OSS Segment revenue increased 43.4% to $9.3 million, with gross margin of 45.6% for the third quarter of 2025
Revenue growth, combined with consolidated gross margin of 35.7% drives positive net income and $1.2 million of Adjusted EBITDA for the third quarter of 2025
Company raises 2025 full year consolidated revenue guidance to $63 to $65 million
ESCONDIDO, Calif., Nov. 05, 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), autonomy and sensor processing at the edge, reported results for the third quarter ended September 30, 2025. Third-quarter and nine-month comparisons are to the same year-ago periods unless otherwise noted.
"OSS delivered a strong third quarter with significant consolidated revenue growth, higher gross margin, and positive EBITDA and net income," stated OSS President and CEO, Mike Knowles. "Since repositioning the Company in 2023, we believe we have built a powerful foundation for growth by strengthening our sales pipeline, investing in R&D, and pursuing platform opportunities designed to create a more predictable and scalable business model. The results this quarter mark an important inflection point for OSS, reflecting the success of our multi-year growth plan, the strength of our product portfolio, and the dedication of our team."
"As we execute against our growth initiatives, we aim to capitalize on favorable demand across our commercial and defense markets. To support and accelerate these opportunities, we proactively strengthened our balance sheet after the end of the third quarter through a registered direct offering that added approximately $12.5 million in gross proceeds. This enhanced financial position, combined with improving fundamentals, provides the flexibility to fund our current operations, pursue strategic initiatives, and capitalize on the exciting growth opportunities emerging across our global markets," Mr. Knowles continued.
"Looking ahead, our solid execution and year-to-date performance gives us the confidence to raise our full year 2025 consolidated revenue guidance range from $59 - $61 million to $63 - $65 million, while reaffirming our goal to achieve positive annual EBITDA," concluded Mr. Knowles.
2025 Third-Quarter Financial SummaryConsolidated revenue increased 36.9% to $18.8 million, from $13.7 million in the third quarter of 2024.
OSS segment revenue increased 43.4%, as compared to the same period in 2024. The increase was primarily due to higher revenue related to the development and production of custom server products for a defense customer, higher shipments of data storage products to a defense prime customer, shipments of server products to a medical device customer, and shipments of compute and server products for an autonomous maritime application to a customer in Asia.
Bressner segment revenue increased 31.1%, as compared to the same period in 2024 primarily due to higher demand across multiple industrial end markets.
The following table sets forth net revenue by segment for the three months ended September 30, 2025, and September 30, 2024 (Dollars may not calculate due to rounding):
Three Months Ended
Entity:
September 30,2025
% of Net Revenue
September 30,2024
% of Net Revenue
% Change
OSS
$
9,262,517
49.4
%
$
6,460,290
47.2
%
43.4
%
Bressner
9,493,682
50.6
%
7,240,807
52.8
%
31.1
%
Total net revenue
$
18,756,199
100.0
%
$
13,701,097
100.0
%
36.9
%
Consolidated gross margin was 35.7% for the three months ended September 30, 2025, compared to (12.5)% in the prior year quarter, which was impacted by an inventory charge. Gross margin in the prior year quarter, excluding the inventory charge, was 32.0%. On a segment basis, the OSS segment had a gross margin of 45.6%, as compared to the prior year of (51.2)%. OSS segment gross margin in the prior year, excluding the inventory charge, was 43.2%. The increase in OSS segment gross margin was due to the non-recurrence of a $6,099,259 inventory charge recognized in the prior year quarter and a more profitable mix of products. The Company's Bressner segment had a gross margin percentage of 26.0%, compared to 22.0% in the same period last year, primarily due to a more profitable mix of products shipped in the quarter.
Total operating expenses increased 22.0% to $6.1 million. This increase was predominantly attributable to higher personnel costs and higher R&D expenses due to higher engineering costs to support targeted investments in new product development.
The Company reported net income of $0.3 million, or $0.01 per share for the three months ended September 30, 2025, as compared to a net loss of $6.8 million, or $(0.32) per share, in the prior year period. The Company reported non-GAAP net income of $0.7 million, or $0.03 per share, compared to non-GAAP net loss of $6.4 million, or $(0.30) per share. Net loss and non-GAAP net loss for the three-month period ended September 30, 2024, included a $6.1 million inventory charge.
Adjusted EBITDA, a non-GAAP metric, was $1.2 million for the three months ended September 30, 2025, compared to adjusted EBITDA loss of $6.0 million, inclusive of a $6.1 million inventory charge, in the prior year period.
As of September 30, 2025, the Company reported cash and short-term investments of $6.5 million and total working capital of $23.1 million, compared to cash and short-term investments of $10.0 million and total working capital of $24.0 million at December 31, 2024.
On October 1, 2025, OSS completed a registered direct offering with participation from certain new and existing institutional investors, resulting in gross proceeds of approximately $12.5 million, before deducting placement agent commissions and other offering expenses.
2025 Nine Months Financial SummaryConsolidated revenue was $45.1 million, compared to $39.6 million for the same period last year. The Company's OSS segment saw an increase in revenue of $2.7 million, or 15.5%. This increase was primarily driven by higher revenues related to development and production of custom server products for a defense customer, higher shipments of data storage products to a defense prime customer and to a U.S. government customer, and the initiation of shipments of server products to a medical device customer. Bressner experienced an increase in revenue of $2.9 million, or 13.0%, as compared to the same period in 2024, due to higher book-and-ship revenue in the period, higher demand across multiple industrial end markets, as well as the impact of foreign exchange rates.
The following table sets forth net revenue by product category for the nine months ended September 30, 2025, and September 30, 2024, by segment:
Nine Months Ended
Entity:
September 30,2025
% of Net Revenue
September 30,2024
% of Net Revenue
% Change
OSS
$
20,230,038
44.8
%
$
17,516,196
44.3
%
15.5
%
Bressner
24,893,833
55.2
%
22,038,017
55.7
%
13.0
%
Total net revenue
$
45,123,871
100.0
%
$
39,554,213
100.0
%
14.1
%
Consolidated gross margin was 33.5%, as compared to 13.5% in the same year-ago quarter. Prior year gross margin, excluding the inventory charge, was 28.9%. OSS segment gross margin was 44.4%, an increase of 44.6 percentage points from the same period a year ago. Bressner segment gross margin was 24.6%, as compared to 24.4% in the same period in 2024.
Total operating expenses increased 17.4% to $18.3 million. This increase was predominantly attributable to higher personnel costs, impact of foreign exchange rates, and higher research and development expenses due to higher engineering costs to support targeted investments in new product development.
OSS reported a net loss of $3.8 million, or $(0.17) per share, as compared to a net loss of $10.5 million, or $(0.50) per share, in the prior year. The Company reported a non-GAAP net loss of $2.2 million, or $(0.10) per share, compared to non-GAAP net loss of $9.1 million, or $(0.43) per share.
Adjusted EBITDA, a non-GAAP metric, was a loss of $1.0 million, an increase from an adjusted EBITDA loss of $8.0 million in the prior year.
2025 Full Year OutlookThe Company is executing a strategic plan targeting both commercial and defense markets within its OSS segment, 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.
As a result of stronger than expected bookings over the trailing-twelve months, the Company has increased its previously disclosed 2025 full-year financial guidance. OSS now anticipates consolidated revenue of $63 million to $65 million for the full year of 2025, compared to its prior guidance of $59 million to $61 million. Current revenue guidance includes expected OSS segment revenue of approximately $30 million to $32 million.
The Company believes it will be EBITDA positive on a consolidated basis for the full year of 2025.
Conference CallOSS will hold a conference call to discuss its results for the third quarter of 2025, followed by a question-and-answer period.
Date: Wednesday, November 5, 2025Time: 10:00 a.m. ET (7:00 a.m. PT)Toll-free dial-in: 1-800-717-1738International dial-in: 1-646-307-1865Conference ID: 26561 (required for entry)Webcast: https://viavid.webcasts.com/starthere.jsp?ei=1731362&tp_key=85431bf52f
A replay of the call will be available after 1:00 p.m. ET on November 5, 2025, through November 19, 2025.
Toll-free replay: 1-844-512-2921International replay: 1-412-317-6671Passcode: 1126561
About One Stop SystemsOne 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.
Non-GAAP Financial MeasuresWe 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.
For the Three Months EndedSeptember 30,
For the Nine Months EndedSeptember 30,
2025
2024
2025
2024
Net income (loss)
$
263,487
$
(6,815,384
)
$
(3,774,876
)
$
(10,499,551
)
Depreciation
225,768
252,142
676,777
815,420
Amortization of right-of-use assets net of change in lease liability
(2,708
)
(10,739
)
47,136
32,373
Stock-based compensation expense
444,621
458,011
1,572,956
1,423,949
Interest expense
15,065
16,465
42,941
70,910
Interest income
(36,433
)
(116,596
)
(159,240
)
(376,940
)
Provision for income taxes
266,881
167,086
600,535
569,382
Adjusted EBITDA
$
1,176,681
$
(6,049,015
)
$
(993,771
)
$
(7,964,457
)
(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.
The following table reconciles non-GAAP net income and basic and diluted earnings per share:
For the Three Months EndedSeptember 30,
For the Nine Months EndedSeptember 30,
2025
2024
2025
2024
Net income (loss)
$
263,487
$
(6,815,384
)
$
(3,774,876
)
$
(10,499,551
)
Stock-based compensation expense
444,621
458,011
1,572,956
1,423,949
Non-GAAP net income (loss)
$
708,108
$
(6,357,373
)
$
(2,201,920
)
$
(9,075,602
)
Non-GAAP net income (loss) per share:
Basic
$
0.03
$
(0.30
)
$
(0.10
)
$
(0.43
