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Red Flags Detected

  • Material Weakness (worsened) — Material weakness scope expanded from 'a portion of' financial statements to 'across the Company's financial statements', and added reference to user access for IT systems.
NASDAQ: TSSI TSS, Inc. 10-Q

TSSI Q1 revenues fall 44% on lower procurement; integration margins jump to 37.5%

Filed May 7, 2026 · Period ending March 31, 2026 · Compared to 10-Q May 15, 2025 · ~2 min read

Key Changes

  • high

    Total revenues dropped 44% to $55.3M in Q1 2026 vs. $99.0M in Q1 2025, driven by lower federal procurement activity ($39.9M vs. $90.2M). Systems integration revenues grew modestly but couldn't offset the procurement decline.

    MD&A: Revenue Performance verify on EDGAR →
  • high

    Systems integration gross margin improved from 22.1% to 37.5%, driven by December 2025 contract amendment adding fixed monthly fees and higher AI rack volumes. The amended agreement extends the term by two years with automatic renewals.

    MD&A: Margins & Contract Amendment verify on EDGAR →
  • high

    Operating cash flow swung from $20.6M inflow in Q1 2025 to $14.9M outflow in Q1 2026, primarily due to $20.1M paydown of accounts payable accumulated during prior large procurement projects.

    MD&A: Cash Flow verify on EDGAR →

2 more material changes behind this preview — plus the full narrative summary, section-by-section diffs against the prior filing, and verbatim quotes with EDGAR citations.

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Source-verified from EDGAR · Narrative written by AI · Jun 5, 2026 · How we verify