One Stop Systems, Inc. (NASDAQ:OSS) Q3 2023 Earnings Call Transcript

Mike Knowles: So to date, we haven’t seen a major impact of it slowing the business. We’re at the end of the quarter and the move we’re seeing some timing or alignment, but we haven’t seen the cancellation of orders or a downtick. The booking there continues to be generally online quarter-to-quarter. So at this point, we’re still seeing them be able to work through any slowness in Germany.

Max Michaelis: And then last one for me. Just given the push out in orders in the autonomous trucking space, I want to stick with the commercial market, maybe what are some areas you can highlight? I know you talked about win in the auto racing industry, but maybe some area – other areas in the commercial market, you’re pointing your sales force to that you’re seeing maybe pockets of strength. Thanks.

Mike Knowles: Sure, Max, thanks. And I mentioned two of them in the earnings release there on the commercial side that we’re quite excited about, two were in the data center space using our core UP expansion chassis. With the onslaught of the hyperscalers and others buying large massive amounts of GPUs, those GPUs need to go somewhere. And in areas where – there is some niche areas in data centers where they are looking to manage the utilization of those GPUs and mend them into servers. There is some interesting areas where a couple of companies we’re finding some good traction with. So we see that as a nice area for us to go and work through. In addition, I mentioned the multiyear contract that we’re working to finalize here in the commercial aerospace market, where we will be able to bring some Edge processing into that market.

So we will be looking to provide more insight on both of those efforts. We see those as potentially good ones on the commercial side. And then as I mentioned, we are working on RFP now for autonomous trucking. We’re seeing vigil in that market. It’s had a lot of promise, just had some slowing. So I use the cautious optimism on it. We continue to refine. We work through these. Luckily for us, be it design and efforts and solutions we use for autonomous trucking are the same ones we use in a lot of the defense work. So we’re not having to invest special product development or anything in that market. So we can be quick to respond. And if anything, we’re finding a lot of the work we’re doing in defense market creates more flexibility in our offerings for the autonomous truck market.

So we will continue to monitor them, but we – like I said, we use cautious optimism on that one.

Max Michaelis: Alright, thanks, guys.

Operator: At this time, we have no further questions. I’d like to turn the conference back to our speakers for any closing remarks.

Mike Knowles: Morgan, thanks for that. And we look forward to speaking with you again when we report in March, and we hope everybody has a great day.

Operator: Thank you. Now before we conclude today’s call, I would like to provide the company’s safe harbor statement that includes important cautions regarding forward-looking statements made during today’s call. One Stop Systems cautions you that statements in the presentation that are not a description of historical facts are forward-looking statements. These statements are based on the company’s current beliefs and expectations. Such forward-looking statements include, for example, those regarding the company’s expectations for revenue growth generated by new products, future changes to its business objectives and members of management and the Board, design wins and M&A activity amongst other things. The inclusion of such forward-looking statements and others should not be regarded as a representation by OSS that any of its plans will be achieved.

Actual results may differ from those set forth in the presentation due to the risks and uncertainties inherent in our business, including, without limitation, that the market for our products is developing and may not develop as we expect. Military conflicts, global pandemics or other disasters or public health concerns and economic instability in regions of the world where we have operations, customers or source material or sell products may affect such markets. Our operating results could be negatively impacted by inflationary pressures, supply chain constraints, increased interest rates, U.S. government continuing resolution CR or other economic conditions. Our operating results may fluctuate significantly, which would make our future operating results difficult to predict and could cause operating results to fall below expectations or guidance.

If we are unable to offset anticipated future decreases in revenue in our media and entertainment space with other business, our operating financial results may be adversely affected. Our ability to successfully integrate the operation systems, technologies, product offerings and personnel with acquired companies, if any, may prove difficult and adversely affect our financial results. Our products are subject to competition, including competition from the customers to whom we may sell and competitive pressure from new and existing companies, may harm our business sales, growth rates and market share. Our future success depends on our abilities to develop and successfully introduce new and enhanced products that meet the needs of our customers.

The likelihood of our design proposals becoming design wins is uncertain and revenue may never be realized. Our products fulfill specialized needs and functions within the technology industry, and such needs or functions may become unnecessary or the characteristics of such needs and functions may shift in such a way as to cause our products to no longer fulfill such needs or functions. New entrants into our market may harm our competitive position. We rely on the limited number of suppliers to support a manufacturer design process. And if we cannot protect our proprietary design rights and intellectual property rights, our competitive position could be harmed or we could incur significant expenses to enforce our rights. Our international sales and operations subject us to additional risks that can adversely affect our operating results and financial condition.