One Stop Systems Reports 36.9% Revenue Growth and Net Income Turnaround in Latest Quarter

One Stop Systems, Inc. (OSS) reported significant financial improvements in its latest quarterly results, with total revenue for the three months ended September 30, 2025, reaching $18.8 million, a 36.9% increase from $13.7 million in the same period last year. The OSS segment contributed $9.3 million, up 43.4%, driven by increased demand for custom server products and data storage solutions, particularly from defense and medical sectors. For the nine-month period, total revenue rose 14.1% to $45.1 million, with the OSS segment also showing a 15.5% increase. The company reported a net income of $263,487 for the quarter, a stark contrast to a net loss of $6.8 million in the prior year, while the nine-month net loss narrowed to $3.8 million from $10.5 million.

The company’s cost of revenue decreased significantly, down 21.8% to $12.1 million for the third quarter, primarily due to the absence of a substantial inventory charge that impacted the previous year’s results. This led to a gross profit of $6.7 million, compared to a loss of $1.7 million in the same quarter of 2024. The gross margin improved to 35.7%, up from -12.5% a year earlier. For the nine-month period, gross profit was $15.1 million, with a gross margin of 33.5%, reflecting a recovery from the previous year's challenges.

Operationally, OSS has focused on expanding its product offerings and market reach, particularly in edge computing solutions for military and industrial applications. The company has also made strategic changes, including a re-profiling of its executive team to enhance its focus on revenue opportunities in the defense sector. As of September 30, 2025, OSS had approximately 22 million shares outstanding, with a total stockholders' equity of $26.3 million, down slightly from $27.2 million at the end of 2024.

The company’s cash position as of September 30, 2025, was $6.5 million, with total current assets increasing to $36 million from $32.2 million at the end of 2024. However, OSS reported a net cash used in operating activities of $4.9 million for the nine months, compared to cash generated in the same period last year. The company has also entered into a registered direct offering, raising $12.5 million from the sale of 2.5 million shares, which closed on October 1, 2025, to bolster its liquidity.

Looking ahead, OSS management remains cautious due to ongoing economic uncertainties, including geopolitical tensions and potential impacts from U.S. government budget delays. The company plans to continue monitoring these factors while focusing on customer acquisition and operational efficiency to drive growth. Management is committed to maintaining liquidity and may seek additional financing if necessary to support its strategic initiatives and operational needs.