[Forward-Looking Statements](index=2&type=section&id=FORWARD-LOOKING_STATEMENTS) This section outlines forward-looking statements, emphasizing inherent risks and uncertainties that could cause actual results to differ materially - Forward-looking statements are identified by words like 'anticipate,' 'believe,' 'expect,' 'intend,' 'may,' 'plan,' 'project,' 'will,' and similar expressions[7](index=7&type=chunk) - Key risks include **economic uncertainty**, **geopolitical instability**, **volatile market conditions**, ability to raise capital, achieving profitability, dependence on third-party manufacturers, and retaining key personnel[8](index=8&type=chunk)[12](index=12&type=chunk) - Readers are cautioned not to place undue reliance on these statements, as actual results may vary materially due to competitive and rapidly changing environments and unforeseen risks[9](index=9&type=chunk) PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements, including balance sheets, statements of operations, and cash flows [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) Consolidated balance sheets show increased total assets and liabilities, with a slight decrease in stockholders' equity from December 2024 to June 2025 | Metric | June 30, 2025 | December 31, 2024 | Change | | :--------------------------------- | :-------------- | :---------------- | :----- | | Cash and cash equivalents | $8,458,920 | $6,794,093 | +24.5% | | Short-term investments | $1,030,416 | $3,217,065 | -68.0% | | Accounts receivable, net | $7,112,660 | $8,177,371 | -13.1% | | Inventories, net | $14,599,319 | $13,176,156 | +10.8% | | Total current assets | $32,418,870 | $32,201,048 | +0.7% | | Operating lease right-of-use assets | $3,986,046 | $1,536,094 | +159.5% | | Total Assets | $39,375,818 | $36,933,982 | +6.6% | | Accounts payable | $4,097,309 | $2,068,017 | +98.1% | | Accrued expenses and other liabilities | $3,516,054 | $4,806,675 | -26.8% | | Current portion of operating lease obligation | $457,302 | $285,937 | +59.9% | | Total current liabilities | $9,247,729 | $8,195,679 | +12.8% | | Operating lease obligation, net of current portion | $3,846,257 | $1,513,684 | +154.1% | | Total liabilities | $13,171,548 | $9,761,937 | +35.0% | | Total stockholders' equity | $26,204,271 | $27,172,045 | -3.4% | [Unaudited Consolidated Statements of Operations](index=6&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Operations) Q2 2025 revenue increased 6.9% with improved gross profit, reducing net loss; H1 2025 revenue grew 2.0% but net loss widened | Metric | Q2 2025 | Q2 2024 | YoY Change (Q2) | H1 2025 | H1 2024 | YoY Change (H1) | | :-------------------------- | :-------------- | :-------------- | :-------------- | :-------------- | :-------------- | :-------------- | | Revenue | $14,108,585 | $13,201,330 | +6.9% | $26,367,672 | $25,853,116 | +2.0% | | Cost of revenue | $9,696,307 | $9,868,067 | -1.7% | $17,958,403 | $18,796,560 | -4.5% | | Gross profit | $4,412,278 | $3,333,263 | +32.4% | $8,409,269 | $7,056,556 | +19.2% | | Total operating expenses | $6,236,231 | $5,588,128 | +11.6% | $12,178,082 | $10,573,435 | +15.2% | | Loss from operations | $(1,823,953) | $(2,254,865) | -19.1% | $(3,768,813) | $(3,516,879) | +7.2% | | Net loss | $(2,020,730) | $(2,344,545) | -13.8% | $(4,038,364) | $(3,684,167) | +9.6% | | Basic EPS | $(0.09) | $(0.11) | -18.2% | $(0.19) | $(0.18) | +5.6% | | Diluted EPS | $(0.09) | $(0.11) | -18.2% | $(0.19) | $(0.18) | +5.6% | [Unaudited Consolidated Statements of Comprehensive Loss](index=7&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Comprehensive%20Loss) Comprehensive loss for Q2 2025 decreased significantly to $0.93 million, and for H1 2025 to $2.79 million, driven by currency translation adjustments | Metric | Q2 2025 | Q2 2024 | YoY Change (Q2) | H1 2025 | H1 2024 | YoY Change (H1) | | :--------------------------------- | :-------------- | :-------------- | :-------------- | :-------------- | :-------------- | :-------------- | | Net loss | $(2,020,730) | $(2,344,545) | -13.8% | $(4,038,364) | $(3,684,167) | +9.6% | | Currency translation adjustment | $1,094,358 | $(24,537) | N/A | $1,247,298 | $(180,824) | N/A | | Total other comprehensive income (loss) | $1,091,618 | $(26,740) | N/A | $1,244,952 | $(188,234) | N/A | | Comprehensive loss | $(929,112) | $(2,371,285) | -60.8% | $(2,793,412) | $(3,872,401) | -27.8% | [Unaudited Consolidated Statements of Stockholders' Equity](index=8&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Stockholders%27%20Equity) Stockholders' equity decreased from $27.17 million to $26.20 million, driven by net loss, partially offset by stock-based compensation and currency adjustments | Item | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :----------------------------- | :----------------------------- | | Balance, January 1 | $27,172,045 | $39,582,322 | | Stock-based compensation | $1,128,335 | $965,938 | | Exercise of stock options, RSUs and warrants | $1,000,780 | $219,348 | | Taxes paid on net issuance of employee stock options | $(303,477) | $(349,296) | | Currency translation adjustment | $1,247,298 | $(180,824) | | Net unrealized gain (loss) on short-term investments | $(2,346) | $(7,410) | | Net loss | $(4,038,364) | $(3,684,167) | | Balance, June 30 | $26,204,271 | $36,545,909 | [Unaudited Consolidated Statements of Cash Flows](index=10&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Cash%20Flows) H1 2025 operating activities used $1.50 million cash, a shift from prior year; investing provided $2.01 million, and financing provided $0.70 million | Cash Flow Activity | H1 2025 | H1 2024 | YoY Change | | :-------------------------------------- | :-------------- | :-------------- | :--------- | | Net cash (used in) provided by operating activities | $(1,504,300) | $1,226,742 | -222.7% | | Net cash provided by investing activities | $2,010,973 | $2,541,086 | -20.9% | | Net cash provided by (used in) financing activities | $697,303 | $(1,014,840) | N/A | | Net change in cash and cash equivalents | $1,203,976 | $2,752,988 | -56.3% | | Cash and cash equivalents, end of period | $8

Core Insights - One Stop Systems, Inc. reported a consolidated gross margin increase of over 600 basis points year-over-year to 31.3% on consolidated revenue of $14.1 million for the second quarter of 2025 [1][3] - The OSS segment achieved a gross margin of 41.3% on revenue of $5.8 million, with year-to-date bookings of $25.4 million, indicating a strong outlook for revenue growth and profitability in the second half of 2025 [1][2] Financial Performance - Consolidated revenue increased by 6.9% to $14.1 million from $13.2 million in Q2 2024, with OSS segment revenue rising by 4.3% [3][4] - The OSS segment's gross margin improved significantly by 16.4 percentage points to 41.3%, attributed to a more profitable product mix and the absence of prior inventory charges [4][6] - Total operating expenses rose by 11.6% to $6.2 million, mainly due to increased marketing, selling, and R&D costs [5][10] - The company reported a net loss of $2.0 million, or $(0.09) per share, an improvement from a net loss of $2.3 million, or $(0.11) per share, in the prior year [6][11] Market Outlook - The company anticipates consolidated revenue for the full year 2025 to be between $59 million and $61 million, with OSS segment revenue expected to grow over 20% year-over-year [12][14] - The strategic plan focuses on both commercial and defense markets, aiming to establish OSS as a key player in large, multi-year programs, which is expected to enhance predictable, recurring revenue [12][14] Segment Performance - The Bressner segment revenue increased by 8.7% compared to the same period in 2024, contributing to the overall revenue growth [4][8] - Year-to-date, the OSS segment has generated one of the highest levels of bookings in its history, with a book-to-bill ratio of 2.3x, indicating strong demand from defense and commercial customers [2][13]

Core Viewpoint - One Stop Systems, Inc. (OSS) is set to release its second quarter 2025 financial results on August 7, 2025, with a conference call scheduled for the same day to discuss the results [1]. Company Overview - One Stop Systems, Inc. is a leader in rugged Enterprise Class compute solutions for artificial intelligence (AI), machine learning (ML), and sensor processing at the edge [1][3]. - The company designs and manufactures products that enable rugged AI, sensor fusion, and autonomous capabilities, catering to demanding environments across various applications [3][4]. Product Offerings - OSS's product lineup includes ruggedized servers, compute accelerators, flash storage arrays, and storage acceleration software, utilized in industries such as autonomous trucking, farming, and defense [4]. - The solutions provided by OSS address the entire AI workflow, from data acquisition to deep learning and large-scale inference, achieving many industry firsts for industrial OEM and government customers [5]. Market Position - OSS operates in the rapidly growing segment of the multi-billion-dollar edge computing market, delivering high-performance AI-enabled solutions in challenging environments [5].

Core Insights - One Stop Systems, Inc. (OSS) has launched Ponto, the world's first PCIe Gen 5 GPU expansion system designed for commercial datacenters, supporting up to 16 high-wattage GPUs in a compact 6U rack space, marking a significant advancement in high-performance infrastructure solutions for AI workloads [1][2] Group 1: Product Features - Ponto delivers over 16 kW of power, achieving 2.7 kW per rack unit, making it the highest-power GPU expansion platform in its class, supporting 16 dual-width add-in cards or up to 32 single-width add-in cards [2] - The system is engineered for high-density, high-throughput environments and is built specifically for PCIe Gen 5 applications, supporting composable infrastructure applications [3] - Advanced cooling solutions and intelligent system management features are integrated to ensure full-power operation in demanding workloads [4][7] Group 2: Market Potential - The market for composable infrastructure applications is projected to grow from $5.87 billion in 2024 to $28.44 billion by 2031, indicating significant growth potential for OSS's offerings [3] - Ponto is positioned to enhance OSS's commercial growth strategy by optimizing enterprise environments for scalable PCIe expansion, AI training, and large-scale inference [4] Group 3: Company Overview - OSS specializes in AI-enabled solutions for edge computing, designing rugged enterprise-class compute and storage products that cater to demanding applications across various industries, including defense and autonomous systems [6][8] - The company addresses the entire AI workflow, from data acquisition to deep learning and inference, delivering high performance in challenging environments [9]

Company Overview - One Stop Systems, Inc. (NASDAQ: OSS) is a micro-cap stock that has experienced a significant surge of over 160% in the past year, indicating strong market interest and potential growth opportunities [1] Analyst Background - The analysis is conducted by a financial analyst with a background in petroleum and gas engineering, who has transitioned into finance, focusing on technology, infrastructure, and internet services [1] Investment Focus - The company emphasizes the importance of pairing strong fundamentals with real potential, aiming to attract long-term investors who are interested in sustainable returns rather than short-term fluctuations [1]

Group 1 - One Stop Systems, Inc. (OSS) shares increased by 10.5% to $5.6 in the last trading session, with a notable trading volume, and have gained 13.2% over the past four weeks [1] - The company is experiencing growing demand for its high-performance edge compute solutions, driven by advancements in AI, machine learning, autonomy, and sensor fusion [1] - The consensus EPS estimate for OSS is a quarterly loss of $0.05 per share, reflecting a year-over-year change of +44.4%, with expected revenues of $13.3 million, up 0.8% from the previous year [2] Group 2 - The consensus EPS estimate for OSS has remained unchanged over the last 30 days, indicating that stock price movements may not continue without trends in earnings estimate revisions [3] - OSS is ranked 3 (Hold) by Zacks, while Rockwell Automation (ROK), another company in the same industry, has a Zacks Rank of 2 (Buy) [3][4] - Rockwell Automation's consensus EPS estimate has changed by +0.3% to $2.68, representing a year-over-year change of -1.1% [4]

Core Insights - One Stop Systems, Inc. (OSS) has secured $3.9 million in new contracts to support the P-8A Poseidon Reconnaissance Aircraft, bringing its lifetime contracted revenue on the platform to over $50 million [1][2][3] Group 1: Company Overview - OSS specializes in rugged Enterprise Class compute solutions for AI, machine learning, and sensor processing at the edge [1][6] - The company has been supporting the P-8A Poseidon platform for over eight years, emphasizing its commitment to defense programs [2][3] - OSS's products include ruggedized servers, compute accelerators, and flash storage arrays, utilized across various industries including defense [7] Group 2: Product and Technology - The latest order involves military-spec data storage units that enhance the U.S. Navy's C5ISR mission capabilities [2][4] - OSS's proprietary design features rugged, hot-swappable canisters of high-capacity NVMe flash storage, crucial for airborne environments [2][4] - The 3U-SDS system is highlighted as OSS's most flexible, PCIe-enabled rugged solution for AI at the edge, suitable for various mobile applications [5] Group 3: Market Position and Strategy - OSS aims to be the preferred provider of compute and storage technologies for next-generation AI-driven applications at the edge [3][8] - The company is positioned to meet the increasing demand for data-intensive defense missions that rely on real-time analytics [3][8] - OSS's solutions address the entire AI workflow, from data acquisition to deep learning, showcasing its capability in the fast-growing edge computing market [8]

Core Insights - One Stop Systems, Inc. (OSS) has secured a $2 million production contract for medical imaging technology, with expectations of total program value exceeding $25 million over the next five years [1][2][6] - The contract involves the provision of 65 next-generation liquid-cooled 3U-SDS systems, transitioning from a pilot phase to volume production [2][3] - OSS's strategy focuses on expanding into commercial edge AI markets, leveraging its success in the defense sector [6] Company Overview - OSS specializes in rugged Enterprise Class compute solutions for AI, machine learning, and sensor processing at the edge [1][7] - The company designs and manufactures products that deliver data center-class performance in challenging environments, including autonomous vehicles and medical devices [4][7][8] - OSS's product offerings include ruggedized servers, compute accelerators, and storage solutions, catering to various industries such as healthcare and defense [8][9] Technology and Innovation - The 3U-SDS system is highlighted as OSS's most flexible and rugged solution for AI at the edge, designed for diverse applications [4][5] - OSS employs advanced PCIe technologies and proprietary liquid cooling solutions, reducing system noise by up to 20 decibels compared to traditional air-cooled servers [5] - The company's innovations enable AI workloads to operate effectively in acoustically sensitive environments, such as patient care settings [5][9]

Core Insights - One Stop Systems, Inc. (OSS) has secured a $5 million contract from the U.S. Navy to deliver 61 rugged data storage units for the P-8A Poseidon reconnaissance aircraft, which is expected to contribute to OSS's revenue throughout 2025 [1][3] Group 1: Contract Details - The contract involves the delivery of military-spec data storage units designed and manufactured by OSS, featuring hot-swappable canisters of high-capacity NVMe flash storage for secure data offload and analysis in airborne environments [2] - To date, OSS has received over $45 million in total contracted revenue to support the P-8A Poseidon program, highlighting the company's ongoing commitment to this mission-critical aircraft [3] Group 2: Company Overview - OSS specializes in rugged Enterprise Class compute and storage products that enable AI, sensor fusion, and autonomous capabilities in challenging environments, including land, sea, and air [4][5] - The company's products are utilized across various industries, including defense, autonomous trucking, and farming, showcasing their versatility and application [5][6] Group 3: Market Position - OSS operates in the rapidly growing multi-billion-dollar edge computing market, focusing on AI-enabled solutions that require high performance in demanding conditions [6] - The company aims to pursue additional multiyear platform opportunities across both defense and commercial markets, reinforcing its growth strategy [3]

Core Insights - One Stop Systems, Inc. (OSS) has received a third order worth $340,000 from a leading defense contractor in Asia for autonomous maritime applications, indicating a shift from system development to production deployment [1][2] - OSS anticipates approximately $4 million in cumulative sales from 2026 to 2029 due to the expected expansion of unmanned surface vehicle (USV) production [2] - The company’s rugged computing technology is designed to convert manned patrol boats into autonomous vessels, supporting various mission profiles in defense and maritime security [3] Company Overview - OSS specializes in rugged Enterprise Class computing solutions for AI, machine learning, and sensor processing, catering to demanding environments [6][8] - The company’s product offerings include ruggedized servers, compute accelerators, and storage solutions, utilized across multiple industries including defense, autonomous trucking, and farming [7] - OSS's technology addresses the entire AI workflow, providing high-speed data acquisition and deep learning capabilities, positioning the company as a leader in the edge computing market [8] Product Details - OSS is supplying 16 rugged 3U Gen 5 Short Depth Servers and redundant ethernet switches for high-speed data processing from over 30 cameras, designed to operate reliably in extreme temperatures [4] - The systems are integral to the USV's computer vision and autonomous navigation, enhancing operational capabilities in complex marine environments [4] Strategic Positioning - The CEO of OSS highlighted the importance of the partnership with the defense contractor, emphasizing the transition to production and the long-term value of this relationship [5] - OSS aims to embed its PCIe/Switch Fabric technology throughout the lifecycle of defense programs, aligning with how global defense contractors manage critical projects [5]