One Stop Systems Raises 2026 Growth Outlook To About 40% From 25%-30% As Commercial Sales Climb
The rugged-computing maker still lost money in the third quarter and expects several multimillion-dollar orders to close in the fourth.
One Stop Systems, which makes rugged computers for artificial intelligence and sensor processing at the edge, lifted its 2026 revenue growth guidance to about 40% from 25% to 30%, the company said Wednesday in an 8-K filing. Third-quarter revenue from continuing operations rose 35.9% to $12.6 million from $9.3 million, led by commercial customers in healthcare, aerospace and data centers.
Commercial customers lead the quarter
Nine-month revenue reached $30.0 million against $20.2 million a year earlier, a 48.3% increase. The company said the third-quarter gains came from new customers and higher production volumes with existing ones.
The drivers it named were first deliveries to a new customer building a network of autonomous energy nodes, more production deliveries to a commercial aerospace customer for in-flight entertainment systems, and higher sales to a medical imaging maker for a breast cancer screening application.
The company also ties its raised outlook to stronger-than-expected third-quarter sales and orders. It now guides to gross margin of about 40% to 42% and adjusted EBITDA of $0.5 million to $1.0 million for the year.
Still a loss, with costs rising
The loss from continuing operations was $0.6 million, or $0.02 per diluted share, against a $0.4 million loss, or $0.02 per share, a year earlier. Gross margin slipped to 42.6% from 45.6%, which the company attributed mainly to product mix.
Operating expenses rose 33.7% to $6.2 million. They included $0.5 million of bad debt tied to a former customer's bankruptcy, $0.4 million of legal fees from a previously disclosed settlement with a former customer, and $0.5 million more in stock-based compensation.
Adjusted EBITDA, an adjusted earnings measure, was $0.3 million, up from $0.2 million. Excluding the bad debt and legal fees, it would have been about $1.2 million, the company said.
Cash drain and big orders ahead
Net cash used in continuing operations was $12.4 million for the first nine months, against $5.9 million a year earlier. That included a $6.25 million legal settlement paid in the second quarter and a $7.8 million increase in inventories to support expected growth; inventories stood at $13.7 million on September 30, up from $5.4 million at the end of 2025.
Cash, equivalents and short-term investments were $18.9 million, down from $31.2 million at year-end. The company sold its Bressner Technology unit on December 30, 2025.
CEO Mike Knowles said third-quarter bookings were influenced by the timing of customer orders, but the company expects "several large, multimillion-dollar orders to close during the fourth quarter." Year-to-date book-to-bill was 1.46x. The company said it is also watching possible supply constraints on components such as memory and the outlook for the federal budget, either of which could move 2026 results up or down.
The next test is whether the fourth-quarter orders Knowles described close as expected.
Sources
- 8-K Filing — ONE STOP SYSTEMS, INC. (OSS) — SEC EDGAR
- Exhibit oss-ex99_1.htm — ONE STOP SYSTEMS, INC. 8-K exhibit — SEC EDGAR
- One Stop Systems to Report Third Quarter 2026 Financial — globenewswire.com
- One Stop Systems Expands Enterprise AI Market Opportunity — globenewswire.com
