TSSI Overview

Airship AI Holdings: Airship AI is focused on AI software and services, with government contracts driving a projected 30% YoY revenue growth. However, the company faces challenges, including a significant decline in gross profit and a 40% YTD stock drop.

TSS Inc.: TSS provides data center integration services and has seen nearly double revenues year-over-year, reaching $184.8 million. While profitable, the company relies heavily on a single large client, posing risks for future revenue diversification.

Veritone Inc.: Veritone specializes in AI software and services, reporting strong revenue growth but facing high operating losses and negative cash flow. The company is working to improve its balance sheet by repaying debt, which could enhance its financial stability.

Investment Outlook: Airship AI, TSS, and Veritone represent unique investment opportunities in the AI infrastructure space, each with distinct risk profiles and potential for growth as the AI market expands through 2026.

U.S. Stock Market Performance: U.S. stocks showed mixed results, with the Dow Jones falling 0.44%, while the NASDAQ and S&P 500 rose by 0.59% and 0.27%, respectively. Utilities shares increased slightly, but communication services stocks dropped by 1%.

Notable Company Performances: Spire Inc's shares fell over 2% after reporting larger-than-expected quarterly losses, while Cidara Therapeutics saw a 105% surge in shares following Merck's acquisition announcement.

Commodities Update: Oil prices rose by 1.9% to $59.81, while gold and silver prices fell by 2.2% and 5%, respectively. Copper also saw a decline of 1.1%.

Global Market Trends: European shares declined, with the STOXX 600 down 1.54%, and Asian markets mostly closed lower, highlighted by Japan's Nikkei 225 dropping 1.77%.

U.S. Stock Market Trends: U.S. stock futures are down, with Dow futures dropping approximately 100 points on Friday morning.

Red Cat Holdings Performance: Red Cat Holdings Inc. shares fell 15.1% in pre-market trading after reporting disappointing third-quarter results, with revenue of $9.65 million and a loss of 16 cents per share, both missing analyst expectations.

Other Stocks Declining: Several other companies also saw significant pre-market declines, including TSS Inc. (-40.2%), StubHub Holdings Inc. (-18.8%), and WhiteFiber Inc. (-13.4%), all reporting worse-than-expected financial results.

Market Reactions: The overall market is reacting negatively to various companies' earnings reports, leading to notable drops in stock prices across multiple sectors.

Third-Quarter Financial Results: TSS, Inc. reported a 40% decline in revenue, resulting in a net loss of $1.5 million, with earnings dropping to a loss of 6 cents per share compared to a profit of 10 cents per share a year earlier.

Segment Performance: Procurement revenue fell by 49%, while Systems Integration revenue increased by 20%. Overall, gross profit declined by 41%, highlighting significant challenges in procurement activity.

Year-to-Date Growth: Despite the quarterly losses, TSS reported an 88% increase in year-to-date revenue, reaching $184.8 million, with adjusted EBITDA rising by 59% to $10.7 million.

Future Outlook: CEO Darryll Dewan anticipates stronger fourth-quarter results and has raised the full-year adjusted EBITDA growth outlook to between 50% and 75% for 2024, expecting continued momentum into 2026.

RLX Technology Inc Performance: RLX Technology's shares rose 6% to $2.47 in pre-market trading after reporting third-quarter earnings of 3 cents per share and $158.6 million in sales.

Notable Gainers: Cidara Therapeutics surged 92% to $203.50 following a significant ownership disclosure, while other companies like Binah Capital Group and Expion360 also saw substantial pre-market gains.

Significant Losers: TSS Inc experienced a 40.2% drop to $9.10 after reporting a year-over-year decline in financial results, with enVVeno Medical Corp and Nuvve Holding Corp also facing significant losses.

Market Overview: The pre-market trading session showed a mix of gains and losses among various stocks, reflecting varied financial performances and investor reactions to earnings reports.

Management Insights: TSS, Inc. reported an 88% revenue increase and a 59% rise in adjusted EBITDA year-to-date for 2025, despite a year-over-year decline in Q3 revenues attributed to lower procurement services. The company is optimistic about Q4 rack volumes and is exploring strategic acquisitions and partnerships, particularly in AI and edge computing.

Financial Performance: Q3 2025 consolidated revenue was $41.9 million, down from $70.1 million in the previous year, with a net loss of $1.5 million. Systems integration revenue increased by 20%, while procurement services revenue significantly decreased, reflecting challenges in the procurement market.

Operational Challenges: The company faced operational issues related to scaling its new Georgetown facility, including power requirements and ERP integration, which delayed expected rack volumes. Analysts expressed concerns about client concentration and the need for clearer communication regarding growth strategies.

Future Outlook: TSS, Inc. anticipates a record year with projected adjusted EBITDA growth of 50% to 75% for 2025 and initial guidance of 40% to 50% growth for 2026. Management remains confident in their ability to capitalize on emerging opportunities in the AI infrastructure market despite recent challenges.