Q1 2026 surge lifts One Stop Systems (NASDAQ: OSS) growth outlook
Rhea-AI Filing Summary
One Stop Systems, Inc. reported strong Q1 2026 results, with revenue from continuing operations rising 55.0% to $8.1 million, driven by higher defense and medical imaging sales and new combat vehicle programs. Gross margin improved to 51.6% from 45.5% on a more profitable mix, engineering efficiencies and better manufacturing absorption.
Operating expenses from continuing operations increased modestly by 2.5% to $4.8 million. The company narrowed its net loss from continuing operations to $0.4 million, or $(0.01) per diluted share, versus a $2.3 million loss a year earlier, and generated non-GAAP net income of $0.3 million, or $0.01 per diluted share.
Adjusted EBITDA from continuing operations turned positive at $0.2 million compared to a $1.6 million loss, while net cash provided by continuing operating activities was $4.0 million versus $1.5 million used previously. Nearly $15 million of Q1 bookings produced a 1.8x book-to-bill ratio. As of March 31, 2026, the company held $34.4 million in cash, cash equivalents and short-term investments and $44.7 million in working capital, and it reaffirmed a 2026 outlook for 20% to 25% revenue growth, gross margin of approximately 40%, and positive EBITDA and adjusted EBITDA.
Positive
- Strong top-line and margin performance: Q1 2026 revenue from continuing operations grew 55.0% year-over-year to $8.1 million, while gross margin expanded to 51.6% from 45.5%, reflecting a more profitable mix and better manufacturing absorption.
- Return to positive non-GAAP profitability and cash generation: The company reported non-GAAP net income of $0.3 million and adjusted EBITDA of $0.2 million from continuing operations, with $4.0 million of net cash provided by continuing operating activities.
- Robust bookings and supportive outlook: Nearly $15 million in Q1 bookings drove a 1.8x book-to-bill ratio and a trailing twelve-month book-to-bill above 1.2x, alongside 2026 guidance for 20%–25% revenue growth, gross margin of approximately 40%, and positive EBITDA and adjusted EBITDA.
Negative
- None.
Insights
Q1 2026 shows strong growth, margin expansion, and a swing to positive non-GAAP profitability.
One Stop Systems delivered 55.0% revenue growth from continuing operations to $8.1 million, with gross margin rising to 51.6%. Growth was driven by defense data storage, liquid-cooled medical servers and prototype systems for an enhanced vision program, indicating traction in targeted verticals.
The cost base was well controlled, with operating expenses up only 2.5% to $4.8 million. Net loss from continuing operations narrowed to $0.4 million, while non-GAAP net income reached $0.3 million and adjusted EBITDA turned positive at $0.2 million, signaling improving operating leverage.
Bookings of nearly $15 million produced a book-to-bill of 1.8x and a trailing twelve-month book-to-bill above 1.2x, supporting visibility into future revenue. With $34.4 million in cash and investments and $44.7 million in working capital as of March 31, 2026, plus guidance for 20–25% 2026 revenue growth and positive EBITDA, the company appears positioned for continued expansion, subject to defense budgets and component supply conditions outlined in its outlook.
8-K Event Classification
Key Figures
Key Terms
non-GAAP financial measures financial
adjusted EBITDA financial
book-to-bill ratio financial
discontinued operations financial
forward-looking statements regulatory
Earnings Snapshot
For full-year 2026, the company expects revenue growth of 20% to 25%, gross margin of approximately 40%, and positive EBITDA and adjusted EBITDA.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 6, 2026 |
One Stop Systems, Inc.
(Exact name of Registrant as Specified in Its Charter)
Delaware |
001-38371 |
33-0885351 |
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(State or Other Jurisdiction |
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2235 Enterprise Street #110 |
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Escondido, California |
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92029 |
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Registrant’s Telephone Number, Including Area Code: 760 745-9883 |
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
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Trading |
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Common Stock, $0.0001 par value per share |
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OSS |
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The Nasdaq Capital Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
The information provided below concerning the press release regarding the financial results of One Stop Systems, Inc. (the “Company”) in “Item 7.01 - Regulation FD Disclosure” of this Current Report on Form 8-K (this “Current Report”) is incorporated by reference into this Item 2.02.
Item 7.01 Regulation FD Disclosure.
On May 6, 2026, One Stop Systems, Inc. (the “Company”) issued a press release regarding the Company’s financial results for its first fiscal quarter ended March 31, 2026. A copy of that press release is furnished as Exhibit 99.1 hereto and incorporated herein by reference.
Exhibit 99.1 includes non-GAAP financial measures as defined in Regulation G. Exhibit 99.1 also includes a presentation of the most directly comparable financial measures calculated and presented in accordance with accounting principles generally accepted in the United States (“GAAP”), information reconciling the non-GAAP financial measures to the GAAP financial measures and a discussion of the reasons why the Company’s management believes that presentation of the non-GAAP financial measures provides useful information to investors regarding the Company’s financial condition and results of operations. The non-GAAP financial measures presented therein should be considered in addition to, not as a substitute for, or superior to, financial measures calculated and presented in accordance with GAAP.
Exhibit 99.1 also contains forward-looking statements. These forward-looking statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Forward-looking statements are based upon assumptions as to future events that may not prove to be accurate. Actual outcomes and results may differ materially from what is expressed in these forward-looking statements.
The information set forth under Item 7.01 of this Current Report on Form 8-K (“Current Report”), including Exhibit 99.1 attached hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of such section. The information in Item 7.01 of this Current Report, including Exhibit 99.1, shall not be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any incorporation by reference language in any such filing, except as expressly set forth by specific reference in such a filing. This Current Report will not be deemed an admission as to the materiality of any information in this Current Report that is required to be disclosed solely by Regulation FD.
Item 9.01 Financial Statements and Exhibits.
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Exhibits. |
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Exhibit |
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Description |
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99.1 |
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Press Release, dated May 6, 2026. |
104 |
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Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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ONE STOP SYSTEMS, INC. |
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Date: |
May 8, 2026 |
By: |
/s/ Michael Knowles |
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Michael Knowles |
One Stop Systems Reports Q1 2026 Results
First quarter of 2026 revenue increased 55.0% year-over-year to $8.1 million,
with gross margin increasing 610-basis points to 51.6%
Net cash provided by continuing operating activities of $4.0 million for first quarter of 2026
First quarter book-to-bill of 1.8x, supporting a TTM book-to-bill above 1.2x
ESCONDIDO, Calif. – May 6, 2026 – One Stop Systems, Inc. ("OSS" or the "Company") (Nasdaq: OSS), a leader in rugged Enterprise Class compute for artificial intelligence (AI), machine learning (ML), autonomy and sensor processing at the edge, reported results for the first quarter ended March 31, 2026. First quarter comparisons are to the same year-ago periods unless otherwise noted. On December 30, 2025, the Company closed a definitive agreement to sell all assets and operations of Bressner Technology GmbH. All operations, assets, and liabilities associated with the sale of Bressner have been classified as discontinued operations.
“Positive momentum continued into 2026, driven by significant year-over-year revenue growth, disciplined execution across the business, and continued expansion in profitability,” stated OSS President and CEO, Mike Knowles. “We are seeing increased demand for our enterprise-class, ruggedized compute platforms across both defense and commercial markets, which we believe supports OSS’s role as a critical enabler of next-generation AI, autonomy, and sensor-driven applications at the edge.”
“Importantly, higher demand is translating into tangible growth, with nearly $15 million in bookings during the first quarter, representing one of the strongest quarters of new bookings in our history. This produced a book-to-bill ratio of 1.8x, supporting our goal of maintaining a trailing twelve-month book-to-bill ratio above 1.2x. We are seeing an expansion in our pipeline and increased customer engagement, as a growing number of organizations turn to OSS for enterprise-class, deployable compute solutions. We believe this positions us to scale alongside some of the most advanced commercial and defense programs and reinforces our confidence in sustained, multi-year growth,” continued, Mr. Knowles.
“We also generated record free cash flow in the quarter from continuing operations, strengthening our balance sheet, and providing flexibility to pursue both organic and inorganic growth opportunities. As a result, we believe OSS is well positioned to capitalize on a multi-year growth opportunity as demand for enterprise class, ruggedized compute at the edge remains strong,” concluded Mr. Knowles.
2026 First-Quarter Financial Summary
Total revenue from continuing operations increased 55.0% to $8.1 million, from $5.2 million in the first quarter of 2025. The increase was primarily due to higher sales to a defense prime customer of data storage products to support the P-8A, higher sales to a medical imaging OEM of liquid-cooled server
products, and sales to a defense prime customer related to the design, development, and delivery of prototype compute systems for an enhanced vision system for combat vehicles.
Gross margin from continuing operations was 51.6% for the three months ended March 31, 2026, compared to 45.5% in the prior year quarter. The increase in gross margin was primarily due to a more profitable mix of revenue, engineering efficiencies in customer-funded development programs and improved manufacturing absorption due to higher production volume.
Total operating expenses from continuing operations increased 2.5% to $4.8 million. This increase was predominantly attributable to higher general and administrative expenses partially offset by lower marketing and selling and R&D expenses.
The Company reported a net loss from continuing operations of $0.4 million, or $(0.01) per diluted share for the three months ended March 31, 2026, as compared to a net loss from continuing operations of $2.3 million, or $(0.11) per share, in the prior year period. The Company reported non-GAAP net income from continuing operations of $0.3 million, or $0.01 per diluted share, compared to non-GAAP net loss of $1.7 million, or $(0.08) per share, in the prior year period.
Adjusted EBITDA, from continuing operations, a non-GAAP metric, was $0.2 million for the three months ended March 31, 2026, compared to an adjusted EBITDA loss, from continuing operations, of $1.6 million in the prior year period.
Net cash provided by continuing operations for the three months ended March 31, 2026, was $4.0 million, compared to net cash used in continuing operations of $1.5 million in the prior year period.
As of March 31, 2026, the Company reported cash, cash equivalents, and short-term investments of $34.4 million, restricted cash of $2.2 million, and total working capital of $44.7 million, compared to cash, cash equivalents, and short-term investments of $31.2 million, restricted cash of $2.2 million and total working capital of $45.3 million at December 31, 2025.
Income from Discontinued Operations, net of Income Taxes
Income from discontinued operations consists of income from the Company’s Bressner Technologies subsidiary, which was sold on December 30, 2025. Income from discontinued operations also includes the gain recognized on the sale.
Loss from discontinued operations, net of income taxes, was $0.2 million for the three months ended March 31, 2026, compared to income of $0.3 million in the prior year. The loss in the current year period was due to post-transaction adjustments to the gain on sale of the Bressner business for final net working capital balances.
2026 Full Year Outlook
The Company is executing a strategic plan targeting both commercial and defense markets, aiming to provide integrated solutions and establish OSS as a platform incumbent on large, multi-year programs. This approach is expected to drive long-term value by increasing predictable, recurring revenue and building a strong, multi-year backlog.
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The Company’s expectations for 2026 take into consideration the following: continued growth in core defense and commercial markets, higher customer funded development sales compared to 2025 levels, the potential impacts of supply chain issues for certain components such as memory, and the current outlook for the federal government budget. Changes in these assumptions could positively or negatively impact OSS’s results in 2026.
For the full year of 2026, OSS expects:
Conference Call
OSS will hold a conference call to discuss its results for the first quarter of 2026, followed by a question-and-answer period.
Date: Wednesday, May 6, 2026
Time: 10:00 a.m. ET (7:00 a.m. PT)
Toll-free dial-in: 1-800-717-1738
International dial-in: 1-646-307-1865
Conference ID: 21430 (required for entry)
Webcast: https://viavid.webcasts.com/starthere.jsp?ei=1756447&tp_key=f17a290f0f
A replay of the call will be available after 1:00 p.m. ET on May 6, 2026, through May 20, 2026.
Toll-free replay: 1-844-512-2921
International replay: 1-412-317-6671
Passcode: 1121430
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.
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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.
Non-GAAP Financial Measures
We believe that the use of adjusted earnings before interest, taxes, depreciation and amortization, or adjusted EBITDA, is helpful for an investor to assess the performance of the Company. The Company defines adjusted EBITDA as income (loss) before interest, taxes, depreciation, amortization, acquisition expense, impairment of long-lived assets, financing costs, government funded programs, fair value adjustments from purchase accounting, stock-based compensation expense, and expenses related to discontinued operations.
Adjusted EBITDA is not a measurement of financial performance under generally accepted accounting principles in the United States, or GAAP. Because of varying available valuation methodologies, subjective assumptions and the variety of equity instruments that can impact a company’s non-cash operating expenses, we believe that providing a non-GAAP financial measure that excludes non-cash and non-recurring expenses allows for meaningful comparisons between our core business operating results and those of other companies, as well as providing us with an important tool for financial and operational decision making and for evaluating our own core business operating results over different periods of time.
Our adjusted EBITDA measure may not provide information that is directly comparable to that provided by other companies in our industry, as other companies in our industry may calculate non-GAAP financial results differently, particularly related to non-recurring and unusual items. Our adjusted EBITDA is not a measurement of financial performance under GAAP and should not be considered as an alternative to operating income or as an indication of operating performance or any other measure of performance derived in accordance with GAAP. We do not consider adjusted EBITDA to be a substitute for, or superior to, the information provided by GAAP financial results.
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(Dollars may not calculate due to rounding)
Adjusted EPS excludes the impact of certain items and, therefore, has not been calculated in accordance with GAAP. We believe that exclusion of certain selected items assists in providing a more complete understanding of our underlying results and trends and allows for comparability with our peer company index and industry. We use this measure along with the corresponding GAAP financial measures to manage our business and to evaluate our performance compared to prior periods and the marketplace. The Company defines non-GAAP income (loss) as income or (loss) before amortization, government funded programs, impairment of long lived assets, stock-based compensation, expenses related to discontinued operations, and acquisition costs. Adjusted EPS expresses adjusted income (loss) on a per share basis using weighted average diluted shares outstanding.
Adjusted EPS is a non-GAAP financial measure and should not be considered in isolation or as a substitute for financial information provided in accordance with GAAP. These non-GAAP financial measures may not be computed in the same manner as similarly titled measures used by other companies. We expect to continue to incur expenses similar to the adjusted income from continuing operations and adjusted EPS financial adjustments described above, and investors should not infer from our presentation of these non-GAAP financial measures that these costs are unusual, infrequent or non-recurring.
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The following table reconciles non-GAAP net income and basic and diluted earnings per share:
(Dollars may not calculate due to rounding)
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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. Words such as, but not limited to, "anticipate," "aim," "believe," "contemplate," "continue," "could," "design," "estimate," "expect," "intend," "may," "might," "plan," "possible," "potential," "predict," "project," "seek," "should," "suggest," "strategy," "target," "will," "would," and similar expressions or phrases, or the negative of those expressions or phrases, are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These statements include but are not limited to statements in this press release relating to the Company’s expected financial performance and outlook for 2026, including anticipated revenue growth, gross margin and EBITDA expectations; anticipated demand trends across defense and commercial markets; expected customer-funded development activity; the Company’s ability to execute its strategic plan and secure positions on large, multi-year programs; opportunities related to defense and national security programs and commercial applications such as aerospace, autonomous systems, construction and healthcare; the anticipated benefits from the sale of Bressner Technology GmbH, including improved focus on higher-margin opportunities; and the potential impact of supply chain conditions, component availability and government budget considerations on the Company’s operations and results. The inclusion of forward-looking statements should not be regarded as a representation by One Stop Systems or its partners that any of its plans or expectations will be achieved, including but not limited to expected increases in sales, revenues and profitability, non-GAAP financial measures, our multi-year strategy, expected market growth, continued or new demand for our products, increase in margins, and operating expenses. These statements are based on the Company's current beliefs and expectations. 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, as well as those relating to current geopolitical conditions, defense spending changes, the Company’s ability to successfully scale production, manage program execution, and meet customer delivery schedules, semiconductor supply constraints, and customer concentration. 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
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ONE STOP SYSTEMS, INC. (OSS)
CONSOLIDATED BALANCE SHEETS
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ONE STOP SYSTEMS, INC. (OSS)
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars may not calculate due to rounding)
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ONE STOP SYSTEMS, INC. (OSS)
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
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