One Stop Systems Reports Increased Net Loss and Revenue Decline in Q1 2025

One Stop Systems, Inc. (OSS) reported a net loss of $2,017,634 for the three months ended March 31, 2025, compared to a loss of $1,339,622 in the same period of the previous year. Revenue for the quarter decreased by 3.1% to $12,259,088, down from $12,651,786 in the first quarter of 2024. The decline in revenue was primarily attributed to lower shipment volumes to a commercial aerospace customer, although this was partially offset by increased shipments to defense customers. The company's gross profit increased to $3,996,992, resulting in a gross margin of 32.6%, up from 29.4% in the prior year, driven by a more profitable product mix and reduced inventory reserves.

Operating expenses rose significantly, totaling $5,941,852 for the quarter, an increase of 19.2% compared to $4,985,307 in the same period last year. This increase was largely due to higher general and administrative expenses, which grew by 13% to $2,366,369, and a notable 39.8% rise in research and development expenses, reflecting increased investment in new product development. Marketing and selling expenses also increased by 15.5%, indicating a strategic push to expand the sales force and marketing efforts.

In terms of operational metrics, OSS reported a decrease in accounts receivable, which fell to $7,245,983 from $8,177,371 at the end of 2024, reflecting improved cash collection efforts. The company’s inventory increased to $15,099,479, up from $13,176,156, indicating a buildup in stock to meet anticipated demand. OSS's total assets as of March 31, 2025, stood at $37,105,793, a slight increase from $36,933,982 at the end of the previous fiscal year.

Looking ahead, OSS management expressed concerns regarding economic uncertainty, including the impacts of inflation, geopolitical tensions, and supply chain disruptions. The company plans to focus on acquiring new customer orders and expanding its presence in both commercial and military markets. Management is committed to controlling costs and conserving cash while pursuing growth opportunities. The company has also established a $2 million revolving line of credit to support its liquidity needs, although no balance was outstanding as of March 31, 2025. Overall, OSS aims to navigate the challenging economic landscape while continuing to innovate and expand its product offerings in edge computing and defense sectors.