OSS Announces $6 Million in Combined Platform Contract Renewals for Two Existing U.S. Department of Defense Programs

Rhea-AI Summary

One Stop Systems (OSS) has secured two significant contract renewals with the U.S. Department of Defense, totaling $6 million. The first is a $4 million contract for the P-8A Poseidon Aircraft program, including production orders, tech refresh, and a 5-year support extension under a $36 million sole-source supplier agreement. This contract involves providing high-capacity flash storage systems and support services.

The second renewal is a $2 million contract for upgrading PCIe infrastructure supporting sonar sensor processing on the Virginia Class Submarine. This sole-source agreement, ongoing since 2010, will support the program for at least another decade. Prototypes will be delivered in early 2025, with production systems following later in the year.

Positive

• Secured $6M in contract renewals from U.S. Department of Defense
• Maintains position as sole-source supplier for both military programs
• P-8A contract part of larger $36M, 5-year supplier agreement
• Virginia Class Submarine contract extends program support for 10+ years
• Expected production and design revenue in H2 2025

Negative

• None.

Insights

Defense Technology Analyst

These $6 million in contract renewals represent more than just revenue - they demonstrate OSS's entrenched position in critical military infrastructure. The sole-source supplier status for both programs creates a significant competitive moat, as military qualification processes and security requirements create substantial barriers to entry for competitors.

The P-8A Poseidon contract is particularly noteworthy as it combines hardware, software, and support services. The inclusion of OSS's proprietary Ion Accelerator™ software indicates a deeper technological integration that makes platform switching more challenging and costly for the military. The 5-year support extension provides valuable recurring revenue visibility and operational stability.

The Virginia Class submarine contract renewal, extending the relationship beyond its current 13-year tenure, showcases the long-term nature of defense platform positions. The 10-year support horizon for the PCIe upgrade demonstrates the extended lifecycle of military programs, providing predictable revenue streams and opportunities for technology refreshes.

These renewals validate OSS's strategic focus on ruggedized edge computing solutions for demanding military applications. The company's ability to maintain and expand these platform positions suggests strong execution and customer satisfaction. With additional platform opportunities in the pipeline, OSS is well-positioned to leverage its proven capabilities and incumbent status to secure new military programs.

Renewals include a $4 million contract for radar processing on the P-8A Poseidon Aircraft and a $2 million contract to upgrade sonar sensor processing for the Virginia Class Submarine

Orders reflect OSS’ leadership in providing PCIe technologies and flash storage solutions for demanding, ruggedized, and high-performance compute applications that are needed for the modern battlefield

ESCONDIDO, Calif., Feb. 20, 2025 (GLOBE NEWSWIRE) -- One Stop Systems, Inc. (OSS or the Company) (Nasdaq: OSS), a leader in rugged Enterprise Class compute for artificial intelligence (AI), machine learning (ML) and sensor processing at the edge, today announced two contract renewals under longstanding U.S. Department of Defense platform programs. Renewals include an approximate $4 million contract to support data recording for radar sensor processing on the P-8A Poseidon Reconnaissance Aircraft, including a 5-year support contract and an approximate $2 million contract to upgrade sonar sensor processing for the Virginia Class Submarine. OSS expects design and production elements to occur in the second half of 2025.

“We are pleased to announce two program renewals, highlighting our recurring incumbent platform positions and the proven hardware and software capabilities we have created for demanding military applications. These longstanding programs face periodic technology upgrade cycles, and receiving contract renewals is a testament to the continual value we provide in delivering high-performance edge computing solutions. These platform positions are critical components of our long-term strategic plan, and based on our current pipeline, we hope to announce additional platform opportunities in the coming quarters,” stated OSS President and CEO, Mike Knowles.

P-8A Poseidon Aircraft Renewal and Tech Refresh
The approximate $4 million in awards include a follow-on production order, a tech refresh contract to expand the scope of the OSS software provided as part of the current $36 million, 5-year sole-source supplier agreement, and a 5-year extension for support. This agreement involves equipping the Navy’s P-8A reconnaissance aircraft and ground base stations with high-capacity flash storage systems, spare flash storage canisters, and support services.

Designed and manufactured by OSS, these full military-spec storage systems feature hot-swappable canisters of high-capacity NVMe flash storage that may be easily removed and securely transported to ground stations upon the aircraft’s return to base. Controlled by the Company’s exclusive Ion Accelerator™ storage software, these flash storage arrays store high volumes of real-time data collected from the aircraft’s advanced airborne sensors comprised of multifunction radar and associated tracking systems.

Virginia Class Submarine Renewal
The approximate $2 million project is a renewal of a sole-source supplier agreement that OSS has been operating under since 2010. The agreement, through a major defense contractor, involves equipping the U.S. Navy’s Virginia Class submarine with PCIe infrastructure that supports sonar sensor processing capabilities. OSS won a contract to upgrade the PCIe accelerator systems with newer PCIe technology that will support the program for at least another 10 years. Prototypes for the upgraded accelerators will be delivered in early 2025, with production systems later in 2025.

About One Stop Systems
One Stop Systems, Inc. (Nasdaq: OSS) is a leader in AI enabled solutions for the demanding 'edge'. OSS designs and manufactures Enterprise Class compute and storage products that enable rugged AI, sensor fusion and autonomous capabilities without compromise. These hardware and software platforms bring the latest data center performance to harsh and challenging applications, whether they are on land, sea or in the air.

OSS products include ruggedized servers, compute accelerators, flash storage arrays, and storage acceleration software. These specialized compact products are used across multiple industries and applications, including autonomous trucking and farming, as well as aircraft, drones, ships and vehicles within the defense industry.

OSS solutions address the entire AI workflow, from high-speed data acquisition to deep learning, training and large-scale inference, and have delivered many industry firsts for industrial OEM and government customers.

As the fastest growing segment of the multi-billion-dollar edge computing market, AI enabled solutions require-and OSS delivers-the highest level of performance in the most challenging environments without compromise.

OSS products are available directly or through global distributors. For more information, go to www.onestopsystems.com. You can also follow OSS on X, YouTube, and LinkedIn.

Forward-Looking Statements
One Stop Systems cautions you that statements in this press release that are not a description of historical facts are forward-looking statements. These statements are based on the Company's current beliefs and expectations. The inclusion of forward-looking statements should not be regarded as a representation by One Stop Systems or its partners that any of our plans or expectations will be achieved, including but not limited to the potential and/or the results of program renewals with defense contractors and the U.S. Department of Defense, any actual revenue derived from the agreements, the future adoption of technologies or applications, and the expansion of the Company’s offerings and/or relationship with different branches of the U.S. Armed Forces. Actual results may differ from those set forth in this press release due to the risk and uncertainties inherent in our business, including risks described in our prior press releases and in our filings with the Securities and Exchange Commission (SEC), including under the heading "Risk Factors" in our latest Annual Report on Form 10-K and any subsequent filings with the SEC. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof, and the company undertakes no obligation to revise or update this press release to reflect events or circumstances after the date hereof. All forward-looking statements are qualified in their entirety by this cautionary statement, which is made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

Media Contacts:
Robert Kalebaugh
One Stop Systems, Inc.
Tel (858) 518-6154
Email contact

Investor Relations:
Andrew Berger
Managing Director
SM Berger & Company, Inc.
Tel (216) 464-6400
Email contact

FAQ

What is the total value of OSS's recent Department of Defense contract renewals?

OSS secured $6 million in combined contract renewals, comprising a $4 million contract for the P-8A Poseidon Aircraft and a $2 million contract for the Virginia Class Submarine.

What is the scope of OSS's P-8A Poseidon Aircraft contract renewal?

The $4 million P-8A contract includes follow-on production, tech refresh for expanded software scope, and a 5-year support extension, part of a $36 million sole-source supplier agreement.

When will OSS begin delivering products for the Virginia Class Submarine contract?

OSS will deliver prototypes for the upgraded PCIe accelerators in early 2025, with production systems scheduled for later in 2025.

How long has OSS been a supplier for the Virginia Class Submarine program?

OSS has been operating as a sole-source supplier for the Virginia Class Submarine program since 2010, with the recent renewal extending support for at least another 10 years.