TSS, Inc. (NASDAQ: TSSI)

TSS, Inc. provides a comprehensive suite of services for the integration of complex artificial intelligence technologies, planning, design, deployment, maintenance, and refresh of end user and enterprise systems including mission critical facilities. The company serves data centers, operations centers, network facilities, server rooms, security operations centers, communications facilities, and the infrastructure critical to their function.

The company generates revenue by charging fees for technology consulting, design engineering, project management, systems integration, systems installation, facilities management, and IT procurement services. Revenue also comes from the procurement of third party hardware, software, and professional services on behalf of customers where the company may act as a principal or an agent.

The company operates through the following segments:

• Systems Integration Services: This segment provides technology consulting, design and engineering, project management, systems integration, systems installation, facilities management, and IT procurement services including the integration of AI enabled data center server racks, custom configuration of IT products, imaging of software onto hardware, warehousing of high value equipment, and second touch configuration services for end user devices.

• Facilities Management Services: This segment ensures installation integration and testing of computer racks in modular data centers and full facility testing before deployment, provides equipment sales deployment and other services such as project management, value engineering, design management, bid negotiation, subcontractor pre qualification, long lead equipment procurement, issuance of equipment and construction contracts, budget and schedule management, and offers maintenance and management services including post construction facility maintenance, on site staffing, 24x7 network operations support, and monitoring of temperature, humidity, electrical connectivity, power usage, and fire alarm conditions.

• Procurement Services: This segment generates revenue from fees charged to procure third party hardware, software, and professional services on behalf of customers, recognizes revenue on a gross basis when it transforms the product, and on a net basis when it acts as an agent arranging for purchase by another party without taking control of the goods before transfer.

The company operates in a highly competitive fragmented market for mission critical information technology solutions and competes on the strength of customer relationships, technical expertise, specialized knowledge, and broad service offerings. Its competitive advantages include a centralized ISO certified integration facility that enables scalable rack integration, quality control, and the ability to handle both air cooled and direct liquid cooled racks for AI workloads. The company depends on a large Fortune 100 original equipment manufacturer customer for a significant portion of its business and a loss of that relationship could materially affect results.

The company serves enterprise customers who use its services to deploy solutions in their own data centers, modular data centers, colocation facilities, and at the network edge. A major portion of its sales are made through or to a global Fortune 100 information technology company which also provides access to other technology, software, banking, and cloud service providers. Additionally the company serves private sector businesses and government or commercial end users.