One Stop Systems, Inc.

Good day and welcome to the One Stop Assistance Four Quarter 2025 Conference Call and Webcast. At this time, all participants are in a listen-only mode. Later, you will 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, the company's notary 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 forelooking 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 harbor for these statements. Please also be advised that actual results could differ materially from those stated or implied by the forelooking 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 other future filings that OSS will make with the SEC. OSS disclaims any duty to update or revise its forelooking statements. except as required by applicable law. It is now my pleasure to turn the conference over to OSS President and CEO, Mr. Mike Knowles. Please go ahead, sir.

Thank you, Julie.

Good morning, everyone, and thank you for joining today's call. I'm pleased to report that 2025's positive momentum has carried into 2026, and we are off to a strong start with significant year-over-year growth in both revenue and profitability. These results reflect discipline execution by our team and suggest accelerating demand for our enterprise-class, ruggedized compute platforms across both defense and commercial markets. Importantly, we believe these trends further validates OSS's position as a critical enabler of next-generation AI, autonomy, and sensor-driven applications at the edge, markets that we expect to drive sustained long-term growth for years to come. Before we review the specifics of the first quarter, I want to remind everyone on today's call that our first quarter results reflect the opportunistic sale of our wholly owned subsidiary, Bresner, in December of 2025 for proceeds of $22.4 million, subject to final closing working capital balances. As a result, Bresner's historical financial results are now reported as discontinued operations, and the results we are discussing today reflect the performance of the remaining core OSS business. The sale of Bresner was a strategic transaction that we believe unlocked value for shareholders, simplified our operating structure, strengthened our balance sheet, and sharpened our focus on higher margin, higher growth opportunities within our core business. We believe our first quarter performance is already demonstrating the benefits of this transition and reinforcing the earning power of our go-forward strategy. Today, OSS is a pure play provider of ruggedized AI compute platforms for edge applications. As a result, we entered 2026 as a more focused and scalable company, fully aligned around delivering market leading enterprise class compute solutions to both defense and commercial markets. And I'm very pleased with our strong start to the year. Looking at our operational performance in the first quarter, we delivered strong results with revenue increasing 55% year over year to $8.1 million, reflecting growth across both our defense and commercial businesses. Highlights in the defense market include increased shipments to support the PA Poseidon aircraft, a long-range multi-mission maritime control aircraft used for anti-submarine warfare, surveillance, and reconnaissance operations. In addition, we benefited from increased activity related to the design, development, and delivery of prototype compute systems for next-generation enhanced vision systems for U.S. Army combat vehicles. These programs highlight our role supporting mission-critical applications and our ability to scale alongside large multi-year defense platforms. On the commercial side, we experienced increase in demand from a medical imaging OEM, including shipments of our liquid-cooled server platforms, reflecting the growing adoption of our solutions in high-performance, data-intensive environments. Taken together, these drivers demonstrate both production-level demand and early-stage program engagement, which we believe will position us well for continued growth. As our sales grow, we are seeing increased market awareness and stronger customer engagement with a growing number of organizations turning to OSS for enterprise-class deployable compute solutions. During the quarter, we generated nearly $15 million in new bookings that we expect to deliver in 2026 and 2027. I am pleased to report that this was one of the strongest quarters in our history and resulted in a book-to-bill ratio of 1.8, supporting our goal to maintain a trailing 12-month book-to-bill ratio above 1.2. Bookings during the quarter were driven by several key program wins across both defense and commercial markets. First, we announced aggregate new awards of $10.5 million from the U.S. Navy and a leading U.S.-based prime defense contractor in support of the PA Poseidon reconnaissance aircraft, $7.5 million of which was booked during the first quarter, with the remainder falling in last year's fourth quarter. With these latest wins, OSS has secured more than $65 million in total contracted revenue associated with this mission-critical aircraft to date, including over $23 million awarded since the beginning of 2025. Second, we received a new $1.1 million initial order from a top-tier commercial aerospace prime contractor to support next-generation in-flight entertainment systems, which is expected to be delivered by the fourth quarter of 2026. We believe this platform has the potential to generate more than $6.5 million in total revenue over the next five years. Third, we secured a new engagement with a commercial robotics customer manufacturing autonomous construction and mining equipment. We expect this program to generate approximately $2 million in orders in 2026 with a five-year opportunity in the range of an aggregate $10 million to $15 million. Importantly, we displaced an incumbent solution to win this business, we believe highlighting the strength of our technology. More recently, in April 2026, we announced a new relationship with a company building a network of autonomous energy nodes for emerging alternative energy-powered data centers. While the initial order was valued at over $500,000, we expect this customer to scale to an aggregate $10 million opportunity over the next five years. We believe this opportunity reflects how our solutions are increasingly being deployed in next generation data center architectures, where power efficiency, scalability, and enterprise class compute are critical to supporting AI and data intensive workloads. Recent program wins reflect both expansion within existing platforms and new customer additions, underscoring the breadth and durability of demand we are seeing across our markets. We are also seeing a clear shift in the size and composition of our bookings. Orders are becoming larger, more programmatic, and increasingly tied to multi-year deployments across a broader set of customers. In fact, our first quarter bookings of $15 million nearly equal the total bookings we generated for the full year of 2023. In addition, our average order size has increased nearly three times since 2023. And over the past 12 months, we have added a growing number of new programs and projects, further strengthening our long-term growth profile. Supporting the momentum we are seeing in both sales and bookings is the continued expansion of our pipeline of opportunities. Three years ago, we believed our pipeline lacked structure, consistency, and alignment with our long-term strategy. Since then, we have made a deliberate effort to build a more strategic and disciplined pipeline, one that is closely aligned with our commercial and defense go-to-market strategy, our technology roadmap, and applications that we can believe can scale across both markets. I am pleased with the progress we have made, And more companies across our core defense and commercial end markets are pursuing the company's rugged enterprise class compute solutions. As a result, we believe our pipeline has expanded significantly from roughly $1 billion previously. These opportunities are primarily concentrated in North America. However, we are starting to see more international opportunities emerge. This has the potential to further increase the size and diversity of our pipeline materially over time. We believe that underlying this growth are strong and durable market dynamics. Demand for enterprise-class compute is accelerating as AI, machine learning, and sensor fusion applications increasingly move from data center to the edge. This shift is driving a new generation of mission-critical applications across both defense and commercial market areas, where OSS is well-positioned given our expertise in ruggedized compute platforms. Alongside the growth in our pipeline, we are continuing to invest in advancing our technology platform to support the next generation of AI-enabled systems operating at the edge. R&D remains a critical component of our strategy, and we are increasingly working alongside customers on customer-funded development programs that allow us to design and deploy purpose-built compute architectures for emerging applications. These engagements are a key driver of our long-term growth. We believe they position OSS early in the lifecycle of next-generation platforms, deepen our relationship with key customers, and create a clear pathway to the future of production programs. as these technologies move from development to deployment. We are seeing growing traction within U.S. Army labs, defense research organizations, and large defense primes as they reassess current requirements and plan for future compute architectures. And OSS is becoming increasingly embedded as a trusted provider of enterprise class compute solutions supporting next generation warfighting capabilities. These efforts span a range of applications, including advanced vision systems, sensor and data processing, autonomy, and AI-enabled situational awareness. While these development programs typically take multiple years to mature, we are encouraged by our expanding role within the Department of War ecosystem and we believe these engagements position OSS to participate in a growing number of future production programs. Many of the programs we discussed earlier today began as development efforts where we worked alongside customers to design highly specialized compute solutions for demanding applications. As those systems mature and transition into production platforms, we believe they can create multi-year revenue opportunities for OSS. Customer-funded development increased 145% year-over-year in the first quarter, and we expect additional growth through 2026, supported by new defense and commercial development efforts. At the same time, we continue to advance our core technology roadmap. During the fourth quarter of 2025, we led the way in our market with the introduction of our next generation PCIe Gen 6 product portfolio that is designed to address the rapidly increasing bandwidth and data processing requirements associated with artificial intelligence, machine learning, and sensor-driven workloads. PCIe Gen 6 significantly expands data throughput capabilities and will play an important role in enabling the next generation of AI accelerators and GPUs, high-speed storage systems, and advanced compute architectures required for AI applications at the edge. We continue to believe these technology investments position OSS well to support the growing demand for high-performance compute infrastructure as AI-enabled systems continue to expand across both defense and commercial platforms. We believe that OSS is well positioned for long-term growth, and we are encouraged by the strong start to 2026. As we move through the year, we are focused on helping provide the compute and storage needs of our customers, supporting our customers' development efforts, and converting our pipeline to sales. We also continue to closely manage several operational factors, including supply chain dynamics. In particular, we are seeing longer lead times for certain components, including memory, which may impact the timing of certain shipments throughout the year. As a result, we are maintaining our guidance for 2026, and we expect revenue growth in the range of 20% to 25%, supported by our growing pipeline and platform opportunities, increasing customer engagement, higher customer-funded development activities, and the continued transition of development programs into production deployments. We expect gross margins of approximately 40%, reflecting product mix and an increasing contribution for customer-funded development programs, which is an important component of our strategy to advance new technologies alongside our customers. At the same time, we expect to generate positive EBITDA and adjusted EBITDA while continuing to invest in key areas of the business, including sales expansion and customer support resources that support our growing pipeline and deepen relationships with strategic customers. With a strong balance sheet, expanding customer relationships, and a growing pipeline of opportunities driven by the adoption of AI-enabled systems, We believe OSS is well positioned to continue building momentum and delivering long-term value for our shareholders. We also believe our strengthened balance sheet provides the flexibility to make strategic investments in our business and pursue selective strategic acquisitions that could complement our technology platform, expand our customer base, and enhance our capabilities over time. 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 now turn the call over to Dan.