One Stop Systems, Inc.

your program is about to begin.

Good day and welcome to the One Stop System Second Quarter 2025 Conference Call and Webcast. At this time all participants are in a listen-only mode. Later you'll have the opportunity to ask questions during the question and answer session. 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, and the company's multi-year 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. Please be advised that these forward-looking statements are covered under the Please also be advised that actual results could differ material 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-K, subsequent quarterly reports on Form 10-Q, current reports on Form 8-K, and recent press releases. Please read these reports and make sure that you are aware of the information 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 Mike Knowles. Please go ahead, sir.

Thank you, Aaron. Good morning, everyone, and thank you for joining today's call. I'm pleased to report another quarter of progress highlighted by -over-year growth in both revenue and gross margins for the second quarter. Most notably, we ended the quarter with one of the highest-level bookings in our history. This strong start to 2025 underscores the solid foundation we have built as we capitalize on increasing demand from both defense and commercial customers for our rugged, enterprise-class compute solution. As a reminder, we implemented several strategic actions in 2023 and 2024 to reposition OSS for growth. These included strengthening our leadership team with proven defense industry executives, launching a multi-year strategic plan, rebuilding our -to-market approach, expanding our sales pipeline, and driving higher gross margins. I'm proud of what our teams have accomplished across each of these initiatives and believe we're well positioned for strong growth and improved profitability in the second half of 2025 and beyond. We continue to pursue 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. Our pipeline is expanding across leading defense organizations and advanced commercial enterprises that seek trusted, proven partners like OSS. As I outlined last quarter, our sales strategy centers on three priorities. First, we are pursuing development work with prime platform vendors to design OSS into key platforms and become the incumbent supplier. We believe this will result in positioning OSS as the best value and provider of choice going forward. Next, we are focused on expanding the number of OSS systems that are integrated into existing platforms and customer systems. Finally, we are leveraging our integrated compute and storage architecture to deliver higher-value turnkey solutions. Validated in the success of these priorities, our OSS segment has generated one of the highest levels of bookings in our history over the first half of the year, totaling $25.4 million and representing a -to-bill ratio of 2.3. In Q1, we secured a record $6.5 million contract from the leading defense and technology company for 80 high-performance servers and field-programmable data array systems engineered for mobile tactical military environments. This win represents the first large-scale success from our strategy aimed at our goal of establishing OSS as an incumbent supplier on next-generation defense platforms. We also received a third order from a major defense contractor in Asia for an autonomous maritime application. The latest $340,000 order follows a $200,000 award in December 2024 and signals a transition from system development to production deployment. Based on current forecasts and the expected expansion of our customers' product line production, we expect approximately $4 million in cumulative sales between 2026 and 2029. In Q2, we received new awards from the U.S. Navy and the leading crime defense contractor to support the P-8A Poseidon reconnaissance aircraft. These awards, for $5 million and $3.9 million respectively, showcase our intent to become the compute and storage provider of choice for next-generation AI-driven applications at the edge, as well as our platform-focused growth strategy. To date, we have recognized lifetime contracted revenue of over $50 million on the P-8 platform. In addition, we have previously announced a five-year sole source supply agreement and a five-year extension for support, which involves equipping the P-8 aircraft to ground-based stations with high-capacity flash storage systems, fair flash storage canisters, and related support services. We also received a $2 million production order from a leading medical imaging OEM, underscoring the growing relevance of our compute and storage solutions in healthcare. We believe the total value of this program will represent over $25 million of revenue over the next five years. Across our pipeline, demand remains strong, supported by growing interests for our enterprise-class compute solutions, and we anticipate further commercial and defense announcements in the coming months. In addition, we are seeing signs of stabilization in our European markets that are served by our Bresner Operating Unit. Recent bookings and revenue within our Bresner segment have been in line with our targets, and Bresner remains on track to achieve higher sales and profitability for 2025 as compared to last year's results. Looking ahead, we believe OSS is uniquely positioned to capitalize on multi-year growth opportunities, 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 like OSS with proven expertise in rugged enterprise-class compute solutions. In support of this, we've increased R&D investments in 2025 to capitalize on emerging opportunities we see developing within our markets. In July, we announced Ponto, the world's first PCIe Gen 5 GPU expansion platform, purpose-built for commercial data centers. This product was designed to address the growing composable infrastructure market, a market expected to grow from $5.87 billion in 2024 to $28.44 billion by 2031, according to verified market research. This launch is aligned with our commercial strategy to deliver standard products in addition to customized solutions, and marks pivotal steps in OSS's evolution toward leading the transformation of composable infrastructure and enterprise-scale AI compute by also generating new commercial opportunities. Ponto is engineered to bring high-density enterprise-class compute optimized for composable infrastructure environments. It enables dynamic resource pooling and real-time orchestration of compute, storage, and networking to efficiently scale workloads up or down based on application demand. Ponto is ideally suited for space-constrained deployments such as remote data centers, corporate campuses, hospitals, and research-intensive universities, where performance, density, and operational flexibility are critical. We're excited about the long-term commercial opportunity this product and platform represents. We're actively engaged with potential customers about deploying our new data center solution, which we expect will begin contributing to revenue in 2026. Beyond the potential of our Ponto product, we are executing against a growing pipeline in both commercial and defense markets. Our delivery of a rugged compute solution for combat vehicles for the U.S. Army remains under test and evaluation, which is expected to continue for the remainder of the year. We continue to transform the business, and I am encouraged by the growing number of multi-year platforms we are now supporting, as demonstrated by the continued growth on the P-8 for the U.S. Navy and recently announced ongoing production orders for Medical Imaging Device Company and the Autonomous Maritime Product for Leading Defense Prime in Asia. Pursuing these types of platform opportunities is an important component of our strategy. We believe that our bookings growth to date in 2025 points to sustained demand for our products. We are receiving a more diverse mix of larger orders that are extending over multiple periods, compared to other order trends in prior years. These higher quality orders further support our strategy to build more predictable revenue streams, and we are building backlogs for 2026 as our business scales to meet rising market demand. Consistent with our expectation for stronger second half performance in 2025, we expect OSS segment revenue approximately $19 million in the second half of the year, compared to $11 million in the first half of this year. At this level of second half revenue, we would expect positive EBITDA in our OSS segment in the second half of 2025. As a result, we expect full year revenue within our OSS segment of approximately $30 million, representing over 20% -over-year growth. On a consolidated basis, we continue to expect revenue of $59 million to $61 million for the full year of 2025, based on current bookings, orders, and market conditions. In addition, we expect EBITDA to break even for the full year of 2025. I'm excited about the opportunities ahead and look forward to reporting on continued execution and success in the quarters to come. Finally, I want to thank our entire team for their dedication, innovation, and relentless focus on delivering results for our customers and shareholders. So with this overview, I'd like to turn the call over to Dan. Thank you, Mike, and