One Stop Systems 2025 Q1 Earnings Misses Targets as Net Loss Widens 50.6%

One Stop Systems (OSS) reported its fiscal 2025 Q1 earnings on May 7th, 2025. The company's performance fell short of expectations as it reported a net loss that widened by 50.6% compared to the previous year. Additionally, OSS maintained its guidance for the full year, with anticipated consolidated revenue in the range of $59 to $61 million, and expects to achieve EBITDA break-even by year-end. This guidance is in line with previous projections, reflecting the company's strategic initiatives and expanding sales pipeline.

Revenue
In the first quarter of 2025, One Stop Systems experienced a decline in total revenue, which fell to $12.26 million from $12.65 million in the same quarter of 2024. The OSS segment contributed $5.21 million, showing a decrease from the previous year, while Bressner generated $7.05 million. Together, these segments accounted for the total revenue decline of 3.1%.

Earnings/Net Income
One Stop Systems experienced a deeper loss in Q1 2025, with earnings per share dropping to $0.09, compared to a loss of $0.06 per share in Q1 2024. The net loss increased to $2.02 million, from $1.34 million the previous year, marking a 50.6% increase, indicating a challenging quarter for the company.

Price Action
The stock price of One Stop Systems edged up 0.42% during the latest trading day, climbed 4.33% over the most recent full trading week, and surged 18.72% month-to-date.

Post-Earnings Price Action Review
The strategy of purchasing One Stop Systems (OSS) shares following a quarter-over-quarter revenue drop and holding for 30 days has historically resulted in a loss of 10.55% over the past five years. This pattern suggests that such a strategy has not been profitable during this period, indicating the need for a more flexible approach to investing in OSS shares. Investors are advised to consider a more comprehensive strategy that accounts for market conditions and company performance trends. This could entail analyzing broader market trends, examining the company's strategic initiatives, and assessing potential future growth areas. Given the company's current trajectory and ongoing efforts to align with customer priorities in AI, machine learning, and sensor processing, a more adaptive investment strategy may yield better results.

CEO Commentary
Mike Knowles, President and CEO of One Stop Systems, highlighted that the OSS segment achieved strong bookings of $10.4 million in Q1 2025, driven by rising demand from both commercial and defense customers. He noted that this trend underscores the company’s strategic focus on building predictable revenue streams, particularly amid challenging market conditions. Knowles expressed optimism regarding the company's alignment with customer priorities in AI, machine learning, and sensor processing at the edge. He acknowledged improvements in consolidated gross margins, attributing this to a more profitable product mix, and maintained confidence in the company's trajectory despite near-term order timing impacts.

Guidance
One Stop Systems continues to project consolidated revenue in the range of $59 to $61 million for the full year 2025, with the OSS segment expected to contribute approximately $30 million, representing over 20% year-over-year growth. The company anticipates achieving EBITDA break-even by year-end and expects revenue and profitability to improve at a higher rate in the second half of 2025, supported by a strong sales pipeline and ongoing strategic initiatives.

Additional News
In recent developments, One Stop Systems announced a significant shift in its leadership team. Mike Knowles, formerly the President of OSS, has transitioned to the role of CEO, effective immediately. This change comes as part of the company's strategic initiative to accelerate growth and enhance its focus on high-performance edge computing markets. Additionally, OSS has been actively pursuing international partnerships to expand its global footprint. The company aims to leverage these partnerships to introduce its rugged Enterprise Class compute solutions to new markets, particularly in regions with growing demand for AI-enabled applications. Furthermore, OSS has initiated a stock buyback program, demonstrating confidence in its long-term growth prospects and commitment to enhancing shareholder value.