One Stop Systems OSS delivered first-quarter 2026 adjusted earnings of 1 cent per share, surpassing the Zacks Consensus Estimate of a loss of 5 cents by 120%. Revenues rose 55% year over year to $8.07 million, exceeding the consensus mark of $7 million by 15.29%.
The quarter reflected higher defense and commercial shipments, an improved product mix and stronger execution across customer-funded development programs. OSS reported one of the strongest booking quarters in its history, with a first-quarter book-to-bill ratio of 1.8x, supported by growing demand for ruggedized AI compute platforms at the edge.
OSS’ Q1 Top Line in Detail
Defense revenues benefited from higher shipments of data storage products supporting the P-8A Poseidon aircraft program, along with prototype compute systems tied to next-generation enhanced vision systems for U.S. Army combat vehicles. Management highlighted continued traction across defense platforms as deployments become larger and more programmatic.
Commercial revenues were supported by increased demand from a medical imaging OEM, including shipments of liquid-cooled server platforms. OSS noted that its ruggedized enterprise-class compute systems are gaining momentum in data-intensive edge applications requiring high performance and reliability.
One Stop Systems, Inc. Price, Consensus and EPS Surprise
One Stop Systems, Inc. price-consensus-eps-surprise-chart | One Stop Systems, Inc. Quote
Bookings reached nearly $15 million during the quarter, resulting in a 1.8x book-to-bill ratio. Management stated that average order sizes have increased meaningfully as customers shift toward multi-year deployments and production-oriented programs. OSS also pointed to expanding customer-funded development activity as a pathway to future production opportunities.
OSS’ Q1 Operating Results
Gross margin from continuing operations expanded 610 basis points year over year to 51.6%, driven by a more profitable product mix, engineering efficiencies in customer-funded development work and improved manufacturing absorption from higher production volume.
Operating expenses from continuing operations increased modestly 2.5% year over year to $4.8 million, reflecting higher general and administrative expenses that were partly offset by lower marketing, selling and R&D costs.
Profitability improved significantly during the quarter. Adjusted EBITDA from continuing operations turned positive at $0.2 million compared with a loss in the year-ago period, reflecting stronger operating leverage and margin execution.
One Stop Systems’ Balance Sheet & Cash Flow
As of March 31, 2026, cash, cash equivalents and short-term investments were $34.4 million, along with restricted cash of $2.2 million. This compares with cash, cash equivalents and short-term investments of $31.2 million, along with restricted cash of $2.2 million, as of Dec. 31, 2025. The company remained debt-free at quarter's end.
Net cash provided by continuing operating activities was $4.0 million in the first quarter, supported by strong collections and disciplined working capital management. OSS highlighted that it generated record free cash flow from continuing operations during the quarter.
Working capital stood at $44.7 million as of March 31, 2026, providing financial flexibility to support growth initiatives and production ramps.
OSS Reaffirms 2026 Outlook
Management reaffirmed its full-year 2026 outlook, indicating revenue growth of 20-25%, gross margin of approximately 40%, and positive EBITDA and adjusted EBITDA.
The company stated that first-quarter execution supports its expected second-half ramp, though management continues to monitor supply chain challenges, including extended lead times and pricing volatility in certain memory components. While OSS has generally been able to pass through pricing increases, management noted that timing remains the larger uncertainty.
Zacks Rank & Other Stocks to Consider
OSS currently carries a Zacks Rank #2 (Buy).
Keysight Technologies KEYS, Cisco Systems CSCO, and Dell Technologies DELL are some other top-ranked stocks that investors can consider in the broader Zacks Computer & Technology sector. Keysight Technologies sports a Zacks Rank #1 (Strong Buy), whereas Cisco Systems and Dell Technologies presently carry a Zacks Rank #2 each. You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of Keysight Technologies have surged 78% in the year-to-date period. KEYS is set to report its second-quarter fiscal 2026 results on May 19.
Cisco Systems shares have increased 19.6% in the year-to-date period. CSCO is scheduled to release third-quarter fiscal 2026 results on May 13.
DELL Technologies shares have surged 82.9% in the year to date period. DELL is set to report its first-quarter fiscal 2027 results on May 28.
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