TSS Inc. (TSSI) Revenue Jumps on AI Deployment Surge

TSS Inc. does not build chips or own mega data centers. It installs the racks, power lines and cooling pipes that make AI clusters run. The company's most recent quarter showed revenue of $18.6 million, up from $5.8 million a year earlier. The backlog hit $93 million, more than double the prior year's figure.

That backlog reflects contracts to deploy liquid-cooled racks for high-density AI clusters. The work requires specialized labor and tight coordination with equipment vendors. Gross margin fell to 16.7% from 19.5% a year ago, reflecting the mix shift toward deployment services and away from higher-margin maintenance work.

The deployment business is lumpy. A single large contract can swing quarterly results by millions. One hyperscale client accounted for roughly 60% of revenue in the quarter. TSS is trying to diversify with enterprise and colocation clients. The hyperscale segment still drives most of the growth.

Speed is the edge. TSS can staff a deployment project in weeks. Larger integrators often take months. That speed matters when a hyperscaler is racing to bring a new cluster online before the next GPU generation arrives. TSS also decommissions older infrastructure, a revenue line that grows as operators refresh equipment for higher power densities.