Logo of jester cap with thought bubble.

Image source: The Motley Fool.

DATE

Wednesday, May 6, 2026 at 10 a.m. ET

CALL PARTICIPANTS

  • President and Chief Executive Officer — Michael Knowles
  • Chief Financial Officer — Daniel Gabel

TAKEAWAYS

  • Total Revenue -- $8.1 million, representing 55% year-over-year growth, driven by higher sales in both defense and commercial businesses.
  • Gross Margin -- 51.6%, a first-quarter record, up 6.1 percentage points from the prior year primarily due to favorable product mix and improved manufacturing absorption.
  • GAAP Net Loss from Continuing Operations -- $0.4 million, or $0.01 per diluted share, versus $2.3 million, or $0.11 per share, in the prior-year quarter.
  • Non-GAAP Net Income from Continuing Operations -- $300,000, or $0.01 per diluted share, compared to a loss of $1.7 million, or $0.08 per share, last year.
  • Adjusted EBITDA -- $0.2 million, compared to a loss of $1.6 million for the prior-year first quarter.
  • Bookings -- Nearly $15 million in new bookings, resulting in a book-to-bill ratio of 1.8; first-quarter bookings nearly matched total bookings for full-year 2023.
  • Average Order Size -- Increased nearly three times since 2023, reflecting a shift toward larger, multiyear, programmatic orders.
  • Customer-Funded Development -- Up 145% year over year, with further growth anticipated through 2026 driven by new defense and commercial development work.
  • Net Cash Provided by Continuing Operations -- $4 million during the quarter, a record for a three-month period, versus net cash used of $1.5 million in the prior year.
  • Cash Position -- $34.4 million in cash, cash equivalents, and short-term investments, $2.2 million in restricted cash, and no debt as of March 31, 2026.
  • Working Capital -- $44.7 million as of March 31, 2026, compared to $45.3 million at December 31, 2025.
  • Strategic Divestiture -- Completed the sale of subsidiary Bressner in December 2025 for proceeds of $22.4 million, enabling a focused business model and strengthened balance sheet.
  • Production Program Updates -- Transitioned the commercial aerospace passenger cabin program into production with deliveries begun in 2026; autonomous robotics program for construction and mining is moving from prototype to production within the year.
  • Medical Imaging Segment -- Saw ramp in production demand and expect continued growth; ongoing tech refresh discussions to further enhance system performance.
  • Autonomous Maritime Application -- Customer testing is underway, with anticipated production orders and revenue recognition expected in 2026, contingent on timing of order receipt.
  • Pipeline Growth -- The unfactored opportunity pipeline has expanded significantly from the previous $1 billion, with increasing diversity and growing size of prospects.
  • 2026 Outlook Reaffirmed -- Maintained guidance for revenue growth of 20%-25%, gross margin near 40%, and positive EBITDA, despite ongoing supply chain challenges.
  • Supply Chain Dynamics -- "Lead times are longer than what we saw last year," especially for memory and some CPUs; higher memory pricing is being passed through to customers.
  • Technology Roadmap -- Recently introduced PCIe Gen 6 product portfolio, targeting AI, machine learning, and sensor-driven computing requirements at the edge.
  • Defense Opportunity Update -- Secured more than $65 million in total contracted revenue associated with the U.S. Navy Poseidon aircraft, including over $23 million since 2025.

Need a quote from a Motley Fool analyst? Email [email protected]

RISKS

  • Supply chain headwinds may delay shipments, with management citing, "Lead times are longer than what we saw last year," particularly for memory components, potentially impacting revenue timing.
  • Second-quarter gross margins are expected to "normalize" down to a mid-30s to mid-40s percentage range, indicating a decrease from the Q1 high of 51.6%.
  • Guidance reflects "timing of revenue conversion remains our biggest risk for the year" due to supply chain volatility, especially regarding memory availability and lead times.

SUMMARY

One Stop Systems, Inc.'s first quarter results reflected substantial shifts in reported financials following the December 2025 sale of the Bressner subsidiary, with core business revenue and margin performance highlighted by a surge in bookings and cash generation. Management emphasized a heightened focus on larger, longer-term defense and commercial compute programs, citing rapid order growth and increased customer-funded developments. The pipeline now includes a more diverse set of sizable opportunities, especially in AI, sensor-driven, and autonomous applications, supporting management's confidence in their reaffirmed revenue, margin, and profitability targets for 2026.

  • Recent order wins in next-generation aerospace in-flight systems, commercial robotics, and alternative-energy-powered data centers were cited as indicative of expansion into multi-year, programmatic partnerships.
  • Management underscored PCIe Gen 6 product release as a move to meet escalating edge AI bandwidth requirements, targeting broader adoption across both commercial and defense segments.
  • Company reported its average order size has nearly tripled since 2023, supporting strategic aims for recurring, multiyear contract flows.
  • Company indicated continued traction within defense innovation channels, specifically U.S. Army development efforts for enhanced vision and sensor applications, noting ongoing technology evaluation and testing by the customer.
  • Cash and working capital positions were cited as providing flexibility for "selective strategic acquisitions" and investments to expand capability and customer base over time.

INDUSTRY GLOSSARY

  • Book-to-Bill Ratio: The ratio of new bookings to revenue recognized in a given period, indicating future revenue momentum.
  • Customer-Funded Development: Revenue from development programs where customers directly fund research and product engineering specific to their needs.
  • PCIe Gen 6: The sixth generation of the Peripheral Component Interconnect Express standard, supporting substantially higher data transfer rates for high-performance computing.
  • Adjusted EBITDA: Earnings before interest, taxes, depreciation, and amortization, further adjusted for non-recurring or non-cash items, used to gauge core operating performance.
  • LRIP (Low Rate Initial Production): Early manufacturing stage in defense and industrial sectors used to validate production readiness before full-scale deployment.

Full Conference Call Transcript

Michael Knowles: Thank you, Julie. Good morning, everyone, and thank you for joining today's call. I am pleased to report that 2025's positive momentum has carried into 2026, and we are off to a strong start with significant year-over-year growth in both revenue and profitability. These results reflect disciplined execution by our team and suggest accelerating demand for our enterprise-class ruggedized compute platforms across both the defense and commercial markets. Importantly, we believe these trends further validate One Stop Systems, Inc.'s position as a critical enabler of next-generation AI autonomy and sensor-driven applications at the edge—markets that we expect to drive sustained long-term growth for years to come.

Before we review the specifics of the first quarter, I want to remind everyone on today's call that our first quarter results reflect the opportunistic sale of our wholly owned subsidiary, Bressner, in December 2025 for proceeds of $22.4 million, subject to final closing working capital balances. As a result, Bressner's historical financial results are now reported as discontinued operations, and the results we are discussing today reflect the performance of the remaining core One Stop Systems, Inc. business. The sale of Bressner was a strategic transaction that we believe unlocked value for shareholders, simplified our operating structure, strengthened our balance sheet, and sharpened our focus on higher-margin, higher-growth opportunities within our core business.

We believe our first quarter performance is already demonstrating the benefits of this transition and reinforcing the earning power of our go-forward strategy. Today, One Stop Systems, Inc. is a pure-play provider of ruggedized AI compute platforms for edge applications. As a result, we entered 2026 as a more focused and scalable company, fully aligned around delivering market-leading enterprise-class compute solutions to both defense and commercial markets, and I am very pleased with our strong start to the year. Looking at our operational performance in the first quarter, we delivered strong results with revenue increasing 55% year-over-year to $8.1 million, reflecting growth across both our defense and commercial businesses.

Highlights in the defense market include increased shipments to support the P-8 Poseidon aircraft, a long-range multi-mission maritime patrol aircraft used for anti-submarine warfare, surveillance, and reconnaissance operations. In addition, we benefited from increased activity related to the design, development, and delivery of prototype compute systems for next-generation enhanced vision systems for U.S. Army combat vehicles. These programs highlight our role supporting mission-critical applications and our ability to scale alongside large multiyear defense platforms. On the commercial side, we experienced increased demand from a medical imaging OEM, including shipments of our liquid-cooled server platforms, reflecting the growing adoption of our solutions in high-performance, data-intensive environments.

Taken together, these drivers demonstrate both production-level demand and early-stage program engagement, which we believe will position us well for continued growth. As our sales grow, we are seeing increased market awareness and stronger customer engagement, with a growing number of organizations turning to One Stop Systems, Inc. for enterprise-class deployable compute solutions. During the quarter, we generated nearly $15 million in new bookings that we expect to deliver in 2026 and 2027. I am pleased to report that this was one of the strongest quarters in our history and resulted in a book-to-bill ratio of 1.8, supporting our goal to maintain a trailing twelve-month book-to-bill ratio above 1.2.

Bookings during the quarter were driven by several key program wins across both defense and commercial markets. First, we announced aggregate new awards of $10.5 million from the U.S. Navy and a leading U.S.-based prime defense contractor in support of the Poseidon reconnaissance aircraft—$7.5 million of which was booked during the first quarter, with the remainder falling in last year's fourth quarter. With these latest wins, One Stop Systems, Inc. has secured more than $65 million in total contracted revenue associated with this mission-critical aircraft to date, including over $23 million awarded since the beginning of 2025.

Second, we received a new $1.1 million initial order from a top-tier commercial aerospace prime contractor to support next-generation in-flight entertainment systems, which is expected to be delivered by 2026. We believe this platform has the potential to generate more than $6.5 million in total revenue over the next five years. Third, we secured a new engagement with a commercial robotics customer manufacturing autonomous construction and mining equipment. We expect this program to generate approximately $2 million in orders in 2026, with a five-year opportunity in the range of an aggregate $10 million to $15 million. Importantly, we displaced an incumbent solution to win this business, which we believe highlights the strength of our technology.

More recently, in April 2026, we announced a new relationship with a company building a network of autonomous energy nodes for emerging alternative-energy-powered data centers. While the initial order was valued at over $0.5 million, we expect this customer to scale to an aggregate $10 million opportunity over the next five years. We believe this opportunity reflects how our solutions are increasingly being deployed in next-generation data center architectures where power efficiency, scalability, and enterprise-class compute are critical to supporting AI and data-intensive workloads. Recent program wins reflect both expansion within existing platforms and new customer additions, underscoring the breadth and durability of demand we are seeing across our markets.

We are also seeing a clear shift in the size and composition of our bookings. Orders are becoming larger, more programmatic, and increasingly tied to multiyear deployments across a broader set of customers. In fact, our first quarter bookings of $15 million nearly equal the total bookings we generated for the full year of 2023. In addition, our average order size has increased nearly three times since 2023, and over the past twelve months, we have added a growing number of new programs and projects, further strengthening our long-term growth profile. Supporting the momentum we are seeing in both sales and bookings is the continued expansion of our pipeline of opportunities.

Three years ago, we believed our pipeline lacked structure, consistency, and alignment with our long-term strategy. Since then, we have made a deliberate effort to build a more strategic and disciplined pipeline—one that is closely aligned with our commercial and defense go-to-market strategy, our technology roadmap, and applications that we believe can scale across both markets. I am pleased with the progress we have made, and more companies across our core defense and commercial end markets are pursuing the company's rugged enterprise-class compute solutions. As a result, we believe our pipeline has expanded significantly from roughly $1 billion previously. These opportunities are primarily concentrated in North America; however, we are starting to see more international opportunities emerge.

This has the potential to further increase the size and diversity of our pipeline materially over time. We believe that underlying this growth are strong and durable market dynamics. Demand for enterprise-class compute is accelerating as AI, machine learning, and sensor fusion applications increasingly move from the data center to the edge. This shift is driving a new generation of mission-critical applications across both defense and commercial markets—areas where One Stop Systems, Inc. is well positioned given our expertise in ruggedized compute platforms. Alongside the growth in our pipeline, we are continuing to invest in advancing our technology platform to support the next generation of AI-enabled systems operating at the edge.

R&D remains a critical component of our strategy, and we are increasingly working alongside customers on customer-funded development programs that allow us to design and deploy purpose-built compute architectures for emerging applications. These engagements are a key driver of our long-term growth. We believe they position One Stop Systems, Inc. early in the lifecycle of next-generation platforms, deepen our relationship with key customers, and create a clear pathway to future production programs as these technologies move from development to deployment. We are seeing growing traction within U.S.

Army labs, defense research organizations, and large defense primes as they reassess current requirements and plan for future compute architectures, and One Stop Systems, Inc. is becoming increasingly embedded as a trusted provider of enterprise-class compute solutions supporting next-generation warfighting capabilities. These efforts span a range of applications, including advanced vision systems, sensor and data processing, autonomy, and AI-enabled situational awareness. While these development programs typically take multiple years to mature, we are encouraged by our expanding role within the Department of Defense ecosystem, and we believe these engagements position One Stop Systems, Inc. to participate in a growing number of future production programs.

Many of the programs we discussed earlier today began as development efforts where we worked alongside customers to design highly specialized compute solutions for demanding applications. As those systems mature and transition into production platforms, we believe they can create multiyear revenue opportunities for One Stop Systems, Inc. Customer-funded development increased 145% year-over-year in the first quarter, and we expect additional growth through 2026, supported by new defense and commercial development efforts. At the same time, we continue to advance our core technology roadmap.

During 2025, we led the way in our market with the introduction of our next-generation PCIe Gen 6 product portfolio that is designed to address the rapidly increasing bandwidth and data processing requirements associated with artificial intelligence, machine learning, and sensor-driven workloads. PCIe Gen 6 significantly expands data throughput capabilities and will play an important role in enabling the next generation of AI accelerators and GPUs, high-speed storage systems, and advanced compute architectures required for AI applications at the edge. We continue to believe these technology investments position One Stop Systems, Inc. well to support the growing demand for high-performance compute infrastructure as AI-enabled systems continue to expand across both defense and commercial platforms.

We believe that One Stop Systems, Inc. is well positioned for long-term growth, and we are encouraged by the strong start to 2026. As we move through the year, we are focused on helping provide the compute and storage needs of our customers, supporting our customers' development efforts, and converting our pipeline to sales. We also continue to closely manage several operational factors, including supply chain dynamics. In particular, we are seeing longer lead times for certain components, including memory, which may impact the timing of certain shipments throughout the year.

As a result, we are maintaining our guidance for 2026, and we expect revenue growth in the range of 20% to 25%, supported by our growing pipeline of platform opportunities, increasing customer engagement, higher customer-funded development activities, and the continued transition of development programs into production deployments. We expect gross margins of approximately 40%, reflecting product mix and an increasing contribution from customer-funded development programs, which is an important component of our strategy to advance new technologies alongside our customers.

At the same time, we expect to generate positive EBITDA and adjusted EBITDA while continuing to invest in key areas of the business, including sales expansion and customer support resources that support our growing pipeline and deepen relationships with strategic customers. With a strong balance sheet, expanding customer relationships, and a growing pipeline of opportunities driven by the adoption of AI-enabled systems, we believe One Stop Systems, Inc. is well positioned to continue building momentum and delivering long-term value for our shareholders. We also believe our strengthened balance sheet provides the flexibility to make strategic investments in our business and pursue selective strategic acquisitions that could complement our technology platform, expand our customer base, and enhance our capabilities over time.

Finally, I want to thank our entire team for their dedication, innovation, and relentless focus on delivering results for our customers and shareholders. So with this overview, I would like to now turn the call over to Dan.

Daniel Gabel: Thank you, Mike, and good morning to everyone on today's call. Financial performance in Q1 exceeded our expectations, reflecting both strong customer demand and disciplined operational execution. Q1 results reflect a number of key accomplishments. First, we achieved strong top-line growth of 55%. Second, we achieved robust bookings of nearly $15 million for the first quarter. Third, gross margin of 51.6% remained above our expectations, reflecting favorable mix and pricing, operational improvement, and showcasing the strong value that we provide to our customers. Fourth, higher sales, strong gross margin, and disciplined expense management produced positive adjusted EBITDA in the first quarter. And finally, strong collections and working capital management drove a record amount of free cash flow from continuing operations.

We believe that the company has never been in a stronger position, and with a strong cash position, a solid backlog, and a robust pipeline, we believe we are on track to achieve our 2026 guidance and to execute on our growth and profitability objectives. Now for a quick overview of Q1 2026 financial performance. For the first quarter, we reported total revenue of $8.1 million, compared to $5.2 million last year.

The 55% year-over-year increase in total revenue was primarily due to higher sales to a defense prime customer of data storage products to support the P-8 aircraft, higher sales to a medical imaging OEM of liquid-cooled server products, and sales to a defense prime customer related to the design, development, and delivery of prototype compute systems for an enhanced vision system for combat vehicles. Gross margin in the first quarter was a first-quarter record of 51.6% compared to 45.5% in the prior-year quarter. The 6.1 percentage point increase from the prior year was primarily due to a more profitable mix of products shipped this year, engineering efficiencies in customer-funded development programs, and improved manufacturing absorption due to higher production volume.

We continue to expect some level of variability in gross margins quarter to quarter based on absorption, product mix, and program life cycle. On a sustaining basis, we continue to target margins in the mid-30s to mid-40s. We expect that second-quarter gross margins will normalize into this range. Total first-quarter operating expenses increased 2.5% to $4.8 million. This increase was predominantly attributable to higher general and administrative expenses, partially offset by lower marketing and selling and R&D expenses. For the first quarter, the company reported a GAAP net loss from continuing operations of $0.4 million, or $0.01 per diluted share, compared to a net loss from continuing operations of $2.3 million, or $0.11 per share, in the prior-year quarter.

The company reported non-GAAP net income from continuing operations of $300,000, or $0.01 per diluted share, compared to a non-GAAP net loss from continuing operations of $1.7 million, or $0.08 per share, in the prior-year quarter. Adjusted EBITDA from continuing operations, a non-GAAP metric, was $0.2 million compared to an adjusted EBITDA loss from continuing operations of $1.6 million in the prior-year first quarter. Turning to the balance sheet, cash flow from continuing operating activities was a record for a three-month period as we saw a robust quarter of collections and prudently managed inventory levels.

Net cash provided by continuing operations for the three months ended 03/31/2026 was $4 million, compared to net cash used in continuing operations of $1.5 million in the prior-year period. As of 03/31/2026, One Stop Systems, Inc. had total cash, cash equivalents, and short-term investments of $34.4 million, restricted cash of $2.2 million, and no debt outstanding. Working capital was $44.7 million as of 03/31/2026, compared to $45.3 million at 12/31/2025. As Mike mentioned, we are reaffirming our guidance for the full year, including revenue growth in the range of 20% to 25%, gross margin of approximately 40%, and positive EBITDA. We believe our strong performance in Q1 supports our planned ramp in the second half of the year.

We are seeing strong demand, and our first-quarter performance establishes strong operational momentum. At this time, we are maintaining our guidance as we continue to navigate a dynamic supply chain environment. As we enter the second quarter, we remain focused on disciplined execution, including managing our supply chain to convert customer demand into revenue, profit, and cash. We also remain focused on continuing to drive growth by investing in our technology, pursuing M&A opportunities, and securing new platforms that may provide sustained multiyear revenue streams. As always, we look forward to updating you on our success. This completes our prepared remarks. Julie, please open the call for questions.

Operator: Thank you. Your first question comes from Scott Searle from ROTH Capital. Please go ahead.

Scott Searle: Hey, good morning. Thanks for taking the questions. Congrats on the quarter and the outlook. Maybe just for starters, could you give us a little bit of an idea of the mix of business in the quarter between defense and commercial? And then on the supply chain front, it sounds like there are some headwinds. I am wondering if you could dig in a little bit more in detail—where does memory fit in the stack? Is it a cost issue from a BOM standpoint impacting gross margins, or just general availability as you look out into the second half of this year? And is that the primary constraint?

And Mike, on ongoing military activities, I think there have been some concerns that potentially it is a distraction in terms of the ability to progress existing opportunities. Based on your comments, it does not sound like that has been the case—you have started to move forward on a couple of different fronts and expand that pipeline. I wonder if you could just expand on that a little bit, and then I had a follow-up.

Michael Knowles: Great. I will let Dan start with the mix, and then I will jump in with the supply chain and the ongoing defense activities.

Daniel Gabel: Thanks, Mike. So starting on the mix, in Q1 we saw growth across multiple areas. Customer-funded development was up. Production was also up. Within production, we did see a higher mix of some of our more mature production programs, and those tend to carry higher margins—that is part of what you are seeing. But on the bookings front, we also announced some new wins, including on the commercial side, that are expected to scale over time as we go through the year and into future years.

On the supply chain, what we are seeing primarily is memory, as well as extended lead times for other components, including CPUs, but certainly the critical path for many of our deliveries runs through that memory supply chain. Lead times are longer than what we saw last year. Pricing has certainly moved up. I think there is still some volatility, but relative to three months ago, that volatility has moderated—so, plateaued at a higher level. From a pricing perspective, in general we do not aim to absorb those price increases; we pass them along to our customers. This is a market-wide dynamic, not unique to One Stop Systems, Inc., and generally we have been successful in doing that.

But every bid has its own customer and competitive dynamics, and so we evaluate those bids individually.

Michael Knowles: I would just add that the biggest long-term impact has really been on memory, and it is a moderate portion of the BOM. We have been able to manage the rest of the bill of materials in our products, whether standard or purpose-built, with supply chain quite well. So it is really just those components, and we have a number of risk mitigation actions we have been working to help mitigate the risk of those delivery timeframes. We will assess and continue to work that as it goes through. And as Dan mentioned, we have been able to pass the price on, so financially we have been able to manage that impact.

Now we will just be continuing to work the timing impact across our systems, and it really is just one component—unfortunately, a fairly standard component in server memory. On the change in the defense environment with the ongoing operations in the Middle East and around Iran, given that the budget for 2026 on the defense side was already passed and people are executing against obligations, we really have not seen an impact on bookings or planned orders for the year.

We built into the plan and anticipated there may be some slight delays in award timing, and that is just based on the fact that there is an increased overall movement to move standard logistics and material needed in support of the forces in the Middle East. That has to get contracted and put out, so there is a time factor. But to date so far we have not seen a big impact on timing or on elements of programs or plans that were already budgeted or planned for 2026.

In these kinds of experiences, we have also seen that as these protract, there generally start to be indications from the conflict on what technology applications could be used to better facilitate execution of the battle plans in the area, to become more efficient in the very specific battle or environment. We are positioned in the labs, and we are looking for that to hopefully turn to opportunity for us into this year and next year as we have the opportunity to leverage high-performance computing, commercial-based solutions to readily support any of those applications.

Those generally will come in and around software or sensor capabilities, and to go with that you will need the right level of compute and low latency, which is where we sit. So we will monitor those in the labs and keep an eye out for them. Oftentimes it starts to create opportunity for specific solutions that would enable the current conflict’s operational execution.

Scott Searle: Very helpful. And if I could just follow up on the opportunity—the unfactored opportunity pipeline—I think you indicated that it is up significantly from the prior number; you had talked about it being $1 billion, and it sounds like there are growing-size opportunities within that. I am wondering if you could expand on that a little bit. And as it relates to some of the near-term opportunities, particularly the advanced vision systems for military vehicles, what is the timeline for that to convert to production? And then as we look to 2027, I think the long-term targets you have talked about for growth are 20% to 30%.

Given all the activity that is going on in the pipeline and how you are starting to convert some of that into orders, do we see an inflection in 2027 towards the higher end of that long-term target range? Thanks.

Michael Knowles: Thanks, Scott. On the pipeline, yes, we continue to monitor that. That is our source of identification of opportunities. As we have spoken before, we rate those on the probability that they will be funded, awarded, and happen, and the probability that we win. That helps identify our orders of priority in terms of where we will be addressing opportunities. We continue to see elements moving into the pipeline. I am most encouraged that we are seeing diversity across that pipeline that includes a multitude of new customers and new opportunities, all at moderate values compared to when we looked at the pipeline three years ago.

As I noted in my comments, there is a growing number of booking sizes and multiyear programs. The other thing I would say that is starting to appear in that pipeline is an increased number of potential transitional or transformational opportunities that we have factored down appropriately, but they are creating more opportunities for us to find potential transformational organic growth out of things that we are doing. That is leading us, as we move through the factored elements of that, to continue to feel positive about the ability to grow at that 20% to 30% range.

Some of those transformational opportunities and some long programs of record—where if we see those come to fruition—would represent substantially greater growth than what we are seeing in the probability-weighting factors today. Some of those, as we have mentioned in the past, are in and around Army programs. The current elements we talked about in the past with the 360-degree situational awareness system—that architected solution still remains under testing and evaluation by the U.S. Army. They will make decisions as appropriate in timing and priority for them. This is the joy of working in the Department of Defense—sometimes these things can happen fast, sometimes they can be protracted, sometimes they can come in multiple phases.

The benefit we have is that we have a solution that is present, under test, available, and is the only solution that can provide the capabilities that were written to the requirements we delivered. That architecture has now expanded into multiple additional sensor-based processing applications where the demand for high-performance compute and sensor processing, and the demand for low latency to move that data, has become a requirement across a couple of other capabilities. We mentioned one in our press release about the enhanced vision system, and we continue to work additional opportunities where that compute infrastructure is starting to form the basis for sensor distribution at extremely low latency.

We are seeing those opportunities across the other services as well, where we could find these potential larger transformational programs of record, but there is no distinct timing on any of those quite yet.

Scott Searle: Great. Thanks so much. Congrats on the quarter and outlook again. I will get back in the queue.

Operator: Your next question comes from Eric Martinuzzi from Lake Street. Please go ahead.

Eric Martinuzzi: I wanted to ask a guidance philosophy question. It sounds like if there were not the supply chain issues, there is a chance you could have actually bumped up your outlook for 2026. Am I reading that the right way? And is there any pull-forward impact in the Q1 booking success—was any of that kind of Q2 or Q3 pull-forward, or was it just normal course?

Daniel Gabel: I think that is right, Eric. We are definitely seeing strength on the demand side—you can see that in our bookings. As we look towards guidance, we are remaining cautious as we navigate this dynamic supply chain environment. The other thing I would add is our guidance was back-half weighted for the year. I think the strong performance in Q1 helps to moderate that ramp. It certainly increases our confidence in the guidance. We have seen, and are continuing to see, extended and variable lead times for components, including memory, so the timing of revenue conversion remains our biggest risk for the year. It is a risk that our guidance takes into account.

On bookings, I think it was a combination. There was probably some pull-forward that we saw, and there were also some new wins that we had factored. Maybe the initial awards were not huge, but those will grow over time. Overall, I think Q1 bookings were a very positive story for us.

Michael Knowles: I agree with exactly what Dan said. Across the board, it was a good bookings quarter for us.

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

Brian Kinstlinger: This is Kevin for Brian. First, can you provide updates on both the autonomous robotics for construction and mining, as well as the aerospace programs for passenger cabin systems? When do you expect each might move into production from LRIP?

Michael Knowles: Thanks, Brian. On the robotics front, we have successfully completed prototype and early prototype build and delivery, test, and validation in the environment, and we will be transitioning that program to production here in 2026. We will start to see news on that in the coming months and quarters as that program transitions into production. The commercial aerospace program has actually transitioned into production. Deliveries have started in 2026 and will continue through this year, and then we will look to 2027.

Brian Kinstlinger: Thanks. And then, can you provide any updates on the liquid cooling system for medical imaging where a tech refresh is pending? How will a tech refresh impact this production program?

Michael Knowles: We are well set on the production forecast for the year with the medical imaging company and the liquid-cooled server. We have that laid in. We saw a ramp in production demand from last year, so we are positive about the momentum of that program and where it is going. We do continue to explore the opportunity for tech refresh. In our systems and configurations—while they are based on a lot of commercial open system architectures—the ability for tech refresh and upgrades, being able to put in even more compute or lower latency, can help with the overall performance of systems.

So we always continue, with this customer and with all our customers, to engage in opportunities to provide quick updates in compute and latency to further enhance system performance where needed.

Brian Kinstlinger: Great. Thanks. And then lastly, could you provide an update on the autonomous maritime application? Has testing been completed, and do you still expect production orders this year?

Michael Knowles: Yes. On the autonomous maritime systems, we have delivered, and they are under test and evaluation. We are in discussions with the customer and would expect to see production orders this year. Given that the production orders are received early enough, we should be able to generate revenue on that this year.

Brian Kinstlinger: Great. Thanks. That is all from us.

Operator: And there are no further questions at this time. Ladies and gentlemen, this concludes today's conference call. You may now disconnect. Thank you.