One Stop Systems Sizes Its 'Transformative' Deals At $100 Million Or More — None Are In 2026 Guidance
The CEO says the big programs are longer term, while the CFO says the 2026 outlook of about $45 million in revenue sits in backlog.
One Stop Systems, which makes rugged high-performance computers for edge uses such as aircraft, drones and ships, said on its third-quarter earnings call Wednesday that the "transformative" opportunities it keeps flagging would be programs worth $100 million or more, and that none are in its raised 2026 outlook. CEO Mike Knowles put the full-year revenue target at about $45 million, roughly 40% growth.
Sizing the big bets
Asked by an analyst at Lake Street whether those opportunities were in guidance, Knowles said: "They're not included in the 2026 guidance. They're more longer term." Chief Financial Officer Dan Geiger added that "All of our guidance for 2026 is in backlog."
Pressed on size by an analyst at Roth Capital, Knowles said such programs would look like "$100 million or greater over a, you know, three-, four-year period," comparable to a defense program of record or a large commercial deployment. He conceded that "timing's always a tough one" and said the company has "more swings at the plate" in both defense and commercial markets.
The deals he cited as progress are far smaller: an initial $8.4 million award on an intelligence-related compute platform that he believes has about $44 million of potential revenue over four years, and a $2.2 million commercial robotics production order that he said could reach $10 million to $15 million over five years, though that is not guaranteed.
Quarter and raised outlook
Revenue from continuing operations rose about 36% to $12.6 million, from $9.3 million a year earlier. For the first nine months it reached $30 million, up about 48%. Gross margin was 42.6%, against 45.6% a year earlier, which Geiger attributed mainly to product mix.
Adjusted EBITDA, an earnings measure that strips out certain costs, was about $300,000. It absorbed $544,000 of bad debt tied to a former customer that entered bankruptcy and $394,000 of legal costs from a settlement; without them it would have been $1.2 million. The company reported a standard-accounting net loss from continuing operations of $0.6 million, or $0.02 per share.
Management lifted its revenue growth outlook to about 40%, from a prior 25% to 30% range, and expects gross margin of 40% to 42% and adjusted EBITDA of $0.5 million to $1 million. Geiger said that EBITDA guide would be about $1.4 million higher without the third-quarter items.
Cash, inventory and what's next
The company ended September with $18.9 million in cash and short-term investments and no debt. Over nine months it used $12.4 million in operating cash, after paying a $6.25 million legal settlement and putting $7.8 million into inventory. It has also set up an at-the-market equity program, which lets it sell shares but does not oblige it to.
Knowles said the number of meaningful multi-year programs has grown from one to 14 since he joined in 2023, and average order size has nearly tripled. Year-to-date bookings top $43.6 million, a book-to-bill of 1.46, meaning orders have outrun sales.
Management expects several large multimillion-dollar orders to close in the fourth quarter, and Geiger expects about $5.6 million of milestone collections in October. A detailed 2027 outlook will come with year-end results.
Geiger said full-year operating cash flow will still be slightly negative, and the 2027 guide arrives with year-end results.
Sources
- One Stop Systems, Inc. (OSS) Q3 Earnings Meet Estimates — Yahoo Finance
- One Stop Systems Non-GAAP EPS of $0.01 in-line, revenue of $12.58M beats by $1.66M, raises F | Seeking Alpha — seekingalpha.com
- One Stop Systems Reports Q3 2026 Results — globenewswire.com
- One Stop Systems to Report Third Quarter 2026 Financial — globenewswire.com
- One Stop Systems Expands Enterprise AI Market Opportunity — globenewswire.com
