One Stop Systems, Inc. (NASDAQ:OSS) Q4 2022 Earnings Call Transcript

Joe Gomes: Thanks for taking the questions.

David Raun: Yes. The OSS classic business fluctuates when you pull out the media and entertainment somewhere between 35% and 45% on average. And we have contributors from customers anything from as high as 70% and we have other ones that are lower.

Joe Gomes: Thank you.

Operator: Your next question comes from the line of Brian Kinstlinger from Alliance Global Partners. Please go ahead.

Unidentified Analyst: Good afternoon. This is Shervin on for Brian. Thanks for taking my questions. Could you — I also had a question about autonomous trucking. Last quarter, you mentioned about multiple times in the prototype phase. I wonder, if over the last quarter had any more entered the prototype phase, and when or what does the next phase look like? When do you see — if you have any sort of visibility of when these customers will move into it and the impact it will have on your business from a revenue point of view?

David Raun: Yes. The prototype phase is — it’s a long period of time. Fortunately, the ASPs are high. We may be introducing another account in — this quarter we are in right now. So there is more opportunities there. As far as a production part, depending on who you talk to, it could range anywhere from people’s belief that’s €˜24 to people’s belief that’s 2030, depending on how they look at it. But, what I believe will happen is that they buy, say 25 of them at a time, they do all their work. I believe what’s going to happen next is the FedExs, the Amazons, all these companies that have planned to use autonomous trucks will want to start to work on the logistics of this. And so, they’ll say, hey, we want to buy 25 — we want to get 25 trucks even though a man still has to be in there because we need to start working the logistics of it.

And maybe they limit it to a hub, to another hub or something like that. And we believe that could generate business to increase the size of these accounts over time. It wouldn’t be that inflection point type revenue, but it would be nice growth for us.

Unidentified Analyst: All right. Thank you. Next question, in regards to Rigel. I remember last quarter you mentioned that you were in the talks with the DOD to integrate Rigel into large airframe drones and land vehicles for combat. What has — has there been any progress in those specific instances? And in Rigel in general, when can we start to see meaningful revenue start to ramp? Do you guys have visibility there?

David Raun: Well, we continue to get more activity on Rigel at new opportunities and ones you mentioned are progressing. As far as revenue, we’ll ship revenue in 2023. But, it’s — even the numbers I’m talking about, stuff, you’ve got our current customer and other ones layering in. It’s not tens of millions of dollars of Rigel or anything for this year, but it’s likely single digits of millions this year.

Unidentified Analyst: All right. Thank you. One last question that

David Raun: But just to add on to that, but that is where these things start to go, and deploy them into multiple vehicles and everything. That’s where the numbers start to add up pretty quick and is what has the possibility to grow — fuel that kind of growth rate in 2024 we’re talking about.

John Morrison: And it’s also — if you take what Rigel has brought us into several of these opportunities that we’ve actually closed with other programs. So, the autonomous trucks, a lot of people saw Rigel first out and said that’s what we want. And we gave them that capability maybe with something like the SDS server. And even the Army opportunity that we had announced last — I guess it was this quarter, was something that started off because of the capabilities inside Rigel that they wanted slightly different. And we are doing the design based on that. So, Rigel is opening a lot of doors, even if it’s not producing its own revenue in those ranges that Dave was talking about yet as we close these deals.