One Stop Systems (OSS) Q2 FY26 earnings call: guidance and Q&A

Can you provide an update on the 360 vision solution programs for Army vehicles, their procurement lifecycle, and a reasonable timeline for progression?

The programs are in an undefined testing phase with the Army on representative vehicles. While OSS is production-ready, the Army's timeline for definitive action is uncertain, but capture efforts continue.

“I can't give an exact estimate onto the timeline of how soon or how late we would see something progress, but we do continue with our capture efforts in working with the Army in looking to fulfill their requirements and potential to accelerate these technologies into fielded programs.”

asked by Brian Kinstlinger · answered by Michael Knowles

Given two consecutive quarters of $15 million in bookings, how should we think about bookings goals for the next 6-18 months, and will they be lumpy?

The company is encouraged by strong, diversified bookings and expects continued performance, aligning with a 30% annual growth view. Bookings can be lumpy quarter-to-quarter, but the year-to-date/trailing 12-month book-to-bill ratio is consistent.

“Bookings can be very lumpy. You can see very strong periods of bookings. and then they can fade off based on timing. So, you know, we generally monitor that year-to-date slash trailing 12-month book-to-bill ratio, and that's been fairly consistent here over the last year or so in showing that kind of. 30% a year growth.”

asked by Brian Kinstlinger · answered by Michael Knowles

Customer-funded development was 10% of revenue this quarter. Is this run rate expected to continue?

Management expects customer-funded development to remain strong throughout the year, with the first-half level likely continuing into the second half, though some variability is possible.

“I do expect that it will continue to be strong throughout the year. I think that the level of that you're seeing in the first half should continue in the second half and depending on some opportunities we could see some variability around that but I think it'll be strong in the second half.”

asked by Eric Martinuzzi · answered by Daniel Gabel

What is driving the increased diversity of the customer base, and was it a proactive effort?

Diversification is a culmination of the company's strategic plan, including building a five-year pipeline and aligning sales. As systems are delivered and perform, notoriety spreads, and the product line's market agnosticism allows quick adaptation to new applications.

“So this is really all built into the strategy and the plan, and I think we're seeing that in We're actually, you know, have built more optimism because we're seeing that diversification across, you know, decent-sized programs and not. having to necessarily weigh down one or two really large ones.”

asked by Eric Martinuzzi · answered by Michael Knowles

Given the raised revenue guidance and reiterated gross margins, are you confident in the supply chain for FY26 and FY27, particularly for components like memory?

Strategies used this year should continue to help into next year. While memory lead times remain long, the company has proactively invested $7.1 million in inventory in Q2 to de-risk deliveries for FY26 and is preparing for FY27.

“We are kind of keeping our eye out for those opportunities to de-risk delivery profiles by bringing in memory ahead of lead time.”

asked by Eric Martinuzzi · answered by Daniel Gabel

What changes are observed in how defense customers view rugged AI compute, and is there more opportunity per vehicle/aircraft?

There's an inevitable transition as AI/ML/sensor fusion is exponentially adopted across existing and new platforms (air, land, sea, space). DoD labs are evaluating architectures, and existing open system architectures are being reevaluated to incorporate commercial data center compute to keep up with sensor technologies.

“And those elements really need the kind of architectures and compute that we deliver. So we're seeing that generated in a number of ways, though oftentimes the Department of Defense is slow in their movement.”

asked by Brian Dobson · answered by Michael Knowles

Does the projected increase in the shipbuilding budget or opportunities in Golden Dome/short-range air defense offer more benefit to OSS?

OSS is engaged in all these areas, as both shipbuilding and Golden Dome concepts require high-end, low-latency, rugged compute for sensors and AI/ML applications. The company is involved in early discussions and assessments for Navy vessels and with prime integrators for Golden Dome.

“Ironically, we're engaged in all those areas. So the opportunities exist are both for similar reasons we've continued to identify. They're both moving forward heavy with sensors and compute and applications and AI and ML.”

asked by Austin Moeller · answered by Michael Knowles

When might R&D evaluation stage programs flip to LREP/serial production with higher margins, and will you do advanced procurement of component inventory?

The timeline for early-stage Army programs to flow into a program of record is uncertain. However, if they do, contracts are generally set up to cover inventory and long-lead purchases, with the government often placing orders for long-lead parts in advance.

“I can say though that when a number and if it does, that generally the programs will be set up such that we would be able to be covered under the contract for our inventory and long lead purchase orders to sort of support that.”

asked by Austin Moeller · answered by Michael Knowles