One Stop Systems, Inc. Q4 FY2025 earnings call

• 2025 was a defining year with successful execution of multi-year strategy to reposition around high-performance, ruggedized compute platforms. • Completed sale of Bresner in December 2025, received $22.4 million. • Exited 2025 with strong fourth quarter performance: revenue growth >70% YOY, record quarterly gross margins 58.5%, positive net income from continuing operations $2 million. • Strong operational progress with customers adopting rugged enterprise-class compute platforms. • Full year 2025 revenue above high end of previously communicated guidance range. • Examples of defense programs: over $65 million in total contract revenue associated with P-8 Poseidon aircraft program, $1.2 million follow-on production order from Safran, new agreement with defense prime for next-generation enhanced vision and sensor processing systems for U.S. Army combat vehicles. • Examples of commercial programs: engagement with commercial robotics customer, order with Canadian integrator for commercial aerospace, follow-on production order from medical imaging OEM. • Book-to-bill ratio of approximately 1.2x in 2025. • Investing in advancing technology platform, introduced next-generation PCIe Gen 6 product portfolio in fourth quarter.

For the fourth quarter, total revenue was $12 million compared to $7 million last year. Gross margin was a quarterly record of 58.5% compared to 9.4% in the prior year quarter. Total fourth quarter operating expenses increased 21.8% to $5.1 million. The company reported record GAAP net income from continuing operations of $2 million or $0.08 per diluted share. As of December 31, 2025, OSS had total cash and cash equivalents of $31.2 million, restricted cash of $2.2 million, and no debt outstanding. Working capital increased to $45.3 million. For 2026, expected revenue growth in the range of 20% to 25%, gross margin of approximately 40%, and positive EBITDA and adjusted EBITDA.

• Expect 2026 revenue growth in the range of 20% to 25%. • Expect gross margins of approximately 40%. • Expect positive EBITDA and adjusted EBITDA. • Expect approximately 40% of 2026 full year revenue to be recognized in the first half and 60% in the second half. • Expect negative EBITDA in the first half of 2026 to be offset by positive EBITDA in the second half.

Q: Scott Searle at Roth Capital asked about visibility into 2026 guidance, unfactored opportunity pipeline, and impact of current military actions on near-term decision-making.

A: Visibility in pipeline is strong, encouraged by defense budget but some delays in contracting due to conflicts.

Q: Scott Searle also asked about OPEX in first quarter and M&A activity.

A: Expect lower operating expenses in 2026, R&D to be 10-12% of annual sales, higher in first half. Actively engaged in M&A, evaluating opportunities.

Q: Eric Martinuzzi at Lake Street asked about sales headcount and customer-funded development.

A: Always evaluating sales staff, will adjust as needed. Customer-funded development is a combination of existing and new customers.

Q: Brian Kinslinger at Alliance Global Partners asked about addressable market opportunity for Army vehicle enhanced vision system and revenue guidance visibility.

A: Early stage development, system agnostic to combat vehicle type. Expect 40% revenue in first half and 60% in second half of 2026, less pronounced seasonality than 2025.