin 8.4%; ROE 23.3%; net debt/EBITDA -3.7x.
The estimated value range is 6.68–10.85 USD per share (median of 2 methods, agreement: same basis (multiples on one peer group, not independent confirmations)); assumptions are illustrative. Against the central value of 9.03 USD, the price of 5.95 USD leaves a potential of 51.8% (value / price − 1) and a margin of safety of 34.1% (1 − price / value). The range is the median of the methods' low, central and high values, not a probability interval.
olivLaw score 71/100, methodological classification: neutral profile (score, margin of safety and method agreement together; not a judgement of the right price). Groups assessed only in part: growth, returns. Not investment advice.
Text generated deterministically from the figures shown; no language model. Not investment advice.
What supports the thesis
- ROIC: 25.4%
- Net margin: 8.4%
- Revenue CAGR 3Y: 100.2%
- Net debt / EBITDA: -3.7x
- Interest coverage: 10.8x
- Current ratio: 1.8x
- P/E (TTM): 10.2x
- The price is below the estimated value range
What contradicts it
- FCF conversion: -51.4%
- FCF yield: -5.2%
- Shareholder yield (distributions): 1.4%
Not assessed (insufficient data or a ratio without meaning): EPS CAGR 3Y, Payout ratio (FCF).
Versus the vertical median
Services-Management Consulting Services (SIC 8742) · same industry (4-digit SIC) · compared with 33 companies
Multiples and returns vs the median
Price rebased to 100 (monthly, 5 years)
Companies in the vertical
| Market cap | P/E | ROE | Net margin | Revenue YoY | 1A / 3A | |
|---|---|---|---|---|---|---|
| BAHBooz Allen Hamilton Holding Corporation | 10.6 bn | 13.8 | 70.0% | 7.1% | −6.4% | +7% / −29% |
| GGenpact Limited | 6.9 bn | 12.2 | 22.4% | 11.1% | +6.6% | −7% / +21% |
| FCNFti Consulting, Inc | 5.3 bn | 24.4 | 15.2% | 5.9% | +2.4% | +20% / −11% |
| EXPOExponent, Inc. | 4.1 bn | 38.5 | 31.2% | 17.7% | +4.2% | +19% / +12% |
| HURNHuron Consulting Group Inc. | 2.8 bn | 26.2 | 25.5% | 6.1% | +11.7% | +7% / +69% |
| ASTHAstrana Health, Inc. | 2.2 bn | 47.5 | 5.1% | 1.1% | +56.4% | +69% / +17% |
| ICFIICF International, Inc. | 1.7 bn | 18.0 | 9.1% | 5.3% | −7.3% | +22% / −32% |
| BWMNBowman Consulting Group Ltd. | 745.4 m | 105.5 | 2.9% | 1.4% | +14.9% | +19% / +39% |
| ONTOnterris, Inc. | 682.6 m | — | -2.3% | -1.4% | +19.3% | −24% / −38% |
| PPHCPublic Policy Holding Company, Inc. | 342.7 m | — | -39.5% | -18.9% | +24.7% | unavailable / unavailable |
| HCKTHackett Group, Inc. | 329.4 m | 19.0 | 20.7% | 6.3% | −2.6% | −28% / −40% |
| IIIInformation Services Group Inc. | 283.8 m | 24.7 | 12.7% | 4.7% | −1.2% | +11% / +43% |
| AERTAeries Technology, Inc. | 262.2 m | 19.5 | — | 3.6% | −0.3% | +26% / −70% |
| RMRRmr Group Inc. | 239.0 m | 12.1 | 8.7% | 3.1% | −22.0% | +4% / −33% |
| SUPXSuperx Ai Technology Limited | 208.9 m | — | -101.8% | -527.7% | +1,878.6% | −84% / unavailable |
| TSSITss, Inc. | 167.9 m | 10.2 | 23.3% | 8.4% | +65.9% | −66% / +1,466% |
| GRNQGreenpro Capital Corp. | 126.9 m | — | -26.8% | -169.6% | −40.7% | −55% / −16% |
| AUCAtif Holdings Limited | 108.2 m | — | -90.5% | -723.7% | −74.7% | −13% / −70% |
| ROMARoma Green Finance Limited | 97.6 m | — | -44.2% | -287.8% | −22.2% | +130% / unavailable |
| RTBRTB Digital, INC. | 83.3 m | — | -141.9% | -198.5% | −38.7% | −54% / −95% |
| MHHMastech Digital, Inc. | 76.6 m | 72.6 | 1.3% | 0.7% | −3.8% | −19% / −25% |
| EGGEnigmatig Ltd | 62.1 m | 256.8 | 6.3% | 12.6% | +12.2% | +34% / unavailable |
| CTMCastellum, Inc. | 45.0 m | — | -8.6% | -5.7% | +18.1% | −55% / +115% |
| ACCLAcco Group Holdings Limited | 35.2 m | 120.2 | 7.0% | 5.6% | +5.8% | −37% / unavailable |
| INTJIntelligent Group Limited | 27.0 m | — | -23.5% | -98.3% | −9.0% | −77% / unavailable |
1- and 3-year price returns: for TSSI from daily closes (the same as the performance table), for the other companies from month-end closes.
olivLaw engine forecast
The world engine ran after the company's latest material disclosure. Probabilities are of TOUCHING a level within the horizon (not closing there) and sit next to the random walk (p_rw), the no-information benchmark.
The engine has no published run for this company yet.
Valuation scenarios (editable assumptions)
Illustrative scenarios
Illustrative: not forecasts and without probabilities. Each case is one coherent set of assumptions, computed on today's figures.
Estimated price (USD)
| Estimated price | Bear | Base | Bull |
|---|---|---|---|
| 1 years | 4.01 Total return -33% · Per year -33% | 7.06 Total return 19% · Per year 19% | 10.59 Total return 78% · Per year 78% |
| 3 years | 4.76 Total return -20% · Per year -7% | 9.33 Total return 57% · Per year 16% | 15.25 Total return 156% · Per year 37% |
| 5 years | 5.64 Total return -5% · Per year -1% | 12.35 Total return 107% · Per year 16% | 21.95 Total return 269% · Per year 30% |
- Exit P/E± 2.33
- Net margin± 1.63
- Annual revenue growth± 1.22
- Annual dilution± 0.14
AI analysis
AI-generatedAI-generated analysis (Claude) from cited public sources; it may contain errors. Not investment advice. As of 27 Oct 2026 · Model: claude-haiku-5-5.
Possibly outdated: the newest document it read is from 13 Aug 2026; since then the company filed 8-K (05 Nov 2026 · results), 10-Q (05 Nov 2026).
In brief
TSS, Inc. provides integration, design, deployment and maintenance services for data center infrastructure, including AI racks, plus IT procurement services. The company grew quickly in 2025 on its contract with a major OEM, but revenue fell in the first half of 2026 as the mix shifted toward higher-margin segments, which makes the balance between these lines worth watching. Total revenues rose 66% in fiscal 2025 to 245.7 million USD 1.
SWOT
Strengths
- The company has solid experience in AI rack integration and facilities maintenance, with a centralized ISO-certified facility 1.
- The long-term contract with its main customer includes minimum volumes and fixed fees, which gives some predictability 1.
- The revenue mix is moving toward higher-margin segments, and adjusted EBITDA has held up relatively well 3.
Weaknesses
Opportunities
- Demand for AI infrastructure and modular data centers could increase integration volume if readiness investments are used effectively 13.
- Diversifying the customer base through integration for other OEMs and MDC providers could reduce reliance on the main customer 1.
- The planned readiness investment for the next generation of AI technology could turn into additional integration revenue from the third quarter of 2026 3.
Risks
- Customer concentrationhigh
Nearly all revenue comes from one OEM customer, and a change in volume could have a disproportionate effect on results 1.
- AI agreement terminationhigh
If the company materially breaches the agreement or terminates it without cause, it could be left with lease and debt obligations without the related revenue 1.
- Power availabilitymedium
Access to additional electricity depends on commitments from the city, and the needs of newer rack generations could exceed current availability 1.
- Supply chain and tariffsmedium
Shortages of parts and tariffs could delay revenue recognition and affect liquidity 1.
- Personnel and ERP systemslow
Loss of skilled staff, wage pressure and the ERP implementation could disrupt operations and internal controls 1.
Investment thesis
What would need to be true (bull case)
- If demand for AI racks holds and the readiness investment converts into integration revenue from the third quarter of 2026, growth in the core segment could offset the decline in procurement 3.
- A revenue mix tilted toward integration and facilities could improve gross margin and profitability, as the second quarter trend suggests 3.
- The extended contract with minimum volumes and facility cost coverage could provide a more predictable revenue base 1.
What would break the thesis
- Extreme dependence on one OEM customer could expose the company to sudden revenue drops if volumes change 1.
- Total revenue fell sharply in the first half of 2026, and integration growth may not fully offset the decline in procurement 3.
- Large facility investments and related debt could reduce financial flexibility if volumes fall short of expectations 12.
What to watch
- Integration revenue trend and the effect of the 17 million USD readiness investmentQ3 2026
- Delivery against the adjusted EBITDA outlook of 20 to 22 million USD2026
- Availability of additional electrical power from the city2027
Products, market & competition
AI-generatedAI-generated analysis (Claude) from cited public sources; it may contain errors. Not investment advice. As of 27 Oct 2026 · Model: claude-haiku-5-5.
Possibly outdated: the newest document it read is from 13 Aug 2026; since then the company filed 8-K (05 Nov 2026 · results), 10-Q (05 Nov 2026).
The business
TSS offers a full suite of services for the mission-critical technologies in data centers, from technology consulting, design and engineering to systems integration, installation, facilities management and IT procurement 1. The company integrates server racks, including AI racks for a major OEM customer, in its own centralized facility in Georgetown, Texas, and also provides configuration services at the device level. Third-party hardware, software and services procurement complements the business and broadens its revenue base.
The business depends heavily on one OEM customer, which accounted for approximately 99% of revenues in fiscal 2025 1. The company invested about 40 million USD in the integration facility through December 31, 2025, and the cumulative investment reached about 48 million USD by June 30, 2026 12. The long-term AI rack agreement, amended in December 2025, provides for minimum monthly volumes and extends the term.
Segments
Market context
The data center services market is highly competitive and evolving constantly, as customers shift investment toward AI and accelerated computing infrastructure 1. Demand for AI racks, GPUs and direct liquid cooling is growing, and power and thermal management is critical to deployment 1. Operators need rapid integration, which favors providers with specialized production capacity.
Competition often comes from larger companies with extensive resources 1. Demand could be affected by US tariffs, which may raise costs for equipment made in some countries, and by possible interruptions in federal government purchasing 1.
Trends
- Demand for AI infrastructuretailwind
Companies are directing budgets toward AI racks and accelerated computing, which could support growth in the integration segment if demand holds 13.
- Power and cooling needsmixed
Newer rack generations consume more power, and access to additional electricity is becoming a limiting factor that could require further investment 1.
- Tariffsheadwind
US tariffs on countries where servers are made may reduce customer margins and delay deliveries, which could weigh on revenues if pressure persists 1.
- Shifting revenue mixmixed
Moving from low-margin procurement toward higher-margin integration and facilities supports margins but reduces total revenue in the short term 23.
Competitive position
TSS competes with larger companies that have extensive resources in data center services and infrastructure integration 1. Competitive pressure is high, and the company's advantage rests on centralized integration and ISO-certified facilities 1.
The reviewed sources do not name specific competitors, so the competitive landscape is described only in general terms without listing other companies 1.
- Large IT services and systems integrators
Described in the source as larger companies with extensive resources active in integration and data center services
- OEM equipment manufacturers
Can be both customers and players that integrate their own equipment, creating indirect competition
- Value-added resellers
Active in procurement and configuration, a segment where TSS competes on service and price
- MDC providers
Companies delivering modular data centers that TSS integrates and maintains
Links, dependencies and risks
Who the company is tied to, from its own SEC filings (customers, suppliers, production, partners, competitors, countries, regulation), from the 5 %+ holders' statements (13D/13G) and from what other companies say about it. Click a node for its evidence; on a listed company the graph moves to it.
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News & filings
In the press
No news in our archive over the last 180 days.
SEC filings
- Current report05 Nov 2026Results of operations · Financial statements and exhibits
- Quarterly report05 Nov 2026
- Quarterly report13 Aug 2026
- Current report13 Aug 2026Results of operations · Financial statements and exhibits
- Current report04 Jun 2026Shareholder vote
- Current report07 May 2026Results of operations · Financial statements and exhibits
- Quarterly report07 May 2026
- Proxy statement23 Apr 2026
- Annual report18 Mar 2026
- Current report (amendment)16 Mar 2026Financial statements and exhibits
Sources
- [1] Form 10-K, fiscal year ended 2025-12-31 · SEC / TSS, Inc. · 18 Mar 2026
- [2] Form 10-Q, quarter ended 2026-06-30 · SEC / TSS, Inc. · 13 Aug 2026
- [3] Form 8-K, results release (exhibit 99.1) · SEC / TSS, Inc. · 13 Aug 2026
Figures computed by olivLaw from SEC filings and closing prices; the qualitative analysis is AI-generated from cited sources. Not investment advice.