One Stop Systems, Inc.

Total revenue from continuing operations in Q2 2026 was $9.3 million, up 62.3% year over year from $5.8 million. Gross margin from continuing operations was 39.1% versus 41.3% in the prior-year quarter. GAAP net loss from continuing operations was $7.3 million, or $0.29 per share, versus a $2.5 million loss, or $0.11 per share, last year; non-GAAP net loss from continuing operations was $0.2 million, or $0.01 per share, versus $2.0 million, or $0.09 per share. Adjusted EBITDA loss from continuing operations was $0.3 million versus $1.8 million a year ago. Q2 bookings were $15.1 million and year-to-date bookings were more than $30 million, with a book-to-bill ratio of approximately 1.7. The company also recorded a $6.25 million legal settlement charge in Q2. For 2026, management raised revenue growth guidance to 25% to 30% from 20% to 25%, reiterated full-year gross margin of about 40%, and expects positive EBITDA and adjusted EBITDA.

Mike Knowles said the first half of 2026 exceeded internal expectations and showed the benefits of OSS’s shift to a more focused, pure-play rugged edge compute business. He emphasized that revenue growth is being driven by programs that started as development work years ago and are now moving into multi-year production and deployment, supported by a broader customer base and expanding pipeline. His tone was constructive and confident, while also noting the company will keep investing in R&D, personnel, and selective M&A.

Daniel Gabel highlighted that Q2 revenue from continuing operations was $9.3 million and gross margin was 39.1%, with the margin decline tied to product mix and earlier-stage work. He noted operating expenses rose to $11.3 million including the $6.25 million settlement charge, but excluding that item operating expenses increased only 2.9% to $5.1 million and were 54.3% of revenue versus 85.5% a year ago, showing operating leverage. He also said the balance sheet remained strong with $31.4 million in cash, cash equivalents, and short-term investments, no debt, and $629,000 of cash used in operations for the first half, driven largely by a $7.1 million inventory build to support demand and supply chain risk.

Analysts asked about the Army 360-degree vision programs, bookings durability, customer-funded development, customer diversification, supply chain, and when programs could move from R&D evaluation into LRIP or serial production. Management said the Army programs are in test and evaluation, bookings can be lumpy but the pipeline and book-to-bill support continued growth, and customer-funded development should stay strong in the second half. They also said supply chain lead times, especially for memory, remain long but the company used inventory buys to de-risk deliveries, and they do not yet have a precise timeline for early-stage programs to reach program-of-record or serial production.