Q1 2025 One Stop Systems Inc Earnings Call
Speaker Change: Good day, and welcome to the One Stop Systems first quarter 2025 conference call in
At this time, all participants are in the listen only mode [inaudible]
Speaker Change: Later, you will have the opportunity to ask questions during the question and answer session.
Speaker Change: As a reminder, this call is being recorded. As part of the discussion today, the representatives from OSS will be making certain forward-looking statements.
Speaker Change: regarding the company's future financial and operating results, including those relating to revenue growth, as well as business plans, bookings, the company's multi-year strategy, business objectives, and expectations. [inaudible]
Speaker Change: This statements are based on the company's current beliefs and expectations and expectations.
Speaker Change: and should not be regarded as a representation by OSS that any of its plans or expectations
Speaker Change: Please be advised that this forward-looking statements are covered under the safe harbor provisions of the private securities litigation reformed act of 1995 and that OSS desires to avail itself of the protections of the safe harbor for this statement.
Speaker Change: Please also be advised that actual results could differ materially from those stated or implied by the forward-looking statements.
Speaker Change: Due to certain risks and uncertainties, including those described in the company's most recent annual report on Form 10K, subsequent quarterly reports on Form 10Q and recent press releases. Please read these reports in other future filings that OSS will make with the SEC.
Speaker Change: OSS disclaims any duty to update or revise its forward-looking statements, except as required by applicable law. It is now my pleasure to turn the conference over to OSS President and CEO . Mr. Mike Knowles, please go ahead, sir.
Mike Knowles: Thank you, Angela. Good morning, everyone, and thank you for joining today's call.
Speaker Change: I'm pleased to report on the progress we made during the 2025 first quarter, highlighted by both year-over-year and sequential improvements in gross margin, stable year-over-year revenue and strong OSS segment bookings and demand trends.
Speaker Change: For the first quarter of 2025, Consolidated Gross Margin increased year-over-year 320 basis points to 32.6 percent during by a strong gross margin of 45.5 percent within our OSF segment.
Speaker Change: We also announced a single record contract award of 6.5 million with a large defense prime, as well as new order multi-year relationship with an innovative medical imaging OEM and two renewals with a combined value of $6 million from existing US Department of Defense programs.
Speaker Change: As expected, near-term market conditions affected the timing of certain notices segment orders anticipated for the first and second quarters of 2025.
Speaker Change: However, based on recent orders as well as future booking expectations, we believe we are on track to achieve our 2025 annual guidance which includes consolidated revenue of $59 to $61 billion and even a break even for the full year.
Speaker Change: We believe a second half of 2025 is setting up the period of growth and transformation, and I want to use my time to review our expectations for 2025 and beyond.
Speaker Change: As I mentioned before, we are pursuing strategic growth opportunities that leverage our high performance edge compute solutions to meet the growing demands of AI, machine learning, autonomy, and sensor fusion at the edge.
Speaker Change: Over the past two years, we have invested in our organization, Technology and Team, which has created a necessary platform to pursue a large multi-year pipeline of commercial and defense sales.
Speaker Change: We have a strong and growing pipeline of opportunities across leading defense organizations and advanced commercial enterprises. They are looking for partners like OSS to support their need for high performance edge compute solutions.
Speaker Change: Our sales approach has been focused on driving adoption of our products through three main business development initiatives.
Speaker Change: Our first strategy aims at identifying applications and customers early in the engineering cycle to pursue collaborative relationships through customer funded development programs. We believe this will establish incumbent positions on platforms that will lead to follow-on production and long-term sustainment positions.
Speaker Change: We believe development relationships will take one to two years before leading to production orders as a result we expect certain development programs that we worked on during 2024 to transition to orders and sales in 2025 and beyond.
Speaker Change: Our second key business development initiative is focused on land-and-expand strategy. This is supported by the best-in-class, ruggedized enterprise-class compute solutions we offer and are differentiated engineering capabilities.
Speaker Change: We've engineered solutions that compress data center scale performance into compact, ruggedized systems that are capable of thriving in harsh environments as significant size, weight, power, and cost advantages to competing solutions.
Speaker Change: In fact, our solutions are 350% faster, can run 28 times the number of AI applications and have 130 times better computational performance than competing offerings.
Speaker Change: As a result, we are developing meaningful relationships with customers and engineering teams who are looking for the types of enterprise class solutions we provide.
Speaker Change: For example, a couple of weeks ago we announced the third program win over the past eight months with a defense customer that is embedding our enterprise class compute and storage products deeper into next generation US Department of Defense Initiatives [inaudible]
Speaker Change: On the commercial side, as we previously announced, we are further extending our relationship with the customer and the medical field to transition their medical sensing solution to an enterprise class solution. Our hardware will process sensor data and use AI applications to bring significantly better medical information to the doctors and patients to address cancer treatment.
Speaker Change: Our third sales strategy underway leverages the company's integration of compute and storage architecture capabilities which is allowing us to address more integrated solutions. Providing integrated solutions helps OSS solve additional customer problems and creates opportunities to expand beyond just supporting prime contracts by delivering OSS products directly to end customers.
Speaker Change: As momentum bills are expanding pipeline and recent awards, reinforce our belief in the scalability and long term value or business model. Higher OSS segment orders are particularly encouraging amid ongoing uncertainty in business and government spending.
Speaker Change: Long return, we believe our sales strategies will build highly valuable, predictable, and recurring revenue streams as we pursue a growing number of platforms and program opportunities across our commercial defense markets.
Speaker Change: This creates an attractive business model, where in any given year we have platform programs in development, others transitioning or in production, and a backlog of programs in entertainment and support.
Speaker Change: We experience strong bookings within our OSS segment during the first quarter with a book to bill ratio of 2.0 which contributed to a trailing 12 month book to bill ratio of 1.33 3.
Speaker Change: Recent award highlights within our OSS segment include an initial $1.4 million contract award for radar processing systems on the P-8 Poseidon aircraft, including a five-year support agreement.
Speaker Change: An initial 1.6 million in contract awards to upgrade Sonar sensor processing for the Virginia class submarine, including enhancements to PCIe accelerator systems, with next generation technology that extends program by ability for at least another 10 years.
Speaker Change: A $500,000 contract with a leading medical OEM with anticipated follow-on production orders valued at over 25 million over the next five years, and a record $6.5 million dollar award from a leading defense and technology solutions company to support next generation mobile intelligence platform.
Speaker Change: Order activity remains drawn, supported by growing demand for our enterprise class compute solutions, and we anticipate further commercial defense announcements in the coming months.
Speaker Change: While the German and EU economies were challenged in 2023 and 2024, we are starting to see more stability in the region. Recent bookings and revenue within our Fresner segment have been in line with our targets and Fresner remains on track to achieve consistent sales and profitability for 2025 compared to last year's results.
Speaker Change: We do not currently expect terrorists to have a material impact on our operations or cost structure. In fact, we are seeing potential in both our OSS and President segments.
Speaker Change: In the OSS segment, terrorists provide a competitive advantage against lower cost agent manufacturers in many of our markets.
Speaker Change: We are actively pursuing opportunities to display these competitors in the US markets, additionally we are exploring partnerships with international companies seeking US-based manufacturing options, leveraging our access capacity and technical capabilities.
Speaker Change: Within our Fresner segment, we see opportunities to capture new business as European customers reassess supply chain dependencies and prioritize partners with secure, tariff, resilient logistics.
Speaker Change: We are also targeting OEMs that are shifting production strategies due to geopolitical and cost pressures, positioning Brezner as a trusted integration and distribution partner.
Speaker Change: In addition, the newly heightened desire was a NATO and the EU to increase defense spending could create expanded defense opportunities for Brezner and OSS products in 2026 and beyond. Indications are that while budgets are likely to show a significant increase, it will take some time for those budgets to work through procurement channels to actual awarded efforts.
Thank you for watching!
Speaker Change: While terrorists and shifts in government spending have delayed certain programs to the second half of 2025, underlying demand remains strong. We continue to see solid engagement across key programs and remain confident in our ability to meet our full year 2025 guys.
Speaker Change: Looking ahead, we believe OSS is uniquely positioned to capitalize on a multi-year growth opportunity driven by accelerating adoption of artificial intelligence, machine learning, autonomy, and sensor fusion at the edge.
Speaker Change: As these requirements become increasingly central to the fencing commercial innovation, customers are turning to trusted partners with proven expertise and rugged enterprise class compute solutions.
Speaker Change: With the right products, a highly capable team and a focus strategy, we remain well positioned to capture growing demand across our core markets, and we are energized by the scale of the opportunities ahead.
Dan: So with this overview, I'd like to turn the call over to Dan
Speaker Change: Dan, thank you Mike, and good morning to everyone on today's call. Since joining the OSS in November 2024, I've been continuously impressed by the company's differentiated technology, customer-focused, and by the momentum that we're seeing across the business.
Speaker Change: In the first quarter of 2025, I was particularly pleased by the momentum that we achieved toward two of our key financial objectives. Growth and profitability [inaudible]
Speaker Change: On Growth, our OSS segment 2.0 Book to Bill in the Quarter and 1.33 Trailing 12 Month Book to Bill demonstrates that our technology is resonating with customers and positions us to achieve our growth objectives for the second half of the year.
Speaker Change: On Profitability, OSS segment gross margins of 45.5% in the quarter demonstrates the value that customers place on our differentiated products as well as our continued commitment to operational
Speaker Change: There's always work to do, but we're off to a strong start and we're well-positioned both operationally and financially to execute against our 2025 goals and to unlock long-term value pressure holders.
Speaker Change: And now for a quick overview of Q1 2025 financial performance.
Speaker Change: For the first quarter we reported a consolidated revenue of 12.3 million. The 3.1% year-over-year decreased in consolidated revenue was a result of approximately 330K of lower OSS segment revenue and 66K of lower Resonance segment revenue.
Speaker Change: As we mentioned last quarter, we expect revenue and profitability to improve at a higher rate in the second half of 2025.
Speaker Change: Consolidated Gross Margin in the first quarter expanded to 32.6% compared to 29.4% in the prior year quarter. The 320 basis point improvement reflects the more profitable mix of revenue in the OSS segment.
Speaker Change: On a segment basis, Gross margins for the company's OSS segment improved to 45.5% compared to 34.2% for the same period a year ago.
Speaker Change: The increase was primarily due to a larger volume of certain higher margin products shipped in the quarter.
Speaker Change: OSS gross margins also benefited from a 212K reduction in inventory reserves in the segment due primarily to the usage of certain previously reserved inventory items to satisfy a new customer order received in the quarter.
Speaker Change: On a full year basis, we continue to expect OSS segment margins to be in the mid to upper 30% range.
Speaker Change: The company's residents segment had gross profit margin of 23.1%. The 260 basis point decreased from sanctuary last year was primarily due to product mix.
Speaker Change: Total First Quarter Operating Expenses increased 19.2% to 5.9 million compared to the year ago quarter.
Speaker Change: This increase was predominantly attributable to higher marketing and selling costs due to an increase in personnel costs from the additions and pet count made during the course of 2024, as well as an increase in research and development costs driven by higher engineering labor to support new product development.
Speaker Change: For the first quarter, the company recorded a gas net loss of $2 million or $0.9 per share compared to a net loss of $1.3 million or $0.6 cents per share in the prior year quarter.
Speaker Change: The company reported a non-GAAP net loss of $1.4 million or $0.7 per share compared to a non-GAAP net loss of $931K or $0.4 per share in the prior year quarter.
Speaker Change: The adjusted EBITDA non-GAAP metric was a loss of 1.1 million compared to an adjusted EBITDA loss of about 500K in the prior year of first quarter.
Speaker Change: Turning to Bouncy, as of March 31st, 2025, OSS had total cash and short-term investment of $9.1 million, no borrowing's outstanding on our $2 million revolving line of credit, and a consolidated balance outstanding on our turn loans of $1.1 million.
Speaker Change: For the three months ended March 31st, 2025 OSS used 1.1 million in cash from operating activities compared to operating cash flow of 2 million for the three months ended March 31st, 2024. The change from the prior year quarter was primarily due to the timing of working capital.
Mike Knowles: As Mike mentioned, we believe we are on track to achieve our 2025 annual guidance. We expect bookings to remain strong throughout the year within our OSF segment, which we believe will support profitable revenue growth in the second half of 2025 and into 2026.
Mike Knowles: As we guided last quarter, we expect our revenue and profitability growth to accelerate in the second half of 2025, with first half roughly flat to the priority.
Mike Knowles: Discomplete our prepared remarks. Operator, please open up the call to questions.
Thank you.
We are now
Open for Q&A
And at this point,
Mike Knowles: Ladies and gentlemen, we will now begin the question and answer session. Should you have a question? Please press the star, followed by the number one on your touchtone phone, and you will hear a prompt that your hand has been erased.
Mike Knowles: Should you wish to decline from the polling process, please press the star followed by the number two. If you use the speaker phone, please lift the handset before pressing any keys. One moment please for your first question.
Speaker Change: The first question comes from Brian Kinstlinger with Alliance Global Partners. Please go ahead.
Brian Kinslinger: My first question relates to the visibility on the $30 million of Cora OSS revenue expect this year. How much of that is coming from contractual orders that have already been signed versus new business you've only done this year?
Brian Kinslinger: Yeah, it's a little bit of mixed amongst Brian . Thanks for the question. As we noted in the comments, we're generating bookings now here in the first half that would lead to expected revenue in the second half of the year. And we had a smaller percentage of backlog left over from the end of 2024 that's looking at deliveries more in the second half of the year.
Okay, and then
Brian Kinslinger: The announcement for the 80 Best in Class high performance servers for $1.5 million.
Speaker Change: I couldn't tell based on the press ladies school, all of that be delivered in 2025 or if not over what time period will that be?
Speaker Change: Yeah, Brian , we expect all of that to be delivered and to convert to revenue within 2025. We'll see some spread between Q2, Q3, Q4, but we expect to finish all of those deliveries within the year.
Speaker Change: Great. And then it turns into pipeline. Can you share with us maybe how many opportunities are of size and maybe 20 million dollars and what I need the adjudicated this year?
Speaker Change: Brian , I don't have an exact number here in front of me, but the pipeline is made up of a number of opportunities and programs that weigh in value from different sides. Our expectation in growing the company really is along the lines of finding more programs like the one we've just recently announced, where we have a longer run of development and larger production runs in the back end. So we expect, especially as we build out of 2025 and in 2026.
Speaker Change: that will start to see more program values represented of our most recent announcement.
Speaker Change: Great. Lastly, maybe touch on in your open letter. I didn't hear you talk about it.
He Discussed
Speaker Change: A $200 million opportunity with the Army for situational awareness, maybe take us through that opportunity and how you are situated in terms of competitiveness and then separately talk about the data center and opportunity which I think is more of a market opportunity as opposed to one customer. [inaudible]
to Combat Vehicle Architecture for the US Army, for a specific application in moving.
Speaker Change: Video or camera video from around the vehicle into the work center's work stations inside the vehicle.
Speaker Change: So that system was delivered at the end of 2024. It's been under evaluation and test.
Speaker Change: Combat Vehicle Types Inside US Army. US Army will evaluate that should they determine a final requirement for that, then they would transition to an acquisition and fielding plant.
Speaker Change: Across any combat vehicles, we know the US Army doesn't have tens or hundreds of vehicles, they have thousands of vehicles . . . . . .
Speaker Change: a good position to help influence that and move it forward.
Speaker Change: Similarly on the commercial side, we've launched and noted some recent products in our GPU expansion product line where we achieve significantly high density of GPUs.
in a single expansion chassis.
Speaker Change: And what we're seeing is for some areas of the data center market where people have a smaller footprint or looking for mobile or extended data center capabilities.
Speaker Change: This high density of GPUs is highly attractive to be able to extend off of a single server rather than purchasing multiple servers and so this market opportunity is we've been seeing growing increase in terms of its demand and application across.
Speaker Change: Multiple vendors and customers and so we see a similar market opportunity there that we believe could lead to a multi-year contract for those products.
One last call, in terms of that Army contract.
Speaker Change: Are there other solutions being evaluated, or is it just an OS test solution with your partners? And then the book to Bill, I was confused.
Speaker Change: I thought it was 2.0 based on 10 million over the revenue for CoroSS. How did you get to 1.33?
Speaker Change: Yeah, on the first one, Brian , right now, we're the only solution for the US Army that are evaluating on this system.
Speaker Change: in part because they weren't able to solve the concept with the prior architectures that they were using to switch to enterprise class architecture a lot, allow them to meet their system requirements in processing and latency. So that was very positive for us. So we're the only company right now with the system that achieves. [inaudible]
Speaker Change: Those, those directives and we have also been now been able to implement
Speaker Change: A few of the noted standards that the Army is looking for in their network architectures.
Speaker Change: So our system is one of the first that embeds that into the overall processing architecture, so...
Speaker Change: We feel good about our position there in terms of that. And then this book to Bill Ratio, the 2.0 was for this quarter, so you're correct. It was the OSS segment bookings against the revenue. And the 1.33 is the OSS segment book to Bill Ratio for the trailing 12 months. And then this book to Bill Ratio for the trailing 12 months. And then this book to Bill Ratio for the trailing 12 months.
So we go back
Yeah, thank you so much. Thank you, Brian.
Thank you.
Speaker Change: Thank you. The next question comes from Scott Searle with Roth's Capitol. Please go ahead.
Speaker Change: Digging my questions. Hey Mike, maybe just to dive in on the data center opportunity, could you give us some timeline that might be attached to that one? We'd see the first revenues from that and then maybe following up on some of the the tariff driven partnerships with international players, what's the timeline associated with that? How actively engage? Well, can we start to see that impacting the pipeline and ultimately the the PNL? [inaudible]
Mike Knowles: Yeah, great. Thanks guys and appreciate the call and the question. So I'm the I'm the I'm the
Mike Knowles: Data Center, stuff of the expansions they're talking about so we've we've had a
Mike Knowles: A Consistent Expansion Capability There So we have been delivering some of our existing standard products in our what we call our 4UP product line range. We have also announced a 6U unit that
that increases the density and of GPUs and those expansions
Mike Knowles: production viability here in the Lake Q2 and into Q3, Q4.
on the tariff and adjustment on the question for manufacturing.
So, we're in discussions with a couple companies [inaudible]
Thank you.
Mike Knowles: One particularly further along with the decision to move forward with that concept. Again, we would probably see something late Q2, early Q3 is where we start generating revenue from that concept.
Speaker Change: Very helpful. Thank you. And maybe the shift gears over to AI for a second. You've been working with some different vendors on software partnerships to try and develop more of that channel.
Yes, continue down those paths, actively engage.
Speaker Change: We meet with AI companies generally for two reasons. One, a lot of AI companies are looking to standardize their AI processing on a set of hardware.
Speaker Change: And then secondly, it allows us to identify more integrated solutions we can offer our end customers, so we can deliver more fully capable systems. So we continue that effort finding new opportunities at developing existing ones.
Speaker Change: We've reaped some capabilities where we've expanded our ability to work with customers to actually test and validate their AI or processing algorithms and actually provide them an output on optimizing their software on a hardware platform specific to their application.
Speaker Change: We've engaged with a number of companies on the first model where they're looking to standardize their processing on our hardware. We have a couple extended relationships there that we're hoping could lead to product releases and program positions in a bad cap of this year and into next year.
Speaker Change: Okay, great. Thank you. And lastly, if I could just just two more the current government discretionary budgets I'm wondering how that impacts you or doesn't impact you I'm sure you've had an opportunity to prove it in terms of your program exposure and also in terms of customer funded.
Speaker Change: Opportunities. I'm wondering if there's a rule of thumb to look at that in terms of the multiplier effect once you look out then two years in terms of what 500,000 of customer development funded translates into in terms of products longer term. [inaudible]
Speaker Change: Yep, sure, got so watching the budgets on the defense side for this year.
Speaker Change: You know, the government is still working under a full year continuing resolutions. It does allow for program new starts.
Speaker Change: So there's still a little bit of a grayness, if you will, inside the defense budgets and how they're allocating their discretionary budgets across that. So it's requiring a little bit more work and effort, rather than normal advice budgets would roll down through program element line numbers specifically to end programs on new starts.
Speaker Change: So, a little bit of extra work around the DOD to move budgets and elements out We're seeing some of that as a resulting in delayed program awards this year so we're working through that
Speaker Change: But we are seeing now that the 2026 budget cycle is accelerating back to on schedule. It had a slow start, but in the last six weeks
Speaker Change: The efforts inside the process have accelerated to work to get the 2026 budgeting plan back on track so hopeful that that will prove to make 2026 a normal year maybe even see a budget without a continuing resolution we could only hope [inaudible]
And then the.
Speaker Change: Last part on customer-funded leading to program. I think a great way to look at that is maybe to look at an example program that we have had in the company for a number of years now.
Speaker Change: P-8 program. You know that program we started with a small dollar value like around a million dollar customer funded development efforts lasted about a year and in development and then let itself into low rate initial production, full rate production.
Speaker Change: And it's now transitioning into a sustainment support. That program we've generated about $40 million in revenues since it started in 2018.
Speaker Change: And we just signed a five-year extension for sustainment and support on that program. So that's kind of representative of how we see platform positions, especially on DOD platforms.
Speaker Change: and the scalability of size of those we just depend on the overall compute system and or the number of platforms in the inventory for that.
Speaker Change: And lastly, if I could just on the gross margins for the OSS front, certainly a high number this quarter. I'm just wondering if you could remind us in terms of what was the upside because it looks like you're talking about 38 to 40% is or high 30s is the ongoing number, but customer funded R&D is in there as well. So I wonder what the OSS component without customer funded programs looks like on a sustainable ongoing basis. Thanks.
Speaker Change: So overall we continue to expect those margins in the mid to upper 30% range. The way I would model that is is products, growth margins in the high 30s to low 40s and then customer funded development in the 15 to 20% range.
Thanks so much.
Thanks, guys. Thanks.
Speaker Change: Thank you. The next question comes from Eric Martinuzzi with Lake Street. Please go ahead.
Eric Martinuzzi: Yeah, I wanted to better understand the near-term market conditions that pushed out the first half orders. Can you give me either an example, or maybe you just overall?
Speaker Change: Industry Commentary that helps better understand that because I had a flat OSS for Q1 and obviously yet, that was a misfire in my model.
Yeah, Eric, good morning. Thanks for the question.
Speaker Change: I guess a sample, maybe on both sides, really on the Department of Defense side. As I mentioned when the year started, a government was still struggling with budgets and so it wasn't until the end of Q1 before they settled in on a full year continuing resolution. So we just saw delay in some DOD programs that were smaller in value but were opportunities to book and shift in the quarter.
Speaker Change: So those have delayed into Q2 or Q3 for this year.
And then on the commercial side, we had had a ...
Speaker Change: We had an existing contract and that we had planned a couple deliveries on in the quarter that the customer decided to re-align with their end customer later in the year, you know, bath half of Q2 into Q3.
Speaker Change: Okay, and then the the six and a half million dollar contract that you got from the leading defense and tech company was there a large element of the design work first if you could give me just kind of a size and term that you've been working with that was the case.
Speaker Change: Yes, so this one came with a little bit less customer-funded NRE as a fractional amount of that value, some modest adjustments to some standard product that we have similar to what they've used in the past contracts with that we've done with them. So this one is the majority of it really is production and as Dan noted, we'll be able to deliver all of that this year.
Speaker Change: And then the you talked about a more profitable product mix for the higher margin data storage units and component tree any verticals that we should be better to better understand that was at a defense with enterprise side and mix of both.
Speaker Change: Yeah, the I margin data storage products were for a defense customer, but in general across defense and commercial, we see variability, but overall those two markets we target similar margins for products.
Got you, okay? And then the, um,
Speaker Change: It's just it is a pretty steep ramp in the second half. Do we have any kind of recent history with
where there is...
Speaker Change: It's a complete follow-through here because if bookings were revenue would be rolling in it, it just seems like it's a log jam where it's about to burst upon us here so just trying to get a better sense for your confidence in the second half.
Speaker Change: Yeah, Eric, a little bit of a log jam into the second half, as we notice the forecast and the view we have into the year still gives us confidence to achieve the plan.
Speaker Change: We had a strong Q4 in terms of revenue in 2024. So the revenue values and the shipment values of what we need to do in Q3 and Q4 are all definitely achievable. We have more than enough staff, more than enough capacity to be able to achieve that amount of revenue and shipments in those two quarters. So I'm not worried about availability or capacity to meet that. We've got insight into you. We can continue to manage the supply chain. Thank you.
Speaker Change: So as long as we can maintain on the bookings run with the identified customers and plan in the forecast, we should still be able to achieve our objectives.
Speaker Change: Okay. Lastly, you did talk about tariffs and actually having a potential positive impact on the revenue side. Just curious on the supply chain side, anything even on the margin where you guys maybe are sourcing something from overseas where you might not be able to get that domestically.
Speaker Change: Eric, because of the fact that we're doing commercial defense work, we've got a fairly diversified supply chain inside and outside the US and in both the component supply and in contract manufacturing for board building all.
Speaker Change: So while our days for our procurement team have gotten much busier as they try to work the open market on where to source supply, we've done a pretty admiral job in managing tariffs and...
Speaker Change: and Managing Supply Chain, and where we move things in from.
And then it's ...
Speaker Change: Long been a policy in the terms and conditions of the work that we do for OSS, that we pass on to ensure that the impact of the customers.
Speaker Change: And we have not seen a pushback on that as we work through the system. But to be fair we've done a very good job at working supply chain and keeping the tariff impacts to a minimum and within a range that's been acceptable to our customers.
Thanks for taking my questions.
Thank you very much, you're
Thank you.
Speaker Change: There are no further questions of this time. Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.
Brian Kinstlinger, One Stop Systems Inc