One Stop Systems Q1 2025 Earnings Call Transcript

Quartr
Provided by Quartr
May 7, 2025

There are 6 speakers on the call.

Operator

Good day, and welcome to the One Stop Systems First Quarter twenty twenty five Conference Call and Webcast. At this time, all participants are in a listen only mode. As a reminder, this call is being recorded. As part of the discussion today, the representatives from OSS will be making certain forward looking statements regarding the company's future financial and operating results, including those relating to revenue growth as well as business plans, bookings, the company's multiyear strategy, business objectives, and expectations. These statements are based on the company's current beliefs and expectations and should not be regarded as a representation by OSS that any of its plans or expectations will be achieved.

Operator

Please be advised that these forward looking statements are covered under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and that OSS desires to avail itself of the protections of the safe harbor for these statements. Please also be advised that actual results could differ materially from those stated or implied by the forward looking statements due to certain risks and uncertainties, including those described in the company's most recent annual report on Form 10 ks, subsequent quarterly reports on Form 10 Q and recent press releases. Please read these reports and other future filings that OSS will make with the SEC. OSS disclaims any duty to update or revise its forward looking statements, except as required by applicable law. It is now my pleasure to turn the conference over to OSS' President and CEO, Mr.

Operator

Mike Knowles. Please go ahead, sir.

Speaker 1

Thank you, Angeline. Good morning, everyone, and thank you for joining today's call. I'm pleased to report on the progress we made during the twenty twenty five first quarter, by both year over year and sequential improvements in gross margin, stable year over year revenue and strong OSS segment bookings and demand trends. For the first quarter of twenty twenty five, consolidated gross margin increased year over year three twenty basis points to 32.6%, driven by a strong gross margin of 45.5 within our OSS segment. We also announced the single record contract award of $6,500,000 with a large defense prime, as well as new order multi year relationship with an innovative medical imaging OEM and two renewals with a combined value of $6,000,000 from existing U.

Speaker 1

S. Department of Defense programs. As expected, near term market conditions affected the timing of certain OSS segment orders anticipated for the first and second quarters of twenty twenty five. However, based on recent orders as well as future booking expectations, we believe we are on track to achieve our 2025 annual guidance, which includes consolidated revenue of 59,000,000 to $61,000,000 and EBITDA breakeven for the full year. We believe the second half of twenty twenty five is setting up to be a period of growth and transformation, and I want to use my time to review our expectations for 2025 and beyond.

Speaker 1

As I mentioned before, we are pursuing strategic growth opportunities that leverage our high performance edge compute solutions to meet the growing demands of AI, machine learning, autonomy and sensor fusion at the edge. Over the past two years, we have invested in our organization, technology and team, which has created the necessary platform to pursue a large multi year pipeline of commercial and defense sales. We have a strong and growing pipeline of opportunities across leading defense organizations and advanced commercial enterprises that are looking for partners like OSS to support their need for high performance edge compute solutions. Our sales approach has been focused on driving adoption of our products through three main business development initiatives. Our first strategy aims at identifying applications and customers early in the engineering cycle to pursue collaborative relationships through customer funded development programs.

Speaker 1

We believe this will establish incumbent positions on platforms that will lead to follow on production and long term sustainment positions. We believe development relationships will take one to two years before leading to production orders. As a result, we expect certain development programs that we worked on during 2024 to transition to orders and sales in 2025 and beyond. Our second key business development initiative is focused on land and expand strategy. This is supported by the best in class ruggedized enterprise class compute solutions we offer and our differentiated engineering capabilities.

Speaker 1

We've engineered solutions that compress data center scale performance into compact ruggedized systems that are capable of thriving in harsh environments at significant size, weight, power and cost advantages to competing solutions. In fact, our solutions are 350% faster, can run 28 times the number of AI applications and have 130 times better computational performance than competing offerings. As a result, we are developing meaningful relationships with customers and engineering teams who are looking for the types of enterprise class solutions we provide. For example, a couple of weeks ago, we announced the third program win over the past eight months with a defense customer that is embedding our enterprise class compute and storage products deeper into next generation U. S.

Speaker 1

Department of Defense initiatives. On the commercial side, as we previously announced, we are further extending our relationship with a customer in the medical field to transition their medical sensing solution to an enterprise class solution. Our hardware will process sensor data and use AI applications to bring significantly better medical information to the doctors and patients to address cancer treatment. Our third sales strategy underway leverages the company's integration of compute and storage architecture capabilities, which is allowing us to address more integrated solutions. Providing integrated solutions helps OSS solve additional customer problems and creates opportunities to expand beyond just supporting prime contracts by delivering OSS products directly to end customers.

Speaker 1

As momentum builds, our expanding pipeline and recent awards reinforce our belief in the scalability and long term value of our business model. Higher OSS segment orders are particularly encouraging amid ongoing uncertainty in business and government spending. Longer term, we believe our sales strategies will build highly valuable, predictable and recurring revenue streams as we pursue a growing number of platforms and program opportunities across our commercial defense markets. This creates an attractive business model where in any given year we have platform programs in development, others transitioning or in production and a backlog of programs in sustainment and support. We experienced strong bookings within our OSS segment during the first quarter with a book to bill ratio of two point zero, which contributed to a trailing twelve month book to bill ratio of 1.33.

Speaker 1

Recent award highlights within our OSS segment include an initial $1,400,000 contract award for radar processing systems on the P-eight Poseidon aircraft, including a five year support agreement. An initial $1,600,000 in contract awards to upgrade sonar sensor processing for their Virginia class submarine, including enhancements to PCIe accelerator systems with next generation technology that extends program viability for at least another ten years. A $500,000 contract with a leading medical OEM with anticipated follow on production orders valued at over $25,000,000 over the next five years, and a record $6,500,000 award from a leading defense and technology solutions company to support next generation mobile intelligence platform. Order activity remains strong supported by growing demand for our enterprise class compute solutions and we anticipate further commercial and defense announcements in the coming months. While the German and EU economies were challenged in 2023 and 2024, we are starting to see more stability in the region.

Speaker 1

Recent bookings and revenue within our Bresner segment have been in line with our targets and Bresner remains on track to achieve consistent sales and profitability for 2025 compared to last year's results. We do not currently expect tariffs to have a material impact on our operations or cost structure. In fact, we are seeing potential in both our OSS and Bressner segments. In the OSS segment, tariffs provide a competitive advantage against lower cost Asian manufacturers in many of our markets. We are actively pursuing opportunities to displace these competitors in The U.

Speaker 1

S. Markets. Additionally, we are exploring partnerships with international companies, seeking U. S.-based manufacturing options, leveraging our excess capacity and technical capabilities. Within our Bresner segment, we see opportunities to capture new business as European customers reassess supply chain dependencies and prioritize partners with secure tariff resilient logistics.

Speaker 1

We are also targeting OEMs that are shifting production strategies due to geopolitical and cost pressures, positioning Bresner as a trusted integration and distribution partner. In addition, the newly heightened desire within NATO and the EU to increase defense spending could create expanded defense opportunities for Bresner and OSS products in 2026 and beyond. Indications are that while budgets are likely to show significant increase, it will take some time for those budgets to work through procurement channels to actual awarded efforts. While tariffs and shifts in government spending have delayed certain programs for the second half of twenty twenty five, underlying demand trend remains strong. We continue to see solid engagement across key programs and remain confident in our ability to meet our full year 2025 guidance.

Speaker 1

Looking ahead, we believe OSS is uniquely positioned to capitalize on a multiyear growth opportunity driven by accelerating adoption of artificial intelligence, machine learning, autonomy and sensor fusion at the edge. As these requirements become increasingly central to defense and commercial innovation, customers are turning to trusted partners with proven expertise and rugged enterprise class compute solutions. With the right products, a highly capable team and a focused strategy, we remain well positioned to capture growing demand across our core markets and we are energized by the scale of the opportunities ahead. So with this overview, I'd like to turn the call over to Dan. Dan?

Speaker 2

Thank you, Mike, and good morning to everyone on today's call. Since joining OSS in November 2024, I've been continuously impressed by the company's differentiated technology, customer focus and by the momentum that we're seeing across the business. In the first quarter of twenty twenty five, I was particularly pleased by the momentum that we achieved toward two of our key financial objectives, growth and profitability. On growth, our OSS segment two point zero book to bill in the quarter and 1.33 trailing twelve month book to bill demonstrates that our technology is resonating with customers and positions us to achieve our growth objectives for the second half of the year. On profitability, OSS segment gross margins of 45.5% in the quarter demonstrate the value that customers place on our differentiated products as well as our continued commitment to operational efficiency.

Speaker 2

There's always work to do, but we're off to a strong start and we're well positioned both operationally and financially to execute against our 2025 goals and to unlock long term value for our shareholders. And now for a quick overview of Q1 twenty twenty five financial performance. For the first quarter, we reported consolidated revenue of $12,300,000 The 3.1% year over year decrease in consolidated revenue was a result approximately 3 and $30,000 of lower OSS segment revenue and $66,000 of lower Greshner segment revenue. As we mentioned last quarter, we expect revenue and profitability to improve at a higher rate in the second half of twenty twenty five. Consolidated gross margin in the first quarter expanded to 32.6% compared to 29.4% in the prior year quarter.

Speaker 2

The three twenty basis point improvement reflects the more profitable mix of revenue in the OSS segment. On a segment basis, gross margins for the company's OSS segment improved to 45.5% compared to 34.2% for the same period a year ago. The increase was primarily due to a larger volume of certain higher margin products shipped in the quarter. OSS gross margins also benefited from a two twelve ks reduction in inventory reserves in the segment due primarily to the usage of certain previously reserved inventory items to satisfy a new customer order received in the quarter. On a full year basis, we continue to expect OSS segment margins to be in the mid to upper 30% range.

Speaker 2

The company's Bresner segment had gross profit margin of 23.1%. The two sixty basis point decrease from the same period last year was primarily due to product mix. Total first quarter operating expenses increased 19.2% to $5,900,000 compared to the year ago quarter. This increase was predominantly attributable to higher marketing and selling costs due to an increase in personnel costs from the additions in headcount made during the course of 2024, as well as an increase in research and development costs driven by higher engineering labor to support new product development. For the first quarter, the company reported a GAAP net loss of $2,000,000 or $09 per share compared to a net loss of 1,300,000 or $06 per share in the prior year quarter.

Speaker 2

The company reported a non GAAP net loss of $1,400,000 or $07 per share compared to a non GAAP net loss of 931 ks or $04 per share in the prior year quarter. Adjusted EBITDA, a non GAAP metric was a loss of $1,100,000 compared to an adjusted EBITDA loss of about 500 ks in the prior year first quarter. Turning to the balance sheet. As of 03/31/2025, OSS had total cash and short term investments of $9,100,000 no borrowings outstanding on our $2,000,000 revolving line of credit and a consolidated balance outstanding on our term loans of $1,100,000 For the three months ended 03/31/2025, OSS used $1,100,000 in cash from operating activities compared to operating cash flow of $2,000,000 for the three months ended 03/31/2024. The change from the prior year quarter was primarily due to the timing of working capital.

Speaker 2

As Mike mentioned, we believe we are on track to achieve our 2025 annual guidance. We expect bookings to remain strong throughout the year within our OSS segment, which we believe will support profitable revenue growth in the second half of twenty twenty five and into 2026. As we guided last quarter, we expect our revenue and profitability growth to accelerate in the second half of twenty twenty five with first half roughly flat to the prior year. This completes our prepared remarks. Operator, please open up the call to questions.

Operator

Thank you. We are now open for Q and A. And at this point, ladies and gentlemen, we will now begin the question and answer session. The The first question comes from Brian Kinstlinger with Alliance Global Partners. Please go ahead.

Speaker 3

My first question relates to the visibility on the $30,000,000 of core OSS revenue expect this year. How much of that is coming from contracts or orders that have already been signed versus new business you still need to win this year?

Speaker 1

Yes, it's a little bit of mix of both Brian. Thanks for the question. As we noted in the comments, right, we're generating bookings now here in the first half that would lead to expected revenue in the second half of the year. And we had a smaller percentage of backlog left over from the end of twenty twenty four that's looking at deliveries more in the second half of the year.

Speaker 3

Okay. And then the announcement for the 80 best in class high performance servers for $6,500,000 I couldn't tell based on the press release, will all of that be delivered in 2025? Or if not, over what time period will that be?

Speaker 2

Yes, Brian. So we expect all of that to be delivered and to convert to revenue within 2025. We'll see some spread between Q2, Q3, Q4, but we expect to finish all of those deliveries within the year.

Speaker 3

Great. And then in terms of the pipeline, can you share with us maybe how many opportunities are of size and maybe $20,000,000 And will any be adjudicated this year?

Speaker 1

Yes. Brian, I don't have an exact number here in front of me, but the pipeline is made up of a number of opportunities and programs that weigh in value from different sides. Our expectation in growing the company really is along the lines of finding more programs like the one we've just recently announced where we have a longer run of development and larger production runs in the back end. So we expect, especially as we build out of 2025 into 2026, that we'll start to see more program values representative of our most recent announcement.

Speaker 3

Great, lastly, maybe touch on in your open letter, I didn't hear you talk about it. You discussed a $200,000,000 opportunity with the Army for situational awareness. Maybe take us through that opportunity and how you are situated in terms of competitiveness. And then separately talk about the data center opportunity, which I think is more of a market opportunity as opposed to one customer.

Speaker 1

Yes, thank you. So highlighting both of those in our open letter, we wanted to really identify based on questions and interest we have gotten, where there may be transformative opportunity in the pipeline of values that we are addressing. And so the first one was a program with the Army where we had developed under customer funded NRE a rugged solution to bring processing switch capability and sensor processing capability to combat vehicle architectures for the U. S. Army for a specific application in moving video or camera video from around the vehicle into the work centers, workstations inside the vehicle.

Speaker 1

So that system was delivered at the end of twenty twenty four. It's been under evaluation and test in the Army Evaluation Lab and under review from multiple combat vehicle types inside the U. S. Army. U.

Speaker 1

S. Army will evaluate that. Should they determine a final requirement for that, then they would transition to an acquisition and fielding plan. Across any combat vehicles, we know the U. S.

Speaker 1

Army doesn't have tens or hundreds of vehicles, they have thousands of vehicles. So for us that would represent a transformative opportunity in that buying thousands of a system like that would create opportunities on the order of hundreds of millions of dollars across a three to five year period and then long term support on the back end of that. So transformational opportunities like that, again nothing certain or fielded or in the budget yet, but the fact that an existing solution is already under test and evaluation puts us in a good position to help influence that and move it forward. Similarly on the commercial side, we've launched and noted some recent products in our GPU expansion product line, where we achieved significantly high density of GPUs in single expansion chassis. And what we're seeing is for some areas of the data center market where people have a smaller footprint or looking for mobile or extended data center capabilities, this high density of GPUs is highly attractive to be able to extend off of a single server rather than purchasing multiple servers.

Speaker 1

And so this market opportunity is we've been seeing growing increase in terms of its demand and application across multiple vendors and customers. And so we see a similar market opportunity there that we believe could lead to multiyear contracts for those products.

Speaker 3

One last follow-up. In terms of that Army contract, are other solutions being evaluated or is it just an OS dash solution with your partners? And then the book to bill, I was confused. I thought it was two point zero based on $10,000,000 over the revenue for core OSS. How did you get to 1.33?

Speaker 1

Yes. On the first one, Brian, right now we're the only solution S. Army they're evaluating on this system. In part because they weren't able to solve the concept with the prior architectures that they were using.

Speaker 1

The switch to enterprise class architecture allowed them to meet their system requirements in processing and latency. So that was very positive for us. So we're the only company right now with the system that achieves those directives. And we have also been now been able to implement a few of the noted standards that the Army is looking for in their network architectures. So our system is one of the first that embeds that into the overall processing architecture.

Speaker 1

So we feel good about our position there in terms of that. And then the book to bill ratio, the two point zero was for this quarter, so you're correct, it was the OSS segment bookings against the revenue and the 1.33 is the OSS segment book to bill ratio for the trailing twelve months. So we go back to the

Speaker 3

you so much.

Speaker 1

Thank you, Brian.

Operator

Thank you. The next question comes from Scott Searle with Roth Capital. Please go ahead.

Speaker 4

Taking my questions. Hey, Mike, maybe just to dive in on the data center opportunity, could you give us some timeline that might be attached to that when we would see the first revenues from that? And then maybe following up on some of the tariff driven partnerships with international players, what's the timeline associated with that? How actively engaged? When can we start to see that impacting the pipeline and ultimately the P and L?

Speaker 1

Yes, great. Thanks guys and appreciate the call and the question. So on the data center stuff with the expansion that we're talking about. So we've had a consistent expansion capability there. So we have been delivering some of our existing standard products in our what we call our 4UP product line range.

Speaker 1

We have also announced a 6U unit that increases the density of GPUs in those expansions. That product is available now this year. So we're looking to extended sales across both the 4U and 6U product line in the second half of the year. So we have some existing contracts we announced one last year with a customer that we would look to pull down orders in the second half of the year with these product lines against there. And then we have active engagements with multiple customers now going on to look to place orders on those systems as they would roll into production viability here in the late Q2 and into Q3 and Q4.

Speaker 1

On the tariff and adjustment question for manufacturing, So we're in discussions with a couple of companies, one particularly further along. With the decision to move forward with that concept, again, would probably see something late Q2, early Q3 is where we start generating revenue from that concept.

Speaker 4

Very helpful. Thank you. And maybe to shift gears over to AI for a second. You've been working with some different vendors on software partnerships to try and develop more of that channel. Could you give us an update on that front, what you're seeing and how active things are on that front?

Speaker 1

Yes. Continue down those paths actively engaged. Again, meet with AI companies generally for two reasons. One, a lot of AI companies are looking to standardize their AI processing on set of hardware. And then secondly, it allows us to identify more integrated solutions we can offer our offer end customers, so we can deliver more fully capable systems.

Speaker 1

So we continue that effort of finding new opportunities developing existing ones. We've reached some capabilities where we've expanded our ability to work with customers to actually test and validate their AI or processing algorithms and actually provide them an output on optimizing their software on a hardware platform specific to their application. We've engaged with a number of companies on the first model where they're looking to standardize their processing on our hardware. We have a couple of extended relationships there that we're hoping could lead to product releases and program positions in the back half of this year and into next year.

Speaker 4

Okay, great. Thank you. And lastly, if I could, just two more. The current government discretionary budgets, I'm wondering how that impacts you or doesn't impact you. I'm sure you've had an opportunity to peruse it in terms of your program exposure.

Speaker 4

And also in terms of customer funded opportunities, I'm wondering if there's a rule of thumb to look at that in terms of the multiplier effect once you look out then two years in terms of what 500,000 of customer development funded translates into in terms of products longer term?

Speaker 1

Yes, sure Scott. So watching the budgets on the defense side for this year, the government is still working under a full year continuing resolution. It does allow for program new starts. So there's still a little bit of a grayness if you will inside the defense budgets and how they're allocating their discretionary budgets across that. So it's requiring a little bit more work and effort rather than normal advised budgets would roll down through program element line numbers specifically to end programs on new starts.

Speaker 1

So a little bit of extra work around the DoD to move budgets and elements out. We're seeing some of that as a resulting in delayed program awards this year. So we're working through that. But we are seeing now that the 2026 budget cycle is accelerating back to on schedule. It had a slow start, but in the last six weeks the efforts inside the process have accelerated to work to get the 2026 budgeting plan back on track.

Speaker 1

So hopeful that that will prove to make 2026 a normal year, maybe even see a budget without a continuing resolution, we could only hope. And then the last part on customer funded leading the program. I think a great way to look at that is maybe to look at an example program that we have had in the company for a number of years now, the P8 program. That program we started with a small dollar value like around $1,000,000 customer funded development effort, lasted about a year in development and then let itself into low rate initial production, full rate production and it's now transitioning into sustainment support. That program we've generated about $40,000,000 revenue since it started in 2018.

Speaker 1

And we just signed a five year extension for sustainment and support on that program. So that's kind of representative of how we see platform positions, especially on DoD platforms. And the scalability or size of those would just depend on the overall compute system and or the number of platforms in the inventory for that.

Speaker 4

Got you. Very helpful. And lastly, if I could, just on the gross margins for the OSS front, certainly a high number this quarter. I'm just wondering if you could remind us in terms of what was the upside, because it looks like you're talking about 38% to 40% is or high 30s is the ongoing number, but customer funded R and D is in there as well. So wondering what the OSS component without customer funded programs looks like on a sustainable ongoing basis?

Speaker 4

Thanks.

Speaker 2

Yes. Overall, we continue to expect gross margins in the mid to upper 30% range. The way I would model that is product gross margins in the low high 30s to low 40s and then customer funded development in the 15% to 20% range.

Speaker 4

Great. Thanks so much.

Speaker 1

Thanks, Scott.

Operator

Thank you. The next question comes from Eric Martinuzzi with Lake Street. Please go ahead.

Speaker 5

Yes. I wanted to better understand the near term market conditions that pushed out the first half orders. Can you give me either an example or maybe just an overall industry commentary that helps better understand that? Because I had flat OSS for Q1, and obviously that was a misfire on my model.

Speaker 1

Yes, good morning. Thanks for the question. I guess an example maybe on both sides really on the Department of Defense side. As I mentioned, when the year started, was still struggling with budgets and so it wasn't until the end of Q1 before they settled in on a full year continuing resolution. So we just saw a delay in some DoD programs that were smaller in value, but were opportunities to book and ship in the quarter.

Speaker 1

So those have delayed into Q2 or Q3 for this year. And then on the commercial side, we had an existing contract and that we had planned a couple of deliveries on in the quarter that the customer decided to realign with their end customer later in the year, back half of Q2 into Q3.

Speaker 5

Okay. And then the $6,500,000 contract that you got from the leading defense and tech company, was there a large element of the design work first? If you could give me just kind of a size and term that you've been working, if that was the case.

Speaker 1

Yes. So, this one came with a little bit less customer funded NRE. It's a fractional amount of that value, some modest adjustments to some standard product that we have similar to what they've used in the past contracts that we've done with them. So this one is the majority of it really is production. And as Dan noted, we'll be able to deliver all of that this year.

Speaker 5

Okay. And then you talked about a more profitable product mix for the higher margin data storage units and componentry. Any verticals that we should be better to better understand that? Was that a defense? Was that enterprise side?

Speaker 5

A mix of both?

Speaker 2

Yeah. The high margin data storage products were for a defense customer. But in general, across defense and commercial, we see variability, but overall those two markets we target similar margins for products.

Speaker 5

Gotcha. Okay. And then it is a pretty steep ramp in the second half. Do we have any recent history where there's complete follow through here? Because if bookings was revenue, we'd be rolling in it.

Speaker 5

It just seems like it's a logjam where it's about to burst upon us here. So just trying to get a better sense for your confidence in the second half.

Speaker 1

Yes. It's a little bit of a logjam into the second half. We noted, the forecast and the view we have into the year still gives us confidence to achieve the plan. We had a strong Q4 in terms of revenue in 2024. So the revenue values and the shipment values of what we need to do in Q3 and Q4 are all definitely achievable.

Speaker 1

We have more than enough staff, more than enough capacity to be able to achieve that amount of revenue and shipments in those two quarters. So I'm not worried about availability or capacity to meet that. We've got insight and view. We can continue to manage the supply chain. So as long as we can maintain on the bookings run with the identified customers and plan in the forecast, we should still be able to achieve our objectives.

Speaker 5

Okay. And lastly, you did talk about tariffs and actually having a potential positive impact on the revenue side. Just curious on the supply chain side, anything even on the margin where you guys maybe are sourcing something from overseas where you might not be able to get that domestically?

Speaker 1

Yes, Eric, because of the fact that we're doing commercial and defense work, we've got a fairly diversified supply chain inside and outside The U. S. And in both component supply and in contract manufacturing for board bills and all. So while our days for our procurement team have gotten much busier as they try to work the open market on where to source supply, we've done a they've done a pretty admirable job in managing tariffs and managing supply chain and where we move things in from. And then it's long been a policy in the terms and conditions of the work that we do for OSS that we pass on tariff impact to customers.

Speaker 1

And we have not seen a pushback on that as we work through the system. But to be fair, we've done a very good job at working supply chain and keeping tariff impacts to a minimum and within a range that's been acceptable to our customers.

Speaker 5

Got it. Thanks for taking my questions.

Speaker 1

Thank you very much, Eric.

Operator

Thank you. There are no further questions at this time. Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.

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Key Takeaways

  • OSS reported Q1 revenue of $12.3 M, a 3.1% year-over-year decline, while consolidated gross margin improved 320 basis points to 32.6%, and management reaffirmed full-year guidance of $59–61 M in revenue and EBITDA breakeven.
  • The OSS segment achieved a 2.0x book-to-bill ratio in Q1 (1.33x trailing twelve months), driven by a record $6.5 M defense-prime contract, a multi-year medical imaging OEM order, and $6 M in U.S. DoD renewals.
  • Management outlined a three-pronged growth strategy focused on customer-funded development to secure early platform positions, a land-and-expand approach boasting rugged edge compute solutions that are 350% faster with 28× AI application capacity, and integrated compute-storage offerings.
  • Key pipeline opportunities include a potential hundreds-of-millions-dollar U.S. Army situational awareness program moving from evaluation to acquisition and rising commercial demand for high-density GPU expansion chassis poised to drive 2H25 revenue.
  • The Bressner segment is on track for consistent 2025 profitability amid improving EU market stability, with tariff-driven competitive advantages and plans to develop U.S.-based manufacturing partnerships to support growth.
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Earnings Conference Call
One Stop Systems Q1 2025
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