OSS · One Stop Systems, Inc.

One Stop Systems' shareholder letter highlights a successful transformation since June 2023, shifting from declining revenue and 29.5% gross margins—including low-margin legacy media business—to a focused rugged Enterprise Class compute provider for AI, ML, and edge sensor processing in defense and commercial markets. 2025 results reflect this pivot: continuing operations revenue surged 31.2% to $32.2 million with gross margins expanding to 49.6%, driven by defense traction like the P-8 Poseidon program ($65 million total contracts, $23 million new since early 2025) and commercial wins in robotics, aerospace ($6 million multi-year), and medical imaging (>$25 million potential over five years). Q4 capped the year with record EPS of $0.08 from continuing operations, underscoring execution amid market tailwinds in edge AI and autonomy. The accelerated December 2025 sale of Bressner for $22.4 million—originally planned later—bolstered the balance sheet, eliminated lower-margin exposure, and enabled pure-play focus, enhancing financial flexibility for growth investments. Looking to 2026, management guides 20-25% revenue growth, ~40% gross margins, and positive EBITDA, supported by 1.2x book-to-bill, expanding pipeline, multi-year programs, and recurring revenue potential. Risks noted include supply chain issues and federal budgets, but positioning in high-growth defense (sensor fusion, autonomy) and commercial verticals signals sustained momentum and long-term value creation for investors.