{
  "@context": "https://frontierpicks.com/schemas/dossier.v1.json",
  "ticker": "TSSI",
  "name": "TSS, Inc.",
  "url": "https://frontierpicks.com/dossiers/TSSI/",
  "json_url": "https://frontierpicks.com/dossiers/TSSI.json",
  "status": "DORMANT",
  "current_conviction": "LOW",
  "archetype": {
    "code": "a2",
    "n": 2
  },
  "current_thesis": "TSS, Inc. passed its third-quarter test: record AI rack integration revenue of $16.1 million and a raised profit outlook. The shares still closed at $6.96 on 10 November, so fourth-quarter integration revenue now has to prove the recovery.",
  "invalidation_trigger": "A daily close above $8.68, 26% above the last close (2026-11-11), would show the shares leading the S&P 500 and prove this call wrong.",
  "catalyst_date": null,
  "portfolio": null,
  "pick": null,
  "themes": [
    "ai-datacenter-infrastructure"
  ],
  "tags": [],
  "sources": [],
  "caveats": [],
  "source_links": [
    {
      "title": "TSS, Inc. - Form 8-K - FY2026",
      "url": "https://www.sec.gov/Archives/edgar/data/0001320760/000165495426009565/tssi_ex991.htm",
      "date": null
    },
    {
      "title": "TSS Reports Third Quarter 2026 Financial Results",
      "url": "https://www.newswire.com/news/tss-reports-third-quarter-2026-financial-results",
      "date": null
    },
    {
      "title": "TSS Q3 2026 Earnings Call Transcript",
      "url": "https://www.webull.com/news/15873680427279360",
      "date": null
    }
  ],
  "evidence": [
    {
      "claim": "Third-quarter 2026 total revenue was $50.1 million, up 20%; systems integration revenue was $16.1 million, up 75%; procurement was $32.4 million, up 4%.",
      "source": "TSS Q3 2026 earnings release (Form 8-K exhibit 99.1)",
      "as_of": "2026-11-05"
    },
    {
      "claim": "Third-quarter gross profit was $8.6 million, up 86%; adjusted EBITDA was $4.7 million, up 225%; net income was $1.1 million, or $0.04 per diluted share.",
      "source": "TSS Q3 2026 earnings release (Form 8-K exhibit 99.1)",
      "as_of": "2026-11-05"
    },
    {
      "claim": "Management raised its 2026 adjusted EBITDA outlook to $21 million to $23 million.",
      "source": "TSS Q3 2026 earnings release (Form 8-K exhibit 99.1)",
      "as_of": "2026-11-05"
    },
    {
      "claim": "Cash and cash equivalents were $54.0 million at September 30, 2026, against $85.5 million at December 31, 2025.",
      "source": "TSS Q3 2026 earnings release (Form 8-K exhibit 99.1)",
      "as_of": "2026-11-05"
    },
    {
      "claim": "Needham maintained a Buy rating and lowered its TSS price target to $9.",
      "source": "Needham rating headline, 2026-11-06 news reports",
      "as_of": "2026-11-06"
    },
    {
      "claim": "Third-quarter sales of $50.06 million beat the $46.262 million estimate; EPS of $0.04 was in line.",
      "source": "News headline, 2026-11-05",
      "as_of": "2026-11-05"
    },
    {
      "claim": "TSS signed a seven-year lease for about 380,000 square feet of warehouse space in Georgetown, Texas; terms not disclosed.",
      "source": "TSS press release via Newswire and Benzinga",
      "as_of": "2026-10-06"
    }
  ],
  "view_changes": [],
  "frame": null,
  "filed_numbers": {
    "as_of": "2026-11-13",
    "sector": "Industrials",
    "financials": {
      "status": "ok",
      "reason": null,
      "close_date": "2026-11-13",
      "latest_quarter": "2026-09-30",
      "figures": {
        "revenue": {
          "status": "ok",
          "quarters": [
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              "filed": "2026-11-05",
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              "value_musd": 50.1,
              "yoy_pct": 19.5
            },
            {
              "end": "2026-06-30",
              "filed": "2026-08-13",
              "restated": null,
              "value_musd": 35.1,
              "yoy_pct": -20.1
            },
            {
              "end": "2026-03-31",
              "filed": "2026-05-07",
              "restated": null,
              "value_musd": 55.3,
              "yoy_pct": -44.1
            },
            {
              "end": "2025-12-31",
              "filed": "2026-03-18",
              "restated": null,
              "value_musd": 60.9,
              "yoy_pct": 21.8
            },
            {
              "end": "2025-09-30",
              "filed": "2025-11-13",
              "restated": null,
              "value_musd": 41.9,
              "yoy_pct": -40.2
            },
            {
              "end": "2025-06-30",
              "filed": "2025-08-11",
              "restated": null,
              "value_musd": 44,
              "yoy_pct": 261.6
            }
          ]
        },
        "gross_margin": {
          "status": "ok",
          "quarters": [
            {
              "end": "2026-09-30",
              "filed": "2026-11-05",
              "restated": null,
              "pct": 17.2
            },
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              "restated": null,
              "pct": 22.8
            },
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              "filed": "2026-05-07",
              "restated": null,
              "pct": 15.9
            },
            {
              "end": "2025-12-31",
              "filed": "2026-03-18",
              "restated": null,
              "pct": 18.6
            },
            {
              "end": "2025-09-30",
              "filed": "2025-11-13",
              "restated": null,
              "pct": 11.1
            },
            {
              "end": "2025-06-30",
              "filed": "2025-08-11",
              "restated": "2026-08-13",
              "pct": 16.4
            }
          ]
        },
        "operating_margin": {
          "status": "ok",
          "quarters": [
            {
              "end": "2026-09-30",
              "filed": "2026-11-05",
              "restated": null,
              "pct": 2.3
            },
            {
              "end": "2026-06-30",
              "filed": "2026-08-13",
              "restated": null,
              "pct": 4.6
            },
            {
              "end": "2026-03-31",
              "filed": "2026-05-07",
              "restated": null,
              "pct": 4.1
            },
            {
              "end": "2025-09-30",
              "filed": "2025-11-13",
              "restated": "2026-11-05",
              "pct": -4.2
            },
            {
              "end": "2025-06-30",
              "filed": "2025-08-11",
              "restated": "2026-08-13",
              "pct": 3.1
            }
          ]
        },
        "pretax_income": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-11-05",
          "value_musd": 1.5
        },
        "net_income": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-11-05",
          "four_quarters_end": "2026-09-30",
          "value_musd": 1.1,
          "four_quarters_musd": 17
        },
        "operating_cash_flow": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-11-05",
          "first_end": "2025-12-31",
          "value_musd": 6
        },
        "capital_spending": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-11-05",
          "first_end": "2025-12-31",
          "value_musd": 14.8
        },
        "free_cash_flow": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-11-05",
          "first_end": "2025-12-31",
          "value_musd": -8.8
        },
        "diluted_share_change": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-11-05",
          "base_end": "2025-09-30",
          "pct": 15.8
        },
        "cash": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-11-05",
          "value_musd": 54
        },
        "debt": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-11-05",
          "value_musd": 15.4,
          "composition": "long-term debt"
        },
        "net_cash": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-11-05",
          "value_musd": 38.5
        },
        "deferred_revenue": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-11-05",
          "value_musd": 109,
          "yoy_pct": 803.6
        },
        "backlog": {
          "status": "not reported"
        },
        "receivables": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-11-05",
          "value_musd": 13.9
        },
        "inventory": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-11-05",
          "value_musd": 12.4
        },
        "equity": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-11-05",
          "value_musd": 82.5
        },
        "market_value": {
          "status": "ok",
          "close_date": "2026-11-13",
          "basis_end": "2026-10-30",
          "basis_filed": "2026-11-05",
          "value_musd": 170.2
        },
        "enterprise_value": {
          "status": "ok",
          "close_date": "2026-11-13",
          "basis_end": "2026-10-30",
          "basis_filed": "2026-11-05",
          "value_musd": 131.6
        },
        "ev_sales": {
          "status": "ok",
          "close_date": "2026-11-13",
          "basis_end": "2026-10-30",
          "basis_filed": "2026-11-05",
          "multiple": 0.7
        },
        "ev_ebit": {
          "status": "not available"
        },
        "pe": {
          "status": "ok",
          "close_date": "2026-11-13",
          "basis_end": "2026-10-30",
          "basis_filed": "2026-11-05",
          "multiple": 10
        },
        "pb": {
          "status": "ok",
          "close_date": "2026-11-13",
          "basis_end": "2026-10-30",
          "basis_filed": "2026-11-05",
          "multiple": 2.1
        },
        "fcf_yield": {
          "status": "ok",
          "close_date": "2026-11-13",
          "basis_end": "2026-10-30",
          "basis_filed": "2026-11-05",
          "pct": -5.1
        }
      }
    },
    "short_interest": {
      "status": "ok",
      "settlement": "2026-10-15",
      "published": "2026-10-26",
      "short_pct_of_outstanding": 15.44,
      "days_to_cover": 5.2,
      "change_pct": -6.4
    },
    "insiders": {
      "status": "ok",
      "as_of": "2026-11-15",
      "windows": [
        {
          "days": 90,
          "status": "ok",
          "from": "2026-08-18",
          "bought_usd": 0,
          "sold_usd": 0,
          "bought_unpriced": 0,
          "sold_unpriced": 0
        },
        {
          "days": 365,
          "status": "ok",
          "from": "2025-11-16",
          "bought_usd": 40000,
          "sold_usd": 8886741.35,
          "bought_unpriced": 0,
          "sold_unpriced": 0
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      ]
    }
  },
  "body_markdown": "## Current Thesis\n\nThird-quarter 2026 systems integration revenue was a record $16.1 million, and management raised its 2026 adjusted EBITDA outlook to $21–23 million. The shares have not responded. They closed at $6.96 on November 10, 2026, down 41.8% over three months and 59.3% below the 52-week high of $17.09 (adjusted daily closes). The fourth-quarter report decides whether integration growth turns into the earnings the outlook implies.\n\nThe company reported on November 5, ahead of the November 12 and November 16 dates that third-party calendars listed. Total revenue was $50.1 million, up 20% from a year earlier and well above the $46.3 million consensus estimate cited in a November 5 news headline. Diluted earnings per share were $0.04, in line with that estimate. Needham kept its Buy rating on November 6 but cut its price target to $9 from $13, per a Needham headline carried by news services.\n\nThe story is well known: the integration story is well known, the third-quarter print delivered on it, and the shares closed lower on November 10 than the $7.69 close of October 28. The 14-day relative strength index (RSI, a 0-to-100 momentum gauge) has recovered to 44.7 from 26.2 on October 28.\n\n## Bull Case\n- **Integration beat the bar.** Systems integration revenue was $16.1 million, up 75% year over year, against $13.9 million in the second quarter, per the November 5 earnings release (SEC Form 8-K exhibit 99.1).\n- **Profit rose faster than sales.** Gross profit was $8.6 million, up 86%, and adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) was $4.7 million, up 225%, per the same release. Net income was $1.1 million against a prior-year loss.\n- **The outlook went up.** Management raised 2026 adjusted EBITDA guidance to $21–23 million from the earlier $20–22 million range, and CEO Darryll Dewan said on November 5 that the company expects further growth in the fourth quarter.\n- **Revenue growth returned.** Total revenue rose 20% to $50.1 million after falling 20% to $35.1 million in the second quarter, per the August 13 and November 5 releases.\n- **Analysts still rate it Buy.** Needham kept its Buy rating on November 6. Its new $9 target sits above the November 10 close of $6.96.\n\n## Bear Case\n- **The market sold the good news.** The shares closed at $6.96 on November 10, below the $7.69 close of October 28 that came before the report. Needham cut its target to $9 from $13 the day after the report.\n- **Integration share of sales fell.** Integration was 32% of third-quarter revenue, against 39% in the second quarter, per the earnings releases. Procurement revenue of $32.4 million, up 4%, supplied most of the growth in total sales.\n- **Cash fell.** Cash and equivalents were $54.0 million at September 30, 2026, against $85.5 million at December 31, 2025, per the earnings release. The company is carrying a seven-year, 380,000-square-foot Georgetown, Texas lease announced October 6.\n- **One customer drives results.** The company relies heavily on a single major customer, so that customer's order timing can swing a quarter.\n- **Insiders sold higher.** Director Peter H. Woodward sold 100,000 shares at $15.48 on June 2, 2026, per MarketBeat's insider listing. Nothing in the filings reviewed shows insider buying since.\n\n## Setup & Price Structure\n\nThe adjusted close on November 10 was $6.96. The 52-week high is $17.09, and the three-month change is −41.8%. The October 28 close of $7.69 and the $6.85 level frame the recent range. The shares sit just above that level.\n\nCrowding looks limited. Two analysts cover the stock, there is no earnings date left to anticipate inside the next 30 days, and the last insider transaction was a sale in June, far above today's price. Small-capitalisation Nasdaq shares with thin coverage can move sharply on single news items.\n\n## Catalyst Calendar\n\n- **~2026-11-16 (est.):** Form 10-Q for the third quarter of 2026. Should detail lease commitments, customer concentration and cash use behind the raised $21–23 million adjusted EBITDA outlook.\n- **~2026-12-15 (est.):** Company update on the modular capacity for Nvidia Vera Rubin systems. Fourth-quarter integration revenue depends on this capacity running on time; a delay moves the payoff into 2027.\n\n## What Would Change Our Mind\n\nA daily close above $8.68, 26% above the last close (2026-11-11), would show the shares leading the S&P 500 and prove this call wrong.\n\n## Correlation Notes\nTSS trades with small-capitalisation AI infrastructure suppliers that depend on Nvidia platform schedules. Its largest swing factor is the timing of one customer's orders, which can move the shares independently of that group. No current theme cluster carries the name.",
  "first_seen": "2026-11-10",
  "last_analyzed": "2026-11-11T05:11:18+00:00",
  "last_synthesized": "2026-11-11",
  "date_modified": "2026-11-11",
  "license": "Content © FrontierPicks. Cite the canonical URL."
}