OSS to deliver 80 best-in-class high performance servers and field-programmable gate array systems designed for a mobile intelligence platform Record $6.5 million contract reflects the Company’s multi-year growth strategy that is focused on establishing production platform positions ESCONDIDO, Calif., April 30, 2025 (GLOBE NEWSWIRE) -- One Stop Systems, Inc. (OSS or the Company) (Nasdaq: OSS), a leader in rugged Enterprise Class compute for artificial intelligence (AI), machine learning (ML) and sensor proc ...

Core Viewpoint - One Stop Systems, Inc. (OSS) is set to release its first quarter 2025 financial results on May 7, 2025, and will hold a conference call to discuss these results [1] Company Overview - One Stop Systems, Inc. is a leader in AI-enabled solutions for edge computing, focusing on rugged Enterprise Class compute and storage products [3] - The company designs and manufactures products that support AI, sensor fusion, and autonomous capabilities in challenging environments [3][5] Product Offerings - OSS's product lineup includes ruggedized servers, compute accelerators, flash storage arrays, and storage acceleration software [4] - These products are utilized across various industries, including autonomous trucking, farming, and defense applications [4] Market Position - OSS operates in the rapidly growing multi-billion-dollar edge computing market, specifically in AI-enabled solutions that require high performance in demanding conditions [5]

Core Insights - One Stop Systems, Inc. (OSS) has made significant progress in 2024, positioning itself in the high-performance edge compute (HPeC) market for AI and machine learning [2][3] - The company executed a multi-year strategy focused on higher-margin opportunities, resulting in a strengthened sales pipeline exceeding $1 billion [4][6] - OSS anticipates consolidated revenue of $59 to $61 million for 2025, with OSS segment revenue expected to grow over 20% year-over-year [13] Company Progress - In 2024, OSS achieved sequential revenue growth every quarter, expanding order volumes and strengthening its sales pipeline [3] - The company created a new customer-funded development revenue stream, which grew by 118% to $3.7 million, indicating a focus on military and commercial applications [7][8] - OSS's defense market growth was driven by new and existing programs, including significant contracts with the U.S. Army and Navy [9][10] Market Opportunities - OSS is pursuing a potential $200 million multi-year opportunity in the composable infrastructure/datacenter market, with initial contracts already established [11] - The company expects to transition development programs from 2024 into production orders in 2025, particularly in healthcare and aerospace sectors [7][12] - Despite economic uncertainties, OSS sees increasing demand across its commercial and defense markets, with a projected book-to-bill ratio of 1.2x for 2025 [12][14] Financial Outlook - The company expects to be EBITDA break-even for the full year of 2025, with revenue and profitability anticipated to improve significantly in the second half of the year [13] - OSS's investments in 2023 and 2024 have laid a solid foundation for scaling the business and capturing transformative revenue opportunities [16]

Company Overview - One Stop Systems, Inc. (OSS) is a leader in rugged Enterprise Class compute solutions for artificial intelligence (AI), machine learning (ML), and sensor processing at the edge [3][5] - OSS designs and manufactures products that enable rugged AI, sensor fusion, and autonomous capabilities, delivering data center performance in challenging environments [3][5] Product Offerings - OSS products include ruggedized servers, compute accelerators, flash storage arrays, and storage acceleration software, utilized across various industries such as autonomous trucking, farming, and defense [4][5] - The company's solutions address the entire AI workflow, from high-speed data acquisition to deep learning and large-scale inference, achieving many industry firsts for industrial OEM and government customers [5] Event Participation - OSS will present at the Planet MicroCap Showcase: VEGAS 2025 on April 23, 2025, at 3:30 PM PT, in partnership with MicroCapClub [1][2] - The event will include opportunities for 1x1 investor meetings scheduled in person at the Paris Hotel & Casino in Las Vegas, NV [2]

Company Overview - One Stop Systems, Inc. (OSS) is a leader in rugged Enterprise Class compute solutions for artificial intelligence (AI), machine learning (ML), and sensor processing at the edge [1][3] - OSS designs and manufactures products that enable rugged AI, sensor fusion, and autonomous capabilities, delivering data center performance in challenging environments [3][5] Product Offerings - OSS offers a range of products including ruggedized servers, compute accelerators, flash storage arrays, and storage acceleration software [4] - These products are utilized across various industries such as autonomous trucking, farming, and defense applications including aircraft, drones, and ships [4] Market Position - OSS solutions address the entire AI workflow from high-speed data acquisition to deep learning and large-scale inference, positioning the company as a key player in the rapidly growing edge computing market [5] - The company has achieved many industry firsts for industrial OEM and government customers, highlighting its innovative capabilities [5] Upcoming Events - OSS will present at the Planet MicroCap Showcase: VEGAS 2025 on April 23, 2025, at 3:30 PM PT, providing an opportunity for investors to engage with the company [1][2] - The event will be held at the Paris Hotel & Casino in Las Vegas, NV, and will include opportunities for one-on-one meetings with OSS management [2]

Core Insights - One Stop Systems, Inc. (OSS) has secured a $500,000 contract from a medical imaging OEM customer, expected to contribute to revenue throughout 2025 [1][2] - The contract involves providing 4U short-depth servers equipped with Enterprise Class NVIDIA GPUs to support FDA-cleared breast scanning technology [2] - OSS anticipates follow-on orders for next-generation liquid-cooled 3U-SDS servers, which may become standard for the OEM's breast scanning devices [2] - The CEO of OSS, Mike Knowles, expressed optimism about the contract's potential to generate over $25 million in cumulative sales over the next five years [3] Company Overview - OSS specializes in rugged Enterprise Class compute solutions for AI, machine learning, and sensor processing at the edge [1][4] - The company designs and manufactures products that deliver data center performance in challenging environments, applicable across various industries including defense and commercial markets [4][5] - OSS's product offerings include ruggedized servers, compute accelerators, and storage solutions, catering to sectors such as autonomous trucking, farming, and defense [5][6] Market Position - The contract with the medical OEM highlights the increasing demand for ruggedized computing capabilities in commercial markets [3] - OSS is focused on high-growth, high-margin opportunities, particularly in the rapidly expanding edge computing market, which is valued in the multi-billion-dollar range [6]

Financial Data and Key Metrics Changes - OSS reported consolidated revenue of $15.1 million for Q4 2024, reflecting a 15.1% year-over-year increase driven by double-digit growth across both OSS and Bressner segments [29] - Consolidated gross margin for Q4 2024 was 15.7%, down from 33.7% in the prior year, with gross margin excluding one-time charges at 23.8% [30] - The company expects consolidated gross margin to return to the low 30% range in Q1 2025 [30] Business Line Data and Key Metrics Changes - OSS segment gross margin for Q4 2024 was 9.4%, compared to 45.9% in the same period last year, with expectations for improvement to the mid to upper 30% range in Q1 2025 [31] - Customer-funded development revenue increased by 118% in 2024 to $3.7 million, indicating strong growth potential for future revenues [10] Market Data and Key Metrics Changes - The company experienced greater adoption in both defense and commercial end markets, contributing to a broader customer base [9] - The annual book-to-bill ratio for the OSS segment was lifted to 1.14, with expectations for a ratio of approximately 1.2 in 2025 [11][12] Company Strategy and Development Direction - OSS is focused on transforming the company and pursuing growth opportunities driven by artificial intelligence, machine learning, and sensor processing [5] - The company anticipates significant opportunities in composable infrastructure for data centers, with a projected $200 million multiyear pipeline [17] - OSS aims to leverage its technology to meet the increasing demand for rugged enterprise-class compute solutions in both defense and commercial markets [13] Management's Comments on Operating Environment and Future Outlook - Management noted that while uncertainty related to business and government spending is expected to continue in the first half of 2025, the embedded position with customers remains strong [11] - The company projects consolidated revenue of $59 million to $61 million for 2025, with OSS segment revenue expected to grow over 20% year-over-year [22][23] - Management expressed confidence in the financial position and potential for 2025, despite anticipated near-term volatility [24] Other Important Information - OSS incurred a $1.2 million charge related to contract losses and $7.1 million in inventory charges in 2024, impacting gross margin and net income [27][28] - The company had total cash and short-term investments of $10 million as of December 31, 2024, with no borrowings on its revolving line of credit [35] Q&A Session Summary Question: What was the reason for the lower OSS segment gross margin? - Management indicated variability in gross margin based on the mix of products, with lower margin products shipping in Q4 2024 [40][43] Question: How has the order pipeline changed for 2025? - Management stated that the pipeline remains stable, with no significant shifts, and they are seeing increased opportunities [52] Question: Where is the growth expected to come from in the commercial and defense markets? - Growth is expected to be balanced across both markets, with notable opportunities in data centers and medical imaging [64][66] Question: Are there any unexpected areas of strength in the commercial segment? - The medical imaging sector is seeing faster adoption of AI than initially anticipated [70] Question: How many product programs are currently in development under the OSS segment? - Management noted that customer-funded development programs are crucial for long-term opportunities, but specific numbers were not provided [73]

One Stop Systems (OSS) Q4 2024 Earnings Call March 19, 2025 07:46 PM ET Company Participants Mike Knowles - President and Chief Executive OfficerDaniel Gabel - CFOBrian Kinstlinger - MD, Director of Research & Head of Technology Research Conference Call Participants Max Michaelis - Research Analyst Operator Good day, and welcome to the One Stop Systems Fourth Quarter twenty twenty four Conference Call and Webcast. At this time, all participants are in a listen only mode. Later, you will have the opportunity ...

Economic and Market Conditions - Economic uncertainty and capital markets disruption significantly impacted by geopolitical instability could harm the company's financial condition and results of operations [150]. - The company may be adversely affected by inflation, which has increased overall cost structure and could lead to higher interest rates and capital costs [164]. - The market for high-performance computing products is developing and may not grow as expected, affecting demand and sales [165]. - Business disruptions from natural disasters or geopolitical conflicts could lead to significant losses and increased costs [153]. - Changes in U.S. government priorities and defense spending could negatively impact the company's financial position and results [151]. - The company has not been materially impacted by ongoing geopolitical conflicts to date, but future effects remain unpredictable [160]. Customer and Supplier Risks - The company relies on a limited number of parts suppliers, and any disruption could impact manufacturing and design processes [151]. - A limited number of customers represent a significant portion of sales, and losing key customers could lead to a substantial decrease in revenue [151]. - In the year ended December 31, 2024, 20.2% of total consolidated revenues were attributable to the top three customers, including Raytheon, Alcon Gps, and Torc Robotics [193]. - In the year ended December 31, 2024, 39.7% of OSS segment revenues were attributable to the top three customers, indicating a significant reliance on a limited customer base [193]. - Approximately 37% of materials purchased in 2024 came from suppliers that accounted for more than 10% of total parts purchases, highlighting supply chain concentration risks [195]. - The company relies on a limited number of parts suppliers, and disruptions could adversely affect product marketing and sales [195]. Competition and Market Position - The company faces competition from new entrants and existing customers, which could harm its competitive position [150]. - The competitive landscape is evolving, with new entrants and distribution models potentially harming the company's market position [171]. - The company’s products face competition from mass-produced hardware solutions, which could create pricing pressure and reduce profit margins [170]. - The ongoing commoditization of HPC hardware and software is leading to increased pricing pressure, potentially reducing gross margins and adversely affecting operating results [213]. Government and Regulatory Risks - Changes in U.S. government priorities and potential reductions in defense spending could negatively impact the company's financial position and growth prospects [185]. - The U.S. government may terminate contracts at its convenience, which could adversely affect the company's business and financial performance [188]. - The company is subject to procurement laws and regulations that could impose risks and costs on its business [187]. - Compliance with evolving data protection regulations, such as GDPR and CCPA, could result in penalties of up to 4% of worldwide revenue and increased compliance costs [224][226]. - The company is subject to governmental export and import controls that could impair its ability to compete internationally and result in significant penalties for non-compliance [229][230]. - Changes in regulations or standards related to suppliers' products may lead to unanticipated costs or liabilities, adversely affecting business operations and future sales [231]. Cybersecurity and Intellectual Property Risks - The company faces risks associated with cybersecurity incidents that could disrupt operations and expose it to liabilities [176]. - The company has implemented systems to address cybersecurity risks, but these measures may not be sufficient for all possible situations [178]. - Cybersecurity breaches pose a risk of theft of proprietary designs, which could negatively impact competitive edge and financial results [216]. - The company faces significant risks related to intellectual property protection, including potential costs and resource diversion from enforcing proprietary rights against competitors [214][215]. - The company is obligated to indemnify channel partners and end-customers for certain intellectual property infringement claims, which could lead to substantial costs [222]. Financial and Operational Challenges - The company’s operating results may fluctuate significantly due to various factors, including longer sales cycles in military and defense markets [167]. - The sales cycles for some products can take several months or longer, increasing the risk of inventory becoming obsolete [202]. - The company offers extended product warranties, which could lead to significant costs if failure rates unexpectedly increase [205]. - Achieving design wins is critical for success, and failure to do so could harm the company's business [207]. - Acquisitions may require significant management attention and could disrupt operations, leading to potential financial dilution [211]. - The company anticipates that future growth will require significant expansion of operations and innovation, which may strain management and financial resources [192]. Stock and Ownership Structure - Directors, executive officers, and significant stockholders own approximately 40% of the outstanding common stock, allowing them to exert significant control over corporate matters [237]. - As of March 5, 2025, there are 21,323,261 shares of common stock outstanding, with potential future equity issuances causing dilution to current shareholders [241]. - The company has the right to issue up to 10,000,000 shares of blank-check preferred stock, which could adversely affect common stock rights and preferences [242]. - The company has never paid cash dividends and does not expect to do so in the foreseeable future, relying on share price appreciation for returns [250]. - The company qualifies as a "smaller reporting company," which may make its common stock less attractive to investors due to reduced reporting requirements [252]. - The market price of common stock could decline if equity research analysts downgrade the stock or cease coverage [240]. - Anti-takeover provisions in the company's charter could delay or prevent changes in control, potentially affecting stock price [244]. - The concentration of ownership among major stockholders may adversely affect the market price of common stock [237]. - The company may face challenges in raising additional capital on acceptable terms, impacting its ability to develop new technologies and expand operations [248].

Group 1 - One Stop Systems, Inc. reported a quarterly loss of $0.12 per share, significantly worse than the Zacks Consensus Estimate of $0.01, marking an earnings surprise of -1,300% [1] - The company posted revenues of $15.14 million for the quarter ended December 2024, exceeding the Zacks Consensus Estimate by 0.93% and showing an increase from $13.16 million year-over-year [2] - Over the last four quarters, One Stop Systems has surpassed consensus revenue estimates four times, but has only exceeded EPS estimates once [2] Group 2 - The stock has underperformed the market, losing about 8.7% since the beginning of the year compared to the S&P 500's decline of -4.5% [3] - The current consensus EPS estimate for the upcoming quarter is -$0.01 on revenues of $14 million, while for the current fiscal year, it is $0.01 on revenues of $61.3 million [7] - The Zacks Industry Rank for Electronics - Miscellaneous Products is in the bottom 40% of over 250 Zacks industries, indicating potential challenges for stock performance [8]