Company Overview - One Stop Systems, Inc. (OSS) is a leader in AI-enabled solutions for edge computing, designing and manufacturing enterprise-class compute and storage products for rugged applications [5][7] - OSS's products include ruggedized servers, compute accelerators, flash storage arrays, and storage acceleration software, utilized across various industries such as autonomous trucking, farming, and defense [6][7] Recent Achievement - OSS's subsidiary, BRESSNER Technology GmbH, has been awarded Digi International's 2024 EMEA Growth Partner of the Year, recognizing its leadership and contributions to connected technologies [1][2][3] - The award highlights BRESSNER's commitment to providing advanced hardware solutions for demanding applications [3] Industry Context - Digi International's Global Channel Awards celebrate impactful channel partners that demonstrate innovation and a customer-first mindset, contributing to the expansion of IoT and infrastructure management [2][3] - The recognition of BRESSNER reflects the growing importance of partnerships in driving digital transformation across various industries [3] Product and Service Offerings - BRESSNER offers a wide range of industrial hardware solutions, including tailored solutions for machine automation, logistics, and AI applications [4] - OSS's solutions address the entire AI workflow, from data acquisition to deep learning and large-scale inference, positioning the company in the fast-growing edge computing market [7]

Group 1 - Hybrid Power Solutions Inc. has announced a new dealer agreement with One Stop Truck & Equipment to distribute its portable power systems [1][2] - The agreement allows One Stop to utilize Hybrid's battery technology, including the Batt Pack and Batt Pack Jupiter, to provide sustainable power solutions [2] - This partnership aims to enhance the adoption of clean energy solutions in California and supports both companies' commitment to environmental sustainability [3] Group 2 - Hybrid Power Solutions specializes in developing portable power systems that eliminate the need for fossil fuels, focusing on off-grid and remote applications [4] - The company is listed on the Canadian Securities Exchange under the symbol "HPSS" and is committed to leading the clean energy transition through technological innovation [4] - One Stop Truck & Equipment is a trusted provider of truck and equipment solutions, serving various industries with high-quality products [5]

Core Viewpoint - One Stop Systems, Inc. has entered into a Cooperative Research and Development Agreement (CRADA) with U.S. Special Operations Command (USSOCOM) to develop advanced High Performance edge Computer (HPeC) solutions aimed at enhancing the operational capabilities of U.S. Special Operations Forces [1][2][3] Group 1: Partnership and Strategic Goals - The partnership aims to leverage OSS's expertise in rugged AI and ML computing solutions to improve USSOCOM's maritime platform performance and capabilities [2][3] - The initiative focuses on enhancing situational awareness, decision-making, and operational capabilities of special operations forces in maritime operations [2] - OSS's collaboration with USSOCOM is part of a multi-year strategy to expand offerings and establish relationships across all branches of the U.S. Armed Forces [3] Group 2: Product and Technology Overview - OSS specializes in rugged Enterprise Class compute and storage products designed for extreme conditions, enabling AI, sensor fusion, and autonomous capabilities [4][5] - The company's products include ruggedized servers, compute accelerators, and storage solutions used in various industries, including defense [5][6] - OSS solutions address the entire AI workflow, from data acquisition to deep learning and inference, positioning the company as a leader in the rapidly growing edge computing market [6]

Core Insights - One Stop Systems, Inc. (OSS) is participating in the NVIDIA GTC Paris Conference on June 11-12, 2025, showcasing its rugged, enterprise-class compute solutions for AI and machine learning applications [1][2] - OSS emphasizes its long-term partnership with NVIDIA and the importance of the GTC Paris event for demonstrating its specialized AI computing solutions [2] - The conference will feature discussions on various AI applications, including generative AI and robotics, attracting developers and business leaders [3] Company Overview - OSS is a leader in AI-enabled solutions designed for edge environments, providing enterprise-class compute and storage products that perform in challenging conditions [4] - The company's product offerings include ruggedized servers, compute accelerators, and storage solutions, utilized across industries such as autonomous trucking, defense, and aerospace [5][6] - OSS addresses the entire AI workflow, from data acquisition to deep learning and inference, positioning itself in the rapidly growing edge computing market [6] Event Details - The NVIDIA GTC Paris Conference is organized in partnership with VivaTech 2025, focusing on real-world applications of AI and accelerated computing [3] - OSS will have a presence at Booth E07, with representatives from its European subsidiary, Bressner, also exhibiting at the conference [2]

Core Insights - One Stop Systems, Inc. (OSS) has appointed Lieutenant General David Bassett (Ret.) to its Board of Directors, effective May 14, 2025, enhancing its leadership with significant defense acquisition and modernization expertise [1][2] Company Overview - OSS is a leader in rugged Enterprise Class compute solutions for AI, machine learning, and sensor processing at the edge, focusing on delivering high-performance computing capabilities in challenging environments [6][8] - The company designs and manufactures products such as ruggedized servers, compute accelerators, and flash storage arrays, which are utilized across various industries, including defense, autonomous trucking, and farming [7][8] Leadership and Expertise - Lieutenant General David Bassett brings over 35 years of military experience, including his recent role as Director of the Defense Contract Management Agency (DCMA), where he oversaw more than 250,000 contracts valued over $3.5 trillion [4] - His previous positions include Program Executive Officer for Command, Control, and Communications-Tactical and Ground Combat Systems, focusing on modernization efforts for the U.S. Army [4][5] Strategic Importance - The appointment of Bassett is seen as a strategic move to align OSS's growth initiatives with the modernization needs of the U.S. Armed Forces, particularly in enhancing situational awareness for Army vehicles [2][3] - Bassett emphasizes the critical role of OSS's AI and edge computing technologies in modernizing military platforms, highlighting the need for resilient capabilities and data-driven decision-making [2]

Financial Data and Key Metrics Changes - For Q1 2025, consolidated revenue was reported at $12.3 million, reflecting a 3.1% year-over-year decrease due to lower revenue in both OSS and Bresner segments [19][21] - Consolidated gross margin increased to 32.6% from 29.4% in the prior year, driven by a more profitable mix of revenue in the OSS segment [19][20] - OSS segment gross margin improved to 45.5% compared to 34.2% a year ago, primarily due to higher margin products shipped [20][21] - The company reported a GAAP net loss of $2 million or $0.09 per share, compared to a net loss of $1.3 million or $0.06 per share in the prior year [21][22] Business Line Data and Key Metrics Changes - OSS segment bookings showed a strong performance with a book-to-bill ratio of 2.0 for the quarter, contributing to a trailing twelve-month book-to-bill ratio of 1.33 [11][18] - Bresner segment gross profit margin was reported at 23.1%, a decrease of 260 basis points from the same period last year, primarily due to product mix [21] Market Data and Key Metrics Changes - The company noted that while the German and EU economies faced challenges in 2023 and 2024, stability is beginning to return to the region [12] - The ongoing uncertainty in business and government spending has affected order timing, but demand for enterprise class compute solutions remains strong [11][16] Company Strategy and Development Direction - The company is focusing on strategic growth opportunities in high-performance edge compute solutions to meet demands in AI, machine learning, and sensor fusion [6][17] - OSS is pursuing a land and expand strategy, leveraging ruggedized enterprise class compute solutions to establish long-term customer relationships [8][9] - The company aims to build predictable and recurring revenue streams through a growing number of platforms and program opportunities across commercial and defense markets [11][17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving 2025 annual guidance, expecting revenue growth to accelerate in the second half of the year [5][24] - The company is well-positioned to capitalize on multiyear growth opportunities driven by the increasing adoption of AI and machine learning technologies [17] - Management acknowledged delays in certain programs due to government budget processes but remains optimistic about underlying demand trends [16][64] Other Important Information - The company announced a record contract award of $6.5 million with a defense prime contractor and several other significant contracts in the OSS segment [4][12] - The company is exploring partnerships with international firms and seeking U.S.-based manufacturing options to leverage excess capacity [14][16] Q&A Session Summary Question: Visibility on $30 million of core OSS revenue - Management indicated a mix of existing contracts and new business contributing to the expected revenue, with bookings in the first half leading to anticipated revenue in the second half [26] Question: Delivery timeline for the $6.5 million contract - All deliveries from the contract are expected to be completed within 2025, with revenue spread across Q2, Q3, and Q4 [27] Question: Pipeline opportunities of $20 million size - Management noted a variety of opportunities in the pipeline, with expectations for larger program values as the company progresses into 2026 [28] Question: Army situational awareness opportunity - The company is positioned well for a potential $200 million opportunity with the Army, currently under evaluation [29][30] Question: Data center market opportunity - The company is seeing growing demand for high-density GPU solutions, which could lead to multiyear contracts [32][33] Question: Impact of government discretionary budgets - Management noted that the current budget environment is causing delays in program awards, but the 2026 budget cycle is accelerating [47][48] Question: Customer funded development opportunities - Management provided an example of a previous program that transitioned from a small customer-funded effort to significant revenue generation over time [49][50] Question: Gross margins sustainability - Management expects OSS segment gross margins to remain in the mid to upper 30% range, with product margins in the low to high 30s [52]

Financial Data and Key Metrics Changes - For Q1 2025, consolidated revenue was reported at $12.3 million, reflecting a 3.1% year-over-year decrease due to lower revenue in both OSS and Bresner segments [17][19] - Consolidated gross margin increased to 32.6% from 29.4% in the prior year, driven by a more profitable mix of revenue in the OSS segment [17][18] - OSS segment gross margin improved to 45.5% compared to 34.2% a year ago, primarily due to higher margin products shipped [18] - The company reported a GAAP net loss of $2 million or $0.09 per share, compared to a net loss of $1.3 million or $0.06 per share in the prior year [19][20] Business Line Data and Key Metrics Changes - OSS segment bookings showed a strong performance with a book-to-bill ratio of 2.0 for the quarter, contributing to a trailing twelve-month book-to-bill ratio of 1.33 [10][16] - Bresner segment gross profit margin was reported at 23.1%, a decrease of 2.6 percentage points from the same period last year, primarily due to product mix [19] Market Data and Key Metrics Changes - The company noted that while the German and EU economies faced challenges in 2023 and 2024, stability is beginning to return to the region [11] - The company is exploring partnerships with international firms and seeking U.S.-based manufacturing options to leverage excess capacity and technical capabilities [12][14] Company Strategy and Development Direction - The company is focusing on strategic growth opportunities in high-performance edge compute solutions to meet demands in AI, machine learning, and sensor fusion [6][15] - The sales strategy includes identifying applications early in the engineering cycle, a land and expand strategy, and leveraging integrated compute and storage architecture capabilities [7][9] - The company aims to build predictable and recurring revenue streams through a growing number of platforms and program opportunities across commercial and defense markets [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving 2025 annual guidance, expecting revenue and profitability to improve significantly in the second half of the year [5][21] - The company is well-positioned to capitalize on multiyear growth opportunities driven by the increasing adoption of AI and related technologies [15] - Management acknowledged delays in certain programs due to government budget issues but remains optimistic about underlying demand trends [14][56] Other Important Information - The company announced a record contract award of $6.5 million with a defense prime contractor and several other significant contracts in the OSS segment [4][11] - The company is actively pursuing opportunities to displace lower-cost Asian manufacturers in the U.S. markets due to tariffs providing a competitive advantage [12] Q&A Session Summary Question: Visibility on $30 million of core OSS revenue - Management indicated a mix of existing contracts and new business contributing to the expected revenue [23] Question: Delivery timeline for the $6.5 million contract - All deliveries are expected to be completed within 2025, with some spread across Q2, Q3, and Q4 [24] Question: Pipeline opportunities of size around $20 million - Management noted a variety of opportunities in the pipeline, with expectations for larger program values in the future [25] Question: $200 million Army situational awareness opportunity - The system is under evaluation by the Army, and if adopted, could lead to significant revenue over several years [26][28] Question: Timeline for data center opportunities - Existing products are expected to generate revenue in the second half of the year, with active engagements ongoing [39] Question: Impact of government discretionary budgets - Current budgets are under a continuing resolution, causing some delays in program awards, but the 2026 budget cycle is accelerating [45] Question: Customer-funded development opportunities - An example was provided where a $1 million customer-funded program led to $40 million in revenue over several years [46] Question: Gross margins for OSS segment - Expected gross margins in the mid to upper 30% range, with product margins in the low to high 30s and customer-funded development in the 15% to 20% range [49]

Company Performance - One Stop Systems, Inc. reported a quarterly loss of $0.07 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.04, marking an earnings surprise of -75% [1] - The company posted revenues of $12.26 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 3.47%, and down from $12.65 million a year ago [2] - Over the last four quarters, One Stop Systems has not surpassed consensus EPS estimates, and has only topped consensus revenue estimates three times [2] Stock Outlook - One Stop Systems shares have declined approximately 22.7% since the beginning of the year, compared to a decline of 4.7% for the S&P 500 [3] - The current consensus EPS estimate for the upcoming quarter is -$0.03 on revenues of $13.8 million, and -$0.02 on revenues of $59.9 million for the current fiscal year [7] - The estimate revisions trend for One Stop Systems is currently unfavorable, resulting in a Zacks Rank 4 (Sell), indicating expected underperformance in the near future [6] Industry Context - The Electronics - Miscellaneous Products industry, to which One Stop Systems belongs, is currently ranked in the bottom 43% of over 250 Zacks industries, suggesting a challenging environment [8] - Empirical research indicates that the top 50% of Zacks-ranked industries outperform the bottom 50% by more than a factor of 2 to 1 [8]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to ________________ Commission File Number: 001-38371 One Stop Systems, Inc. (Exact Name of Registrant as Specified in its Charter) Delaware 33-08853 ...

Financial Performance - The consolidated gross margin for the first quarter of 2025 increased by 320 basis points year-over-year to 32.6%, with consolidated revenue of $12.3 million [1][4] - OSS segment revenue was $5.2 million, reflecting a decrease of 5.9% compared to the same period in 2024, primarily due to lower shipments to a commercial aerospace customer [4][5] - The Bressner segment revenue decreased by $65,637, or 0.9%, compared to the same period in 2024 [4] - The company reported a net loss of $2.0 million, or $(0.09) per share, compared to a net loss of $1.3 million, or $(0.06) per share, in the prior year period [7][27] Operational Highlights - The OSS segment achieved strong first-quarter bookings of $10.4 million, driven by demand from both new and existing commercial and defense customers [2] - Management expects double-digit consolidated revenue growth in 2025 and anticipates reaching EBITDA break-even for the year [1][10] - The OSS segment gross margin improved to 45.5%, an increase of 11.3 percentage points from the prior year, attributed to a more profitable product mix [3][5] Strategic Outlook - The company is executing a strategic plan targeting both commercial and defense markets, aiming to establish OSS as a platform incumbent on large, multi-year programs [9] - OSS anticipates consolidated revenue for the full year of 2025 to be between $59 million and $61 million, with OSS segment revenue expected to grow over 20% year-over-year [10] - Management expects revenue and profitability to improve at a higher rate in the second half of 2025 based on current trends and an expanding sales pipeline [3][10]