{"id":1014623,"date":"2026-10-28T10:48:59","date_gmt":"2026-10-28T14:48:59","guid":{"rendered":"https:\/\/www.marketnewsdesk.com\/index.php\/one-stop-systems-reports-q3-2026-results\/"},"modified":"2026-10-28T10:48:59","modified_gmt":"2026-10-28T14:48:59","slug":"one-stop-systems-reports-q3-2026-results","status":"publish","type":"post","link":"https:\/\/www.marketnewsdesk.com\/index.php\/one-stop-systems-reports-q3-2026-results\/","title":{"rendered":"One Stop Systems Reports Q3 2026 Results"},"content":{"rendered":"
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\n Year-over-year revenue growth for the third quarter of 35.9% driven primarily by expanding commercial customer base across healthcare, aerospace and data center markets<\/em>\n <\/p>\n

\n Year-to-date book-to-bill of 1.46x reflects strong demand and robust pipeline <\/em>
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\n across defense and commercial markets<\/em>\n <\/p>\n

\n Management increases revenue growth guidance to approximately 40% for 2026, from its prior guidance of 25% to 30%, as a result of stronger than expected third quarter sales and orders<\/em>\n <\/p>\n

ESCONDIDO, Calif., Oct. 28, 2026 (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, 2026. Third quarter and nine-month 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.<\/p>\n

\u201cOur third quarter results were better than expected and reflect accelerating momentum across our business, supported by growing demand for our Enterprise Class compute solutions and the expanding diversity of our customer base,\u201d stated OSS President and CEO, Mike Knowles. \u201cWe are particularly encouraged by the composition of our third quarter revenue growth, which was primarily driven by higher sales to commercial customers across healthcare, commercial aerospace, and specialized data center applications, complementing our established strength and continued momentum in defense markets. Expanding customer diversification, combined with higher average order values, reflects growing demand for our differentiated compute solutions across multiple end markets.\u201d<\/p>\n

\u201cOur pipeline remains robust, with a year-to-date book-to-bill ratio of 1.46x reflecting strong underlying demand for our solutions. While third quarter bookings were influenced by the timing of customer orders, we expect several large, multimillion-dollar orders to close during the fourth quarter and continue to advance what we believe to be potentially transformative opportunities across our core defense and commercial markets. We believe these opportunities reflect our strengthening competitive position and provide a solid foundation for sustained growth,\u201d continued Mr. Knowles.<\/p>\n

\u201cThird quarter adjusted EBITDA increased 33.7% year-over-year to $0.3 million. In the quarter, we recognized $0.5 million of bad debt expense related to the bankruptcy filing of a former customer and $0.4 million of legal expenses related to a previously disclosed settlement with a former customer. Excluding these two items, third quarter adjusted EBITDA would have been approximately $1.2 million, or nearly 10% of third quarter total revenue, demonstrating the underlying profitability and operating leverage of our business. We are excited about the opportunities ahead in the fourth quarter and as we enter 2027, and remain confident in our ability to drive sustainable, profitable growth and long-term shareholder value,\u201d concluded Mr. Knowles.<\/p>\n

\n 2026 Third-Quarter Financial Summary<\/strong>\n <\/p>\n

Total revenue from continuing operations increased to $12.6 million, from $9.3 million in the third quarter of 2025. The 35.9% year-over-year increase in total revenue was driven by revenue generated from new customers in 2026 and from higher production volumes with certain existing customers. Key drivers of the revenue increase included initial deliveries to a new customer developing a network of autonomous energy nodes engineered to power compute payloads, higher production deliveries to a commercial aerospace customer for in-flight entertainment systems, and higher sales to a medical imaging OEM to support a breast cancer screening application.<\/p>\n

Gross margin from continuing operations was 42.6% for the three months ended September 30, 2026, compared to 45.6% in the prior year quarter. The year-over-year decrease in gross margin percentage was primarily driven by product mix, partially offset by more favorable manufacturing absorption.<\/p>\n

Total operating expenses from continuing operations increased 33.7% to $6.2 million. The $1.6 million year-over-year increase in operating expenses was primarily due to $0.5 million of bad debt expense recognized for a receivable with a former customer that entered bankruptcy, $0.4 million of legal fees associated with a previously disclosed legal settlement with a former customer, and $0.5 million of higher stock-based compensation expense due to a higher grant date fair value of RSUs expensed in the current year period. Total operating expenses were partially offset by lower year-over-year R&D expenses.<\/p>\n

The Company reported a loss from continuing operations of $0.6 million, or $0.02 per diluted share for the three months ended September 30, 2026, as compared to a loss from continuing operations of $0.4 million, or $0.02 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 income of $31,000, or $0.00 per share, in the prior year period.<\/p>\n

Adjusted EBITDA, from continuing operations, a non-GAAP metric, was $0.3 million for the three months ended September 30, 2026, compared to adjusted EBITDA, from continuing operations, of $0.2 million in the prior year period. Adjusted EBITDA for the third quarter of 2026 included expenses of $0.5 million for a bad debt expense and $0.4 million of legal fees associated with the previously disclosed legal settlement with a former customer. 2026 third quarter adjusted EBITDA excluding these expenses would have been $1.2 million.<\/p>\n

Net cash used in continuing operations for the nine months ended September 30, 2026, was $12.4 million, compared to net cash used in continuing operations of $5.9 million in the prior year period. 2026 year-to-date net cash included a $6.25 million legal settlement that occurred in the 2026 second quarter, and a year-to-date increase of $7.8 million in inventories to support expected revenue growth.<\/p>\n

As of September 30, 2026, the Company reported cash, cash equivalents, and short-term investments of $18.9 million, and total working capital of $37.9 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.<\/p>\n

\n 2026 Nine Month Financial Summary<\/strong>\n <\/p>\n

Total revenue from continuing operations increased to $30.0 million, compared to $20.2 million for the same period last year. The 48.3% year-over-year increase in total revenue was driven by revenue generated from new customers in 2026 and from higher production volume with certain existing customers. Key drivers of the revenue increase included higher sales to support the P-8A Poseidon reconnaissance aircraft, higher sales to a medical imaging OEM to support a breast cancer screening application, higher sales for military applications onboard naval vessels and aircraft, initial deliveries to a new customer developing a network of autonomous energy nodes, and higher revenue from customer-funded development programs.<\/p>\n

Gross margin from continuing operations was 43.9%, as compared to 44.4% in the prior year. The slight year-over-year decrease in gross margin percentage was primarily driven by product mix, partially offset by more favorable manufacturing absorption and higher engineering efficiencies on customer funded development programs.<\/p>\n

Total operating expenses increased 56.5% to $22.4 million, from $14.3 million for the same period last year. The $8.0 million year-over-year increase in operating expenses included a $6.25 million charge related to the legal settlement in the second quarter, as well as a $0.5 million of bad debt expense, primarily driven by provision for a receivable with a former customer that entered bankruptcy, $0.7 million of legal fees associated with a previously disclosed legal settlement with a former customer, and $0.9 million of higher stock-based compensation expense due to a higher grant date fair value of RSUs expensed in the current year period. Total operating expenses were partially offset by lower year-over-year R&D expenses.<\/p>\n

OSS reported a loss from continuing operations of $8.3 million, or $0.33 per share, as compared to a loss from continuing operations of $5.1 million, or $0.24 per share, in the prior year. The Company reported non-GAAP net income from continuing operations of $0.4 million, or $0.02 per share, compared to a non-GAAP net loss from continuing operations of $3.7 million, or $0.17 per share in the prior year.<\/p>\n

Adjusted EBITDA income, from continuing operations, a non-GAAP metric, was $0.1 million, compared to an adjusted EBITDA loss, from continuing operations, of $3.2 million in the prior year period. Adjusted EBITDA for the first nine-months of 2026 included $0.5 million for a bad debt expense associated with the bankruptcy of a former customer and $0.7 million of legal fees associated with the previously-disclosed legal settlement with a former customer. 2026 year-to-date adjusted EBITDA excluding these expenses would have been $1.4 million.<\/p>\n

\n Income from Discontinued Operations, net of Income Taxes<\/strong>\n <\/p>\n

Income from discontinued operations consists of income from the Company\u2019s Bressner Technologies subsidiary, which was sold on December 30, 2025. Income from discontinued operations also includes the gain recognized on the sale.<\/p>\n

The Company recorded no income or loss from discontinued operations, net of income taxes, for the three months ended September 30, 2026, compared to income of $0.6 million in the prior year. For the nine months ended September 30, 2026, loss from discontinued operations, net of income taxes, was $0.2 million, compared to income from discontinued operations, net of income taxes, of $1.4 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.<\/p>\n

\n 2026 Full Year Outlook<\/strong>\n <\/p>\n

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.<\/p>\n

Based on its current performance and business outlook, OSS is increasing its full-year 2026 revenue growth guidance. We believe that the Company\u2019s expectations for 2026 reflect better than expected growth across its core defense and commercial markets and expected higher customer-funded development revenue compared with 2025. The Company also continues to monitor potential supply chain constraints affecting certain components, including memory, and the current outlook for the federal government budget. Changes in these assumptions could positively or negatively affect OSS\u2019s 2026 results.<\/p>\n

For the full year of 2026, OSS expects:<\/p>\n